SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PEABODY ENERGY CORPORATION
(Name of Registrant as Specified in Its Charter)
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other thanOther Than the Registrant)
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NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 5, 2022 |
PROXY STATEMENT
2022
Our mission is to create superior value for
shareholders as the leading global supplier
of coal, which enables economic prosperity
and a better quality of life.
Our Values
•Safety:We commit to safety and health as a way of life.
•Customer Focus:We provide customers with quality products and excellent service.
•Leadership: We have the courage to lead, and do so through inspiration, innovation, collaboration, and execution.
•People:We offer an inclusive work environment and engage, recognize, and develop employees.
•Excellence:We are accountable for our own success. We operate cost-competitive mines by applying continuous improvement and technology-driven solutions.
•Integrity:We act in an honest and ethical manner.
•Sustainability:We take responsibility for the environment, benefit our communities, and restore the land for generations that follow.
St. Louis, Missouri 63101
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY
10, 20185, 2022
Peabody Energy Corporation
(the “company”(“Peabody” or the “Company”) will hold its
20182022 Annual Meeting of Stockholders (the
“2018“2022 Annual Meeting”) at the
Sheraton Clayton Plaza Hotel, 7730 Bonhomme Ave., Clayton, MO 63105Marriott St. Louis West, 660 Maryville Centre Drive, St. Louis, Missouri 63141 and virtually via the internet at www.virtualshareholdermeeting.com/BTU2022 on Thursday, May
10, 2018,5, 2022, at
10:9:00 a.m.
, Central
time,Time to:
| 1. | Elect nine directors for aone-year term; |
| 2. | Approve, on an advisory basis, our named executive officers’ compensation; |
| 3. | Approve, on an advisory basis, the frequency of future advisory votes to approve our named executive officers’ compensation; |
| 4. | Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018; and |
| 5. | Transact any other business as may properly come before the 2018 Annual Meeting and any adjournment or postponement thereof. |
1.Elect nine directors for a one-year term;
2.Approve, on an advisory basis, our named executive officers’ compensation;
3.Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2022; and
4.Transact any other business as may properly come before the 2022 Annual Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the proxy statement accompanying this notice. The
boardBoard of
directorsDirectors has fixed the close of business on March
19, 201810, 2022, as the record date for determining stockholders of
the companyPeabody entitled to receive notice of and vote at the
20182022 Annual Meeting and any adjournment or postponement thereof.
In light of potential concerns relating to the coronavirus (COVID-19), we strongly encourage you to vote your shares by proxy prior to the 2022 Annual Meeting and, if you plan to attend the 2022 Annual Meeting, to consider doing so virtually via the internet. If we determine it is not possible or advisable to allow stockholders to attend the 2022 Annual Meeting in person, we will announce the decision to hold the meeting virtually only over the internet in advance. Whether you attend the meeting in person or virtually, you will be able to vote your shares and participate in the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE
20182022 ANNUAL MEETING
IN PERSON OR VIRTUALLY VIA THE INTERNET, WE URGE YOU TO VOTE YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR OVER THE INTERNET, AS PROVIDED IN THE ENCLOSED MATERIALS. IF YOU REQUESTED A PROXY CARD BY MAIL, YOU MAY SIGN, DATE, AND MAIL THE PROXY CARD IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
A. Verona Dorch
Executive Vice President, Chief Legal Officer, Government Affairs and Corporate Secretary
March 28, 2018
| | | | | |
| By Order of the Board of Directors, |
| |
| Scott T. Jarboe |
| Chief Administrative Officer and Corporate Secretary |
| |
| March 24, 2022 | |
| | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 10, 2018.5, 2022. The Notice of Annual Meeting, Proxy Statement, and Annual Report for the fiscal year ended December 31, 20172021, are available at www.proxyvote.com. |
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IMPORTANT NOTICE REGARDING ADMISSION TO THE 2022 ANNUAL MEETING We ask that stockholders or their legal proxy holders who wish to attend the 2022 Annual Meeting preregister with Peabody’s Investor Relations Department no later than 5:00 p.m. Central Time on Friday, April 29, 2022. For complete instructions for preregistering, see page 72 of this Proxy Statement. |
It is my pleasure to invite you to attend our annual meetingthe 2022 Annual Meeting of stockholdersStockholders on Thursday, May 105, 2022. We will again be hosting a hybrid annual meeting this year in St. Louis. Louis, Missouri, and online.
2021 was a pivotal year for Peabody, despite the pressures that COVID-19 and its variants continue to inflict on global economies. Your Company earned $360 million in income attributable to common shareholders and Adjusted EBITDA* of $917 million while generating Free Cash Flow* of $289 million. In the second half of 2021, as economies around the world began recovering from the impacts of COVID, there was a robust increase in demand and price for our products globally. The Company was able to benefit from this resurgence of demand, with our operations positioned to deliver our essential products and capture price improvements while keeping focused on working safely and responsibly. As a result, from a total shareholder return perspective, shares of BTU gained more than 300% over the full year, reflecting our improved financial position and future prospects.
This
will be our first annual meeting followingyear, we continued to advance actions to position the Company for a
year of significant changebright future and
accomplishment for Peabody.We believe that stockholders in BTU benefited in multiple ways following the company’s emergence from restructuring in April 2017. The share price increased 79 percent from its modified plan value, 2018 deleveraging targets were achieved a year ahead of schedule, the ongoing share buyback program continues to be implemented,resilient in all market cycles. In 2021 we further improved our capital structure with $270 million of net proceeds generated through at-the-market common share issuances which were used to reduce the Company’s senior secured debt levels; also, through open market purchases and debt-for-equity exchanges, the board authorized a dividend program early thisCompany reduced principal debt by more than $400 million in the year. These benefits accompany Peabody’s multiple operationalWe continued initiatives to improve cost per ton and financial achievements that are outlinedto achieve productivity efficiencies across the platform and we put in our annual reportplace programs to attract and other communications.
The completed restructuring process was necessary givenretain the unparalleled issues and extended downturnright team for the coal industry. At the same time, we recognize this action created difficult challenges for manyfuture of our stakeholders. We believe that the substantial accomplishments since the company emerged are tangible signs of the commitment that management and the new board have toward creating value for the long term for our stockholders.
Company.
At Peabody, we also believerecognize that howthe success of our business and our responsibility goes beyond the financial statements. As a result, we behave is just as important as what we do. Peabody has been frequently recognized for ourare driving a holistic approach to environmental, social, and governance (“ESG”) practices to deliver further value across our business and to our stakeholders. Our Board of Directors, with its very diverse set of skills and experiences, has ultimate oversight for our ESG initiatives, progress, and risk assessments.
This holistic approach has led us to enhance our ESG program to better describe our Company's commitment to the energy transition to net-zero emissions, recognizing the effects of climate change, acknowledging our role in reducing our greenhouse gas emissions and committing to establishing and reporting on specific, measurable short-term goals for Scope 1 and 2 emissions reductions. In 2021 we stood up a group of dedicated ESG resources to develop processes and programs to support these ambitions and goals. I invite you to further explorereview the Company’s commitments and progress in our approach through our Corporateupcoming annual ESG Report and Social Responsibility Report, ourexisting Statement on EnergyClimate Change.
In 2021 our Company achieved its lowest global injury rate in the last twenty years with two of our operations reporting zero incidents. During the year, we had bond releases approved on over 7,000 acres of reclaimed land and Climate Change, our performanceEl Segundo Mine received the 2021 Excellence in safetyReclamation Award from the New Mexico Mining and sustainability and the other elements around whatMinerals Division.
Since our last annual meeting, we
call “Coal Done Right.”As Peabody relisted in 2017, we did so with a focus onhave continued to provide strong governance and oversight, and we believe our approach on this front has been successful. I am proud to have been asked by my fellow directors to lead the newly constituted board, which includes eight of nine directors who are independent. They are thoughtful and engaged, and come from leading companies with global reach and experience across many industries. In addition to providing oversight on good governance,compensation, financial planning, compliance reporting, strategy, and risk management,management. Importantly, in June 2021 we completed a comprehensive process to identify the talent needed to advance our boardCompany objectives into the future; we were pleased to welcome Jim Grech to our leadership team as our President and Chief Executive Officer and member of the Company’s Board of Directors and the Executive Committee of the Board. Mr. Grech brings not only substantial operational, commercial, and financial experience in the coal and natural gas industries, but also has designed a compensation program that is consistent with best practicesin utilities and peers and aligns management with stockholders. That alignment carries through to the entire Peabody team, and all employees at all levels were offered emergence grants in 2017.
capital markets.
We believe there is much to like about our company in 2018 and beyond, and we begin the year with an emphasis on delivering results and generating value. Our financial approachthat coal will continue to be essential in the production of affordable, reliable energy and steel for building brighter futures - we will continue to strengthen our position by aligning our strategy and practices with the goals of our stakeholders and remaining focused on creating value. We remain committed to generating
value through reweighing investments toward seaborne markets, maximizing U.S. thermal asset cash
maintaininggeneration, and enhancing our financial strength
investing wisely and returning cashthrough debt reductions. This focus, coupled with our commitment to
stockholders.On behalfsustainability, will continue to drive the future success of our board of directors and management team, we thankbusiness.
Thank you for your
time and ongoing support of Peabody.
Your vote is important to us, and we encourage you to submit your vote either electronically, via telephone or in person as described in these materials.
Bob Malone
Chairman of the Board
*Adjusted EBITDA and Free Cash Flow are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure in Appendix B to this proxy statement.
TABLE OF CONTENTS
This summary highlights certain information contained in the Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy Statement before voting. For more complete information regarding
the company’s 2017Peabody’s 2021 performance, please review
the company’sPeabody’s Annual Report on Form
10-K for the year ended December 31,
2017.2021. This Proxy Statement and related materials were first made available on the internet or mailed to stockholders on or about March 24, 2022. | | | | | |
20182022 Annual Meeting Overview
|
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| Date and Time | | May 10, 20185, 2022, at 10:9:00 a.m., Central time Time |
Place
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| Place | Sheraton Clayton Plaza Hotel, 7730 Bonhomme Avenue,Marriott St. Louis West, 660 Maryville Centre Drive, St. Louis, Missouri 63105
63141 and online at www.virtualshareholdermeeting.com/BTU2022 |
Record Date
Virtual Meeting | | March 19, 2018
As part of our precautions regarding COVID-19, our meeting will be also available virtually on the Internet at www.virtualshareholdermeeting.com/BTU2022. If we determine it is not possible or advisable to allow stockholders to attend the 2022 Annual Meeting in person, we will announce the decision to hold the meeting virtually only over the internet in advance and provide stockholders with comprehensive information on their ability to participate in the meeting. |
Voting
| |
| Record Date | March 10, 2022 |
| |
| Voting | Stockholders of record as of the close of business on the record date are entitled to vote. Each share of Common Stock of the companyPeabody (“Common Stock”) is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. |
| |
| Stock Outstanding on Record Date | | 127,365,066138,260,325 shares of Common Stock
|
Registrar & Transfer Agent
| | American Stock Transfer & Trust Company, LLC
|
Company’s State of Incorporation
| | Delaware
|
ROADMAP OF VOTING MATTERS
Stockholders are being asked to vote on the following matters at the
20182022 Annual Meeting:
| | | | | | | | | | | | | | |
| Proposal | Proposals
Board
Recommendation | | More
Information |
| 1.Election of directors. | ProposalFOR each
Nominee
| | Board
Recommendation | | More
Information | | Broker
Discretionary
Voting
Allowed?
| | Votes Required
for Approval | | Abstentions
and Broker
Non-Votes | | Page 9 |
| | 1. Election of Directors.
| | FOR each
Nominee
| | Page 7 | | No | | The affirmative
vote of a
majority of
shares present
in person or
represented
by proxy, and
entitled to
vote on the
matter, is
necessary for
election or
approval of all
four proposals. | | Abstentions have the same effect as votes AGAINST the relevant proposal.
Broker
non-votes2. have no impact on the outcome of the vote for any of the proposals.
| | |
| | 2. Advisory approval of the company’sPeabody’s named executive officerofficers’ compensation.
| | FOR | | Page 57 | | No | | | 56 |
| | 3. Advisory approval of the frequency of holding future advisory votes to approve the company’s named executive officer compensation. | | EVERY YEAR | | Page 58 | | No | | | |
| | 4. Ratification of the appointment of Ernst & Young LLP as the company’sPeabody’s independent registered public accounting firm for the fiscal year ending December 31, 2018.
| 2022. | FOR | | Page 62 | | Yes | | | 61 |
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 1 |
We are committed to
good corporate governance, which we believe promotes the long-term interests of stockholders. The Corporate Governance section beginning on page
2125 describes our governance framework, which includes the following highlights:
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Governance Highlights
|
| |
Board Practices
| | Stockholder Matters
|
✓Non-Executive Chairman
| | ✓ Active and Ongoing Stockholder Outreach
|
✓ 8 of 9 Directors Are Independent
| | ✓ Annual“Say-on-Pay” Advisory Vote
|
✓ Independent Board Committees
| | ✓ Proxy Access Rights
|
✓Regular Executive Sessions of Independent Directors
| | ✓ Stockholder Right to Call Special Meeting
|
✓ Annual Election of All Directors
| | Other Best Practices
|
✓Annual Board and Committee Evaluations
| | ✓ Robust Stock Ownership Guidelines
|
✓Structured Process for Board’s Risk Oversight
| | ✓ Prohibition on Hedging and Pledging Stock
|
✓ Majority Voting in Director Elections
| | ✓ Executive Compensation Clawback Policy
|
DIRECTOR NOMINEES
| | | | |
Snapshot of 2018 Director Nominees
Governance Highlights |
| |
| Board Practices | Stockholder Matters |
✓ Non-Executive Chair | ✓Active and Ongoing Stockholder Outreach |
✓ 9 of 10 Current Directors Are Independent | ✓Annual “Say-on-Pay” Advisory Vote |
✓ Independent Board Committees | ✓Proxy Access Rights |
✓ Regular Executive Sessions of Independent Directors | ✓Stockholder Right to Call Special Meeting |
✓ Annual Election of All Directors | Other Best Practices |
✓ Annual Board and Committee Evaluations | ✓ Robust Stock Ownership Requirements |
✓ Structured Process for Board’s Risk Oversight | ✓Prohibition on Hedging and Pledging Stock |
✓ Majority Voting in Director Elections | ✓Executive Compensation Clawback Policy |
✓Limits on Outside Board Service | ✓Annual Report on CEO Succession Planning |
✓Diverse Backgrounds and Expertise of Directors | |
APPROACH TO ENVIRONMENTAL, SOCIAL, AND GOVERNANCE COMPONENTS
We recognize that the long-term success of our Company depends on more than merely focusing on financial metrics. As such, we take a holistic approach to Environmental, Social, and Governance (ESG) matters, focusing on supporting our customers and other stakeholders' ESG goals in order to generate value for our stockholders. Our commitment to sustainability underpins everything we do today and shapes our strategy for the future.
ESG is integrated into all areas of our business, from the boardroom to the coal face. Our Board has ultimate oversight for ESG initiatives, progress, and risk assessments, with our Nominating and Corporate Governance committee taking the organizing lead for the Board. The executive leadership team and senior management champion our practices, and our global workforce turns those good practices into meaningful changes.
Environmental: Our environmental approach is to focus on responsible coal mining with leading stewardship practices while creating value for our stakeholders. We begin with a deep appreciation and understanding for the land and communities where we operate. Before any mining activity starts, we complete comprehensive baseline studies of local ecosystems and land uses and incorporate our findings into detailed mine plans aimed at reducing potential impacts from our operations. We use industry-leading practices to make the most efficient use of natural resources. This includes a focus on reducing greenhouse gas intensity, conserving water, advancing recycling and waste management programs, and applying progressive land reclamation to lessen surface disturbance.
Society has a growing need for energy and a desire to reduce emissions, and we believe both goals can be achieved by embracing technology. As outlined in our enhanced Statement on Climate Change, which can be found at www.peabodyenergy.com under the Sustainability tab, Peabody recognizes that the effects of climate change must be addressed and that a concerted global effort is required to reduce greenhouse gas (GHG) emissions, including those resulting from the use of energy sources such as coal.
We acknowledge that, in collaboration with our various stakeholders, Peabody has a responsibility to reduce our GHG emissions to fulfill our company's ambition of achieving net-zero emissions by 2050. We commit to establish and report out on specific, measurable short-term targets that will move us along the path to this ambition. Our first incremental target is to reduce our Scope 1 and Scope 2 GHG emissions by 15 percent by 2026 from our 2018 base.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 2 |
Peabody is already taking direct actions to reduce emissions from our mining operations, as well as continuing to drive investment in the development and adoption of the low emissions technologies that will be critical for the world to reach its climate ambitions.
Importantly, we believe the transition to a net-zero emissions economy must balance the need for a timely transition with the necessity for affordable, reliable energy and steel.
We believe that applying emission reduction technology to existing resources and infrastructure must play a key role in reaching a net-zero future. Innovation, experimentation, and technology must be used to reduce emissions, including carbon capture and future carbon offset frameworks.
Social: Our social approach is grounded in our belief that our people are key to a better business and a better society. At Peabody, we begin by creating a strong, united workforce with a commitment to safety as a way of life. Safety is our first value and leading measure of excellence. We approach safety with both vigilance and humility, understanding that incident-free workplaces can be achieved only by accountability and continuous improvement at all levels of our organization.
We seek a workforce that is comprised of diverse backgrounds, thoughts, and experiences as a means to drive innovation and excellence within our business, and we have formalized inclusion programs and training in policy and practice. Our Company strives to attract and retain the best people, and to develop their potential and their skills to address the business' important initiatives and activities. We believe in fostering an inclusive work environment built on mutual trust, respect, and engagement. And we invest in our employees through health and wellness programs, competitive total rewards packages, and development opportunities. And we actively seek our employees' feedback — including through surveys and focus groups — on our Employee Value Proposition.
We endeavor to engage with our organized workforce and foster strong relationships with those organizations built on trust and communication, which was evidenced in 2021 by successful labor negotiations at our Metropolitan, Shoal Creek, Wambo Underground, and Wilpinjong mines.
Peabody works to develop strong, respectful, and collaborative relationships with Indigenous people wherever we operate based upon comprehensive engagement and communication at the site level. In addition, we offer philanthropic support to organizations that our people and communities support.
Governance: Our governance approach provides the framework for how we drive performance and reaches far beyond what we are required to do — to what is right to do. Integrity is embedded in our corporate culture and facilitates ethical decision-making, allows us to build trust among stakeholders, and supports stability within the business. This culture is an expectation that is communicated in our Code of Business Conduct and Ethics and related anti-corruption policies as well as to our suppliers through our Vendor Code of Conduct.
These policies and procedures support compliance with local, state, federal, tribal, and international laws and regulations, including securities requirements, to promote the best interests of the enterprise and enhance our reputation as a world-class, responsible mining company. Our governance practices include, but are not limited to, an independent non-executive Board chair; a majority independent Board; independent Board committees; regular executive sessions of independent directors; annual election of all directors; annual Board and committee evaluations; a structured process for Board risk oversight; majority voting in director elections; diverse backgrounds and expertise of directors; annual “Say-on-Pay” advisory voting; proxy access rights; and robust stock ownership requirements. We believe our executive compensation program is consistent with best practices, aligns management with stockholders, and incorporates ESG metrics. Our approach to corporate governance also focuses on identifying, managing, and mitigating risk. Our Board of Directors oversees an enterprise-wide assessment of risks to appropriately manage and achieve organizational objectives to drive long-term stockholder value.
Additional information regarding our ESG approach and progress can be found within our annual ESG report available at www.peabodyenergy.com/Peabody/media/MediaLibrary/Sustainability/2020-Peabody-ESG-FINAL.pdf. Our annual ESG Report is reviewed by Peabody’s Board of Directors and Executive Leadership Team. Our website and our ESG Report are not incorporated by reference and should not be considered part of this proxy statement.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 3 |
Diversity & Inclusion
Peabody is an equal opportunity employer and, in addition, one of our core values is to offer an inclusive workplace. Our policies and practices support diversity of thought, perspective, sexual orientation, gender, gender identity and expression, race, ethnicity, culture, and professional experience, among others.
Peabody actively supports inclusion and diversity initiatives, including implementing inclusive leader and unconscious bias education to enable the workforce to begin recognizing, acknowledging, and minimizing potential blind spots in interactions with others, while managing more effectively in today’s workplace. Our employees have the right to report issues in a safe and anonymous manner when necessary through our third-party-managed "Tell Peabody" reporting platform, and Peabody has an established process for employees to raise concerns with legal protection. Furthermore, we are committed to continuing our journey toward greater awareness and actions in support of workforce diversity.
United Nations Global Compact
In early 2019, Peabody became a signatory to the United Nations Global Compact, the world’s largest global corporate sustainability initiative. The UN Global Compact provides a universal framework for sustainability in the areas of human rights, labor, environment, and anti-corruption. We endeavor to incorporate the UN Global Compact and its principles in our strategy, culture, and operations and will work to support collaborative projects, which advance the broader development goals of the United Nations and are in line with our mission and values. We reaffirmed our support of the Ten Principles of the UN Global Compact in the areas of human rights, labor, environment, and anti-corruption. We describe our actions to integrate the UN Global Compact and its principles into our business strategy, culture, and operations in our annual Communications on Progress included within our 2020 ESG Report available on our website.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 4 |
DIRECTOR NOMINEES
| | | | | | | | |
| Snapshot of 2022 Director Nominees |
| | |
Executive Chairman, President and Chief Executive Officer of First Sonora Bancshares, Inc., and Chairman, President and Chief Executive Officer of the First National Bank of Sonora, Texas Other Public Company Boards: 3 | Samantha B. Algaze Director since 2020 Portfolio Manager at Elliott Investment Management L.P. Other Public Company Boards: 0 | 
Andrea E. Bertone Director since 2019 Former President of Duke Energy International, LLC (Retired) Other Public Company Boards: 2 |
| | |
William H. Champion Director since 2020 Former Principal of Gladiator Mining Group (Retired) and Former Managing Director, Rio Tinto Coal Australia (Retired) Other Public Company Boards: 1 | Former Managing Director, North America Head of Mining, J.P. Morgan Securities Inc. (Retired) Other Public Company Boards: 0
| | 
Stephen E. Gorman
Director since 2017
Former President and Chief Executive Officer of Borden Dairy Company (Retired)
Other Public Company Boards: 1 | Stephen E. Gorman Director since 2017 Former Chief Executive Officer of Air Methods Corporation (Retired) Other Public Company Boards: 1 |
| | |
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 2 5 |
| | | | |
| | | |
Glenn L. Kellow
 James C. GrechPresident and Chief Executive Officer of the CompanyPeabody Other Public Company Boards: 0 | | 
Former Vice President, of Human Resources and Corporate Services for Chevron Corporation (Retired) Other Public Company Boards: 0
| | 
Teresa S. Madden
Director since 2017
Former Executive Vice President
and Chief Financial Officer of Xcel
Energy, Inc. (Retired)
Other Public Company Boards: 0
|
| | |
Kenneth W. Moore
Director since 2017
President of KWM Advisors, Inc.
and Former Managing Director of
First Reserve Corporation
Other Public Company Boards: 2
| | 
Michael W. Sutherlin
Director since 2014
Former President, Chief Executive
Officer and Director of Joy Global Inc. (Retired)
Other Public Company Boards: 1 | | 
Shaun A. Usmar
David J. Miller Director since 2017Chief Executive Officer2020
Equity Partner, Senior Portfolio Manager and member of TripleFlag Mining Finance Ltd.the Management and Former Senior Executive VicePresident and Chief FinancialOfficer of Barrick Gold Global Situational Investment Committees at Elliott Investment Management L.P. Other Public Company Boards: 01 |
2017 PERFORMANCE AT A GLANCE
2017 marked
BUILDING THE RIGHT TEAM FOR THE FUTURE
During 2021, the Board focused on attracting and retaining the right talent and leadership to propel the Company forward. The Board appointed James C. Grech to serve as President and Chief Executive Officer and as a director of the Company, effective June 1, 2021, with a term expiring at the Company’s 2022 Annual Meeting of Stockholders. Mr. Grech brings a strong operational, commercial, and financial background in both mining and other energy business operations and has extensive utilities and capital markets experience.
Also, during the year,
of both considerable change and significant improvement for Peabody. We substantially increased revenues, Adjusted EBITDA1 and cash flows while reducing debt, buying back stock and executing on our stated financial approach.Key safety, financial and operational highlights include:
| - | In April 2017, Peabody emerged from Chapter 11 and relisted on the New York Stock Exchange. From a modified plan value of $22.03 per share, the company observed a 79 percent increase in BTU’s share price through year-end. |
| - | 2017 revenues rose 18 percent over the prior year, led by robust seaborne coal pricing and higher U.S. demand. |
1 Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciledthe Board promoted Scott Jarboe to the nearest GAAP measure inAppendix B.
position of Chief Administrative Officer and Corporate Secretary and Marc Hathhorn as President of U.S. Operations. Both Messrs. Jarboe and Hathhorn each bring more than a decade of experience with the Company to their new roles and have been critical to the Company's success during that time.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 3 6 |
| - | Adjusted EBITDA1 reached the highest level since 2012, with Australian Adjusted EBITDA1results marking the platform’s largest contribution since 2008. |
| - | Peabody increased liquidity to $1.24 billion as ofyear-end, released approximately $220 million of restricted cash and closed on, and subsequently upsized, a $350 million revolving credit facility, which enables the company to free up additional restricted cash for other purposes over time.
|
| - | The company refinanced its term loan, lowering its interest rate by 100 basis points and modifying terms to provide the company with additional flexibility. |
| - | As part of Peabody’s commitment to deleveraging, the company repaid $500 million of debt, reaching its previously established 2018 targets a year in advance. These voluntary payments, coupled with the company’s meaningful cash position, reduced net debt by nearly 50 percent since Emergence. |
| - | Peabody continues to execute on its authorized $500 million share repurchase program, completing approximately $175 million in share repurchases in the last five months of 2017. |
| - | At an operational level, Peabody’s global safety performance continues to surpass industry averages. The Australian platform recorded record safety results, reflecting a 17 percent improvement from the prior year. |
| - | The company’s North Goonyella high-quality hard coking coal mine achieved record annual production, allowing Peabody to take advantage of strong seaborne coal pricing. |
| - | Peabody believes land restoration is an essential part of the mining process. Both the U.S. and Australian operations exceeded goals for reclamation, restoring a total of 1.4 acres for each acre disturbed. |
| - | In recognition of these actions, Peabody was named the best global responsible mining company for environmental, social and governance standards and performance for the second consecutive year by Capital Finance International. |
| - | Peabody was also awarded Coal Mining Company of the Year by Corporate Livewire. |
Table of Contents
EXECUTIVE COMPENSATION HIGHLIGHTS
On April 3, 2017 (the “Effective Date”), the company successfully emerged from Chapter 11 reorganization (the “Emergence”). Prior to Emergence, our
Peabody’s 2021 executive compensation reflected a combination of performance-based cash incentivesprogram included several features that demonstrate our pay-for-performance approach to executive compensation. This approach aligns with Peabody’s business strategy and Emergence stock grants approved byis designed to motivate and reward our major creditorsleaders for long-term performance and enhanced company value. In addition, we continued to engage with and listen to our investors. We believe that our 2021 executive compensation program is aligned with stockholder interests given the Bankruptcy Court. Soon after Emergence, the new Peabody board of directors (the “Board”) established the 2017emphasis on Free Cash Flow and Adjusted EBITDA.
The 2021 executive compensation program for our named executive officers (“Named Executive Officers” or “NEOs”)
.1 Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure inAppendix B.
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 4 |
Executive Compensation Timeline
The two compensation programs in place during the year – the 2017 executive compensation program and Chapter 11 related compensation – are summarized in the following table:
| | | | | | |
Key 2017 Executive Compensation Elements
|
Element
| | Performance Metric(s)
| | General Description
| | Anticipated Change for 2018
|
Base Salary
| | N/A
| | Fixed cash compensation; reviewed annually and subject to adjustment
| | Market adjustments effective April 1, 2018
|
STIP
| | Adjusted EBITDAR2
Safety
Individual objectives
| | Short-term incentive cash compensation earned based on performance against 2017 financial, safety and individual performance goals
| | Performance objectives consist of Free Cash Flow per Share,3 Adjusted EBITDA2and safety goals. Individual performance goals are excluded from the 2018 STIP to place greater emphasis on measurable Company performance
|
LTIP
| | N/A
| | N/A
| | The reintroduced 2018 LTIP includes a mix of performance share units (60%) and restricted stock units (40%)
|
Key 2017 Chapter 11 Compensation Elements
|
Element
| | Performance Metric(s)
| | General Description
| | Anticipated Change for 2018
|
KEIP
| | Consolidated Adjusted EBITDAR (excluding Australia)4
Australian Adjusted EBITDAR4
Consolidated Cash Flow (before Restructuring Costs)4
Environmental Reclamation
| | Performance-based cash compensation payable only upon successful emergence from Chapter 11
These wereone-time, Chapter11-specific incentives approved by the Bankruptcy Court and our major creditors and will not apply going forward
| | Not applicable
|
Emergence Grant: Restricted Stock Units (“RSUs”)
| | We believe these RSUs recognize the company’s performance during Chapter 11 and align our NEOs’ compensation interests with our stockholders’ investment interests in that increasing levels of value realized by NEOs is contingent on increases in the company’s stock price
| | Awards generally vest ratably on an annual basis over three years, subject to continued employment
These wereone-time, Chapter 11 specific incentives approved by the Bankruptcy Court and our major creditors and will not apply going forward
| | Not applicable
|
2 Adjusted EBITDAR
_____________________________1The performance metrics applicable to NEO awards are explained below under “Compensation Discussion and Analysis.”
2Adjusted EBITDA - STIP and Free Cash Flow - LTIP are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure inAppendix B.3 Free Cash Flow per Share is anon-GAAP measure defined as net cash provided by operating activities less net cash used in investing activities, divided by weighted average diluted shares outstanding. Free Cash Flow per Share is used by management as a measure of our financial performance and our ability to generate excess cash flow from our business operations on a per share basis. Free Cash Flow per Share is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
4 Consolidated Adjusted EBITDAR (excluding Australia), Australian Adjusted EBITDAR and Consolidated Cash Flow (before Restructuring Costs) are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure inAppendix C.
this proxy statement.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 5 7 |
BOARD RESPONSIVENESS TO STOCKHOLDERS
Stockholder Outreach
Peabody engaged in open and constructive dialogue with its stockholders throughout 2021 and into 2022. During this time, Peabody reached out to 62 institutional stockholders, representing about 70% of total shares outstanding as of December 31, 2021, to solicit feedback on Peabody’s strategy, compensation programs, and other ESG matters.
Matters Discussed
In addition to Say-on-Pay matters, members of the Peabody team discussed Peabody’s strategy and value proposition; fundamental drivers of the long-term success of the business; Peabody’s holistic approach to ESG matters, including sustainability; and Board composition and operations; among other items.
Program Structure
Based on the discussions described above, stockholders did not identify any concerns regarding Peabody’s compensation programs. Given this, we believe that the 2021 compensation program remains properly aligned with stockholder feedback.
SUMMARY OF CERTAIN EXECUTIVE COMPENSATION PRACTICES
The table below highlights our current executive compensation practices, including practices we have implemented because we believe they drive performance, and the practices we have not implemented because we do not believe they would serve our stockholders’ long-term interests.
| | | | | | | | | | | |
Executive Compensation Practices |
What We Do | | What We Don’t Do |
✓
| | | |
| ✓ | WeDo have apay-for-performance philosophy, which ties compensation to the creation of stockholder value | ✗ |
✗
| | WeDon’t Don’tallow discounting, reloading, or repricing of stock options without stockholder approval |
✓ | | | |
| ✓ | WeDo use multiple performance metrics for annualSTIP and long-term incentive compensation programsLTIP awards | ✗ |
✗We
| | WeDon’t have “single trigger” vesting of outstanding equity-based awards based on a change in control
|
| | | |
| ✓ | We ✓Do use competitive market information to inform compensation decisions | ✗ | | | WeDo use an independent compensation consultant
| | ✗
| | WeDon’tmaintain compensation programs that encourage unreasonable risk taking
risk-taking |
| | | |
| ✓ | We ✓Do grant a majority of the CEO’s compensation in the form of performance-based awards | ✗ | We Don’t have employment agreements with our U.S.-based NEOs |
| | | |
| ✓ | WeDo use an independent compensation consultant | ✗ | We Don’thave excessive perquisites |
| | | |
| ✓ | We Do have reasonable severance and change in control protections that require involuntary termination | ✗ |
✗We
| | WeDon’t have employment agreements with our NEOs
transferability on equity awards |
✓ | | | |
| ✓ | WeDo have a clawback policy | | ✗
| | WeDon’t have excessive perquisites
|
✓
| | | |
| ✓ | WeDo have policies prohibiting hedging/pledging of the company’sPeabody’s stock | | ✗
| | WeDon’t have transferability on equity awards
|
✓
| | | |
| ✓ | WeDo have robust stock ownership guidelines for our NEOs | | | | |
Please see the Questions and Answers section in Appendix A beginning on page
7169 for important information about the
proxy statement,Proxy Statement, the
20182022 Annual Meeting, the proposals, and voting. Additional questions may be directed to the Corporate Secretary at Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101 or by calling (314)
342-3400. | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 6 8 |
PROPOSAL 1 – ELECTION OF DIRECTORS
The Board has nominated
Samantha B. Algaze, Andrea E. Bertone, William H. Champion, Nicholas J. Chirekos, Stephen E. Gorman,
Glenn L. Kellow,James C. Grech, Joe W. Laymon,
Teresa S. Madden, Bob Malone,
Kenneth W. Moore, Michael W. Sutherlin and
Shaun A. UsmarDavid J. Miller for election as directors, each to serve for a term of one year
andor until his or her successor is duly elected and qualified.
None of the Board's director nominations is required under any contractual arrangement. Our former President, Chief Executive Officer, and director, Glenn L. Kellow, resigned from the Board effective May 31, 2021. Each nominee is currently serving as a director and has consented to serve for the new
term.term, and each nominee was previously elected to serve for a one-year term at our 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”), except for James C. Grech, who joined the Board in June 2021 in connection with his appointment as President and Chief Executive Officer. Should any of
themthe nominees become unavailable for election, your proxy authorizes
useach of Stephen E. Gorman and Scott T. Jarboe to vote for such other person, if any, as the Board may recommend.
Overview of Director Election Process
Pursuant to the Amended and Restated Bylaws (“bylaws”), the Board shall consist of at least three members and no more than 15, and may be fixed from time to time by a resolution adopted by the Board or by the stockholders.
At present,The Board currently consists of ten members but will be reduced to nine members following Mr. Sutherlin's retirement from the Board
has nine members.as of our 2022 Annual Meeting; please refer to the section entitled “Director Not Standing for Reelection” for further information regarding Mr. Sutherlin’s retirement. Directors need not be stockholders
at the time of nomination but are subject to certain share ownership requirements as described below.
Each director to be elected by stockholders shall be elected by
the vote of a majority
vote of the stockholders, except that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by a plurality of votes. There is no cumulative voting in the election of directors. Directors may be removed, with or without cause, by a majority vote of our voting stock.
All directors will be in one class and serve for a term ending at the annual meeting following the annual meeting at which the director was elected.
OurEach of our current
class of directors is subject to reelection at our
20182023 Annual Meeting.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 9 |
The Board recommends that you vote “FOR” the director nominees named below.
| | | | | | | | |
Director Nominees |
| Samantha B. Algaze Director since 2020 Age 34 | Samantha B. Algaze, 34, is a Portfolio Manager at Elliott Investment Management L.P. (“Elliott”), a Florida-based investment fund with over $50 billion in assets under management, where she works on investments spanning multiple industries. Ms. Algaze joined Elliott in 2013 after working at H.I.G. Capital, a private equity and alternative asset investment firm, in the Private Equity division. Prior to that, she was an analyst in Deutsche Bank’s Real Estate, Gaming, Lodging & Leisure Investment Banking Group. Ms. Algaze previously served as chairman of the board of Claire’s Holdings LLC from October 2018 to February 2022, and continues to serve as a member of the board. She has served on the board of AG US Holdco LLC, a vehicle importer, distributor, and retailer with operations primarily in Chile and Peru, since June 2021. Ms. Algaze earned her B.S. in Economics from the University of Pennsylvania’s Wharton School of Business. Ms. Algaze brings to our Board capital market and financial expertise from her roles at Elliott, H.I.G. Capital and Deutsche Bank. |
Committees: ■Nominating & Corporate
Governance |
| Andrea E. Bertone Director since 2019 Age 60 | Andrea E. Bertone, 60, served as President of Duke Energy International, LLC (“Duke Energy”), a subsidiary of Duke Energy Corporation that until December 2016 owned, operated and managed power generation facilities in Central and South America, from 2009 until her retirement in 2016. Prior to her role as President of Duke Energy, she served as Associate General Counsel of Duke Energy from 2003 to 2009 and as Assistant General Counsel, Duke Energy Trading/Marketing and Duke Energy Merchants from 2001 to 2002. Ms. Bertone also served as a director of Duke Energy International Geração Paranapanema S.A. from 2008 until 2016. From 1984 to 2000, Ms. Bertone served in various legal roles in both South America and the United States. Ms. Bertone also served as a director of Yamana Gold Inc. from 2017 to 2020. Other directorships include DMC Global Inc. and Amcor plc. Ms. Bertone earned a Master of Laws, International and Comparative Law from Chicago-Kent College of Law and a Bachelor of Law from the University of São Paulo Law School. She also completed a finance program for senior executives at Harvard Business School. Ms. Bertone brings to our Board extensive leadership experience in the energy sector in the Americas and significant international and risk management experience. |
Committees: ■Audit ■Health, Safety, Security &
Environmental (Chair) ■Executive |
| William H. Champion Director since 2020 Age 69 | William H. Champion, 69, served as Principal at Gladiator Mining Group, LLC from 2014 until his retirement in 2017. From 2002 to 2014, he served in a number of executive management roles for Rio Tinto PLC in its coal, diamond, and copper segments, including as Managing Director of Rio Tinto’s former Australian coal assets. Mr. Champion earned a pair of Bachelor of Science degrees in Chemical Engineering and Biological Sciences from the University of Arizona. He also attended the W.P. Carey School of Business Executive MBA Program at Arizona State University. He is currently an independent director of Buenaventura Mining Co. Inc., Peru’s largest, publicly-traded precious and base metals company, and previously served on the Board of PJSC Polyus Gold, a Russian gold mining company, until March 2022. Mr. Champion brings to our Board extensive mining expertise in both coal and other mineral and metals commodities and risk management experience. |
Committees: ■Audit ■Health, Safety, Security & Environmental |
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 10 |
| | | | | | | | |
| Age 59Committees:
◾ Audit
◾ Nominating &
Corporate Governance
63 | | Nicholas J. Chirekos, 59,63, served in various investment banking roles at J.P. Morgan Securities Inc. from 1987 until his retirement in 2016. He was most recently the Managing Director, North America Head of Mining from 2002 to 2016. Prior to that, he served as the Global Head of Mining and Metals. Mr. Chirekos serves on the RiemanBoard of Directors for New Gold Inc. (Corporate Governance and Nominating Committee and Compensation Committee), as well as the Reiman School of Finance Advisory Board at the University of Denver’s Daniels College of Business andBusiness. He previously served on the boardBoard of directorsDirectors of The Mineral Information Institute. He earned a Bachelor of Science from the University of Denver and a Master of Business Administration from New York University. Mr. Chirekos brings to our Board financial expertise from his extensive experience in investment banking roles, including significant experience within the mining sector, encompassing both North American companies as well as companies with global operations. He also has significant mergers and acquisitions experience and capital markets expertise. |
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 7 |
Committees:
■Audit (Chair)
■Executive
■Nominating & Corporate
Governance
| | |
| Age 62Committees:
◾ Compensation
◾ Executive
◾ Health, Safety, Security &
Environmental (Chair)
66 | | Stephen E. Gorman, 62,66, retired as Chief Executive Officer of Air Methods Corporation in 2020. Prior to that, he served as the President and Chief Executive Officer of Borden Dairy Company from 2014 until his retirement in July 2017. Prior to joining Borden Dairy Company, he was with Delta Air Lines, Inc. from 2007 to 2014, where he was the Chief Operating Officer. From 2003 to 2007 Mr. Gorman served as the President and Chief Executive Officer of Greyhound Lines, Inc. Mr. Gorman was also the Executive Vice President, Operations Support and President, North America for Krispy Kreme Doughnuts, Inc. from 2001 to 2003. Other directorships includeHe currently serves as the Lead Director of ArcBest Corporation ASP AMC Holdings, Inc., ASP MSG Holdings, Inc.(Compensation Committee, and Bradley University.Nominating and Governance Committee). He earned a Bachelor of Science from Eureka College and a Master of Business Administration from Bradley University. Mr. Gorman brings to our Board extensive leadership from his roles as chief executive officer of twothree companies and operations experience as a senior executive of several companies, including companies with global operations. He also has mergers and acquisitions experience as well as financial expertise. |
Glenn L. Kellow
Committees: ■Compensation ■Executive ■Nominating & Corporate
Governance (Chair) |
| James C. Grech Age 50Committees:
◾ Executive
60 | | Glenn L. Kellow, 50,
James C. Grech, 60, was named Peabody President and Chief Operating Officer in August 2013, President, Chief Executive Officer-elect and a director in January 2015, and President and Chief Executive Officer in May 2015.June 2021. Mr. KellowGrech has extensiveover 30 years of experience in the global resource industry, where he hasnatural resources industry. Most recently, Mr. Grech served in multiple executive, operationalas CEO and financial roles in coal, petroleum, steel and other commodities in the United States, Australia and South America. From 1985 to 2013, Mr. Kellow served in a number of roles with BHP Ltd., including senior appointments as President, Aluminum and Nickel (2012-2013), President, Stainless Steel Materials (2010-2012), President and Chief Operating Officer, New Mexico Coal (2007-2010), and Chief Financial Officer, Base Metals (2003-2007). He is Vice Chairman of the World Coal Association, a director and executive committee member of the U.S. National Mining Association,Board of Directors of Wolverine Fuels, LLC, a thermal coal producer and marketer based in Sandy, Utah, from July 2018 until May 2021. Prior to joining Wolverine Fuels, LLC, Mr. Grech served as President of Nexus Gas Transmission from October 2016 to July 2018, and previously held the position of Chief Commercial Officer and Executive Vice ChairmanPresident of International Energy Agency Coal Industry Advisory Board.Consol Energy. He serves as a director of Blue Danube Incorporated. Mr. Kellow isGrech holds a graduateBachelor of the Advanced Management Program at theScience in Electrical Engineering from Lawrence Technological University of Pennsylvania’s Wharton School of Business and holds a Master of Business Administration and a Bachelor Degree in Commerce from the University of Newcastle. He holds an Honorary Doctor of Science from the South Dakota School of MinesMichigan. Mr. Grech brings to our Board a strong operational, commercial, and Technology.Mr. Kellow’s strong qualifications for Board service include deep globalfinancial background in both mining and other energy business operations and steel experience, combined withhas extensive utilities, capital markets, risk management, and executive leadership of our organization.
experience. |
Committees: ■Executive |
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 8 11 |
| | | | | | | | |
| Age 65Committees:
◾ Compensation (Chair)
◾ Executive
◾ Health, Safety, Security &
Environmental
69 | | Joe W. Laymon, 65,69, served as Vice President, of Human Resources and Corporate Services for Chevron Corporation from 2008 until his retirement in 2017. Prior to joining Chevron Corporation, Mr. Laymon worked at Ford Motor Company from 2000 to 2008, where he was the Vice President, Human Resources and later the Group Vice President, Corporate Human Resources and Labor Affairs. He also served as the Vice President, Human Resources, U.S. and Canada Region for Eastman Kodak Company from 1996 to 2000. Other directorships include Clark Atlanta University, BoardRoomIQ.comHe currently serves as a director of Clearwater Paper Corporation (Compensation and United WayNomination & Governance Committees member), the Piston Group (Chair of the Bay Area.Compensation Committee), and Detroit Thermal Systems. Mr. Laymon also owns JWL Consulting LLC and co-owns VJ Enterprises LLC. Mr. Laymon earned a Bachelor of Science in Economics from Jackson State University and a Master of Arts in Economics from the University of Wisconsin. Mr. Laymon brings to our Board extensive leadership, human resources, and international expertise from his experience as a senior human resources executive in a number of large, global companies, including the steel experience,industry, and corporate governance, legal, and regulatory experience. |
Teresa S. Madden
Director since 2017
Age 62
◾■ AuditCompensation (Chair)◾■Health, Safety, Security &
Environmental
| | Teresa S. Madden, 62, retired from Xcel Energy, Inc. (“Xcel”), a utility holding company serving both electric and natural gas customers, in May 2016, where she was employed from 2003 and served most recently as Executive Vice President and Chief Financial Officer from 2011 to 2016. Prior to joining Xcel, she was the Controller at Rogue Wave Software, Inc. From 1979 to 2000, she was the Controller and Manager at Xcel. She also served as an Executive in Residence at the University of Colorado’s Global Energy Management Program during the 2016-2017 school year. Other directorships include the Public Education & Business Coalition. She earned a Bachelor of Science from Colorado State University and a Master of Business Administration from Regis University.
Ms. Madden’s qualifications to serve on our Board include her extensive career in senior financial management positions, most recently with a company in the energy sector, and her advanced degree in business administration. She also has experience with restructurings, mergers and acquisitions and regulatory issues.
|
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 9 |
| | |
Bob Malone Chairman of the Board of Directors
Age 66Committees:
◾ Executive (Chair)
70 | | Bob Malone, 66,70, was elected Executive Chairman, President and Chief Executive Officer of First Sonora Bancshares, Inc., a financial servicesprivately-held bank holding company, in October 2014. He also serves as Chairman, President and Chief Executive Officer of the First National Bank of Sonora, Texas (dba Sonora Bank), a community bank owned by First Sonora Bancshares, Inc., a position he has held since 2014. He joined First Sonora Bancshares and Sonora Bank in October 2009.2009 as President and Chief Executive Officer. He is a retired Executive Vice President of BP plc and the retired Chairman of the Board and President of BP America Inc., at the time the largest producer of oil and natural gas and the second largest gasoline retailer in the United States. He served in that position from 2006 to 2009. Mr. Malone previously servedHe currently serves as Chief Executive Officera director of BP Shipping Limited from 2002Teledyne Technologies Incorporated and Halliburton Company, and expects to 2006,continue serving as Regional President Western United States, BP America Inc. from 2000 to 2002 and as President, Chief Executive Officer and Chief Operating Officer, Alyeska Pipeline Service Company from 1996 to 2000. Mr. Malone previously served in senior positions with Kennecott Copper Corporation. Other directorships include Halliburton Company,a director of BP Midstream Partners and Teledyne Corporation.GP LLC until the closing of its acquisition by BP p.l.c. (which is expected to close in the first quarter of 2022). Mr. Malone holds a Bachelor of Science in Metallurgical Engineering from The University of Texas at El Paso and a Master of Science in Management from Massachusetts Institute of Technology. Mr. Malone’s qualificationsMalone brings to serve on theour Board include his extensive leadership experience, his expertise in the energy sector and in safety regulation compliance, his restructuring experience, and financial expertise, and experience from his service on other public company boards. |
Kenneth W. Moore
Chair of the Board of Directors Committees: ■Executive (Chair) |
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 12 |
| | | | | | | | |
| David J. Miller Age 48Committees:
◾ Audit
◾ Nominating & Corporate
Governance
43 | | Kenneth W. Moore, 48, has served as President
David J. Miller, 43, is an Equity Partner, Senior Portfolio Manager and member of KWM Advisors, Inc. since 2016. Before that,the Management and Global Situational Investment Committees at Elliott Investment Management L.P., a Florida-based investment fund with over $50 billion in assets under management, where he was Managing Director of First Reserve Corporation, a private equityis responsible for investments across the capital structure spanning multiple industries. Mr. Miller joined Elliott in 2003 after working in M&A and infrastructure investment firm focused on energy from 2004 to 2015. From 2000 to 2004 he servedfinancing advisory roles at Peter J. Solomon Company. Mr. Miller is currently serving as a Vice President at Morgan Stanley & Co. Other directorships include Cobaltdirector of Howmet Aerospace Inc., a leading provider of engineered products and solutions to the aerospace, automotive, and other industries. He also serves as a director of Brazilian American Automotive Group, Inc., and AG US Holdco LLC, a vehicle importer, distributor and retailer with operations primarily in Chile and Peru, two of the largest automotive dealership groups in Latin America, as well as Acosta Inc., a leading sales and marketing agency. Mr. Miller previously served on the boards of JCIM, LLC, an automotive component supply joint-venture affiliated with Johnson Controls, Inc., ISCO International, LLC, a telecommunications equipment manufacturer, and SemGroup Energy Inc., Chaparral Energy, Inc. andPartners GP, the SEAL Legacy Foundation.general partner of a publicly-traded midstream energy company. He earnedholds a Bachelor of Arts degree, magna cum laude with high honors in field, from Tufts University and Master of Business Administration from Cornell University.Harvard College. Mr. MooreMiller brings to theour Board significantextensive capital market and executive management experiencefinancial expertise as well as expertise in the energy sector, financial expertiserestructuring, risk management, and mergers and acquisitions experience. |
Committees: ■Executive ■Compensation |
Director Not Standing for Reelection
In accordance with our Corporate Governance Guidelines, Mr. Sutherlin will not stand for reelection at the 2022 Annual Meeting because he has reached the mandatory retirement age of 75. The Company appreciates the dedication and numerous contributions Mr. Sutherlin has made over the last eight years as a director of the Company.
| | | | | | | | |
| Director Not Standing for Reelection |
| Age 71Committees:
◾ Compensation
◾ Executive
◾ Nominating & Corporate
Governance (Chair)
75 | | Michael W. Sutherlin, 71,75, served as the President and Chief Executive Officer and Director of Joy Global Inc. (“Joy”), a mining equipment and services provider, from 2006 tountil his retirement in 2013. From 2003 to 2006, he served as Executive Vice President of Joy and as President and Chief Operating Officer of its subsidiary, Joy Mining Machinery. Prior to joining Joy, Mr. Sutherlin served as President and Chief Operating Officer of Varco International, Inc. Mr. Sutherlin serves on the board of directorshas served as a director of Schnitzer Steel Industries, Inc. since 2015. Mr. Sutherlin holds a Master of Business Administration from the University of Texas at Austin and a Bachelor of Business Administration in Industrial Management from Texas Tech University. Mr. Sutherlin’s qualifications to serve on the Board includeSutherlin has expertise in the manufacturing and mining sectors, core international business experience and restructuring and mergers and acquisitions experience. |
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 10 |
| | |
Shaun A. Usmar
Director since 2017
Age 48
Committees: ◾■Audit
■Nominating & Corporate
Governance◾ Health, Safety, Security &
Environmental
| | Shaun A. Usmar, 48, founded Triple Flag Mining Finance Ltd. (“Triple Flag”) in April 2016 and serves as its Chief Executive Officer. Prior to founding Triple Flag, Mr. Usmar served as Senior Executive Vice President and Chief Financial Officer of Barrick Gold Corporation, from 2014 to 2016, where he helped restructure the company. He joined Xstrata in 2002 as a founding member of the leadership team that grew the company into one of the world’s largest diversified miners at the time of its acquisition by Glencore in 2013. While at Xstrata, his roles includedco-head of Business Development in London, CFO of Xstrata’s global Ferro-Alloys business in South Africa, and CFO of Xstrata’s global Nickel business in Canada. Prior to Xstrata, Mr. Usmar worked at BHP Billiton in Corporate Finance in London, and started his career in mining in operations in the steel and aluminum industries as a production engineer. He has also served on the Ontario Advisory board of The Children’s Wish Foundation, since 2010. Mr. Usmar holds a BSc in Metallurgy and Materials Engineering from the University of Witwatersrand in South Africa, and an MBA from the Kellogg Graduate School of Management at Northwestern University in Evanston, Illinois, both with distinction.
Mr. Usmar brings to the Board extensive leadership experience as a senior officer at several companies, restructuring and mergers and acquisitions experience, and experience in the mining sector as well as financial and commercial expertise and international experience.
|
Director Selection and Evaluation Process
Selection of Directors in 2017
On April 13, 2016 (the “Petition Date”), the company and a majority of the company’s wholly owned domestic subsidiaries and one international subsidiary in Gibraltar (collectively with the company, the “Debtors”), filed voluntary petitions under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Missouri (the “Bankruptcy Court”). The Debtors’ Chapter 11 cases (collectively, the “Chapter 11 Cases”) were jointly administered under the captionIn re Peabody Energy Corporation, et al., CaseNo. 16-42529 (Bankr. E.D. MO.).
On December 22, 2016, the Debtors filed with the Bankruptcy Court a Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and a related Disclosure Statement, and, on January 25, 2017, the Debtors filed with the Bankruptcy Court the First Amended Joint Plan of Reorganization and the First Amended Disclosure Statement. On January 27, 2017, the Debtors filed with the Bankruptcy Court the Second Amended Joint Plan of Reorganization (as amended, the “Plan”) and the Second Amended Disclosure Statement to address certain modifications after a hearing before the Bankruptcy Court on January 26, 2017. On January 27, 2017, the Bankruptcy Court entered the Order: (i) Approving Second Amended Disclosure Statement, (ii) Establishing Procedures for Solicitation and Tabulation of Votes to Accept or Reject Second Amended Plan of Reorganization, (iii) Scheduling Hearing on Confirmation of Second Amended Joint Plan of Reorganization and (iv) Approving Related Notice Procedures, which authorized the Debtors to solicit creditors’ votes on the Plan. On March 6, 2017 and March 15, 2017, the Debtors filed supplements to the Plan with the Bankruptcy Court.
On March 17, 2017, the Bankruptcy Court entered the Order Confirming Second Amended Joint Plan of Reorganization of Debtors and Debtors in Possession as Revised on March 15, 2017 (the “Confirmation Order”), which approved and confirmed the Plan.
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 11 |
On the Effective Date, the Debtors satisfied the conditions to effectiveness set forth in the Plan. As a result, the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases.
Pursuant to the Plan, ourCurrent Board
Our current Board consists of our President and CEO,
Glenn L. Kellow,James C. Grech, and
eightnine independent directors: Bob Malone (Chair),
Samantha B. Algaze, Andrea E. Bertone, William H. Champion, Nicholas J. Chirekos, Stephen E. Gorman, Joe W. Laymon,
Teresa S. Madden, Kenneth W. Moore,David J. Miller, and Michael W.
Sutherlin and Shaun A. Usmar. The directorsSutherlin. All of
our current Board members were elected to serve for a one-year term at the
company were selected pursuant to the Plan as follows: (a) the CEO; (b) the Debtors designated one independent director – Bob Malone; (c) Contrarian Capital Management, L.L.C. (“Contrarian”), PointState Capital Management, LP (“PointState”), Panning Capital Management, LP (“Panning”), as creditors, together designated one independent director – Kenneth W. Moore; (d) Elliott Management Corp. (“Elliott”) selected one independent director – Shaun A. Usmar; and (e) a selection committee comprising the chief executive officer of the company, a representative of Elliott and one nominee acting on behalf of Contrarian, PointState, and Panning, acting as a selection committee, retained atop-tier, international search firm to identify and recommend the remaining five independent directors, which were then selected by such selection committee.Each of the current directors of2021 Annual Meeting, except for James C. Grech, who joined the Board was appointed effective on the Effective Date in connection with the Plan and process outlined above, and each was determined by the company’s Nominating and Corporate Governance Committee and full Board to be qualified to serve on the Board. The term for all the directors expires at the upcoming 2018 Annual Meeting, and all directors will be elected annually.
On the Effective Date, the following persons ceased to serve as directorsJune 2021.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 13 |
Overview of Director Nominating Process
The Board believes one of its primary goals is to advise management on strategy and to monitor
ourits performance. The Board also believes the best way to accomplish this goal is by choosing directors who possess a diversity of experience, knowledge, and skills that are particularly relevant and helpful to us. As such, current Board members and director nominees possess a wide array of skills and experience in the coal industry, related energy industries, and other important areas, including engineering, finance and accounting, operations, environmental affairs, international affairs, governmental affairs and administration, public policy, corporate governance, board service, and executive management. When evaluating potential members, the Board seeks to enlist the services of candidates who possess high ethical standards and a combination of skills and experience which the Board determines are the most appropriate to meet its objectives. The Board believes all candidates should be committed to creating value over the long term and to serving our best interests and the best interests of our stockholders.
The Nominating and Corporate Governance Committee is responsible for identifying, evaluating, and recommending qualified candidates for election to the Board. The Nominating and Corporate Governance Committee will consider director candidates submitted by stockholders. stockholders in accordance with the process outlined below.
Any stockholder wishing to submit a candidate for consideration should send the following information to the Corporate Secretary, Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101:
| – | Stockholder’s name, number of shares owned, length of period held and proof of ownership; |
| – | Candidate’s name, age and address; |
| – | A detailed resume describing, among other things, the candidate’s educational background, occupation, employment history and material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.); |
| – | A supporting statement which–Stockholder’s name, number of shares owned, length of period held, and proof of ownership; –Candidate’s name, age, and address; –A detailed resume describing, among other things, the candidate’s educational background, occupation, employment history, and material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.); –A supporting statement that describes the candidate’s reasons for seeking election to the Board, and documents the candidate’s ability to satisfy the director qualifications criteria described above; |
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 12 |
| – | A description of any arrangements or understandings between the stockholder and the candidate; and |
| – | A signed statement from the candidate confirming his/her willingness to serve on the Board, if elected. |
The Corporate Secretary will promptly forward such materials to the Committee ChairBoard and documents the candidate’s ability to satisfy the director qualifications criteria described above;
–A description of any arrangements or understandings between the stockholder and the Chairman ofcandidate; and
–A signed statement from the Board. The Corporate Secretary also will keep copies of such materials for future reference bycandidate confirming his/her willingness to serve on the Nominating and Corporate Governance Committee when filling Board, positions.if elected.
Stockholders may submit potential director candidates
for consideration at any time in accordance with these procedures. The Nominating and Corporate Governance Committee will consider such candidates if a vacancy arises or if the Board decides to expand its membership, and at such other times as the Nominating and Corporate Governance Committee deems necessary or appropriate.
We recentlyIn 2015, we modified our bylaws to implement “proxy access,” a means for stockholders to include stockholder-nominated director candidates in our proxy materials for annual meetings of stockholders. Separate procedures apply if a stockholder wishes to nominate a director candidate at the
20182023 Annual Meeting. Those procedures are described below under the heading
“Process“Additional Information—Process for Stockholder Proposals and Director Nominations.”
Under its charter, the Nominating and Corporate Governance Committee must review with the Board, at least annually, the requisite qualifications, independence, skills, and characteristics of Board candidates, members, and the Board as a whole.
When assessing potential new directors, the Committee considers individuals from various and diverse backgrounds. While the selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, the Nominating and Corporate Governance Committee believes candidates should generally meet the criteria listed below under the heading “Director Qualifications.”
The Nominating and Corporate Governance Committee will consider candidates submitted by a variety of sources, (including, without limit, incumbent directors, stockholders, management and third-party search firms)including stockholder nominees, when filling vacancies and/or expanding the Board. If a vacancy arises or the Board decides to expand its membership, the Nominating and Corporate Governance Committee generally asks each director to submit a list of potential candidates for consideration. The Nominating and Corporate Governance Committee then evaluateswill evaluate each potential candidate’s educational background, employment history, outside commitments, and other relevant factors to determine whether he/she is potentially qualified to serve on the Board. At that time, the Nominating and Corporate Governance Committee alsoQualified stockholder nominees will consider potential candidates submitted by stockholders in accordance with the procedures described above. The Committee seeks to identify and recruit the best available candidates, and it intends to evaluate qualified stockholder nomineesbe evaluated on the same basis as those submitted by Board members or other sources.
After completing this process, the Nominating and Corporate Governance Committee will determine whether one or more candidates are sufficiently qualified to warrant further investigation. If the process yields one or more desirable candidates, the Nominating and Corporate Governance Committee will rank them by order of preference, depending on their respective qualifications and our needs. The Committee Chair, or another director designated by the Committee Chair, will then contact the preferred candidate(s) to evaluate their potential interest and to set up interviews with members of the Nominating and Corporate Governance Committee. All such interviews are held in person, and include only the candidate and the independent Nominating and Corporate Governance Committee members. Based upon interview results and appropriate background checks, the Nominating and Corporate Governance Committee then decides whether it will recommend the candidate’s nomination to the full Board.
The Nominating and Corporate Governance Committee believes
thisthat its process
for selecting directors will consistently produce highly qualified, independent Board members. However, the Committee may choose, from time to time, to use additional resources (including independent third-party search firms) after determining that such resources could enhance a particular director search.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 13 14 |
Under its charter, the Nominating and Corporate Governance Committee reviews with the Board, at least annually, the requisite qualifications, independence, skills and characteristics of Board candidates,
current Board members, and the
Board.Board as a whole. While the selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, the Nominating and Corporate Governance Committee believes that candidates should generally meet the following criteria:
•Broad training, experience and a successful track record at senior policymaking levels in business, government, education, technology, accounting, law, consulting, and/or administration;
•The highest personal and professional ethics, integrity, and values;
•Commitment to representing our long-term interests and those of all our stockholders;
•An inquisitive and objective perspective, strength of character, and the mature judgment essential to effective decision-making;
•Expertise that is useful to us and complementary to the background and experience of other Board members; and
•Sufficient time to devote to Board and committee activities and to enhance their knowledge of our business, operations, and industry.
The Board believes that all
of our
current directors meet these criteria. In addition, as outlined below, each director brings a strong and unique background and set of skills to the Board, giving the Board competence,
experience and
experiencediversity in a wide variety of areas, including mining and related industries, end-user segments (energy/steel),
mergers and acquisitions (“M
&A,&A”), finance and accounting, human capital and organizational health, restructuring, global operations, health, safety and environmental affairs, international, governmental affairs and administration, public policy, corporate governance, legal and regulatory, board service, and executive management.
We believe the Board as a whole and each of our directors individually possess the necessary qualifications and skills to effectively advise management on strategy, monitor our performance, and serve our best interests and the best interests of our stockholders.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 14 |
The following chart highlights each director nominee’stable shows our directors’ specific skills, knowledge, and experience that the Nominating and Corporate Governance Committee and Board relied upon when determining whether to nominate the individual for election. A particular nominee may possess other valuable skills, knowledge, or experience even though they are not indicated below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Competencies
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | | Chirekos
| | Gorman
| | Kellow
| | Laymon
| | Madden
| | Malone
| | Moore
| | Sutherlin
| | Usmar
15 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Malone | Algaze | Bertone | Champion | Chirekos | Gorman | Grech | Laymon | Miller | Sutherlin |
| Skills, Knowledge, and Experience |
| Public Company Board Experience | l | l | l | l | l | l | l | l | l | l |
| Financial | l | l | l | | l | l | l | l | l | l |
| Health, Safety, Environmental | l | | l | l | | l | l | l | | l |
| Risk Management | l | | l | l | l | | l | l | l | l |
| Accounting | | l | | | l | | | | | l |
| Corporate Governance/Ethics | l | | l | l | l | | | l | l | l |
| Legal/Regulatory | l | | l | | | | | | | l |
| Human Capital/Organizational Health/Compensation | l | | | | | | | l | | l |
| Executive Experience | l | | l | l | | l | l | l | | l |
| Strategic Planning/Oversight | l | | l | l | l | l | l | l | l | l |
| Technology/Cybersecurity | l | | | | | | | | | l |
| Mergers and Acquisitions | l | l | l | | l | l | l | l | l | l |
| Mining or Related | l | | l | l | l | | l | l | | l |
| End User Segments (Energy/Steel) | l | | l | | | | l | l | | |
| Commercial Sales/Marketing | l | | | | | | l | | | l |
| Global Operations/Supply Chain | l | | l | l | | l | l | | | l |
| Government/Public Policy | l | | | l | | | | l | | l |
| International (Australia /AsiaPac) | l | | | l | l | l | | l | | l |
| Restructuring Industry/Company | l | l | | l | | l | l | l | l | l |
| Select Minority Demographics |
| Female | | l | l | | | | | | | |
| African American | | | | | | | | l | | |
| Latino(a) | | | l | | | | | | | |
| Veteran/Military Service |
| Prior Service | | | | | | | | l | | l |
| Board Tenure |
| Years | 13 | 2 | 3 | 2 | 5 | 5 | 1 | 5 | 2 | 8 |
| Compliance Considerations |
| Independent Director | l | l | l | l | l | l | | l | l | l |
CEO Experience
| | | | ✓
| | ✓
| | | | | | ✓
| | | | ✓
| | ✓
|
Restructuring
Industry/Company
| | | | ✓
| | ✓
| | ✓
| | ✓
| | ✓
| | | | ✓
| | ✓
|
Health, Safety,
Environment
| | | | ✓
| | ✓
| | ✓
| | | | ✓
| | | | | | ✓
|
Global Operations,
Supply Chain
| | ✓
| | ✓
| | ✓
| | ✓
| | | | ✓
| | | | ✓
| | ✓
|
Financial Depth,
Expertise
| | ✓
| | ✓
| | ✓
| | | | ✓
| | ✓
| | ✓
| | ✓
| | ✓
|
M&A Experience
| | ✓
| | ✓
| | ✓
| | | | ✓
| | | | ✓
| | ✓
| | ✓
|
Human Capital,
Organization Health
| | | | ✓
| | | | ✓
| | | | | | | | ✓
| | |
Government, Public
Policy
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | | | | | | | | ✓
| | ✓
| | ✓
| | | | | | ✓
|
Corporate Governance,
Legal, Regulatory
| | | | ✓
| | ✓
| | ✓
| | ✓
| | ✓
| | ✓
| | ✓
| | |
Mining or Related
| | ✓
| | | | ✓
| | | | | | ✓
| | | | ✓
| | ✓
|
End User Segments
(Energy/Steel)
| | | | | | ✓
| | ✓
| | ✓
| | ✓
| | ✓
| | ✓
| | ✓
|
International
(Australia, AsiaPac)
| | ✓
| | ✓
| | ✓
| | ✓
| | | | ✓
| | ✓
| | ✓
| | ✓
16 |
Peabody is an equal opportunity employer and, in addition, one of our core values is to offer an inclusive workplace. Our policies and practices support diversity of thought, perspective, sexual orientation,
gender, gender identity and expression, race, ethnicity, culture, and professional experience, among others. While the Board does not have a formal policy of considering diversity when evaluating director candidates, the Board does believe that its members should reflect diversity in
perspectives and experiences, including in professional experience, cultural experience, gender, and ethnic background. These factors, together with the director qualifications criteria noted above, are considered by the Nominating and Corporate Governance Committee in assessing potential new directors.
In May 2018, Peabody became a signatory to the CEO Action for Diversity & Inclusion Pledge. CEO Action for Diversity & Inclusion is known as the largest CEO-driven business commitment for inclusive workplaces, with more than 650 signatories. By signing the pledge, Peabody commits to a deliberate focus on:
•Continuing to make our workplaces trusting environments for open exchange and complex conversations about diversity and inclusion;
•Implementing and expanding unconscious bias education; and
•Sharing diversity and inclusion practices – those that produce positive results, and those found less successful – with other companies, with the goal of continuous improvement.
The Board conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. Pursuant to its charter, the Nominating and Corporate Governance Committee is responsible for developing and administering an annual review process to evaluate the performance of the Board. This annual review process includes the annual solicitation of comments from all directors, after which the Nominating and Corporate Governance Committee reports to the Board with an assessment of the Board’s performance, which is discussed by the full Board. The Board has confirmed that each committee and the Board as a whole is functioning effectively.
Board Training and Development
From time to time, the Board members attend ongoing training and development sessions.
For instance, in early 2018, the BoardOur directors are members
attended training on various topics facilitated byof the National Association of Corporate
Directors.Directors, and from time to time attend trainings provided through that organization. In 2021, our directors also participated in an in-boardroom training session presented by the Company’s advisors. | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 15 17 |
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
Committee Role and Responsibilities
The specific roles and responsibilities of the Board’s Audit, Compensation, Nominating and Corporate Governance, Executive and Health, Safety, Security, and Environmental Committees are delineated in written charters adopted by the Board for each committee. Each member of the Audit, Compensation,
and Nominating and Corporate Governance
and Health, Safety, Security, and Environmental Committees is independent in accordance with our Corporate Governance Guidelines, which applies the independence standards (the “Independence Standards”) included in the New York Stock Exchange (“NYSE”) Listed Company Manual and the Exchange Act (as defined herein). Our Corporate Governance Guidelines and the charters of each of the Board’s committees are available on the
Corporate Governance“Governance Documents” page under the
Investors“Investor” section of our website at: www.peabodyenergy.com. As provided in their charters, each committee is authorized to engage or consult from time to time, as appropriate, at our expense, with outside independent legal counsel or other experts or advisors it deems necessary, appropriate, or advisable to discharge its duties.
| | | | | |
Audit Committee
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 18 |
| | | | | |
Audit Committee |
Andrea E. Bertone William H. Champion Nicholas J. Chirekos Teresa S. Madden (Chair)
Kenneth
Michael W. Moore------------------------------------
9Sutherlin
----------------------------------- 10 meetings in fiscal year 2017:6 meetings post-Emergence
3 meetingspre-Emergence
2021 | | ◾■Reviews and discusses with management and the independent registered public accounting firm the audited annual financial statements, quarterly financial statements, and changes in our application of accounting principles;◾■Assists the Board in fulfilling its oversight responsibility with respect to: (a) the quality and integrity of our financial statements and financial reporting processes; (b) our systems of internal accounting and financial controls and disclosure controls; (c) the independent registered public accounting firm’s qualifications and independence; (d) the performance of our internal audit function and independent registered public accounting firm; and (e) compliance with legal and regulatory requirements and codes of conduct and ethics programs established by management and the Board;◾■Appoints our independent registered public accounting firm, which reports directly to the Audit Committee;◾■Pre-approves all audit engagement fees and terms and all permissible non-audit engagements with our independent registered public accounting firm; ◾■Ensures that we maintain an internal audit function and reviewsreviews the appointment of the senior internal audit team;◾■Meets on a regular basis with our management, internal auditors, and independent registered public accounting firm to review matters relating to our internal accounting controls, internal audit program, accounting practices and procedures, the scope and procedures of the external audit, the independence of the independent registered public accounting firm, and other matters relating to our financial condition;◾■Oversees our financial reporting process and review in advance of filing or issuance of our Quarterly Reports on Form10-Q, Annual Reports on Form10-K, annual reports to stockholders, and earnings press releases;◾■Performs an annual review of our information technology security function and strategy;
■Reviews, our guidelinespre-approves, and policiesinforms independent auditors of transactions and relationships with respectrelated parties that are significant to risk assessmentthe Company; and risk management, and our major financial risk exposures and steps management has taken to monitor and control such exposures; and |
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 16 |
| | |
| | ◾■Makes regular reports on its activities to the Board.
See the “Audit Committee Report” on page 59.57. All the members of the Audit Committee are independent under regulations adopted by the Securities and Exchange Commission (“SEC”), NYSE listing standards, and the Independence Standards. The Board has determined that each member of the Audit Committee is financially literate under NYSE guidelines, and each is anMr. Chirekos and Mr. Sutherlin are audit committee financial expertexperts pursuant to the criteria prescribed by the SEC. The Audit Committee is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. |
| | | | | |
Compensation Committee
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 19 |
| | | | | |
Compensation Committee |
Joe W. Laymon (Chair) Michael W. Sutherlin
David J. Miller ------------------------------------ 7
6 meetings in fiscal year 2017:4 meetings post-Emergence
3 meetingspre-Emergence
2021 | | ◾■Reviews and recommends to the Board the company’sPeabody’s executive compensation philosophy for the compensation of the executive officers of the companyPeabody and its subsidiaries;◾■Annually reviews and recommends to the Special Committee (as defined below) the corporate goals and objectives relevant to the compensation of our CEO, initiates the evaluation by the Board of the CEO’s performance in light of those goals and objectives, and, together with the Special Committee, determines and approves the CEO’s compensation levels based on this evaluation;◾■Annually reviews with the CEO the performance of our other executive officers and makes recommendations to the Board with respect to the compensation plans for such officers;◾■Annually reviews and approves for the NEOs (other than the CEO) and recommends for our CEO base salary, annualshort-term incentive opportunity and long-term incentive opportunity, stock ownership requirements, and, as appropriate, severance arrangements, retirement and other post-employment benefits,change-in-control provisions, and any special supplemental benefits;◾■Approves annualshort-term incentive awards for executive officers other than the CEO;◾■ OverseesAdministers our annualshort-term and long-term incentive plans and programs;◾■Periodically assesses our director compensation program and stock ownership requirements and, when appropriate, recommends modifications for Board consideration;
■Oversees matters related to human capital management (and disclosures related to such matters), including diversity and inclusion, pay equity, the Company’s culture, employee engagement, and the general approach to broad-based compensation, benefits, and employee growth and development practices; ◾■Reviews the Compensation Discussion and Analysis for inclusion in our annual Proxy Statement;
■Oversees, in consultation with management, regulatory compliance with respect to compensation matters; and ■Makes regular reports on its activities to the Board. The “Special Committee” is comprised of the independent members of the Board. It is responsible for decisions regarding the compensation of the CEO. See the “Compensation Discussion and Analysis” beginning on page 2629 for more information. The Compensation Committee has the sole discretion to retain or obtain the advice of any compensation consultant, legal counsel or other advisor to assist in the Compensation Committee’s evaluation of executive compensation, including the sole authority to approve fees for any such advisor. The Compensation Committee is also responsible for assessing the independence of any such advisor. All the members of the Compensation Committee are independent under NYSE listing standards and the Independence Standards. The Committee may form and delegate authority to subcommittees where appropriate and may delegate certain grant authority to our officers under our 2017 Incentive Plan, subject to limitations under applicable law and the terms of the 2017 Incentive Plan. |
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 17 20 |
| | | | | |
Health, Safety, Security, and Environmental Committee |
Andrea E. GormanBertone (Chair) William H. Champion Joe W. Laymon Teresa S. Madden
Shaun A. Usmar
------------------------------------ 8
6 meetings in fiscal year 2017:6 meetings post-Emergence
2 meetingspre-Emergence
2021 | | ◾■Responsible for reviewing, with management, our significant risks or exposures in the health, safety, security, and environmental areas and steps taken by management to address such risks;◾■Reviews our health, safety, security, and environmental objectives, policies, and performance, including processes to ensure compliance with applicable laws and regulations;◾■Reviews our efforts to advance our progress on sustainable development;◾■Reviews and discusses with management any material noncompliance with health, safety, security, and environmental laws, and management’s response to such noncompliance;◾■Reviews and recommends approval of the environmental and mine safety disclosures required to be included in our periodic reports on Forms10-K and10-Q;◾■Considers and advises the Board on health, safety, security, and environmental matters and sustainable development;◾■Considers and advises the Compensation Committee on our performance with respect to incentive compensation metrics relating to health, safety, security, or environmental matters;◾■Reviews and discusses significant legislative, regulatory, political and social issues, and trends that may affect our health, safety, security, and environmental management process and system, and management’s response to such matters; and◾■Makes regular reports on its activities to the Board.
All the members of the Health, Safety, Security, and Environmental Committee are independent under NYSE listing standards and the Independence Standards. |
| | | | | |
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 21 |
| | | | | |
| Nominating and Corporate Governance Committee |
Samantha B. Algaze Nicholas J. Chirekos Kenneth W. Moore
Stephen E. Gorman (Chair) Michael W. Sutherlin (Chair)Shaun A. Usmar
------------------------------------ 8
4 meetings in fiscal year 2017:5 meetings post-Emergence
3 meetingspre-Emergence
2021 | | ◾■Responsible for corporate governance matters;◾■Reviews with the Board the requisite qualifications, independence, skills, and characteristics of Board candidates, members, and the Board as a whole;
■Initiates nominations for election as a director of Peabody; ■Assists the company;◾ EvaluatesBoard in developing and administering an annual review process to evaluate the performance of the Board;
Board, Board committees, and management; ◾■Identifies, evaluates, and recommends qualified candidates, including stockholder nominees, for election to the Board;◾■Advises the Board on corporate governance policies and procedures;◾■ Assists the Board in developing and administering an annual review process to evaluate performance of the Board;◾Recommends the structure, composition, and responsibilities of other Board committees;
◾■Assists in the preparation of the disclosure in our annual Proxy Statement regarding corporate governance practices;
■Advises the Board on matters related to corporate social responsibility (e.g., equal employment, corporate contributions, and lobbying); ◾■Oversees the Company's strategy on global corporate social responsibility and sustainability, including evaluating the impact of Company practices on communities and individuals;
■Develops and recommends to the Board policies and procedures relating to the Company's corporate social responsibility and sustainability activities, and monitors compliance with the Company's corporate responsibility and sustainability program; ■Ensures we maintain an effective orientation program for new directors and a continuing education and development program to supplement the skills and needs of the Board; ◾■Provides review and oversight of potential conflicts of interest situations, including transactions in which any related person had or will have a direct or indirect material interest; |
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 18 |
| | |
| | ◾■Reviews our policies and procedures with respect to related person transactions at least annually and recommends any changes for Board approval;
◾■Reviews and makes recommendations to the Board in conjunction with the Chair and CEO, as appropriate, with respect to executive officer succession planning and management development;
■Monitors compliance with, and advises the Board regarding any significant issues arising under, our corporate compliance program and Code of Business Conduct and Ethics; and ◾■ Reviews and makes recommendations to the Board in conjunction with the Chairman and CEO, as appropriate, with respect to executive officer succession planning and management development; and◾Makes regular reports on its activities to the Board.
All the members of the Nominating and Corporate Governance Committee are independent under NYSE listing standards and the Independence Standards. |
| | | | | |
Executive Committee
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 22 |
| | | | | |
Executive Committee |
Committee Members Glenn L. Kellow
Andrea E. Bertone Nicholas J. Chirekos James C. Grech Joe W. Laymon Teresa S. Madden
Bob Malone (Chair) Michael W. Sutherlin
David J. Miller ------------------------------------ 1 meeting in fiscal year 2017 –pre-Emergence
2021 | | ◾■Responsible for assuming Board responsibilities when the Board is not in session.session; and ◾■When the Board is not in session, the Executive Committee has the power and authority as delegated by the Board, except with respect to matters that may require Board or stockholder approval under applicable law, including:◾■Amending our certificate of incorporation and bylaws;◾■Adopting an agreement of merger or consolidation;◾■Recommending to stockholders the sale, lease or exchange of all or substantially all our property and assets;◾■Recommending to stockholders dissolution of the CompanyPeabody or revocation of any dissolution;◾■Filling vacancies on the Board;◾■Appointing members of Board committees; and◾■Changing major lines of business.
|
The Board met
1522 times in fiscal
2017. Seven of suchyear 2021 due, in large part, to special meetings
that were
held post-Emergenceconvened to evaluate various financial and
eight were heldpre-Emergence.other initiatives and opportunities to improve the Company's long-term resiliency in all market cycles. During fiscal
2017,year 2021, each incumbent director attended 75% or more of the aggregate number of meetings of the Board and the committees on which he or she served, and their average attendance was
96%approximately 98%.
In accordance with our Corporate Governance Guidelines, the
non-management directors meet in executive session at least quarterly. During fiscal
2017,year 2021, our
non-management directors met in executive session
fiveseven times. Our
Chairman,Chair, Mr. Malone, chaired these executive sessions.
Under Board policy, each director is expected to attend our annual meetings of stockholders in person, subject to occasional excused absences due to illness or unavoidable conflicts.
AlthoughAll of our then-current directors attended the
company did not hold an annual meeting2021 Annual Meeting, and all of
stockholders in 2017, all our director nominees are expected to attend the
20182022 Annual Meeting.
Board’s Role in Risk Oversight
The Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to enhance long-term organizational performance and
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 19 |
stockholder value. A fundamental part of risk management is not only understanding the risks we face, how those risks may evolve over time, and what steps management is taking to manage and mitigate those risks, but also understanding what level of risk tolerance is appropriate for us. Management is responsible for theday-to-day management of the risks we face, while the Board, as a whole and through its committees, is responsible for the oversight of risk management.
In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board regularly reviews information regarding marketing, operations, safety performance, trading, finance,
and business development,
cybersecurity function and strategy, the impact of COVID-19, and environmental, social, and governance objectives, policies, and performance as well as the risks associated with each. In addition, the Board holds strategic planning sessions with management to discuss our strategies, key challenges, and risks and opportunities. The full Board receives reports on our enterprise risk management initiatives on at least an annual
basis.basis and oversees the process of identifying and mitigating our material risks.
While the Board is ultimately responsible for risk oversight, Board committees also have been allocated responsibility for specific aspects of risk oversight. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls,
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 23 |
risk assessment, and risk management. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the risks arising from our compensation policies and
programs.programs and human capital matters. The Health, Safety, Security, and Environmental Committee assists the Board in fulfilling its oversight responsibilities with respect to the risks associated with our health, safety, security, and environmental objectives, policies, and
performance.performance, including those related to cybersecurity and data privacy. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the risks associated with board organization, membership and structure, ethics and compliance, political contributions, and lobbying expenditures, succession planning for our directors and executive officers, and corporate governance.
In accordance with our Corporate Governance Guidelines, a majority of our Board must be independent as defined by the NYSE listing standards and the Exchange Act. As required by the NYSE listing standards, the Board evaluates the independence of its members at least annually, and at other appropriate times when a change in circumstances could potentially impact the independence or effectiveness of one or more directors (such as in connection with a change in employment status or other significant status changes). This process is administered by the Nominating and Corporate Governance Committee, which consists entirely of directors who are independent under applicable NYSE rules. After carefully considering all relevant relationships, the Nominating and Corporate Governance Committee submits its recommendations regarding independence to the full Board, which then makes a determination with respect to each director.
On January 18, 2018, the
The Board
has determined that all
theof its current members, except for Mr.
KellowGrech, are independent.
In addition, the Board previously determined that Mr. Kellow and Darren R. Yeates, our Executive Vice President and Chief Operating Officer, were not independent during their tenures. In making independence determinations, the Nominating and Corporate Governance Committee and the Board consider all relevant facts and circumstances, including (1) the nature of any relationships with us, (2) the significance of the relationship to us, the other organization, and the individual director, (3) whether or not the relationship is solely a business relationship in the ordinary course of our and the other organization’s businesses and does not afford the director any special benefits, and (4) any commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships. For purposes of this determination, the Board generally deems any relationships that have expired for more than three years to be immaterial. The Board also considered the relationships described below in “Review of Related Person Transactions.” The Audit Committee, Compensation Committee,
Health, Safety, Security, and Environmental Committee, and Nominating and Corporate Governance Committee are each comprised of independent directors.
Board Leadership Structure
Our bylaws and Corporate Governance Guidelines permit the roles of Chairman and CEO to be filled by different individuals. Effective May 1, 2017, the Board elected Mr. Malone to the role ofnon-executive Chairman of the Board.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 20 |
Our Board leadership structure provides for strong oversight by independent directors. The Board is currently comprised of Mr. KellowGrech and eightnine independent directors. All Board committees are chaired by and composed entirely of independent directors, except for the Executive Committee, of which Mr. KellowGrech is a member.
Effective May 1,
Our bylaws and Corporate Governance Guidelines permit the roles of Chair and CEO to be filled by different individuals. In 2017, the Board elected Mr. Malone becameto the role of non-executive Chairman Chair of the Board. Board of Peabody and continues to believe that separating the roles of Chair and CEO is in the best interest of our stockholders. The Board believes that the current structure provides many advantages to the effective operation of the Board and enhances the Board’s oversight of management.
As
Chairman,Chair, Mr. Malone’s duties are to:
•Manage the affairs of the Board;
•Preside at meetings of the Board, at executive sessions of the independent directors, and at meetings of our stockholders;
•Call meetings of the Board and the independent directors of the Board;
•Organize the work of the Board, with assistance from Peabody’s CEO and Corporate Secretary, including to establish annual Board schedules and meeting agendas, to ensure the Board is provided with accurate and timely information, and to consult with other directors concerning such matters;
•By standing invitation, attend meetings of those committees of the Board of which the Chair is not a listed member (in each case as a non-voting member);
| – | Manage the affairs | | | |
Peabody | Notice of the Board;2022 Annual Meeting of Stockholders and Proxy Statement | 24 |
| – | Preside at meetings of the Board, at executive sessions of the independent directors and at meetings of our stockholders; |
| – | Call meetings of the Board and the independent directors of the Board; |
| – | Organize the work of the Board, with assistance from the company’s CEO and Corporate Secretary, including to establish annual Board schedules and meeting agendas, to ensure the Board is provided with accurate and timely information and to consult with other directors concerning such matters; |
| – | By standing invitation, attend meetings of those committees of the Board of which the Chairman is not a listed member (in each case as a
•Facilitate effective communication among directors; •Review and approve minutes of the meetings of the Board and stockholders; •non-voting member); |
| – | Facilitate effective communication among directors; |
| – | Review and approve minutes of the meetings of the Board and stockholders; |
| – | In conjunction with the Nominating and Corporate Governance Committee, ensure that processes governing the Board’s work are effective to enable the Board to exercise oversight and due diligence; |
| – | Promote Board effectiveness by working with the Nominating and Corporate Governance Committee to: (1) plan Board and committee composition, Board recruitment, new director orientation, director education and Board succession planning, (2) coordinate the Board evaluation process and obtain director feedback, (3) review changes in the circumstances of existing directors, determine if directors’ other commitments conflict with their Board duties, and review requests from the CEO to sit on the boards of other organizations, and (4) formulate governance policies and procedures that best serve the interests of the company and its stockholders; |
| – | Coordinate periodic Board review of, and input regarding, management’s strategic plan for the company; |
| – | With the assistance of the Compensation Committee, lead the annual Board performance evaluation of the CEO and communicate the results to the CEO; |
| – | Lead the Board’s review of the succession plan for the CEO and other key executives; |
| – | Facilitate communication between the directors and the CEO; |
| – | Provide advice and counsel to the CEO, serve as an advisor to the CEO concerning the interests of the Board and the Board’s relationship with management, and brief the CEO on issues and concerns arising from Board executive sessions; |
| – | Facilitate the role of the Board in crisis management, where appropriate; |
| – | If requested by the CEO or the Board, attend meetings or communicate with outside stakeholders; and |
| – | In consultation with the CEO, share the company’s views on policies or corporate matters with other boards and organizations when required. |
Corporate Governance
Committee, ensure that processes governing the Board’s work are effective to enable the Board to exercise oversight and due diligence;
•Promote Board effectiveness by working with the Nominating and Corporate Governance Committee to: (1) plan Board and committee composition, Board recruitment, new director orientation, director education and Board succession planning, (2) coordinate the Board evaluation process and obtain director feedback, (3) review changes in the circumstances of existing directors, determine if directors’ other commitments conflict with their Board duties, and review requests from the CEO to sit on the boards of other organizations, and (4) formulate governance policies and procedures that best serve the interests of Peabody and its stockholders;
•Coordinate periodic Board review of, and input regarding, management’s strategic plan for Peabody;
•With the assistance of the Compensation Committee, lead the annual Board performance evaluation of the CEO and communicate the results to the CEO;
•Lead the Board’s review of the succession plan for the CEO and other key executives;
•Facilitate communication between the directors and the CEO;
•Provide advice and counsel to the CEO, serve as an advisor to the CEO concerning the interests of the Board and the Board’s relationship with management, and brief the CEO on issues and concerns arising from Board executive sessions;
•Facilitate the role of the Board in crisis management, where appropriate;
•If requested by the CEO or the Board, attend meetings or communicate with outside stakeholders; and
•In consultation with the CEO, share Peabody’s views on policies or corporate matters with other boards and organizations when required.
As CEO, Mr. Grech has primary responsibility for the day-to-day operations of Peabody and provides leadership on our key strategic objectives.
Corporate Governance
Good corporate governance is a priority at Peabody. Our key governance practices are outlined in our Corporate Governance Guidelines, committee charters, and Code of Business Conduct and Ethics. These documents can be found on our website (www.peabodyenergy.com) by clicking on “Investor,
Info” and” then
“Corporate Governance.“Governance Documents.” Information on our website is not considered part of this Proxy Statement.
The Nominating and Corporate Governance Committee is responsible for reviewing the Corporate Governance Guidelines from time to time and reporting and making recommendations to the Board concerning corporate governance matters. Each year, the Nominating and Corporate Governance Committee, with the assistance of
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 21 |
outside experts, reviews our corporate governance practices, not only to ensure that they comply with applicable laws and NYSE listing requirements, but also to ensure that they continue to reflect what the Nominating and Corporate Governance Committee believes are best practices and to promote our best interests and the best interests of our stockholders.
Director Service on Other Public Company Boards
As stated above, when reviewing qualifications, independence, skills and characteristics of Board candidates and nominees, the Nominating and Corporate Governance Committee examines whether such candidates or nominees have any material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.) which might adversely affect their performance as a director on the Board. Current directors are required to advise the
ChairmanChair of the Board and the Chair of the Nominating and Corporate Governance Committee prior to accepting an invitation to serve on another public company board.
It is the current view of the Board that no director should serve on more than four
other public company boards,
in addition toincluding the Board. Except in extraordinary circumstances, and only after the Board has determined that such simultaneous service would not impair the ability of the director to serve effectively on
the company’sPeabody’s Audit Committee, no member of
the company’sPeabody’s Audit Committee shall serve simultaneously on the audit committee of more than two other public companies. For purposes of this guideline and as provided under NYSE rules, (i) service on the boards of multiple funds within a single fund complex shall be deemed as service on one public company board, and (ii) service on multiple audit committees within a single fund complex shall be deemed as service on one public company audit committee.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 25 |
Majority Voting and Mandatory Director Resignation Policy
Our bylaws provide for majority voting in the election of directors. In the case of uncontested elections, in order to be elected, the number of shares voted in favor of a nominee must exceed 50% of the number of votes cast with respect to that nominee’s election at any meeting of stockholders for the election of directors at which a quorum is present. Votes cast include votes against or votes to withhold authority with respect to that nominee’s election, but exclude abstentions and broker
non-votes.If a nominee is an incumbent director and does not receive a majority of the votes cast with respect to the nominee’s election, such director is expected to promptly tender his or her resignation to the
ChairmanChair of the Board following certification of the stockholder vote. The Nominating and Corporate Governance Committee will promptly consider the resignation submitted by such director and will recommend to the Board whether to accept or reject the tendered resignation. In considering whether to accept or reject the tendered resignation, the Nominating and Corporate Governance Committee will consider all factors deemed relevant by its members. The Board will act on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days following the date of the stockholders’ meeting where the election occurred. In considering the Nominating and Corporate Governance Committee’s recommendation, the Board will consider the factors considered by the Nominating and Corporate Governance Committee and such additional information and factors the Board deems to be relevant. Any director who tenders his or her resignation under our Corporate Governance Guidelines will not participate in the Nominating and Corporate Governance Committee recommendation or Board consideration regarding whether to accept the tendered resignation.
In the case of contested elections, directors will be elected by a plurality of the votes of the shares present in person or by proxy and voting for nominees in the election of directors at any meeting of stockholders for the election of directors at which a quorum is present. For these purposes, a contested election is any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 22 |
Term Limits and Retirement Age
Pursuant to our Corporate Governance Guidelines, the Board has not established term limits for directors. While term limits facilitate Board refreshment, they can also result in the loss of experience and expertise that is critical to effective operation of the Board. Longer tenured directors can provide valuable insight into the Company and its operations. To ensure that the Board continues to evolve and benefit from fresh perspectives and ideas, the Nominating and Corporate Governance Committee evaluates qualifications and contributions of each incumbent director before recommending the nomination of such director for an additional term.
The Board has adopted a retirement age of 75 for all directors. No director who is, or would be over, the age of 75 at the expiration of his or her current term may be nominated to a new term pursuant to our Corporate Governance Guidelines.
Code of Business Conduct and Ethics
We have adopted a code of ethics, the “Code of Business Conduct and Ethics” which can be found on our website (www.peabodyenergy.com) by clicking on
“Investor Info”“Investor” and then
“Corporate Governance.“Governance Documents.” The Code of Business Conduct and Ethics applies to all our directors, officers, and salaried employees.
Pursuant to the Corporate Governance Guidelines, our CEO provides the
Nominating and Corporate Governance CommitteeBoard with an annual report on succession planning and related development recommendations. The report includes a short-term succession plan which delineates temporary delegation of authority in the event that the CEO or any other executive officer is unable to perform his or her duties.
The Nominating and Corporate Governance Committee, working with the CEO, then presents its recommendations with respect to succession planning to the full Board (except for any employee directors who could potentially be impacted by such succession planning processes).
Director Compensation
Compensation
The 2021 compensation of
non-employee directors
for 2017 consisted of cash compensation
(specifically, annual(annual Board,
committee retainers and
committee retainers)per meeting fees in excess of 12 during any calendar year) and equity compensation. Each of these components is described in more detail below. Any director who
iswas also our employee
receivesreceived no additional compensation for serving as a director.
The Board consists of nine directors, including our CEO and eight independent directors. Our Board adopted In setting director compensation, the following compensation structure for ournon-employee directors who were members of ourpost-Emergence Board:
Compensation | | | | | |
Peabody | Notice of 2022 Annual cash retainerMeeting of Stockholders and Proxy Statement | 26 |
Committee received input from F.W. Cook, its independent compensation consultant. In addition, our 2017 Incentive Plan places a limit of $600,000 total on cash and equity compensation that may be awarded to each non-employee director in any calendar year.
In October 2020, F.W. Cook conducted a competitive market review of our non-employee director compensation program. Data were collected from the same peer group we utilized for executive compensation decisions (as described below under “Compensation Discussion and Analysis”). Based on this review, F.W. Cook presented to the Compensation Committee recommendations for our non-employee director compensation program and the Committee approved the following changes to both (1) enhance certainty in the program by increasing the emphasis on cash which recognizes the significant level of volatility in our stock; and (2) recognize the extraordinary time commitment of the non-employee directors by compensating them for meeting attendance beyond a predetermined minimum number of meetings:
•Increase the annual cash retainer from $110,000 to $200,000 (effective October 13, 2020)
•Decrease the annual equity retainer from $140,000 to $25,000 (effective for the 2021 grant)
•Introduce a $1,500 Board meeting fee when the number of meetings exceeds 12 per year (effective October 13, 2020)
The above changes had the effect of reducing the total (cash and equity) fixed director retainers from $250,000 to $225,000 (excluding any incremental compensation provided for Board/Committee leadership and/or Board meeting attendance above the predetermined threshold). We believe the reduction in fixed retainers is appropriate given the increased certainty in the program as a result of emphasizing cash versus equity. Given the extensive review of non-employee director compensation in late 2020, there were no changes to director compensation in 2021.
The following table summarizes the non-employee director compensation structure for 2021:
| $110,000 | | | | | | | |
| 2021 Non-Employee Director Compensation Component | | Amount |
Annual equity award valueCash Retainer | | $130,000 (see below for more information) | 200,000 | |
| Additional Committee Chair Cash Retainer | | |
Audit Committee Chair cash retainer | | $ 20,000 | 25,000 | |
Additional Compensation Committee Chair cash retainer | | $ | 15,000 | |
Additional Health, Safety, Security, and Environmental Committee Chair cash retainer | | $ | 15,000 | |
Additional Nominating and Corporate Governance Committee Chair cash retainer | | $ | 15,000 | |
AdditionalNon-Executive Chairman cash retainerCash Retainer | | $ | 150,000 | |
| Annual Equity Award Value | | $ | 25,000 | |
The
initial post-Emergence2021 equity award for our
non-employee directors was comprised of deferred stock units (“DSUs”)
, and was granted effective May 2, 2017.. The number of DSUs granted to each
non-employee director
in 2021 was determined by dividing
$130,000$25,000 by the closing price per share of
the company’sPeabody's Common Stock on the grant date (and rounding down to the nearest whole DSU). DSUs generally vest monthly over 12 months. However, the underlying shares are generally not distributed until the earlier of (1) three years after the grant date and (2) the director’s separation from
service.service, depending on the director’s election.
Other Elements of Board Compensation
In addition to the compensation described above, we
paypaid travel and accommodation expenses of our
non-employee directors to attend meetings and other integral corporate functions.
Non-employee directors
do not receive meeting attendance fees.Non-employee directors maycould be accompanied by a spouse/partner when traveling on company business on
our aircraft ora charter aircraft.
Non-employee directors also
havehad the opportunity to participate in our
political action committee charitable
contribution matching giftsmatch program at the same level and based on the same guidelines applicable to our full-time employees.
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 23 27 |
Primary ElementsPre-Emergence
BoardOur Board, with the approval of the Bankruptcy Court, adopted the following compensation structure for ournon-employee directors who were members of the Board prior to our emergence from the Chapter 11 Cases:
| | |
Annual cash retainer | | $175,000 |
Additional Audit Committee Chair cash retainer | | $ 15,000 |
Additional Compensation Committee Chair cash retainer | | $ 15,000 |
Additional Health, Safety, Security and Environmental Committee Chair cash retainer | | $ 10,000 |
Additional Nominating and Corporate Governance Committee Chair cash retainer | | $ 10,000 |
AdditionalNon-Executive Chairman cash retainer | | $150,000 |
Upon our Emergence, any then-existing prior equity-based holdings of our directors were canceled, including DSUs.
The following table sets forth compensation for each director (other than Mr. Kellow)Messrs. Grech, Kellow and Yeates) who served on the Board in 2017:2021:
| | | | | | | | | | | | | | |
| Director | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) (3) | Total ($) |
| Samantha B. Algaze | 222,500 | 24,996 | — | 247,496 |
| Andrea E. Bertone * | 234,750 | 24,996 | — | 259,746 |
| William H. Champion | 212,000 | 24,996 | — | 236,996 |
| Nicholas J. Chirekos * | 250,500 | 24,996 | — | 275,496 |
| Stephen E. Gorman * | 237,500 | 24,996 | — | 262,496 |
| Joe W. Laymon * | 240,500 | 24,996 | — | 265,496 |
| Bob Malone ^ | 375,500 | 24,996 | 7,500 | 407,996 |
| David J. Miller | 222,500 | 24,996 | — | 247,496 |
| Michael W. Sutherlin | 227,750 | 24,996 | — | 252,746 |
| | | | | | | | | | | | | | | | |
Director | | Fees Earned
or Paid in
Cash ($) (1) | | | Stock
Awards
($)(2) | | | All Other
Compensation
($) (3) | | | Total ($) | |
Board members who served only to the Effective Date: | |
| | | | |
William A. Coley(4) | | | 87,500 | | | | — | | | | 2,500 | | | | 90,000 | |
| | | | |
William E. James(4) | | | 87,500 | | | | — | | | | 2,500 | | | | 90,000 | |
| | | | |
Robert B. Karn III(4) | | | 87,500 | | | | — | | | | 2,500 | | | | 90,000 | |
| | | | |
Henry E. Lentz(4) | | | 92,500 | | | | — | | | | 2,500 | | | | 95,000 | |
| | | | |
William C. Rusnack(4) | | | 95,000 | | | | — | | | | — | | | | 95,000 | |
| | | | |
John F. Turner(4) | | | 92,500 | | | | — | | | | 200 | | | | 92,700 | |
| | | | |
Sandra Van Trease(4) | | | 95,000 | | | | — | | | | 1,000 | | | | 96,000 | |
| | | | |
Heather A. Wilson(4) | | | 87,500 | | | | — | | | | — | | | | 87,500 | |
| |
Board members appointed on the Effective Date (including continuing Board members): | |
| | | | |
Nicholas J. Chirekos | | | 82,500 | | | | 129,994 | | | | 7,500 | | | | 219,994 | |
| | | | |
Stephen E. Gorman * | | | 93,750 | | | | 129,994 | | | | 2,000 | | | | 225,744 | |
| | | | |
Joe W. Laymon * | | | 93,750 | | | | 129,994 | | | | 5,000 | | | | 228,744 | |
| | | | |
Teresa S. Madden * | | | 97,500 | | | | 129,994 | | | | 7,500 | | | | 234,994 | |
| | | | |
Bob Malone ^ | | | 292,500 | | | | 129,994 | | | | 6,000 | | | | 428,494 | |
| | | | |
Kenneth W. Moore | | | 82,500 | | | | 129,994 | | | | 7,500 | | | | 219,994 | |
| | | | |
Michael W. Sutherlin * | | | 150,000 | | | | 129,994 | | | | — | | | | 279,994 | |
| | | | |
Shaun A. Usmar | | | 82,500 | | | | 129,994 | | | | — | | | | 212,494 | |
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 24 |
*Committee Chair
(1) | Fees earned include the annual retainer and any committee chair ornon-executive chair fees or retainers. |
(2) | On May 2, 2017, eachnon-employee director was granted 4,994 DSUs at a grant date fair value of $26.03 per share, as indicated in this column. As of December 31, 2017, these were the only stock awards outstanding for thenon-employee directors. No options were held by directors as of the end of 2017. |
(3) | All Other Compensation for Mr. Chirekos, Mr. Coley, Mr. Gorman, Mr. James, Mr. Karn, Mr. Laymon, Mr. Lentz, Ms. Madden, Mr. Malone, Mr. Moore, Mr. Turner and Ms. Van Trease consists of charitable contributions in accordance with our matching gifts programs. |
(4) | In accordance with the Plan, on the Effective Date, Mr. Coley, Mr. James, Mr. Karn, Mr. Lentz, Mr. Rusnack, Mr. Turner, Ms. Van Trease, and Ms. Wilson ceased to be members of the Board. |
^ Non-Executive Chairman
(1)Fees earned include the annual retainer, any committee chair or non-executive chair fees or retainers and fees for any Board meetings in excess of 12 meetings per year.
(2)On May 7, 2021, each non-employee director was granted 4,882 DSUs at a grant date fair value of $5.12 per share, as indicated in this column. As of December 31, 2021, Ms. Algaze and Mr. Miller had 22,382 stock awards outstanding, Ms. Bertone had 24,597 stock awards outstanding, Mr. Champion had 16,548 stock awards outstanding, Mr. Laymon had 26,759 stock awards outstanding, and all other non-employee directors had 23,405 stock awards outstanding. No options were held by directors as of the end of 2021.
(3)All Other Compensation for Mr. Malone consists of political action committee matching contributions to a charitable organization in accordance with our Political Action Committee program.
Non-Employee Director Share Ownership Requirements
Under our share ownership requirements for directors, each
non-employee director
iswas required to acquire and retain Common Stock having a value equal to at least five times his or her annual cash retainer.
To reflect the higher cash retainer, effective October 13, 2020, the director stock ownership guideline was changed from a multiple of cash retainer to a fixed dollar amount of $500,000. Directors are expected to achieve compliance with the guidelines within 5 years of Board appointment.
If at any time a
non-employee director does not meet his or her ownership requirement, the director must retain (1) any Common Stock owned by the director (whether owned directly or indirectly) and (2) any net shares received as the result of the exercise, vesting or payment of any equity award until the ownership requirement is met, in each case unless otherwise approved in writing by the Compensation Committee. For this purpose, “net shares” means the shares of Common Stock that remain after shares are sold or withheld, as the case may be, to (1) pay the exercise price for a stock option award or (2) satisfy any tax obligations, including withholding taxes, arising in connection with the exercise, vesting or payment of an equity award.
Compliance with these requirements is evaluated as of December 31 of each year. The value of an individual’s share ownership as of such date is determined by multiplying the number of shares of our Common Stock or other eligible equity interests held by the individual by the closing price of our stock as of the business day immediately preceding the date of determination.
Currently, each non-employee director is in compliance with these requirements.
For purposes of determining stock ownership levels, only the following forms of equity interests are included:
•stock owned directly (including stock or stock units held in any defined contribution plan or employee stock purchase plan and shares of restricted stock);
•stock held by immediate family members residing in the same household or through trusts for the benefit of the person or his or her immediate family members residing in the same household;
•unvested restricted stock or RSUs (provided that vesting is based solely on the passage of time and/or continued service with Peabody); and
•vested and undistributed DSUs.
| ● | | Stock owned directly (including stock or stock units held in any defined contribution plan or employee stock purchase plan and shares of restricted stock); |
| ● | | Stock held by immediate family members residing in the same household or through trusts for the benefit of the person or his or her immediate family members residing in the same household; |
| ● | | Unvested restricted stock or RSUs (provided that vesting is based solely on the passage of time and/or continued service with Peabody); and |
| ● | | Vested and undistributed DSUs. |
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 25 28 |
COMPENSATION DISCUSSION AND ANALYSIS
Dear Fellow Stockholder:
Overview
On April 3, 2017,
I am writing to you today on behalf of the company successfully emerged from Chapter 11 reorganization. Priorentire Compensation Committee of Peabody’s Board of Directors. As members of the Compensation Committee, we have a critical responsibility to Emergence, ourensure that Peabody’s executive compensation reflectedprograms align with the interests of our stockholders and attract, retain, and incentivize our executives to execute Peabody’s long-term business strategy.
Our executive compensation program is grounded in a pay-for-performance approach, with rewards consisting of a combination of base salary, annual incentives, and long-term incentives. The structure of the long-term incentive plan was changed for the fiscal year 2021 to reduce volatility in the program for participants as the Company struggled through a down-cycle in coal pricing in 2020 and the first half of 2021.These changes increased the emphasis on cash and acknowledged the challenge of developing 3-year goals in an extremely difficult business environment. Key changes made by the Compensation Committee are:
•Long-term incentive targets for each NEO reduced by approximately 40%
•Mix for the target value of long-term incentive awards changed to as follows:
◦50% performance-based cash
◦25% restricted stock units
◦25% restricted cash
•Maximum opportunity (as % of target) reduced in both the short-term incentive and long-term performance plan from 200% of target to 150% of target
In the first half of 2021, the COVID-19 pandemic continued to negatively impact Peabody’s operations, pricing, and demand for its products. However, in the second half of the year, as economies around the world began recovery from the pandemic, our Company was able to benefit from an increase in demand and price which resulted in positive financial results and robust share performance. By design, a significant portion of management’s target compensation is at risk, subject to achieving both short-term and long-term performance goals. Only the base salary and restricted cash awards are fixed. As a result, based on 2021 business performance, the following outcomes were realized:
•Base salaries for most of our NEOs were increased by 2%
•140.4% overall achievement of the target value of the 2021 short-term incentive program was earned, based upon our strong 2021 business results
•Aligned with our strong financial results, the one-year Free Cash Flow component of the 2021 long term incentive program (comprising 40% of the 2021 performance-based cash incentivesgrant) surpassed maximum performance expectations and stock grants approved bywas paid at 150% of target
•63.9% of the target units of the 2019 performance unit awards were earned, reflecting the impact of the negative TSR modifier given Peabody’s share price performance over the 3-year performance period. The value of the award earned was 23% of the original grant date value, demonstrating strong pay-for-performance alignment between our major creditorsmanagement team and shareholders.
On behalf of the Bankruptcy Court. Soon after Emergence,Compensation Committee, I would like to thank you for your support. Our Committee remains committed to the Board establishedongoing evaluation of executive compensation programs to ensure alignment with the 2017interests of our stockholders and support of our business strategy. Thank you.
Sincerely,
Joe Laymon
Compensation Committee Chair
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 29 |
Overview
We believe Peabody’s 2021 executive compensation program demonstrated our commitment to a pay-for-performance philosophy. This approach aligns with Peabody’s current business strategy and is designed to motivate and reward our leaders for long-term performance and enhanced company value. In addition, we continued to engage with and listen to our investors. We believe that our 2021 executive compensation program supported Peabody’s strategic objectives and was aligned with stockholder interests and the feedback provided by our owners during that engagement process.
2021 Named Executive Officers
(“NEOs”).Named Executive Officers
This Compensation Discussion and Analysis (the “CD&A”) explains the
key elements of the compensation of
the company’sPeabody’s NEOs and describes the objectives and principles underlying
the company’sPeabody’s executive compensation program and decisions made in
2017.fiscal year 2021. For
the 2017 fiscal year
2021, our NEOs were:
| | | | | |
Name
Current Officers | | Title as of December 31, 2017 2021 |
Glenn L. Kellow
James C. Grech(1) | | President and Chief Executive Officer |
Amy B. Schwetz
Mark A. Spurbeck | | Executive Vice President and Chief Financial Officer |
Charles F. Meintjes
Darren R. Yeates | | Executive Vice President – Corporate Services and Chief CommercialOperating Officer |
Kemal Williamson
Marc E. Hathhorn(2) | | President – Americas U.S. Operations |
A. Verona Dorch
Scott T. Jarboe(3) | | Executive Vice President, Chief LegalAdministrative Officer Government Affairs and Corporate Secretary
|
| Former Officers | Former Title |
Glenn L. Kellow(4) | President and Chief Executive Officer |
Kemal Williamson(5) | President-U.S. Operations |
(1)On June 1, 2021, Mr. Grech was hired as President and Chief Executive Officer.
(2)On November 15, 2021, Mr. Hathhorn was appointed President - U.S. Operations.
(3)On November 1, 2021, Mr. Jarboe was promoted from Chief Legal Officer and Corporate Secretary to Chief Administrative Officer and Corporate Secretary.
(4)On June 1, 2021, Mr. Kellow’s employment was terminated without cause by the Company.
(5)On November 15, 2021, Mr. Williamson transitioned to Senior Advisor to the Chief Operating Officer.
Business Highlights for
2017As discussed2021
For many individuals, communities, and businesses, including Peabody, the COVID-19 pandemic brought with it many challenges. Against this backdrop and uncertainty, the Company quickly adapted to these challenges with cost improvement and other initiatives to position the Company for success. In the second half of the year, as a result of global economic recovery and constrained supply, demand for our product increased, with pricing in all markets that we operate reaching decade highs. The Company was positioned to benefit from this increase in demand and ended the year strong.
•There were no fatal accidents at any of our operated mines for the third consecutive year. Two of our U.S. thermal mines had zero reportable incidents, demonstrating truly zero harm, and globally Peabody recorded its lowest injury rate in the proxy summary,last twenty years.
•Operational and financial results were strong in April 2016, we and certain of our subsidiaries filed voluntary petitions for reorganization under Chapter 11 of Title 11the second half of the United States Bankruptcy Code. On April 3, 2017,year after being impacted in the Plan became effective and we successfully emerged from Chapter 11. During 2017, our financial and operating performance was strong.Key safety, financial and operational highlights include:
In April 2017, Peabody emerged from Chapter 11 and relistedfirst half of the year by negative market factors as a result of COVID-19. Total 2021 revenues increased by 15% on the New York Stock Exchange. From a modified plan value of $22.03 per share, the company observed a 79 percent increase in BTU’s share price through year-end.
2017 revenues rose 18 percent overflat sales volumes as compared to the prior year, led by robust seaborne coal pricingresulting in net income attributable to common stockholders of $360.1 million. For the year, Adjusted EBITDA1 totaled $916.7 million, over 3.5 times of prior year results.
•We completed development work within our Seaborne Thermal segment to extend the life of Wilpinjong and higher U.S. demand.to establish the Wambo JV. At our Wambo UG, we began efforts to develop subsequent panels based on economic evaluation.
•In our Seaborne Met segment, we successfully implemented cost improvement initiatives across the platform and restarted longwall production at our Shoal Creek and Metropolitan mines after idling due to
| • | | Adjusted EBITDA5 reached the highest level since 2012, with Australian Adjusted EBITDA5 results marking the platform’s largest contribution since 2008. |
Peabody increased liquidity to $1.24 billion as ofyear-end, released approximately $220 million of restricted cash and closed on, and subsequently upsized, a $350 million revolving credit facility, which enables the company to free up additional restricted cash for other purposes over time.
The company refinanced its term loan, lowering its interest rate by 100 basis points and modifying terms to provide the company with additional flexibility.
As part of Peabody’s commitment to deleveraging, the company repaid $500 million of debt, reaching its previously established 2018 targets a year in advance. These voluntary payments, coupled with the company’s meaningful cash position, reduced net debt by nearly 50 percent since Emergence.
5 | Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure inAppendix B. |
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 26 30 |
economic conditions. In addition, we began development efforts of Moorvale South within the CMJV complex which will result in an upgraded product quality.
•Within the U.S. thermal segment, we are advancing efforts for incremental production to executemeet current customer demand for our products with equipment optimizations, mine development and new hires that will result in rapid returns on its authorized $500 million share repurchase program, completing approximately $175 millionminimal investment.
•We benefited from a full year of a streamlined corporate structure, resulting in share repurchases in the last five months of 2017.
At an operational level, Peabody’s global safety performance continues15 percent lower SG&A expense compared to surpass industry averages. The Australian platform recorded record safety results, reflecting a 17 percent improvement from the prior year.
The company’s North Goonyella high-quality hard coking coal mine achieved record annual production allowing Peabody•We took action to take advantageincrease our financial strength, retiring approximately $420 million of strong seaborne coal pricing.
Peabody believes land restoration is an essential partsenior secured debt in the year, representing 25% of our debt outstanding at the beginning of the mining process. Both theyear. We did this through open market purchases and debt to equity exchanges, resulting in a net gain from early debt extinguishment of $33 million. We raised additional net proceeds of $270 million by issuing 24.8 million shares under a "at-the-market" equity program.
•We had approximately $16.5 million of U.S. and Australian operations exceeded goals for reclamation restoring a total of 1.4bond releases approved including final release on approximately 7,000 acres. In addition, we restored nearly 2,500 acres for each acre disturbed.
In recognition of these actions, Peabody was named the best global responsible mining company for environmental, social and governance standards and performance for the second consecutive year by Capital Finance International.
Peabody was also awarded Coal Mining Company of the Year by Corporate Livewire.
Executive Compensation Highlights for 2017
Overall, our 2017 executive compensation reflects a combination of salary, cash incentives and equity awards. While in Chapter 11, compensation was part of comprehensive plans approved by our major creditors. The program was in line with compensation programs of comparable companies that undertook financial restructuring under the Bankruptcy Code. The Plan received 93% approval overall and unanimous acceptance by all 20 voting classes. Following Emergence, our new Compensation Committee approved certain changes as described under “Post-Emergence Compensation.”
Executive Compensation Timeline
Compensation Decisions During Chapter 11
While in Chapter 11, all incentives for our NEOs were negotiated with the various stakeholders in the Chapter 11 Cases, includingyear.
•The El Segundo Mine received the Creditors’ Committee and the U.S. Trustee for the Eastern District of Missouri, and were approved by the Bankruptcy Court. This included the following:STIP (no payment was made under the Bankruptcy Court approved plan for 2017)
KEIP, which was a performance-based cash incentive
Emergence RSU2021 Excellence in Reclamation Award (“Emergence RSU Award”)
On our emergence from the Chapter 11 Cases, allNew Mexico Mining and Minerals Division for its reclamation work at the outstanding equity awards and equity held by our NEOs were canceled without payment prior to the Emergence RSU Award.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 27 |
mine.
Compensation Decisions After Emergence
In May 2017, after Emergence, the new Compensation Committee, and as it relates to our CEO, the Special Committee (the “Committees”), approved the following for the NEOs:
| • | | Base Salary. Base salaries were adjusted by 1.5% for all NEOs and Ms. Schwetz also received a market adjustment. |
| • | | STIP. The Committees approved three changes to the Bankruptcy Court established 2017 Executive Leadership Team STIP to create the new 2017 STIP. The Adjusted EBITDAR6 targets were increased to reflect post-emergence expectations, individual objectives were added as a metric and the maximum award potential was increased to 200% of target to be consistent with competitive practice and incent exceptional performance. Based on our company and individual performance, the Committees approved award payouts for the NEOs in a range of 156% to 167% of target. |
| • | | KEIP. The Committees approved the awards earned under the KEIP, which covered the period we were in Chapter 11. Based on our exceptional performance from April 2016 to April 2017, the Committees approved award payouts at 150% of target. |
| • | | Addition of CEO to Severance Plan. In connection with the company’s emergence from the Chapter 11 Cases, the Committees approved Mr. Kellow’s participation in our executive severance plan. |
Executive Compensation Programs
The following discussion provides details
•We successfully negotiated labor agreements at four of our executive compensation program for each of our NEOs during the Chapter 11 process and following Emergence.
Chapter 11 Compensation
Base Salaries
Base salaries for the NEOs, indicated as follows, were unchanged from 2016 levels as the company began 2017: Mr. Kellow, $1,007,475; Ms. Schwetz, $500,000; Mr. Meintjes, $555,500; Mr. Williamson, $505,000 and Ms. Dorch, $460,000.
2017 Executive Leadership Team STIP (“2017ELT-STIP”)
The 2017ELT-STIP was intended to motivate our NEOs to meet and exceed certain operational goals critical for the Debtors’ Chapter 11 restructuring and key to enhancing the value of the enterprise. The maximum payout under the 2017ELT-STIP was set at 150% of target as a result of negotiations with the various stakeholders in the Chapter 11 Cases, including the Creditors’ Committee and the U.S. Trustee for the Eastern District of Missouri. The target opportunity, expressed as a percentage of base salary, for each of the NEOs was as follows: Mr. Kellow, 110%; Ms. Schwetz, 80%; Mr. Meintjes, 80%; Mr. Williamson, 80%; and Ms. Dorch, 80%. The Committees established these opportunities through an analysis of compensation for comparable positions in companies of similar size and complexity, and the opportunities were intended to provide a competitive level of compensation if performance objectives were achieved.
6 Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure inAppendix B.
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The table below shows the initial underlying performance metrics established under the 2017ELT-STIP:
| | | | | | | | | | | | | | | | | | | | |
| | | | | Performance Range |
Metric | | % of Total Award | | Threshold | | Target | | Maximum |
2017ELT-STIP Adjusted EBITDAR7 ($ in millions) | | | | 75.0% | | | | | $359 | | | | | $479 | | | | | $671 | |
Total Recordable Incidence Frequency Rate (“TRIFR”) | | | | 12.5% | | | | | 1.43 | | | | | 1.10 | | | | | 0.77 | |
Safety, A Way of Life (“SAWOL”) Management System (“MS”) Conformance | | | | 12.5% | | | | | 80% | | | | | 95% | | | | | 100% | |
Payouts with respect to each metric would have been at 40% of target if threshold performance was achieved, 100% of target if target performance was achieved and 150% of target if maximum performance or greater was achieved.Ultimately, no payments were made under the Bankruptcy Court approved 2017ELT-STIP as a new STIP was approved upon Emergence.
Key Employee Incentive Plan
Due to our Chapter 11 Cases, we were not permitted to vest or settle equity awards granted prior to the Petition Date. A KEIP was developed during the pendency of the Chapter 11 Cases and approvedlocations that are represented by the Bankruptcy Court in August 2016. The KEIP was a performance-based cash incentive program intended to incent our NEOs to drive value for stakeholders and expedite the emergence from Chapter 11. The KEIP was comprised of one performance period running from the Petition Date through Emergence.organized labor unions.
Shown below are the performance metrics, weights and payout opportunities under the KEIP:
| | | | | | | | | | | | | | | | | | | | |
| | | | | Payout Range |
Metric | | Weight | | Threshold | | Target | | Maximum |
Consolidated Adjusted EBITDAR (excluding Australia)8 | | | | 30% | | | | | 33% | | | | | 100% | | | | | 150% | |
Australian Adjusted EBITDAR8 | | | | 10% | | | | | 50% | | | | | 100% | | | | | 150% | |
Consolidated Cash Flow (before Restructuring Costs)8 | | | | 40% | | | | | 50% | | | | | 100% | | | | | 150% | |
Environmental Reclamation | | | | 20% | | | | | 25% | | | | | 100% | | | | | 150% | |
7 2017
ELT-STIP1 Adjusted EBITDAR is anon-GAAP financial metric and is defined as Adjusted EBITDA (as defined and reconciled inAppendix B) further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the UMWA VEBA Settlement and corporate hedging. 2017ELT-STIP Adjusted EBITDAR and Adjusted EBITDA are not recognized terms under GAAP and are not, and do not purport to be an alternative to operating income or net income as determined in accordance with GAAP as a measure of profitability. Because these measures are not calculated identically by all companies, our calculation may not be comparable to similarly titled measures of other companies.8 Consolidated Adjusted EBITDAR (excluding Australia), Australian Adjusted EBITDAR and Consolidated Cash Flow (before Restructuring Costs) are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure inAppendix C.
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The table below provides a definition and the purpose of the performance metrics:
| | | | |
| | |
Metric
| | Definition
| | Purpose
|
Consolidated Adjusted EBITDAR (excluding Australia)
| | Consolidated Adjusted EBITDAR (excluding Australia) is anon-GAAP financial metric and is defined as Adjusted EBITDA9 of our consolidated enterprise, except for our Australian subsidiaries, further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the UMWA VEBA Settlement and corporate hedging. This measure is reconciled to the nearest GAAP measure inAppendix C.
| | Designed to incentivize the NEOs to maximize the value of the Debtors’non-Australian assets.
|
Australian Adjusted EBITDAR
| | Australian Adjusted EBITDAR is anon-GAAP financial metric and is defined as Adjusted EBITDA9of our Australian subsidiaries further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the UMWA VEBA Settlement and corporate hedging. This measure is reconciled to the nearest GAAP measure inAppendix C.
| | Designed to incentivize the NEOs to focus on improving the profitability of the Debtors’ Australian affiliates. |
Consolidated Cash Flow (before Restructuring Costs)
| | Consolidated Cash Flow (before Restructuring Costs) is anon-GAAP financial metric and is defined as net change in cash and cash equivalents, before deducting cash used for reorganization costs, restructuring, certain employee compensation programs related to the Chapter 11 Cases, adequate protection payments and any proceeds, repayments, fees, interest or other charges related to the DIP Financing. This measure is reconciled to the nearest GAAP measure inAppendix C.
| | Designed to incentivize the NEOs to focus on and increase cash flow from projections set forth in the business plan prepared by the Debtors in August 2016. |
Environmental Reclamation
| | Environmental Reclamation is tied to land reclamation and is defined as the ratio of reclaimed or graded land to disturbed land. Reclaimed or graded land means returning the land to the final contour grading prior to soil replacement. The term disturbed land means new acres impacted for mining purposes. | | Designed to incentivize the NEOs to achieve the financial metrics while honoring the Debtors’ commitment to reclaim mined land in an environmentally responsible manner and in accordance with existing laws. |
The target incentive opportunity was established through an analysis of target total direct compensation in analogous companies that undertook a financial restructuring under the Bankruptcy Code. The opportunities were intended to provide an appropriate level of compensation when performance objectives are achieved. In the event performance fell below the minimum threshold amount for a metric, the NEOs were not eligible for an incentive award related to that metric.
9Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure inAppendix CB.
Response to Last Year’s Say-on-Pay Vote
At the 2021 Annual Meeting, we conducted a Say-on-Pay vote in which we received 97% support. The Compensation Committee considered the result of the 2021 Say-on-Pay vote in making compensation decisions after the 2021 Annual Meeting, but it did not make any changes to our compensation policies or practices that were specifically driven by the 2021 Say-on-Pay vote.
Peabody engaged in open and constructive dialogue with its stockholders throughout 2021 and into 2022. The Board and the Compensation Committee value these discussions and will continue to engage with stockholders to receive feedback about our executive compensation programs.
In addition to stockholder engagement, we sought the advice of the Compensation Committee’s independent consultant and other external advisors.
The Compensation Committee determined that the 2021 overall structure of the executive compensation program was grounded in a pay-for-performance approach, is aligned with current business realities, and is designed to motivate and reward our leaders for long-term performance and enhanced company value.
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 30 31 |
2021 Executive Compensation Program Structure
Our 2021 executive compensation program reflected a combination of base salary, annual cash incentives, and long-term incentives.
The
threshold,graphs below display the 2021 target
total direct compensation mix for our CEO and
maximum goals forour other NEOs, as well as the
KEIP metrics were designed to fluctuate based upon the quarter in which Emergence occurred. Because Emergence occurred on April 3, 2017, the goals for Q1 2017 were ultimately applicable. Based on our performance over the applicable period, our NEOs earned KEIP payouts of 150% of target, asportion that was performance-based. As shown in the
table below. | | | | | | | | | | | | | | |
| Performance Metric | | | | Period
Ending Q1 2017 | | | Actual | | | Award
Achievement | |
Consolidated Adjusted EBITDAR (excluding
Australia)10 ($ in millions) | | Threshold | | | $414 | | | | | | | | | |
| | Target | | $517 | | | $683 | | | 150% | |
| | Maximum | | $620 | | | | | | | |
Australian Adjusted EBITDAR10 ($ in millions) | | Threshold | | | $(179) | | | | | | | | | |
| | Target | | $(47) | | | $394 | | | 150% | |
| | Maximum | | $85 | | | | | | | |
Consolidated Cash Flow (before Restructuring
Costs)10 ($ in millions) | | Threshold | | | $323 | | | | | | | | | |
| | Target | | $646 | | | $1,281 | | | 150% | |
| | Maximum | | $969 | | | | | | | |
Environmental Reclamation | | Threshold | | | 1 to 1 | | | | | | | | | |
| | Target | | 1.1 to 1 | | | 1.54 to 1 | | | 150% | |
| | Maximum | | 1.3 to 1 | | | | | | | |
The following table shows the KEIP awards earned by each NEO while the company was in Chapter 11:
| | | | | | | | | | | | | | | |
| Name | | Target Opportunity as
a % of Base Salary | | KEIP Award Earned
as a % of Target | | KEIP Award
Achieved ($) |
Glenn L. Kellow | | | | 175 | % | | | | 150 | % | | | | 2,644,622 | |
Amy B. Schwetz | | | | 150 | % | | | | 150 | % | | | | 1,125,000 | |
Charles F. Meintjes | | | | 125 | % | | | | 150 | % | | | | 1,041,563 | |
Kemal Williamson | | | | 125 | % | | | | 150 | % | | | | 946,875 | |
A. Verona Dorch | | | | 125 | % | | | | 150 | % | | | | 862,500 | |
10 | Consolidated Adjusted EBITDAR (excluding Australia), Australian Adjusted EBITDAR and Consolidated Cash Flow (before Restructuring Costs) are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure inAppendix C. |
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Emergence Compensation
Cancellation of Equity Awards
Upon emergence from Chapter 11, all the equity awards held by our NEOs were canceled without payment. The tablegraphs below, summarizes the aggregate grant date fair values of these canceled equity awards. Our NEOs received no value for any of these awards:
| | | | | | | | | | | | | | | | | | | | |
Named Executive Officer | | Stock Options ($) | | Restricted Shares ($) | | Performance
Units ($) | | Total Awards Cancelled ($) |
Glenn L. Kellow | | | | 2,749,665 | | | | | 749,890 | | | | | 4,524,530 | | | | | 8,024,085 | |
Amy B. Schwetz | | | | — | | | | | 180,071 | | | | | 227,331 | | | | | 407,042 | |
Charles F. Meintjes | | | | 372,315 | | | | | 458,247 | | | | | 952,790 | | | | | 1,783,352 | |
Kemal Williamson | | | | 4,495,194 | | | | | 249,963 | | | | | 866,168 | | | | | 5,611,325 | |
A. Verona Dorch | | | | — | | | | | 225,000 | | | | | 227,331 | | | | | 452,331 | |
Emergence RSU Awards
Under the Peabody Energy Corporation 2017 Incentive Plan (“2017 Incentive Plan”),we granted Emergence RSU Awards to all active employees, including the NEOs. For the NEOs, these Emergence RSU Awards generally vest ratably on eachabout 53% of the first three anniversariesCEO’s target total direct compensation and, on average, about 48% of the grant date, subject to continued employment. The Emergence RSU program, includingtarget total direct compensation for the total value, allocation to ourother NEOs and award terms were part of a comprehensive plan approved by our major creditors in advance of successfully emerging from Chapter 11.
The amountswas performance-based.
Process for Determining 2021 NEO Compensation
Our executive compensation philosophy is comprised of the Emergence RSU Awards were determined based primarily onfollowing core principles:
•Pay-for-performance;
•STIP awards should be tied to the following factors:successful achievement of pre-established objectives that support our business strategy; and Competitive market practice in restructuring events;•Long-term incentives should provide opportunities for executives to earn equity and cash compensation if certain pre-established long-term objectives are successfully achieved.
ConsiderationSummarized below are roles and responsibilities of the additional value created by our leadership duringparties that participated in the Chapter 11 Cases;
Desire to retain our high-performingdevelopment of Peabody’s 2021 executive team;compensation program:
Consideration of improvements that were realized because of instituted cost-cutting measures; andCommittees
The fact that the ultimate value received will depend on sustainability of results.
The actual Emergence RSU Awards for the NEOs were as follows:
| | | | | | | | | | |
| Name | | Number of RSUs
Granted | | Target Value |
Glenn L. Kellow | | | | 680,890 | | | | | $15,000,000 | |
Amy B. Schwetz | | | | 236,042 | | | | | $5,200,000 | |
Charles F. Meintjes | | | | 226,963 | | | | | $5,000,000 | |
Kemal Williamson | | | | 226,963 | | | | | $5,000,000 | |
A. Verona Dorch | | | | 158,874 | | | | | $3,500,000 | |
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To receive the Emergence RSU Awards, the NEOs were required to execute restrictive covenant agreements that generally require the recipient to (1) maintain confidentiality of our information; (2) refrain from competing for a period of 12 months following term of employment; and (3) refrain from soliciting employees or customers for a period of 12 months following term of employment.
Post-Emergence Compensation
As outlined above, in April 2017, the company emerged from Chapter 11 with a newly established board of directors determined to lead Peabody to a successful future. A new Compensation Committee and, as it relates to the CEO, the Specialindependent members of the Board (the “Special Committee” and together with the Compensation Committee, (as defined above)the “Committees”), were formed.had responsibility for overseeing our executive compensation framework. The Committees, modifiedworking with the Committees’ independent compensation advisor (discussed further below), other advisors, and senior management, sought to align pay with performance and create incentives that reward operational excellence, safety, and financial management, and that ultimately are designed to create stockholder value.
The Committees’ responsibilities included:
•developing our executive compensation philosophy;
•approving base salaries and STIP and LTIP programs and opportunities;
•assessing performance and approving earned incentives;
•approving LTIP grants including performance goals and award terms; and
•approving severance programs and executive participation.
In making compensation decisions for 2021, the Committees reviewed the total compensation opportunity for each of our NEOs and determined base salaries and incentive targets, taking into consideration:
•the breadth, scope, complexity and criticality of each NEO’s role;
•competitive market information;
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 32 |
•internal equity or roles of similar responsibilities, experience, and organizational impact;
•current compensation levels; and
•individual performance.
The Committees did not use a predetermined formula to make overall decisions but generally considered all of the above factors.
Management
For 2021, in relation to compensation, the role of the CEO was to review the performance of the other NEOs and make recommendations on base salary, STIP, and LTIP opportunities for the other NEOs. The CEO is not present during deliberations or voting with respect to his own compensation.
Independent Compensation Consultants
The Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel, or other advisor only after taking into consideration all factors relevant to that person’s independence from management and is directly responsible for the appointment, compensation arrangements, and oversight of the work of any such person. Under this authority, for 2021 the Compensation Committee engaged an independent compensation consultant, F.W. Cook, after assessing its independence. F.W. Cook does not provide any other services to us and its work in support of the Compensation Committee did not raise any conflicts of interest or independence concerns. F.W. Cook in general provided the Committees with competitive market information, assistance on evaluation of the peer group composition, input to incentive program design, and information on compensation trends. The Board conducts an annual review of the performance of F.W. Cook.
Competitive Market Information
Talent for senior-level management positions and key roles in the organization can be acquired across a broad spectrum of companies. As such, we utilized competitive market compensation information for 2021:
•as an input in developing base salary levels, STIP targets and LTIP award ranges;
•to evaluate the form and mix of equity awarded to NEOs;
•to assess the competitiveness of total direct compensation opportunities for NEOs;
•to evaluate share utilization by reviewing overhang levels and annual run rates;
•to evaluate share ownership guidelines;
•to validate whether our executive compensation program was aligned with our performance; and
•as an input in designing compensation plans, benefits and perquisite programs.
This competitive market information comes from both compensation surveys and a group of companies of similar size and/or complexity as us (the “Compensation Peer Group”), described in more detail in the section below. The survey data provided a significant sample size, included information for management positions below senior executives, and included other industries from which we might recruit for executive positions. The primary survey source was the Willis Towers Watson Executive Database. We did not select the constituent companies comprising this survey group, and the component companies’ identities were not a material factor in the applicable compensation analysis.
As stated above, while the Compensation Committee examined competitive market information from this survey and the Compensation Peer Group, competitive market information was not the sole factor in its decision-making process.
Compensation Peer Group
In determining the composition of the company’s executivesCompensation Peer Group, our Compensation Committee considered companies that were:
•direct business competitors;
•labor market competitors;
•in a similar industry (for example, coal and consumable fuels, mining and metals, energy, and other companies subject to reflect prioritiessimilar economic opportunities and align with shareholders’ interests. Decisions regardingchallenges); and
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 33 |
•of a similar scale (with revenue and total assets generally within 1/3-times to 3-times the size of our company).
The following table illustrates the peer group developed as a result of this analysis:
| | |
| 2021 Compensation Peer Group (16) |
| Alliance Resource Partners, L.P. |
Alpha Metallurgical Resources, Inc.(2) |
| Antero Resources Corporation |
| Arch Resources, Inc. |
| Cleveland-Cliffs Inc. |
| Compass Minerals International, Inc. |
| CONSOL Energy Inc. |
| CVR Energy, Inc. |
| Domtar Corporation |
| Kosmos Energy Ltd. |
| Noble Energy, Inc. |
| SM Energy Company |
| Southwestern Energy Company |
| Teck Resources Limited |
| United States Steel Corporation |
| Warrior Met Coal, Inc. |
(1)Data is reflected as of the most recently reported four quarters at January 1, 2022 from S&P’s Capital IQ. For Peabody, this represents the fourth quarter of 2020 and the first three quarters of 2021. Includes adjustments that may differ from GAAP reporting made by Capital IQ.
(2)Effective February 1, 2021, Contura Energy, Inc. changed its name to Alpha Metallurgical Resources, Inc.
2021 NEO Compensation Determinations and Outcomes
The following discussion provides details of our executive compensation made byprogram determinations and outcomes for each of our NEOs during 2021.
Base Salaries
In general, we pay base salaries to the
Committees during 2017 reflect our industry fundamentals, operating environment and results.Base Salaries
The Committees approvedNEOs to provide them with a 1.5%level of fixed income for their service to Peabody. Each of the NEOs received a base salary increase for each NEOof 2% effective April 1, 2017. This2021. There was no increase was consistent with a 1.5% increase provided to all salaried employees. The Compensation Committee also approved a 13.3% market adjustment for Ms. Schwetz, to bring herin base salary closerfor Mr. Yeates since he was hired on November 1, 2020. Mr. Grech was hired on June 1, 2021, and there were no further adjustments to the market median. The following chart summarizes thehis base pay during 2021. Mr. Kellow received no increase in base pay during 2021.
| | | | | | | | | | | |
| Named Executive Officer | Base Salary as of
January 1, 2021 | Base Salary as of
December 31, 2021 | Overall % Change
in 2021 |
| James C. Grech | N/A(1) | $ | 1,000,000 | | N/A(1) |
| Mark A. Spurbeck | $ | 520,000 | $ | 530,400 | | 2%(2) |
| Darren R. Yeates | $ | 700,000 | $ | 700,000 | | 0 | % |
| Marc E. Hathhorn | $ | 505,000 | $ | 515,100 | | 2%(3) |
| Scott T. Jarboe | $ | 465,000 | $ | 474,300 | | 2%(4) |
| Glenn L. Kellow | $ | 1,100,000 | N/A(5) | N/A(5) |
| Kemal Williamson | $ | 536,100 | $ | 546,822 | 2 | % |
(1)Mr. Grech was hired on June 1, 2021.
(2)In connection with his assumption of responsibilities for our IT and Shared Services departments beginning in November 2021, Mr. Spurbeck's base salary changeswas increased to $600,000, effective January 1, 2022.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 34 |
(3)Mr. Hathhorn's base salary will be increased to $530,000, effective April 1, 2022.
(4)In connection with his assumption of responsibilities for our NEOs. | | | | | | |
| Named Executive Officer | | Base Salary as of January 1, 2017 | | Base Salary as of April 1, 2017 | | % Change in April 2017 |
Glenn L. Kellow | | $1,007,475 | | $1,022,587 | | 1.5% |
Amy B. Schwetz | | $ 500,000 | | $ 575,000 | | 15.0% |
Charles F. Meintjes | | $ 555,500 | | $ 563,833 | | 1.5% |
Kemal Williamson | | $ 505,000 | | $ 512,575 | | 1.5% |
A. Verona Dorch | | $ 460,000 | | $ 466,900 | | 1.5% |
STIP
human resources department beginning in November 2021, Mr. Jarboe's base salary was increased to $490,000, effective January 1, 2022.
(5)Mr. Kellow was not employed as of December 31, 2021.
Short-Term Incentive Program
The STIP is designed to
incent our NEOs to maximize current year profitabilityreward company performance while encouraging management to continue to improve upon our excellent safety record.
In May 2017, followingFor 2021, the STIP design reflected an emphasis on our
emergence from Chapter 11,strategic priorities and our pay-for-performance approach. As part of our efforts to simplify the
Committees approved three changesprogram and focus on metrics most aligned with our shareholders, Adjusted EBITDA - STIP was used as the primary financial metric in the short-term plan while Free Cash Flow - LTIP, or FCF - LTIP, was shifted to the
program: | • | | Increased the Adjusted EBITDAR11 targets to better reflect the post-Emergence expectations; |
Added individual objectives as a metric; and
Increasedlong-term plan to avoid redundancy between the maximum award potential to 200%two plans.
The table below provides the definitions for and the purposes of target to be consistent with competitive practice and incent exceptional performance.
11 Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciledthe 2021 STIP performance metrics, which applied to the nearest GAAP measureexecutive officers and certain other participants inAppendix B.
the 2021 STIP: | | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 33 |
The table below provides a definition and the purpose of the performance metrics:
| | | | |
| Metric | Definition | Purpose |
MetricAdjusted EBITDA - STIP | | Definition | | Purpose |
Adjusted EBITDAR
| | This metric is based on Adjusted EBITDAR12 (as defined inAppendix B)EBITDA – STIP of our consolidated enterprise, after excluding 50% ofwith a +/- 100% collar on seaborne sales net pricing variances, fuel pricing variances, and A$ variances. | •Drives management to maximize Adjusted EBITDA, the impact of realizedprimary metric used to measure our segments’ operating performance. •The collar is intended to focus management on operating performance while limiting exposure to pricing, versus budget and 75% of the impact of Australian Dollar Foreign Exchange movements versus budget, both capped at $100 million. In 2017, these adjustments impacted Adjusted EBITDAR12 by reducing it by $93 million related to the pricing collar offset by an increase of $19 million related to the foreign exchange collar. | | Measures the impact of cost savings programs and operational earnings across the global platform. The price and foreign exchange collars address the impact of extraordinary pricefuel and foreign exchange volatility, both positive and negative.
|
Global TRIFR
| | Global TRIFR is theThe number of injuries that result in medical treatment, restricted work or lost time, divided by the number of hours worked (includes employees, contractors, and visitors), multiplied by 200,000 hours. The rate includes the injuries and hours associated with office workers, as well as travel-related injuries when employees are traveling for work purposes.
| | Safety is a value that is integrated into our business. For 2017, our quantitative safety target was set at a 10% improvement over 2016’s actual results.
|
SAWOL
Safety & Sustainability MS
Conformance | | SAWOL
Safety & Sustainability MS sets the expectations relating to safety and health for the organization. SAWOLSafety & Sustainability MS aligns with CORESafetyTM (a National Mining Association framework) and is centered on three key areas of leadership and organization, risk management and assurance. Embedded in this framework is a requirement to audit conformance. | •Safety is a value that is integrated into our business, and is a leading measure of operational excellence and a critical culture and industry imperative. |
The 2021 STIP awards were designed so that no 2021 STIP award could exceed $5,000,000.
| For 2017, our qualitative safety target was set as “90% of global mine sites complete SAWOL MS audit” and “95% conformance with SAWOL MS elements and approved standards.”
| | | | |
Individual Objectives
Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | | The individual objectives are personalized goals and initiatives set for each NEO.
| | Align NEOs’ goals with key strategic areas of importance to the company.
35 |
Summarized in the table below areare: the weights for each 2021 STIP performance metric; threshold, target, and maximum performance expectations; actual results; and the achievement percentpercentage for each performance objective.metric:
| | | | | | | | | | | | | | | | | | | | |
| Metric | Weight | Threshold (25%) | Target (100%) | Maximum (150%) | Actual Results | Achievement(1) |
| Adjusted EBITDA - STIP ($ in millions) | 80% | $234 | $334 | $384 | $511 | 150.0% |
| Safety TRIFR | 10% | 1.52 | 1.17 | 0.82 | 1.10 | 110.0% |
| Safety & Sustainability MS | 10% | Not more than two (2) open major non-conformances | Not more than one
(1)
open major
non-conformance | Full conformance
with all Safety &
Sustainability MS
elements and
approved standards | 94.4% Conformance | 94.2% |
| | | | Total Weighted Achievement | 140.4% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Metric | | Weight | | | Threshold | | | Target | | | Maximum | | | Actual
Results | | | Achievement | |
Adjusted EBITDAR12 ($ in millions) | | | 50.0% | | | | $927 | | | | $1,158 | | | | $1,389 | | | | $1,363 | | | | 189% | |
TRIFR | | | 12.5% | | | | 1.43 | | | | 1.10 | | | | 0.77 | | | | 1.38 | | | | 58% | |
SAWOL MS | | | 12.5% | | | | 80% | | | | 95% | | | | 100% | | | | 99% | | | | 177% | |
Individual Objectives | | | 25.0% | | | | (described below) | | | | Various | | | | Various | |
12 Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciled
(1)Due to the nearest GAAP measurelength of time that the mine was not actively producing coal, Shoal Creek was excluded from the safety metrics, effectively reducing the overall achievement of the TRIFR metric from 127.4% to 110.0% and the Safety & Sustainability MS metric from 96.7% achievement to 94.2%.
In the first half of 2021, the COVID-19 pandemic continued to negatively impact Peabody’s operations and pricing and demand for its products. However, inAppendix B the second half of the year, as economies around the world began recovery from the pandemic, Peabody was able to benefit from an increase in demand and price which resulted in positive financial results and robust share performance. In addition to Peabody’s financial performance, the Company recorded its lowest reportable injury rate in over a decade. The Compensation Committee made no discretionary adjustments to the 2021 STI awards due to the impact of the COVID-19 pandemic.
| | | | | | | | | | | | | | |
| Name | Target Opportunity
as a % of Base Salary | 2021 STIP Earned
as a % of Target | 2021 STIP Earned
($) | |
| James C. Grech | 125% | 82% | 1,027,111 | (1) |
Mark A. Spurbeck(2) | 85% | 140% | 633,070 | |
| Darren R. Yeates | 100% | 140% | 982,940 | |
| Marc E. Hathhorn | 85% | 140% | 614,808 | |
| Scott T. Jarboe | 80% | 140% | 532,810 | |
| Glenn L. Kellow | 125% | 59% | 806,258 | (3) |
| Kemal Williamson | 85% | 140% | 652,670 | |
(1)The short-term incentive payment was pro-rated for the period from June 1, 2021, through December 31, 2021.
(2)In recognition of increased job responsibilities assumed by Mr. Spurbeck beginning in November 2021, his 2022 short-term incentive target was increased to 90% effective January 1, 2022.
(3)The short-term incentive payment was pro-rated for the period from January 1, 2021, through June 1, 2021.
Long-Term Incentive Program
As the Company struggled through a down-cycle in coal pricing in 2020, the structure of the long-term incentive plan was changed for fiscal year 2021 to shift a significant portion of target value from equity to cash and to reflect a shorter payout period. These changes were made to enhance certainty in the program for participants by increasing the emphasis on cash (recognizing the significant volatility in our stock) and to acknowledge the challenge of developing 3-year goals in an extremely difficult business environment. In light of these changes, the long-term incentive targets for each NEO were reduced by approximately 40%.
We do not expect to maintain this structure on a long-term basis, especially given the Company’s improved financial outlook since the development of the 2021 incentive structure.
The 2021 LTIP for the NEOs was 50% performance-based and 50% time-based (with half of the time-based awards comprised of RSUs and the other half restricted cash). The awards generally vest ratably over a two-year period. Target aggregate LTIP award values were established for the NEOs as shown in the following table.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 34 36 |
| | | | | | | | |
| Name | Target Value of Reduced LTIP Award | |
| James C. Grech | $ | 2,940,000 | | (1) |
| Mark A. Spurbeck | $ | 624,000 | | (2) |
| Darren R. Yeates | $ | 980,000 | | (3) |
| Marc E. Hathhorn | $ | 606,000 | | |
| Scott T. Jarboe | $ | 372,000 | | (4) |
| Glenn L. Kellow | $ | 2,940,000 | | |
| Kemal Williamson | $ | 643,320 | | |
The following table summarizes(1)On June 1, 2021, Mr. Grech was hired as President and Chief Executive Officer and received a RSU award on that date equal to $1,500,000 that vests ratably over a 3-year period. This grant was in recognition of equity that Mr. Grech forfeited at his previous employer. Beginning with the individual objectives achievement level earned2022 LTI grant, Mr. Grech's target LTI value is $2,940,000 and will be delivered in the same mix as the other NEOs (i.e., 50% performance-based). Mr. Grech's target LTI value of $2,940,000 is shown above for clarity.
(2)In recognition of increased job responsibilities assumed by each NEO and their key accomplishments. | | | | |
Name | | Individual
Objectives
Achievement | | Key Accomplishments |
Glenn L. Kellow
| | 175%
| | • Achieved strong safety performance, with the company’s global safety performance continuing to surpass industry averages, and the Australian platform recording record safety results, reflecting a 17 percent improvement from the prior year
• Successfully led emergence from Chapter 11, refinanced and publicly relisted the company
• Developed a strategic plan approved by the board of directors that included an assessment of strategic options and a capital allocation framework
• Rolled out the Peabody employeeMr. Spurbeck beginning in November 2021, his 2022 long-term incentive target was increased to $1,100,000.
(3)Mr. Yeates' unreduced LTI target value proposition and advanced the development of managerial talent• In support of the Chairman, onboarded the new Peabody board of directors and Committees
• Led the company to achieve its highest total Adjusted EBITDA13 since 2012, with Australian Adjusted EBITDA13results marking the platform’s largest contribution since 2008
• Led both the U.S. and Australia operations to exceed goals for reclamation, restoring a total of 1.4 acres for each acre disturbed
|
Amy B. Schwetz
| | 175%
| | • Led the negotiations for the plan of reorganization
• Led the $1.5 billion of equity raising for the business, $1.95 billion of market-based debt and a $250 million accounts receivable securitization. Refinanced the term loan within six months. Relisted the company on the NYSE.
• $500 million of debt reduction and $175 million shares repurchased
• Re-established banking relationships, secured a $350 million revolver and progressed a surety bonding program in Australia
• Secured $800 million surety capacity to replace self-bonding in the U.S.
|
Charles F. Meintjes
| | 140%
| | • Successfully led the Australian business through Emergence
• Transitioned to the EVP Corporate Services and CCO from President Australia
• Advanced the enhancement of the portfolio with the sale of Burton and Millennium prep plant and progression of other strategic options in Australia and the U.S.
|
13 Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled$980,000. Mr. Yeates' 2022 long-term incentive target was increased to $1,250,000 effective January 1, 2022.
(4)In recognition of increased job responsibilities assumed by Mr. Jarboe beginning in November 2021, his 2022 long-term incentive target was increased to $950,000.
Performance Awards were granted to the
nearest GAAP measure inAppendix B. | | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 35 |
| | | | |
Name
| | Individual
Objectives
Achievement
| | Key Accomplishments
|
Kemal Williamson
| | 130%
| | • Achieved strong cost and volumeNEOs for a performance period beginning on January 1, 2021, and ending December 31, 2022. The LTIP includes Performance Awards to provide strong linkage to Company performance compared to target
• Exceeded the goal ratio of reclaimed acres to disturbed acres, negotiated with the DOI and with state governments to provide support that eventually allowed the ability to exit the bankruptcy with the third-party bonding solution
• Led the efforts to ensure NGS and the Kayenta mine operate through 2019
|
A. Verona Dorch
| | 150%
| | • Supported negotiations for the plan of reorganization
• Led the litigation and legal strategy of the Chapter 11 process with Emergence in less than 12 months and 93% voting approval
• Spearheaded advocacy efforts around coal mining, energy policies, taxation reform and other activities
• Led negotiations and settlement of $600M+ Multi-Employer Plan litigation
• Resolved legacy liability issues relating to Gold Fields
|
The Committees reviewed and approved the achievement and payouts for the NEOs as summarized in the table below:
| | | | | | |
Name | | Target Opportunity
as a % of Base Salary | | 2017 STIP Earned as
a % of Target | | 2017 STIP Achieved
($) |
Glenn L. Kellow | | 110% | | 167% | | 1,883,470 |
Amy B. Schwetz | | 80% | | 167% | | 770,236 |
Charles F. Meintjes | | 80% | | 159% | | 715,808 |
Kemal Williamson | | 80% | | 156% | | 640,483 |
A. Verona Dorch | | 80% | | 161% | | 602,086 |
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 36 |
2018 Compensation
As outlined on the prior pages, 2017 was an unusual year for our business and compensation programs, which impacts the values reported in the 2017 Summary Compensation Table on page 48. To provide an understanding of the Committees’ direction for our ongoing programs, summarized below is information on our 2018 incentive programs and target compensation opportunities for the NEOs.
STIP
Our STIP was modified to better align with the strategic priorities of the company. Under the STIP for our NEOs in 2018, payouts are based on the following measures:
| | |
Metric
| | Weighting
|
Free Cash Flow per Share14
| | 40%
|
Adjusted EBITDA15 with a price collar to manage outsized volatility
| | 40%
|
Safety
| | 20%
|
Individual performance is not considered under the 2018 STIP to emphasize measurable company performance.
LTIP
Awards for 2018 consist of a mix of performance share units (“PSUs”) (60%) and RSUs (40%). The performance measures applicable to PSUs are return on invested capital (80%) and environmental reclamation (20%), with a relative total shareholder return (“RTSR”) modifier (+/- 25%).
metrics described below.
The table below
showsprovides definitions for and the
2018 target total direct compensation for eachpurposes of
our NEOs: | | | | | | | | | | | | | | | | | | | | | | | | | |
Executive | | Base Salary ($) | | STIP Target (%) | | LTIP Target ($) | | Target Total Direct
Compensation ($) |
Glenn L. Kellow | | | | $1,100,000 | | | | | 125% | | | | | | | | | | $4,900,000 | | | | | $7,375,000 | |
Amy B. Schwetz | | | | $600,000 | | | | | 100% | | | | | | | | | | $1,350,000 | | | | | $2,550,000 | |
Charles F. Meintjes | | | | $575,000 | | | | | 85% | | | | | | | | | | $1,150,000 | | | | | $2,213,750 | |
Kemal Williamson | | | | $523,000 | | | | | 85% | | | | | | | | | | $1,046,000 | | | | | $2,013,550 | |
A. Verona Dorch | | | | $476,238 | | | | | 80% | | | | | | | | | | $952,476 | | | | | $1,809,704 | |
14 Free Cash Flow per Share is anon-GAAP measure defined as net cash provided by operating activities less net cash used in investing activities, divided by weighted average diluted shares outstanding. Free Cash Flow per Share is used by management as a measure of our financialthe performance and our ability to generate excess cash flow from our business operations on a per share basis. Free Cash Flow per Share is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
15 Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciledmetrics applicable to the nearest GAAP measure inAppendix B.
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 37 |
The graphs below display the 2018 target total direct compensation mix for our CEO and our other NEOs, as well as the portion that is2021 performance-based compensation.
Determination of NEO Compensation
Our executive compensation philosophy is comprised of the following core principles:
cash awards:Pay-for-performance
Annual incentives tied to the successful achievement ofpre-established objectives that support our business strategy
Long-term incentives that provide opportunities for executives to earn equity compensation if certainpre-established long-term objectives are successfully achieved
Summarized below are roles and responsibilities of the parties that participate in development of the company’s executive compensation program:
Bankruptcy Court and Creditors
During the pendency of our Chapter 11 Cases, we were required to seek Bankruptcy Court approval to provide our NEOs compensation beyond their base salaries. The Court and creditors approved the KEIP and Emergence RSU Awards.
Committees
A new Compensation Committee and, as it relates to the CEO, the Special Committee, have responsibility for overseeing our executive compensation framework. The Committees, working with external advisors and senior management, seek to align pay with performance and create incentives that reward operational excellence, safety and financial management and that ultimately are designed to create stockholder value.
While in bankruptcy, the Committees approved base salaries for our NEOs. After Emergence, the Committees retained normal responsibilities including:
Developing our executive compensation philosophy
Approving base salaries, STIP and LTIP programs and opportunities
Assessing performance and approving earned incentives
Approving long-term incentive grants including performance goals and award terms
Approving severance programs and executive participation
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 38 |
Management
The role of the CEO is to review the performance of the other NEOs and make recommendations on base salary, STIP and LTIP opportunities for the other NEOs. The compensation group in our Human Resources Department supports the Committees’ efforts.
Independent Compensation Consultants
The Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other advisor and is directly responsible for the appointment, compensation arrangements and oversight of the work of any such person.
The Compensation Committee may select a compensation consultant, legal counsel or other advisor to the Compensation Committee only after taking into consideration all factors relevant to that person’s independence from management. Under this authority, the Compensation Committee has engaged an independent compensation consultant, F.W. Cook, after assessing its independence. F.W. Cook does not provide any other services to us and its work in support of the Compensation Committees did not raise any conflicts of interest or independence concerns. F.W. Cook provides the Committees with competitive market data, assistance on evaluation of the peer group composition, input to incentive program design, and information on trends.
While we were in Chapter 11, the Committees also retained Mercer to provide market data specific to compensation practices for companies in bankruptcy.
Shareholder Outreach /Say-on-Pay Results
The last time we conducted an advisory vote to approve the compensation of our NEOs (which we refer to as“Say-on-Pay”) was at our 2015 Annual Meeting of Stockholders. Because of our Chapter 11 filing, the results of the 2015Say-on-Pay vote did not have a material impact on the key compensation programs that were in place for our NEOs for 2016 and in 2017, as the compensation programs put in place after our Chapter 11 filing were negotiated with the various stakeholders in the Chapter 11 Cases, including the Creditors’ Committee and the U.S. Trustee for the Eastern District of Missouri, and were approved by the Bankruptcy Court.
The input of our shareholders is important to the Committees and our company. We regularly reach out to our major shareholders to get their feedback and will continue this practice going forward.
In making compensation decisions, the Committees consider many factors including:
The breadth, scope, complexity and criticality of the NEO’s role;
Competitive market information;
Internal relationships or roles of similar responsibilities, experience and organizational impact;
Current compensation levels; and
Individual performance.
The Committees do not use a predetermined formula to make overall decisions but consider all the above factors.
Competitive Market Information
Talent for senior-level management positions and key roles in the organization can be acquired across a broad spectrum of companies. As such, we utilize competitive compensation information from both compensation surveys and a group of companies of similar size and/or complexity as us (the “Compensation Peer Group”):
As an input in developing base salary ranges, annual incentive targets and long-term equity award ranges;
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 39 |
To evaluate share utilization by reviewing overhang levels and annual run rates;
To evaluate the form and mix of equity awarded to NEOs;
To evaluate share ownership guidelines;
To assess the competitiveness of total direct compensation awarded to NEOs;
To validate whether our executive compensation program is aligned with our performance; and
As an input in designing compensation plans, benefits and perquisite programs.
The survey data provides a significant sample size, includes information for management positions below senior executives, and includes other industries from which we might recruit for executive positions. The primary survey source was Willis Towers Watson Executive Database.
As stated above, while the Compensation Committee examines executive compensation data from surveys and the Compensation Peer Group, competitive compensation information is not the sole factor in its decision-making process.
Compensation Peer Group
In July 2017, the Compensation Committee requested its independent compensation consultant evaluate the appropriateness of the Compensation Peer Group for our company post-Emergence. In selecting the new Compensation Peer Group, our Compensation Committee considered companies that are:
Direct business competitors;
Labor market competitors;
In a similar industry (for example, coal and consumable fuels, mining and metals, energy and other companies subject to similar economic opportunities and challenges); and
At a similar scale (with revenue and enterprise value generally within1/3-times to3-times the size of our company).
The following table illustrates the changes to the peer group based on this analysis:
| | | | | | | | |
Peers Removed (10)Metric | Definition | | | Peers Added (9) | | | | 2017 Compensation Peer
Group (18)
Purpose |
Air Products & Chemicals, Inc.
Free Cash Flow - LTIP | Net Cash Provided By/Used In Operating Activities +\- Net Cash Provided By/Used In Investing Activities (as disclosed in our public filings with the U.S. Securities and Exchange Commission). Calculations may be subject to adjustment provisions for material transactions or events. | | | Antero Resources Corporation | | =All-encompassing measure of Company performance by incorporating earnings, capital expenditures, interest, taxes and working capital.
| | AK Steel Corporation•Drives performance to maximize returns on capital investments. |
Allegheny Technologies, Inc.
Environmental Reclamation | •A ratio of reclaimed graded acres vs. disturbed acres, where “graded” means returning the land to the final contour grading prior to soil replacement and “disturbed” means new acres impacted for mining purposes; and •Payout is based on a straight average of annual two-year performance. | | Chesapeake Energy Corporation | | | Antero Resources CorporationEncourages commitment to reclamation and reduction of mining footprint, and, more broadly, a commitment to environmental and social responsibility, by incentivizing management to maximize acres reclaimed versus disturbed. |
The Free Cash Flow - LTIP metric (which has a weighting of 80%) has a bifurcated performance period with 50% paying out after year one based on the achievement of the one-year FCF - LTIP performance period and the remaining 50% paying out after year two based on the achievement of the two-year FCF - LTIP performance period. The Environmental Reclamation metric (which has a weighting of 20%) pays at the end of the two-year performance period. The maximum achievement for Environmental Reclamation will be capped at target with the 2-year FCF - LTIP achievement used as a modifier to exceed target. If the Environmental Reclamation ratio
Alpha Natural Resources, Inc.
| | | CVR Energy, Inc. | | | Arch Coal, Inc. |
Eastman Chemical Company
| | | The Mosaic Company | | | Barrick Gold Corporation |
Ecolab, Inc.
| | | Noble Energy, Inc. | | | Chesapeake Energy Corporation |
Joy Global, Inc.
| | | Packaging Corporation of America | | | Cleveland-Cliffs Inc.16 |
Kinross Gold Corporation
| | | Southwestern Energy Company | | | CONSOL Energy Inc. |
Praxair, Inc.
| | | SunCoke Energy, Inc. | | | CVR Energy, Inc. |
Rockwell Automation, Inc.
| | | United States Steel Corporation | | | Domtar Corporation |
SPX Corporation
| | | | | | Freeport-McMoRan Inc. |
| | | | | | | | The Mosaic Company |
| | | | | | | | Newmont Mining Corporation |
| | | | | | | | Noble Energy, Inc. |
| | | | | | | | Packaging Corporation of America |
| | | | | | | | Southwestern Energy Company |
| | | | | | | | SunCoke Energy, Inc. |
| | | | | | | | Teck Resources Limited |
| | | | | | | | United States Steel Corporation |
16 | Formerly Cliffs Natural Resources Inc.
|
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 40 37 |
is at target or higher and FCF is above target, then Environmental Reclamation target achievement will be multiplied by the FCF achievement; otherwise, no adjustment will be made.
Summarized in the top table below is the weight for the one-year Free Cash Flow - LTIP performance metric and threshold, target and maximum performance expectations. During 2021, the Company posted $121 million of net cash margin relating to its economic hedging arrangements due to the newextreme volatility in coal pricing decreasing its Free Cash Flow. As the net cash margin posted is tied to unrealized mark-to-market charges in the period, the impact of net cash margin has been excluded from the calculation of Free Cash Flow - LTIP for purposes of the performance metric. Summarized in the bottom table below is the year 1 payout amounts to the named executive officers.
| | | | | | | | | | | | | | | | | |
| Metric | Weight | Threshold | Target | Maximum | Actual |
| Free Cash Flow - LTIP | 40% | ($304M) | ($179M) | ($54M) | $409M |
| Payout as a Percent of Target | | 50% | 100% | 150% | 150% |
| | | | | | | | | | | | | | | | | |
| Name | Full Award Granted ($) | Year 1 Weighting | Metric Payout of Target | Weighted Payout | Year 1 Payout
($) |
| James C. Grech | N/A | N/A | N/A | N/A | N/A |
| Mark A. Spurbeck | 312,000 | 40% | 150% | 60% | 187,200 |
| Darren R. Yeates | 490,000 | 40% | 150% | 60% | 294,000 |
| Marc E. Hathhorn | 303,000 | 40% | 150% | 60% | 181,800 |
| Scott T. Jarboe | 186,000 | 40% | 150% | 60% | 111,600 |
| Glenn L. Kellow | 1,470,000 | 40% | 150% | 60% | 882,000 |
| Kemal Williamson | 321,660 | 40% | 150% | 60% | 192,996 |
RSUs generally represent the right to receive a defined number of shares of our Common Stock after completing a service period established at the time of grant. RSUs granted to the NEOs in 2021 generally vest ratably on each of the first two anniversaries of the grant date, subject to continued employment. The Compensation Peer Group,Committee believes RSUs are important because they link compensation to stock price performance, promote retention, and build executive ownership and alignment with stockholders.
Restricted cash awards granted to the NEOs in 2021 generally vest ratably on each of the first two anniversaries of the grant date, subject to continued employment. The Compensation Committee believes the restricted cash awards are important to enhance certainty in the program (recognizing the significant level of volatility in our stock) and addresses the need to retain our executive leadership team during a period of significant industry uncertainty.
Earned Performance Unit Awards for 2019 Grant
With respect to the performance units for the 2019 grant, the overall performance was 63.93% as noted below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Metric | Threshold | Target | Maximum | Weighting | 2019 - 2021
Actual | Metric Payout
of Target | Weighted
Payout |
| ROIC | 5.0% | 10.0% | 15.0% | 80% | 8.7% | 86.67% | 69.33% |
| Environmental Reclamation | 0.8 to 1 | 1.0 to 1 | 1.2 to 1 | 20% | 0.992 | 98.00% | 19.60% |
| RTSR Payout Modifier | -25% | No Change | +25% | | -25% | | -25.00% |
| | | | | | | 63.93% |
Annual ROIC was 9.7%, (5.2%) and 21.5% for the years 2019-2021, respectively, after adjusting for impacts relating to economic hedging arrangements. Average ROIC for the period 2019-2021 was 8.7%, as adjusted.
In 2021, the Company
falls betweenrecorded unrealized mark-to-market charges of $115 million and posted $121 million of net cash margin relating to its economic hedge positions. As the
45th and 50th percentile in both revenue and total assets, as shownnet cash margin posted is tied to unrealized mark-to-market charges in the
table below. | | | | |
Company | | Revenue ($ in millions) (1) | | Total Assets ($ in millions) (2) |
Median | | 5,876 | | 8,540 |
Peabody Energy Corporation | | 5,579 | | 8,181 |
Peabody Energy Corporation Percentile Rank | | 45% | | 49% |
Data Source: S&P’s Capital IQ; includes adjustmentsperiod, the impacts have been excluded from the calculation of ROIC for purposes of the Performance Unit Awards.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 38 |
Recognition Awards for Mr. Spurbeck and Mr. Jarboe
In recognition of their tremendous contributions towards the Company's refinancing efforts which helped avoid another restructuring, both Mr. Spurbeck and Mr. Jarboe received a restricted cash award granted on March 1, 2021, that may differvests ratably on January 2, 2022, and January 2, 2023. Mr. Spurbeck's award was $100,000 and Mr. Jarboe's award was $70,000.
Employment Agreement Modification for Mr. Yeates
Mr. Yeates' Employment Agreement was modified on December 6, 2021 to remove the requirement that Mr. Yeates relocate to the Company's headquarters in St. Louis, Missouri.
Transition Agreement with Mr. Kellow
As previously disclosed in a Current Report on Form 8-K filed with the SEC on March 18, 2021, the Company and Mr. Kellow entered into an Employment Transition Agreement (Transition Agreement) as part of its succession planning process. Pursuant to the Transition Agreement, during the twelve months following his termination date of June 1, 2021, Mr. Kellow will provide consulting services to the Company for up to twenty hours per month. Mr. Kellow's consulting arrangement ensures a smooth leadership transition during a critical period for the Company. In determining to provide this compensation, the Committee considered the positive effect derived from GAAP reporting madehis knowledge of the ongoing strategic initiatives that were in process at the time of his departure, Peabody's business strategy and his relationships with a varied group of key stakeholders. During the consulting period, Mr. Kellow will receive a monthly consulting fee of $85,000 per month. The consulting fees are not guaranteed; the Company will have no further obligation to provide the monthly consulting fee if (1) the Company terminates the consulting agreement for Cause; or if (2) Mr. Kellow voluntarily terminates the consulting arrangement (except for limited circumstances narrowly defined in the agreement). As a result of the Transition Agreement, Mr. Kellow’s equity awards continued to vest while performing these consulting services as follows:
•RSUs and time-based cash grants: Any RSUs and time-based cash grants that would vest by Capital IQ to all companies(1) Reflectedtheir original terms during the twelve months following Mr. Kellow’s termination date of June 1, 2021, vested upon his termination date.
•Performance Stock Units and Performance-based cash awards: A pro-rata portion (based upon the sum of the number of days employed plus the number of days in the consulting period during any applicable performance period, including any days remaining in such period following any date that the Company terminates the consulting period without cause, with sum divided by the number of days in
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 39 |
the performance period) of any performance stock units or performance-based cash awards held by Mr. Kellow that are outstanding as of the
most recently reported four quarters at December 31, 2017.(2) Reflected as oftermination date shall remain eligible to vest based on actual performance through the most recently reported quarter at December 31, 2017.
entire performance period.
Executive Compensation Policies and Practices
In 2021, NEOs
are eligible to participateparticipated in benefit plans generally available to the broader employee group.
Excess Retirement
Non-Qualified Defined Contribution Plan
Previously, our NEOs generally participated in our nonqualified excess
The PIC Board approved the termination of the non-qualified defined contribution retirement plan (“Excess Retirement Plan”). The Excess Retirement Plan was designed to allowin May 2020. Participants in the non-qualified defined contribution plan received a select grouplump sum distribution of highly compensated management employees to make contributions in excess of certain limits imposed by the Internal Revenue Code that apply to ourtax-qualified 401(k) plan, and to receive matching contributions on such employee contributions. The Excess Retirement Plan was suspended effective December 31, 2015 and participants, including our NEOs, were no longer able to contribute totheir account balance under the plan andin May 2021.
Perquisites
In 2021, we
did not make any contributions on behalf of the NEOs for 2016 or 2017. Under the Plan confirmed by the Bankruptcy Court, the liabilities relating to our current employees under the Excess Retirement Plan were transferred to a new nonqualified supplemental employee retirement account plan. Beginning January 1, 2018, our NEOs are eligible to make contributions to the new supplemental employee retirement account.Perquisites
We provideprovided limited perquisites that the Committees believe arebelieved were necessary to enable the NEOs to perform their responsibilities safely and efficiently. We believe the benefit we receive from providing these perquisites significantly outweighs the cost of providing them. The limited perquisites utilized by our NEOs in 20172021 are explained in the footnotes to the All Other Compensation table on page 49.
46.
During 2021, we offered our NEOs financial counseling services. Offering such services helped ensure that our NEOs understand, appreciate and maximize our benefit programs. Not all of our NEOs utilized the financial counseling services; however, for those who did, we reported the value of the service as a perquisite in the All Other Compensation table below (these values were not “grossed up” for tax purposes). We stopped providing financial counseling services as of December 31, 2021. Additionally, in 2021, we provided the former President & CEO with tax preparation benefits of $15,968 in value (which benefit was also not “grossed up" for tax purposes). This perquisite is reported in the All Other Compensation table below.
Share Ownership Requirements
We have share ownership requirements for our NEOs, which are designed to align their long-term financial interests with those of our stockholders. stockholders. The NEO share ownership requirements are as follows: | | | | | |
Role | | Value of Common Stock to be Owned |
CEO | | 5 times base salary |
Other NEOs | | 3 times base salary |
If
Prior to August 5, 2021, if at any time
ana NEO
doesdid not meet his or her ownership requirement
for shares received, he or she
musthad to retain 100% of net shares received as the result of the exercise, vesting or payment of any equity award until the ownership requirement
was met. To better align with market practice, the Committee approved reducing the holding requirement to 50% of net shares received until the guideline is
met.achieved. This applies to shares received on or after August 5, 2021. For this purpose, “net shares” means the shares that remain after shares are sold or withheld to satisfy any tax obligations, including withholding taxes, arising in connection with the exercise, vesting or payment of an equity award. As of
the date of this filing,December 31, 2021, all NEOs
complywere in compliance with
thesethe requirement to retain 100% of shares received as the result of the exercise, vesting, or payment of any equity award until such NEO’s ownership
requirements. | | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 41 |
requirement is met.
Prohibition on Hedging or Pledging of Company Stock
Our Insider Trading Policy prohibits our directors and all our employees, including our NEOs, from entering into hedging transactions involving our stock, and from holding our stock in a margin account as collateral for a margin loan or otherwise pledging our stock as collateral for a loan.
Prohibited hedging transactions specifically include transactions involving the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 40 |
Clawback Provisions
If we are
In 2018, our Compensation Committee approved a revised, stand-alone clawback policy designed to align with current market practice with respect to clawback policies. Under this policy, subject to certain exceptions, if Peabody is required to prepare an accounting restatement due to
fraudulent and/material noncompliance with any financial reporting requirement under the U.S. federal securities laws, and the Board determines any current or former Section 16 officer of Peabody who received certain incentive-based compensation (including STIP awards and PSUs) has willfully committed an act of fraud, dishonesty, or intentional
material misrepresentation,disregard of Company policies in the performance of his or her duties as a Section 16 officer that contributed to the noncompliance that resulted in Peabody’s obligation to prepare the accounting restatement, the Board may
act to recoup incentive awards and equity gains on awards granted to NEOs torecover from each such culpable officer “excess incentive-based compensation.” For this purpose, excess incentive-based compensation generally is the
extent such awards exceededamount of incentive-based compensation received by the
paymentculpable officer in excess of the amount that
otherwise would have been
madereceived had such incentive-based compensation been determined based on the
restated financial results. This rightaccounting restatement. The clawback policy applies to
recoup expires unless such determination is made byincentive-based compensation for which the applicable performance period ended (or, for stock options, the grant was made) in, or in the three years prior to, the year in which the Board
within three years following the payment of the award.determines that an accounting restatement is required.
On February 21, 2019, the Board adopted the Peabody Energy Corporation 2019 Executive Severance Plan, effective as of January 1, 2019 (the “2019 Severance Plan”). The
2019 Severance Plan revised and replaced the Peabody Energy Corporation 2015 Amended and Restated Executive Severance
Plan. The 2019 Severance Plan
(the “Severance Plan”) is intendedprovides for severance payments and benefits to
provide transitional assistance tothe NEOs upon certain
senior executives whosequalifying terminations of employment
is terminated by
usPeabody without “Cause,” or by the NEO for
reasons other than “cause”“Good Reason” (as
such key terms are defined in the
Severance Plan), death or “disability” (as defined in the Severance Plan), or by the senior executive for “good reason” (as defined in the2019 Severance Plan).
For more information about the 2019 Severance Plan, see “Potential Payments upon Termination or Change in Control.” | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 42 41 |
The following table highlights the key Severance Plan provisions (certain terms used in the following table are defined in the Severance Plan):
| | |
Element
| | Severance Plan Provisions
|
NEOs Covered
| | All NEOs
|
Term of Arrangement | | Severance Plan may be modified, amended or terminated at any time by the Board without notice to plan participants (“Participants”) with certain exceptions
For a period of two years following a Change in Control, the Severance Plan may not be discontinued, terminated or amended in such a manner that decreases the Severance Payment payable to any Participant or that makes any provision less favorable for any Participant without the consent of the Participant
Severance Plan may not be modified, amended or terminated in a manner adverse to Participants as of the date of the modification, amendment or termination without one year’s advance written notice of such modification, amendment or termination
Either Peabody or the executive may terminate employment at any time for any reason (other than for cause) by delivery of notice 90 days in advance of the termination date
|
Severance Benefits
| | Upon termination other than for cause or upon resignation for good reason, severance is equal to a 2x multiple times (or, in the event termination occurs within two years after a Change in Control for the CEO, the severance multiplier changes to 2.5x):
• Base salary;
• Average annual cash incentive award paid for the three years preceding the year of termination; and
• 6% of base salary (to compensate for company contributions he or she otherwise would have earned under our 401(k) plan)
Upon termination other than for cause or upon resignation for good reason, executive is also entitled to certain medical and other benefits for up to 18 months
|
Restrictive Covenants (post-termination)
| | Confidentiality (perpetual)
Non-compete (1 year)
Non-solicitation (1 year)
Breach will result in forfeiture of any unpaid amounts or benefits; executive will repay any portion of the severance payment previously paid to him or her
|
TaxGross-Ups
| | None
|
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 43 |
DeductibilityTable of Compensation Expenses
Under Section 162(m) of the Internal Revenue Code, compensation paid to certain executive officers (and, beginning in 2018, certain former executive officers) in excess of $1 million is not tax deductible. Historically, compensation that qualifies as “performance-based compensation” under Section 162(m) of the Code could be excluded from this $1 million limit, but this exception has now been repealed, effective for taxable years beginning after December 31, 2017, unless certain transition relief for certain compensation arrangements in place as of November 2, 2017 is available. The Committees have in the past generally considered the impact of Section 162(m) of the Internal Revenue Code when establishing incentive compensation plans. The Committees believe that the tax deduction limitation should not be permitted to compromise our ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of compensation may result in compensation that in certain cases is not deductible for federal income tax purposes. Moreover, even if the Committees intended to grant compensation that qualifies as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code, we cannot guarantee that such compensation will so qualify or ultimately is or will be deductible.
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 44 |
Contents
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs.
Coley, Gorman,
James, Laymon,
Rusnack,Miller, and Sutherlin
and Ms. Bertone served on our Compensation Committee during
2017.2021. None of these committee members is a current or former Peabody officer or employee. In addition, none of our executive officers served during
20172021 as a member of the board of directors or compensation committee of any entity which has one or more executive officers serving as a member of our Board or Compensation Committee.
No member of the Compensation Committee has ever served as an officer or employee of the Company or any of its subsidiaries or had any relationship during the fiscal year ended December 31, 2021, that would be required to be disclosed pursuant to Item 404 of Regulation S-K. | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 45 42 |
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the above section of this Proxy Statement entitled “Compensation Discussion and Analysis” with management. Based on such review and discussion, the Compensation Committee has recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement for filing with the SEC and incorporated by reference in Peabody’s Annual Report on Form
10-K for the fiscal year ended December 31,
2017.2021.
MEMBERS OF THE COMPENSATION COMMITTEE:
STEPHEN E. GORMAN
MICHAEL W. SUTHERLIN
DAVID J. MILLER
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 46 43 |
RISK ASSESSMENT IN COMPENSATION PROGRAMS
The Compensation Committee periodically reviews our compensation programs for features that might encourage inappropriate risk-taking. The programs are designed with features that mitigate risk without diminishing the incentive nature of the compensation. We believe our compensation programs encourage and reward prudent business judgment without encouraging undue risk.
In
January 2018,2021, we conducted, and the Compensation Committee reviewed, a comprehensive global risk assessment. The risk assessment included a global inventory of incentive plans and programs and considered factors such as the plan metrics, number of participants, maximum payments, and risk mitigation factors. Based on the review, we believe our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on
the company.Peabody. | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 47 44 |
EXECUTIVE COMPENSATION TABLES
2017
2021 Summary Compensation Table
The following table summarizes the compensation of our Named Executive Officers for their performance during the years ended December 31, 2017, 20162021, 2020 and 2015,2019, as applicable.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Year | Salary
($) (1) | Bonus ($) (2) | Stock
Awards
($) (3) | | Non-Equity
Incentive Plan
Compensation
($) (4) | | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) (5) | Total
($) |
| James C. Grech | 2021 | 583,333 | | 1,000,000 | | 1,499,999 | | | 1,027,111 | | | — | 128,829 | | 4,239,272 | |
| President and | | | | | | | | | | |
| Chief Executive Officer | | | | | | | | | | |
| Mark A. Spurbeck | 2021 | 527,800 | | 260,000 | | 155,999 | | | 820,270 | | | — | 31,002 | | 1,795,071 | |
| Executive Vice President | 2020 | 488,482 | | — | | 521,028 | | | 111,618 | | | — | 15,524 | | 1,136,652 | |
| and Chief Financial Officer | | | | | | | | | | |
| Darren R. Yeates | 2021 | 700,000 | | — | | 244,999 | | | 1,276,940 | | | — | — | | 2,221,939 | |
| Executive Vice President | 2020 | 217,474 | | 600,000 | | 78,155 | | (6) | 116,667 | | | — | — | | 1,012,296 | |
| and Chief Operating Officer | | | | | | | | | | |
| Marc E. Hathhorn | 2021 | 512,575 | | — | | 151,498 | | | 796,608 | | | — | 723,690 | | 2,184,371 | |
| President—U.S. Operations | 2020 | 505,000 | | 97,500 | | 1,073,832 | | | 93,534 | | | — | 40,923 | | 1,810,789 | |
| 2019 | 459,511 | | 331,626 | | 977,398 | | | 442,017 | | | — | 48,548 | | 2,259,101 | |
| Scott T. Jarboe | 2021 | 471,975 | | — | | 92,998 | | | 644,410 | | | — | 24,701 | | 1,234,083 | |
| Chief Administrative Officer and Corporate Secretary | | | | | | | | | | |
| Glenn L. Kellow | 2021 | 462,500 | | 367,500 | | 1,193,696 | | (7) | 1,688,258 | | | — | 5,041,858 | | 8,753,812 | |
| Former President and | 2020 | 1,100,000 | | — | | 5,209,680 | | | — | | | — | 43,231 | | 6,352,911 | |
| Chief Executive Officer | 2019 | 1,100,000 | | — | | 5,227,494 | | | 1,160,225 | | | — | 123,104 | | 7,610,823 | |
| Kemal Williamson | 2021 | 544,142 | | — | | 160,830 | | | 845,666 | | | — | 1,989,071 | | 3,539,709 | |
Former President — U.S. Operations | 2020 | 536,100 | | — | | 1,139,963 | | | 99,294 | | | — | 33,660 | | 1,809,017 | |
| 2019 | 532,825 | | — | | 1,115,865 | | | 384,507 | | | 1,785 | 68,968 | | 2,103,950 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary ($) | | | | | | Bonus
($) | | | Stock
Awards ($)(1) | | | Option
Awards
($)(1) | | | Non-Equity
Incentive Plan
Compensation
($)(2) | | | | | | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)(3) | | | All Other
Compensation
($)(4) | | | Total ($) | |
Glenn L. Kellow | | | 2017 | | | | 1,018,809 | | | | | | | | — | | | | 15,000,007 | | | | — | | | | 4,528,092 | | | | | | | | — | | | | 30,117 | | | | 20,577,025 | |
President and | | | 2016 | | | | 997,896 | | | | | | | | — | | | | 1,085,000 | | | | — | | | | 1,435,370 | | | | | | | | — | | | | 17,610 | | | | 3,535,876 | |
Chief Executive Officer | | | 2015 | | | | 874,167 | | | | (5) | | | | — | | | | 2,573,358 | | | | 749,747 | | | | 519,730 | | | | (6) | | | | — | | | | 94,220 | | | | 4,811,222 | |
Amy B. Schwetz | | | 2017 | | | | 556,250 | | | | | | | | — | | | | 5,200,005 | | | | — | | | | 1,895,236 | | | | | | | | — | | | | 38,787 | | | | 7,690,278 | |
Executive Vice | | | 2016 | | | | 479,583 | | | | | | | | — | | | | 227,331 | | | | — | | | | 518,080 | | | | | | | | — | | | | 34,887 | | | | 1,259,881 | |
President | | | 2015 | | | | 341,837 | | | | (7) | | | | — | | | | 180,071 | | | | — | | | | 174,108 | | | | (6) | | | | — | | | | 200,613 | | | | 896,629 | |
and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Charles F. Meintjes | | | 2017 | | | | 561,750 | | | | | | | | — | | | | 4,999,995 | | | | — | | | | 1,757,371 | | | | | | | | — | | | | 55,049 | | | | 7,374,165 | |
Executive Vice President | | | 2016 | | | | 554,583 | | | | | | | | — | | | | 284,169 | | | | — | | | | 575,587 | | | | | | | | — | | | | 72,869 | | | | 1,487,208 | |
Corporate Services and | | | 2015 | | | | 550,000 | | | | | | | | — | | | | 1,218,471 | | | | — | | | | 243,638 | | | | (6) | | | | — | | | | 188,912 | | | | 2,201,021 | |
Chief Commercial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Kemal Williamson | | | 2017 | | | | 510,681 | | | | | | | | — | | | | 4,999,995 | | | | — | | | | 1,587,358 | | | | | | | | 886 | | | | 16,269 | | | | 7,115,189 | |
President - Americas | | | 2016 | | | | 504,167 | | | | | | | | — | | | | 258,331 | | | | — | | | | 523,261 | | | | | | | | 980 | | | | 50,938 | | | | 1,337,677 | |
| | | 2015 | | | | 500,000 | | | | | | | | — | | | | 857,800 | | | | 249,916 | | | | 205,489 | | | | (6) | | | | — | | | | 51,960 | | | | 1,865,165 | |
A. Verona Dorch | | | 2017 | | | | 465,175 | | | | | | | | — | | | | 3,499,994 | | | | — | | | | 1,464,586 | | | | | | | | — | | | | 103,741 | | | | 5,533,496 | |
Executive Vice | | | 2016 | | | | 456,667 | | | | | | | | — | | | | 227,331 | | | | — | | | | 476,634 | | | | | | | | — | | | | 136,063 | | | | 1,296,695 | |
President, Chief Legal Officer, Government Affairs and Corporate Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)For Mr. Grech, the amount in the Salary column reported for 2021 represents the prorated amount of his annual $1,000,000 salary. Mr. Grech became President and Chief Executive Officer on June 1, 2021.
(2)Amounts in the Bonus column reported for 2021 represent a one-time inducement payment for Mr. Grech in conjunction with his employment start date; a one-time cash inducement payment for Mr. Spurbeck in recognition of his promotion in 2020, and the payment of Mr. Kellow's restricted cash award that vested per the terms of the Transition Agreement dated March 18,2021.
(3)Amounts in the Stock Awards column reported for 2021 represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“FASB ASC Topic 718”).
(4)Amounts in this column reported for 2021 represent awards earned under the 2021 STIP based on actual performance and the earned performance cash award for the one-year performance period as follows:
(1) | Amounts in the Stock Awards column reported for 2017 represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“FASB ASC Topic 718”). |
(2) | Amounts in this column reported for 2017 represent awards earned under the KEIP and the 2017 STIP based on actual performance. The material terms of the KEIP can be found on page 29 and the 2017 STIP awards are described on starting on page 28. Of the amounts reported in this column for 2017, the following amounts are attributable to KEIP payouts: Mr. Kellow - $2,644,622; Ms. Schwetz - $1,125,000; Mr. Meintjes - $1,041,563; Mr. Williamson - $946,875; and Ms. Dorch - $862,500. Of the amounts reported in this column for 2017, the following amounts are attributable to STIP payouts: Mr. Kellow - $1,883,470; Ms. Schwetz - $770,236; Mr. Meintjes - $715,808; Mr. Williamson - $640,483; and Ms. Dorch - $602,086. |
(3) | Amounts in this column reported for 2017 reflect only changes in the actuarial present value of Mr. Williamson’s accumulated benefit under the Peabody Investments Corp. (or “PIC”) Retirement Plan. See page 51 for more discussion about this plan. |
(4) | Amounts included in this column are described in the All Other Compensation table below. |
(5) | Mr. Kellow served as our President and Chief Operating Officer prior to being named President and Chief Executive Officer effective May 1, 2015. The 2015 salary amount for Mr. Kellow represents a blend of (1) amounts paid prior to his promotion to President and CEO for the applicable time period, and (2) amounts paid following his promotion. During the period beginning on May 1, 2015 and ending on December 31, 2015, Mr. Kellow requested a voluntary 10% reduction to his annual base salary in response to market conditions and to align with our cash conservation initiatives. |
(6) | Award payouts earned based on actual performance under the 2015 annual cash incentive plan were reduced by 50%. |
(7) | The 2015 salary amount for Ms. Schwetz represents a blend of (1) amounts paid prior to her promotion to Executive Vice President and Chief Financial Officer for the applicable time period, and (2) amounts paid following her promotion. |
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 48 45 |
| | | | | | | | | | | |
| NEO | Short-term Incentive | Performance-based cash award earned for one-year performance period | Total |
| James C. Grech | 1,027,111 | N/A | 1,027,111 |
| Mark A. Spurbeck | 633,070 | 187,200 | 820,270 |
| Darren R. Yeates | 982,940 | 294,000 | 1,276,940 |
| Marc E. Hathhorn | 614,808 | 181,800 | 796,608 |
| Scott T. Jarboe | 532,810 | 111,600 | 644,410 |
| Glenn L. Kellow | 806,258 | 882,000 | 1,688,258 |
| Kemal Williamson | 652,670 | 192,996 | 845,666 |
(5)Amounts in this column reported for 2021 are described in the All Other Compensation table below.
(6)Represents non-employee director DSU awards granted in fiscal 2020.
(7)Represents the incremental fair value of modified equity awards that would have otherwise been forfeited. Such amounts are computed as of the modification date, March 18, 2021, in accordance with FASB ASC Topic 718.The incremental value of the RSUs was $743,801 and the net incremental value of the PSUs was $449,895. See “Transition Agreement with Mr. Kellow” above for more detail.
All Other Compensation
The following table sets forth detailed information regarding the 20172021 amounts reported in the All Other Compensation column of the 20172021 Summary Compensation Table above.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Group
Term Life
Insurance
($) | Registrant Contributions for Qualified 401(k) Plan ($) (1) | Restoration Benefit ($) (2) | Tax Gross-Ups ($) (3) | Perquisites ($) (4) | Consulting Agreement ($) (5) | Contractual Separation Payments ($) (6) | Relocation ($) (7) | Tax Equalization Payments ($) (8) | Total
($) |
| James C. Grech | 4,389 | | 9,525 | | 21,275 | | 43,266 | | — | | — | | — | | 50,374 | | — | | 128,829 | |
| Mark A. Spurbeck | 1,335 | | 14,500 | | 11,112 | | — | | 4,055 | | — | | — | | — | | — | | 31,002 | |
| Darren R. Yeates | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | |
| Marc E. Hathhorn | 1,983 | | 14,500 | | 10,540 | | 148,448 | | 126,979 | | — | | — | | — | | 421,239 | | 723,690 | |
| Scott T. Jarboe | 1,184 | | 14,500 | | 9,016 | | — | | — | | — | | — | | — | | — | | 24,701 | |
| Glenn L. Kellow | 1,202 | | 8,775 | | — | | — | | 15,968 | | 510,000 | | 4,505,913 | | — | | — | | 5,041,858 | |
| Kemal Williamson | 6,069 | | 5,388 | | 15,038 | | — | | 15,670 | | — | | 1,946,906 | | — | | — | | 1,989,071 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Group
Term Life
Insurance
($) | | Registrant
Contributions
for Defined
Contribution
Plans ($)(1) | | Tax
Gross- Ups
($)(2) | | Perquisites
($)(3) | | Total ($) |
Glenn L. Kellow | | | | 2,622 | | | | | 24,300 | | | | | 3,195 | | | | | — | | | | | 30,117 | |
Amy B. Schwetz | | | | 942 | | | | | 21,800 | | | | | 16,045 | | | | | — | | | | | 38,787 | |
Charles F. Meintjes | | | | 4,092 | | | | | 24,300 | | | | | 26,657 | | | | | — | | | | | 55,049 | |
Kemal Williamson | | | | 3,696 | | | | | 12,414 | | | | | 159 | | | | | — | | | | | 16,269 | |
A. Verona Dorch | | | | 1,789 | | | | | 24,300 | | | | | 33,646 | | | | | 44,006 | | | | | 103,741 | |
(1)Represents employer contributions to the Company’s qualified 401(k) plan. The non-qualified defined contribution plan was terminated in May 2020.
(2)Represents amounts paid directly to the named executive officer that Peabody would have contributed to the officer's account under the Peabody 401(k) plan absent limits applicable to such plans under the Internal Revenue Code. These payments are based on the same matching contribution formula applicable to all participants in this plan.
(3)For Mr. Grech, represents a tax gross-up for relocation costs. For Mr. Hathhorn, represents a tax gross-up on expenses related to his expatriate assignment.
(4)For Mr. Williamson, represents cost of financial planning services. For Mr. Spurbeck and Mr. Kellow, represents cost of tax return preparation services. For Mr. Hathhorn, represents expenses related to his expatriate assignment.
(5)Represents consulting fees paid during 2021 pursuant to the Transition Agreement dated March 18, 2021.
(6)For Mr. Kellow and Mr. Williamson, represents payments received from the 2019 Severance Plan and the total value of continuation of benefits. The payments were made pursuant to the terms of the 2019 Severance Plan. There were no discretionary adjustments to the severance plan benefits for Mr. Kellow or Mr. Williamson.
(7)For Mr. Grech, represents relocation costs, specifically relocation allowance, lodging, meals, airfare, and mileage.
(8)For Mr. Hathhorn, represents both U.S. and foreign taxes paid less hypothetical tax withholding.
(1) | Represents employer contributions to the company’s qualified 401(k) plan. There were no employer contributions to the company’s Excess Retirement Plan. |
(2) | For Mr. Kellow and Mr. Williamson, representstax-gross ups related to the use of the Company aircraft by their spouses to accompany them and jointly attend business events. For Ms. Schwetz, represents taxgross-ups consisting of $15,388 related to her expatriate assignment in Australia and $657 for tax return preparation. For Mr. Meintjes, represents taxgross-up related to his expatriate assignment in Australia. For Ms. Dorch, represents taxgross-up related to her relocation expenses. |
(3) | Mr. Kellow’s and Mr. Williamson’s use of the Corporate aircraft when their spouses accompanied them on business is considered a perquisite for the purposes of this disclosure, but there was no associated incremental cost. For Ms. Dorch, represents expenses incurred related to her relocation. |
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 49 46 |
2021 Grants of Plan-Based Awards
The following table summarizes grants to the NEOs of plan-based awards during the year ended December 31, 2017.2021. The table includes Emergence RSU Awards as approved by the creditorsawards, PSU awards, performance cash awards, restricted cash awards and Bankruptcy Court, and 20172021 STIP opportunities as approved by the Committees.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards:
Number of
Shares of
Stock or Units (#) (3) | Grant Date
Fair Value of Stock and
Option
Awards ($) (4) |
| Name | Grant Date | Threshold
($) | Target ($) | Maximum
($) | Threshold
(#) | Target
(#) | Maximum
(#) |
| James C. Grech | 36,458 | 729,166(5) | 1,093,749 | — | — | — | — | — |
| 6/1/2021 | — | — | — | — | — | — | 202,429 | 1,499,999 |
| Mark A. Spurbeck | 22,542 | 450,840 | 676,260 | — | — | — | — | — |
| 1/4/2021(6) | 31,200 | 312,000 | 468,000 | — | — | — | 53,061 | 155,999 |
| Darren R. Yeates | 35,000 | 700,000 | 1,050,000 | — | — | — | — | — |
| 1/4/2021(6) | 49,000 | 490,000 | 735,000 | — | — | — | 83,333 | 244,999 |
| Marc E. Hathhorn | 21,892 | 437,835 | 656,753 | — | — | — | — | — |
| 1/4/2021(6) | 30,300 | 303,000 | 454,500 | — | — | — | 51,530 | 151,498 |
| Scott T. Jarboe | 18,972 | 379,440 | 569,160 | — | — | — | — | — |
| 1/4/2021(6) | 18,600 | 186,000 | 279,000 | — | — | — | 31,632 | 92,998 |
| Glenn L. Kellow | 68,750 | 1,375,000 | 2,062,500 | — | — | — | — | — |
| 1/4/2021(6) | 147,000 | 1,470,000 | 2,205,000 | — | — | — | — | — |
| 3/18/21 | — | — | — | 1,834 | 18,342 | 36,684 | 20,974 | 144,812 |
| 3/18/21 | — | — | — | 9,791 | 97,910 | 195,820 | 65,333 | 608,884 |
| 3/18/21 | | | | | | | 125,000 | 440,000 |
| Kemal Williamson | 23,240 | 464,799 | 697,198 | — | — | — | — | — |
| 1/4/2021(6) | 32,166 | 321,660 | 482,490 | — | — | — | 54,704 | 160,830 |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1) | | | All Other
Stock
Awards: Number of
Shares of
Stock or | | | Grant Date
Fair Value of
Stock and
Option
Awards ($)(3) | |
Name | | Grant
Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Units (#)(2) | | |
Glenn L. Kellow | | | — | | | | 70,303 | | | | 1,124,846 | | | | 2,249,692 | | | | — | | | | — | |
| | | 4/3/2017 | | | | — | | | | — | | | | — | | | | 680,890 | | | | 15,000,007 | |
Amy B. Schwetz | | | — | | | | 28,750 | | | | 460,000 | | | | 920,000 | | | | — | | | | — | |
| | | 4/3/2017 | | | | — | | | | — | | | | — | | | | 236,042 | | | | 5,200,005 | |
Charles F. Meintjes | | | — | | | | 28,192 | | | | 451,066 | | | | 902,132 | | | | — | | | | — | |
| | | 4/3/2017 | | | | — | | | | — | | | | — | | | | 226,963 | | | | 4,999,995 | |
Kemal Williamson | | | — | | | | 25,629 | | | | 410,060 | | | | 820,120 | | | | — | | | | — | |
| | | 4/3/2017 | | | | — | | | | — | | | | — | | | | 226,963 | | | | 4,999,995 | |
A. Verona Dorch | | | — | | | | 23,345 | | | | 373,520 | | | | 747,040 | | | | — | | | | — | |
| | | 4/3/2017 | | | | — | | | | — | | | | — | | | | 158,874 | | | | 3,499,994 | |
(1)The first line under Non-Equity Incentive Plan Awards represents the potential payouts under the 2021 STIP. For the 2021 STIP, the target award represents the award payable upon achievement of the performance measures (Adjusted EBITDA, TRIFR and Safety and Sustainability) described above in the CD&A under the subheading “Short-term Incentive Program" at 100% of the specified performance measures. The maximum award represents 150% of the target award value and the threshold award represents 5% of the target award value (that is, the result if the lowest weighted metric met the threshold). Actual payouts under the 2021 STIP are included in the 2021 Summary Compensation Table.
(2)Represents the incremental number of PSUs that continued to vest per the terms of the Transition Agreement. The material terms are described on page 39. The maximum award represents 200% of the target award value and the threshold represents 10% of the target award value (that is, the result if the lowest weighted metric met the threshold).
(3)Represents RSU awards granted in fiscal 2021. The material terms of these awards are described beginning on page 36. For Mr. Kellow, this represents the number of RSUs that continued to vest per the terms of the Transition Agreement.
(4)Represents the grant date fair value of stock awards determined in accordance with FASB ASC Topic 718.
(5)Represents a prorated potential payout under the 2021 STIP for time served from the hire date.
(6)Represents the potential payouts of the performance-based cash awards. The target award represents the award payable upon achievement of the performance measures (Free Cash Flow - LTIP and Environmental Reclamation). The maximum award represents 150% of the target award value and the threshold award represents 10% of the target award value (that is, the result if the lowest weighted metric met the threshold). Actual payouts of the performance-based cash awards for the one-year performance period are included in the 2021 Summary Compensation Table.
(1) | Represents the potential payouts under the 2017 STIP. The target award represents the award payable upon achievement of the performance measures (Adjusted EBITDAR,17 TRIFR, SAWOL MS and individual objectives) described above in CD&A under the subheading “Short-term Incentive Plan“ at 100% of the specified performance measures. The maximum award represents 200% of the target award value and the threshold award represents 6.25% of the target award value, if only the lowest weighted metric met the threshold. Actual payouts under the 2017 STIP are included in the 2017 Summary Compensation Table. |
(2) | Represents the number of shares of our Common Stock underlying Emergence RSU Awards granted in 2017. The Emergence RSU Awards generally vest ratably on each of the first three anniversaries of the grant date. The material terms of these awards are described on page 32. |
(3) | Represents the grant date fair value of stock awards determined in accordance with FASB ASC Topic 718. |
17 | Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure inAppendix B. |
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 50 47 |
Outstanding Equity Awards at 20172021 FiscalYear-End The table below sets forth details about the outstanding equity awards for each of the NEOs as of December 31, 2017.2021. We generally note that the amount ultimately realized from outstanding equity awards typically varies based on many factors, including stock price fluctuations and stock sales. As noted above, under
| | | | | | | | | | | | | | | | | |
| | Stock Awards |
| Name | Grant
Date | Number of Shares or Units of Stock That Have Not Vested (#) (1) | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) |
| James C. Grech | 06/01/2021 | 202,429 | 2,038,460 | — | — |
| Mark A. Spurbeck | 01/02/2019 | 1,480 | 14,904 | 2,961 | 29,817 |
| | 01/02/2020 | 14,349 | 144,494 | — | — |
| | 01/22/2020 | 9,650 | 97,176 | — | — |
| | 07/01/2020 | 16,315 | 164,292 | 81,600 | 821,712 |
| | 01/04/2021 | 53,061 | 534,324 | — | — |
| Darren R. Yeates | 01/04/2021 | 83,333 | 839,163 | — | — |
| Marc E. Hathhorn | 01/02/2019 | 2,981 | 30,019 | 5,962 | 60,037 |
| 07/01/2019 | 18,338 | 184,664 | — | — |
| 09/01/2019 | 1,101 | 11,087 | 3,304 | 33,271 |
| 01/02/2020 | 26,933 | 271,215 | 121,200 | 1,220,484 |
| 01/04/2021 | 51,530 | 518,907 | — | — |
| Scott T. Jarboe | 01/02/2019 | 1,214 | 12,225 | 2,428 | 24,450 |
| | 01/02/2020 | 11,766 | 118,484 | 44,818 | 451,317 |
| | 04/01/2020 | 9,506 | 95,725 | — | — |
| | 01/04/2021 | 31,632 | 318,534 | — | — |
| Glenn L. Kellow | 01/02/2019 | — | — | 103,643 | 1,043,685 |
| 01/02/2020 | — | — | 473,726 | 4,770,421 |
| Kemal Williamson | 01/02/2019 | 4,916 | 49,504 | 22,124 | 222,789 |
| 01/02/2020 | 28,592 | 287,921 | 128,664 | 1,295,646 |
| | 01/04/2021 | 54,704 | 550,869 | — | — |
(1)The RSU award granted to Mr. Grech on June 1, 2021, vests ratably on the Plan, all our outstanding equity securities asfirst three anniversaries of Emergence were canceled, includingthe grant date. The RSU awards granted on January 4, 2021, for Mr. Spurbeck, Mr. Yeates, Mr. Hathhorn, Mr. Jarboe, and Mr. Williamson vest ratably on January 4, 2022, and January 4, 2023. For awards granted prior to 2021, these RSU awards generally vest ratably on the first three anniversaries of the grant date, except that the RSU award for Mr. Hathhorn with a July 1, 2019 grant date vests in full on January 2, 2022, the RSU award for Mr. Hathhorn with a September 1, 2019, grant date generally vests ratably on January 2, 2021, and January 2, 2022, the RSU award for Mr. Spurbeck with a January 22, 2020, grant date vests on January 22, 2021, January 2, 2022, and January 2, 2023, and the RSU award for Mr. Spurbeck with a July 1, 2020 grant date vests on July 1, 2021, January 2, 2022, and January 2, 2023.
(2)Market value was calculated based on the closing market price per share of our Common Stock and any outstanding equityon the last trading day of 2021 ($10.07 per share).
(3)These PSU awards in respect of such equity securities. | | | | | | |
| | | Stock Awards(1) |
| Name | | Number of
Shares or Units
of Stock That
Have Not Vested (#)(2) | | | Market Value of
Shares or Units
of Stock That Have Not Vested ($)(3) |
Glenn L. Kellow | | | 680,890 | | | 26,806,639 |
Amy B. Schwetz | | | 236,042 | | | 9,292,974 |
Charles F. Meintjes | | | 226,963 | | | 8,935,533 |
Kemal Williamson | | | 226,963 | | | 8,935,533 |
A. Verona Dorch | | | 158,874 | | | 6,254,869 |
(1) | This table reflects that only the Emergence RSU Awards were outstanding as of the end of the 2017 fiscal year. |
(2) | These Emergence RSU Awards were granted effective as of April 3, 2017 and generally vest ratably on the first three anniversaries of the grant date. |
(3) | Market value was calculated based on the closing market price per share of our Common Stock on the last trading day of 2017 ($39.37 per share). |
2017 Option Exercises and Stock Vested
There were no stock option exercises or stock vesting events in 2017. As described above, under the Plan, all our equity securities were canceled as of Emergence, including our Common Stock and any outstanding equity awards in respect of such equity securities.
2017 Pension Benefits
Our Retirement Plan for Salaried Employees, or pension plan, isgenerally vest following a qualified “defined benefit” pension plan. The pension plan provides a monthly annuity to eligible salaried employees when they retire. An employee must have at least five years of service to be vested in his or her benefit under the pension plan. A full benefit is available to a retiree at age 62. A retiree can begin receiving a benefit as early as age 55; however, a 4% reduction factor applies for each year a retiree receives a benefit prior to age 62.
The pension plan was phased out beginning January 1, 2001. Certain transition benefits were introducedthree-year performance period based on the age and service of affected employees at December 31, 2000. Eachrelative achievement of the participants in the pension plan has had his or her pension benefits frozen and those who had less than five years of service as of December 31, 2000 became fully vested in their accrued benefit. In all cases, final average earnings for retirement purposes are capped at December 31, 2000 levels.
A participant’s retirement benefit under the pension plan is equal to the sum of (1) 1.112% of the highest average monthly earnings over 60 consecutive months up to the “covered compensation limit” multiplied by the employee’s years of service, not to exceed 35 years, and (2) 1.5% of the average monthly earnings over 60
applicable performance objectives. | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 51 48 |
2021 Option Exercises and Stock Vested
The following table summarizes the
“covered compensation limit” multiplied by the employee’s years of service, not to exceed 35 years. Under the pension plan, “earnings” include compensation earned as base salary and up to five annual incentive awards.Listed below is the actuarial present valueRSU awards that vested during fiscal 2021 for each of the current accumulated pension benefit underNEOs.
| | | | | | | | |
| Stock Awards |
| Name | Number of Shares
Acquired on Vesting
(#) | Value Realized on
Vesting
($) |
| James C. Grech | — | — |
| Mark A. Spurbeck | 27,633 | 137,920 |
| Darren R. Yeates | — | — |
| Marc E. Hathhorn | 23,675 | 65,746 |
| Scott T. Jarboe | 15,068 | 43,173 |
| Glenn L. Kellow | 389,001 | 2,130,437 |
| Kemal Williamson | 37,468 | 116,681 |
2021 Non-Qualified Deferred Compensation
The PIC Board approved the
pension plan as of December 31, 2017 for the NEOs. Due to thephase-outtermination of the
pensionnon-qualified defined contribution plan
(the “Non-Qualified Plan”) in
2001, Mr. Williamson isMay 2020. Following the
only NEO who is eligible to receive a benefit undertermination of the
pension plan. The estimated present value was determined assuming Mr. Williamson retired at age 62, the normal retirement age under the plan, using a discount rate of 3.70 % and the RP 2014 Blue CollarSex-Distinct Annuitant Mortality projected back to 2007 with MP 2014, and projected forward using generational ScaleMP-2017. The disclosed amounts are estimates only and do not necessarily reflect the actual amounts that will be paid to an NEO. Such amounts will be known only at the time the NEO becomes eligible for payment. | | | | | | | | | | |
| Name | | | | Plan Name | | Number of Years
Credited Service (#) (1) | | Present Value of
Accumulated Benefit ($) | | Payments During Last Fiscal Year |
Glenn L. Kellow | | (2) | | Peabody Investments Corp. Retirement Plan | | — | | Not a plan participant | | — |
Amy B. Schwetz | | (2) | | Peabody Investments Corp. Retirement Plan | | — | | Not a plan participant | | — |
Charles F. Meintjes | | (2) | | Peabody Investments Corp. Retirement Plan | | — | | Not a plan participant | | — |
Kemal Williamson | | (3) | | Peabody Investments Corp. Retirement Plan | | 0.4 | | $10,537 | | — |
A. Verona Dorch | | (2) | | Peabody Investments Corp. Retirement Plan | | — | | Not a plan participant | | — |
(1) | Due to thephase-out of our pension plan as described above, years of credited service are less than years of actual service. The actual years of service number for Mr. Williamson is 17.4. |
(2) | Mr. Kellow, Mr. Meintjes, Ms. Schwetz and Ms. Dorch are not eligible to receive benefits under our pension plan because their employment with us began after the pension plan was phased out. |
(3) | Under the terms of thephase-out, pension benefits for Mr. Williamson were frozen as of December 31, 2000, and years of credited service, for the purposes of the pension plan, ceased to accrue. |
2017 Nonqualified Deferred Compensation
Historically, our executives also participated in the Excess RetirementNon-Qualified Plan, which is designed to allow highly compensated management employees to make contributions in excess of certain limits imposed by the Internal Revenue Code that apply to ourtax-qualified 401(k) plan. The Excess Retirement Plan is designed to restore the benefits, including matching contributions, not permitted due to certain limits imposed by the Internal Revenue Code on the 401(k) plan. Investment options under the Excess Retirement Plan were identical to those under the 401(k) plan. The Excess Retirement Plan was suspended effective December 31, 2015 and participants were no longer able to contribute to the plan and the company did not make any contributions on behalf of participants.
Under the Plan, the liabilities relating to our current employees under the Excess Retirement Plan were spun off and transferred to a new nonqualified supplemental employee retirement account plan. Beginning January 1, 2018, our executives are eligiblepermitted to make contributions to the new supplemental employee retirement account plan. The liabilities of former employees remained under the Excess Retirement Plan, which was frozenplan and was not assumed by us.
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 52 |
The following table sets forth detail about activity for the NEOs in our Excess Retirement Plan:
| | | | | | | | | | | | | | | | | | |
Name | | Plan Name | | Executive
Contributions
in Last Fiscal
Year ($) | | Registrant
Contributions
in Last Fiscal
Year ($) | | Aggregate
Earnings in
Last Fiscal
Year ($)(1) | | | Aggregate
Withdrawals/
Distributions
($) | | | Aggregate
Balance at
Last Fiscal
Year End
($)(2) | |
| | | | | | |
Glenn L. Kellow | | Excess Retirement Plan | | — | | — | | | 31,712 | | | | — | | | | 211,823 | |
| | | | | | |
Amy B. Schwetz | | Excess Retirement Plan | | — | | — | | | 2,243 | | | | — | | | | 13,015 | |
| | | | | | |
Charles F. Meintjes | | Excess Retirement Plan | | — | | — | | | 6,721 | | | | — �� | | | | 345,799 | |
| | | | | | |
Kemal Williamson | | Excess Retirement Plan | | — | | — | | | 226,359 | | | | — | | | | 1,243,059 | |
| | | | | | |
A. Verona Dorch | | Excess Retirement Plan | | — | | — | | | — | | | | — | | | | — | |
(1) No portion of the amounts reported in this column were reported as compensation in the last completed fiscal year in the 2017 Summary Compensation Table.
(2) Of the totals in this column, the following amounts represent registrant or executiveCompany contributions to the Excess Retirement Plan thatplan were reporteddiscontinued. Participants in the Summary Compensation Table forNon-Qualified Plan received a lump sum distribution of their account balance under the years 2007-2016:
plan in May 2021.
| | | | | |
| Name | Amount Distributed ($) |
Name
James C. Grech | | Prior
Contributions ($)
| N/A |
| Mark A. Spurbeck | 25,116 |
Darren R. Yeates | N/A |
| Marc E. Hathhorn | 112,619 |
| Scott T. Jarboe | 507 |
| Glenn L. Kellow | | | 168,680 | 656,677 |
| |
Amy B. Schwetz
| | | 9,220 | |
| |
Charles F. Meintjes
| | | 182,341 | |
| |
Kemal Williamson | | | 160,120 | |
| |
A. Verona Dorch
| | | — | 1,562,179 |
Potential Payments upon Termination or Change
2019 Severance Plan
The 2019 Severance Plan, which was in
ControlThe Severance Planeffect for all of 2021, was adopted to provide transitional assistance to certain senior executives whose employment is terminated by us (for reasons other than cause, death or disability) or by the senior executive for good reason. See page 42 for an overviewAs discussed above, in February 2019, the Board adopted the 2019 Severance Plan, effective as of January 1, 2019.
The following table highlights the key provisions of the
Executive2019 Severance
Plan.Plan in effect during 2021 (certain terms used in the following table are defined in the 2019 Severance Plan):
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 49 |
| | | | | |
| Element | Severance Plan Provisions |
| NEOs Covered | All NEOs. |
| Term of Arrangement | The 2019 Severance Plan may be modified, amended or terminated at any time by the Board without notice to plan participants (“Participants”) with certain exceptions. For a period of two years following a Change in Control, the 2019 Severance Plan may not be discontinued, terminated, or amended in such a manner that decreases the Severance Payment payable to any Participant or that makes any provision less favorable for any Participant without the consent of the Participant. The 2019 Severance Plan may not be modified, amended or terminated in a manner adverse to Participants as of the date of the modification, amendment, or termination without six months’ advance written notice of such modification, amendment, or termination. Either Peabody or the executive may terminate employment at any time for any reason (other than for cause) by delivery of notice 90 days in advance of the termination date. |
| Severance Benefits | Upon termination other than for cause or upon resignation for good reason, severance is equal to a 1.5x multiplier for the NEOs (other than Mr. Williamson, who has a 2x multiplier) and 2x for the CEO (or, in the event termination occurs within two years after a Change in Control, the severance multiplier changes to 2x for the NEOs including Mr. Williamson and 2.5x for the CEO): •base salary; •average annual cash incentive award paid for the three years preceding the year of termination; and •6% of base salary for the NEOs other than Mr. Grech, Mr. Yeates, Mr. Spurbeck and Mr. Jarboe (to compensate for Company contributions he or she otherwise would have earned under our 401(k) plan). The multiples are 1.5x for the non-Change in Control severance and 2x for the Change in Control severance benefits described above for each of Mr. Yeates, Mr. Spurbeck, Mr. Hathhorn, and Mr. Jarboe. Upon termination other than for cause or upon resignation for good reason, the executive is also entitled to a pro-rata portion of the current-year annual incentive based upon actual performance for the year in which termination occurs, as well as certain medical and other benefits for up to 18 months. |
Restrictive Covenants (post-termination) | Confidentiality (perpetual). Non-compete (1 year). Non-solicitation (1 year). Breach will result in forfeiture of any unpaid amounts or benefits; executive will repay any portion of the severance payment previously paid to him or her. |
| Tax Gross-Ups | None. |
While Mr. Yeates has not entered into the Company’s standard form of participation agreement for executive officers of the Company (a “Participation Agreement”) under the 2019 Severance Plan, Mr. Yeates is required pursuant to his Employment Agreement to comply with the terms of the 2019 Severance Plan and Participation Agreement during his employment and may be entitled to the benefits set forth in the 2019 Severance Plan upon certain terminations of his employment, subject to Mr. Yeates’ satisfaction of the requirements set forth in his Employment Agreement, the 2019 Severance Plan and Participation Agreement.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 50 |
The table set forth on the next page reflects the amount of compensation that would have been payable to the NEOs in the event of termination of employment, including certain benefits upon an involuntary termination related to a Change in Control, under the terms of the
2019 Severance Plan and
Emergence RSU Awardequity award agreements, as applicable. Certain terms used in the chart are defined in the
2019 Severance Plan or applicable award agreement. The amounts shown assume a termination effective as of December
29, 2017.31, 2021, and reflect the terms of the employment transition agreement entered into with Mr. Kellow on March 18, 2021. The severance amount for Mr. Williamson is based on his termination date of January 9, 2022. The actual amounts that would be payable can be determined only at the time of the NEO’s termination.
The amount of compensation payable to each NEO upon retirement is not included in the table, as none of the NEOs were eligible for retirement (age 60, with 10 years of service) as of December 29, 2017.Under the award agreement applicable to the Emergence RSU Awards,and restricted cash awards, such awards generally vest in full on the grantee’s death or “disability” (as defined in the award agreement). If the grantee becomes eligible for “retirement” (as defined in the award agreement) after the grant date, the award will begin to vest on a quarterly basis (rather than an annual basis), still generally subject to continued employment.
Under the award agreements applicable to the PSU and performance-based cash awards, in the event of the grantee’s termination of service on account of death or “disability” (as defined in the award agreement), such awards generally become earned and vest on the basis of the relative achievement of the applicable performance goals for the entire performance period. In the event of a grantee’s termination of service on account of “retirement” (as defined in the award agreement), or on account of a termination without “cause,”“cause” or for “good reason,”reason” (as each such term is defined in the award agreement), other than following a change in control, a pro-rata portion of the PSUs and performance-based cash awards will vest, based on the number of days that the grantee provided services to Peabody or due to death or “disability.” Ina subsidiary during the performance period and the relative achievement of the applicable performance goals for the entire performance period.
Generally, in the event of a “change in
control,”control” (as defined for purposes of the awards), if
the Emergence RSU Awardsoutstanding equity awards are continued, assumed, or replaced by the acquiring or surviving entity, unless otherwise determined by the Compensation Committee, the Compensation Committee will either (1) make such adjustment to the
Emergence RSU Awardsawards then outstanding as the Compensation Committee deems appropriate to reflect
suchthe change in control or (2) cause any such outstanding
Emergence RSU Awardsawards to be replaced and/or substituted by new rights by the acquiring or surviving entity after
suchthe change in control. If the
Emergence RSU Awardsawards are not to be
continued, assumed
or replaced in the change in control, the Compensation Committee
will generally cancel such awards in exchange for consideration (whether in cash or other property) based on the price paid per share as part of the change in control, and the Compensation Committee may
in such circumstances convert the
outstanding Emergence RSU Awardsawards into
a cash-settled
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 53 |
award awards based on the value of the consideration Peabody’s stockholders receive in the change in control, as determined by the Compensation Committee in compliance with Section 409A of the Internal Revenue Code.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Name and Event of Termination | | Cash
Severance ($) | | | Continued
Benefits and
Perquisites
($) | | | Other
Cash
Payment
($) | | | Accelerated and/or
Continued Vesting/
Earnout of Unvested
Equity
Compensation ($)(1) | | | Excise Tax
Gross-up or
Cut-back ($) | | | Total ($) | |
| | | | | | |
Glenn L. Kellow | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
“For Cause” Termination or Voluntary Termination | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
Death or Disability(2) | | | — | | | | — | | | | 1,883,470 | | | | 26,806,639 | | | | — | | | | 28,690,109 | |
| | | | | | |
Involuntary Termination “Without Cause” or “For Good Reason”(3) | | | 4,108,195 | | | | 22,846 | | | | 1,883,470 | | | | 26,806,639 | | | | — | | | | 32,821,150 | |
| | | | | | |
Involuntary Termination Related to a Change in Control(5) | | | 5,135,243 | | | | 22,846 | | | | 1,883,470 | | | | 26,806,639 | | | | — | | | | 33,848,198 | |
| | | | | | |
Amy B. Schwetz | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
“For Cause” Termination or Voluntary Termination | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
Death or Disability(2) | | | — | | | | — | | | | 770,236 | | | | 9,292,974 | | | | — | | | | 10,063,210 | |
| | | | | | |
Involuntary Termination “Without Cause” or “For Good Reason”(3) | | | 1,796,259 | | | | 22,846 | | | | 770,236 | | | | 9,292,974 | | | | — | | | | 11,882,315 | |
| | | | | | |
Involuntary Termination Related to a Change in Control(4) | | | 1,796,259 | | | | 22,846 | | | | 770,236 | | | | 9,292,974 | | | | — | | | | 11,882,315 | |
| | | | | | |
Charles F. Meintjes | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
“For Cause” Termination or Voluntary Termination | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
Death or Disability(2) | | | — | | | | — | | | | 715,808 | | | | 8,935,533 | | | | — | | | | 9,651,341 | |
| | | | | | |
Involuntary Termination “Without Cause” or “For Good Reason”(3) | | | 2,099,721 | | | | 22,846 | | | | 715,808 | | | | 8,935,533 | | | | — | | | | 11,773,908 | |
| | | | | | |
Involuntary Termination Related to a Change in Control(4) | | | 2,099,721 | | | | 22,846 | | | | 715,808 | | | | 8,935,533 | | | | — | | | | 11,773,908 | |
If a grantee’s service is terminated without “cause” or for “good reason” within two years after a change in control, outstanding equity awards held by such grantee will generally vest in full. PSU and performance-based cash awards will generally vest in such circumstances based on the relative achievement of the applicable performance goals for the full performance period.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 54 51 |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Name and Event of Termination | | Cash
Severance ($) | | | Continued
Benefits and
Perquisites
($) | | | Other
Cash
Payment
($) | | | Accelerated and/or
Continued Vesting/
Earnout of Unvested
Equity
Compensation ($)(1) | | | Excise Tax
Gross-up or
Cut-back ($) | | | Total ($) | |
| | | | | | |
Kemal Williamson | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
“For Cause” Termination or Voluntary Termination | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
Death or Disability(2) | | | — | | | | — | | | | 640,483 | | | | 8,935,533 | | | | — | | | | 9,576,016 | |
| | | | | | |
Involuntary Termination “Without Cause” or “For Good Reason”(3) | | | 1,880,947 | | | | 22,846 | | | | 640,483 | | | | 8,935,533 | | | | — | | | | 11,479,809 | |
| | | | | | |
Involuntary Termination Related to a Change in Control (4) | | | 1,880,947 | | | | 22,846 | | | | 640,483 | | | | 8,935,533 | | | | — | | | | 11,479,809 | |
| | | | | | |
A. Verona Dorch | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
“For Cause” Termination or Voluntary Termination | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
Death or Disability(2) | | | — | | | | — | | | | 602,086 | | | | 6,254,869 | | | | — | | | | 6,856,955 | |
| | | | | | |
Involuntary Termination “Without Cause” or “For Good Reason”(3) | | | 1,943,096 | | | | 21,046 | | | | 602,086 | | | | 6,254,869 | | | | — | | | | 8,821,097 | |
| | | | | | |
Involuntary Termination Related to a Change in Control(4) | | | 1,943,096 | | | | 21,046 | | | | 602,086 | | | | 6,254,869 | | | | — | | | | 8,821,097 | |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
(as of December 31, 2021)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Event of Termination | | Cash
Severance ($) | | Continued
Benefits and
Perquisites
($) | | Other
Cash
Payment
($) | | Accelerated and/or
Continued Vesting/
Earnout of Unvested
Equity
Compensation
($) (1) | | Excise Tax
Gross-up or
Cut-back ($) | | Total ($) |
| James C. Grech | | | | | | | | | | | | |
| “For Cause” Termination or Voluntary Termination | | — | | | — | | | — | | | — | | | — | | | — | |
Death or Disability (2) | | — | | | — | | | 1,027,111 | | | 2,038,460 | | | — | | | 3,065,571 | |
Involuntary Termination “Without Cause” or “For Good Reason” (3) | | 4,500,000 | | | 14,671 | | | 1,027,111 | | | — | | | — | | | 5,541,782 | |
Involuntary Termination Related to a Change in Control (4) | | 5,625,000 | | | 14,671 | | | 1,027,111 | | | 2,038,460 | | | — | | | 8,705,242 | |
| Mark A. Spurbeck | | | | | | | | | | | | |
| “For Cause” Termination or Voluntary Termination | | — | | | — | | | — | | | — | | | — | | | — | |
Death or Disability (2) | | — | | | — | | | 1,357,070 | | | 1,525,621 | | | — | | | 2,882,691 | |
Involuntary Termination “Without Cause” or “For Good Reason” (3) | | 1,035,400 | | | 20,886 | | | 960,670 | | | 386,809 | | | — | | | 2,403,765 | |
Involuntary Termination Related to a Change in Control (5) | | 1,380,534 | | | 20,886 | | | 1,357,070 | | | 1,525,621 | | | — | | | 4,284,111 |
| Darren R. Yeates | | | | | | | | | | | | |
| “For Cause” Termination or Voluntary Termination | | — | | | — | | | — | | | — | | | — | | | — | |
Death or Disability (2) | | — | | | — | | | 1,962,940 | | | 839,163 | | | — | | | 2,802,103 | |
Involuntary Termination “Without Cause” or “For Good Reason” (3) | | 2,100,000 | | | — | | | 1,497,440 | | | — | | | — | | | 3,597,440 | |
Involuntary Termination Related to a Change in Control(5) | | 2,800,000 | | | — | | | 1,962,940 | | | 839,163 | | | — | | | 5,602,103 | |
| Marc E. Hathhorn | | | | | | | | | | | | |
| “For Cause” Termination or Voluntary Termination | | — | | | — | | | — | | | — | | | — | | | — | |
Death or Disability (2) | | — | | | — | | | 1,220,808 | | | 1,894,489 | | | — | | | 3,115,297 | |
Involuntary Termination “Without Cause” or “For Good Reason” (3) | | 1,253,772 | | | 20,886 | | | 932,958 | | | 605,864 | | | — | | | 2,813,480 | |
Involuntary Termination Related to a Change in Control (6) | | 1,671,695 | | | 20,886 | | | 1,220,808 | | | 1,894,489 | | | — | | | 4,807,878 | |
| Scott T. Jarboe | | | | | | | | | | | | |
| “For Cause” Termination or Voluntary Termination | | — | | | — | | | — | | | — | | | — | | | — | |
Death or Disability (2) | | — | | | — | | | 974,810 | | | 863,433 | | | — | | | 1,838,243 | |
Involuntary Termination “Without Cause” or “For Good Reason” (3) | | 923,122 | | | 7,580 | | | 728,110 | | | 217,612 | | | — | | | 1,876,424 | |
Involuntary Termination Related to a Change in Control (5) | | 1,230,830 | | | 7,580 | | | 974,810 | | | 863,433 | | | — | | | 3,076,653 | |
| Kemal Williamson | | | | | | | | | | | | |
Involuntary Termination “Without Cause” or “For Good Reason” (3) | | 1,926,020 | | | 20,886 | | | — | | | — | | | — | | | 1,946,906 | |
(1) | Reflects the value the NEO could realize as a result of the accelerated vesting of unvested RSUs. Value attributed to Emergence RSU Awards is based on the December 29, 2017 closing stock price of $39.37. |
(2) | For all NEOs, compensation payable upon death or disability would include (1) accrued but unused vacation; (2) earned but unpaid STIP for the year of termination; and (3) the value the NEO could realize as a result of the accelerated vesting of any unvested RSUs. Amounts do not include life insurance payments in the case of death. |
(3) | For all NEOs, compensation payable would include: (1) severance payments of two times base salary; (2) a payment equal to two times the average of the actual annual incentives paid in the three prior years; (3) a payment equal to two times 6% of base salary to compensate the NEO for company contributions the NEO otherwise might have received under our 401(k) plan; (4) any earned but unpaid annual incentive for the year of termination; (5) continuation of benefits for 18 months; and (6) the value that could be realized based on vesting of outstanding RSU awards. |
(4) | The amounts the NEOs would receive in the event of an involuntary termination in connection with a Change in Control, as defined in the Severance Plan or applicable award agreement, are similar to those described in footnote 3 above. |
(5) | For the CEO, compensation payable would include: (1) severance payments of two and one half times base salary; (2) a payment equal to two and one half times the average of the actual annual incentives paid in the three prior years; (3) a payment equal to two and one half times 6% of base salary to compensate the CEO for company contributions the CEO otherwise might have received under our 401(k) plan; (4) any earned but unpaid annual incentive for the year of termination; (5) continuation of benefits for 18 months; and (6) the value that could be realized based on vesting of outstanding RSU awards. |
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 55 52 |
(1)Reflects the value the NEO could realize as a result of the accelerated vesting of unvested RSUs and accelerated or continued vesting of unvested PSUs. Value attributed to RSU and PSU awards is based on the December 31, 2021 closing stock price of $10.07.
(2)For all NEOs, compensation payable upon death or disability would include: (1) accrued but unused vacation; (2) earned but unpaid STIP for the year of termination; and (3) the value the NEO could realize as a result of the accelerated or continued vesting of any unvested RSUs, PSUs, restricted cash and performance-based awards. Amounts do not include life insurance payments in the case of death.
(3)For all NEOs, compensation payable would include: (1) severance payments of 1.5 times (or 2 times for Mr. Grech, Mr. Kellow, and Mr. Williamson) base salary; (2) a payment equal to 1.5 times (or 2 times for Mr. Grech, Mr. Kellow, and Mr. Williamson) the average of the actual annual incentives paid in the three prior years; (3) a payment equal to 1.5 times 6% of base salary for Mr. Hathhorn (or a payment of 2 times 6% of base salary for Mr. Kellow and Mr. Williamson) to compensate the NEO for Company contributions the NEO otherwise might have received under our 401(k) plan (excluding Mr. Grech, Mr. Spurbeck, Mr. Yeates, and Mr. Jarboe); (4) any earned but unpaid annual incentive for the year of termination; (5) continuation of benefits for 18 months (excluding Mr. Yeates); and (6) the
value that could be realized based on vesting of outstanding RSU, PSU, restricted cash and performance-based awards.
(4)For the CEO, compensation payable would include: (1) severance payments of two and one half times base salary; (2) a payment equal to two and one half times the average of the actual annual incentives paid in the three prior years; (3) any earned but unpaid annual incentive for the year of termination; (4) continuation of benefits for 18 months; and (5) the value that could be realized based on vesting of outstanding RSU, PSU, restricted cash and performance-based awards.
(5)For Mr. Yeates, Mr. Spurbeck, and Mr. Jarboe, compensation payable would include (1) severance payments of two times base salary; (2) a payment equal to two times the average of the actual annual incentives paid in the three prior years; (3) a pro-rata, current-year annual incentive based upon actual performance for the year in which termination occurs; (4) any earned but unpaid annual incentive for the year of termination; (5) continuation of benefits for 18 months; and (6) the value that could be realized based on vesting of outstanding RSU, PSU, restricted cash and performance-based awards.
(6)For Mr. Hathhorn, compensation payable would include (1) severance payments of two times base salary; (2) a payment equal to two times the average of the actual annual incentives paid in the three prior years; (3) ) a payment equal to two times 6% of base salary to compensate Mr. Hathhorn for Company contributions Mr. Hathhorn otherwise might have received under our 401(k) plan; (4) a pro-rata, current-year annual incentive based upon actual performance for the year in which termination occurs; (5) any earned but unpaid annual incentive for the year of termination; (6) continuation of benefits for 18 months; and (7) the value that could be realized based on vesting of outstanding RSU, PSU, restricted cash and performance-based awards.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 53 |
Transition Agreement with Mr. Kellow
Per the Transition Agreement dated March 18, 2021, during the twelve months following Mr. Kellow's termination date of June 1, 2021, Mr. Kellow will provide consulting services to the Company for up to twenty hours per month. Mr. Kellow's consulting arrangement ensures a smooth leadership transition during a critical period for the Company. In determining to provide this compensation, the Committee considered the positive effect derived from his knowledge of the ongoing strategic initiatives that were in progress at the time of his departure, Peabody's business strategy and his relationships with a varied group of key stakeholders. During the consulting period, Mr. Kellow will receive a monthly consulting fee of $85,000 per month. The consulting fees are not guaranteed; the Company will have no further obligation to provide the monthly consulting fee if (1) the Company terminates the consulting agreement for Cause; or if (2) Mr. Kellow voluntarily terminates the consulting arrangement (except for limited circumstances narrowly defined in the agreement). As a result of this transition agreement, Mr. Kellow's equity awards continued to vest while performing these consulting services. The value of Mr. Kellow's equity that continued to vest, severance payments and consulting fees are outlined in the following table.
| | | | | | | | | | | |
| Glenn Kellow Transition Agreement |
| Equity & Separation Payments | Shares (#) | Value ($) |
RSUs(1) | 211,307 | 1,565,785 |
PSUs(2) | | |
| 2019 Award | 18,342 | |
| 2020 Award | 97,910 | |
Performance- Cash (2021)(3) | | 784,134 |
Service-based Cash (2021)(4) | | 367,500 |
| Total Equity & Cash Payments | | 2,717,419 |
| Severance Payments | | 4,485,027 |
| Continued Benefits | | 20,886 |
| Total Severance | | 4,505,913 |
Consulting Agreement(5) | | 1,020,000 |
| Grand Total | | 8,243,332 |
(1)Represents the RSUs that vested and were released per the Transition Agreement on Mr. Kellow's termination date of June 1, 2021 at a share price of $7.41.
(2)Represents the number of PSUs that remain eligible to vest per the Transition Agreement; value subject to final performance outcomes.
(3)Represents the portion of the performance-based cash award that continued to vest per the Transition Agreement at target performance.
(4)Represents the portion of the restricted cash award that vested on June 1, 2021, per the Transition Agreement.
(5)Represents the monthly consulting fee of $85,000.
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 54 |
The pay ratio information is provided pursuant to the SEC’s guidance under Item 402(u) of Regulation
S-K. We note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this pay ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation
S-K using the data and assumptions described below. The pay ratio was not used to make management decisions and the Board does not use this pay ratio to determine executive compensation adjustments.
Methodology to Determine Median Employee
To determine the
In determining such median employee, we evaluated our 4,5203,211 U.S. and 2,6451,908 non-U.S. employees (other than our CEO) as of October 1, 2017December 31, 2021 (the “Determination Date”). From this total number, we excluded 174 non-U.S. employees (consisting of nine employees in the United Kingdom, sevenfour employees in China, and one employee in India, or collectively 0.24%0.08% of our total workforce), in accordance with ade minimisexception. The remaining 7,1485,115 employees consistconsisted of all of our full-time, part-time and temporary employees (other than our CEO) in the United States and Australia as of the Determination Date. The median employee was selected using a total cash compensation approach, consisting of base salary, overtime, and target short-term incentive levels for the period beginning on January 1, 20172021, and ending on December 31, 2017,2021, and salaries were annualized for employees who were not employed for all of 20172021 as permitted by the applicable rules. Median Employee to CEO Pay RatioAfter identifying the median employee,
For 2021, we calculated annual total compensation for
thatthe median employee using the same methodology as for our NEOs as described in the
20172021 Summary Compensation Table within this
proxy statement. The following table showsProxy Statement. With respect to the
annual total compensation
details forof our CEO,
(the same amountwe annualized the total compensation of our current CEO, as
his compensation is reported
for Mr. Kellow for 2017 underin the
20172021 Summary Compensation Table
above) andabove, since he began serving on June 1, 2021. The ratio of the annual total compensation of our median
employee:employee to the annual total compensation of our CEO is shown below: | | | | | |
| Individual | |
Individual
| | Annual Total
Compensation |
James C. Grech
President and Chief Executive Officer | $6,823,829 |
| Median Employee | $110,472 |
| Pay Ratio | 62 to 1 |
| |
Glenn L. Kellow
President and
Chief Executive Officer
| | | $20,577,025 | |
| |
Median Employee
| | | $ 118,812 | |
| |
Pay Ratio
| | | 173 to 1 | |
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 56 55 |
PROPOSAL 2 – ADVISORY APPROVAL OF THE COMPANY’S NAMED EXECUTIVE OFFICEROFFICERS’ COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”) require that we permit our stockholders to vote to approve, on an advisory
(non-binding) basis, the compensation of our named executive officers as disclosed in the CD&A, the Summary Compensation Table and accompanying executive compensation tables, and the related narrative disclosure accompanying such information. At our
2011 annual meeting,2018 Annual Meeting, our stockholders approved, on an advisory basis, that an advisory vote on named executive officer compensation should be held annually. Based on such result, our Board determined that the advisory vote on
our named executive
officerofficers’ compensation will be held every year until the next advisory vote on the frequency of future advisory votes on
our named executive
officer compensation, which is set to occur at the 2018 Annual Meeting (see Proposal 3, below).officers’ compensation. We expect the next advisory vote to approve
our named executive
officerofficers’ compensation will be held at the
20192023 Annual
Meeting and the next advisory vote on the frequency of future advisory votes to be held at the 2024 Annual Meeting.
We believe that our compensation programs and policies reflect an overall
pay-for-performance culture that is strongly aligned with the interests of our stockholders. We are committed to utilizing a mix of incentive compensation programs that will reward success in achieving
the company’sPeabody’s financial objectives and growing value for stockholders, and continuing to refine these incentives to maximize
companyCompany performance. The Compensation Committee of the Board has overseen the development of a compensation program designed to achieve
pay-for-performance and alignment with stockholder interests, as described more fully in the CD&A section above. The compensation program was designed in a manner that we believe is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our executives.
The company
Peabody and the Board continually evaluate our compensation policies and practices to ensure they are meeting our objectives and are consistent with corporate governance best practices. As part of that process, the Compensation Committee and the Board consider the results of our stockholder advisory vote on executive compensation. The Compensation Committee will continue to routinely evaluate and, as appropriate, take into account the views of our stockholders to enhance our compensation program.
For the reasons discussed in the CD&A section above, the Board recommends that stockholders vote, on an advisory basis, in favor of the following
“Say-on-Pay” “Say-on-Pay” resolution:
“Resolved, that the compensation paid to
the Company’sPeabody’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables, narrative discussion and any related material disclosed in this
proxy statement,Proxy Statement, is hereby approved.”
Because your vote is advisory, it will not be binding upon
the company,Peabody, the Board or the Compensation Committee. However, we value the views of our stockholders, and the Compensation Committee expects to continue to take into account the outcome of the vote when considering future executive compensation arrangements.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” PROPOSAL 2.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 57 56 |
(non-binding)
basis, the frequency of future stockholder advisory votes to approve the compensation of our named executive officers. This proposal gives you the opportunity to advise the Board on whether such advisory votes should occur every year, every two years or every three years. Oursay-on-pay votes currently take place on an annual basis.The Board believes that submitting the advisory vote on the compensation of our named executive officers on an annual basis is appropriate for the company and our stockholders. We view the advisory vote on the compensation of our named executive officers as an additional opportunity for our stockholders to communicate with us regarding their views. Additionally, an annual advisory vote is consistent with our objective of engaging in regular dialogue with our stockholders on corporate governance and executive compensation matters. Accordingly, the Board recommends that stockholders approve holding the advisory vote to approve the compensation of our named executive officers “EVERY YEAR.”
The enclosed proxy card gives you four choices for voting on this item. You can choose whether theSay-on-Pay vote should be conducted EVERY YEAR, EVERY TWO YEARS or EVERY THREE YEARS. You may also abstain from voting on this item, which abstention will not be counted as a vote for any option. Please note that you are not voting to approve or disapprove the Board’s recommendation on this proposal.
Although the advisory vote isnon-binding, the Board expects to consider the outcome of the vote when making future decisions about the frequency of holding an advisory vote to approve named executive officer compensation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR CONDUCTING FUTURE ADVISORY VOTES TO APPROVE THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION “EVERY YEAR.”
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 58 |
AUDIT COMMITTEE REPORT
The Company’s
Peabody’s management is responsible for preparing financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial reporting process, including
the Company’sPeabody’s disclosure controls and procedures and internal control over financial reporting.
The Company’sPeabody’s independent registered public accounting firm is responsible for (i) auditing
the Company’sPeabody’s financial statements and expressing an opinion as to their conformity to GAAP and (ii) auditing the effectiveness of
the Company’sPeabody’s internal control over financial reporting and expressing an opinion as to its effectiveness. The Audit Committee of the Board, composed solely of independent directors, meets periodically with management, including the
Vice President,Director, Internal Audit (the employee with primary responsibility for
the Company’sPeabody’s internal audit functions) and others in
the Company,Peabody, and
the Company’sPeabody’s independent registered public accounting firm to review and oversee matters relating to
the Company’sPeabody’s financial statements, audit services,
(internal audit)internal audit activities, disclosure controls and procedures, and internal control over financial reporting and
non-audit services provided by the independent accountants.
The Audit Committee has reviewed and discussed with management and Ernst & Young LLP (“EY”),
the Company’sPeabody’s independent registered public accounting firm,
the Company’sPeabody’s audited financial statements for the fiscal year ended December 31,
2017.2021. The Audit Committee has also discussed with EY the matters required to be discussed by
Auditing Standard No. 16 (codified as Auditing Standard No. 1301), “Communications with Audit Committees” issued bythe applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”)
., including critical audit matters (CAMs), and the SEC. In addition, the Audit Committee received from EY the written disclosures and the letter required by applicable requirements of the PCAOB regarding EY’s communications with the Audit Committee concerning independence, discussed with EY its independence from
the CompanyPeabody and
the Company’sPeabody’s management, and considered whether EY’s provision of
non-audit services to
the CompanyPeabody is compatible with maintaining the auditor’s independence.
The Audit Committee conducted its own self-evaluation and evaluation of the services provided by EY during the fiscal year ended December 31,
2017.2021. Based on its evaluation of EY, the Audit Committee reappointed EY as
the Company’sPeabody’s independent registered public accounting firm for the fiscal year ending December 31,
2018.2022.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that
the Company’sPeabody’s audited financial statements be included in the Annual Report on Form
10-K for the fiscal year ended December 31,
2017,2021, for filing with the SEC.
AUDIT COMMITTEE MEMBERS:
TERESA S. MADDEN, CHAIR
NICHOLAS J. CHIREKOS,
KENNETH CHAIR
ANDREA E. BERTONE
WILLIAM H. CHAMPION
MICHAEL W.
MOORESUTHERLIN | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 59 57 |
Fees Paid to Independent Registered Public Accounting Firm
Ernst & Young LLP has served as our independent registered public accounting firm since 1991. In approving the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal years endedyear ending December 31, 20172021, the Audit Committee considered, among other factors:
•Audit approach and 2016. supporting tools;
•General technical expertise;
•Audit quality factors, including timing of procedures and engagement team workload and allocation;
•Recent Public Company Accounting Oversight Board (PCAOB) inspection findings and Ernst & Young LLP’s responses thereto;
•Communication and interaction with the Audit Committee and management;
•Independence and commitment to objectivity and professional skepticism;
•Prior year audit performance; and
•The reasonableness and appropriateness of fees.
The following fees were paid to Ernst & Young LLP for services rendered during the fiscal years ended December 31, 2021, and 2020:
•Audit Fees: $3,341,860 (for the fiscal year ended December 31, 2021) and $4,109,533 (for the fiscal year ended December 31, 2020) for fees associated with the annual audit of our last twoconsolidated financial statements, including the audit of internal control over financial reporting, the reviews of our Quarterly Reports on Form 10-Q, services provided in connection with statutory and regulatory filings or transactional requirements, assistance with and review of documents filed with the SEC and accounting and financial reporting consultations.
•Audit-Related Fees: $29,219 (for the fiscal years: | • | | Audit Fees: $7,526,866 (for the fiscal year ended December 31, 2017) and $5,250,376 (for the fiscal year ended December 31, 2016) for fees associated with the annual audit of our consolidated financial statements, including the audit of internal control over financial reporting, the reviews of our Quarterly Reports onForm 10-Q, services provided in connection with statutory and regulatory filings or transactional requirements, assistance with and review of documents filed with the SEC and accounting and financial reporting consultations including the application of fresh start accounting, which accounted for approximately $3 million of the fees during the year ended December 31, 2017. |
| • | | Audit-Related Fees: $66,426 (for the fiscal year ended December 31, 2017) and $45,166 (for the fiscal year ended December 31, 2016) for assurance-related services for internal control reviews, and other attest services not required by statute. |
| • | | Tax Fees: $209,929 (for the fiscal year ended December 31, 2017) and $243,622 (for the fiscal year ended December 31, 2016) for tax compliance, tax advice and tax planning services. |
| • | | All Other Fees: $1,995 (for the fiscal year ended December 31, 2017) and $1,995 (for the fiscal year ended December 31, 2016) for fees related to an online research tool. |
year ended December 31, 2021) and $39,613 (for the fiscal year ended December 31, 2020) for assurance-related services for internal control reviews, and other attest services not required by statute.
•Tax Fees: $123,779 (for the fiscal year ended December 31, 2021) and $155,608 (for the fiscal year ended December 31, 2020) for tax compliance, tax advice and tax planning services.
•All Other Fees: $1,030 (for the fiscal year ended December 31, 2021) and $2,000 (for the fiscal year ended December 31, 2020) for fees related to an online research tool.
Under the Board’s established procedures, the Audit Committee is required to
pre-approve all audit and
non-audit services performed by our independent registered public accounting firm to ensure that the provisions of such services do not impair such firm’s independence. The Audit Committee may delegate its
pre-approval authority to one or more of its members, but not to management. The member or members to whom such authority is delegated must report any
pre-approval decisions to the Audit Committee at its next scheduled meeting.
Each fiscal year, the Audit Committee reviews with management and the independent registered public accounting firm the types of services that are likely to be required throughout the year. Those services are comprised of four categories, including audit services, audit-related services, tax services, and all other permissible services. At that time, the Audit Committeepre-approves a list of specific services that may be provided within each of these categories and sets fee limits for each specific service or project. Management is then authorized to engage the independent registered public accounting firm to perform thepre-approved services as needed throughout the year, subject to providing the Audit Committee with regular updates. The Audit Committee regularly reviews the amount of all billings submitted by the independent registered public accounting firm to ensure their services do not exceedpre-defined limits. The Audit Committee must review and
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 58 |
approve in advance, on a
case-by-case basis, all other projects, services and fees to be performed by or paid to the independent registered public accounting firm.
Under our policy and/or applicable rules and regulations, our independent registered public accounting firm is prohibited from providing the following types of services to us: (1) bookkeeping or other services related to our accounting records or financial statements, (2) financial information systems design and implementation, (3) appraisal or valuation services, fairness opinions or
contribution-in-kind reports, (4) actuarial services, (5) internal audit outsourcing services, (6) management functions, (7) human resources, (8) broker-dealer, investment advisor or investment banking services, (9) legal services, (10) expert services unrelated to audit, (11) any services entailing a contingent fee or commission (not including fees awarded by a bankruptcy court)
| | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 60 |
and (12) tax services to any of our officers whose role is in a financial reporting oversight capacity (regardless of whether we or the officer pays the fee for the services).
During the fiscal years ended December 31,
20172021, and
2016,2020, all the services described under
the headings “Audit Fees,” “Audit-Related Fees,” “Tax
Fees”Fees,” and “All Other Fees” were approved by the Audit Committee in accordance with the procedures described above.
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 61 59 |
AUDIT COMMITTEE CHAIR’S LETTER
Number of meetings in 2021:10
Membership and Attendance:
| | | | | | | | | | | | | | |
| Members | Total Meetings
Attended in 2021 | Attendance
Percentage of All
Meetings in 2021 | Meetings
Attended as a
Committee
Member | Attendance Percentage of Meetings
Held While a
Committee
Member |
| Andrea E. Bertone | 10 | 100% | 10 | 100% |
| William H. Champion | 10 | 100% | 10 | 100% |
Nicholas J. Chirekos (Chair) | 10 | 100% | 10 | 100% |
| Michael W. Sutherlin | 10 | 100% | 10 | 100% |
Dear Stockholder:
On behalf of the Board, I am pleased to present this year's Audit Committee (the Committee) report. During the year in addition to our regular duties, the Committee focused on implementation of the new reserve and resource reporting requirements, impacts of capital structure initiatives throughout the year, and accounting for derivatives.
Committee Membership
The membership of the Committee remained constant throughout 2021, with all members of the Committee being reappointed following the annual meeting of stockholders in May 2021. Unfortunately, in 2022 we will be losing the expertise of Mr. Sutherlin from the Committee, as he will retire from the Board effective as of the 2022 Annual Meeting. We thank Mr. Sutherlin for his service and wish him well in his retirement.
Annual Report
The judgements and factors that the Committee considered in reviewing the Company’s financial statements are set out in the Audit Committee Report. Based on those reviews, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the SEC.
Plans for 2022
The Committee is focused on continuing to ensure strong internal controls over financial reporting and accounting impacts of ongoing capital structure initiatives.
I will be available at the Annual Meeting to answer any questions about our work.
| | | | | |
| |
| Nicholas J. Chirekos | |
| Audit Committee Chair | |
| |
| March 24, 2022 | |
| | | | | |
| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 60 |
PROPOSAL
43 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Board’s Audit Committee has appointed Ernst & Young LLP (EY) as the Company’sPeabody’s independent registered public accounting firm to audit the Company’sPeabody’s financial statements for the fiscal year ending December 31, 2018.2022. As a matter of good corporate governance, the Audit Committee submits its selection of EY to our stockholders for ratification, and will consider the vote of our stockholders when appointing our independent registered public accounting firm in the future. A representative of EY is expected to attend the 20182022 Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement, if desired.
The Audit Committee considers a number of factors in deciding whether to re-engage EY as the independent registered public accounting firm, including the length of time the firm has served in this role and an assessment of the firm’s professional qualifications and resources. In this regard, the Audit Committee considered that Peabody requires global, standardized and well-coordinated services, not only for audit purposes, but for other nonaudit services items, such as valuation support, IT consulting and payroll services. Many of these services are provided to Peabody by other multinational audit and accounting firms. A change in our independent auditor would require us to replace one or more of the multinational service providers that perform nonaudit services for us and could significantly disrupt our business due to the loss of cumulative knowledge in the service providers’ areas of expertise.
For additional information regarding
the Company’sPeabody’s relationship with EY, please refer to the “Audit Committee Report” and “Audit Fees” sections above.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” PROPOSAL
4.3. | | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 62 61 |
STOCK OWNERSHIP
Section 16(a) Beneficial Ownership Reporting Compliance
Our officers and directors and persons beneficially holding more than 10% of our Common Stock are required under the Exchange Act to file reports of ownership and changes in ownership of our Common Stock with the SEC and the NYSE. We file these reports of ownership and changes in ownership on behalf of our officers and directors.
To the best of our knowledge, based solely on our review of the copies of such reports furnished to us during the fiscal year ended December 31, 2017, filings with the SEC and written representations from certain reporting persons that no additional reports were required, all required reports were timely filed for such fiscal year, except that Elliott Associates, L.P. and Elliott International, L.P., which file Section 16 reports with respect to their ownership of our securities, each filed Form 4s reporting transactions that occurred on April 12, 2017 (three total transactions) and May 16, 2017 (two total transactions) on April 17, 2017 and May 22, 2017, respectively.
Security Ownership of Directors and Management and Certain Beneficial Owners
The following table sets forth information as of March
15, 2018,10, 2022, with respect to persons or entities who are known by
the companyPeabody to beneficially own more than 5% of our outstanding Common Stock, each current director, each executive officer named in the Summary Compensation Table, and all directors and executive officers as a group.
Beneficial Owners of More Than 5Five Percent, Directors and Management
| | | | | | | | | | | |
Name and Address of Beneficial Owner (1) | Amount and Nature of Beneficial Ownership
(2)(3)(4) | | Percent of Class (5) |
Elliott Investment Management L.P. c/o Elliott Investment Management L.P. Phillips Point, East Tower 777 S. Flagler Drive, Suite 1000 West Palm Beach, FL 33401 | 25,859,970 | | (6) | 18.7% |
State Street Corporation SSGA Funds Management, Inc. State Street Financial Center 1 Lincoln Street Boston, MA 02111
| 10,116,471 | | (7) | 7.3% |
| Samantha B. Algaze | — | | | * |
| Andrea E. Bertone | — | | | * |
| William H. Champion | — | | | * |
| Nicholas J. Chirekos | 8,348 | | | * |
| Stephen E. Gorman | 8,348 | | | * |
| James C. Grech | — | | | |
| Marc E. Hathhorn | 18,335 | | | * |
| Scott T. Jarboe | 17,694 | | | * |
| Glenn L. Kellow | 938,554 | | (8) | * |
| Joe W. Laymon | 4,994 | | | * |
| Robert A. Malone | 8,348 | | | * |
| David J. Miller | — | | | * |
| Mark A. Spurbeck | 12,742 | | | * |
| Michael W. Sutherlin | 8,348 | | | * |
| Kemal Williamson | 105,496 | | (8) | * |
| Darren R. Yeates | 41,667 | | | * |
| All Directors and Executive Officers as a Group, excluding the former CEO & former President - U.S. Operations (16 People) | 128,824 | | | * |
(1)The address for all officers and directors listed is c/o Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101.
(2)Beneficial ownership is determined in accordance with SEC rules and includes voting and investment power with respect to shares. Unless otherwise indicated, persons and entities named in the table have sole voting and dispositive power with respect to all shares beneficially owned.
(3)Excludes restricted stock units that remain unvested except that it includes restricted stock units that will vest and become available within 60 days of March 10, 2022.
(4)Excludes deferred stock units held by our non-employee directors as of March 10, 2022 as follows: Ms. Algaze, 22,382; Ms. Bertone, 24,597; Mr. Champion, 16,548; Mr. Chirekos, 23,405; Mr. Gorman, 23,405; Mr. Laymon, 26,759; Mr. Malone, 23,405; Mr. Miller, 22,382; Mr. Sutherlin, 23,405 and all directors as a group, 206,288. Also excludes 17,500 deferred stock units held by Mr. Yeates as of March 10, 2022.
| | | | | | | | | | |
Name and Address of Beneficial Owner (1)
| | Amount and Nature
of Beneficial Ownership
(2)(3)(4)
| | Percent of Class (5)
|
Elliott Associates, L.P., Elliott International, L.P., and Elliott
International Capital Advisors Inc.
c/o Elliott Management Corporation
40 West 57th Street, New York, NY 10019
| | |
| 35,339,802(6)
|
| | | | 27.68
| %
|
Contrarian Capital Management, L.L.C.
411 West Putnam Avenue, Suite 425,
Greenwich, CT 06830
| | |
| 10,247,274(7)
|
| | | | 8.03
| %
|
The Vanguard Group, Inc.
100 Vanguard Blvd., Malvern, PA 19355
| | |
| 7,677,178(8)
|
| | | | 6.01
| %
|
Nicholas J. Chirekos
| | | | —
| | | | | | *
|
A. Verona Dorch
| | | | 52,958
| | | | | | *
|
Stephen E. Gorman
| | | | —
| | | | | | *
|
Glenn L. Kellow
| | | | 235,483
| | | | | | *
|
Joe W. Laymon
| | | | —
| | | | | | *
|
Teresa S. Madden
| | | | —
| | | | | | *
|
Bob Malone
| | | | —
| | | | | | *
|
Charles F. Meintjes
| | | | 75,654
| | | | | | *
|
Kenneth W. Moore
| | | | —
| | | | | | *
|
Amy B. Schwetz
| | | | 78,681
| | | | | | *
|
Michael W. Sutherlin
| | | | —
| | | | | | *
|
Shaun A. Usmar
| | | | —
| | | | | | *
|
Kemal Williamson
| | | | 75,654
| | | | | | *
|
All directors and executive officers as a group (15 people)
| | | | 540,990
| | | | | | *
|
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 63 62 |
(5)Applicable percentage ownership is based on 138,260,325 shares of Common Stock outstanding on March 10, 2022. An asterisk (*) indicates that the applicable person beneficially owns less than 1% of the outstanding shares. Share ownership requirements for our directors are described on page 28 under the heading “Non-Employee Director Share Ownership Requirements” and requirements for our executives are described on page 40 under the heading “Share Ownership Requirements”.
(6)This information is based solely on a Schedule 13D/A filed by Elliott Investment Management L.P. (“EIM”), the investment manager of Elliott Associates, L.P. (“Elliott Associates”) and Elliott International, L.P. (“Elliott International” and together with Elliott Associates, the “Elliot Funds”), with the SEC on November 10, 2021, with respect to shares of Common Stock held by the Elliott Funds and/or their respective subsidiaries. According to such Schedule 13D/A, EIM beneficially owns 25,859,970 shares, and has sole voting power and sole dispositive power with respect to such shares.
(7)This information is based solely on a Schedule 13G filed by State Street Corporation ("State Street") and SSGA Funds Management, Inc. ("SSGA") with the SEC on February 11, 2022. According to such Schedule 13G, State Street beneficially owns and has shared dispositive power over 10,116,471 shares and has shared voting power over 10,055,377 shares. SSGA, a subsidiary of State Street, beneficially owns and has shared dispositive power over 8,490,141 shares and has shared voting power over 8,474,641 shares. The remaining shares are held directly or indirectly through other State Street Corporation subsidiaries for which State Street Corporation is the parent holding company.
(8)Represents beneficial ownership balances as of the last Form 4 filed since Mr. Kellow and Mr. Williamson are no longer executives.
(1) | The address for all officers and directors listed is c/o Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101. |
(2) | Beneficial ownership is determined in accordance with SEC rules and includes voting and investment power with respect to shares. Unless otherwise indicated, persons and entities named in the table have sole voting and dispositive power with respect to all shares beneficially owned. |
(3) | Excludes restricted stock units that remain unvested except that it includes restricted stock units that will vest and become available within 60 days of March 15, 2018. |
(4) | Excludes deferred stock units held by ournon-employee directors as of March 15 2018. |
(5) | Applicable percentage ownership is based on 127,665,066 shares of Common Stock outstanding on March 15, 2018. An asterisk (*) indicates that the applicable person beneficially owns less than 1 percent of the outstanding shares. Share ownership requirements for our directors are described on page 25 under the heading“Non-Employee Director Share Ownership Requirements” and requirements for our executives are described on page 41 under the heading “Share Ownership Requirements”. |
(6) | This information is based solely on a Schedule 13D/A filed jointly by Elliott Associates, L.P. (“Elliott”), Elliott International, L.P. (“Elliott International”) and Elliott International Capital Advisors Inc. (“EICA”) with the SEC on February 2, 2018. According to such Schedule 13D/A, Elliott beneficially owns 11,308,687 shares and has sole voting power and sole dispositive power with respect to such shares and Elliott International and EICA each beneficially owns 24,031,115 shares and each has shared voting power and shared dispositive power with respect to such shares. |
(7) | This information is based solely on a Schedule 13G filed by Contrarian Capital Management, L.L.C. (“Contrarian”) with the SEC on February 21, 2018. According to such Schedule 13G, Contrarian beneficially owns 10,247,274 shares and has shared voting power and shared dispositive power with respect to such shares. |
(8) | This information is based solely on a Schedule 13G filed by The Vanguard Group. (“Vanguard”) with the SEC on February 9, 2018. According to such Schedule 13G, Vanguard beneficially owns 7,667,178 shares, has sole voting power with respect to 84,937 of the shares and shared voting power with respect to 16,900 of the shares, and has sole dispositive power with respect to 7,582,702 of the shares and shared dispositive power with respect to 94,476 of such shares. |
| | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 64 63 |
REVIEW OF RELATED PERSON TRANSACTIONS
Policy for Approval of Related Person Transactions
Under a written policy adopted by the Board, the Nominating and Corporate Governance Committee is responsible for
reviewingperforming a reasonable prior review and approving all transactions between
the companyPeabody and certain “related persons,” such as our executive officers, directors, and owners of more than 5% of our voting securities. In reviewing a transaction, the Nominating and Corporate Governance Committee considers the relevant facts and circumstances, including the benefits to us, any impact on director independence, and whether the terms are consistent with a transaction available on an arms-length basis. Only those related person transactions that are determined to be in (or not inconsistent with) our best interests and the best interests of our stockholders are permitted to be approved. No committee member may participate in any review of a transaction in which the member or any of his or her family members is the related person. A copy of the policy can be found on our website
(www.peabodyenergy.com)(www.peabodyenergy.com) by clicking on “Investor,
Info,” then “Governance Documents,” and then “Related
PartyPersons Transaction Policy” and is available in print to any stockholder who requests it.
During 2017, the following related persons transactions occurred as required by the Plan.Registration Rights Agreement
On the Effective Date, we entered into a Registration Rights Agreement with certain of ourpre-Emergence creditorsThe Board has concluded that received our securities on the Effective Date (the “Holders”), as provided in the Plan. The Registration Rights Agreement provides resale registration rights for the Holders’ Registrable Securities (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, we were required to file a shelf registration statement with respect to the Registrable Securities; we fulfilled this requirement. We are required to maintain the effectiveness of such registration statement until the Registrable Securities covered by the registration statement have been disposed of orthere are no longer Registrable Securities. Holders also have customary underwritten offering, demand registrationmaterial related person transactions or agreements during 2021 and piggyback registration rights, subject tothrough the limitations set forth in the Registration Rights Agreement. Under their underwritten offering registration rights, certain Holders have certain rights to demand that we effectuate the distribution of any or all their Registrable Securities by means of an underwritten offering pursuant to a shelf takedown.
These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration statement and our right to delay or withdraw a registration statement under certain circumstances. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as blackout periods and, if an underwritten offering is contemplated, limitations on the number of shares to be included in the underwritten offering that may be imposed by the managing underwriter.
No separate reviewdate of this transaction was performed by the Nominating and Corporate Governance Committee as it was a requirement of the Plan.
2017 Share Repurchase
On August 1, 2017, we announced that our Board had authorized a $500 million share repurchase program. Repurchases under the share repurchase program may be made from time to time at our discretion. No expiration date has been set for the share repurchase program, and the program may be suspended or discontinued at any time.
In August 2017, pursuant to their rights under the Registration Rights Agreement, certain of our then-existing stockholders affiliated with Discovery Capital Management, LLC (collectively, the “selling stockholders”) offered
Proxy Statement requiring disclosure.
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 65 64 |
Communications with the Board
The Board has adopted the following procedures for stockholders and other interested persons to send communications to the Board and/or individual directors (collectively, “Stockholder Communications”).
Stockholders and other interested persons seeking to communicate with the Board and/or individual directors should submit their written communications to the
Chairman,Chair, Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101. The
ChairmanChair will forward such Stockholder Communications to each Board member (excluding routine advertisements and business solicitations, as instructed by the Board), and provide a report on the disposition of matters stated in such Stockholder Communications at the next regular meeting of the Board. If a Stockholder Communication (excluding routine advertisements and business solicitations) is addressed to a specific individual director, the
ChairmanChair will forward that Stockholder Communication to the named director and will discuss with that director whether the full Board and/or one of its committees should address the subject matter.
If a Stockholder Communication raises concerns about management’s or
the company’sPeabody’s ethical conduct, it should be sent directly to our Chief
LegalAdministrative Officer at Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101. The Chief
LegalAdministrative Officer will review the Stockholder Communication and, if appropriate, forward a copy of it to the Chair of the Audit Committee and, if appropriate, the
ChairmanChair of the Board, and see that the subject matter is addressed by the appropriate Board committee, management and/or the full Board.
If a stockholder or other interested person seeks to communicate exclusively with our
non-management directors, individually or as a group, such Stockholder Communication should be sent directly to the Corporate Secretary, who will forward it directly to the
ChairmanChair of the Board. The Corporate Secretary will first consult with and receive the approval of the
ChairmanChair of the Board before disclosing or otherwise discussing the Stockholder Communication with members of management or directors who are members of management.
At the direction of the Board, we reserve the right to screen all materials sent to our directors for potential security risks, harassment, and/or other inappropriate content.
At our
20182022 Annual Meeting, stockholders will have an opportunity to pose questions to the
directors.directors whether they attend in-person or virtually via the internet.
Process for Stockholder Proposals and Director Nominations
Stockholder Proposals Included in Our Proxy
Materials:Materials
If you wish to submit a proposal for inclusion in next year’s proxy statement, we must receive the proposal on or before November
28, 2018,24, 2022, which is 120 calendar days prior to the anniversary of
the mailing date of this year’s
mailing date.Proxy Statement. Upon timely receipt of any such proposal, we will determine whether to include such proposal in the proxy statement and proxy in accordance with applicable regulations governing the solicitation of proxies. Any proposals should be submitted, in writing, to the Corporate Secretary, Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101.
Director Nominations (including Proxy Access) and Other Matters to be Brought Before the
20192023 Annual Meeting of
Stockholders:Stockholders
Under our bylaws, the following process applies if you wish to nominate a director or bring other business before the stockholders at the
2019 Annual Meeting2023 annual meeting of stockholders without having your proposal included in next year’s proxy statement.
•You must notify the Corporate Secretary in writing at our principal executive offices between January 4, 2023, and February 3, 2023; however, if we advance the date of the meeting by more than 20 days or delay the date by more than 70 days, from May 5, 2023, then such notice must be received no earlier than 120 days before the date of the annual meeting and not later than the close of business on the later of the 90th day before such date or the 10th day after public disclosure of the meeting is made; and
| | | | | |
Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 67 65 |
| – | You must notify the Corporate Secretary in writing at our principal executive offices between January 10, 2019 and February 9, 2019; however, if we advance the date of the meeting by more than 20 days or delay the date by more than 70 days, from May 10, 2019, then such notice must be received no earlier than 120 days before the date of the annual meeting and not later than the close of business on the later of the 90th day before such date or the 10th day after public disclosure of the meeting is made; and |
| – | Your notice must contain the specific information required by our bylaws regarding the proposal or nominee, including, but not limited to, name, address, shares held, a description of the proposal or information regarding the nominee and other specified matters. Our new proxy access bylaw, discussed below, has additional requirements for nominees submitted through that proxy access process. We modified our bylaws in 2015 to implement “proxy access,” a means for stockholders to include stockholder-nominated director candidates in our proxy materials for annual meetings of stockholders. The proxy access process under the bylaws was first available to stockholders for our 2018 Annual Meeting. These provisions permit a stockholder, or group of not more than 20 stockholders, meeting specified eligibility requirements to include director nominees in our proxy materials for annual meetings. In order to be eligible to use the proxy access provisions, eligible stockholders, among other requirements, must have owned 3% or more of our outstanding Common Stock continuously for at least three years. The maximum number of stockholder-nominated candidates under the proxy access provisions of our bylaws is equal to the greater of two directors or the largest whole number that does not exceed 20% of the number of directors on our Board as of the last day on which a proxy access notice may be delivered. The submission process described above applies to nominees submitted through this proxy access process. |
•Your notice must contain the specific information required by our bylaws regarding the proposal or nominee, including, but not limited to, name, address, shares held, a description of the proposal or information regarding the nominee and other specified matters. Our proxy access bylaw, discussed below, has additional requirements for nominees submitted through the proxy access process. The proxy access provisions permit a stockholder, or group of not more than 20 stockholders, meeting specified eligibility requirements to include director nominees in our proxy materials for annual meetings. In order to be eligible to use the proxy access provisions, eligible stockholders, among other requirements, must have owned 3% or more of our outstanding Common Stock continuously for at least three years. The maximum number of stockholder-nominated candidates under the proxy access provisions of our bylaws is equal to the greater of two directors or the largest whole number that does not exceed 20% of the number of directors on our Board as of the last day on which a proxy access notice may be delivered. The submission process described above applies to nominees submitted through this proxy access process.
In addition to the above requirements, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than Peabody’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 6, 2023.
You can obtain a copy of our bylaws, without charge, by writing to the Corporate Secretary at the address shown above or by accessing our website (www.peabodyenergy.com) and clicking on “Investor,
Info,” and then
“Corporate Governance.“Governance Documents.” Information on our website is not considered part of this Proxy Statement. These requirements are separate from and in addition to the requirements a stockholder must meet to have a proposal included in our proxy statement. The foregoing time limits also apply in determining whether notice is timely for purposes of SEC rules relating to the exercise of discretionary voting authority.
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for annual reports, proxy statements, and notices of internet availability with respect to two or more stockholders sharing the same address by delivering a single annual report and/or proxy statement and/or notices of internet availability addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. We and some brokers household annual reports, proxy statements, and notices of internet availability, delivering a single annual report, proxy statement, and notice of internet availability to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders.
Once you have received notice from your broker or us that your broker or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate annual report, proxy statement, and/or notice of internet availability in the future, please notify your broker if your shares are held in a brokerage account or notify us at the address or telephone number below if you hold registered shares. If, at any time, you and another stockholder sharing the same address wish to participate in householding and prefer to receive a single copy of our annual report, proxy statement, and/or notice of internet availability, please notify your broker if your shares are held in a brokerage account or notify us if you hold registered shares.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 68 |
At any time, you may request a separate copy of our annual report or proxy statement by sending a written request to the Corporate Secretary at Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101 or by calling (314)342-3400.
Our Annual Reports on Form
10-K, Quarterly Reports on Form
10-Q, Current Reports on Form
8-K, and all amendments to those reports are available without charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. They may be accessed at our website (www.peabodyenergy.com) by clicking on “Investor,
Info,” and then “SEC Filings.” Information on our website is not considered part of this Proxy Statement.
In accordance with SEC rules, the information contained in the Report of the Audit Committee and the Report of the Compensation Committee shall not be deemed to be “soliciting material,” or to be “filed” with the SEC or
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 66 |
subject to the SEC’s Regulation 14A, or to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically request that the information be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.
Costs of Solicitation
We are
The accompanying proxy is being solicited by and on behalf of the Board. Peabody is paying the cost of preparing, printing, and mailing these proxy materials. We have engaged
InnisfreeMorrow Sodali to assist in distributing proxy materials, soliciting proxies, and in performing other proxy solicitation services for a fee of $20,000 plus their
out-of-pocket expenses. Proxies may be solicited personally or by telephone by our regular employees without additional compensation as well as by employees of
Innisfree.Morrow Sodali. We will reimburse banks, brokerage firms, and others for their reasonable expenses in forwarding proxy materials to beneficial owners and obtaining their voting instructions.
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 69 67 |
The Board is not aware of any matters requiring stockholder action to be presented at the
20182022 Annual Meeting other than those stated in the
20182022 Notice of Annual Meeting. Should other matters be properly introduced at the
20182022 Annual Meeting, those persons named in the enclosed proxy will have discretionary authority to act on such matters and will vote the proxy in accordance with their best judgment.
We will provide to any stockholder, without charge and upon written request, a copy (without exhibits unless otherwise requested) of our Annual Report on Form
10-K for the
Fiscal Year Endedfiscal year ended December 31,
20172021, as filed with the SEC. Any such request should be directed to Investor Relations, Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101.
By Order of the Board of Directors,
A. VERONA DORCH
Executive Vice President,
SCOTT T. JARBOE
Chief
LegalAdministrative Officer
Government Affairs and Corporate Secretary
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 70 68 |
APPENDIX A: QUESTIONS AND ANSWERS
Q: Why did I receive a notice in the mail regarding the internet availability of proxy materials this year instead of a full set of proxy materials?
A: Q: | Why did I receive a notice in the mail regarding the internet availability of proxy materials this year instead of a full set of proxy materials? |
A: | In accordance with rules and regulations adopted by the SEC, instead of mailing a printed copy of our proxy materials to each stockholder of record, we may furnish proxy materials, including this Proxy Statement and the Peabody Energy Corporation 2017 Annual Report to Stockholders, by providing access to them via the internet. We believe this allows us to provide our stockholders with the information they need, while reducing delivery costs and the environmental impact of our 2018 Annual Meeting. |
In accordance with rules and regulations adopted by the SEC, instead of mailing a printed copy of our proxy materials to each stockholder of record, we may furnish proxy materials, including this Proxy Statement and the Peabody Energy Corporation 2021 Annual Report on Form 10-K, by providing access to them via the internet. We believe this allows us to provide our stockholders with the information they need, while reducing delivery costs and the environmental impact of our 2022 Annual Meeting.
Some stockholders will not receive printed copies of the proxy materials unless they request them. Instead, a Notice of Internet Availability of Proxy Materials (the “Notice”) was mailed which tells them how to access and review all the proxy materials on the internet. The Notice also provides information about how to submit a proxy on the internet or by telephone. If you received a Notice and would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting them in the Notice.
Q: | Why am I receiving these materials? |
A: | We are providing these proxy materials to you on the internet or delivering printed versions of these materials to you by mail in connection with our solicitation of proxies to be voted at our 2018 Annual Meeting, which will take place on May 10, 2018. These materials were first made available on the internet or mailed to stockholders on or about March 28, 2018. You are invited to attend the 2018 Annual Meeting and requested to vote on the items described in this Proxy Statement. |
Q: | What is included in these materials? |
A: | These materials include: |
Q: Why am I receiving these materials?
A: We are providing these proxy materials to you on the internet or delivering printed versions of these materials to you by mail in connection with our solicitation of proxies to be voted at our 2022 Annual Meeting, which will take place on May 5, 2022. These materials were first made available on the internet or mailed to stockholders on or about March 24, 2022. You are invited to attend the 2022 Annual Meeting in person or virtually via the internet and requested to vote on the items described in this Proxy Statement.
Q: What is included in these materials?
A: These materials include:
•Our Proxy Statement for the 20182022 Annual Meeting; and
•Our 20172021 Annual Report to Stockholders,on Form 10-K, which includes our audited consolidated financial statements.
If you received printed versions of these materials, they also include the proxy card/voting instruction form for the
20182022 Annual Meeting.
Q: | What am I being asked to vote on? |
A: | You are being asked to vote on the following proposals: |
Q: What am I being asked to vote on?
A: You are being asked to vote on the following proposals:
•Election of Samantha B. Algaze, Andrea E. Bertone, William H. Champion, Nicholas J. Chirekos, Stephen E. Gorman, Glenn L. Kellow,James C. Grech, Joe W. Laymon, Teresa S. Madden, Bob Malone, Kenneth W. Moore, Michael W. Sutherlin and Shaun A. UsmarDavid J. Miller as directors for a one-year term;
one-year• term;
Approval, on an advisory basis, of our named executive officers’ compensation;
Approval, on an advisory basis, of the frequency of future advisory votes approving our named executive officers’ compensation;
•Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018;2022; and
•Any other matter properly introduced at the 20182022 Annual Meeting.
Q: What are the Board’s voting recommendations?
A: The Board recommends the following votes:
•FOR the election of Samantha B. Algaze, Andrea E. Bertone, William H. Champion, Nicholas J. Chirekos, Stephen E. Gorman, James C. Grech, Joe W. Laymon, Bob Malone, and David J. Miller as directors for a one-year term (Proposal 1);
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 71 69 |
Q: | What are the Board’s voting recommendations? |
A: | The Board recommends the following votes: |
one-year
term (Proposal 1);
•FOR the approval, on an advisory basis, of our named executive officers’ compensation (Proposal 2); and
EVERY YEAR, on an advisory basis, for the frequency of future advisory votes approving our named executive officers’ compensation (Proposal 3); and
•FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 20182022 (Proposal 4)3).
Q: | Will any other matters be voted on? |
A: | We are not aware of any other matters that will be brought before the stockholders for a vote at the 2018 Annual Meeting. If any other matter is properly brought before the 2018 Annual Meeting, your proxy will authorize each of Michael W. Sutherlin and A. Verona Dorch to vote on such matters in his or her discretion. |
A: | If you are a stockholder of record as of the record date you may vote using any of the following methods: |
| • | Via the internet, by visiting the website “www.proxyvote.com” and following the instructions for internet voting on your Notice or proxy card/voting instruction form; |
Q: Will any other matters be voted on?
A: We are not aware of any other matters that will be brought before the stockholders for a vote at the 2022 Annual Meeting. If any other matter is properly brought before the 2022 Annual Meeting, your proxy will authorize each of Stephen E. Gorman and Scott T. Jarboe to vote on such matters in his or her discretion.
Q: How do I vote?
A: If you are a stockholder of record as of the record date you may vote using any of the following methods:
•Via the internet, by visiting the website “www.proxyvote.com” and following the instructions for internet voting on your Notice or proxy card/voting instruction form;
•By dialing1-800-690-6903 and following the instructions for telephone voting on your Notice or proxy card/voting instruction form;
•If you received your proxy materials by mail, by completing and mailing your proxy card/voting instruction form; or
•By casting your vote in person at the 20182022 Annual Meeting.
If you vote over the internet, you may incur costs such as telephone and internet access charges for which you will be responsible. The telephone and internet voting facilities for the stockholders of record of all shares will close at 10:59 p.m. Central
timeTime on May
9, 2018.4, 2022. The internet and telephone voting procedures are designed to authenticate stockholders by use of a control number and to allow you to confirm that your instructions have been properly recorded.
If you vote by internet or telephone, or return your signed proxy card/voting instruction form, your shares will be voted as you indicate. If you do not indicate how your shares are to be voted on a matter, your shares will be voted for all matters in accordance with the Board’s voting recommendations.
If your shares are held in a brokerage account in your broker’s name (also known as “street name”), you should follow the instructions for voting provided by your broker or nominee. You may submit voting instructions by internet or telephone or, if you received your proxy materials by mail, you may complete and mail a proxy card/voting instruction form to your broker or nominee. If you provide specific voting instructions by telephone, internet or mail, your broker or nominee will vote your shares as you have directed. Ballots will be provided during the
20182022 Annual Meeting to anyone who wants to vote
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 72 |
in person at the 20182022 Annual Meeting. If you hold shares in street name, you must request a confirmation of beneficial ownership from your broker or nominee to vote in person at the 20182022 Annual Meeting.
A: | Yes. If you are a stockholder of record, you can change your vote or revoke your proxy before the 2018 Annual Meeting by: |
Q: Can I change my vote?
A: Yes. If you are a stockholder of record, you can change your vote or revoke your proxy before the 2022 Annual Meeting by:
•Submitting a valid, later-dated proxy card/voting instruction form;
•Submitting a valid, subsequent vote by telephone or the internet at any time prior to 10:59 p.m. Central timeTime on May 9, 2018;4, 2022;
•Notifying our Corporate Secretary in writing that you have revoked your proxy; or
•Completing a written ballot at the 20182022 Annual Meeting.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 70 |
If your shares are held in a brokerage account in your broker’s or nominee’s name, you should follow the instructions for changing or revoking your vote provided by your broker or nominee.
Q: | Is my vote confidential? |
A: | Yes. All proxies, ballots and vote tabulations that identify how individual stockholders voted will be kept confidential and not be disclosed to our directors, officers or employees, except in limited circumstances, including: |
Q: Is my vote confidential?
A: Yes. All proxies, ballots, and vote tabulations that identify how individual stockholders voted will be kept confidential and not be disclosed to our directors, officers, or employees, except in limited circumstances, including:
•When disclosure is required by law;
•During any contested solicitation of proxies; or
•When written comments by a stockholder appear on a proxy card/voting instruction form or other voting material.
Q: | What will happen if I do not instruct my broker how to vote? |
A: | If your shares are held in street name and you do not instruct your broker how to vote, one of two things can happen depending on the type of proposal. Under NYSE rules, brokers have discretionary power to vote your shares on “routine” matters, but they do not have discretionary power to vote your shares on“non-routine” matters. We believe the only proposal that will be considered routine under NYSE rules is Proposal 4, which means your broker may vote your shares in its discretion on that item if you have not provided instructions. This is known as “broker discretionary voting.” |
Q: What will happen if I do not instruct my broker how to vote?
A: If your shares are held in street name and you do not instruct your broker how to vote, one of two things can happen depending on the type of proposal. Under NYSE rules, brokers have discretionary power to vote your shares on “routine” matters, but they do not have discretionary power to vote your shares on “non-routine” matters. We believe the only proposal that will be considered routine under NYSE rules is Proposal 3, which means your broker may vote your shares in its discretion on that item if you have not provided instructions. This is known as “broker discretionary voting.”
The election of directors
- Proposal 1 -(Proposal 1) and
Proposals 2 and 3approval, on an advisory basis, of our Named Executive Officers’ compensation (Proposal 2) are considered
non-routine matters. Accordingly, your broker may not vote your shares with respect to these items if you have not provided instructions. This will result in a “broker
non-vote.”
We strongly encourage you to submit your proxy and exercise your right to vote as a stockholder.
Q: How many shares must be present to hold the 2022 Annual Meeting?
A: Holders of record of a majority of the shares of outstanding Common Stock as of the record date must be represented in person or by proxy at the 2022 Annual Meeting in order to conduct business. This is called a quorum. If you vote, your shares will be part of the quorum. Abstentions, “Withheld” votes and broker non-votes also will be counted in determining whether a quorum exists.
Q: What vote is required to approve the proposals?
A: In the election of directors (Proposal 1), the number of shares voted “For” a nominee must exceed 50% of the number of votes cast with respect to such nominee’s election for such nominee to be elected. Votes cast exclude abstentions and broker non-votes. If the number of shares voted “For” a nominee does not exceed 50% of the number of votes cast with respect to such nominee’s election, our Corporate Governance Guidelines require that such nominee promptly tender his or her resignation to the Chair of the Board following certification of the stockholder vote. The proposals to approve, on an advisory basis, our Named Executive Officers’ compensation (Proposal 2) and to ratify the appointment of Ernst & Young LLP (Proposal 3), will require approval by the holders of a majority of the shares present in person or by proxy at the 2022 Annual Meeting and entitled to vote. Abstentions will count as a vote against these proposals, and broker non-votes, if any, will have no effect on these proposals. Votes will be tabulated by the independent inspector of election appointed for the 2022 Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions, and broker non-votes.
Q: What does it mean if I receive more than one Notice or proxy card or voting instruction form?
A: It means your shares are registered differently or are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all your shares.
Q: | How many shares must be present to hold the 2018 Annual Meeting? |
A: | Holders of a majority of the shares of outstanding Common Stock as of the record date must be represented in person or by proxy at the 2018 Annual Meeting in order to conduct business. This is called a quorum. If you vote, your shares will be part of the quorum. Abstentions, “Withheld” votes and brokernon-votes also will be counted in determining whether a quorum exists. |
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 73 71 |
Q: | What vote is required to approve the proposals? |
A: | In the election of directors (Proposal 1), the number of shares voted “For” a nominee must exceed 50% of the number of votes cast with respect to such nominee’s election for such nominee to be elected. Votes cast exclude abstentions and brokernon-votes. If the number of shares voted “For” a nominee does not exceed 50% of the number of votes cast with respect to such nominee’s election, our Corporate Governance Guidelines require that such nominee promptly tender his or her resignation to the Chairman of the Board following certification of the stockholder vote. The proposals to approve, on an advisory basis, our named executive officers’ compensation (Proposal 2), to approve, on an advisory basis, the frequency of the future advisory votes approving our named executive officers’ compensation (Proposal 3) and to ratify the appointment of Ernst & Young LLP (Proposal 4), will require approval by the holders of a majority of the shares present in person or by proxy at the 2018 Annual Meeting and entitled to vote. Abstentions will count as a vote against these proposals, and brokernon-votes, if any, will have no effect on these proposals. Votes will be tabulated by the independent inspector of election appointed for the 2018 Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and brokernon-votes. |
Q: | What does it mean if I receive more than one Notice or proxy card or voting instruction form? |
A: | It means your shares are registered differently or are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all your shares. |
Q: | Who may attend the 2018 Annual Meeting? |
A: | All our stockholders as of March 19, 2018 may attend the 2018 Annual Meeting. |
Q: | What do I need to do to attend the 2018 Annual Meeting? |
A: | An admission card or other proof of ownership, together with valid government-issued photo identification such as a driver’s license or passport, are required to attend the 2018 Annual Meeting. The registration desk will open at 9:30 a.m. Central time on the day of the meeting, and the meeting will begin at 10:00 a.m. Central time. Please note that seating in the meeting room is limited and stockholders may be required to view the meeting from an overflow room. |
Q: Who may attend the 2022 Annual Meeting?
A: All our stockholders as of the close of business on March 10, 2022 may attend the 2022 Annual Meeting.
Q: What do I need to do to attend the 2022 Annual Meeting?
A: An admission card or other proof of ownership, together with valid government-issued photo identification such as a driver’s license or passport, are required to attend the 2022 Annual Meeting. The registration desk will open at 8:30 a.m. Central Time on the day of the meeting, and the meeting will begin at 9:00 a.m. Central Time. Please note that seating in the meeting room is limited and stockholders may be required to view the meeting from a secondary room.
If you own shares in street name, you will need to ask your bank or broker for an admission card in the form of a confirmation of beneficial ownership. You will need to bring a confirmation of beneficial ownership with you to vote at the
20182022 Annual Meeting. If you do not receive your confirmation of beneficial ownership in time, bring your most recent brokerage statement with you to the
20182022 Annual Meeting. We can use that to verify your share ownership and admit you to the meeting; however, you will not be able to vote your shares at the
20182022 Annual Meeting without a confirmation of beneficial ownership.
For safety reasons, we will not allow anyone to bring large bags, briefcases, packages, or other similar items into the meeting or
overflowsecondary rooms, or to record or photograph the meeting.
We will follow COVID-19 screening procedures consistent with local requirements and masks will be required by all attendees.Stockholders can participate in the virtual annual meeting at www.virtualshareholdermeeting.com/BTU2022 by entering the control number found on the proxy card. Further details on how to participate in the virtual meeting are available on proxyvote.com.
As part of our precautions regarding COVID-19, we are planning for the possibility that the annual meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance.
Q: Why are you holding a virtual annual meeting in addition to an in-person meeting?
A: Due to the continuing public health impact of COVID-19 and to support the health and well-being of our stockholders, the 2022 Annual Meeting will be held in a virtual meeting format in addition to the in-person format. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation, and communication. For example, the virtual format allows stockholders to communicate with us during the 2022 Annual Meeting so they can ask questions of the Board or management. During the live Q&A session of the 2022 Annual Meeting, we may answer questions as they come in, to the extent relevant to the business of the 2022 Annual Meeting, as time permits.
Q: Do I need to preregister in order to attend the in-person meeting?
A: In order to ensure that we have ample space at the in-person meeting, we ask that stockholders or their legal proxy holders who wish to attend the 2022 Annual Meeting preregister with Peabody’s Investor Relations Department by sending an email to IR@PeabodyEnergy.com no later than 5:00 p.m. Central Time on Friday, April 29, 2022. If you have questions about the admission process, you may call 314-342-7900.
Your request must include your name, email address, mailing address, telephone number (in case we need to contact you regarding your request), and one of the following:
•If you are a stockholder of record (i.e., you hold your shares through Peabody’s transfer agent, American Stock Transfer & Trust Company LLC (AST)), your request must include one of the following items: (i) a copy of your proxy card delivered as part of your proxy materials, (ii) a copy of your AST account statement indicating your ownership of Peabody common stock as of the record date, or (iii) the Notice Regarding the Availability of Proxy Materials, if you received one.
Q: | Where can I find the voting results of the 2018 Annual Meeting? |
A: | We plan to announce preliminary voting results at the 2018 Annual Meeting and to publish final results in a Current Report on Form8-K filed with the SEC within four business days after the 2018 Annual Meeting. |
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 74 72 |
• | | | | | | | | | | | | |
| | | 2017 | |
| | | | |
| | | Successor | | | Predecessor | | | | |
| | | April 2 through
December 31 | | | January 1
through April 1 | | | Short-term
Incentive | |
| | | | |
| | | (In Millions) | |
Income (loss) from continuing operations, net of income taxes | | $ | 713 | | | $ | (195) | | | $ | 518 | |
Depreciation, depletion and amortization | | | 522 | | | | 120 | | | | 642 | |
Asset retirement obligation expenses | | | 41 | | | | 15 | | | | 56 | |
Netmark-to-market adjustment on actuarially determined liabilities | | | (45) | | | | - | | | | (45) | |
Asset impairment | | | - | | | | 31 | | | | 31 | |
Changes in deferred tax asset valuation allowance and amortization of basis difference related to equity affiliates | | | (17) | | | | (5) | | | | (22) | |
Interest expense | | | 120 | �� | | | 33 | | | | 153 | |
Loss on early debt extinguishment | | | 21 | | | | - | | | | 21 | |
Interest income | | | (6) | | | | (3) | | | | (9) | |
Reorganization items, net | | | - | | | | 627 | | | | 627 | |
Gain on disposal of reclamation liability | | | (31) | | | | - | | | | (31) | |
Gain on disposal of Burton Mine | | | (52) | | | | - | | | | (52) | |
Break fees related to terminated asset sales | | | (28) | | | | - | | | | (28) | |
Unrealized losses (gains) on economic hedges | | | 23 | | | | (17) | | | | 6 | |
Unrealized losses onnon-coal trading derivative contracts | | | 1 | | | | - | | | | 1 | |
Coal inventory revaluation | | | 67 | | | | - | | | | 67 | |
Take-or-pay contract-based intangible recognition | | | (23) | | | | - | | | | (23) | |
Income tax benefit | | | (161) | | | | (264) | | | | (425) | |
Adjusted EBITDA(1) | | $ | 1,145 | | | $ | 342 | | | $ | 1,487 | |
Selling and administrative expenses for certain employee compensation programs related to the Chapter 11 Cases | | | - | | | | 5 | | | | 5 | |
Corporate hedging | | | - | | | | 28 | | | | 28 | |
Pricing collar | | | (93) | | | | - | | | | (93) | |
Foreign exchange collar | | | 19 | | | | - | | | | 19 | |
Fresh start impacts | | | (83) | | | | - | | | | (83) | |
Adjusted EBITDAR(2) | | $ | 988 | | | $ | 375 | | | $ | 1,363 | |
| | | | |
(1) Adjusted EBITDA isIf you are anon-GAAP measure defined street name stockholder (i.e., you hold your shares through an intermediary, such as income (loss) from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses, depreciation, depletion and amortization and reorganization items, net. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance as displayed in the reconciliation. Adjusted EBITDA is used by management asa bank or broker), your request must include one of the primary metricsfollowing items: (i) a copy of your voting instruction form provided by your broker or other holder of record as part of your proxy materials, (ii) a copy of a recent bank or brokerage statement indicating your ownership of Peabody common stock as of the record date, or (iii) the Notice Regarding the Availability of Proxy Materials, if you received one.
•If you are not a stockholder, but are attending as proxy for a stockholder, your request must include a valid legal proxy. If you plan to measure our operating performance. Management also believesnon-GAAP performance measures are used by investorsattend as proxy for a street name stockholder, you must present a valid legal proxy from the stockholder of record (i.e., the bank, broker, or other holder of record) to measure our operatingthe street name stockholder that is assignable and a valid legal proxy from the street name stockholder to you. Stockholders may appoint only one proxy holder to attend on their behalf. Q: Where can I find the voting results of the 2022 Annual Meeting?
A: We plan to announce preliminary voting results at the 2022 Annual Meeting and to publish final results in a Current Report on Form 8-K filed with the SEC within four business days after the 2022 Annual Meeting.
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Peabody | Notice of 20182022 Annual Meeting of Stockholders and Proxy Statement | | 75 73 |
performance and lenders to measure our ability to incur and service debt. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures
non-GAAP
measure defined as Adjusted EBITDA of our consolidated enterprise, further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases and corporate hedging results prior to Emergence. Adjusted EBITDAR also excludes 50% of the impact of realized pricing versus budget and 75% of the impact of Australian Dollar Foreign Exchange movements versus budget, both capped at $100 million. Adjusted EBITDAR is used by management as a performance metric. Adjusted EBITDAR is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. | | |
Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 76 |
APPENDIX C:B: RECONCILIATION OF CERTAINNON-GAAP MEASURES
| | | | | | | | | | | | |
| | | Predecessor | |
| | | Year Ended
December 31,
2016 | | | Three Months
Ended March 31, 2017 | | | KEIP Results | |
| | | (In Millions) | |
(Loss) income from continuing operations, net of income taxes | | $ | (664) | | | $ | 124 | | | $ | (540) | |
Depreciation, depletion and amortization | | | 465 | | | | 120 | | | | 585 | |
Asset retirement obligation expenses | | | 42 | | | | 15 | | | | 57 | |
Selling and administrative expenses related to debt restructuring | | | 22 | | | | - | | | | 22 | |
Asset impairment | | | 248 | | | | 31 | | | | 279 | |
Changes in deferred tax asset valuation allowance and amortization of basis difference related to equity affiliates | | | (8) | | | | (5) | | | | (13) | |
Interest expense | | | 299 | | | | 33 | | | | 332 | |
Loss on early debt extinguishment | | | 30 | | | | - | | | | 30 | |
Interest income | | | (6) | | | | (3) | | | | (9) | |
Reorganization items, net | | | 159 | | | | 42 | | | | 201 | |
Unrealized losses (gains) on economic hedges | | | 40 | | | | (17) | | | | 23 | |
Income tax (benefit) provision | | | (95) | | | | 2 | | | | (93) | |
| | | | |
Adjusted EBITDA(1) | | $ | 532 | | | $ | 342 | | | $ | 874 | |
Selling and administrative expenses for certain employee compensation programs related to the Chapter 11 Cases | | | 5 | | | | 5 | | | | 10 | |
Restructuring charges | | | 15 | | | | - | | | | 15 | |
Unrealized (losses) gains on economic hedges | | | (40) | | | | 17 | | | | (23) | |
UMWA VEBA settlement | | | (68) | | | | - | | | | (68) | |
Corporate hedging | | | 241 | | | | 28 | | | | 269 | |
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Consolidated Adjusted EBITDAR(2) | | $ | 685 | | | $ | 392 | | | $ | 1,077 | |
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Powder River Basin Mining Operations | | $ | 380 | | | $ | 92 | | | $ | 472 | |
Midwestern U.S. Mining Operations | | | 217 | | | | 50 | | | | 267 | |
Western U.S. Mining Operations | | | 102 | | | | 50 | | | | 152 | |
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Total U.S. Mining Operations | | | 699 | | | | 192 | | | | 891 | |
Australian Metallurgical Mining Operations | | | (16) | | | | 110 | | | | 94 | |
Australian Thermal Mining Operations | | | 217 | | | | 75 | | | | 292 | |
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Total Australian Mining Operations | | | 201 | | | | 185 | | | | 386 | |
Trading and Brokerage Operations | | | (32) | | | | 9 | | | | (23) | |
Other | | | (336) | | | | (44) | | | | (380) | |
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Adjusted EBITDA(1) | | $ | 532 | | | $ | 342 | | | $ | 874 | |
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 77 |
| | | | | | | | | | | | |
| | | Predecessor | |
| | | Year Ended
December 31,
2016 | | | Three Months
Ended March 31, 2017 | | | KEIP Results | |
| | | (In Millions) | |
Adjusted EBITDA(1) - Australian Mining Operations | | $ | 201 | | | $ | 185 | | | $ | 386 | |
Australian selling and administrative expenses | | | (14) | | | | (4) | | | | (18) | |
Australian income from equity affiliates | | | 13 | | | | 11 | | | | 24 | |
Australian gains on disposals | | | 2 | | | | - | | | | 2 | |
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Australian Adjusted EBITDAR(3) | | $ | 202 | | | $ | 192 | | | $ | 394 | |
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Consolidated Adjusted EBITDAR(2) | | $ | 685 | | | $ | 392 | | | $ | 1,077 | |
Less: Australian Adjusted EBITDAR(3) | | | (202) | | | | (192) | | | | (394) | |
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Consolidated Adjusted EBITDAR (excluding Australia)(4) | | $ | 483 | | | $ | 200 | | | $ | 683 | |
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Net change in cash and cash equivalents | | $ | 611 | | | $ | 196 | | | $ | 807 | |
Professional fees, related to reorganization | | | 90 | | | | 31 | | | | 121 | |
Adequate protection payments | | | 80 | | | | 30 | | | | 110 | |
Payment of deferred financing costs | | | - | | | | 55 | | | | 55 | |
Surety bonding cash collateral | | | - | | | | 90 | | | | 90 | |
Settlement oftake-or-pay obligations | | | - | | | | 6 | | | | 6 | |
Net DIP proceeds | | | 51 | | | | - | | | | 51 | |
DIP interest | | | 41 | | | | - | | | | 41 | |
| | | | |
Consolidated Cash Flows (before Restructuring Costs)(5) | | $ | 873 | | | $ | 408 | | | $ | 1,281 | |
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(1) Adjusted EBITDA is anon-GAAP measure defined as income (loss) from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses, depreciation, depletion and amortization and reorganization items, net. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance as displayed in the reconciliation. Adjusted EBITDA is used by management as one of the primary metrics to measure our operating performance. Management also believesnon-GAAP performance measures are used by investors to measure our operating performance and lenders to measure our ability to incur and service debt. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
(2) Consolidated Adjusted EBITDAR is anon-GAAP measure defined as Adjusted EBITDA of our consolidated enterprise, further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the United Mine Workers of America (UMWA) voluntary employee beneficiary association (VEBA) settlement and corporate hedging. Consolidated Adjusted EBITDAR is used by management as a performance metric. Consolidated Adjusted EBITDAR is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 78 |
(3) Australian Adjusted EBITDAR is anon-GAAP financial metric and is defined as Adjusted EBITDA of our Australian subsidiaries further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the UMWA VEBA settlement and corporate hedging. Australian Adjusted EBITDAR is used by management as a performance metric. Australian Adjusted EBITDAR is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
(4) Consolidated Adjusted EBITDAR (excluding Australia) is anon-GAAP financial metric and is defined as Adjusted EBITDA of our consolidated enterprise, except for our Australian subsidiaries, further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the UMWA VEBA settlement and corporate hedging. Consolidated Adjusted EBITDAR (excluding Australia) is used by management as a performance metric. Australian Adjusted EBITDAR (excluding Australia) is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
(5) Consolidated Cash Flow (before Restructuring Costs) is anon-GAAP financial metric and is defined as net change in cash and cash equivalents, before deducting cash used for reorganization costs, restructuring, certain employee compensation programs related to the Chapter 11 Cases, adequate protection payments and any proceeds, repayments, fees, interest or other charges related to theDebtor-in-Possession (DIP) Financing. Consolidated Cash Flow (before Restructuring Costs) is used by management as a performance metric. Consolidated Cash Flow (before Restructuring Costs) is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
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Peabody | Notice of 2018 Annual Meeting of Stockholders and Proxy Statement | | 79 |
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PEABODY ENERGY CORPORATION
701 MARKET STREET
SAINT LOUIS, MO 63101-1830
| | | | 
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PEABODY ENERGY CORPORATION | | | | | | | | | | | | | | | | | | |
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| | The Board of Directors recommends you vote FOR the following:
| | | | | | | | | | | | | | | | | | |
| | 1. | | Election of Directors | | For | | Against | | Abstain | | | | | | | | | | | | |
| | | | Nominees: | | | | | | | | | | | | | | | | | | |
| | | | 1a. | | Bob Malone | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | 1b. | | Nicholas J. Chirekos | | ☐ | | ☐ | | ☐ | | The Board of Directors recommends you vote FOR proposal 2.
| | | | For | | Against | | Abstain | | |
| | | | | | | | | | | | |
| | | | 1c. | | Stephen E. Gorman | | ☐ | | ☐ | | ☐ | | 2. Approve, on an advisory basis, our named executive officers’ compensation.
| | | | ☐ | | ☐ | | ☐ | | |
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| | | | 1d. | | Glenn L. Kellow | | ☐ | | ☐ | | ☐ | | The Board of Directors recommends you vote 1 YEAR on the following proposal.
| | 1 Year | | 2 Years | | 3 Years | | Abstain | | |
| | | | | | | | | | | | |
| | | | 1e. | | Joe W. Laymon | | ☐ | | ☐ | | ☐ | | 3. Approve, on an advisory basis, the frequency of future advisory votes to approve our named executive officers’ compensation.
| | ☐ | | ☐ | | ☐ | | ☐ | | |
| | | | | | | | | | | | |
| | | | 1f. | | Teresa S. Madden | | ☐ | | ☐ | | ☐ | | The Board of Directors recommends you vote FOR proposal 4.
| | | | For | | Against | | Abstain | | |
| | | | | | | | | | | | |
| | | | 1g. | | Kenneth W. Moore | | ☐ | | ☐ | | ☐ | | 4. Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018.
| | | | ☐ | | ☐ | | ☐ | | |
| | | | | | | | | | | | |
| | | | 1h. | | Michael W. Sutherlin | | ☐ | | ☐ | | ☐ | | NOTE:Such other business as may properly come before the meeting or any adjournment thereof.
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| | | | | | | | | | | | |
| | | | 1i. | | Shaun A. Usmar | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | |
| | | | | | |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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| Year
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| (In Millions) |
| Reconciliation of Non-GAAP Financial Measures | | | | | | | | | | | | | | | | | |
| Income from Continuing Operations, Net of Income Taxes | $ | 347.4 | | | | | | | | | | | | | | | | | |
| Depreciation, Depletion and Amortization | 308.7 | | | | | | | | | | | | | | | | | |
| Asset Retirement Obligation Expenses | 44.7 | | | | | | | | | | | | | | | | | |
| Restructuring Charges | 8.3 | | | | | | | | | | | | | | | | | |
| Changes in Deferred Tax Asset Valuation Allowance and Reserves and Amortization of Basis Difference Related to Equity Affiliates | (33.8) | | | | | | | | | | | | | | | | | |
| Interest Expense | 183.4 | | | | | | | | | | | | | | | | | |
| Net Gain on Early Debt Extinguishment | (33.2) | | | | | | | | | | | | | | | | | |
| Interest Income | (6.5) | | | | | | | | | | | | | | | | | |
| Net Mark-to-Market Adjustment on Actuarially Determined Liabilities | (43.4) | | | | | | | | | | | | | | | | | |
| Unrealized Losses on Derivative Contracts Related to Forecasted Sales | 115.1 | | | | | | | | | | | | | | | | | |
| Unrealized Losses on Foreign Currency Option Contracts | 7.5 | | | | | | | | | | | | | | | | | |
| Take-or-Pay Contract-Based Intangible Recognition | (4.3) | | | | | | | | | | | | | | | | | |
| Income Tax Provision | 22.8 | | | | | | | | | | | | | | | | | |
Adjusted EBITDA (1) | $ | 916.7 | | | | | | | | | | | | | | | | | |
Pricing Collar Adjustment to STIP Performance Metric (2) | (434.0) | | | | | | | | | | | | | | | | | |
Fuel Pricing/A$ Collar Adjustment to STIP Performance Metric (2) | 28.0 | | | | | | | | | | | | | | | | | |
Adjusted EBITDA-STIP (3) | $ | 510.7 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Net Cash Provided By Operating Activities | $ | 420.0 | | | | | | | | | | | | | | | | | |
| Net Cash Used In Investing Activities | (131.5) | | | | | | | | | | | | | | | | | |
Free Cash Flow (4) | $ | 288.5 | | | | | | | | | | | | | | | | | |
Adjustment to LTIP Performance Metric (2) | 120.6 | | | | | | | | | | | | | | | | | |
Free Cash Flow-LTIP (5) | $ | 409.1 | | | | | | | | | | | | | | | | | |
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| | | | Signature [PLEASE SIGN WITHIN BOX]
| | Date
| | | | Signature (Joint Owners)
| | Date
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 74 |
Important Notice Regarding the Availability
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| Year
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| Income (Loss) from Continuing Operations, Net of Income Taxes | $ | 347.4 | | | | | | | $ | (1,859.8) | | | | | | | $ | (188.3) | | | | | |
| Interest Expense | 183.4 | | | | | | | 139.8 | | | | | | | 144.0 | | | | | |
| Net (Gain) Loss on Early Debt Extinguishment | (33.2) | | | | | | | — | | | | | | | 0.2 | | | | | |
| Interest Income | (6.5) | | | | | | | (9.4) | | | | | | | (27.0) | | | | | |
| Net Periodic Benefit (Credit) Costs, Excluding Service Cost | (38.3) | | | | | | | (1.8) | | | | | | | 19.4 | | | | | |
| Net Mark-to-Market Adjustment on Actuarially Determined Liabilities | (43.4) | | | | | | | (5.1) | | | | | | | 67.4 | | | | | |
| Income Tax Provision | 22.8 | | | | | | | 8.0 | | | | | | | 46.0 | | | | | |
Annual Operating Profit (6) | $ | 432.2 | | | | | | | $ | (1,728.3) | | | | | | | $ | 61.7 | | | | | |
Sales Contract Amortization (2) | (0.2) | | | | | | | 4.2 | | | | | | | 26.6 | | | | | |
Restructuring Charges (2) | 8.3 | | | | | | | 37.9 | | | | | | | 24.3 | | | | | |
Net Impact of Asset Impairment (2) | — | | | | | | | 1,431.9 | | | | | | | 270.2 | | | | | |
Net Impact of Unrealized Mark-to-Market Charges (2) | 115.1 | | | | | | | — | | | | | | | — | | | | | |
Income Tax (Payments) Refunds, Net (2) | (11.6) | | | | | | | 39.9 | | | | | | | 9.1 | | | | | |
Net Operating Profit After Tax (7) | $ | 543.8 | | | | | | | $ | (214.4) | | | | | | | $ | 391.9 | | | | | |
| | | | | | | | | | | | | | | | | |
| Cash and Cash Equivalents | | $ | 954.3 | | $ | 587.0 | | $ | 548.3 | | $ | 580.2 | | | | $ | 709.2 | | $ | 814.6 | | $ | 848.5 | | $ | 682.5 | | | | $ | 732.2 | | $ | 759.1 | | $ | 853.0 | | $ | 798.1 | |
Cumulative Cash Margin Impacts (2) | | 120.6 | | 230.1 | | 36.9 | | 10.6 | | | | — | | — | | — | | — | | | | — | | — | | — | | — | |
Available Liquidity Under Letter of Credit Facility (2) | | 15.3 | | 15.8 | | 15.5 | | 22.8 | | | | — | | — | | — | | — | | | | — | | — | | — | | — | |
Available Liquidity Under Revolving Credit Facility and Accounts Receivable Securitization Program (2) | | 26.3 | | 12.6 | | 0.3 | | 0.8 | | | | 19.5 | | 45.5 | | 77.6 | | 505.2 | | | | 543.6 | | 590.4 | | 348.9 | | 316.0 | |
Less: Minimum Liquidity Required (2) | | (800.0) | | (800.0) | | (800.0) | | (800.0) | | | | (800.0) | | (800.0) | | (800.0) | | (800.0) | | | | (800.0) | | (800.0) | | (800.0) | | (800.0) | |
Excess Cash (8) | | $ | 316.5 | | $ | 45.5 | | $ | (199.0) | | $ | (185.6) | | | | $ | (71.3) | | $ | 60.1 | | $ | 126.1 | | $ | 387.7 | | | | $ | 475.8 | | $ | 549.5 | | $ | 401.9 | | $ | 314.1 | |
| | | | | | | | | | | | | | | | | |
| Current Portion of Long-Term Debt | | $ | 59.6 | | $ | 59.5 | | $ | 94.0 | | $ | 69.4 | | | | $ | 44.9 | | $ | 1,600.1 | | $ | 10.9 | | $ | 12.6 | | | | $ | 18.3 | | $ | 23.4 | | $ | 28.5 | | $ | 34.8 | |
| Long-Term Debt, Less Current Portion | | 1,078.2 | | 1,268.7 | | 1,324.1 | | 1,411.3 | | | | 1,502.9 | | — | | 1,597.0 | | 1,294.3 | | | | 1,292.5 | | 1,329.4 | | 1,327.1 | | 1,326.9 | |
| Total Stockholders’ Equity | | 1,820.8 | | 1,042.3 | | 951.8 | | 891.5 | | | | 981.3 | | 1,100.8 | | 989.3 | | 2,533.3 | | | | 2,672.5 | | 2,985.0 | | 3,225.8 | | 3,262.1 | |
Cumulative Net Impact of Asset Impairment (2) | | — | | — | | — | | — | | | | 1,702.1 | | 1,658.9 | | 1,685.0 | | 268.6 | | | | 270.2 | | 20.0 | | — | | — | |
Cumulative Impact of Unrealized Mark-to-Market Charges (2) | | 115.1 | | 264.0 | | 25.6 | | 1.9 | | | | — | | — | | — | | — | | | | — | | — | | — | | — | |
Less: Excess Cash (2) | | (316.5) | | (45.5) | | — | | — | | | | — | | (60.1) | | (126.1) | | (387.7) | | | | (475.8) | | (549.5) | | (401.9) | | (314.1) | |
Invested Capital (9) | | $ | 2,757.2 | | $ | 2,589.0 | | $ | 2,395.5 | | $ | 2,374.1 | | | | $ | 4,231.2 | | $ | 4,299.7 | | $ | 4,156.1 | | $ | 3,721.1 | | | | $ | 3,777.7 | | $ | 3,808.3 | | $ | 4,179.5 | | $ | 4,309.7 | |
| | | | | | | | | | | | | | | | | |
| Calculation of Non-GAAP Financial Measures | | | | | | | | | | | | | | | | | |
Average Invested Capital (10) | $ | 2,529.0 | | | | | | | $ | 4,102.0 | | | | | | | $ | 4,018.8 | | | | | |
ROIC (11) | 21.5 | % | | | | | | -5.2 | % | | | | | | 9.7 | % | | | | |
ROIC (11) – 2019-2021 Average | 8.7 | % | | | | | | | | | | | | | | | | |
Note: Adjusted EBITDA; Adjusted EBITDA-STIP; Free Cash Flow; Free Cash Flow-LTIP; Annual Operating Profit; Net Operating Profit After Tax; Excess Cash; Invested Capital; Average Invested Capital; and ROIC are non-GAAP financial measures. Management believes that non-GAAP performance
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 75 |
measures are used by investors to measure our operating performance and lenders to measure our ability to incur and service debt. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
(1)Adjusted EBITDA is defined as income from continuing operations before deducting net interest expense; income taxes; asset retirement obligation expenses; and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the Annual Meeting:The Notice anddiscrete items that management excluded in analyzing each of our segment’s operating performance, as displayed in the reconciliation above. Adjusted EBITDA is used by management as the primary metric to measure each of our segment’s operating performance.
(2)Item impacting STIP/LTIP performance metric, as described within the Proxy Statement under “Compensation Discussion and Analysis.”
(3)Adjusted EBITDA-STIP is equal to Adjusted EBITDA further adjusted for certain items which impact the STIP performance metric.
(4)Free Cash Flow is defined as net cash provided by operating activities less net cash used in investing activities and excludes cash outflows related to business combinations. Free Cash Flow is used by management as a measure of our financial performance and our ability to generate excess cash flow from our business operations.
(5)Free Cash Flow-LTIP is equal to Free Cash Flow further adjusted for certain items which impact the LTIP performance metric.
(6)Annual Report areOperating Profit is defined as income (loss) from continuing operations before deducting net interest expense; income taxes; net periodic benefit (credit) costs, excluding service cost; and net mark-to-market adjustment on actuarially determined liabilities. Annual Operating Profit is used by management as a measure of our financial performance.
(7)Net Operating Profit After Tax is equal to Annual Operating Profit further adjusted for certain items which impact the LTIP performance metric.
(8)Excess Cash is Peabody’s unrestricted cash and cash equivalents and available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E43775-P00755
liquidity, minus Peabody’s targeted liquidity level. PEABODY ENERGY CORPORATION
Annual Meeting(9)Invested Capital is the sum of Stockholders
May 10, 2018 10:00 AM Central Time
This Proxy Is SolicitedPeabody’s total debt and stockholders’ equity, minus Excess Cash and further adjustments for certain items which impact the LTIP performance metric.
(10)Average Invested Capital is the four-quarter average of Invested Capital.
(11)ROIC is Net Operating Profit After Tax divided by the BoardAverage Invested Capital.
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| Peabody | Notice of 2022 Annual Meeting of Stockholders and Proxy Statement | 76 |
Table of them, as proxies, each with the power to appoint his or her substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Peabody Energy Corporation that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 AM Central Time on May 10, 2018, at theSheraton Clayton Plaza Hotel, 7730 Bonhomme Avenue, Clayton, Missouri 63105, and any adjournment or postponement thereof.This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side
Contents
