Big US pension funds heed NY’s call on Massey

Investors square up to under-fire mining company

Some of the largest pension funds in the US have joined the New York State Common Retirement Fund in calling for shareholders to vote against three directors of embattled mining firm Massey Energy Co. at its annual shareholder meeting next week.
The $129.4bn (€102.7bn) New York fund first called on fellow investors to oppose the re-election of Baxter Phillips, Richard Gabrys and Dan Moore on April 27, after previously calling for the resignation of Massey CEO Don Blankenship. The move followed an explosion at Massey’s Upper Big Branch mine in West Virginia last month that killed 29 people which has unleashed a barrage of criticism about the company.
Now funds from California, Connecticut, Illinois, Maryland, North Carolina and Pennsylvania have written to shareholders arguing that the directors have “failed to carry out their duties” on Massey’s safety and environmental committee. They note that advisory firms RiskMetrics and Glass Lewis have also recommended withholding support from the trio.
“Massey’s safety record has significant consequences for its shareholders,” the letter states, adding that the firm’sshares lost around $975m in value after the blast.
Massey has said it would post losses of up to $150m in the wake of the incident. Lady Barbara Judge, who chaired Massey’s governance committee, resigned on April 20.
The latest development comes amid a war of words between Massey and the CtW Investment Group. The union-affiliated CtW has also called for the resignation of Blankenship, but the company says it is not a shareholder.
The new funds involved include the California State Teachers’ Retirement System, the Illinois State Board of Investment, the Maryland State Retirement and Pension System, the New York City Employees’ Retirement System as well as state treasurers from Connecticut, North Carolina, Oregon and Pennsylvania.
Massey says Phillips, Gabrys and Moore bring “extensive leadership, industry experience and valuable insight to our Board of Directors at a critical and turbulent time in our company’s proud history”.
Link to letter: