{"id":7547,"date":"2012-06-22T12:55:53","date_gmt":"2012-06-22T17:55:53","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=7547"},"modified":"2012-12-19T14:58:10","modified_gmt":"2012-12-19T20:58:10","slug":"four-things-you-should-know-about-chesapeakes-new-chairman-and-board","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2012\/06\/22\/four-things-you-should-know-about-chesapeakes-new-chairman-and-board\/","title":{"rendered":"Four Things You Should Know About Chesapeake’s New Chairman and Board"},"content":{"rendered":"
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Joe Wertz \/ StateImpact Oklahoma<\/p>\n

Chesapeake Energy's Oklahoma City campus.<\/p>\n<\/div>

Chesapeake Energy on Thursday named its new chairman and debuted a reworked board of directors, bowing to\u00a0shareholders demanding increased oversight and a change in the Oklahoma City natural gas giant’s corporate leadership.<\/p>

The shake-up \u2014 which has been expected for weeks \u2014 is important to shareholders, and the changes could impact employees and ordinary Oklahomans.<\/p>

Here are four key takeaways.<\/p>

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1. This is a Historic Power Shift<\/h3>

CEO and company founder Aubrey McClendon no longer has control of the board.<\/p>

The majority of Chesapeake’s reconstituted board<\/a> was either selected or approved by its two largest shareholders, Southeastern Asset Management, and billionaire activist investor Carl Icahn.<\/p>

Together the shareholders own more than 20 percent of the company, which both think is undervalued<\/a>. But Southeastern and Icahn want Chesapeake to pay down its debt, sell assets and balance its books.<\/p>\n

“The thing I think they need to do is limit drilling to how much cash they have available. I don’t think the company needs to take on any more debt,” new director Bob G. Alexander tells<\/a> the Wall Street Journal<\/em>.<\/p><\/blockquote>\n

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ROBYN BECK \/ AFP\/GettyImages<\/p>\n

Fans arrive for Game 2 of the NBA Finals at the Chesapeake Energy Arena in Oklahoma City.<\/p>\n<\/div>\n

2. ‘Non-Core’ Assets Could be in the Crosshairs<\/h3>

Southeastern and Icahn also want Chesapeake to curtail spending on “non-core” assets, which includes more than $300 million in Oklahoma City real estate holdings. Chesapeake started off buying land near its OKC campus, which improved nearby neighborhoods. Now its local real estate holdings include high-end shopping centers beloved by locals.<\/p>\n

\u201cI think they\u2019ve totally reshaped that whole area of town,\u201d Roy Williams, CEO of the Greater Oklahoma City Chamber, told<\/a> Bloomberg’s David Wethe. \u201cNow, it\u2019s a destination.\u201d<\/p><\/blockquote>

Chesapeake also spends millions<\/a> on the Oklahoma City Thunder, which McClendon owns a 19 percent stake of. And some investors \u2014 like New York City Comptroller John C. Liu, who directs NYC’s pension funds, which hold 1.9 million Chesapeake shares \u2014 have taken issue with Chesapeake directing corporate funds to McClendon’s personal investments.<\/p>\n

Liu chided Chesapeake directors in a May 17 letter for \u201ccostly oversight failures,\u201d including the company\u2019s \u201cmulti-million dollar deals\u201d with the sports team partly owned by McClendon, Bloomberg reported<\/a>.<\/p><\/blockquote>

Chesapeake has defended its Thunder sponsorship and arena-naming agreement. And its investment in the team \u2014 and OKC in general \u2014 is championed by Oklahomans<\/a>, business and nonprofits<\/a>, and public officials throughout the state and its capital city.<\/p>\n

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