Chesapeake Energy Corporation : Investors want Chesapeake annual meeting delayed
05/16/2012| 04:28pm US/Eastern
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(Reuters) - Shareholders have asked a judge to delay Chesapeake Energy Corp's annual meeting, arguing that more disclosures are needed about Chief Executive Aubrey McClendon's compensation and personal loans taken out against his share in company wells.
Investors need more information to make "an informed vote" on three shareholder proposals and the re-election of Richard Davidson and Burns Harris to the board of directors at the meeting planned for June 8, said the motion filed in U.S. District Court in Oklahoma City, Oklahoma.
Reuters reported on April 18 that McClendon had arranged loans totaling $1.1 billion where his interest in thousands of wells granted as a corporate perk were put up as collateral.
The bulk of the loans were made by EIG Global Energy Partners, an investment firm that also provides significant amounts of funding to Chesapeake. Both situations could put McClendon's interests at odds with shareholders, analysts and academics said.
Since the Reuters investigation, Chesapeake and McClendon have expanded their disclosures about his well interests and the program that grants him 2.5 percent of every well the company drills. The program, called the Founders Well Participation Program (FWPP), will be terminated 14 months early.
A spokesman for Chesapeake said the meeting schedule had not changed.
That motion to postpone Chesapeake's annual meeting was made as part of a lawsuit filed in April seeking more disclosures about the FWPP.
Shares of Chesapeake fell 4 percent on Wednesday to close at $14.04.
The case is Deborah Mallow v. Chesapeake Energy Corp, U.S. District Court, Western District of Oklahoma No. 12-436.
(Reporting by Anna Driver; Editing by Tim Dobbyn)
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