Chesapeake Energy Corporation (NYSE:CHK) has issued a press release in which it states that its founder and CEO, Aubrey McClendon, will retire on April 1. Shares are sky-rocketing on the news, as investors seem to be relieved that McClendon, who was involved in many questionable activities is leaving. Shares of Chesapeake Energy Corporation (NYSE:CHK) are up over 11% in after hours trading.
In a press release issued on Tuesday afternoon, Chesapeake Energy Corporation (NYSE:CHK) announced that its Co-founder, Chief Executive Officer (CEO) and President, Aubrey K. McClendon, has agreed to retire from the Company on April 1, 2013 and will continue to serve as Chief Executive Officer until his successor is appointed. Mr. McClendon, 53, has served as Chesapeake`s Chief Executive Officer since the inception of the Company in 1989 and served as Chairman of the Board from its founding until 2012.
The decision appears to be made by the Board of Directors and is likely a result of differences in strategic perspectives for CHK. Mr. McClendon cited "philosophical differences" with the new Board.
While this is somewhat a surprise, Mr. McClendon has been put under a microscope by investors and the media with regards to his personal financial arrangements that have been perceived as conflicts of interest with his role as a CEO of CHK.
The Board has also indicated that the company will release the results of its review of Mr. McClendon's personal financial arrangements related to his Founders Well Program in the 4Q12 results report. However, the Board indicated that it had not found any improper conduct to date.
No one knows what McClendon plans to do, but right now it appears unlikely that he will end up in federal penitentiary.
Analysts at Raymond James expect the news to positively impact Chesapeake Energy Corporation (NYSE:CHK) shares as investors look for the management changes to bring better operational and financial discipline.
Carl Icahn, famous activist, and one of the largest shareholders, has responded to the news with the following statement:
“Aubrey has every right to be proud of the company he has built, the world class team of people at Chesapeake and the collection of assets he has assembled, which in my opinion, are the best portfolio of energy assets in the country. While it is known that some of these assets will be sold by the company in due course, I do not believe that this will in any way effect the ultimate realization of Chesapeake’s potential.
“I am confident that history will prove that Aubrey has been correct about the value of natural gas in general and the value of Chesapeake in particular.”
Disclosure: No position