New York State Common Retirement Fund will vote its 3.51 million shares of Chesapeake Energy Corp. against two directors seeking re-election at the company's annual meeting June 8., confirmed Eric Sumberg, a spokesman for New York State Comptroller Thomas DiNapoli, the sole trustee of the $150.3 billion fund.
The shares are worth about $50.4 million, Mr. Sumberg wrote in an e-mail. That's less than 1% of the company's $10.8 billion market capitalization.
“Chesapeake's falling share price and current financial condition are reason enough to withhold votes from the entire board of directors,” Mr. DiNapoli said in a letter to Chesapeake shareholders made public on Tuesday. “However, since only two directors are up for re-election this year, our withhold votes against V. Burns Hargis and Richard K. Davidson should be viewed as a proxy for the performance of the entire board.”
Mr. Hargis is chairman of the board's audit committee, and Mr. Davidson is a member of the audit committee. The board has a total of nine members.
On May 17, New York City Comptroller John Liu sent a letter to Chesapeake shareholders saying he would vote the $121.9 billion city pension system's 1.9 million Chesapeake shares, worth about $31.7 million, against Messrs. Hargis and Burns.
Chesapeake responded to Mr. Liu's criticism on May 23 with its own letter to shareholders, saying it has made “significant changes” in the company's executive compensation program and revised its compensation for outside directors.
The letter said the board is separating the roles of chairman and CEO, both currently held by Aubrey McClendon, and is searching for an independent non-executive chairman “with no previous substantive relationship with Chesapeake.”