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Analysis: Which Chesapeake board members will survive purge?

Chesapeake Energy Corp. is leaving everyone guessing as to who is staying and who is going after announcing the company will replace four board members at the urging of its two largest shareholders.
BY JAY F. MARKS Published: June 6, 2012

More than half of Chesapeake Energy Corp.'s board will be replaced in the coming weeks after the company bowed to pressure from its two largest shareholders, but it's unclear which members will be leaving.

Chesapeake will replace four board members, while adding a new independent chairman with no prior ties to the company.

To accommodate the new board members — who will be nominated by Southeastern Asset Management and activist investor Carl Icahn — four current members will resign their positions, Chesapeake announced Monday.

The company didn't offer any details about which board members would be stepping down, and a Chesapeake spokesman did not respond to a request for comment.

“It's almost like watching a soap opera,” said Oppenheimer analyst Fadel Gheit, who declined to speculate on who might be leaving the Chesapeake board. “It's not really an analyst's job.”

Gheit said the only Chesapeake board member he knows is Charles T. Maxwell, a fellow energy analyst.

Maxwell is leaving the board since 80 is mandatory retirement age, but his spot appears to be earmarked for a new independent chairman.

CEO Aubrey McClendon is being replaced as chairman of the company he co-founded with SandRidge Energy Inc. CEO Tom Ward in 1989, but there has been little indication the company's critics want to see him replaced as the company's chief executive. He will remain on the board and as company CEO.

Gheit said only one of Chesapeake's nine-board members appears to be safe from the panel's pending makeover.

Former GEICO executive Lou Simpson was added to the Chesapeake board last summer at the urging of Southeastern Asset Management, Chesapeake's largest shareholder.

“He's the only protected member of the board right now,” Gheit said.

The two most endangered board members could be Oklahoma State University President Burns Hargis and former Union Pacific Corp. executive Richard K. Davidson.

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