06/19/2010 05:12 am ET | Updated May 25, 2011

How Much Is A Miner's Life Worth To Massey Coal Company?

Don Blankenship, the CEO of Massey Energy Company which runs the Upper Big Branch mine where 29 miners were killed earlier this month in an explosion, spoke to the Charleston Daily Mail about his company's plans for survivor's benefits.

The benefits as described by Blankenship, can be summarized as:

-- Life insurance payouts from the company that will total five times the worker's annual pay.

-- Payments will continue over the course of the life of spouse.

-- At least 20 years of health benefits to survivors.

-- $5,000 per year for "child care" for the 16 children under the age of 18 effected by the explosion.

This explanation didn't give a precise dollar amount but, based on a 2007 study of miner pay, non-unionized miners (Massey's workers are not unionized) made an average of $75,000 per year. Five years of salaried pay would put the insurance payout at around $375,000 in total. Since Blankenship stated that the payment would be given over the course of the survivor's life rather than in one lump sum, let's do a little more math. If the survivor lives 40 more years, they can expect $9,375 per year, or $781.25 per month to account for both the loss of their loved one and to make up financially for what could have been the main breadwinner of the family. However, we don't know all of the details of how the payout will be structured -- if Massey buys an annuity, the total payout could result in more than the 5 years of total salary depending on how the investment does over time.

Blankenship told the Daily Mail: ''The benefits, I think, by any measure, are very good, and we're very proud of the benefits, although we realize it doesn't help much,' Blankenship said. But he said he thinks families will be OK financially."

To head off charges that the payouts are being offered as settlements to head off lawsuits, the company responded,

In the wake of this tragedy, the Company is meeting with families and describing benefits that it will provide to them. These benefits are designed to ensure that no family will have to worry about missing a paycheck, paying a medical bill or sending a child to college.

At least one internet media source has inaccurately suggested that these benefits are being provided to settle lawsuits. This is absolutely untrue. These benefits are being provided by the Company without any obligation by the families to agree to any settlement.

The Company is aware that personal injury lawyers have published advertisements seeking cases and that some personal injury lawyers have made efforts to contact some of the families during this difficult time.

Massey Energy believes that there will be an appropriate time to discuss settlement options with the families. If any proposals are made to the families, those families will be given a full opportunity to review those proposals with a lawyer of their choosing. To the extent settlements are reached, it is the Company's desire that the families -- and not personal injury attorneys - receive the money. Unfortunately, personal injury attorneys frequently take 30-40% of any settlement received by a family. The Company hopes such a result can be avoided in this circumstance.

As a point of comparison to what Massey is offering families, in 2009 Massey reported a profit in coal of $104.4 million and a revenue of $2.3 billion. This weekend, NPR reported on Massey CEO's Don Blankenship's soaring salary despite ongoing safety concerns:

Massey Energy CEO Don Blankenship was paid $17.8 million last year even as some of the coal mines he supervised accumulated safety violations and injuries at rates that greatly exceed national rates.

That 2009 pay represents a $6.8 million raise over 2008 and almost double his compensation package in 2007.

Blankenship also has a deferred compensation package valued at $27.2 million at the end of last year.

NPR goes on to point out that:

In the year it paid Blankenship $17.8 million in salary, bonuses and perks, Massey Energy was assessed $12.9 million in proposed fines for safety violations. Massey has appealed three-quarters of those fines.