After a Reuters story last week questioned Chesapeake Energy’s (CHK) practice of allowing CEO Aubrey McClendon to take stakes in Chesapeake’s wells and then use those stakes as collateral for loans, the company initially took a defensive stance. But today, the natural gas giant said it would no longer allow McClendon to have a contractual right to take those 2.5% stakes once the agreement runs out on December 31, 2015. McClendon has also agreed to provide more info on those stakes:
“Following consultation with the company’s Board of Directors, Mr. McClendon will separately disclose supplemental information regarding the interests he has acquired through the company’s Founder Well Participation Program as of December 31, 2011. The company also announced the Board of Directors is reviewing the financing arrangements between Mr. McClendon (and the entities through which he participates in the FWPP) and any third party that has had or may have a relationship with the company in any capacity.”
The stock, which had fallen hard after the news first broke, is down about 2.3% this afternoon.