* Massey says three directors reelected "overwhelmingly"
* Shareholder groups say margin shows lack of confidence
* Stock down 1.7 percent
(Adds official voting figures, analyst comment; stock down)
By Steve James
NEW YORK, May 18 Three directors were narrowly
reelected to coal miner Massey Energy Co's MEE.N 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
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,
"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 shareholder value.
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