A year before Alpha Natural Resources filed for Chapter 11 bankruptcy the coal company gave its executives more than $3.5 million in bonuses, according to the company’s filings with the U.S. Securities and Exchange Commission.
We’re learning all of this in the weeks after Alpha laid off employees and proposed suspending medical and life insurance benefits for more than 4,500 non-union retirees and their families. The company expects that move could save almost $3 million a year.
Despite the challenging coal industry, federal filings reveal CEO Kevin Crutchfield received $7.75 million in total compensation in 2014. The total number is actually $180,000 less than he made the prior year.
Stock awards accounted for most of Crutchfield’s 2014 compensation, but he also received an $815,100 performance bonus and $500,000 retention bonus, according to the SEC filings. The latter was aimed at keeping him at the helm to ensure stability through “difficult market and regulatory conditions.”
According to SEC filings, two other executives took home retention bonuses too, one of whom has since left the company.
In addition to those retention payments, all six of Alpha’s top executives received performance bonuses in 2014, which ranged from $138,125 to Crutchfield’s $815,100, according to SEC filings. In 2013, SEC filings reveal the CEO took home a $948,024 performance bonus, bringing his 2013 total compensation to $7,955,008.
Crutchfield talked with News Channel 11’s Josh Smith last month about the future of Alpha Natural Resources as the company restructures.
“It is a challenging environment,” he told Smith. “We’re dealing with a very difficult set of circumstances when you look at the confluence of the regulatory environment and with this cheap natural gas environment and it’s taken a toll on the business for sure…Stick with us as we work through this process. We won’t let you down…A more healthy, more sustainable business will emerge out of this in time.”
Alpha Natural Resources declined an on-camera interview for our story. The company also chose not to comment about last year’s bonuses and executive compensation. The 2014 combined executive compensation cost the company more than $20 million, which was $3 million more than it did in 2013.
The company’s stock price and revenues have continued to drop in recent years. In light of Alpha’s Chapter 11 bankruptcy filing the coal company reports it slashed executive pay this year.
The company reports, on average, executive compensation dropped by 57% in 2015. Alpha Natural Resources also reports compensation for its board of directors has been reduced by 47%, with the total number of board members decreasing by two. According to SEC filings, Alpha paid its board of directors a total of $1.8 million in 2014.
In addition to the reduction in executive compensation, Alpha reports the law prohibits retention payments during bankruptcy proceedings.
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