Here is an excerpt:
CEOs can be a cautious breed. Why make yourself a target? Then there's Aubrey McClendon, the CEO of Chesapeake Energy, a driving force behind America's natural gas revolution, a bumptious voice in energy and environmental politics, scourge of the coal industry turned scourge of his former green allies, and lately the target of corporate-governance scrutiny for loans he took from a firm that was also negotiating to buy assets from Chesapeake.
All of which made for a spirited 90 minutes when the lanky, lion-maned executive stopped by the Journal just as the news of his personal loans was breaking. He had used the money to fund his participation in an unusual compensation program that allowed him to personally invest alongside the company in each well that it drilled.
Mr. McClendon did not specifically address the loans from EIG Energy Partners. But he was certainly making no apologies for the long-standing program—approved by shareholders in 2005—allowing him to personally invest in wells. He says the arrangement had been favored by Chesapeake's board since 1993 because directors wanted him to "eat his own cooking." If he had to put his own money on the line, he'd take great care in selecting the most promising drilling projects.
"American business would be run better today if there was more alignment between CEOs' interest and the company," says the 52-year-old Oklahoman. "For example, would the financial crisis of 2008 have occurred if the CEO of Lehman and Morgan Stanley and Goldman and Citibank had to take a very small percentage of every mortgage-backed security . . . or every loan they made?"
Well, so much for that defense. This week the Chesapeake board, after days of media pounding and new regulatory scrutiny, announced that it will terminate the program. The board also said that it "is reviewing the financing arrangements between Mr. McClendon . . . and any third party that has had or may have a relationship with the company in any capacity." Asked for additional comment Friday, a spokesman for Mr. McClendon responded that the board statement "says everything we intend to say at this point."
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