Chesapeake investors triumphant
Chesapeake Energy took another beating at its 8 June AGM as shareholders sided against the board on a number of proposals.
80% of shareholders rejected the executive remuneration plan and 69% did not support the company’s LTIP. PIRC had recommended shareholders vote against both proposals. Directors Hargis and Davidson, the only two directors up for election, agreed to step down from the board after receiving 74% and 73%, respectively, of votes cast against their re-appointments. Both directors were members of the audit committee that permitted CEO Aubrey McClendon to borrow over $1billion in loans from the company’s treasury. PIRC had advised shareholders to abstain on Hargis’ re-election and vote for Davidson’s re-appointment to the board.
Though the measure did not pass due to failure to acquire the two-thirds of votes needed to approve a bylaw amendment, the board has agreed to adopt majority voting. It has also become the second US Company to pass the shareholder proposal on proxy access after receiving 60% of shareholder support. Prior to the AGM the company agreed to reconstitute its board of directors by adding a new independent non-executive chairman and four new independent directors recommended by shareholders over the next two weeks. All directors will stand for election at the company’s 2013 AGM due to the board’s adoption of majority voting. PIRC had also advised shareholders to vote in favour of the shareholder resolutions on majority voting and proxy access.