Peabody Energy management is rewarded as investors lose and workers are at risk
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Key Findings
Peabody’s $176.6 million loss in the first quarter of 2015 was significantly higher than the $48.5 million loss it experienced in the same quarter in 2014.
Current Peabody employees are at risk for continued employment, and both current employees and retirees are at risk for their postretirement health and insurance benefits.
Even though the company’s investors have seen the value of their equity investment evaporate, Peabody’s management has continued to be rewarded with extremely high compensation.
Executive Summary
Investors in Peabody Energy have lost over $16 billion of their stock value since the end of 2010, as the stock price has plunged from $64 per share to $4.50 per share. The company reports it has cut over 20% of its work force, and more layoffs seem likely as the company seeks ways to cut costs.
Despite these catastrophic losses, Peabody’s top management has continued to be rewarded handsomely, and has been paid even more than they earned in 2010 before the stock downturn began. Only in the last few weeks have the outgoing and the incoming Chief Executive Officers announced small and temporary reductions in their base salaries, saying they would share the pain of cost cutting. However, as will be discussed below, these CEO salary reductions are merely public relations moves that are far smaller than they have been made to appear.
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Press release: PEABODY ENERGY: Management Is Rewarded as Investors Lose and Workers Are at Risk
