Last Updated Apr 15, 2010 1:00 PM EDT
But times have changed. And now the calls for Blankenship's head are coming from shareholders. This week both the CtW Investment Group and New York Comptroller Thomas DiNapoli called for the Blankenship's immediate resignation. DiNapoli, trustee of New York State Common Retirement Fund, isn't exactly small potatoes. The retirement fund owns more than 300,000 shares of Massey worth more than $14 million.
CtW Investment, meanwhile, works with pension funds sponsored by unions. Which means that Blankenship's supporters can argue that its move is politically motivated. Here's the thing, though: CtW and DiNapoli complained about Blankenship and Massey's board policy prior to the mine blast. And both get to the root of the problem. It's not just about Blankenship, his substantial compensation package or the hundreds of regulatory violations filed against Massey mines during his reign. It's also about the board's inability -- or unwillingness -- to rein him in.
So what about Massey's biggest shareholders? So far the top five institutional owners of Massey Energy stock including, Fidelity Management & Research; BlackRock Advisors; Duquesne Capital Management; Wellington Management and State Street Global Advisors haven't uttered a word publicly.
Should Blankenship go? The CEO has steered Massey through a period of lagging demand for coal by shifting the company's focus more towards high quality metallurgical coal, an ingredient used to make steel. The company's success, though, came at a substantial cost. As demand for met coal rose, the production per miner at the Upper Big Branch mine, where the explosion occurred this month, nearly doubled in the fourth quarter. Investigators will surely look into whether the big push to meet demand and capture those idyllic prices caused shortcuts in safety. And now Massey, and the coal industry as a whole, face increased scrutiny from Congress, which could lead to even stricter mining regulations.
Unfortunately for those who would love to see Blankenship out the door, his departure right now would cause more harm than good for the company. Massey's $960 million acquisition of Cumberland Resources would certainly falter if Blankenship walked. Once the crisis period is over, however, shareholders should look for a replacement and press for a restructuring of the company's board.
Photo of Quit Now sign from Flickr user fuzzcat, CC 2.0 See additional BNET Energy coverage on Massey Energy: