Is Chesapeake Giving McClendon the Boot?

Chesapeake Energy Corp (NYSE:CHK) has bowed to popular demand, announcing Tuesday that it will replace Chairman Aubrey McClendon, as well as terminate its controversial Founders Well Participation Program, through which McClendon was granted minority stakes in Cheasapeake’s oil wells. McClendon will maintain his position as chief executive.

The company announced Tuesday it is looking for an independent and non-executive chairman to replace McClendon on the board.

Though he would continue as chief executive, McClendon would receive no compensation for the termination of the FWWP, the company said. Reuters reported a few days ago that McClendon had used his well stakes as collateral for obtaining personal loans totaling roughly $1.1 billion.

The U.S. Internal Revenue Service was also reported to be reviewing McClendon’s ownership of the well stakes.

“We believe separation of the chairman and CEO roles will improve Chesapeake’s corporate governance and the early termination of the FWPP will eliminate a source of controversy, both of which should send a positive signal to the market and improve shareholder value,” Merrill “Pete” Miller, Jr., Chesapeake’s lead independent director, said in a statement.

In a rare statement, reclusive investor O. Mason Hawkins said, “We are pleased that the Board has listened to our input and believe it has made the right decision by ending the FWPP early and seeking an independent chairman.” Hawkins owns Southeastern Asset Management, which holds a 13 percent stake Chesapeake and is its largest shareholder.