Chesapeake's Corporate Chessboard

The embattled gas and oil driller Chesapeake Energy Corp. announced a board overhaul early Monday, promising to add four new directors suggested by big shareholders in addition to the new and independent chairman it expects to name by June 22.

Investors applauded, sending shares up more than 6 percent (and an additional 3 percent Tuesday morning). But the new plan will require some complex choreography.

First, some numbers: Chesapeake is now committed to adding five fresh faces to its nine-member board, and has said it will not expand the group beyond nine. That means that at least four current directors must step down. The question is, which ones?

Not Aubrey McClendon. The company's beleaguered founder and CEO, while prepared to relinquish his chairmanship as soon as a replacement is found, has no plans to step off the board, according to Monday's press release and people familiar with the matter — despite calls by some shareholders and analysts to resign his post entirely. (McClendon has been dogged in recent months by revelations that he ran a hedge fund for four years that invested in natural gas alongside his work as Chesapeake's CEO, as well as by details about loans he received from parties that were also doing business with Chesapeake, some of which were used to help fund McClendon's investments in company wells.)

Louis Simpson, the former Geico insurance official who was named to Chesapeake's board last year at least partly at the behest of Southeastern Asset Management, the driller's largest shareholder, is also expected to stay, according to these people. (SEAM has not responded to multiple requests for comment.)

So what of this year's elections? Former Union Pacific railroad chief Richard Davidson and Oklahoma State University President Burns Hargis are up for reelection this year and may stay on even if shareholders reject them (more on that in a moment). And Charles Maxwell, the Weeden & Co. energy analyst, is set to retire Friday, leaving open a seat that, according to Monday's press release, will be filled by the incoming chairman.

That still leaves four seats yet to be vacated in this game of boardroom musical chairs. Logic suggests that natural-gas entrepreneur Kathleen Eisbrenner, National Oilwell Varco CEO Merrill "Pete" Miller, former Senator Don Nickels, and former Governor-cum-banking lobbyist Frank Keating are likely to step down, since McClendon and Simpson aren't going anywhere and Davidson and Hargis are running for reelection. But don't jump to conclusions yet, because there's a wrinkle, according to the people familiar with the matter: Chesapeake is reluctant to part with Miller, who sits on the board's audit committee (which is in the midst of an investigation of McClendon's financial affairs) and was only recently named the company's lead independent director.

So where will the additional opening come from? Let's revisit the subject of Davidson and Hargis. Under Chesapeake's board practices, in order to be reelected by shareholders, both directors need more than 50 percent of the vote at Friday's annual meeting in Oklahoma City if they are to continue — an outcome that is not at all a sure thing in the current environment. But even if Davidson and Hargis glean less than half the votes — a scenario that would force them to tender their resignations — the board is not obliged to accept those pink slips, meaning that they could be permitted to stay on regardless of what shareholders think. Then again, if they are both reelected, one will likely have to step down anyway, in order to make room for Miller and four new nominees.

Reached Tuesday for elaboration, a Chesapeake spokesman shed little light on the situation. "Our press release speaks for itself, and this will all become clear on or before the 22nd of June," he said.

One thing, however, is now very clear: Chesapeake's attempts to freshen up its board are throwing investors into an even deeper quagmire of confusion.

Kate Kelly is a CNBC reporter. Follow her on twitter @katekellycnbc

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