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"Mr. McClendon's interests and Chesapeake's (
) are completely aligned," says the firm,
to this morning's
. "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
makes for a good read for those interested in corporate governance.
View news story
I might perhaps have misunderstood the entire issue here, but I do not think the financial technicalities of McClendon's loan are really the problem.
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.
Apr 19 04:14 AM
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