US gas giant Chesapeake Energy said it is replacing its embattled founder Aubrey McClendon as chairman of the board and will name an independent non-executive chairman in the “near future”.
McClendon will stay on as the company’s chief executive, Chesapeake said in a statement on Tuesday.
Chesapeake also said it is ending McClendon’s controversial well-participation perk that allows him to invest as a 2.5% partner in every new well the company drills.
The perk, known as the Founder Well Participation Programme (FWPP), has come under fire recently after it was revealed that McClendon had borrowed up to $1.1 billion to pay for his interest in the wells, using the profits of future wells as collateral. McClendon has been under increasing pressure since the financing scheme was revealed earlier this month.
The board of directors has renegotiated the terms of the FWPP and will terminate the programme on 30 June 2014, 18 months before the end of its current term.
McClendon will receive “no compensation of any kind” for the early termination, Chesapeake said.
The chief executive said he was “completely supportive” of the decision.
Pete Miller – chief executive of National Oilwell Varco who also serves as Chesapeake’s lead independent director – said the move was made in the interest of shareholders.
“We believe separation of the chairman and CEO roles will improve Chesapeake’s corporate governance and the early termination of the FWPP will eliminate a source of controversy, both of which should send a positive signal to the market and improve shareholder value,” he said in a statement.
The board’s Nominating and Corporate Governance Committee is considering potential candidates “with no previous substantive relationship with Chesapeake” and will look to shareholders for input on the new chairman.
The board also said it is reviewing the financing arrangements between McClendon and any third party that has had a relationship with the company in any capacity.