N.C., other state investors oppose Massey directors

Posted May 12, 2010 12:19 p.m. EDT
Updated May 12, 2010 3:18 p.m. EDT

— More Massey Energy Inc. shareholders are rebelling against the coal company in response to the deadly explosion at its Upper Big Branch mine in West Virginia.

Nine state pension funds or treasurer's offices with shares in Massey, including North Carolina, said Wednesday they want investors to withhold votes from Massey President Baxter Phillips Jr. and directors Richard Gabrys and Dan Moore at the company's May 18 annual meeting. Collectively, the California State Teachers' Retirement System and the others say they own $64 million worth of Massey stock.

They're the latest shareholders to rebel over what they say is Massey's poor safety record. Among other things, they cite the history of violations at the mine before the April 5 explosion that killed 29 men and injured two.

“Massey Energy has an extensive history of persistent and serious safety violations. We believe the three board members who serve on the Safety, Environmental, and Public Policy Committee have failed to address these concerns,” North Carolina State Treasurer Janet Cowell said in a statement. “Ultimately, that has consequences for long-term shareholder value.”

Virginia-based Massey said it is confident the majority of shareholders realize disrupting the board and management now is not in the best interest of the company, its employees or investors.

"We are disappointed when we learn of a shareholder vote to withhold, but respect the process to ensure good corporate governance," the company said in a statement Wednesday.

Besides North Carolina and the California teachers' fund, the other investors are the Office of Connecticut State Treasurer, Illinois State Board of Investment, Maryland State Retirement and Pension System, New York State Common Retirement Fund, New York City Employees Retirement System, Oregon State Treasury and the Pennsylvania Treasury.

At Massey's current price of approximately $36.55 a share, they own a relatively small 1.7 percent of the company's roughly 103 million shares of stock. Massey's dominant shareholders - mutual fund giant Fidelity, with a more than 9 percent stake, and BlackRock Financial Management with more than 8 percent - have not joined the clamor. Nor have Duquesne Capital, Wellington Management and State Street, all of which hold more than 5 percent apiece.