Chesapeake Energy Corp. tapped its head of finance, Domenic “Nick” Dell’Osso, to serve as its new CEO, ending the search to replace former CEO Doug Lawler after he left the Oklahoma City-based E&P company in April.
In a company release on Oct. 11, Chesapeake said its board of directors had unanimously voted to appoint Dell’Osso as president and CEO and a member of the company’s board, effective immediately. Mike Wichterich, who served as interim CEO, will assume the role of executive chairman.
“Chesapeake’s future is bright, and following an extensive search, it was clear to the board that the unique combination of Nick’s vision and experience make him the right person to lead our company,” Wichterich commented in the release.
Chesapeake, once the second largest natural gas producer in the U.S., emerged from bankruptcy in February 2021. Under its court-approved plan of reorganization, approximately $7.8 billion of the company’s debt had been equitized and its preferred and common equity interests cancelled.
Commenting on the departure of the company’s previous CEO, Wichterich said in May that Lawler had not left because of any action and that the company’s strategy was unchanged, according to a Reuters report. He added that the Chesapeake board wanted a fresh start as it emerged from bankruptcy.
“The board and I look forward to working in partnership with Nick and the management team to build on the recent momentum we have enjoyed as a company, and responsibly deliver sustainable results for our shareholders,” Wichterich said in the Oct. 11 release.
Dell’Osso previously served as executive vice president and CFO of Chesapeake since November 2010. Prior to that, he served as vice president of finance and CFO of Chesapeake Midstream Development LP from August 2008 to November 2010.
Before joining Chesapeake, Dell’Osso was an energy investment banker with Jefferies & Co. from 2006 to 2008 and Banc of America Securities from 2004 to 2006.
In a statement commenting on his appointment, Dell’Osso said he is honored to have been selected to lead Chesapeake and implement the company’s vision for “differential returns and a sustainable future.”
“I am confident Chesapeake’s best days lie ahead of us and look forward to working tirelessly with my colleagues to generate and return to our shareholders sustainable free cash flow while aggressively lowering our emissions profile,” he said in the release.
Concurrently with Dell’Osso’s appointment, Chesapeake also announced revisions to the company’s executive compensation program. Several significant changes, according to the company release, include:
- Program Goal: Designed to attract, retain, and appropriately reward top talent while ensuring strong alignment between executive compensation and performance metrics that directly drive shareholder value.
- Long Term Incentive Program (LTIP): Paid entirely in equity with 75% of the award value linked to total shareholder returns.
- Annual Incentive Plan (AIP): Focused on the value drivers and discipline that our shareholders value including environmental and safety excellence, delivering free cash flow, lowering per unit operating costs, enhancing capital efficiency and improving base production.
- Commitment to Environmental and Safety Performance: Failure to meet threshold levels of environmental and safety performance caps AIP payout at target for all other metrics regardless of results.
Brian Steck, chairman of Chesapeake’s compensation committee commented, “There is no more important asset for Chesapeake than our employees.”
The adjustments are designed to deliver a compensation program that attracts, retains and appropriately rewards top talent, while focusing Chesapeake’s leaders on what is most crucial to achieving sustainable success, according to Steck.
“While this program will continue to evolve,” he continued, “we will be uncompromising in our pursuit of an innovative, results-driven culture which aligns executive compensation with environmental, operating, and equity performance.”
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