By Saabira Chaudhuri
Chesapeake Energy Corp. (CHK) has appointed Archie W. Dunham,
the former chairman of ConocoPhillips (COP), as its new independent
chairman, along with naming four new independent directors to its
reconstituted nine-member board.
Mr. Dunham, who formerly also served as chief executive of
Conoco, succeeds Aubrey K. McClendon, who remains a director and
will continue to serve as Chesapeake's CEO and president.
The board has faced tough scrutiny since it emerged in April
that Mr. McClendon has secured loans for more than $1 billion from
financial firms that do business with Chesapeake, pledging his
stakes in the company's wells as collateral. The company, which
produces more natural gas than any U.S. company after Exxon Mobil
Corp. (XOM), has been beset in recent months by decade-low prices
for its principal product and a string of governance
controversies.
Days before its June 8 annual meeting, the embattled natural gas
giant agreed to shuffle its board and allow activist investor Carl
Icahn and Southeastern Asset Management Inc. to appoint four new
members.
Southeastern, Chesapeake's largest holder with a 13.9% stake,
has appointed three new members: Bob G. Alexander, R. Brad Martin
and Frederic M. Poses.
Icahn, who owns 7.6%, has appointed his own agent, Vincent
Intrieri, to the board. Intrieri is a senior managing director of
Icahn Capital LP and a director at Dynegy Inc. (DYN) and CVR Energy
Inc. (CVI), where Icahn holds significant and controlling stakes,
respectively.
The five new directors replace Richard K. Davidson, Kathleen M.
Eisbrenner, Frank Keating and Don Nickles, who have resigned, and
Charles T. Maxwell, who retired at the annual meeting.
Shareholders overwhelmingly voted against the two directors up
for election at Chesapeake's annual meeting. The directors, V.
Burns Hargis, president of Oklahoma State University, and Richard
Davidson, former chief executive of Union Pacific Corp. (UNP),
subsequently offered to resign. Chesapeake accepted Davidson's
resignation, but not Hargis' as he's chairman of the audit
committee. It will reconsider the resignation following its
financial review.
Shares were up five cents to $19.09 in recent premarket trading.
The stock is down 34% in the last 12 months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com