Massey Energy & Third Point LLC

WEST PALM BEACH, FL (HEDGECO.NET) – Third Point LLC has filed a report with the U.S. Securities and Exchange Commission on Monday stating that Massey Energy should be held responsible for its history of poor management guidance and weak stock performance .

“It is necessary to hold management accountable for operational shortcomings,” said Third Point in the filing.  Third Point is a hedge fund based in New York City, and with a reported $4 billion in assets, they have the funding necessary for such a venture.

The hedge fund is headed by activist shareholder Daniel Loeb, Third Point controls some 5.9 percent of Virginia-based Massey Energy.  Loeb nominated himself and an associate, Todd Swanson, to the Massey board in March and are asking other Massey shareholders to elect them to the company’s nine-member board of directors next month.  The hedge fund expects to spend $500,000 trying to win the election.

Loeb said in an interview with Reuters that he would urge the company to expedite or expand the share buyback program and make further proposals including a “review the personal use by management of private aircraft, company housing and company cars.”

“In the past three years,” stated the SEC in filing, “[Massey] has lavished compensation on its chief executive officer, paying him a multiple of the CEO compensation paid by four publicly-traded competitors.” Peabody Energy Corporation, CONSOL Energy Inc., Arch Coal, Inc. and Foundation Coal Holdings, Inc.

Massey Chief Executive, Don Blankenship was paid $33.7 million for the year ended Dec. 31, 2005.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: [email protected]

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