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"Mr. McClendon's interests and Chesapeake's (CHK) are completely aligned," says the firm,...
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Wednesday, April 18, 2012, 8:37 PM ET"Mr. McClendon's interests and Chesapeake's (CHK) are completely aligned," says the firm, responding to this morning's story. "The suggestion of any conflicts of interest is unfounded." The Board of Directors: "The BOD is fully aware of the existence of Mr. McClendon's financing transactions and the fact that these occur is disclosed in the proxy." The Q&A makes for a good read for those interested in corporate governance.
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This news story has 31 comments:
For an investor it means that the stock see's extreme valuations, both high and low. Your job is to harvest the inevitable lows.
One thing you shouldnt forget is that CHK has valuable assets. As the heat gets turned up on the board, CHK could be put into play!
PS The Board would kneel down and ask Aubrey what he wants. They would out of self preservation perhaps cut him off from additional funds before asking however. In the not so old days they agreed to buy his art investments in hard times.
This is really a non issue. Imho someone wants more money, went to a lawyer and is ready to sue. In fact i got a message from a law firm ready to launch a class action. They had a website up within hours.
Aubrey, like all people, does not, by law, have to disclose their personal interests. Since its fairly clear there is no conflict, and since the recent martha stewart case hold as precedent, this is a non issue.
All i hear are the legal time clocks cranking fees, ugh.
Very disappointing. Maybe the price will go low enough so someone will take them over and get rid of this self serving board and management.
E
The numbers involved are simply absurd. If he wants, he can resign and convince people to lend him money and he can form a private firm and pay himself all the profits!!
Its not a surprise - after all this board bought MAPS of his when he was hard up for cash... whats a billion or so in sweetheart loans?
In this day and age, how many people would stay employed running a personal business from work?
If he gets 2.5% out of every well CHK drills, then his interest is clearly to drill as many wells as possible. The glut in shale natural gas has driving the price to yet uncharted bottoms, thus significantly hurting CHK profitability. Here is where I see the conflict of interest; he gains by hurting company revenues.
And lets face it - what business did the board have buying his maps???
I know of no other similar company that offers this give-away to their CEO - I would think that getting a few million a year would be enough to ensure he concentrates on his responsibilities to shareholders.
If your company offered you a 2.5% stake in the office they were building, and you sold your portion to a third party, does that hurt your company? No, there is just someone else responsible for the costs, and who gets the revenue.
I have still yet to see a logical argument for how this creates a conflict of interest.
The maps have nothing to do with the FWPP. That's done and over with, and you are just using it as a negative mark to prove a point.
So it creates a situation where he could be making decisions that benefit him/live up to his personal commitments - but that are bad for shareholders.
And the maps have everything to do with pointing out the board is severely derelict in their duties.
He has to go. Then he can go form his own personal company and play by his own rules.
You do know that he can not cherry pick, CKH invests then he must, if he sells that doesn't mean CHK does... Since he must invest in every well, which ones stay on and off don't make a difference. There is no conflict.
the maps are old news, get over it. So is his reckless buying stock on margin. I am not defending their past performance, I am just over it and looking forward. We all learn from mistakes.
This was his company, he built it from scratch. His only mistake was not going the way of Facebook, Google, Groupon and keeping control of his company.
It stopped being his company when he went public.
He is more than free to resign and start his own private firm and do whatever he'd like with it.
He hasn't learned anything from his mistakes. And in effect all these side investments are all taking place on shareholder's dime - we aren't getting his undivided attention as CEO - but I didn't notice him giving back any money to the company for time spent elsewhere?
And the maps are exactly what is wrong with corporate governance. The entire board should be fired for that and frankly brought up on charges of neglecting their fiduciary duties.
I'm not fan of these folks "occupying" various cities - but I understand where the feelings stem from - and this clown is a good exhibit of why folks are fighting mad. Two sets of rules.
I think you fully realize that there really is no conflict, just as for the past 20+ years shareholders haven't thought so...
Only now with stock prices continuing to fall do they have a problem.
You are right he is free to resign, and take his huge lifetime compensation package (I don't think the company wants this right now).
The maps issue is done and over with, shareholders sued and won, and Aubrey bought them back. The reality is that we all knew it was more of a loan than CHK buying the maps.
No this clown is not a good exhibit of why folks are fighting mad, the government is doing a good job of that, the 99% are too busy collecting their check to notice.
Many people have two jobs, or more than one business, that are in similar fields. It sounds like media hype to me, but I will do more research.
McClendon and his team has changed the energy picture for the US.
The government didn't do it, XON and CVN and COP didn't do it. CHK and similar companies will blaze the trail to US energy independence.
I don't care what he sucks out of the company.....my heating bills are a lot lower becauseof him.