In May, I wrote that Aubrey McClendon needed to be shown the door as Chesapeake Energy's ( ) CEO. Given the historical precedent of shareholders inexplicably supporting McClendon and his merry band of board members, I didn't think his departure was possible. Today, I'd be surprised if it didn't happen.
A good deal has happened in two months. The most recent revelation -- that Chesapeake may have colluded with competitor Encana ( ) in land auctions -- wascovered by Brian Stoffel earlier this week. The accusation is no joke. Brian noted:
Colluding with a competitor to hold prices down for land would be in direct violation of the Sherman Antitrust Act and carry stiff penalties. Companies could be fined up to $100 million -- and individuals $1 million -- for each offense. Additionally, victims of the rigging can receive up to triple what they missed out on.That follows a tsunami of other reports detailing questionable dealings by McClendon -- from borrowing more than $1 billion against personal Chesapeake well interests to running a commodity hedge fund while at the helm of the natural-gas producer.
It's a laundry list of missteps that shareholders simply couldn't let slide, and as a result they've taken a hatchet to Chesapeake's board and governance practices. McClendon was stripped of his chairman title. Under pressure from the company's two largest shareholders --Southeastern Asset Management and Carl Icahn -- four directors were replaced by new directors named by Southeastern and Icahn. It was a massacre at the annual shareholders' meeting:Read the rest of the article here.
Clearly, shareholders were ready for a change.
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