Aubrey K. McClendon, Chesapeake Energy’s audacious chairman and chief executive, has ridden the busts and booms in natural gas like a rodeo cowboy. He became a billionaire as the company he co-founded aggressively outbid competitors for land leases and drilled highly productive wells in virtually every major shale gas field in the country. And he acquired trophy assets like an N.B.A. team and a $12 million antique map collection.
But Mr. McClendon also borrowed heavily, with loans currently of $846 million, to finance his participation in an unusual compensation plan that allowed him to invest alongside Chesapeake in every well that it drilled, sharing in both the profits and the expenses.
Now Mr. McClendon may be about to tumble off the bucking bronco. Record low natural gas prices are undermining the value of the company’s investments and his own. Chesapeake announced on Thursday that it was phasing out the contentious compensation plan and undertaking a review of Mr. McClendon’s financial relationships with outside parties.
And a growing chorus of criticism about Mr. McClendon’s risk-taking management style and his compensation could force further changes at the company, the nation’s second-largest producer of natural gas, after Exxon Mobil .
The Securities and Exchange Commission has begun an informal inquiryinto Mr. McClendon’s financial arrangements. Some analysts have called for the company to appoint an independent board chairman.
Standard & Poor’s downgraded Chesapeake’s debt further into “junk” territory on Thursday, warning that “turmoil resulting from these developments could hamper Chesapeake’s ability to meet the massive external funding requirements stemming from its currently weak operating cash flow and continuing aggressive capital spending.”
Chesapeake shares fell more than 3 percent on Thursday to close at $17.56. Over the last year, the stock price has swooned by 45 percent.
The shares of other prominent gas explorers like Encana and Southwestern Energy have also been battered by low prices for the fuel. But Chesapeake, based in Oklahoma City, has come under particular criticism because of Mr. McClendon’s strategy of borrowing vast sums of money to buy land and drill wells and the passive attitude of the company’s board, which has repeatedly deferred to his personal financial interests.