New York State Comptroller Thomas P. DiNapoli, who oversees the state’s common retirement fund, was one of several institutional investors who had called for leadership changes at Chesapeake Energy Corp.
He was pleased that shareholders on Friday voted against retaining two members of the Oklahoma City oil and natural gas company’s board.
“Today’s voting results are a rebuke to the failed leadership of the board of directors of Chesapeake Energy.
Given today’s decisive withhold vote against Chesapeake directors V. Burns Hargis and Richard K. Davidson, it is imperative that the board of directors accept their resignations. To fail to do so would be a direct contradiction of the clear will of a majority of shareholders.
The board should take immediate steps to implement the shareholder proposals that passed today, including proxy access and the elimination of supermajority voting. The days of an entrenched and unaccountable board structure at Chesapeake must be numbered.
In addition, the advisory vote on executive compensation sends a strong message that Chesapeake must overhaul its plan to align the interests of shareholders with management.”
The New York State Common Retirement Fund owned about 3.6 million shares of Chesapeake stock on June 1. Those holdings were worth about $57.2 million.
New York City Comptroller John C. Liu was another also had called on Chesapeake shareholders to vote out Hargis and Davidson, who made up the board’s audit committee.
“Today’s overwhelming vote of no-confidence in two directors was, in fact, a referendum on Chesapeake’s entire board and reflects its failure to protect the company and its shareowners. It will be up to the new board to take tangible steps to restore lost investor confidence and exercise independent oversight of management. An immediate step would be to adopt the proxy access proposal, which a wide majority of shareowners supported today.”
Liu’s office proposed the proxy access measure, which received support from 60 percent of Chesapeake shareholders in Friday’s vote.