OKLAHOMA CITY- Two Chesapeake board members offered to resign after shareholders overwhelmingly voted against their re-election. Oklahoma State President Burns Hargis and former Union Pacific CEO Richard Davidson each received less than 28% of shareholder votes. The shareholders voiced their concerns with the board and the company Friday morning.
Earlier this week, Chesapeake Energy agreed to replace four of the board members. Chesapeake’s largest shareholders Southeastern Asset Management, which owns 13.6% of the company’s stock, and investor Carl Icahn, who holds 7.6% , will play a large role in choosing the new board members. Southeastern Asset Management will choose three and Icahn will choose the fourth. Chairman and CEO Aubrey McClendon will step down as chairman and be replaced, but will remain CEO. A fifth board member is retiring.
A spokesperson for Carl Icahn said McClendon is “a great oil and gas man, but needs board oversight.”
McClendon met with shareholders to address their concerns. He fielded questions and laid out his plan for the future. McClendon is calling for an increase in oil and natural gas production and a reduction of debt by 25% in 2012. Chesapeake is selling off non-essential assets and will focus on 10 oil and gas fields across the U.S. McClendon says the company is transitioning from land acquisition to drilling.
"We don’t intend to kick any can down the road, we intend to crush the can," said McClendon.
Shareholders have expressed concern about oversight and the company’s debt. Recent media reports also have some concerned about McClendon’s personal finances and his role as CEO at Chesapeake Energy.
“It means a lot to Oklahoma that we see Chesapeake succeed," said Jim Roth, shareholder.