The Greedsters Sequels: ONE OF WORLD'S RICHEST MEN GETS DEMOTED

Thursday, May 3, 2012

ONE OF WORLD'S RICHEST MEN GETS DEMOTED

WSJ - 5/3/2012 Founder, Board Chairman, and CEO Mr. Aubrey Mclendon of Chesapeake Energy Corporation was dealt a blow by his Board of Directors when they voted to replace him as Board Chairman without an immediate replacement. As a leader in the recent gas-drilling frenzy and fracking of shale formations to release trapped gas and oil, Mr. McClendon had a neat deal with the company that allowed him to purchase a 2 1/2% share in every well drilled by the company. That right was terminated when he stepped down on Tuesday, May 1 as Chairman. Talk about sweet-heart deals: In the first full year of his right to buy into new wells, Chesapeake drilled 19 wells. In 2011, they drilled nearly 1,700 wells, and Mr. McClendon's personal cost of the 2 1/2% of each well was $457.2 million. He borrowed money from private sources - as well as from Chesapeake without the Board being fully informed. It's another example of misuse of a financial position when being CEO and Board Chairman. More and more companies are finally realizing the financial risk of the dual voting positions of CEO and Board Chairman. being the same person.

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