CEO's Salary Grew While Mine Safety Suffered
LIANE HANSEN, host:
This is WEEKEND EDITION from NPR News. Im Liane Hansen.
The 29 people who died in that coal mine explosion in West Virginia earlier this month worked for a CEO who received hefty raises in his multi-million dollar pay, even as his company's safety violations grew. And last year, that company, Massey Energy, was fined close to $13 million for alleged safety violations.
NPR's Howard Berkes joins us now with more. Good morning, Howard.
HOWARD BERKES: Good morning, Liane.
HANSEN: Youve been reviewing newly released documents that detail CEO's Don Blankenship's compensation package. What did you find?
BERKES: Don Blankenship made $17.8 million last year. His compensation package nearly doubled since 2007. There's a complicated formula, by the way, thats laid-out in these documents, which were filed with the Securities and Exchange Commission. And it starts with a base salary, which is close to a million dollars, and then adds bonuses, awards, perks, incentives - all based on how close Blankenship comes to meeting or exceeding performance targets. Things like how much money Massey made, how much coal it produced, and even how safe his mines are for workers.
HANSEN: But, as I said, Massey had $13 million in safety fines last year. And there have been a lot of revelations about safety problems since that explosion at the Upper Big Branch Mine. Given those safety issues, how does Massey's board of director justify the pay increases?
BERKES: Well, they do have one benchmark for safety thats in this compensation formula: its worker days lost to non-fatal injuries. And the company does have a stellar record when it comes to that particular statistic. A 14 percent reduction in worker days lost to injuries last year, and a better than average rate for that in 17 of the last 19 years. But thats not the only way to measure safety, of course.
HANSEN: Well, I know, you and our colleague Robert Benincasa have been searching the federal mine safety records for those other measures of safety. What did you find?
BERKES: Robert pulled out a couple of things that I think are worth noting that help put all this in perspective. The year that Don Blankenship received what is essentially a $7 million pay raise, four of his mines, including the Upper Big Branch Mine, had an injury rate more than twice the national rate. Ten mines had injury rates that exceeded the national rate, and those 10 mines were cited for these alleged safety violations 2400 times.
Also that year, according to the Mine Safety and Health Administration, the Upper Big Branch Mine, where those Massey workers died, had a rate of repeated significant and substantial violations 19 times the national rate.
HANSEN: So what does Masseys CEO say in response to all of this?
BERKES: There's been nothing specific so far about the compensation package. But both Blankenship and the Massey board strenuously defend their safety record. They point out that there were three Massey mines that received safety awards last year from the same federal mine safety agency thats filing all those safety violations citations. Massey did appeal most of those citations, arguing that they're unjustified.
They say they fix most safety problems the day they're flagged. Now, some Massey shareholders, though, they're not buying this. Two have called for the resignation of Blankenship. A third shareholder has filed suit, accusing Blankenship and the board of consciously failing to assure that the company complied with worker safety laws. So with that and the federal and state probes underway, I guess we're going to see.
LIANE HANSEN, host: NPR's Howard Berkes, Howard, thank you.
BERKES: You're welcome, Liane.
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