NEW YORK (AP) -- Aubrey McClendon said Tuesday he's giving up the chairmanship of Chesapeake Energy Corp. following shareholder complaints that his personal business interests could conflict with those of the company he runs.
The Chesapeake founder will remain as CEO. The company's board said it's searching for a non-executive chairman.
As part of his compensation package, McClendon was allowed to purchase stakes in the oil and gas company's wells. Investors have long complained about the program and the freedom Chesapeake's board has allowed McClendon to pursue his personal interests.
Those complaints intensified last month following reports that McClendon took out more than $1 billion in loans to pay for his stake in the wells. He got the money from a group that Chesapeake was negotiating to sell assets to. That raised concerns that McClendon's private dealings with the group could have influenced Chesapeake's decision to sell those assets.
McClendon puts the principal amount of the loans at $846 million.
Chesapeake is the second-largest U.S. natural gas producer behind Exxon Mobil Corp. Chesapeake shares, already depressed because of a sharp drop in natural gas prices, fell sharply after the loan disclosure. They surged 7 percent in Tuesday morning trading to $19.72.
The board of directors said Friday that candidates for the non-executive chairman's position will have "no previous substantive relationship with Chesapeake." It's ending the well-investment program on June 30, 2014, 18 months ahead of its previously planned end date, to "eliminate a source of controversy." The board also is reviewing McClendon's loans.
"I am completely supportive of the board's plans," McClendon said in a statement. The actions will "enable me to focus my full time and attention on execution of the company's strategy."
Chesapeake's largest shareholder applauded the decision to remove McClendon as chairman and end its special investment program.
"Aubrey was right to recognize that these actions are in the best interests of the company and its shareholders," said O. Mason Hawkins, chairman and CEO of Southeastern Asset Management.
Chesapeake has denied the well-investment program created any conflict of interest. It said McClendon negotiated the loans separately and did not participate in negotiations on the asset sale.
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