May 3, 2017 Read More →

U.S. Coal Execs Rake in Millions While Pushing Miners Into $17-an-Hour Temp Work

New York Times:

Glenn Kellow, the coal executive who led Peabody Energy through bankruptcy, just collected an estimated $15 million stock bonus. John Eaves at Arch Coal, another recently bankrupt coal giant, got an award valued at $10 million.

The view from the coal pits is far less rosy.

An analysis of recent government data shows that the wage gap between the coal industry’s top executives and average coal workers has expanded, while low-end pay has stagnated.

From 2004 to 2016, the average annual wage for chief executives in the coal industry grew as much as five times faster than those of lower-paying jobs in the industry, like construction or truck and tractor operator jobs. Executive pay averaged $200,000, up 60 percent from $125,000, while paychecks for truck and tractor operators rose just 15 percent, to $43,770 from $38,060. Pay for construction jobs in mining rose just 11 percent, to $35,080 from $31,470.

Pay for chief executives in the coal industry also grew much faster, on average, than that of their counterparts across the wider economy, while the average pay for coal industry construction workers failed to keep up with similar jobs in other fields. The data excludes bonuses, share options and other perks, which often inflate executive compensation — and the pay gap — many times more. Mr. Kellow’s stock options in the last year, for example, are worth almost 350 times what a typical coal truck and tractor operator makes in a year.

“The company boards seem to think they need to keep executives from fleeing a sinking ship,” said Sarah Anderson, an executive compensation expert at the Institute for Policy Studies, a Washington research group. “But when you protect people at the top from risk,” she said, “you’re not incentivizing them to shift to another approach, like making a transition toward more renewables.”

Many coal miners now compete for temporary jobs, which pay by the hour and offer few benefits. An online posting for an underground coal miner job in Waynesburg, Pa., offered as little as $17 an hour.

The steep executive salaries have come despite dismal recent performances by coal companies that have driven a string of former giants into bankruptcy. Coal executives misread the market in China, racing to develop mines there only to see demand falter, which also caused American coal exports to slump. At home, they have been unable to stem a slide in the domestic market, driven by cheaper natural gas.

Despite those woes, top coal executives have continued to draw hefty rewards.

Peabody paid its executive team around $75 million from 2012 to 2014, according to its filings with the Securities and Exchange Commission. In the same period, the company lost nearly $2 billion.

In 2016, Alpha Natural Resources secured a $12 million bonus package for its executives during bankruptcy proceedings, saying they should be compensated for navigating the complexities of the process. The previous year, the company lost $1.3 billion.

Seven Arch Coal executives received about $8 million in bonuses three days before the company filed for bankruptcy in January 2016, seeking to cut $4.5 billion in debt.

Coal Jobs Prove Lucrative, but Not for Those in the Mines

 

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