McClendon Out at Chesapeake

Chesapeake Energy Corp.'s (NYSE: CEO) CEO Aubrey McClendon is leaving the company he co-founded in 1989, citing "philosophical differences" with Chesapeake's board. Until last year, there would have been no such differences because the company's board was merely a rubber stamp for McClendon.

In the announcement of McClendon's departure, the board's chairman said that results of the internal review of McClendon and the companies he controls that allow him to participate as a part-owner of certain wells will be announced on February 21. That program led to McClendon's downfall because it forced him to give up his board chairmanship and to add independent directors to the board.

The philosophical differences likely had to do with giving up Chesapeake's practice of acquiring massive lease positions in potential gas fields and then flipping some of the leases to other companies to pay down the acquisition costs. The company sold off more than $13 billion in assets last year on its way to bringing its debt under control.

The more independent board probably wants to consolidate its holdings and then run a nice, steady, cost-conscious exploration and production company. Such an operation is of no interest to McClendon, and he no longer had a tame board to acquiesce to his every wish.

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