Published January 29, 2013
Chesapeake Energy Corp said on Tuesday that Aubrey McClendon will step down as chief executive after a tumultuous year in which a series of Reuters investigations triggered civil and criminal probes of second-largest U.S. natural-gas producer.
News of the executive's plan to depart on April 1 sent the company's shares up 8 percent. The stock has recovered in recent months after losing almost half its value last spring when a Reuters report opened the company and its co-founder up to intense scrutiny.
Federal regulators and Chesapeake's board are both looking into whether McClendon, 53, blurred the line between his personal dealings and that of the company, and into possible antitrust violations. Big shareholders took control of the board in June after he was stripped last year of his title as chairman of the company he co-founded in 1989.
The internal deliberations that led to McClendon's departure remain unclear. The findings of the board's probe will be released next month, but Chesapeake said in a statement that the review has "to date found no improper conduct."
"I think that the controversy, governance and other issues that have been pulled up have caused lots of questions about him," said David Larcker, professor of accounting at Stanford University's Graduate School of Business. "This was just sucking up so much time, it had to be a reasonable decision to change management."
A Reuters investigation published last April found that McClendon had arranged to personally borrow more than $1 billion from EIG Global Energy Partners, a firm that also is a big investor in Chesapeake.
The loans, arranged through McClendon's personal shell companies, were secured by his interest in company wells. McClendon is allowed to take a 2.5 percent stake in every single well Chesapeake drills under a controversial program called the Founders Well Participation Program (FWPP).
Chesapeake shares rose to $20.50 in post market trading, up from a New York Stock Exchange close of $18.97.