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Massey CEO made $23.7 million in 2007




CHARLESTON, W.Va.

Massey Energy Co. Chief Executive Don Blankenship’s compensation soared more than 35 percent along with the coal mine operator’s fortunes last year.

Blankenship’s 2007 salary, bonus and perks, including use of a company-owned house, topped $23.7 million, according to a filing with the Securities and Exchange Commission on Tuesday. Blankenship’s compensation totaled more than $17.5 million in 2006.

Massey’s profit more than doubled to $94.1 million in 2007, compared with $41 million the previous year. Its stock gained nearly 63 percent over the same period, rising from $21.93 a share to finish 2007 at $35.70.

Still, executive pay experts says that’s a big jump.

“We’re just not seeing those kind of increases,” said James Reda, founder and managing director of compensation and corporate governance consulting firm James F. Reda & Associates. “Flat or down is more like what we’re seeing.”

The Associated Press calculates executive compensation using salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The AP does not include changes in the present value of pension benefits. As a result, AP figures may differ from totals listed in the summary compensation table of proxy statements filed with the SEC.

Massey, for instance, says Blankenship realized compensation of approximately $8.87 million in 2007.

The bulk of his 2007 compensation came from $16.8 million in stock and options, according to the SEC filing. In 2006, Blankenship received $15.4 million in stock and options.

While Blankenship’s $1 million salary was unchanged in 2007, his non-equity incentive compensation jumped to $5.25 million from $514,000 in 2006, according to the filing. Regardless of his compensation, Blankenship is well fixed; the filing lists his deferred compensation at $23.4 million as of Dec. 31.

Massey also gave Blankenship more than $386,000 in perks last year, up from $257,000 in 2006, according to the filing. Among other things, the 2007 perks included the benefit of a home provided by Massey, which the company says was worth more than $129,000 and use of Massey aircraft, valued at $184,000.

“Nobody gets a free house anymore,” Reda said. “We’re doing a perk study … We’ve never heard of it.”

Also rare are business dealings between Massey and Blankenship’s nephew and a member of the company’s board of directors.

The proxy says Massey subsidiaries spent more than $712,000 with an auto parts supplier owned by Blankenship’s nephew and more than $112,000 with an auto dealership owned by director Dan Moore, who unsuccessfully ran for governor in 2004. Massey has disclosed these dealings for a number of years.

Such arrangements are much less common these days, said Charles Elson, the director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “They raise lots of investor questions.”

While Massey is the nation’s fourth-largest coal company by revenue, Blankenship’s compensation puts him among the highest paid chief executives in the industry. St. Louis-based Peabody Energy’s Greg Boyce, chief executive of the nation’s largest coal producer, received $6.4 million in compensation last year. Brett Harvey received $8.4 million in compensation for running the No. 3 producer, Pittsburgh based Consol Energy Inc., in 2007.

Blankenship also has a higher profile.


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