Peabody now wants to give $11.9 million in bonuses to execs

By CARL GREEN

Correspondent

St. Louis – Peabody Energy executives continue grabbing for millions in bonuses before even filing the bankruptcy plan that is supposed to ensure pensions and health care for its retirees.

Peabody filed for bankruptcy in April, citing $10 billion in debt and a faltering coal market, so the United Mine Workers of America stepped up to make sure in court that the settlement would protect the retirees.

But before Peabody could file its bankruptcy plan, the company asked the U.S. bankruptcy court in St. Louis to let it pay up to $3.24 million in bonuses to keep its office workers from leaving.

The Mine Workers objected, but Judge Barry Schermer in June approved the plan anyway. Peabody lauded the plan as “egalitarian” because the money is going to 42 company workers, not top executives.

But there was nothing egalitarian last week about Peabody’s latest filing, for permission to dole out another $11.9 million in bonuses, this time to only six top executives.

The company calls these “incentive” bonuses tied to whatever success it has in improving its financial performance while meeting safety, environmental and restructuring goals.

Even if the executives completely fail, they’ll still be paid their salaries, ranging from $444,000 to just over $1 million.

According to the company, promising bonuses to top executives is good for all of its creditors, including the retirees. Here’s what they said in court papers:

“The debtors (Peabody) believe that incentives for the executives to successfully implement the debtors’ restructuring and enhance value at this critical time will help maximize the value of the debtors’ estates for the benefit of all the debtors’ stakeholders.”

WHO GETS IT

The executives to receive the bonuses are:

• Glenn Kellow, chief executive officer.
• Amy Schwetz, chief financial officer.
• A. Verona Dorch, chief legal officer.
• Charles Meintjes, president of the Australian division.
• Kemal Williamson, president of the Americas division.
• Bryan Galli, executive for marketing and trading.

Court papers show that Kellow would be eligible for bonuses of up to $2.868 million. With his salary, his total compensation could reach $3.9 million. But company supporters may cry for him anyway, because the company states that he would have been expected to get even more if not for the bankruptcy filing.

The proposal is scheduled for review in a hearing Aug. 17. One bad sign is that a rival company, Alpha Natural Resources, won court approval to pay out $6.8 million in bonuses to 15 officers as it emerged from bankruptcy in July.

The UMWA had not issued a response to the new filing by press time, but in June, the union strongly opposed the earlier bonus plan, saying in court, “Slashing the health benefits of aged and medically vulnerable retirees with extremely limited resources, while lavishly rewarding white-collar employees, is neither fair nor reasonable” and adding that the plan was “premature” and amounted to “effectively pre-approving one provision” of the bankruptcy plan.

(Information from the Associated Press, Dow Jones Newswire and the St. Louis Post-Dispatch.)