NYS Comptroller DiNapoli Letter: Chesapeake Needs New Board

Anti-drilling New York State Comptroller Thomas DiNapoli is once again going after Chesapeake Energy. Like many Democrats, he’s not one to waste a good crisis. You may recall that DiNapoli previously scolded Chesapeake over its Founders Well Participation Program (FWPP) that allowed CEO Aubrey McClendon, the guy who founded the company, to participate in each well drilled, with up to 2.5 percent ownership (see this MDN story).

Now that the board has rescinded the FWPP program after next year, DiNapoli needs something else to target, so he’s lobbying to have a new board of directors installed and sent an open letter to shareholders calling for just that (see the letter embedded below).

DiNapoli is the sole trustee in control of the New York State Common Retirement Fund—the state’s huge pension fund of some $140 billion of investments. The pension fund owns 3 million shares of Chesapeake stock—just a sliver really, when compared to Carl Icahn’s 7.56 percent (50 million shares). But DiNapoli holds a very visible and high political office in one of the largest states in the country. So when he issues his press releases and letters, they get noticed.

DiNapoli is calling for a “board overhaul” and he says that starts with voting against the two board members who are standing for re-election on Friday, June 8: V. Burns Hargis and Richard Davidson. DiNapoli says both board members have failed shareholders. He’s not the only one calling for a vote against them. Will they be re-elected? We’ll know in a week.

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