Shareholder confidence in Chesapeake Energy Corp. sank to its lowest point since the 2008 global economic meltdown as company directors reversed course on the need to examine Chief Executive Officer Aubrey McClendon’s personal financial transactions.
Chesapeake’s board, propelled by a plunging stock price and potential conflicts between McClendon’s personal finances and corporate duties, said yesterday it would end a program allowing its chairman and CEO to buy stakes in the company’s wells and review loans McClendon obtained by using those investments as collateral.
Chesapeake fell 3.1 percent yesterday to $17.56 in New York.
His share of such costs was $973 million for the 2009 to 2011 period, the company said in an April 20 filing.
The recent decline in Chesapeake’s stock price is reminiscent of late 2008, when McClendon was forced to sell almost all his stock in the company to meet margin calls. McClendon dumped millions of shares over the course of a few days, accelerating a freefall in October and November 2008 that wiped out more than half the company’s market value.