We are disappointed by your failure to respond to our March 31 letter, in which we communicated our intent to oppose the three directors up for election at Massey Energy's May 18, 2010 shareholder meeting unless the board of directors takes immediate steps to enhance its independence and accountability. In the wake of the subsequent Upper Big Branch mine disaster, we call on the board to also immediately seek the resignation of Donald L. Blankenship as Chairman and CEO.
We believe the Upper Big Branch mine explosion, which claimed the lives of 29 miners, is the tragic consequence of the board's failure to challenge Chairman and CEO Blankenship's confrontational approach to regulatory compliance. As you know, we first raised this as a shareholder concern in our March 31 letter, in which we specifically cited the board's "inability to exercise independent oversight of [Mr.] Blankenship."
The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a coalition of unions representing six million members. These funds, together with public pension funds in which members of CtW unions participate, are substantial long-term Massey shareholders.
In our March 31 letter we delineated various indicators of an entrenched and unaccountable board. Most presciently, we echoed the shareholder concerns first raised in a June 13, 2007 board resignation letter from former directors Daniel S. Loeb and Todd Q. Swanson. These include the board's "misguided insistence on keeping [Mr. Blankenship] in place as CEO" and its "unwillingness to confront the company's "poor risk management" and "confrontational handling of environmental and regulatory matters."
Under Chairman and CEO Blankenship's domineering leadership, Massey Energy placed short-term production and profit goals ahead of prudent risk management, with devastating consequences for the corporation, its shareholders and employees. In light of these consequences, the urgent need for new leadership is apparent.
We have raised these issues with institutional shareholders assembled today in Washington, DC for the Spring Meeting of the Council of Institutional Investors and believe other shareholders share our view about the need for new leadership.