The Associated Press put out a story about Massey Energy CEO Don Blankenship’s 2009 compensation the other day, reporting:
Total compensation for the head of Massey Energy Co. fell 12.3 percent last year as the coal mining company coped with sluggish demand in wake of the recession, according to an Associated Press analysis of a regulatory filing.
Don Blankenship, chairman and CEO, earned $17.3 million in compensation last year, compared with $19.7 million in 2008. Massey owns the West Virginia mine where an explosion earlier this month killed 29 miners in the nation’s worst coal mining disaster in decades.
The story continued:
The bulk of Blankenship’s 2009 compensation came in a performance award of $11.5 million, nearly double the $6 million he earned in 2008.
Blankenship received $933,369 in salary, down 6.6 percent, as he and other executives took a pay cut because of difficult business conditions. He got a bonus of $300,000.
He received stock awards that Massey valued at $3.9 million when awarded and $609,875 in compensation for such perks as aircraft travel, cost of housing provided by the company, 401k matching contribution and insurance.
By way of explanation:
The Associated Press compensation formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.
Not really discussed in this particular story were the factors that go into deciding Blankenship’s bonus … You can check them out by reading the most recent Proxy Statement Massey filed with the U.S. Securities and Exchange Commission …
Among the factors are Massey’s earnings, tons of coal sold, productivity, and fulfillment of contracts. The bonus also includes a factor for “environmental violation reductions.” As for mine safety, the only measure factored in is the rate of reduction of non-fatal days lost injuries … there is nothing listed for rate of reduction of mine safety and health violations cited by inspectors.
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I don’t understand where these numbers came from: Massey’s 14A Proxy Statement shows Blankenship’s 2009 compensation as over $17.8M (half a million more than listed in this article), and his 2008 compensation as just over $11M ($8.7M less than this article states). I know the article acknowledges that the numbers will be different, but this is a significant gap.
Ken, do you have any idea what the AP’s formula is, or where one could find it?
The “non-fatal days lost injuries” is subject to gross manipulation. I know a coal miner, (not in a Massey mine) who suffered an injury that required surgery on his arm on a Friday. He was required to go back to work on Monday. They restricted him to outside work and therefore minimized the “non-fatal days lost injuries.”
Andrew — It would take me more digging than I’ve got time for, but I’m pretty sure your question is answered in the last paragraph Ken excerpted:
“The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.”
My limited understanding is the difference comes down to accounting for calculations of deferred compensation (which for tax purposes is usual categorized as a pension benefit).
How does someone make that much money, (and dosen’t get dirty) and what does he do with it? I have to work a full time job and a part time job to make ends meet, and still driving a 16 year old truck. How do people in WV do this?? How can he sleep at night knowing how these families are suffering, and have this much money while those men worked their guts out in that mine and didn’t make any where even close to that kind of money. OMG.
“Non-fatal days lost injuries” data can be distorted. I am aware of one coal company where a miner was injured by a rock fall on a Friday. He was required to return to work on Monday, although the injury required surgery. He “work” outside the mine and did not have any lost days to injury.
I hope miners who have had experiences with safety violations and other life threatening violations at ALL coal companies, call the hotline or MSHA. REPORT THESE PEOPLE. YOU DESERVE TO LIVE.