Chesapeake CEO McClendon steps down after year of tumult

Tue Jan 29, 2013 11:22pm EST
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By Anna Driver and Brian Grow

(Reuters) - 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 the second-largest U.S. natural gas producer.

News of the executive's plan to depart on April 1 boosted the company's shares by 9 percent. The stock has made a partial recovery since losing almost half its value last spring after 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 those of the company, and into possible antitrust violations. Big shareholders took control of the board in June after he was stripped of his title as chairman of the company he cofounded 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."

Chairman Archie Dunham was not available to comment late on Tuesday. The former head of ConocoPhillips was brought in to quell the shareholder revolt.

In an email to employees, McClendon put his departure down to "philosophical differences" with the board, but assured them: "The separation will be amicable and smooth."

Despite a history of McClendon's perks and corporate benefits creating controversy among shareholders, he will leave Chesapeake with a lavish package. The company said he "will receive his full compensation and other benefits to which he is entitled."   Continued...

Chief Executive Officer, Chairman, and Co-founder of Chesapeake Energy Corporation Aubrey McClendon walks through the French Quarter in New Orleans, Louisiana March 26, 2012. REUTERS/Sean Gardner