Icahn and Southeastern Win: Chesapeake to Shake Up Board
Chesapeake Energy (NYSE: CHK) has announced that has agreed to requests from Southeastern Management and Carl C. Icahn and Associates to open up its board to new members. In this announcement, the company has said that the activist shareholders have won a total of four board seats, three being for designees of Southeastern and one for either Icahn or a designee of his choosing.
The news comes on the back of Icahn's recent revelation that he is the second largest holder of Chesapeake, after Southeastern. Southeastern's Chairman and CEO, O. Mason Hawkins, said that they are pleased that Chesapeake is willing to listen to its shareholders and that, "these steps to reconstitute the board will enhance oversight and provide greater accountability."
The announcement came just before Chesapeake's annual meeting on June 8. Four existing board members are resigning, and Chesapeake is still searching for a fifth to fill the non-Executive Chairman role. A search which is expected to end on June 22, the five board seats will be changed in the near future.
At the annual meeting, shareholders are set to vote on a measure for the majority voting of directors. If this passes, the company announced that this would apply to 2012 results. Further, Chesapeake is pushing to be exempted from an Oklahoma law requiring classified boards, meaning that in 2013, shareholders can vote on all members directly.
This is good news for shareholders, as now the company will be have a more open management board and a a greater voice in how it is run. Icahn is quoted as saying, "We appreciate the board's willingness to listen to shareholders and to respond appropriately. Under Aubrey's leadership, Chesapeake has assembled has assembled great assets and I am confident I can help the company create significant shareholder value from these assets."
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