Tuesday, January 29, 2013

Chesapeake's (CHK) McClendon Stepping Down

As of the time of this writing, a review into the behavior of Chesapeake Energy Corp. (CHK) founder and CEO Aubrey McClendon by the board said that "to date found no improper conduct," but nonetheless the embattled executive will be stepping down from his position on April 1.

Almost immediately after the announcement shares of the company jumped 9 percent. He had already been forced out as Chairman of the company he founded.

There have been a lot of investigations of McClendon by different entities concerning a number of his ways of doing business, although none to this day have unveiled anything illegal.

Most of the controversy surrounding McClendon is in regard to deals he entered into which appeared to too closely blend the personal and professional business interests he held.

Even though some of his questionable activities and decisions opened him up to intense media scrutiny, in the end what probably really did him in was overextending his acquisitions, which caught up with the company once the price of natural gas plunged because of the huge supply available to the market.

Carl Icahn, who holds a significant stake in Chesapeake said he believes McClendon will ultimately be proven right on his estimate of the value of the natural gas assets of the company.

Reasons for the departure weren't released or commented on by the company, and McClendon said in an email to employees that it was based on "philosophical differences" with the board.

Assuming the benefit package and terms of departure are the same as presented to shareholders in 2012, McClendon could walk away with a package worth up to $53 million over a five-year period.

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