Chesapeake Founder Gets Payout as He Builds New Company
Chesapeake Energy Corp. (CHK) former Chief Executive Officer Aubrey McClendon will be paid $11.1 million in cash after leaving the company he founded 24 years ago. McClendon is already seeking assets as he builds a new oil and natural gas company.
The terms of McClendon’s separation agreement also will entitle him to a 28.125 percent interest in a Citation X aircraft through the end of 2016, the Oklahoma City-based company said in a filing with the U.S. Securities and Exchange Commission today.
McClendon, 53, stepped down on March 29 after a shareholder revolt led by Carl Icahn and Southeastern Asset Management Inc. In an April 16 e-mail to industry contacts, McClendon announced he has formed American Energy Partners LP, an Oklahoma City- based enterprise that he wants to build into a “substantial” exploration and production company.
“I will be looking for deals with a lot of drilling left on them and will also consider undeveloped acreage,” McClendon wrote in the e-mail, first reported yesterday by The Oklahoman newspaper. “I am not scared of natural gas.”
McClendon didn’t respond to requests for comment about his new company.
McClendon was stripped of his chairmanship and stepped down as CEO after questions were raised about his use of personal stakes in company-owned wells to obtain more than $800 million in private loans. A board review of the transactions cleared him of any intentional wrongdoing in February.
The company today reiterated that McClendon still will buy stakes in every well Chesapeake drills before June 30, 2014.
The man who was ranked 389th in Forbes magazine’s list of the wealthiest Americans last year began his career as a “land man,” acquiring drilling rights for properties that may hold oil or gas. He formed Chesapeake with Tom Ward, now the CEO of SandRidge Energy Inc. (SD), with a $50,000 investment in 1989.
Thomas S. Price, Chesapeake’s senior vice president for corporate development, will work with McClendon at the new venture, Price told The Oklahoman in an interview this month. Price’s departure was announced the same day the company said Henry Hood, senior vice president for land and former general counsel, will be leaving.
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