By Matthew Goldstein and Jennifer Ablan
You gotta give credit to O. Mason Hawkins and Carl Icahn, the unlikely partnership that managed to get some important concessions from Chesapeake Energy Corp., the embattled natural gas company. But when it comes to public pensions that also own stock in Chesapeake, it’s a far different story.
The head of Southeastern Asset Management and the billionaire activist trader came together to get Chesapeake to agree to shake-up its board and allow the pair to name four new independent directors on the company’s nine-member board. And for the most part, Hawkins and Icahn managed to wrest that change from Chesapeake without much help from public pensions that own shares in the Oklahoma-based company.
The move is an attempt by Chesapeake to deal with criticism shareholder anger that company long has been to forgiving to the wheeling-and-dealing of its chief executive Aubrey McClendon.
It’s not clear yet whether the board shake-up will be enough to right the ship at Chesapeake, which has been reeling ever since the Reuters’ reporting duo Brian Grow and Anna Driver broke the news that McClendon had secured more than $1 billion in loans from a company doing business with Chesapeake. McClendon got the loans to continue to participate in a well drilling program the company offered as a perk to its co-founder.
Still, it’s a start and to be fair there were plenty of skeptics about Hawkins and Icahn–see Sam Forgione’s excellent profile on Hawkins and our take on Icahn’s early public flirtation with Chesapeake.