NEW YORK, May 18 (Reuters) -
Three directors were narrowly reelected to coal miner Massey Energy Co's
board on Tuesday in a proxy battle launched by investors angered that share
value has plummeted since an explosion killed 29 workers at a company mine
six weeks ago.
The company said the board
members were "overwhelmingly" reelected with clear majorities and it
criticized a shareholder group, CtW Investment Group, for an "aggressive and
misleading campaign," for saying the winning margins were "razor-thin."
Miners who protested outside
the meeting, meanwhile hailed the vote as a victory in their campaign to
expose Massey's safety shortcomings, which have been exacerbated by the
Upper Big Branch mine blast on April 5.
The shareholder meeting in
Richmond, Virginia, was raucous, with environmentalists also protesting
outside the hotel and reports of at least two arrests. Company officials
ended it after barely 90 minutes following some angry exchanges.
"It was not a mob scene and
there were no placards inside, but these were unsettled shareholders," said
William Patterson, of the union-backed CtW, which owns less than 1 percent
of Massey stock.
David Khani, an analyst with
FBR Capital Markets, said it was evident it was going to be contentious.
"The investors have definitely
made it be known there is reputational damage," he said.
Chief Executive and Chairman
Don Blankenship, who has been under fire for allegedly trading safety for
profits, announced the results and declared: "We reject all accusations that
we are indifferent to safety."
He said only that preliminary
results showed all three directors received a majority. Later, in a
statement, Massey said Richard Gabrys won with 55.36 percent, Dan Moore with
55.09 percent and Baxter Phillips Jr. with 57.83 percent.
One director, retired Admiral
Bobby Inman -- a former CIA deputy director and President Carter's National
Security Agency chief -- said the company was grateful to shareholders "for
their show of confidence in the board" by reelecting the trio.
But North Carolina State
Treasurer Janet Cowell, whose state pension fund owns over $17 million worth
of Massey stock, was disappointed.
"Based on the close results,
it is clear that a near majority of shareholders have no confidence in these
directors," she said. "We will continue our fight to secure leadership at
Massey ... that will look out for the interest of their shareholders and the
safety of their own workers."
CtW's Patterson said the
coalition, which has blamed Massey's poor safety record for a $1.8 billion
drop in shareholder value, was talking to lawyers about future action.
"There was high drama here,"
Patterson told Reuters after the vote which was closed to the press. "It's a
razor-thin margin. This is not conclusive and casts a cloud over the
legitimacy of the election."
It was not known if Massey's
two major institutional shareholders voted for the directors or sided with
the dissidents. Both Fidelity Investments and BlackRock Advisors had
stressed beforehand that their voting policies were based on enhancing
Major corporate proxy advisory
services had recommended shareholders vote "no" for the directors who all
serve on Massey's Safety, Environment and Public Policy committee.
"I am told by folks inside
that they were reelected, but not by a whole heck of the vote," said Phil
Smith, spokesman for the United Mine Workers of America (UMWA), which
opposes Massey's use of nonunion labor.
"We are pleased to have sent a
message to this company that their safety record is atrocious. People have
taken notice, including the company."
UMWA President Cecil Roberts
led over 1,000 miners on a march from Massey headquarters in Richmond to the
hotel where the meeting was held.
Massey stock rose over 3
percent during the day, but fell back when the broader market took a turn.
It closed 1.7 percent down at $32.72 on the New York Stock Exchange. The
stock has plummeted over 30 percent from a year-high price of $54.80 on
April 5, when the Upper Big Branch mine accident occurred. (Reporting by
Steve James; editing by Gerald E. McCormick and Andre Grenon)