BUSINESS:

Amid financial probe, Chesapeake CEO announces retirement

Chesapeake Energy Corp.'s embattled co-founder and CEO Aubrey McClendon has announced he will retire this spring.

He will officially step down April 1 and will continue to serve as CEO until his successor is selected, the Oklahoma City-based gas firm announced yesterday.

The announcement comes months after reports of McClendon's massive personal debts first surfaced, casting a shadow over his fitness as a leader and prompting an overhaul of the gas giant's board, led by top investors Southeastern Asset Management Inc. and billionaire Carl Icahn (EnergyWire, June 11, 2012). Next month, Chesapeake's directors plan to release the results of a previously announced probe of McClendon's financial dealings, the company said.

"While I have certain philosophical differences with the new board, I look forward to working collaboratively with the company and the board to provide a smooth transition to new leadership for the company," McClendon said in a statement.

The company has recruited Washington, D.C.-based executive search firm Heidrick & Struggles to help find McClendon's replacement. The board will consult McClendon during the process, and internal and external candidates will be considered, Chesapeake said.

McClendon will continue to hold Chesapeake stock, and as part of the company's controversial Founder Well Participation Program, he will continue to hold interest in certain Chesapeake wells (EnergyWire, May 2, 2012). The program, which drew scrutiny when reports revealed that McClendon had borrowed against his well stakes to pay for them, ends June 30, 2014.

He leveraged lavish personal expenditures, including flights for friends and family, using company funds and perks, disclosures have shown. To compensate, McClendon recently declined his 2012 bonus and offered to repay Chesapeake for excessive personal use of the company jet (EnergyWire, Jan. 9).

According to Chesapeake, the board's investigation has not revealed any wrongdoing by the outgoing CEO.

"Chesapeake is at an important transition in its history, and Aubrey and the board of directors have agreed that the time has come for the company to select a new leader," said Archie Dunham, who replaced McClendon as chairman of the Chesapeake board in June, as part of the panel's reshuffling (EnergyWire, June 22, 2012). "The board will be working collaboratively with Aubrey to make a smooth transition to Chesapeake's next chief executive officer."