Chesapeake's Controversial CEO McClendon Stepping Down
Chesapeake Energy's (NYSE: CHK) CEO, Aubrey McClendon, will retire from the company, effective April 1. McClendon was once the CEO and Chairman; he vacated the Chairman role last year after he came under fire for some agreements he had entered into with the company.
Benzinga named him one the most controversial CEOs last week, noting:
Chesapeake's founder and CEO makes the list for his aggressive nature. In 2008 he received a massive margin call after making aggressive bets on his company's stock with borrowed money.
Despite having most of his Chesapeake stake wiped out due to his reckless speculation, McClendon was one of the highest paid CEOs on Wall Street in 2008. The executive's reputation for brashness was only solidified in 2012 after a special report from Reuters revealed that he had borrowed $1.1 billion to make personal investments in wells drilled by Chesapeake.
Under a special benefit program, known as the Founder Well Participation Plan, McLendon was given the opportunity to personally earn 2.5 percent of the profits in every well that Chesapeake drilled, as long as he payed for 2.5 percent of the expenses. Longtime analysts and shareholders were in the dark about the loans.
Particularly shocking was the fact that the loans themselves were collateralized by the very same wells he was investing in, opening up serious conflict of interest questions. The fallout from the report burnished the perception on Wall Street that McLendon runs Chesapeake more like a personal fiefdom than a publicly traded natural gas company.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.