Chesapeake Energy Corp. (IW 500/104) CEO Aubrey McClendon will relinquish his position as company chairman and discontinue his participation in a well-investment program 18 months early amid an Internal Revenue Service review of the compensation plan, the company said Tuesday.
The company's board of directors will name an independent, nonexecutive chairman. McClendon will serve as chairman until the board names his replacement, the company said.
McClendon will end his participation in the Founder Well Participation Program on June 30, 2014, instead of the current term scheduled to close on Dec. 31, 2015.
McClendon will not receive any compensation in connection with the program's early termination.
The moves come after Reuters news service detailed in a lengthy special report on April 18 how the Chesapeake chief executive used his stake in the well program to secure $1.1 billion in loans over the past three years.
The program was approved by shareholders for a 10-year term in 2005 as part of McClendon's employment agreement with the company.
The company's largest shareholder Southeastern Asset Management issued a statement saying it's "pleased" about the board's decision to end the well program early and seek an independent chairman.
"Aubrey was right to recognize that these actions are in the best interests of the Company and its shareholders, said O. Mason Hawkins, chairman and CEO of Southeastern Asset Management. "We support management's continuing efforts to unlock and deliver the value embedded in Chesapeake's assets."
McClendon also said he's supports the board's decisions. .
"This action reflects our determination to uphold strong corporate governance standards and will also enable me to focus my full time and attention on execution of the company's strategy, the implementation of our transformation into a major oil producer and the completion of our asset monetization and joint venture objectives, McClendon said.