US pension funds call for resignation of Massey chief after mine deaths

Some of the biggest US pension fund investors have called for the resignation of Don Blankenship, chief executive of US mining firm Massey Energy Co., following a mine accident last week that killed 29 workers. New York State Comptroller Thomas DiNapoli, trustee of the $129.4bn New York State Common Retirement Fund which holds 303,550 shares of Massey stock, worth about $14.1 million, said that Massey under Blankenship’s watch had failure to adequately address and manage the risks at West Virginia’s Upper Big Branch mine, where 29 miners died following the explosion. DiNapoli said: “Massey’s cavalier attitude toward risk and callous disregard for the safety of its employees has exacted a horrible cost on dozens of hard-working miners and their loved ones.” In November last year, the New York fund filed a shareholder resolution calling for Massey to declassify its board so that shareholders may more effectively weigh in on board performance. The resolution will be voted on at Massey’s annual meeting this spring. CtW Investment Group, a US labour union pension fund body which represents assets of $1.5trn (€1.1trn) has also written to Massey’s lead director Bobby Inman calling for Blankenship’s resignation. CtW said it had earlier written to Massey to tell the company it would oppose the three directors up for election at its annual general meeting on May 18 “unless the board of directors takes immediate steps to enhance its independence and accountability”. CtW said Massey had not responded to this letter. CtW said the explosion was the result of the board’s failure tochallenge Blankenship’s “confrontational approach to regulatory compliance”. It said that under Blankenship’s “domineering leadership”, Massey Energy had placed short-term production and profit goals ahead of prudent risk management, with devastating consequences for the corporation, its shareholders and employees. The issue could be embarrassing for the UK’s £4bn Pension Protection Fund, which last week named Massey director Barbara Judge as its new chair. The PPF, a UN PRI signatory, has pledged to put environmental, social and governance factors at the heart of its investments. Judge, according to NASDAQ data, holds around 12,600 shares in Massey, currently worth around $580,000 (€427,000). Judge sits on Massey’s safety and environmental committees, earning $144,858 in fees and stock awards in fiscal 2008. In 2009, Massey’s board told shareholders to vote against shareholder requests for reports on carbon dioxide emissions at its annual general meeting. Massey’s largest shareholders are Wellington Management Co., FMR LLP (Fidelity), BlackRock Advisors and State Street Corp. CtW, affiliated to five unions including the Teamsters and the United Farm Workers of America, said it believes other shareholders shares its view about the need for new leadership at Massey. Massey said late last week that safety was its top priority and that it strives to be in compliance with all regulations at all times. Standard & Poor’s, the rating agency, has upgraded Massey to buy from hold, saying the financial impact of the disaster would be “immaterial”.