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Two Board Members Step Down During Chesapeake Meeting

Scott Detrow / StateImpact Pennsylvania

Chesapeake CEO Aubrey McClendon

Chesapeake Energy’s annual shareholders meeting – which we liveblogged as it happened – has drawn to a close.

The Wall Street Journal called shareholder votes “a stinging rebuke” to the company, pointing out stockholders “overwhelmingly voting against two members of the board of directors standing for re-election.”

Only 27% of shareholder votes were cast in favor of board member Richard Davidson, the former CEO of Union Pacific UNP -0.45% Corp.; V. Burns Hargis, president of Oklahoma State University, received 26.4% of votes cast.

Both men tendered their resignations, the company said, under a measure that drew 97.1% of votes, requiring directors who don’t receive a majority of votes cast to offer to step down. Chesapeake said in a statement that the board would “review the resignations in due course.”

Here’s the Post-Gazette’s take:

The revolt put the pressure on Mr. McClendon at this morning’s meeting, the first time in the past three months the CEO has made extended remarks about the fallout. His response: focusing on an “asset harvest” company strategy that will most likely lead to more rigs appearing in Pennsylvania and Ohio.

About 230 shareholders pre-registered to attend this morning’s meeting; only 85 attended at all last year, according to a Chesapeake spokesman. The unrest was clear from the beginning.

Vincent J. Intrieri, a representative from shareholder activist Carl Icahn’s firm Icahn Capital, called Mr. McClendon a “great oil and gas man,” but said, “even great executives need vigilant oversight.”

Mr. McClendon, meanwhile, used the annual meeting to promote the company’s “fourth phase” of asset harvest, saying the firm will focus exclusively on 10 domestic gas and oil formations that include Appalachia’s Marcellus Shale and Ohio’s Utica Shale.

We’ll have more coverage from StateImpact Oklahoma later today.

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