West Virginia Mine Disaster: Coal Company Directors Survive Shareholder Revolt
Massey Energy board attacked on safety record during first meeting after blast.
May 18, 2010— -- An attempt to oust three corporate directors at the West Virginia coal company that lost 29 miners in a deadly April explosion was unsuccessful Tuesday morning, but critics who attended the contentious shareholder meeting said their challenge sent a stern message about the need for Massey Energy to improve its safety record.
The bid to unseat three of Massey Energy's board members was launched in the aftermath of the nation's worst mining disaster in a generation. It was led by labor unions and state pension officials who had sizeable investments in the publicly traded company. Massey officials refused to release the vote total, but said in a statement that the three directors survived the challenge.
"The Board of Directors of Massey Energy Company is grateful to shareholders for their show of confidence in the Board by reelecting Directors Richard M. Gabrys, Dan R. Moore and Baxter F. Phillips Jr.," said Admiral Bobby R. Inman, who is the company's lead independent director. "Their knowledge of Massey Energy and their expertise as business leaders will serve this company well in this critical period in Massey Energy's history."
William Patterson, the director of the investment group that led the effort to unseat the board members, said his group conducted an unofficial tally and believes that the directors only narrowly escaped the vote. The CtW Investment Group said its tally showed the three board members each prevailed with about 51 percent of the vote.
"This razor-thin vote casts a cloud over the legitimacy of the current Massey board and is a clear demand for new directors who will make needed changes in company leadership," Patterson said in a statement. "The opposition votes against the Massey directors were the highest of any this year at an S&P 500 company… The onus is now on the Massey board to address the underlying concerns that drove today's huge shareholder opposition vote."
Massey Energy released figures on Tuesday afternoon that showed all three directors winning reelection with between 55 and 58 percent of the vote, with a shareholder turnout of 85.4 percent. The company said it will file the numbers with federal regulators within four days, as required by law. The company said it will file the official vote totals with federal regulators within four days, as required by law.
A group of the angry investors rode by bus from Washington, D.C., to Richmond Tuesday to attend the meeting and several used a question-and-answer session to direct pointed questions at Massey Energy CEO Don Blankenship. Among them was Daniel Pedrotty, who is the director of the AFL-CIO's Office of Investment. He told ABC News that Blankenship had no answer for questions about the company's rocky record on safety, which he said included 52 deaths in the past ten years.
"What we saw was an imperial CEO challenged repeatedly about how bad his company's safety and health record was," Pedrotty said. "Blankenship's response was that he knows something went wrong at the mine, but that he didn't yet know what it was. In my view, it failed to satisfy the investors."
Also asking questions was Marty Hudson, 53, whose cousin was working in the Upper Big Branch the day of the accident, and who remains under a doctor's care for what he went through. Hudson said his cousin had to sprint to escape the blast of air and dust, and then attempted to perform CPR on six of his fellow miners, whose bodies were charred black.
"I was not satisfied," Hudson told ABC News in an interview after the meeting. "I asked [Blankenship] about the push for production over safety and the mentality of the bosses. But I didn't hear anything changing. My opinion is, he's not going to be able to buy your way out of this."
Massey officials have said they are working with investigators to determine what caused the blast, and will work to improve conditions to prevent future accidents. "Applying lessons learned regarding mine operations and safety is critically important to Massey Energy," the company statement said.
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