Investor Coalition Urges Shareowners to Vote on Massey Energy's Governance Proposals

Oct 06, 2010, 08:45 ET from Pennsylvania Treasury Department

Shareowners to Vote at Special Meeting on October 6

HARRISBURG, Pa., Oct. 6 /PRNewswire-USNewswire/ -- An investor coalition, comprising seven public pension funds, is urging shareowners to vote their shares at Massey Energy Company's special meeting. Some of the proposals call for improved corporate governance practices, including instituting annual elections of directors, the elimination of supermajority voting requirements, and allowing shareholders to call special meetings. The coalition is not supporting a proposal to remove cumulative voting, which would let shareowners apply all of their combined shares for director seats to one or more candidates rather than separately for each director.

"Massey is moving in the right direction, and we are seeing increased accountability.  Last spring's disaster at Upper Big Branch invited sharp demands for improved approaches to safety, health, management, compensation, and governance practices," stated Pennsylvania State Treasurer Rob McCord. "As usual, sunshine and scrutiny proved to be a strong disinfectant, and I'm hopeful that Massey can rebound fully.  Shareholders and the public are enjoying greater protection.  That was our goal here."

"We have strongly urged, alongside our peer pension funds, Massey Energy to strengthen its corporate governance practices and ultimately the accountability of the company," stated North Carolina State Treasurer Janet Cowell.  "However, we continue to closely monitor how the board of directors and management respond to recent events."

Shareholders will vote on the management-sponsored reforms at a special meeting scheduled for October 6, 2010, six months after an explosion at one of the company's West Virginia coal mines killed 29 miners. Massey subsequently met with investors and allowed majority voting in non-contested director elections.

Additionally, Glass Lewis and RiskMetrics Group, leading proxy advisory firms, support Massey reforms to have all directors stand for annual election and eliminate supermajority vote thresholds for adopting bylaw amendments and changes in business operations such as mergers, acquisitions and consolidations. Adoption currently requires an 80 percent vote of all outstanding shares.

"In light of the 80 percent supermajority requirement to pass these critical governance reforms, I encourage Massey shareholders to make sure they vote on October 6," Connecticut State Treasurer Denise L. Nappier said.  "After all, it is not often that shareholders have the opportunity to vote on several corporate governance issues we advocated for that are now being proposed by the board.   Together, we must insure past is not prologue."

Among the corporate governance proposals shareholders will vote on are:

  • Declassification of the board to have all directors stand for annual election (item 1)
  • Elimination of the supermajority vote rule for bylaw amendments (item 3)
  • Elimination of the supermajority vote requirement for business operations (item 4)
  • Restoration of shareowners' right to call special meetings (item 5)

"It is vital that shareowners vote at the special meeting called by Massey on October 6th," said Anne Simpson, the Senior Portfolio Manager who heads the CalPERS corporate governance program. "Investors have pushed for these governance changes to strengthen accountability. Now is the time to act and make sure those changes take place."

In April, the investor coalition sent a letter to Massey Lead Director Admiral Bobby R. Inman calling on the board to direct CEO Don L. Blankenship to step down as Chairman of the Board and to undergo a comprehensive evaluation of its competencies and performance. Additionally, the coalition withheld voting its shares from all three director nominees up for election at the company's annual meeting on May 18, 2010.

In May, Massey announced plans to create a Safety and Environmental Committee consisting entirely of independent directors; amend the Corporate Governance Guidelines to clarify the responsibilities of the lead independent director; and prohibit a Massey director who is a CEO of a public company from being on the boards of more than two public companies (other than his or her own board). Massey non-executive directors are prohibited from serving on the boards of more than five public companies.

The investor coalition collectively owns 1,556,331 shares of Massey Energy valued at over $23 million. The members of the coalition are: California Public Employees Retirement System, Office of Connecticut State Treasurer, Illinois State Board of Investment, Maryland State Pension and Retirement System, New York State Common Retirement Fund, North Carolina Department of State Treasurer, and Pennsylvania Treasury.

Pennsylvania Treasurer Rob McCord is committed to increasing the economic security and prosperity of all Pennsylvanians.  Before winning the statewide elected job of State Treasurer, McCord was a successful business leader.  He is now focused on strengthening the state's economy, managing investments to get strong returns for taxpayers, and helping to create good jobs and retirement security for Pennsylvanians.  To learn more about Treasurer McCord's initiatives, please visit the Pennsylvania Treasury at www.patreasury.org.

SOURCE Pennsylvania Treasury Department



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