Slump Prompts Changes At Chesapeake Energy
Changes at the top at Chesapeake Energy.
Chesapeake Energy Corporation bowed to shareholders’ pressure to change its corporate governance, by replacing four of its board members, days before its annual general meeting. Days before Chesapeake Energy holds its annual general meeting, the natural gas producer has bowed to pressure from shareholders to improve its corporate governance.
Of the four new board members, Carl Icahn, the billionaire investor, and his team will pick one board member, while Southeastern Asset Management, which is also the largest shareholder of Chesapeake will nominate the other three directors. After Reuters reported that the CEO Aubrey McClendon had huge loans amounting to $1 billion which had been gained from personal collateral in various companies; investors and shareholders put a lot of pressure for the management to change the way things are run at the second largest natural producer of gas in the USA. The loans that McClendon got were extended to him by EIG Global Energy Partners, a management investment firm, which is also an investor in Chesapeake. After the Reuters report, shares for the Oklahoma City-based firm dropped, with a number of investors asking that a full disclosure of the CEO’s financial interests and loans be declared.
Carl Icahn has been asking for change from Chesapeake Energy Corp, and was pleased with the new steps that had been taken. The investor billionaire holds 7.6% of the company, and said that it was great that issues that had been raised by investors and shareholders were finally being addressed.