CtW Investment Group Makes Case to Shareholders to Remove Three Massey Directors

Apr 29, 2010, 13:18 ET from CtW Investment Group

Says Directors Ultimately Responsible for Safety Compliance and Governance Failures

WASHINGTON, April 29 /PRNewswire/ -- The CtW Investment Group presented today a in-depth analysis to shareholders of Massey Energy Company (NYSE: MEE), making the case to vote against the three directors up for election at the mining company's May 18 annual meeting, the first meeting of shareholders since the tragic April 5 explosion at Massey's Upper Big Branch mine in West Virginia, in which 29 miners lost their lives. CtW began presentations to institutional investors and proxy advisors, arguing for the removal of three directors, Richard M. Gabrys, Dan R. Moore and Baxter F. Phillips, Jr. CtW charges that:

  • The mine blast that killed 29 miners and destroyed $1.1 billion in shareholder value was preventable and occurred at a mine with an alarming record of serious violations.
  • Massey has a company-wide record of serious worker safety violations that is among the worst in the industry and has deteriorated over the past five years. CtW believes Massey Chair and CEO Donald Blankenship's "production first" emphasis fostered a management culture that tolerated unacceptable safety and compliance failures.
  • Massey has taken a confrontational approach to regulators under Blankenship's leadership that even former directors have said is "counterproductive."
  • Directors Gabrys, Moore and Phillips all sit on the board Safety, Environmental and Public Policy Committee and are thus ultimately responsible for Massey's alarming safety compliance record.
  • Director Moore sits on the board compensation committee that failed to tie CEO pay to safety compliance, resulting in maximum payouts for safety despite record violations.
  • Directors Gabrys and Moore sit on the board Governance Committee and are thus responsible for Massey's poor governance practices, including its entrenched board.

"Massey's alarming record of regulatory non-compliance and corporate governance failures make a clear immediate case for shareholder action to remove these directors," said William Patterson, Executive Director of the CtW Investment Group.

The CtW Investment Group first raised significant concerns regarding corporate governance problems in a March 31, 2010 letter to Massey's lead independent director, Admiral Bobby R. Inman, six days before the April 5 explosion, to which Admiral Inman responded last night. In the past three years, four directors have resigned from Massey's board - two explicitly citing the company's poor environmental and safety record. Ten days ago Lady Barbara Thomas Judge became the latest Massey director to step down.

The CtW Investment Group's letter to Massey shareholders and its March 31, 2010 letter to Admiral Inman are available at: http://ctwinvestmentgroup.com/.

SOURCE CtW Investment Group