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| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
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| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
ANNUAL MEETING OF STOCKHOLDERS — APRIL
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1000 CONSOL Energy275 Technology Drive, Suite 100101
Canonsburg, Pennsylvania 15317
Telephone (724) 416-8300
Dear Fellow Stockholder:
On behalf of the entire Board of Directors (Board) of CONSOL Energy Inc. (“CEIX”), we invite you to attend CEIX’s fifthseventh Annual Meeting of Stockholders. The Annual Meeting will be held solely via live webcast at www.virtualshareholdermeeting.com/CEIX2022CEIX2024 on April 26, 2022,30, 2024, at 9:008 a.m. Eastern Time.
You will be asked to vote on the following items for the Annual Meeting: (i) the election of our directors, (ii) ratification of the appointment of our independent registered public accounting firm, and (iii) advisory approval of our 20212023 executive compensation program.program, (iv) the frequency of future advisory votes on executive compensation and (v) an amendment to our Certificate of Incorporation to provide for liability exculpation of certain of our officers as further described herein. Detailed information about the director nominees, including their specific experience and qualifications, begins on page 1213 of the proxy statement. Information about our independent registered public accounting firm begins on page 1729 of the proxy statement. Our Compensation Discussion and Analysis, which explains our 20212023 compensation decisions, begins on page 2337 of the proxy statement. A summary of why we are seeking stockholder input on say-on-pay vote frequency is on page 77 of the proxy statement. Information about the amendment to our Amended and Restated Certificate of Incorporation begins on page 78 of the proxy statement. We encourage you to read the proxy statement carefully for more information.
During 2021,Our company delivered a strong operational and financial performance during 2023 as we took advantageachieved our third consecutive year of improvingproduction and sales volume growth while also generating record total revenue and other income, net income and adjusted EBITDA*. This success was enabled in large part by our expanding global market conditionsreach and resurgent domesticreliable world-class mining and global economieslogistics operations. In 2023, we also accomplished our strategic priority of pivoting sales away from traditional power-generation markets and toward growing demand from industrial and metallurgical customers in Asia, Africa, and South America. We exported a company record 16.2 million tons of coal in 2023 and derived 70% of our total recurring revenues and other income* from export sales. Additionally, 60% of our total recurring revenues and other income* came from sources other than sales to achieve strong results and position ourselves for the future. coal-fired power plants.
At our flagship operation, the Pennsylvania Mining Complex (PAMC), we grew our PAMC coal revenue to $1,085 million for the year ended December 31, 2021 from $771 million for the year ended December 31, 2020. We also grew PAMC production from 18.8 million tonsthird consecutive year. This resulted in 2020 to 23.9 million tons in 2021, improved oura record average realized coal revenue per ton sold from $41.31sold* in 20202023. Despite continued market volatility contributing to $45.75 in 2021,a high inflationary environment and althoughglobal supply chain difficulties, both of which influenced our total costs and expenses, increased to $1,224 million from $1,031 million for the yearwe ended December 31, 2021 compared to the year ended December 31, 2020, we reduced our cash cost of coal sold per ton* from $29.12 in 2020 to $28.25 in 2021, all while successfully managing inflationary pressures and the continued impacts of COVID-19 on our workforce, supply chain, and logistics partners. As2023 with a result, we were able to grow ourrecord PAMC average cash margin per ton sold* to $17.50 in 2021 from $12.19 in 2020, a 44% year-on-year increase. Moreover, we achieved these results while continuing to diversify our sales portfolio into export and non-power generation markets. During 2021, we exported a record 11 million tons from the PAMC, representing 47% of our total tons sold, and we placed approximately 37% of our total sales tons into industrial and metallurgical markets, which benefit from the characteristics of our high-quality PAMC product. This was enabled, in part, by our wholly-owned.
Our CONSOL Marine Terminal (CMT), which continued also achieved record operational and financial performance during the year and transloaded a record 19 million tons of coal. The CMT has worked without a recordable safety incident since June 2014, surpassing 1 million man hours worked without a recordable safety incident.
At our newly-developed Itmann Mining Complex, we also made meaningful progress by expanding its total sales tonnage, including third-party sales, by 152% compared to serve as2022 levels to an aggregate 515 thousand tons. Moving forward, we expect to increase the Itmann Mining Complex’s sales volume in 2024 compared to 2023, and we expect to continue to ramp up production throughout 2024.
The success of our strategic gatewaycore business also led to the seaborne market and achieved its second-highest throughput year onmultiple record and generated $32 million of net income and $43 million Adjusted EBITDA* attributable to the CMT segmentfinancial results for the year ended December 31, 2021. AllCompany. We took advantage of this was accomplished while maintaining a Total Recordable Incident Rate 54% lower than the national average for underground bituminous coal mines at the PAMC (based on preliminary Mine Safety and Health Administration (MSHA) data) and achieving another year of zero safety exceptions at the CMT.
Our financial performance reflected theseour strong operating and sales results, as we generated $306 million of net cash provided by operating activities and $186 million of free cash flow*. We also have reduced to advance some of our totalkey strategic initiatives in 2023, including (a) achieving our debt in every year since we were spun off as an independent publicly-traded company in 2017. While executingreduction goals, including fully retiring our de-levering goals, we have simultaneously capitalized on opportunitiesTerm Loan B and Second Lien Notes, (b) returning meaningful capital to access alternative sourcesour shareholders through the retirement of financing5.5 million shares of CEIX common stock from year-end 2022 through January 31, 2024 and capture the arbitrage versus our existing debt. Case in point, we raised $75 million in the tax-exempt municipal bond market in 2021, while also making payments of $101dividends, and (c) enhancing our liquidity through cash generation and upsizing our revolving credit facility by an incremental $95 million to reduce consolidatedan aggregate amount of $355 million.
indebtedness, including $17 million toward our higher-interest second lien notes. Our operating and financial performance continued to create value for CEIX stockholders, and our share price appreciated by more than 200% during the year. We see strong fundamentals carrying into 2022, and we stand near fully-contracted for 2022 PAMC sales at anticipated realizations that are substantially improved compared to our 2021 results.
Our continued success and positive near-term outlook have allowed us to make meaningful investments in our future. Chief among these is our Itmann mine project, which we reaccelerated in 2021. We are now on track to complete the relocation of a state-of-the-art preparation plant to the Itmann site and ramp up the mine to full production during the second half of 2022. Once operating at full capacity, we expect the mine and preparation plant to produce approximately 900,000 tons annually of high-quality low-vol metallurgical coal for sale in the domestic and international markets, with a cost structure that will allow it to generate meaningful cash flow across a wide range of market conditions. We also are investing in the development of a fifth longwall at the PAMC, which is targeted for completion by the end of 2022 and will improve our production optionality, including the opportunity to rapidly add incremental production in strong markets such as those we are currently experiencing.
Coal remains the largest source of electricity and the second-largest source of primary energy globally, and lookingLooking ahead, we believe society will continuewe have a continuing critical role to rely on coal as a criticalplay in meeting global energy and resource for electricity, infrastructure, and basic human needs as the energy transition plays out in the coming decades. GivenWe expect the demand for high-BTU content fuels, particularly in industrial applications, will grow significantly in the coming years in developing economies in Asia and Africa, which we are well-positioned to serve through our high-quality products and ownership in the CONSOL Marine Terminal. Additionally, increasing demand for data centers due to the deployment of artificial intelligence technologies, growth of commercial factories, and increasing deployment of electric vehicles are causing electricity usage to soar across the United States. As such, utilities and grid operators are increasing their forecasts for U.S. electricity growth for the next 5 years, well above historical demand trends. This gives us confidence in our ability to continue to contract future domestic business for our products as well. Against this outlook,backdrop, we have spearheaded a public awareness campaign called “Not So Fast” designed to educate the public, elected officials and corporate leaders about the truth involving many of the myths being spoken about coal. We believe the world is too quickly moving away from coal and other proven, fossil-fuel-based sources of energy, in favor of intermittent sources like wind and solar power. The campaign advocates for a more measured, realistic, and moral approach to the energy policies of our goalcountry. More information about this campaign is to leadavailable at www.thecoalhardtruth.com.
Furthermore, we remain focused on leading the industry as a socially and environmentally responsible coal supplier, while continuinghelping to sustainably growensure that global electricity, infrastructure, and diversifybasic human needs are met during these dynamic times. As such, we continue to advance toward our company. To that end, we expect to be releasing our fifth annual Corporate Sustainability Report in May, and we are proud to be among the first pure play coal companies to set greenhouse gas emission reduction targets. These include achieving a 50% reduction involuntary goals of reducing our direct operating greenhouse gas emissions by 50% by 2026 and achieving net zero direct operating greenhouse gas emissions by 2040. Innovation will be paramount for realizingWe also were excited to formally establish CONSOL Innovations, which is dedicated to developing alternative uses of coal and reimagining its application as a building block to meet humanity’s evolving future needs. These efforts are described more fully alongside our financial, strategic,broader sustainability initiatives as part of our 2023 Corporate Sustainability Report, which was released earlier this month. We remain excited about our future and ESG goals,the role we play as a responsible and we continue to invest in a portfolioinnovative supplier of new technologies, such as advanced carbon materials, waste coal utilization,crucial global resources, and greenhouse gas emission reduction technologies, that are aligned with our priorities. Wewe look forward to continuing to achieve Forward Progress in creatingexpand our capability to return value to our shareholders and create sustainable valueopportunities for our stockholders in 2022 and beyond.
Finally, we remain committed to promoting diversity throughout our organization. Our Board believes in the value of diversity, has adopted a diversity policy relating to board membership and emphasizes the importance of diversity within our board when considering succession planning. Our Board likewise continues to promote diversity throughout our workforce by, among other things, ensuring that we have a diverse executive management team.
We are making our proxy materials for the Annual Meeting available to you via the Internet. We hope that this offers you convenience while allowing us to reduce the number of copies that we print.future.
Your vote is important to us. We hope that you will participate in the Annual Meeting, either by attending and voting at the meeting or by voting as promptly as possible through the Internet, by telephone or by completing and mailing a proxy card (following the process as further described in the proxy statement). Detailed instructions on “How to Vote” begin on page 9.11.
William P. Powell will not stand for reelection at our Annual Meeting after six years of service, including as Chairman from November 2017 through April 2024. Mr. Powell was instrumental in the significant amount of progress we have undergone in the last six years since becoming a publicly traded company. In that time, we have implemented a strategy that is transforming the Company and significantly enhanced our governance processes that enables us to support our efforts to drive stockholder value creation and provide the governance needed to deliver on our long-term goals. On behalf of the Board and the Company, we are extremely grateful for and we thank Mr. Powell for his service and contributions.
Effective immediately following the Annual Meeting, I will assume the position of Chairman and John T. Mills will assume the role of Lead Independent Director . Mr. Mills has deep knowledge of the Company and its business and we believe this board structure will provide an effective balance between strong company leadership and oversight by active, independent directors.
Thank you for your investment in CEIX, and we hope you will be able to join us at this year’s Annual Meeting.
Sincerely,
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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Solely via live webcast at www.virtualshareholdermeeting.com/
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AGENDA: | 1. | Elect directors for a one-year term;
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2. | Ratify the appointment of Ernst & Young LLP as CEIX’s independent registered public accounting firm for the fiscal year ending December 31,
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3. | Approve, on an advisory basis, the compensation paid to our named executive officers in
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5. | Consider and act upon a proposal to approve an amendment to our Certificate of Incorporation to provide for exculpation of officers; and | ||||||||||
6. | Transact such other business as may properly come before the meeting and at any adjournments or postponements of the meeting.
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RECORD DATE: |
By resolution of the Board of Directors, we have fixed the close of business on March
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MAILING DATE: | On or about April 1, 2024 | ||||||||||
INFORMATION ABOUT THE MEETING:MEETING:
We are deliveringmailing our proxy materials to stockholders entitled thereto via the Internet. On March 17, 2022,full set delivery option. The approximate date on which the Proxy Statement and proxy card are intended to be first sent or given to the Company’s stockholders entitled thereto is April 1, 2024. This delivery will be by mail or, if a stockholder has previously agreed, by e-mail. In addition to delivering proxy materials to stockholders entitled thereto, we mailed a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) to holders of record as of the record date, and posted ourmust also post all proxy materials on thea publicly accessible website referenced in the Internet Notice. The Internet Notice explainsand provide information to stockholders about how to access that website. These proxy materials include this Notice, the Proxy Statement, the proxy materialscard and our 20212023 Annual Report,Report. These materials are available free of charge throughon our website at www.consolenergy.com by following the website described in the Internet Notice. The Internet Noticelink for “Investors” and website also provide information regarding how you may request to receive proxy materials in printed form, by mail or electronically by e-mail for this meeting and on an ongoing basis.at www.proxyvote.com. You may vote through any of the acceptable means described in the Proxy Statement. Instructions on how to vote begin on page 9.11.
Due to the ongoing public health considerations associated with the coronavirus outbreak (“COVID-19”), ourOur annual meeting of stockholders (the “Annual Meeting”) will be held solely via live webcast on the CEIX Meeting Website and you will not be able to be physically present at the Annual Meeting. You will be able to participate virtually, vote your shares of CEIX Common Stock electronically, view the list of registered holders entitled to vote at the Annual Meeting and submit questions online during the Annual Meeting by logging on to the CEIX Meeting Website using the 16-digit control number included in your proxy card or vote instruction form or notice you previously received and following the directions on the CEIX Meeting Website. If you are not eligible to participate in the Annual Meeting, you may listen to a webcast of the Annual Meeting by logging on to the CEIX Meeting Website as a guest. GuestsIf you are not a stockholder, you will not be able to ask questions or vote at the Annual Meeting. We encourage you to log on 15 minutes prior to the start time of the Annual Meeting. If you have difficulty accessing the Annual Meeting through the CEIX Meeting Website, please call the technical support number provided.
Martha A. Wiegand General Counsel and Secretary
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Important Notice RegardingIMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON APRIL 30, 2024:
We have elected to utilize the Availabilityfull set delivery option and are delivering paper copies to all stockholders entitled thereto of Proxy Materials for the Annual Meeting
of Stockholdersall proxy materials, as well as providing access to be Heldthose proxy materials on April 26, 2022:
a publicly accessible website. The Proxy Statement, 2021the proxy card, and our 2023 Annual Report Notice of Annual Meeting of Stockholders and related materials are available free of charge at www.proxyvote.com or may be obtainedwww.consolenergy.com by contactingfollowing the Investor Relations departmentlink for “Investors” and also at the address and phone number on page 9 of the Proxy Statement.www.proxyvote.com.
TABLE OF CONTENTS
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This Proxy Summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting. On March 17, 2022,or about April 1, 2024, we mailedcommenced mailing the Internet NoticeProxy Statement, the proxy card, and our 2023 Annual Report to holders of record of our common stock as of the record date, and posted our proxy materials on the websitewebsites referenced in the Internet Notice.
20222024 ANNUAL MEETING OF STOCKHOLDERS
PROPOSALS REQUIRING YOUR VOTE Stockholders are being asked to vote on the following proposals at the Annual Meeting. Your vote is very important to us. Please cast your vote immediately on all of the proposals to ensure that your shares are represented.
CURRENT BOARD OF DIRECTORS The following table provides summary information about our current Board of Directors as of March
PROXY SUMMARY
COMPENSATION HIGHLIGHTS
PROXY SUMMARY
PROXY SUMMARY CORPORATE GOVERNANCE HIGHLIGHTS Our Board and management are committed to strong corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability and helps build public trust in our company. This Proxy Statement describes our governance framework, which includes the following highlights:
PROXY SUMMARY
At CEIX, we strive to be
You can learn more about our company by visiting our website, www.consolenergy.com.
CONSOL Energy Inc.
Canonsburg, Pennsylvania 15317 Telephone (724) 416-8300 GENERAL: Proxies are being solicited by the Board to be voted at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on April PROPOSALS, BOARD RECOMMENDATION AND VOTE REQUIRED: Stockholders are being asked to vote on the proposals discussed on the following page at the Annual Meeting. The table on the following page also outlines the Board’s recommendation on how to vote for each proposal and the vote required with respect to each proposal. VOTE TABULATION: In accordance with our governing documents and applicable state law, in tabulating the voting result for any particular proposal, votes that are withheld or shares that constitute broker non-votes (described below) are not considered entitled to vote on that proposal and have no effect on the outcome. Abstentions have the same effect as votes against the matter, except in the case of Proposal RECORD DATE AND QUORUM: The record date with respect to this solicitation is March
INFORMATION ABOUT THE ANNUAL MEETING
INFORMATION ABOUT THE ANNUAL MEETING
INFORMATION ABOUT THE ANNUAL MEETING
PROXY MATERIALS AND INFORMATION ABOUT THE MEETING:We mailed to all stockholders of record entitled to vote at the Annual Meeting this Proxy Statement, the We are utilizing a
Copies of our PROXIES AND VOTING: A proxy is your legal designation of another person to vote the CEIX common shares that you owned as of the record date. The person that you designate to vote your shares is called a “proxy” and when you designate someone to vote your shares in a written document, that document is also called a “proxy” or “proxy card”. The Board has appointed several officers of the company to serve as proxies on the proxy card. If a proxy is properly executed and is not revoked by the stockholder, the shares it represents will be voted at the Annual Meeting in accordance with the instructions provided by the stockholder. If a proxy card is signed and returned without specifying choices, the shares will be voted in accordance with the recommendations of the Board. Accordingly, if no contrary instructions are given, the proxies named by the Board intend to vote the shares represented by such proxies as follows:
The Board does not know of any other business to be brought before the Annual Meeting other than as indicated in the Notice of Annual Meeting of Stockholders.
INFORMATION ABOUT THE ANNUAL MEETING HOW TO VOTE: There are four ways for stockholders of record to vote:
BENEFICIAL OWNERSHIP AND BROKER NON-VOTES: If you hold shares beneficially in street name, then you must provide your voting instructions to your bank, broker or other nominee. If you do not provide your bank, broker or other nominee with voting instructions, your shares may be treated as “broker non-votes.” Generally, broker non-votes occur on a matter when a bank, broker or other nominee is not permitted to vote on that matter without instructions from the beneficial owner and such instructions are not given. Banks, brokers or other nominees that have not received voting instructions from their clients cannot vote on their clients’ behalf on “non-routine” proposals, such as Proposal Nos. 1, 3, 4 and REVOCATION OF PROXY: If you are the stockholder of record of shares of our common stock as of the close of business on the record date, you can revoke your proxy at any time before its exercise by:
If you hold your shares through a bank, broker or other nominee, you must follow the instructions found on your voting instruction form, or contact your bank, broker or other nominee in order to revoke your previously delivered proxy. Attendance at the Annual Meeting without a request to revoke a proxy will not by itself revoke a previously executed and delivered proxy.
INFORMATION ABOUT THE ANNUAL MEETING
ATTENDING THE MEETING: To participate in the virtual Annual Meeting, you will need the 16-digit control number included on your proxy card, vote instruction form or notice you previously received. The Annual Meeting webcast will begin promptly at ASKING QUESTIONS DURING THE MEETING: During the live question and answer portion of the Annual Meeting, CEIX stockholders may submit questions, which will be answered as they come in as time permits. If you wish to submit a question, you may do so by logging in to the CEIX Meeting Website, and under the “Ask a Question” heading, selecting a question topic in the question topic dropdown menu, typing your question in the field titled “Enter Question” and then clicking “Submit”. Only questions pertinent to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints. TECHNICAL SUPPORT FOR ACCESSING THE MEETING: We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting via the CEIX Meeting Website. If you encounter any difficulties accessing the CEIX Meeting Website during the check-in or meeting time, please call the technical support number that will be posted on the CEIX Meeting Website log in page. PROXY SOLICITATION: All costs relating to the solicitation of proxies will be borne by CEIX. CONFIDENTIALITY IN VOTING: As a matter of policy, proxies, ballots and voting tabulations that identify individual stockholders are held confidentially by CEIX. Such documents are available for examination only by the inspectors of election and certain employees who assist in the tabulation of votes. The vote of any individual stockholder will not be disclosed except as may be necessary to meet applicable legal requirements.
The Nominating and Corporate Governance Committee has recommended, and the Board has nominated, To be elected, each nominee must receive a plurality of the votes cast (i.e., the director nominees who receive the highest number of “for” votes cast, up to the maximum number of directors to be elected, are elected as directors). If any nominee should for any reason become unable to serve, all shares represented by valid proxies will be voted for the election of such other person as the Board may designate, as recommended by the Nominating and Corporate Governance Committee. Alternatively, the Board may reduce the number of directors to eliminate the vacancy. Our bylaws provide that if an incumbent director receives a greater number of votes “withheld” from his or her election than votes “for” such director nominee’s election, the director must tender his or her resignation promptly to the Board. The Nominating and Corporate Governance Committee will make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board will act on the tendered resignation, taking into account the Nominating and Corporate Governance Committee’s recommendation, and publicly disclose its decision and the underlying rationale in a press release, a filing with the SEC or other broadly disseminated means of communication within 90 days from the date of the certification of the election results. The biographies included in this Proxy Statement below include information concerning the nominees for director,
PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees
Biographies of Director Nominees
B James A. Brock has served as our Chief Executive Officer since June 2017,
PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees
B John T. Mills joined the Board on November 14, 2017. He currently serves as a member of our Board’s Audit Committee, which he chairs, Compensation Committee and Health, Safety and Environmental Committee. Mr. Mills previously served as a member of the board of directors of CNX from March 2006 until November 28, 2017, when CEIX separated from CNX. From December 2007 until August 2015, he served on the board of directors of Cal Dive International Inc., a marine contractor providing manned diving, derrick, pipelay and pipe burial services to the offshore oil and natural gas industry, where he served as lead independent director, and as a member of the audit, compensation, and corporate governance and nominating committees. From January 2008 through June 2010, Mr. Mills was a member of the board of directors and audit, conflicts and risk management committees of Regency GP, LLC, the general partner of Regency GP, LP, the general partner of Regency Energy Partners LP, a natural gas gathering, processing and transportation master limited partnership. Mr. Mills joined the board of directors of Horizon Offshore, Inc., a marine construction company, in June 2002 and served as the chairman of the board of directors from September 2004 until December 2007, when Horizon Offshore, Inc. was acquired by Cal Dive International, Inc. Mr. Mills was the Chief Financial Officer of Marathon Oil Corporation, an integrated energy company, from January 2002 until his retirement in December 2003. In 2011, Mr. Mills attended the Harvard Business School program “Making Corporate Boards More Effective.”
B Joseph P. Platt joined the Board on November 28, 2017. He currently serves as a member of our Board’s Compensation Committee, which he chairs, Nominating and Corporate Governance Committee and Health, Safety and Environmental Committee. Mr. Platt previously served as a member of the board of directors of CNX from May 2016 until November 28, 2017, when CEIX separated from CNX. He is the general partner at Thorn Partners LP, a family limited partnership, a position he has held since 1998. Mr. Platt’s career at Johnson and Higgins, a global insurance broker and employee benefits consultant (J&H), spanned 27 years until 1997, when J&H was sold to Marsh & McLennan Companies. At the time of the sale, Mr. Platt was an owner, director and executive vice president of J&H. Mr. Platt has served on the board of directors of Greenlight Capital Re, Ltd., a property and casualty reinsurer, since 2004 and has been its lead independent director since 2007. He
PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees
BACKGROUND: Valli Perera joined the Board on Since 2020, Ms. Perera has served on the board of directors for Midmark Corporation, a clinical environmental design private company, and is a member of its audit and compensation committees. Moreover, since 2012, Ms. Perera has served on the board of directors for Communities in Schools of Chicago, a non-profit organization and is the Chair of its governance committee. She received a Master of Science degree in Taxation from Drexel University and a graduate degree in journalism from Northwestern University. Ms. Perera is credentialed by the Chartered Institute of Management Consultants, United Kingdom. Further, she is a retired Certified Public Accountant.
PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees
BACKGROUND: Cassandra Pan joined the Board on March 22, 2023. She currently serves as chair of our Board’s Health, Safety and Environmental Committee and on the Nominating and Corporate Governance Committee. Ms. Pan has extensive entrepreneurial and executive experience in North America, China and internationally. She is currently self-employed as a business consultant and strategic advisor. From 2009 to 2015 based in Pittsburgh, Pennsylvania, she was
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE ABOVE-NAMED DIRECTOR NOMINEES FOR RE-ELECTION TO THE BOARD OF DIRECTORS.
Board of Directors and Its Committees Board of Directors The business and affairs of CEIX are managed under the direction of our Board. Under our Certificate of Incorporation all directors are subject to election annually. We do not have a formal policy regarding directors’ attendance at our annual meetings of stockholders; however, all directors are encouraged to attend. All of CEIX’s directors attended the 2023 Annual Meeting of Stockholders, and all of the directors are expected to attend this year’s Annual Meeting. Board Leadership Structure Our Corporate Governance Guidelines provide that the Board will determine and annually review whether to have a joint Chairman and Chief Executive Officer or whether to separate these offices as part of the succession planning process when it elects a Chief Executive Officer or at other appropriate times. In addition, in the event that our Chief Executive Officer would also serve as the Chairman, our Corporate Governance Guidelines require a Lead Independent Director position with specific responsibilities to ensure independent oversight of management. In connection with Mr. Powell not standing for reelection at our Annual Meeting, the Board has decided to combine the roles of Chairman and Chief Executive Officer. More specifically, the Board has appointed Mr. Brock as Chairman and Mr. Mills to the role of Lead Independent Director, effective immediately following the Annual Meeting and contingent upon their re-election. At this time, the Board believes that the most effective leadership structure for our Company is to have Mr. Brock serve as both Chairman and Chief Executive Officer. Furthermore, the Board believes that this leadership structure helps provide a well-functioning and effective balance between strong company leadership, an independent Lead Director and oversight by active, independent directors. Combining these roles will enable Mr. Brock to leverage his strong leadership and deep understanding of the Company and its operations to effectively execute our strategic initiatives and serve as a bridge between the Board and management. Moreover, Mr. Mills has deep knowledge of the Company and its business due to his combined 16 years of service with CEIX and our former parent company, as well as his meaningful prior experience as a lead independent director. As noted in our Corporate Governance Guidelines, the Lead Independent Director’s duties and responsibilities include, among other things:
Determination of Director Independence The New York Stock Exchange (NYSE) listing standards require a majority of our directors and each member of our Audit, Compensation and Nominating and Corporate Governance Committees to be independent. In February 2024, our Board evaluated the relevant relationships between each director or director nominee (and his or her immediate family members and affiliates) and CEIX, and affirmatively determined that each of our directors, other than Mr. Brock (who is the Chief Executive Officer of CEIX), had no material relationship with CEIX and is “independent” under the corporate governance rules of the NYSE codified in Section 303A of the NYSE Listed Company Manual. In February 2024, the Board also determined that each member of the Audit Committee meets the independence standards required for audit committee members under the NYSE listing standards and the SEC rules, and considered the additional factors under the NYSE rules relating to members of the Compensation Committee before determining that each of them is independent.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees Our independent directors regularly meet in executive sessions with no members of management present. Such executive sessions are presided over by our Chairman, if independent, or Lead Independent Director of the Board. Term Limits 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. Robust Strategy, Risk and Safety Oversight by the Board and Committees Our Board and committees have implemented a robust framework to actively oversee the strategy and risks relating to the operation and management of a publicly-traded coal company. In addition, our Board has a strong commitment to the safety of our workers and the environments in which we operate and has formed a separate Board level committee to oversee these core company values. See “Board’s Role in Risk Management” on page 21 for further information of the Board’s role in risk management.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees Board Skills and Experience The Nominating and Corporate Governance Committee seeks to cultivate a Board with the appropriate skill sets and diversity of experiences to discharge its responsibilities effectively. We believe that our Board should be conversant and equipped to tackle matters facing public company boards and to effectively oversee our business. As such, our slate of nominees possesses a unique background and, in the aggregate, provides a well-balanced array of experience, skills, and knowledge in our industry, leadership, public company experience, management, service, and public relations, making them well seasoned members for our Board. The table below summarizes some of the key skills and experiences that the Nominating and Corporate Governance Committee currently believes should be represented on the Board, as well as the number of director nominees who possess each skill. The demographic information presented below is based on voluntary self-identification by each nominee.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
Among the Board’s most important functions is overseeing risk management. Our risk management framework fosters close interaction among the Board, its committees and our management. The Company faces a variety of risks, including operational, financial, strategic, and reputational risks. The Board oversees the Company’s processes for assessing and managing these risks, through both the whole Board and its committees, while management is responsible for the day-to-day management of these risks. In furtherance of the Board’s oversight responsibilities and the Company’s day-to-day management of risk, CEIX representatives meet periodically with external advisors with respect to our risk management processes, as well as identified and emerging risks.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees Membership and Meetings of the Board of Directors and its Committees In 2023, three of the six incumbent directors attended 100% of the meetings held by our Board and by all Board committees on which he or she served, and in each case, during the periods that he or she served. The remaining three of the six incumbent directors attended at least 80% of the meetings held by our Board and by all Board committees on which he or she served, and in each case, during the periods that he or she served. Committee membership and the number of meetings held during 2023 by each committee are shown in the following table:
Committees of the Board of Directors Our Board has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Health, Safety and Environmental. Currently, all of our directors other than James A. Brock are independent, and our Audit, Nominating and Corporate Governance, and Compensation Committees consist exclusively of independent directors. Our committees regularly make recommendations and report on their activities to the entire Board. All members of each of the Audit, Compensation and Nominating and Corporate Governance Committees are independent under the current listing standards of the NYSE and other applicable regulatory requirements, as described above under “Determination of Director Independence”. Our Board, considering the recommendations of our Nominating and Corporate Governance Committee, reviews committee membership at least annually. The responsibilities of each of the four committees are summarized below.
Our Audit Committee was established pursuant to Section 3(a)(58)(A) of the Exchange Act. Our Board has determined that all members of the Audit Committee are financially literate within the meaning of SEC rules and under the current listing standards of the NYSE. Our Board has also determined that each of the members of the
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees Audit Committee qualify as an “audit committee financial expert.” A copy of the Audit Committee’s report for the 2023 fiscal year is included in this Proxy Statement.
Our Compensation Committee’s charter generally permits it to delegate its authority, duties and responsibilities or functions to one or more members of the Compensation Committee or to CEIX’s officers, except where otherwise prohibited by law or applicable listing standards. The terms of our Omnibus Performance Incentive Plan (the “Omnibus Plan”) also permit our Compensation Committee to delegate any power and authority granted to it by the Board under the Omnibus Plan to our officers. Our Compensation Committee periodically reviews the compensation paid to our non-employee directors and the principles upon which their compensation is determined. The Compensation Committee also periodically reports to the Board on how our non-employee director compensation practices compare with those of other similarly situated public corporations and, if the Compensation Committee deems it appropriate, recommends changes to our director compensation practices to our Board for approval. For additional information regarding the Compensation Committee’s processes and procedures for reviewing and determining executive officer compensation, see the “Compensation Discussion and Analysis” section beginning on page 37.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees Director Nomination Process. The Nominating and Corporate Governance Committee annually reviews and assesses the Board’s membership needs, with the assistance of a consultant when appropriate. When assessing Board composition or identifying suitable candidates for appointment or re-election to the Board, the Nominating and Corporate Governance Committee will consider candidates based on the needs of the Board at the time, having due regard to the benefits of diversity. The Nominating and Corporate Governance Committee seeks to maintain a Board that is comprised of individuals who possess the following skills, experience and/or attributes:
The Nominating and Corporate Governance Committee seeks to identify director candidates with leadership experience in positions with a high degree of responsibility. Director nominees are expected to be selected based upon contributions that they can make to CEIX. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, although a formal policy has not been adopted with respect to consideration of such candidates because stockholder recommendations may be submitted and considered by the Nominating and Corporate Governance Committee under its charter. Director candidates recommended by stockholders will be evaluated by the Nominating and Corporate Governance Committee using the same criteria as candidates identified by the Board or the Nominating and Corporate Governance Committee for consideration. Stockholders may submit names of director candidates to Secretary, CONSOL Energy Inc., 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317. See “Additional Matters” on page 80 for more information on making director nominations. Board Diversity and Inclusion. We believe in diversity and value the benefits diversity can bring to our Board and to the Company. The Board has adopted a policy regarding the diversity of its members, which is included in our Corporate Governance Guidelines. For the purposes of Board composition, diversity includes, but is not limited to, business expertise, experience, skills, geographic location, age, gender, ethnicity and tenure with the Company. Board diversity promotes the inclusion of different perspectives and ideas, and ensures that the Company has the opportunity to benefit from all available talent. The promotion of a diverse Board makes prudent business sense and makes for better corporate governance. CEIX seeks to maintain a Board comprised of talented and dedicated directors with a diverse mix of expertise, experience, skills and background. The skills and backgrounds collectively represented on the Board should reflect the diverse nature of the business environment in which CEIX operates. CEIX will periodically assess the composition of the Board in light of the needs of the Board at the time, including the extent to which the current composition of the Board reflects a diverse mix of expertise, experience, skills and backgrounds.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees CEIX is committed to a Board composition that promotes a diverse and inclusive culture, that solicits multiple perspectives and views, and which is free of conscious or unconscious bias and discrimination. Additionally, we seek to promote diversity throughout our workforce by, among other things, emphasizing diversity among our executive management team. Process for Board Assessment and Future Candidates. Set forth below is a summary of the process the Nominating and Corporate Governance Committee and Board intend to use in reviewing Board needs and future candidates.
We provide transparency into our operations through the regular publishing of corporate sustainability reports. Our Corporate Sustainability Report for 2023 has been posted to our company website. In February 2019, we adopted a human rights policy. This policy reinforces our commitment and responsibility to respect all human rights, including those of our employees, suppliers, vendors, subcontractors and other partners, and individuals in communities in which we operate. Our policy addresses promoting health and safety, eliminating compulsory labor and human trafficking, abolishing child labor, eliminating harassment and unlawful discrimination in the workplace, and providing competitive compensation. Additionally, in 2023, we adopted a new Clawback Policy that complies with SEC and NYSE requirements and we revised our Insider Trading Policy to align with recent amendments to SEC rules on insider trading.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees Corporate Governance Web Page and Available Documents We maintain a corporate governance page on our website at www.consolenergy.com. The following documents are currently included on the corporate governance page of our website:
These documents address important principles and corporate governance processes. We will provide a printed copy of any of these documents free of charge upon request to stockholders who contact our Investor Relations department in writing at CONSOL Energy Inc., 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317. Ethics and Compliance Program We believe strongly in, and provide training and awareness surrounding, our Code of Business Conduct and Ethics and the CONSOL Ethics Compliance Hotline. We provide annual training on our Code of Business Conduct and Ethics. It is our policy to comply with all applicable laws and adhere to the highest level of ethical conduct, including anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar laws in other jurisdictions. In that regard, in 2018 we adopted a Foreign Corrupt Practices Act Policy that has been distributed to all of our employees, directors and officers. In addition to these persons certifying compliance with the policy, we provide training on compliance with the FCPA and our policy. It is important that all of our business activities reflect our commitment to the highest standards of integrity and accountability. Communication with the Board of Directors Stockholders and other interested persons who wish to communicate with the Board may do so by writing to the Board, to the attention of Secretary, CONSOL Energy Inc., 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317, or by sending an e-mail to directors@consolenergy.com. The Secretary will relay all such communications to the Board in its entirety or to individual directors (as appropriate) at the next regularly scheduled Board meeting (or earlier as necessary) except for spam, junk mail, mass mailings, solicitations, résumés, job inquiries or other matters unrelated to CEIX. Communications that are intended specifically for the independent directors should be marked “Confidential” and sent to the street address noted above, to the attention of the Independent Directors in care of the Lead Independent Director of the Board. Information concerning how to communicate with the Board is also included on CEIX’s website at www.consolenergy.com.
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Director Compensation Table—2023 Director Compensation Table—2023 The following table sets forth the compensation elements of our non-employee directors for the 2023 fiscal year:
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Understanding Our Director Compensation Table Understanding Our Director Compensation Table Each non-employee director is entitled to receive an annual equity award in the form of RSUs valued at $150,000 (other than the Board Chairman whose RSUs are valued at $300,000) as of the close of business on the date of the grant, which in 2023 was May 2, 2023. The RSU awards vest on the first anniversary of the grant date. Each non-employee director is also entitled to receive a cash Board Retainer, and if he or she serves as a Committee Chair, an Audit Committee member or the Board Chair, an additional cash retainer for his or her services as follows:
During 2023, the Compensation Committee of the Board reviewed with its independent compensation consultant the current director compensation program and concluded that (1) the mix of cash and equity compensation continues to be appropriate and consistent with broadly observed market practices, (2) the compensation levels are reasonable and in line with peer practices given the small size of the Board, and (3) the aggregate board compensation (reflecting the “total cost of governance”) is reasonably positioned as compared to the Company’s peer group members. The basic non-employee director compensation elements remain unchanged from 2017. Deferred Compensation Plan for Non-Employee Directors Our Non-Employee Director Deferred Compensation Plan authorizes our non-employee directors to defer all or a portion of their annual cash and/or stock compensation, effective with respect to deferrals of compensation during the calendar year. Participation in the plan is voluntary and at the election of each individual director. Amounts deferred under the plan (whether cash or equity–based) are payable in the form of deferred stock units and are generally settled within thirty days of the director’s termination of service, but in no event later than the fifth anniversary of such termination date. The plan is an unfunded and unsecured liability of CEIX and any benefits paid to our non-employee directors will be paid from CEIX’s general assets. Stock Ownership Guidelines Our Board has adopted stock ownership guidelines to align the interest of our non-employee directors with those of our stockholders. The guidelines require each of our non-employee directors to hold CEIX common stock with a value equal to five times their annual cash retainer based on the closing price of our common stock on a particular date, or five times the director’s annual cash retainer divided by $20.00. Each director is required to meet the guidelines on or before the fifth anniversary of becoming a Board member. Shares counted toward the guidelines include: shares owned outright by the director or his or her immediate family members residing in the same household; shares held in trust for the benefit of the director or his or her immediate family members residing in the same household; vested shares of restricted stock; vested deferred stock units, restricted stock units or performance share units that may only be settled in shares; and unvested shares of restricted stock, deferred stock units, restricted stock units or performance share units, in each case whose vesting is time-based rather than performance-based. As of the date of this Proxy Statement, each of Mr. Powell, Mr. Mills and Mr. Platt are in compliance with our stock ownership guidelines and Ms. Pan and Ms. Perera are within the five-year transition period.
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of CEIX’s independent registered public accounting firm. The Audit Committee has appointed Ernst & Young LLP as the independent registered public accounting firm for CEIX for the fiscal year ended December 31, Neither CEIX’s governing documents nor the law require stockholder ratification of the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm. However, the Board is submitting the appointment of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain that firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of CEIX and its stockholders. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to address the meeting and respond to appropriate questions. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31,
The Audit Committee has reviewed and discussed with management and Ernst & Young LLP (“E&Y”), CEIX’s independent registered public accounting firm, the audited financial statements of CEIX for the fiscal year ended December 31, The Audit Committee also has received the written disclosures and letter from E&Y regarding E&Y’s independence required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent registered public accounting firm that firm’s independence from CEIX and its subsidiaries. Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the Audited Financial Statements be included in CEIX’s Annual Report on Form 10-K for the year ended December 31,
The foregoing Audit Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of CEIX under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that CEIX specifically incorporates the Audit Committee Report by reference therein.
AUDIT COMMITTEE AND AUDIT FEES | Independent Registered Public Accounting Firm
Independent Registered Public Accounting Firm The following table presents fees billed for professional audit services rendered by E&Y in connection with its audits of CEIX’s annual financial statements for the years ended December 31,
As used in the table above, the following terms have the meanings set forth below. Audit Fees The fees for professional services rendered in connection with the audit of CEIX’s annual financial statements, for the review of the financial statements included in CEIX’s Quarterly Reports on Form 10-Q, and for services that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements. Audit-Related Fees There were no professional services provided for audit-related work in 2023. The fees for professional services rendered in Tax Fees The fees for professional services rendered in 2023 were in connection with certain tax planning services. There were no professional services for tax-related work in All Other Fees There were no fees incurred for other professional services in 2023. The fees for products and services provided in 2022, other than for the services reported under the headings Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services The Audit Committee, or the Chair of the Audit Committee, must preapprove all audit and non-audit services provided to CEIX by its independent registered public accounting firm. The Audit Committee must consider whether such services are consistent with SEC rules on auditor independence. All of the services performed by E&Y in
Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), CEIX is required to provide its stockholders with the opportunity to cast a non-binding advisory vote on compensation paid to our named executive officers. Accordingly, we ask our stockholders to vote, on an advisory basis, “FOR” the compensation paid to our named executive officers in “RESOLVED, that the compensation paid to CEIX’s named executive officers, as disclosed in this Proxy Statement, including the “Compensation Discussion and Analysis” compensation tables and narrative discussion, is hereby APPROVED on an advisory basis.” As described in detail in the “Compensation Discussion and Analysis,” our executive compensation program is designed to attract, motivate and retain key executives who drive our success and industry leadership. We achieve these objectives through compensation that:
The Compensation Committee reviews the compensation programs for our executive officers to ensure they achieve the desired goal of aligning our executive compensation structure with our stockholders’ interests and current market practices. Please read the “Compensation Discussion and Analysis” beginning on page We are asking our stockholders to indicate their support for the compensation paid to our named executive officers in As an advisory vote, your vote will not be binding on CEIX, the Board or the Compensation Committee. However, our Board and our Compensation Committee, which are responsible for designing and administering CEIX’s executive compensation program, value the opinions of our stockholders and to the extent there is any significant vote against the compensation paid to our named executive officers in After our stockholders voted in 2018, on an advisory basis, on the frequency of this advisory vote on compensation, the Company elected to hold future advisory votes on compensation on an annual basis until the next stockholder advisory vote on frequency, which THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE, ON AN ADVISORY BASIS, “FOR” THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS IN
CEIX’s executive officers are listed below. Each officer is appointed by the Board and holds office for the term set forth in the officer’s written employment agreement or until the officer’s successor has been elected and qualified, or until such officer’s earlier death, resignation or removal.
EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
Compensation Discussion and Analysis – Table of Contents
Named Executive Officers
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Compensation Discussion and Analysis As one of the major producers of high-Btu bituminous thermal and crossover metallurgical coal in the United States and a producer of low-vol metallurgical coal at the Itmann mine and preparation plant, we operate with a pay-for-performance philosophy in a challenging, highly competitive and rapidly evolving environment. This Compensation Discussion and Analysis (“CD&A”) discusses the compensation decisions made for the fiscal year Our Named Executive Officers (NEOs)
Compensation Philosophy and Overview
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Select 2023 Financial and Business Highlights
| • | Strong 2023 financial and operating results: GAAP net income of $656 million; adjusted EBITDA* of $1,048 million; net cash provided by operating activities of $858 million; and free cash flow* of $687 million; |
 – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
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| • | 73% of 2023 free cash flow* returned to shareholders via 5.5 million shares repurchased at a weighted average price of $76.91 per share and dividends for an aggregate $501 million from January 1, 2023 through January 31, 2024. |
Summary of Key Compensation Considerations and Decisions in 2023
During 2023, the Compensation Committee engaged in important decisions and considerations with respect to executive compensation. When making its compensation decisions, the Compensation Committee considered that CEIX is in a unique industry where stock price and financial results are sometimes disconnected. For example, although the CEIX stock price declined steeply in 2020 and into 2021, CEIX (led by its management team) generated strong operational and financial performance, including through extreme economic conditions in 2020 caused by the COVID-19 pandemic, continued to generate significant free cash flow*, and significantly reduced its indebtedness in each year since 2020. The Compensation Committee also reviewed the approximately 94.1% approval with respect to our 2023 say-on-pay vote, which followed our shareholder engagement and responses after our unfavorable 2022 say-on-pay results.
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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Say-on-Pay VoteThis section highlights key aspects of our 2023 compensation considerations and decisions made by the Compensation Committee based on these factors and after consultation with its independent compensation consultant:
We took into consideration
| • | The Compensation Committee continued using a mix of performance-based and time-based restricted stock units in the long-term incentive compensation program. |
| • | The Compensation Committee changed the weighting of the long-term incentive program to provide for 75% of each NEO’s award to be stock-settled (up from 50% in 2022). |
| • | The Compensation Committee incorporated EBITDA targets into certain location-based performance goals for the short-term incentive program and added non-power generation revenue as a performance goal in the long-term incentive program. |
| • | The Compensation Committee increased base salaries for certain of our NEOs with a view toward internal pay equity and NEO retention. |
Pay-for-Performance Emphasis
Our executive compensation program is focused on pay-for-performance. As a result, we link a significant portion of each NEO’s total compensation to the resultsachievement of specified performance goals that we believe indicate both short- and long-term financial performance. The charts below illustrate how the say-on-pay votingmajority of compensation that may be earned by our stockholders last year when reviewing our current policies and practices relatedNEOs is tied to compensation of our NEOs. Of the 24,026,826 votes cast by our stockholders, 97% were in favor of our 2020 executive compensation program. While we believe we have a fair and effective compensation program, we are gratified to receive the vote of confidence from our stockholders. However, in 2021, we continued to receive investor feedback that we should address dilution of our stock through the use of cash-based awards. Accordingly, we modified our compensation program to award performance-based cash in the form of cash-based performance units, the payment of which is dependent on the satisfactory achievement of performance metrics related to ICP Free Cash Flow* and Net Debt Level*, each as defined below, and cash-based market share units,goals and/or fluctuates with the payment of which is dependent on the achievement of stock price targets. We commit to staying up-to-date on recommended best practices where appropriate. Our Compensation Committee and senior management will continue to consider stockholder input, including the advisory say-on-pay vote, as we evaluate the future designunderlying value of our executive compensation programs and the specific compensation decisions for each of our NEOs.common stock (restricted stock units).
CEO 15.4% Base; 23.0% STIC; 61.6% LTIC | Other NEOs (in the aggregate) 29.8% Base; 22.9% STIC; 47.3% LTIC | |
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CEIX Executive Compensation Policies and PracticesPhilosophy
Our commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by our Compensation Committee and our Board, which include the following governance practices and policies:
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CEIX Executive Compensation Philosophy
Board. Our compensation philosophy is designed to attract and retain key talent necessary for us to compete, promote a pay-for-performance culture, incentivize our NEOs to achieve desired financial and operating results, and create a balanced compensation program that aligns risk-taking with the sustainability and both short-term and long-term financial health of our Company.
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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Our philosophy is founded on the following six guiding principles:
Compensation targets and the mix of pay based on market practices.
Actual compensation should align with results against performance objectives.
Incentives should promote above-median pay when performance exceeds Company and peer expectations and below-median pay when performance lags behind these indicators.
Compensation should be aligned with the long-term interests of our stockholders.
Compensation practices and policies should not encourage unreasonable risk-taking.
Compensation programs should align with our corporate values.
| • | Compensation targets and the mix of pay based on market practices |
| • | – 2022 Proxy Statement Actual compensation should align with results against performance objectives |
| • | Compensation should enable us to attract and retain top talent and reflect the value of the job in the marketplace |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
| • | Incentives should promote pay-for-performance by resulting in above-median pay when performance exceeds Company and peer expectations and below-median pay when performance lags behind these indicators |
| • | Compensation should be aligned with the long-term interests of our stockholders |
| • | Compensation practices and policies should not encourage unreasonable risk-taking |
| • | Compensation programs should align with our corporate values |
Our compensation philosophy also reflects our commitment to enhancing management retention and leadership stability in a highly competitive market by subjecting a significant portion of total compensation to multi-year vesting or performance conditions, described on pages 31-33,48-53, relating to our long-term compensation programs, and designing a specific retention structure for our CEO through amendments to his employment agreement.
2021CEIX Executive Compensation OverviewPractices
Significant ChangesOur compensation programs, practices, and policies are reviewed and re-evaluated regularly and are subject to change from time to time in 2021line with market best practices. Listed below are some of our more significant practices and policies that were in effect during fiscal year 2023, which are designed to Retain Top Talent and Shift Most Payments from Equity to Cash
The Compensation Committee adopted several significant changes to the CEIX compensation program for 2021 to address CEIX’s significant decrease in stock price since mid-2018, take into account investor concerns about dilution from ongoing equity-settled awards and most importantly, retain critical key talent given the unintended impact on NEO compensation resulting from the steep decline in CEIX shares. The decrease in stock value from mid-2018 through mid-2021 was driven primarily, if not exclusively, by external events outside management’s control, including visible and intentional movement out of coal stocks by institutional investors. Importantly, CEIX is in a unique industry where stock price and financial results are sometimes disconnected. Although the CEIX stock price declined steeply in 2020 and into 2021, CEIX (led by its management team) generated strong operational and financialdrive performance including through extreme economic conditions in 2020 caused by the COVID-19 pandemic, continued to generate significant free cash flow* and significantly reduced its indebtedness in 2020 and 2021. The Compensation Committee also evaluated and addressed feedback from investors concerned with stock dilution.
Based on these factors and after consultation with its independent compensation consultant, the Compensation Committee acted to make the following significant modifications to the CEIX compensation program for our executives:
Amended our CEO’s employment agreement to increase his base compensation to $1,000,000 per year and to pay cash retention bonuses of $1,000,000 in 2021 and each of the following fiscal years so long as he continues to serve as CEO on each of December 31, 2021, December 31, 2022 and December 31, 2023, respectively.
Changedalign our STIC plan to provide for quarterly payments (instead of annual payments), based on pre-established quantitative measures, to reward employee loyalty and results.
Redesigned 2021 grants to minimize the use of equity and promote executive retention through a combination of cash-settled MSUs based on stock performance and our traditional Performance-Based Cash Units (PBCs) based on internal financial metrics (Net Debt Level* and ICP Free Cash Flow*, each as defined below) to promote current strategic direction and financial objectives.
Increased base salaries for certainexecutives’ interests with those of our NEOs with a view to internal pay equity with new NEOs.stockholders.
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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
2023 Compensation Policies.
As noted above, we maintain the following compensation policies to provide accountability to our Company and our stockholders.
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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Compensation Process: Roles and Responsibilities
Our Compensation Committee has a number of processes and collects information from a variety of sources to assist it in ensuring our executive compensation programs are in line with our compensation philosophy and achieve our objectives. As described in greater detail below, the Compensation Committee, our management team, and an independent compensation consultant are all engaged in these processes.
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Pay Mix.The charts below illustrate the target total direct compensation opportunity for 2021 for Mr. Brock (excluding any retention bonuses) and the average of our other NEOs; 83.4% of our CEO’s total direct compensation is performance-based.
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| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Our Compensation Committee and Management Roles. Our Compensation Committee requests that the CEO be present at committee meetings where compensation and corporate performance are discussed and evaluated. The CEO is encouraged to provide insight, suggestions or recommendations regarding executive compensation if present during these meetings or at other times. However, only independent committee members are allowed to vote on decisions made regarding executive compensation. In making its determinations with respect to executive compensation, the committee is supported by CEIX’s Chief Administrative Officer, its General Counsel and Mercer, the committee’s independent compensation consultant. While the committee meets with the CEO to discuss his own compensation package, ultimately, decisions regarding the CEO’s compensation are made by the committee in executive session without the CEO or any other executive officer present, solely based upon the committee’s deliberations. Decisions regarding other NEOs who report directly to the CEO are also made by the committee (or Board, in the case of equity grants, absent a delegation to the committee or CEO) after considering recommendations from the CEO, Mercer and the Chief Administrative Officer.
CEIX Compensation Consultant. Our Compensation Committee retained Mercer as an independent compensation consultant directly, although in carrying out its assignments, Mercer also interacts with CEIX management when necessary and appropriate. Specifically, the Chief Administrative Officer, responsible for Human Resources matters, including executive compensation, interacts with the consultant to provide compensation data, best practices data, and executive compensation trends. In addition, Mercer may, in its discretion, seek input and feedback from executives regarding its consulting work product prior to the presentation to the Compensation Committee to ensure alignment with CEIX’s business strategy, to determine that additional data may need to be gathered, or to identify other issues, if any, prior to the presentation to the Compensation Committee. Annually, the Compensation Committee reviews with management the independence of any compensation consultant it retains. In February 2022, the Compensation Committee conducted an independence review of Mercer by analyzing the factors mandated by the listing standards of the New York Stock Exchange and concluded that there were no conflicts of interest arising from Mercer’s work. In 2021, CEIX paid Mercer $41,660 in connection with its work providing executive compensation consulting to the Compensation Committee.
Besides Mercer’s involvement with the Compensation Committee, it and its affiliates also provide other nonexecutive compensation services to us. Neither the Board nor the Compensation Committee reviewed or approved these other services, as these other services were approved by management in the ordinary course of business. The total amount paid for these other services provided in 2021 was $5,052,914, consisting of $2,657,015 paid to Mercer for health and wealth consulting services and $2,395,899 paid to Mercer’s parent company, Marsh & McLennan Companies, for property/casualty insurance consulting and brokerage services. The Compensation Committee determined that the other services provided did not raise any conflicts of interest.
2021 Compensation Actions and Programs in Effect
2021 Peer Group. The Compensation Committee selected the following 12The Compensation Committee selected the following 13 publicly-traded companies (the “Peer Group”) based on the recommendation of Mercer, which includes companies in the coal and energy industry similar in revenue size to CEIX and with industry and business characteristics comparable to CEIX in terms of revenue and market cap and with whom we compete for talent. The Compensation Committee does not target a particular percentile within the Peer Group in setting an NEO’s compensation but uses the Peer Group compensation data as one of several reference points in determining the form and amount of compensation. The Compensation Committee also uses general industry competitive market data to evaluate our NEO total compensation packages.
Alliance Resources Partners, L.P. | ||||
Arch | ||||
| Resource Partners, L.P. Alpha Metallurgical Resources, Inc. Cleveland-Cliffs Inc. Compass Minerals International, Inc. Hallador Energy Company | Louisiana-Pacific Corporation NACCO Industries, Inc. Natural Resources Partners L.P. | |||
Peabody Energy Corporation | ||||
Ramaco Resources, Inc. | SunCoke Energy, Inc. | |||
Warrior Met Coal, Inc. |
Compensation Committee | As noted above, in making its determinations with respect to executive compensation, the committee is supported by CEIX’s management team (including the CEO, Chief Administrative Officer, and General Counsel) and Mercer, the committee’s independent compensation consultant. The committee also periodically reviews matters such as succession planning and business environment when making compensation decisions. Decision Making Process While the Compensation Committee meets with the CEO to discuss his own compensation package, ultimately, decisions regarding the CEO’s compensation are recommended by the Compensation Committee and approved by the Board in executive session without the CEO or any other executive officer present, solely based upon the Compensation Committee’s deliberations. Decisions regarding other NEOs who report directly to the CEO are also made by the Compensation Committee (or by the Board, in the case of equity grants, absent a delegation to the committee or CEO) after considering recommendations from the CEO, the Chief Administrative Officer and Mercer. Establishment of Performance Measures At the beginning of each year, our Compensation Committee establishes the Company-wide and any other performance measures on which our NEO’s short- and long-term incentive compensation is largely based. These measures are intended to reflect targets that encourage performance and align executive and stockholder interests. Assessment of Company Performance At the end of the performance period, the Compensation Committee reviews and certifies achievement of previously determined performance measures and considers whether any adjustments to the performance criteria and/or calculations are appropriate. | |
| 42 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
2023 Elements of Total Compensation
In 2023, our NEOs were compensated through the following key elements of compensation.
Compensation Element | Description | Purpose | ||
Base Salary | Fixed compensation that is reviewed annually and is based on performance, experience, responsibilities, skillset, and market value | Provide a base level of compensation that corresponds to position and responsibilities Attract, retain, reward and motivate qualified and experienced executives | ||
Retention Bonus (CEO Only) | At-risk compensation earned by the CEO based on continued service and, for 2023, the achievement of set performance goals | Promote stability among leadership and succession planning and continued reduction in company debt | ||
2023 Short-Term Incentive Compensation (“STIC”) | At-risk compensation earned based on the achievement of identified financial and operational performance goals 80% of each NEO’s award is tied to company-wide performance and the remaining 20% is tied to individualized goals | Incentivize executives to achieve annual goals that ultimately contribute to long-term company growth and stockholder returns | ||
2023 Long-Term Incentive Compensation (“LTIC”) | At-risk compensation in the form of restricted stock units whose value fluctuates according to stockholder value 50% of the award vests based on continued service, with settlement in shares of CEIX stock 50% of the award vests based on achievement of pre-established performance goals, with settlement in 50% cash and 50% shares of CEIX stock | Incentivize executives to achieve goals that drive company performance over the long-term Align executive and stockholder interests Reward continuous service with the company to encourage executive retention | ||
Severance and Change in Control Protections | Cash severance, including post-termination benefits | Provide market-competitive, post-employment compensation Allow executives to focus on generating stockholder value if faced with a significant strategic event | ||
Other Benefits | Broad-based benefit plans provided to our employees (e.g., medical insurance), a qualified 401(k) retirement plan, and other personal benefits where appropriate | Provide a total compensation package that is market-competitive and provides retirement income security | ||
| - 2024 Proxy Statement | 43 |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Detailed Review of 2023 Compensation Components
The following discussion outlines the targeted 2023 executive compensation program and what we paid our NEOs in 2023.
Base Salaries.
In January 2022,2023, Mercer presented to the Compensation Committee its review of the compensation of our NEOs. Based on this review, the Compensation Committee determined to increase the base salaries for Mr. Thakkar, Mr. Salvatori, Ms. Wiegand and Mr. Rothka, as described below, to align their base salaries with appropriate comparable levels of peer companies or comparable positions with other similar companies and also to adjust for internal pay equity considerations. Effective January 19, 2023, Mr. Thakkar was named President, while Mr. Brock retained the Chief Executive Officer title and role. In connection with this transition, Mr. Thakkar’s compensation was revised to align with comparable positions. With the agreement of Mr. Brock, his base salary remained the same as in 2022.
| Name | 2022 Base Salary | 2023 Base Salary | ||||||||
Mr. Brock | $1,000,000 | $1,000,000 | ||||||||
Mr. Thakkar | $485,000 | $600,000 | ||||||||
Ms. Wiegand | $450,000 | $472,500 | ||||||||
Mr. Salvatori | $368,500 | $405,350 | ||||||||
Mr. Rothka | $230,000 | $253,000 | ||||||||
2023 Short-Term Incentive Compensation (STIC).
The STIC is an annual incentive bonus program designed to align our executive officers’ goals with our performance targets for the current year and to encourage meaningful contributions to our future financial performance. Under the STIC, target bonus amounts, expressed as a percentage of base salary, are established for participants at the beginning of each year. Funding of the STIC bonus amounts is determined based on attainment of predetermined financial performance measures (weighted at 80%) along with an assessment of each participant’s individual performance (weighted at 20%).
For 2023, to emphasize retention of our key executives as well as other employees, the Compensation Committee once again approved interim quarterly goals and payouts for the financial performance measures but not for individual performance. At the end of each of the first, second, and third quarter, the Compensation Committee approves achievement against the quarterly financial performance measurement goals. Following the end of the fiscal year, the Compensation Committee reviews and certifies achievement against annual financial performance goals and determines individual performance results. After determining the annual payout amount based on both financial and individual performance, the Compensation Committee approves the payment of any additional amounts owed under the STIC in excess of amounts already received in the first, second, or third quarter.
| |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
equity considerations. In addition, in connectionBonus Targets.
Bonus targets are established based on job responsibilities and comparable market data. For the 2023 STIC award with amending our CEO’s employment agreement, the Compensation Committee increased Mr. Brock’s base salary to $1,000,000 given his critical importance to the Company, strong leadership since becoming an independent public company in 2017, navigating the effects of the COVID-19 pandemic and steering the Company through challenging strategic issues.
2021 Short-Term Incentive Compensation (STIC).In February 2022, our Compensation Committee approved 2021 annual incentive awards for thea performance period beginning January 1, 20212023 and ending December 31, 2021,2023, our Compensation Committee established the paymentfollowing bonus targets:
| Name | 2023 Target Bonus Opportunity | |
Mr. Brock | 150% of base salary | |
Mr. Thakkar | 100% of base salary | |
Ms. Wiegand | 75% of base salary | |
Mr. Salvatori | 70% of base salary | |
Mr. Rothka | 37% of base salary | |
Company-Wide Performance Measures.
The company-wide portion of which2023 STIC awards were contingentbased 30% on the Company’s successful achievementPAMC Production, 20% on PAMC Average Cash Cost of performance goals related to (1) Unit CostCoal Sold per Ton* (weighted at 35%), (2) ICP10% on Itmann Mine Operating EBITDA*, 10% on Baltimore Terminal Operating EBITDA*, and 10% on Permit Effluent Exceedances. For the 2023 STIC, our Compensation Committee retained the Permit Effluent Exceedances performance measure; however, they also added more specific performance measures to ensure focus on a variety of operational goals. Our Compensation Committee removed Incentive Compensation Plan (ICP) Free Cash Flow* (weighted at 35%),as a performance measure for the 2023 STIC program in response to shareholder feedback that it was a duplicative performance measure under the long-term incentive program. The Compensation Committee believes achievement of these performance measures will drive our business and, (3) Environmental Incident Severity (weighted at 10%),in turn, lead to increased stockholder value.
Performance Measure | What it Measures | What it Does | ||
PAMC Production (weighted at 30%) | Total coal production from the Pennsylvania Mining Complex | ✓ Focuses executives on maximizing the productive capability of the Pennsylvania Mining Complex | ||
PAMC Average Cash Cost of Coal Sold per Ton* (weighted at 20%) | Cost of coal sold, less depreciation, depletion and amortization costs related to the Pennsylvania Mining Operation assets; divided by the total tons of coal sold from the Pennsylvania Mining Operation assets. These costs exclude any indirect costs and other costs not directly attributable to the production of coal. | ✓ Focuses executives on the effective management of our controllable costs | ||
Itmann Mine Operating EBITDA* (weighted at 10%) | Adjusted EBITDA; plus general and administrative costs and other costs not directly attributable to operations | ✓ Rewards executives for the continued development of a pure-play metallurgical asset | ||
| - 2024 Proxy Statement | 45 |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
Performance Measure | What it Measures | What it Does | ||
Baltimore Terminal Operating EBITDA* (weighted at 10%) | Adjusted EBITDA; plus general and administrative costs and other costs not directly attributable to operations | ✓ Rewards executives for the continued maximization of the throughput of the Company’s shipping terminal in order to continue to grow the Company’s export sales portfolio | ||
Permit Effluent Exceedances (weighted at 10%) | Number of instances of non-compliance with water discharge quality limitations prescribed by the Company’s National Pollution Discharge Elimination System permit requirements. | ✓ Promote and protect our Social License to Operate | ||
The Compensation Committee reviewed and certified achievement of these annual company-wide performance measures based on threshold, target and maximum payouts, as follows:
| Performance Measure | Annual Threshold (50%) | Annual Target (100%) | Annual Maximum (200%) | Annual Actual Performance | ||||
PAMC Production | 25.2M tons | 26.4M tons | 26.7M tons | 26.1M tons | ||||
PAMC Average Cash Cost of Coal Sold per Ton* | $36.12 | $34.12 | $32.12 | $36.10 | ||||
Itmann Mine Operating EBITDA* | $15.8M | $48.2M | $79.7M | ($17.0M) | ||||
Baltimore Terminal Operating EBITDA* | $59.0M | $62.0M | $67.0M | $84.9M | ||||
Permit Effluent Exceedances | 10 | 8 | 6 | 9 | ||||
In January 2024, the Compensation Committee evaluated the Company’s actual performance against the 2023 STIC pre-established annual performance goals and approved a formulaic payout percentage of 63.4% with respect to these annual company-wide performance goals.
For interim quarterly payments in each of the first three quarters, the sub-goals were as defined below. Thesefollows:
| Performance Measure | 1st Qtr. Threshold (50%) | 1st Qtr. Target (100%) | 1st Qtr. Maximum (200%) | 1st Qtr. Actual Performance | ||||||||||||||||
PAMC Production | 6.8M tons | 7.2M tons | 7.3M tons | 7.0M tons | ||||||||||||||||
PAMC Average Cash Cost of Coal Sold per Ton* | $34.91 | $32.91 | $30.91 | $33.61 | ||||||||||||||||
Itmann Mine Operating EBITDA* | $2.3M | $7.1M | $11.8M | ($3.1M) | ||||||||||||||||
Baltimore Terminal Operating EBITDA* | $15.2M | $16.0M | $17.2M | $21.4M | ||||||||||||||||
Permit Effluent Exceedances | 3 | 2 | 1.5 | 3 | ||||||||||||||||
| 46 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
| Performance Measure | 2nd Qtr. Threshold (50%) | 2nd Qtr. Target (100%) | 2nd Qtr. Maximum (200%) | 2nd Qtr. Actual Performance | ||||||||||||||||
PAMC Production | | 6.5M tons | | 6.8M tons | | 6.9M tons | | 6.3M tons | ||||||||||||
PAMC Average Cash Cost of Coal Sold per Ton* | $34.95 | $32.95 | $30.95 | $36.33 | ||||||||||||||||
Itmann Mine Operating EBITDA* | $4.7M | $14.4M | $23.9M | ($6.9M) | ||||||||||||||||
Baltimore Terminal Operating EBITDA* | $15.0M | $15.7M | $17.0M | $25.0M | ||||||||||||||||
Permit Effluent Exceedances | 3 | 2 | 1.5 | 4 | ||||||||||||||||
| Performance Measure | 3rd Qtr. Threshold (50%) | 3rd Qtr. Target (100%) | 3rd Qtr. Maximum (200%) | 3rd Qtr. Actual Performance | ||||||||||||||||
PAMC Production | | 5.9M tons | | 6.2M tons | | 6.3M tons | | 6.1M tons | ||||||||||||
PAMC Average Cash Cost of Coal Sold per Ton* | $37.68 | $35.68 | $33.68 | $38.36 | ||||||||||||||||
Itmann Mine Operating EBITDA* | $4.6M | $13.9M | $23.1M | ($2.9M) | ||||||||||||||||
Baltimore Terminal Operating EBITDA* | $12.1M | $12.8M | $14.0M | $16.3M | ||||||||||||||||
Permit Effluent Exceedances | 3 | 2 | 1.5 | 0 | ||||||||||||||||
Individual Performance Measure
STIC awards also were subject to modification influenced by each NEO’s contribution based on his or her individual performance (weighted at 20%) as determined by our President and CEO (or for our CEO, the Compensation Committee) and approved by our Compensation Committee. At the time these performance goals were established, our Compensation Committee believed they would encourage our NEOs to stay focused on operational execution, balance sheet strength and environmental safety. The Compensation Committee also approved quarterly cash payments as the targets were achieved to reward performance and to retain our top talent.
The 2021 STIC award payout formula appears below:
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2021 STIC Performance Goals included a threshold, target and maximum payout with an additional 20% allocated to individual NEO performance. CEIX actual performance against the Company’s pre-established performance goals is described below:
Performance Goal | Unit Cost per Ton (35%) | ICP Free Cash Flow (35%) | Environmental Incident Severity (10%) | ||||||||||||
Threshold (50%) | $ | 28.50 | $ | 78.9M | 2.4 | ||||||||||
Target (100%) | $ | 27.50 | $ | 116.2M | 1.9 | ||||||||||
Maximum (200%) | $ | 27.00 | $ | 145.9M | 1.4 | ||||||||||
Actual Performance | $ | 28.25 | * | $ | 184.0M | * | 1.95 | ||||||||
Unit Cost per Ton* is defined as the cost of coal sold, including idle costs incurred associated with the COVID-19 pandemic, less depreciation, depletion and amortization costs related to the Pennsylvania Mining Operation assets divided by the total tons of coal sold from the Pennsylvania Mining Operation assets. These costs exclude any indirect costs, such as selling, general and administrative costs, freight expenses, interest expenses, depreciation, depletion and amortization costs on non-production assets and other costs not directly attributable to the production of coal.
ICP Free Cash Flow* means Incentive Compensation Plan (ICP) Free Cash Flow, which is Adjusted EBITDA less capital expenditures less interest expense plus proceeds of non-EBITDA producing asset sales less the financial accounting impact of non-EBITDA producing asset sales.
Environmental Incident Severity means a weighted average of all of the Company’s environmental incidents, calculated by a numerator, which represents the sum of all of the Company’s environmental incidents after a rating of “1 to 5” is assigned, with a “1” rating representing little to no environmental impact and a “5” rating representing an incident that has a severe or persisting environmental or public health impact divided by the total number of environmental incidents.
In February 2022, the Compensation Committee evaluated the Company’s actual performance against the 2021 STIC pre-established performance goals and approved a formulaic payout percentage of 101.38% with respect to Company performance against goals.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
After applying the individual performance percentage to each NEO, the Compensation Committee approved the following STIC payments to our NEOs:
NEO | 2021 Target Opportunity Percentage (% of Base Salary) | 2021 Target Payout Opportunity | NEO Payout | 2021 Approved Payout | ||||||||||||||||
Mr. Brock |
| 150 | % |
| $1,500,000 |
| 200 | % |
| $2,120,625 | ||||||||||
Mr. Thakkar |
| 50 | % |
| $ 200,000 |
| 180 | % |
| $ 274,750 | ||||||||||
Ms. Wiegand |
| 60 | % |
| $ 255,000 |
| 155 | % |
| $ 337,556 | ||||||||||
Mr. Salvatori |
| 50 | % |
| $ 167,500 |
| 170 | % |
| $ 226,753 | ||||||||||
Mr. Rothka |
| 25 | % |
| $ 55,000 |
| 191 | % |
| $ 131,766 | ||||||||||
2021 Performance Highlights of Our NEOs.
| • | James A. Brock. As our Chief Executive Officer during 2023, Mr. Brock continued to lead the Company. Under his leadership, CEIX generated net cash provided by operating activities of $858 million and posted record financial results, such as generating record free cash flow* of $687 million. With these proceeds, the Company |
| • |
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| • | Martha A. Wiegand.As |
| - 2024 Proxy Statement | 47 |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
mutual areas of interest. Ms. Wiegand and the legal team |
| • | Kurt R. Salvatori.As our Chief Administrative Officer, Mr. Salvatori oversees the Company’s human resources, government affairs, information technology, cybersecurity and public relations, |
| • | John M. Rothka. As our Chief Accounting Officer and Controller, Mr. Rothka leads CEIX’s accounting and financial reporting team. In this role, Mr. Rothka reports to the Audit Committee and also manages CEIX’s relationship with its independent accountants. In |
2023 STIC Payouts
After determining the company-wide performance measure achievement level and applying the individual performance percentage to each NEO, the Compensation Committee approved the following total STIC payments to our NEOs for the 2023 fiscal year:
| Name | 2023 STIC Target Aggregate Payout Opportunity | 2023 STIC Aggregate Award Payout | ||||||||
Mr. Brock | $1,500,000 | $1,551,000 | ||||||||
Mr. Thakkar | $600,000 | $608,400 | ||||||||
Ms. Wiegand | $354,375 | $345,161 | ||||||||
Mr. Salvatori | $283,745 | $282,043 | ||||||||
Mr. Rothka | $92,927 | $88,838 | ||||||||
*As described above, the NEOs received the 2023 STIC payments quarterly. The interim quarterly payments were as follows per quarter for each of the first, second, and third quarters of fiscal year 2023: $567,296 for Mr. Brock, $226,919 for Mr. Thakkar, $134,024 for Ms. Wiegand, $107,312 for Mr. Salvatori, and $35,144 for Mr. Rothka. The remainder of the aggregate award payout is attributable to the fourth quarter, which included the remaining company performance component as well as the 20% individual performance component attributable to the entire year.
Long-Term Incentive Compensation Program (LTIC)
Our LTIC aligns our NEOs’ interests with those of our stockholders by providing the opportunity to earn incentive compensation based on our Company’s long-term success. The Compensation Committee continues to believe that a mix between time-based awards and performance-based awards provides an appropriate balance between incentivizing our executives to continue their employment, which provides greater stability, and ensuring they are focused on long-term financial performance, which directly generates stockholder value.
Moreover, the Compensation Committee favors restricted stock units because the value of these awards is linked to our stock price, providing a significant degree of alignment between our executives’ and stockholders’ interests.
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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
2021-2023 Long-Term Incentive Compensation (LTIC). In February 2021,2023 LTIC Award Design
The 2023 LTIC included two types of grants to our NEOs: stock-settled, time-based restricted stock units (RSUs) and performance-based restricted stock units (PSUs), granted as follows:
The table below shows the amount of time-based RSUs and PSUs our Compensation Committee once again made design changes to the long-term incentive program forawarded our NEOs in 2023.
| Name | Time-Based RSUs | PSUs | ||||||||
Mr. Brock | 32,025 | 32,026 | ||||||||
Mr. Thakkar | 9,607 | 9,608 | ||||||||
Ms. Wiegand | 6,245 | 6,246 | ||||||||
Mr. Salvatori | 4,868 | 4,868 | ||||||||
Mr. Rothka | 1,200 | 1,201 | ||||||||
Time-Based RSUs
The time-based RSUs granted in 2023 generally vest in three, equal installments on February 7 in each of 2024, 2025, and 2026, subject to include grantsan executive’s continuous employment through the applicable vesting date. The Compensation Committee believes these time-based RSUs provide an important role in promoting retention of two types of performance-based cash units to our NEOs. executive officers.
PSUs
The performance-based cash unitsPSUs vest ratably over a three-year period, although their vesting is subject to the executive’s continuous employment through the applicable vesting date and the Company’s satisfactory achievement of pre-established performance goals as follows:goals. One-half of the total PSUs settle in stock and the remaining 50% settles in cash.
For purposes of the 2023 LTIC, the Compensation Committee, with input from Company management and the independent compensation consultant, reviewed the design and performance measures used for the LTIC program. After review, the Compensation Committee decided to retain the use of ICP Free Cash Flow per Share* and Scope 1 & 2 GHG Reduction (tons emitted), adjusting the weighting to 60% and 10% respectively for 2023. The Compensation Committee determined to replace the Net Debt Level* performance measure used in 2022 under the performance-based restricted stock units with a revenue generation performance measure that relates to revenue generated outside of sales to coal-fired power plants, weighted at 30%. This change was intended to focus management on further de-risking the Company by further diversifying its revenues into non-power
| - 2024 Proxy Statement | 49 |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
generation markets. After determining performance based on the goals outlined above, the Compensation Committee applies a total shareholder return (TSR) modifier of +/-20%.
| ||||
| What it Measures | What it Does | |||
(weighted at | Adjusted EBITDA; less capital expenditures; less interest expense; plus proceeds of non-EBITDA producing asset sales; less the financial accounting impact of non-EBITDA producing asset sales |
| ||
(weighted at | ||||
| Annual percentage of total revenue derived from sales to customers in all markets, excluding sales to coal-fired power plants | ✓ Encourages the de-risking of the company’s revenues by expanding the company’s sales portfolio into industrial and metallurgical markets | |||
Scope 1 & 2 GHG Reduction (tons emitted) (weighted at 10%) | Annual change in direct operating GHG emissions | ✓ Focuses on the achievement of stated sustainability goals in the form of GHG emissions reductions | ||
Relative TSR (+/- 20% modifier) | TSR modifier is determined by measuring the relative TSR of the Company using the 10-day average closing stock price of the Company ending on the last day of the performance period as compared to the TSR for the S&P Oil and Gas Exploration and Production EFT (XOP) index | ✓ Adjusts executive LTIC payouts based on the relative return of company stock versus peers in the energy industry | ||
Our Compensation Committee believes the PBCs and MSUs align the interestsPayout of our executives with those1st Tranche of our stockholders because (1) the2023 PSUs
The vesting of the PBCs and MSUs supports executive retention, (2) the vesting of the PBCsPSUs is tied to the achievement of calculated annually based on pre-established, goals related to ICP Free Cash Flow* and Net Debt Level*, and (3) the vesting of the MSUs is tied to the level of our stock price. weighted goals. Our Compensation Committee also designs the targets for our future performance goals to be attainable but reasonably difficult to meet such that future performance must generally exceed current fiscal year performance. Net Debt Level* meansThe table below summarizes the annual change in debt levels during each year of the applicable performance period, less the actual cash on hand at the end of the applicable performance period.
The target dollar value for the PBCs and the MSUs appear below. Each PBC is denominated in phantom units, which represent a fixed value equal to the closing stock price of the Company’s common stock on February 9, 2021, the date of grant. Each MSU is also denominated in phantom units; however, each MSU represents a value equal to the closing stock price of the Company’s common stock on the date on which vesting of the MSU is approved by the Compensation Committee.
Named Executive Officer |
PBC Target |
MSU Target | ||||||||
Mr. Brock | $ | 1,750,000 | $ | 1,750,000 | ||||||
Mr. Thakkar | $ | 250,000 | $ | 250,000 | ||||||
Ms. Wiegand | $ | 325,000 | $ | 325,000 | ||||||
Mr. Salvatori | $ | 162,500 | $ | 162,500 | ||||||
Mr. Rothka | $ | 62,500 | $ | 62,500 | ||||||
The vesting of the PBCs will be calculated annually based on the pre-established equally weighted goals of ICP Free Cash Flow* and Net Debt Level* with a payout threshold equal to 50% of target and the aggregate payout capped at 200% of target.
The vesting of the MSUs will be calculated annually based on the average closing stock price of the Company’s common stock for the fifteen (15) trading days immediately before the last business day of the year in which the relevant performance period ends divided by the closing stock price of the Company’s common stock for the fifteen (15) trading days immediately prior to February 9, 2021, the date of the grant.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
2021 to 2023 Payout for 2021 Tranche
The PBCs target performance goals for the 2021first tranche performance period underof the 2021-2023 LTIC appear below including2023 PSUs as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance against such goals for the 2021 performance period.performance.
2021 | Weight | 50% Target | 100% Target | 200% Target | Actual Performance | ||||||||||||||||||||
ICP Free Cash Flow per Share |
| 50% |
|
| $2.25 |
|
| $3.32 |
|
| $4.17 |
|
| $5.34* |
| ||||||||||
Net Debt Level |
| 50% |
|
| $616.9m |
|
| $579.7m |
|
| $570.0m |
|
| $453.8m* | |||||||||||
| Performance Measure | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Performance | ||||||||||||||||
ICP Free Cash Flow per Share* | $16.97 | $30.19 | $35.18 | $25.87 | ||||||||||||||||
Non-Power Revenue Generation | 43% | 45% | 48% | 59% | ||||||||||||||||
Scope 1 & 2 GHG Reduction (tons emitted) | 7,347,000 | 6,939,000 | 6,531,000 | 6,998,000 | ||||||||||||||||
TSR Modifier | 25th percentile (-20%) | 50th percentile (0%) | 75th percentile (+20%) | 64th percentile | ||||||||||||||||
| 50 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
In February 2022,January 2024, the Compensation Committee evaluated CEIX’sand certified our achievement against the above-described performance goals under the 2021-2023 LTICmeasures and determined that our NEOs earned the following payouts with respect to the 2021 PBCfirst tranche of the 2023 PSUs at 200.0%132.9% of target performance. The units earned were settled in cash and the cash payout amount was determined based on $94.60, our closing stock price on January 31, 2024.
| Named Executive Officer |
2021 PBC |
Target |
2021 PBC |
Cash | ||||||||||||||||
Mr. Brock |
| 59,102 units |
| 200 | % |
| 118,204 units | $ | 1,166,673 | |||||||||||
Mr. Thakkar |
| 8,443 units |
| 200 | % |
| 16,886 units | $ | 166,665 | |||||||||||
Ms. Wiegand |
| 10,976 units |
| 200 | % |
| 21,952 units | $ | 216,666 | |||||||||||
Mr. Salvatori |
| 5,488 units |
| 200 | % |
| 10,976 units | $ | 108,333 | |||||||||||
Mr. Rothka |
| 2,111 units |
| 200 | % |
| 4,222 units | $ | 41,671 | |||||||||||
| Name | Units at Target | Units Earned in 2023 |
Earned | ||||||||||||
Mr. Brock | 10,674 units | 7,092 units | 7,093 | ||||||||||||
Mr. Thakkar | 3,202 units | 2,128 units | 2,128 | ||||||||||||
Ms. Wiegand | 2,082 units | 1,383 units | 1,383 | ||||||||||||
Mr. Salvatori | 1,622 units | 1,078 units | 1,078 | ||||||||||||
Mr. Rothka | 400 units | 266 units | 266 | ||||||||||||
Payout of Awards Granted in Prior Years
This was the second performance year for the 2022 LTIC program as well as the third and final year for the 2021 LTIC program. The MSUstables below describe the payouts earned by our NEOs with respect to these awards granted in prior years.
Payout of 2nd Tranche of 2022 LTIC Program – PBCUs.
The table below summarizes the target performance goals for the 2021second tranche performance period underof the 2021-2023 LTIC appear below including2022 performance-based cash-settled restricted stock units (PBCUs) as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance against such goals for the 2021 performance period.performance.
2021 | Weight | 50% Target | 100% Target | 200% Target | Actual Performance | ||||||||||||||||||||
Stock price |
| 100% |
|
| $4.50 |
|
| $9.00 |
|
| $18.00 |
|
| $22.73+ |
| ||||||||||
|
| Performance Measure | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Performance | ||||||||||||||||
ICP Free Cash Flow per Share* | $14.78 | $19.11 | $20.94 | $42.71 | ||||||||||||||||
Net (Cash)/Debt Level* | $86.8M | $(44.6M) | $(95.1M) | $(527.4M) | ||||||||||||||||
Scope 1 & 2 GHG Reduction (tons emitted) | 7,347,000 | 6,939,000 | 6,531,000 | 6,998,000 | ||||||||||||||||
TSR Modifier | 25th percentile (-20%) | 50th percentile (0%) | 75th percentile (+20%) | 90th percentile | ||||||||||||||||
In February 2022,January 2024, the Compensation Committee evaluated CEIX’sand certified our achievement against the above-described performance goals under the 2021-2023 LTICmeasures and determined that our NEOs earned the following payouts with respect to the 2021 MSUsecond tranche of the 2022 PBCUs at 200.0%200% of target performance.
| Named Executive Officer |
2021 MSU |
Target |
2021 MSU |
Cash | ||||||||||||||||
Mr. Brock |
| 59,102 units |
| 200 | % |
| 118,204 units | $ | 2,830,986 | |||||||||||
Mr. Thakkar |
| 8,443 units |
| 200 | % |
| 16,886 units | $ | 404,420 | |||||||||||
Ms. Wiegand |
| 10,976 units |
| 200 | % |
| 21,952 units | $ | 525,750 | |||||||||||
Mr. Salvatori |
| 5,488 units |
| 200 | % |
| 10,976 units | $ | 262,875 | |||||||||||
Mr. Rothka |
| 2,111 units |
| 200 | % |
| 4,222 units | $ | 101,117 | |||||||||||
|
Prior Year LTICs
In February 2022, The units earned were settled in cash and the Compensation Committee also evaluated CEIX’s performance against pre-established goals for the 2021 year related to the 2020 LTIC and 2019 LTIC.cash payout amount was determined based on $94.60, our closing stock price on January 31, 2024.
| Name | Units at Target | Units Earned in 2023 | ||
Mr. Brock | 24,438 units | 48,876 units | ||
Mr. Thakkar | 4,444 units | 8,888 units | ||
Ms. Wiegand | 4,539 units | 9,078 units | ||
Mr. Salvatori | 2,814 units | 5,628 units | ||
Mr. Rothka | 855 units | 1,710 units |
| | 51 |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
2020 to 2022 Payout forof 3rd Tranche of 2021 TrancheLTIC Program—PBCUs.
In February 2020, our Compensation Committee granted Performance-Based Shares (“PSUs”) to Mr. Brock and PBCs toThe table below summarizes the other NEOs. The PSU and PBC target performance goals for the 2021third tranche performance period under the 2020-2022 LTIC appear below including actual performance against such goals forof the 2021 performance period.PBCUs as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance.
2021 | Weight | 50% Target | 100% Target | 200% Target | Actual Performance | |||||||||||||||
ICP Free Cash Flow per Share |
| 50% |
|
| $5.08 |
|
| $9.54 |
|
| $12.67 |
|
| $11.11* |
| |||||
Debt Level |
| 50% |
|
| $684.0m |
|
| $646.0m |
|
| $596.3m |
|
| $603.7m* |
| |||||
TSR Modifier |
| +/-20% |
|
| 25th Percentile |
|
| 50th Percentile |
|
| 75th Percentile |
|
| 17.36%± |
| |||||
|
| Performance Measure | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Performance | ||||||||||||||||
ICP Free Cash Flow per Share* | $8.29 | $11.38 | $14.05 | $48.05 | ||||||||||||||||
Net (Cash)/Debt Level* | $456.0M | $347.4M | $303.2M | $(527.4M) | ||||||||||||||||
In February 2022,January 2024, the Compensation Committee evaluated CEIX’sand certified our achievement against the above-described performance goals under the 2020-2022 LTICmeasures and determined that our NEOs earned the following payouts with respect to the third tranche of the 2021 tranchePBCUs at 196.74%200% of target performance. The units earned were settled in cash and the cash payout was determined based on $9.87, the stock price identified at the time of grant.
| Named Executive Officer |
2020 PSU |
Target |
2020 PSU |
Cash | ||||||||||||||||
Mr. Brock |
| 73,949 shares |
| 196.74 | % |
| 145,488 shares |
| N/A | |||||||||||
Mr. Thakkar |
| 1,061 units |
| 196.74 | % |
| 2,087 units | $ | 16,386 | |||||||||||
Ms. Wiegand |
| 6,369 units |
| 196.74 | % |
| 12,530 units | $ | 98,362 | |||||||||||
Mr. Salvatori |
| 2,654 units |
| 196.74 | % |
| 5,221 units | $ | 40,988 | |||||||||||
Mr. Rothka |
| 1,061 units |
| 196.74 | % |
| 2,087 units | $ | 16,386 | |||||||||||
| Name | Units at Target | Units Earned in 2023 | ||
Mr. Brock | 59,101 units | 118,202 units | ||
Mr. Thakkar | 8,443 units | 16,886 units | ||
Ms. Wiegand | 10,976 units | 21,952 units | ||
Mr. Salvatori | 5,488 units | 10,976 units | ||
Mr. Rothka | 2,110 units | 4,220 units | ||
2019 toPayout of 3rd Tranche of 2021 Payout for 2021 TrancheLTIC Program—Market Share Units (MSUs).
In February 2019, our Compensation Committee granted our NEOs PSUs. The PSUtable below summarizes the target performance goals for the third tranche of the 2021 tranche performance period underMSUs as well as the 2019-2021 LTIC appear below includingthreshold (50% of target) and the maximum (200% of target) goals compared to actual performance against such goalsperformance.
| Performance Measure | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Performance | ||||||||||||||||
Stock Price | $4.50 | $9.00 | $18.00 | $100.57* | ||||||||||||||||
* Represents the average closing stock price of the Company’s common stock for the 2021 performance period.10 business days of 2023 immediately preceding the last business day of the year.
2021 | Weight | 50% Target | 100% Target | 200% Target | Actual Performance | Score | ||||||||||||||||||||||||
Relative TSR |
| 50% |
|
| 25th Percentile |
| 60th Percentile |
| 75th Percentile |
| 11th Percentile |
| 0.00% |
| ||||||||||||||||
PSU Free Cash Flow |
| 50% |
|
| $133m |
| $193m |
| $257m |
| $212.3m* |
| 130.16% |
| ||||||||||||||||
In February 2022,January 2024, the Compensation Committee evaluated CEIX’sand certified our achievement against the above-described performance goals under the 2019-2021 LTIC and determined that our NEOs earned the following payouts with respect to the third tranche of the 2021 trancheMSUs at 65.08%200% of target performance. The units earned paid out in cash and the cash payout amount was determined based on $94.60, our closing stock price on January 31, 2024.
| Name | Units at Target | ||||||||||||||||
|
|
|
| ||||||||||||||
Mr. Brock | 59,101 units |
|
|
|
| ||||||||||||
Mr. Thakkar | 8,443 units |
|
|
|
| ||||||||||||
Ms. Wiegand | 10,976 units |
|
|
|
| ||||||||||||
Mr. Salvatori | 5,488 units |
|
|
|
| ||||||||||||
Mr. Rothka | 2,110 units |
|
|
|
| ||||||||||||
Looking Forward to 2024
For the 2024 STIC, our Compensation Committee retained the 2023 performance measures but adjusted the weighting to allow for an additional performance measure focused on overall environmental compliance.
| 52 | |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
CEO Employment Agreement. CEIX entered into an employment agreementFor the 2024 LTIC Program, the Compensation Committee determined to replace Non-Power Revenue Generation Growth with Mr. Brock, our Presidentperformance measures specific to Innovations revenue growth and CEO, effective as of February 15, 2018, which was amended in February 2021capital expenditure management.
Other Considerations Important to Our Compensation Program
Severance and February 2022. Because the initial three-year term has run, the employment agreement automatically renews for additional one-year periods unless either party provides advance written notice within sixty days of the end of the term. The agreement sets Mr. Brock’s base salary to be at least $1,000,000 per year and provides additional compensation to Mr. Brock in the form of annual retention payments to ensure his continued employment with us through December 31, 2023. Under the terms of the February 2021 amendment, Mr. Brock received a cash lump-sum retention payment of $1,000,000 for continuing his employment with us on December 31, 2021. In addition, Mr. Brock will receive two additional $1,000,000 retention bonuses if he continues his employment on December 31, 2022 and December 31, 2023, respectively. In the event of Mr. Brock’s involuntary termination of employment absent “cause”, death or Permanent Disability (as defined in his employment agreement) prior to December 31, 2023, we will accelerate payment of any remaining retention payments to him. On Mr. Brock’s involuntary termination absent “cause”, whether or not in connection with a change in control (“CIC”), he will receive a lump-sum cash payment reflecting the cost of the Company’s continued health care coverage in lieu of continued participation in the Company’s plans, and the severance amount due Mr. Brock in the event of an involuntary termination of employment absent “cause” was revised to include a severance multiple of two times his (x) base salary and (y) target annual incentive under our STIC plan. In addition, Mr. Brock shall be considered fully vested in all then-outstanding and unvested time-based equity awards held by Mr. Brock if he continues his employment with CEIX through December 31, 2023. Finally, the agreement contains similar change-in-control and severance benefits and the same post-termination restrictive covenants relating to confidentiality, non-competition and non-solicitation described below for our other NEOs in “Change-in-Control Agreements”. The agreement does not include any gross up feature arising from the excise tax payable on an excess parachute payment.
Change in Control AgreementsBenefits for Other NEOs.
CEIX has severance and double trigger cash severance CIC agreements covering each of our other NEOs, all of which became effective on February 15, 2018 (except for Mr. Thakkar’s current CIC agreement which became effective on November 4, 2020)2020 and was subsequently amended on February 6, 2023). These agreements provide for non-CIC severance exclusively upon a termination of employment absent “cause.” In the case of a CIC scenario, each NEO is only entitled to cash severance if, following or in connection with a CIC, the NEO’s employment is terminated by CEIX absent “cause” or if the NEO resigns due to constructive termination within a specified period. The purpose of these agreements is to ensure that CEIX (a) offers a compensation package that is competitive with that offered by other companies with whom we compete for talent, (b) retains and relies upon the undivided focus of our senior executives immediately prior to, during and following a CIC, and (c) diminishes the inevitable distraction of our NEOs by virtue of personal uncertainties and risks created by the potential job loss following a CIC.
In addition to the double trigger severance CIC provisions, all of the agreements include post-termination restrictive covenants relating to confidentiality, non-competition and non-solicitation and also require each NEO to sign an appropriate release of claims. These agreements do not include any gross up feature arising from the excise tax payable on an excess parachute payment.
We maintain several retirement plans, the purpose of which isare to attract and retain employees and to ensure an overall competitive compensation and benefits offering for all of our employees, including our NEOs. The maintenance of these plans also reflects commitments made at the time of our separation from our former parent that required us to assume certain plan liabilities as a result of the separation.
| • | Qualified Defined Contribution Plan (“Investment Plan”). We maintain a qualified Investment Plan which operates as a 401(k) savings plan for eligible employees of CEIX and its affiliates, including our NEOs. Plan participants may make before-tax, Roth, and/or after-tax contributions of 1% to 75% of eligible compensation to the plan via payroll deductions. Plan participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions. |
| • | Qualified Defined Benefit Plan (“Employee Retirement Plan”).We also maintain an Employee Retirement Plan, a qualified defined benefit plan under Section 401(a) of the Internal Revenue Code of the United States of America (the “Code”), which was initially frozen in 2014 for certain plan participants and then subsequently frozen to all remaining plan participants as of December 31, 2015. None of our named executive officers accrue any future benefit under this plan. |
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
| • | Non-Qualified Retirement Restoration Plan |
| • | Non-Qualified Supplemental Retirement Plan (“SERP”). This plan includes certain obligations for participants under a company predecessor plan. The plan was frozen effective as of December 31, 2011, and none of our named executive officers accrue any future benefit under this plan. |
| - 2024 Proxy Statement | 53 |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
| • | Non-Qualified Defined Contribution Restoration Plan |
Clawback Policy. We maintain a clawback policy in our 2020 Omnibus Performance Incentive Plan (“Omnibus Plan”) that permits our Compensation Committee to recover any award (whether cash or equity-based), which is subject to recovery under any law, government regulation, and stock exchange listing requirement or Company policy. In addition, any awards made under our Omnibus Plan are subject to recoupment in the event an award recipient violates any restrictive covenant in his or her award agreement relating to confidentiality, non-competition or non-solicitation. During 2021, all CEIX incentive awards (whether cash or equity-based) were made under the terms of the Omnibus Plan and thus subject to recovery under our policy.
Stock Ownership Guidelines/Holding Requirements for NEOs.We initially adopted stock ownership guidelines applicable to each of our NEOs, which require that they own a minimum number of shares of CEIX stock, based upon a multiple of base salary alone. Because our stock has experienced extreme volatility, our Board of Directors amended our stock ownership guidelines to permit our executives to attain the levels described below under either a “multiple of salary approach” or a “fixed number of shares approach.” Under the multiple of salary approach, the executive ownership level for each officer category shall be the number of shares of CEIX stock equal to the product of the executive’s annual base salary times his or her multiple, divided by the closing price of CEIX stock. In contrast, the “fixed number of shares approach” allows our executives to reach their ownership level if the number of CEIX shares held equals the product of the executive’s annual base salary, times his or her multiple, divided by $20.00. We further revised the current stock ownership guidelines in 2022 to clarify which shares are included in calculating compliance with these requirements:
(i) shares owned outright by the executive or his or her immediate family members residing in the same household; shares held in trust for the benefit of the executive or his or her immediate family members residing in the same household; vested shares of restricted stock; and (ii) vested deferred stock units, restricted stock units or performance share units that may only be settled in shares, and unvested shares of restricted stock, deferred stock units, restricted stock units or performance share units, in each case when vesting is time-based rather than performance-based. The Board of Directors also amended the guidelines to allow the Compensation Committee to temporarily suspend the guidelines during periods of extreme market volatility. As of the date of this Proxy Statement, all of our NEOs are in compliance with our stock ownership guidelines.
| Named Executive Officer | Ownership (As Multiple | |||||||||
| 5x | |||||||||
President and Chief |
| |||||||||
| 2.5x | |||||||||
Chief Accounting Officer and Controller | 2x | |||||||||
General Counsel and Secretary | 2x | |||||||||
Chief Administrative Officer | 2x | |||||||||
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
No Hedging/Pledging Policy. Our Corporate Governance Guidelines prohibit any executive officer (including an NEO) from entering into speculative transactions in CEIX securities, and similarly prohibit an executive officer from purchasing or selling puts, calls, options or other derivative securities based on CEIX securities. The policy also prohibits hedging or monetization transactions, such as forward sale contracts, in which the holder continues to own the underlying CEIX security without all the risks or rewards of ownership. In addition, directors and officers of CEIX are prohibited from holding CEIX securities in a margin account or otherwise pledging CEIX securities as collateral for a loan.
Equity Grant Practices Policy. We maintain a written policy for granting equity awards, which describes the Compensation Committee’s practices relating to equity grants to executives and the timing of such grants in relation to material and non-public information and which specifically prohibits the backdating of stock options. The policy also describes the Compensation Committee’s delegation of authority to the Chair and CEO to award equity to non-executive employees. We do not have a practice or policy of timing our grants in relation to the announcement of material non-public information. In accordance with the policy, all stock option grants must have an exercise price equal to the closing price of CEIX common stock on the date of grant.
Perquisites. We provide limited perquisites that we believe are reasonable, competitive and consistent with our compensation program, which are described(described more fully in the footnotes to the Summary Compensation Table that appears on pages 3756 and 38.57) which we believe are reasonable, competitive and consistent with our compensation program.
Tax, Accounting and Regulatory Considerations.
Our Compensation Committee believes that stockholder interests are best served if their discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses.expenses for federal income tax purposes. However, our Compensation Committee does not
| 54 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis
anticipate a shift away from variable or performance-based compensation payable to our executive officers in the future, nor do we anticipate applying less rigor in the process by which we establish performance goals or evaluate performance against such pre-established goals, with respect to compensation paid to our NEOs. In addition, accounting considerations are one of many factors that our Compensation Committee considers in determining compensation mix and amount.
Annually, our Compensation Committee reviews the compensation programs and practices of CEIX. The CEIX pay philosophy provides for an effective balance in cash and equity, mix, shortshort- and long-term performance periods, and financial and non-financial performance goals, and affords the Compensation Committee discretion to adjust payouts under the Company’s compensation plans. Further, the CEIX policies in place to mitigate compensation-related risk include stock ownership guidelines, equity vesting periods, on equity, insider trading prohibitions, a clawback policy, caps on the amount of compensation that may be earned, and independent Compensation Committee oversight. In February 2022,January 2024, the Compensation Committee determined that our plans and programs do not encourage unnecessary risk-taking and do not pose a potential material adverse effect on the Company. The review was conducted by CEIX management with the assistance of the Compensation Committee’s independent compensation consultant, Mercer.
| * | This CD&A, which relates to |
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION |Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section above with CEIX’s management and, based upon such review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into CEIX’s Annual Report on Form 10-K for the year ended December 31, 2021.2023. The Compensation Committee’s charter is available on our website at www.consolenergy.com.
Members of the Compensation Committee:
Members of the Compensation Committee: |
Joseph P. Platt, Chair |
John T. Mills |
William P. Powell |
Joseph P. Platt, Chair
John T. Mills
William P. Powell
The foregoing Compensation Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of CEIX under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that CEIX specifically incorporates the Compensation Committee Report by reference therein.
| - 2024 Proxy Statement | 55 |
EXECUTIVE COMPENSATION INFORMATION |Summary Compensation Table
Summary Compensation Table
The following table discloses the compensation for our NEOs, which include Mr. Brock, the principal executive officer of CEIX, Mr. Thakkar, the principal financial officer of CEIX, and the other three most highly compensated executivesexecutive officers of CEIX serving at fiscal year-end 2021: 2023: Ms. Wiegand, General Counsel and Secretary; Mr. Salvatori, Chief Administrative Officer and;Officer; and Mr. Rothka, Chief Accounting Officer and Controller.
Name and Principal Position (a) | Year (b) | Salary(1) (c) | Bonus(2) (d) | Stock Awards(3) (e) | Option Awards (f) | Non-Equity Incentive Compensation(4) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) (h) | All Other Compensation(6) (i) | SEC Total (j) | |||||||||||||||||||||||||||
James A. Brock President and Chief Executive Officer
| 2021 | $ | 997,077 | $ | 1,000,000 | $ | 1,750,000 | — | $ | 3,287,298 | $ | 26,152 | $ | 54,986 | $ | 7,115,513 | ||||||||||||||||||||
| 2020 | $ | 841,154 | — | $ | 3,483,000 | — | $ | 1,704,007 | $ | 674,326 | $ | 37,736 | $ | 6,740,223 | ||||||||||||||||||||||
| 2019 | $ | 803,231 | $ | 1,199,813 | $ | 3,773,887 | — | — | $ | 733,841 | $ | 39,600 | $ | 6,550,372 | ||||||||||||||||||||||
Miteshkumar B. Thakkar Chief Financial Officer | 2021 | $ | 398,846 | — | $ | 250,000 | — | $ | 457,801 | $ | 32,766 | $ | 49,878 | $ | 1,189,291 | |||||||||||||||||||||
Martha A. Wiegand General Counsel and Secretary | 2021 | $ | 424,615 | — | $ | 325,000 | — | $ | 652,584 | $ | 35,999 | $ | 47,800 | $ | 1,485,998 | |||||||||||||||||||||
| 2020 | $ | 413,077 | — | $ | 600,000 | — | $ | 375,897 | $ | 61,116 | $ | 30,600 | $ | 1,480,690 | ||||||||||||||||||||||
| 2019 | $ | 347,855 | $ | 196,875 | $ | 433,371 | — | — | $ | 42,756 | $ | 31,143 | $ | 1,052,000 | ||||||||||||||||||||||
Kurt R. Salvatori Chief Administrative Officer | 2021 | $ | 334,461 | — | $ | 162,500 | — | $ | 376,074 | $ | — | $ | 47,800 | $ | 920,835 | |||||||||||||||||||||
| 2020 | $ | 311,538 | — | $ | 250,000 | — | $ | 226,746 | $ | 306,961 | $ | 32,192 | $ | 1,127,437 | ||||||||||||||||||||||
| 2019 | $ | 298,731 | $ | 123,750 | $ | 270,876 | — | — | $ | 278,960 | $ | 29,800 | $ | 1,002,117 | ||||||||||||||||||||||
John M. Rothka Chief Accounting Officer and Controller | 2021 | $ | 219,692 | $ | — | $ | 62,500 | — | $ | 189,823 | $ | 9,721 | $ | 39,362 | $ | 521,098 | ||||||||||||||||||||
Name and Principal Position | Year | Salary(1) | Bonus(2) | Stock Awards(3) | Non-Equity Incentive Compensation(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | SEC Total | ||||||||||||||||||||||||
James A. Brock Chief Executive Officer | 2023 | $ | 1,000,000 | $ | 1,000,000 | $ | 3,000,000 | $ | 8,012,309 | $ | 147,121 | $ | 35,235 | $ | 13,194,665 | |||||||||||||||||
| 2022 | $ | 1,000,000 | $ | 1,000,000 | $ | 2,000,000 | $ | 5,898,172 | $ | — | $ | 64,931 | $ | 9,963,103 | ||||||||||||||||||
| 2021 | $ | 997,077 | $ | 1,000,000 | $ | 1,750,000 | $ | 3,287,298 | $ | 26,152 | $ | 54,986 | $ | 7,115,513 | ||||||||||||||||||
Mitesh B. Thakkar President and Chief Financial Officer | 2023 | $ | 595,577 | — | $ | 900,000 | $ | 1,817,342 | $ | 67,940 | $ | 44,430 | $ | 3,425,289 | ||||||||||||||||||
| 2022 | $ | 483,365 | — | $ | 363,750 | $ | 1,069,912 | $ | 16,685 | $ | 49,600 | $ | 1,983,312 | |||||||||||||||||||
| 2021 | $ | 398,846 | — | $ | 250,000 | $ | 457,801 | $ | 32,766 | $ | 49,878 | $ | 1,189,291 | |||||||||||||||||||
Martha A. Wiegand General Counsel and Secretary | 2023 | $ | 472,067 | — | $ | 585,074 | $ | 1,551,484 | $ | 57,478 | $ | 45,919 | $ | 2,712,022 | ||||||||||||||||||
| 2022 | $ | 449,519 | — | $ | 371,475 | $ | 1,152,140 | $ | — | $ | 51,976 | $ | 2,025,110 | |||||||||||||||||||
| 2021 | $ | 424,615 | — | $ | 325,000 | $ | 652,584 | $ | 35,999 | $ | 47,800 | $ | 1,485,998 | |||||||||||||||||||
Kurt R. Salvatori Chief Administrative Officer | 2023 | $ | 404,641 | — | $ | 456,019 | $ | 1,024,747 | $ | 120,016 | $ | 44,956 | $ | 2,050,379 | ||||||||||||||||||
| 2022 | $ | 367,856 | — | $ | 230,312 | $ | 754,038 | $ | — | $ | 49,600 | $ | 1,401,806 | |||||||||||||||||||
| 2021 | $ | 334,461 | — | $ | 162,500 | $ | 376,074 | $ | — | $ | 47,800 | $ | 920,835 | |||||||||||||||||||
John M. Rothka Chief Accounting Officer and Controller | 2023 | $ | 252,558 | — | $ | 112,500 | $ | 317,400 | $ | 16,113 | $ | 39,661 | $ | 738,232 | ||||||||||||||||||
| 2022 | $ | 229,808 | — | $ | 70,000 | $ | 335,123 | $ | — | $ | 40,576 | $ | 675,507 | |||||||||||||||||||
| 2021 | $ | 219,692 | — | $ | 62,500 | $ | 189,823 | $ | 9,721 | $ | 39,362 | $ | 521,098 | |||||||||||||||||||
| (1) | The amounts in this column represent base salaries before compensation reduction under any CEIX or affiliated company qualified retirement and/or 401(k) savings plan in effect during |
| (2) | The amount shown in this column for Mr. Brock |
| (3) | The |
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Summary Compensation Table
| (4) | The |
| ● | Cash payments made to the NEOs under the |
| ● | Cash payments for (i) 50% of the first tranche of the |
See the discussion on pages 44 through 52 in the “Compensation Discussion and Analysis” section for additional information regarding the 2023 plan design, 2023 performance and payouts authorized under the 2023 STIC, and 2023 performance and payouts under the LTIC.
| (5) | Amounts in this column reflect the actuarial increase in the present value of each |
| 56 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Summary Compensation Table
| (6) | The amounts shown in this column for |
Category | BROCK | THAKKAR | WIEGAND | SALVATORI | ROTHKA | BROCK | BROCK | THAKKAR | THAKKAR | WIEGAND | WIEGAND | SALVATORI | SALVATORI | ROTHKA | ROTHKA | ||||||||||||||||||||||||||||||
CEIX 401(k) Plan Contributions(a) | $ | 17,400 |
| $ | 17,400 |
| $ | 17,400 |
| $ | 17,400 |
| $ | 13,181 |
| ||||||||||||||||||||||||||||||
CEIX 401(k) Plan Matching Contributions(a) | |||||||||||||||||||||||||||||||||||||||||||||
Vehicle Allowance or Company Car | $ | 13,000 |
| $ | 13,000 |
| $ | 13,000 |
| $ | 13,000 |
| $ | 13,000 |
| ||||||||||||||||||||||||||||||
Executive Health Physical | $ | 2,186 |
| $ | 2,078 |
|
| — |
|
| — |
|
| — |
| ||||||||||||||||||||||||||||||
Business and Country Club Dues | $ | 5,000 |
|
| — |
|
| — |
|
| — |
|
| — |
| ||||||||||||||||||||||||||||||
Discretionary Contribution to the CONSOL Pennsylvania Coal Company 401(k)(b) | $ | 17,400 |
| $ | 17,400 |
| $ | 17,400 |
| $ | 17,400 |
| $ | 13,181 |
| ||||||||||||||||||||||||||||||
Spousal Travel | |||||||||||||||||||||||||||||||||||||||||||||
Financial Planning | |||||||||||||||||||||||||||||||||||||||||||||
| (a) | Annual employer contribution to the CONSOL Energy Inc. 401(k) |
|
Grants of Plan-Based Awards – 20212023
The following table sets forth each grant made to an NEO in the 20212023 fiscal year under plans established by CEIX.
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Plan Awards | Grant Date Fair Value of Stock | ||||||||||||||||||||||||||||||||||||||
Name | Type of Award | Grant Date | Number of Underlying Units | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | (Target)(4) | ||||||||||||||||||||||||||||||
James A. Brock | Annual STIC(1) | $ | 750,000 | $ | 1,500,000 | $ | 3,000,000 | |||||||||||||||||||||||||||||||||
| PBC(2) | 2/9/21 | 177,305 | $ | 875,000 | $ | 1,750,000 | $ | 3,500,000 | ||||||||||||||||||||||||||||||||
| MSU(3) | 2/9/21 | 88,652 | 177,304 | 354,608 | $ | 1,750,000 | ||||||||||||||||||||||||||||||||||
Miteshkumar B. Thakkar | Annual STIC(1) | $ | 100,000 | $ | 200,000 | $ | 400,000 | |||||||||||||||||||||||||||||||||
| PBC(2) | 2/9/21 | 25,329 | $ | 125,000 | $ | 250,000 | $ | 500,000 | ||||||||||||||||||||||||||||||||
| MSU(3) | 2/9/21 | 12,665 | 25,329 | 50,658 | $ | 250,000 | ||||||||||||||||||||||||||||||||||
Martha A. Wiegand | Annual STIC(1) | $ | 127,500 | $ | 255,000 | $ | 510,000 | |||||||||||||||||||||||||||||||||
| PBC(2) | 2/9/21 | 32,928 | $ | 162,500 | $ | 325,000 | $ | 650,000 | ||||||||||||||||||||||||||||||||
| MSU(3) | 2/9/21 | 16,464 | 32,928 | 65,856 | $ | 325,000 | ||||||||||||||||||||||||||||||||||
Kurt R. Salvatori | Annual STIC(1) | $ | 83,750 | $ | 167,500 | $ | 335,000 | |||||||||||||||||||||||||||||||||
| PBC(2) | 2/9/21 | 16,464 | $ | 81,250 | $ | 162,500 | $ | 325,000 | ||||||||||||||||||||||||||||||||
| MSU(3) | 2/9/21 | 8,232 | 16,464 | 32,928 | $ | 162,500 | ||||||||||||||||||||||||||||||||||
John M. Rothka | Annual STIC(1) | $ | 27,500 | $ | 55,000 | $ | 165,000 | |||||||||||||||||||||||||||||||||
| PBC(2) | 2/9/21 | 6,332 | $ | 31,250 | $ | 62,500 | $ | 125,000 | ||||||||||||||||||||||||||||||||
| MSU(3) | 2/9/21 | 3,166 | 6,332 | 12,664 | $ | 62,500 | ||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
| Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Shares of Stock or Units | Grant Date Fair Value of Stock | ||||||||||||||||||||||||||||||||||||||||||
| Name | Type of Award | Grant Date | Number of Underlying Units | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | (Target)(4) | ||||||||||||||||||||||||||||||||||||
| James A. | Annual STIC(1) | $750,000 | $1,500,000 | $3,000,000 | ||||||||||||||||||||||||||||||||||||||||||
| Brock | PSU(2) | 2/7/23 | 32,025 | $1,000,000 | $2,000,000 | $4,000,000 | ||||||||||||||||||||||||||||||||||||||||
| RSU(3) | 2/7/23 | 32,026 | $2,000,000 | |||||||||||||||||||||||||||||||||||||||||||
| Mitesh B. | Annual STIC(1) | $300,000 | $600,000 | $1,200,000 | ||||||||||||||||||||||||||||||||||||||||||
| Thakkar | PSU(2) | 2/7/23 | 9,607 | $300,000 | $600,000 | $1,200,000 | ||||||||||||||||||||||||||||||||||||||||
| RSU(3) | 2/7/23 | 9,608 | $600,000 | |||||||||||||||||||||||||||||||||||||||||||
| Martha A. | Annual STIC(1) | $177,187 | $354,375 | $708,750 | ||||||||||||||||||||||||||||||||||||||||||
| Wiegand | PSU(2) | 2/7/23 | 6,245 | $195,024 | $390,049 | $780,098 | ||||||||||||||||||||||||||||||||||||||||
| RSU(3) | 2/7/23 | 6,246 | $390,049 | |||||||||||||||||||||||||||||||||||||||||||
| Kurt R. | Annual STIC(1) | $141,872 | $283,745 | $567,490 | ||||||||||||||||||||||||||||||||||||||||||
| Salvatori | PSU(2) | 2/7/23 | 4,868 | $152,006 | $304,012 | $608,024 | ||||||||||||||||||||||||||||||||||||||||
| RSU(3) | 2/7/23 | 4,868 | $304,013 | |||||||||||||||||||||||||||||||||||||||||||
| John M. | Annual STIC(1) | $46,463 | $92,927 | $185,854 | ||||||||||||||||||||||||||||||||||||||||||
| Rothka | PSU(2) | 2/7/23 | 1,200 | $37,500 | $75,000 | $150,000 | ||||||||||||||||||||||||||||||||||||||||
| RSU(3) | 2/7/23 | 1,201 | $75,000 | |||||||||||||||||||||||||||||||||||||||||||
| (1) | These awards were made pursuant to the 2023 STIC program, which is described in the “Compensation Discussion and Analysis” beginning on page |
| (2) | These awards were made pursuant to the |
| (3) | These awards were made pursuant to the |
| (4) | The values set forth in this column reflect awards of |
| | 57 |
EXECUTIVE COMPENSATION INFORMATION | Understanding our Summary Compensation and Grants of Plan-Based Awards Tables CEO Employment Agreement
UnderstandingCEO Employment Agreement
CEIX entered into an employment agreement with Mr. Brock, our Summary CompensationCEO and GrantsPresident, effective as of Plan-Based Awards Table
February 15, 2018, which was amended in February 2021, February 2022, and February 2023. Because the initial three-year term has run, the employment agreement automatically renews for additional one-year periods unless either party provides advance written notice not later than sixty days prior to the end of the applicable term. Effective in 2023, Mr. Brock is no longer President of the Company but remains the CEO. The agreement set Mr. Brock’s base salary to be at least $1,000,000 per year and provides additional compensation to Mr. Brock in the form of annual retention payments to ensure his continued employment with us through December 31, 2023. Under the terms of the agreement, as amended, Mr. Brock received a cash lump-sum retention payment of $1,000,000 for continuing his employment with us on each of December 31, 2021 and December 31, 2022. In addition, Mr. Brock received an additional $1,000,000 retention bonus for continuing his employment with the Company through December 31, 2023 and achieving set performance goals. In the event of Mr. Brock’s involuntary termination of employment absent Cause, death, or Permanent Disability (each as defined in his employment agreement) prior to base salaries, our executive officersDecember 31, 2023, he was entitled to accelerated payment of any remaining retention payments to him. On Mr. Brock’s involuntary termination absent “cause”, whether or not in connection with a change in control (“CIC”), he will receive a mix of at-risk compensation, both short and long-term, for their services. Pursuant to various plans, our NEOs are eligible to receive annual cash incentive awards based on the achievement of certain performance targets. With respect to long-term awards, each of our NEOs is also eligible to receive equity and cash-settled long-term awards, which vary depending upon the year in which granted and include PBCs and MSUs. The PBCs and MSUs and the plans under which they are awarded are discussed below, and in greater detail in the “Compensation Discussion and Analysis” on pages 31-33.
STIC
Generally, to be eligible to receive an annual award under the STIC, an NEO must generally be an active, full-time employee on December 31 of the year for which the award was granted, unless otherwise provided for in a separation agreement. For more information on the STIC, see the discussion beginning on page 29 in the “Compensation Discussion and Analysis” section.
MSUs
MSUs were granted under our 2020 Omnibus Performance Incentive Plan. Our Compensation Committee determines the number of MSUs to be granted to each executive participant, the conditions under which the MSUs may be forfeited to CEIX, and the other terms and conditions of such awards. Each MSU represents the right to receive alump-sum cash payment based onreflecting the closing stock pricecost of the Company’s common stock oncontinued health care coverage in lieu of continued participation in the dateCompany’s employee benefit plans. The severance amount due to Mr. Brock in the vestingevent of an involuntary termination of employment absent “cause” was revised to include a severance multiple of two times his (x) base salary and (y) target annual incentive under our STIC plan. In addition, Mr. Brock is considered fully vested in all then-outstanding and unvested time-based equity awards held by Mr. Brock as he continued his employment with CEIX through December 31, 2023. Finally, the unit is approved by the Compensation Committee. The MSUs vest in one-third increments on each December 31st following the grant date, subject to continuous service by the executiveagreement contains similar change-in-control and severance benefits and the achievement of certain performance goals relatedsame post-termination restrictive covenants relating to confidentiality, non-competition and non-solicitation described below for our other NEOs in “Change-in-Control Agreements”. The agreement does not include any gross up feature arising from the closing stock price of the Company’s common stockexcise tax payable on such vesting date. To the extent that the MSUs are subject to Section 409A of the Code, all such payments shall be made in compliance with the requirements of Section 409A of the Code. For more information on the MSU awards, see discussion beginning on page 31 of the “Compensation Discussion and Analysis” section.
PBCs
PBCs were also granted under our 2020 Omnibus Performance Incentive Plan. Our Compensation Committee determines the number of PBCs to be granted to each executive participant, the conditions under which the PBCs may be forfeited to CEIX, and the other terms and conditions of such awards. Each PBC represents the right to receive a cash payment based on the closing stock price of the Company’s common stock on the grant date of the PBC. The PBCs vest in one-third increments on each December 31st following the grant date, subject to continuous service by the executive and the achievement of certain performance goals related to ICP Free Cash Flow* and Net Debt Level*. To the extent that the PBCs are subject to Section 409A of the Code, all such payments shall be made in compliance with the requirements of Section 409A of the Code. For more information on the PBC awards, see discussion beginning on page 31 of the “Compensation Discussion and Analysis” section.an excess parachute payment.
| 58 | |
EXECUTIVE COMPENSATION INFORMATION | Outstanding Equity Awards at Fiscal Year-End for CEIX – 20212023
Outstanding Equity Awards at Fiscal Year-End for CEIX – 20212023
The following table sets forth unvested RSU, PSU, PBCU and MSU awards that have been awarded to our NEOs by CEIX and were outstanding as of December 31, 2021.2023.
| Stock Awards | Stock Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||
Name | Number of (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Vested | Number of (#) | Number of (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Vested | Equity Vested | ||||||||||||||||||||||||||||
James A. Brock | 161,422 | (2) | $ | 3,665,894 | 73,949 | (4) | $ | 1,679,382 | ||||||||||||||||||||||||||||||||
| 145,488 | (3) | $ | 3,304,032 | 118,204 | (5) | $ | 2,684,413 | |||||||||||||||||||||||||||||||||
Miteshkumar B. Thakkar | 6,513 | (2) | $ | 147,910 | 16,686 | (5) | $ | 378,939 | ||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | ||||||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | ||||||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | ||||||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | ||||||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | ||||||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | ||||||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | ||||||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | 39,771 | (2) | $ | 903,199 | 21,952 | (5) | $ | 498,530 | ||||||||||||||||||||||||||||||||
Kurt R. Salvatori | 16,896 | (2) | $ | 383,708 | 10,976 | (5) | $ | 249,265 | ||||||||||||||||||||||||||||||||
Kurt R. Salvatori | ||||||||||||||||||||||||||||||||||||||||
Kurt R. Salvatori | ||||||||||||||||||||||||||||||||||||||||
Kurt R. Salvatori | ||||||||||||||||||||||||||||||||||||||||
John M. Rothka | 7,073 | (2) | $ | 160,628 | 4,222 | (5) | $ | 95,882 | ||||||||||||||||||||||||||||||||
John M. Rothka | ||||||||||||||||||||||||||||||||||||||||
John M. Rothka | ||||||||||||||||||||||||||||||||||||||||
John M. Rothka | ||||||||||||||||||||||||||||||||||||||||
| (1) | The market value for RSUs and PSUs was determined by multiplying the closing market price for CEIX common stock on December |
| (2) | This represents RSUs granted on February |
| (3) |
|
This shows the number of unvested PSUs as of December 31, |
|
The following table sets forth information concerning any vesting of PSUs, RSUs PSUs and MSUs of CEIX during fiscal 2021.year 2023.
| Stock Awards(1) | |||||||||||||||||||||||||||||
| Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||||||||||||||
James A. Brock | |||||||||||||||||||||||||||||
| Stock Awards(1) | |||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||||||||||||||
James A. Brock |
| 373,942 | $ | 7,646,461 | |||||||||||||||||||||||||
Miteshkumar B. Thakkar |
| 20,503 | $ | 444,439 | |||||||||||||||||||||||||
Mitesh B. Thakkar | |||||||||||||||||||||||||||||
Martha A. Wiegand |
| 44,656 | $ | 785,403 | |||||||||||||||||||||||||
Kurt Salvatori |
| 21,383 | $ | 384,946 | |||||||||||||||||||||||||
Kurt R. Salvatori | |||||||||||||||||||||||||||||
John M. Rothka |
| 8,542 | $ | 149,185 | |||||||||||||||||||||||||
| (1) | These amounts reflect the number of shares relating to the gross number of PSUs, RSUs, and MSUs that vested on the applicable vesting date, multiplied by the closing price of our common stock on the applicable vesting date, prior to the withholding of any shares to satisfy taxes for each of the NEOs affected. Values include the vesting of (i) RSU awards granted in |
| | 59 |
EXECUTIVE COMPENSATION INFORMATION | Pension Benefits Table – 20212023
Pension Benefits Table – 20212023
The following table provides information with respect to each plan that provides for specified retirement payments or benefits, or payments or benefits that will be provided primarily following retirement, including tax-qualified defined benefit plans and non-qualified defined benefit plans (which we refer to as the Retirement Restoration Plan, the Supplemental Retirement PlanSERP, and the New Restoration Plan), but excluding nonqualified defined contribution plans.
Name | CEIX Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | CEIX Plan Name | CEIX Plan Name | Number of Years of Credited Service | Number of Years of Credited Service | | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | Payments During Last Fiscal Year ($) | |||||||||||||||||||||||||
James A. Brock | Employee Retirement Plan | 34 | $ | 1,665,696 | — | ||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | 25 | $ | 214,335 | — | |||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | 20 | $ | 2,046,563 | — | |||||||||||||||||||||||||||||||||
| New Restoration Plan | 10 | $ | 965,516 | — | |||||||||||||||||||||||||||||||||
Miteshkumar B. Thakkar | Employee Retirement Plan | — | $ | — | — | ||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| New Restoration Plan | 2 | $ | 58,680 | — | |||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | |||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | |||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | |||||||||||||||||||||||||||||||||||||
Mitesh B. Thakkar | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | Employee Retirement Plan | 6 | $ | 57,883 | — | ||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| New Restoration Plan | 6 | $ | 165,405 | — | |||||||||||||||||||||||||||||||||
Martha A. Wiegand | |||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | |||||||||||||||||||||||||||||||||||||
Martha A. Wiegand | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
Kurt R. Salvatori | Employee Retirement Plan | 23 | $ | 693,613 | — | ||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | 19 | $ | 460,387 | — | |||||||||||||||||||||||||||||||||
| New Restoration Plan | 10 | $ | 184,202 | — | |||||||||||||||||||||||||||||||||
Kurt R. Salvatori | |||||||||||||||||||||||||||||||||||||
Kurt R. Salvatori | |||||||||||||||||||||||||||||||||||||
Kurt R. Salvatori | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
John M. Rothka | Employee Retirement Plan | 9 | $ | 42,178 | — | ||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | — | $ | — | — | |||||||||||||||||||||||||||||||||
| New Restoration Plan | 1 | $ | 14,169 | — | |||||||||||||||||||||||||||||||||
John M. Rothka | |||||||||||||||||||||||||||||||||||||
John M. Rothka | |||||||||||||||||||||||||||||||||||||
John M. Rothka | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Retirement Restoration Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| Supplemental Retirement Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| New Restoration Plan | |||||||||||||||||||||||||||||||||||||
| (1) | The accumulated benefits included in this column were computed through December 31, |
Understanding Our Pension Benefits Table
This section provides information regarding CEIX’s retirement programs, which include the following plans that were either adopted or assumed in connection with the separation:
Employee Retirement Plan;
| • | Employee Retirement Plan |
Retirement Restoration Plan;
| • | Restoration Plan |
Supplemental Retirement Plan; and
| • | SERP |
| • | New Restoration Plan |
New Restoration Plan.
Employee Retirement Plan (the “Pension Plan”)
CEIX assumed sponsorship of the CONSOL Energy Inc. Employee Retirement Plan, (the “Pension Plan”), which was previously sponsored by our former parent and is a qualified defined benefit plan that pays retirement benefits based on years of service and compensation. The Pension Plan is a qualified plan, meaning that it is subject to a variety of Internal Revenue Service rules. Effective December 31, 2015, the Pension Plan was frozen and no employee, including any of our NEOs, is eligible for future accruals under the plan.
Eligibility. Historically, the Pension Plan covered employees of CEIX and affiliated participating companies classified as regular, full-time employees or that completecompleted 1,000 hours of service during a specified twelve-month period. As mentioned above, the plan was frozen effective December 31, 2015 for all participants. As a
| 60 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Pension Benefits Table
result of these amendments, none of our NEOs have accrued any additional benefits under the Pension Plan after December 31, 2015.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Pension Benefits Table
Incapacity Retirement. Employees who have attained age 40 with at least 10 years of service who are deemed disabled and consequently receive a Social Security disability award (proving the disability occurred while employed by CEIX or a participating affiliated company) are eligible for an incapacity retirement resulting in an unreduced benefit under the Pension Plan, payable in the form of an annuity, commencing the month following termination. Messrs. Brock, Salvatori and Rothka and Ms. Wiegand have satisfied the age and service conditions necessary to be eligible for incapacity retirement under the Pension Plan as of December 31, 2021,2023, if any such person had incurred a qualifying disability as of that date.
Separation Retirement. Employees who terminate employment with five or more years of service prior to attaining age 50, or who have attained age 50 but have fewer than 10 years of service upon termination, qualify for separation retirement. The accrued vested benefit is payable at a reduced amount for payments commencing prior to age 65, or the full benefit may be paid at age 65. As of December 31, 2021,2023, Mr. Rothka is eligible for separation retirement under the Pension Plan; provided, however, that he would not be entitled to payment until he attained age 50.
Early Retirement. Employees who have completed 10 or more years of service and are age 50 or older upon termination are eligible for early retirement. Under early retirement, an employee may elect to defer payment to age 65 or elect to begin receiving payment the first of any month up to age 65, subject to a reduction for age. Payments commencing prior to age 65 are reduced based on various early reduction schedules depending upon age at the payment commencement date and years of service at the time of termination. As of December 31, 2021,2023, Mr. Salvatori and Ms. Wiegand are eligible for early retirement under the Pension Plan.
Normal Retirement. Employees who terminate employment and have attained age 65 qualify for normal retirement. Payment of the full benefit commences the month following termination. As of December 31, 2021,2023, Mr. Brock is eligible for normal retirement under the Pension Plan.
Form of Payment. The portion of accrued pension benefits earned under the Pension Plan as of December 31, 2005 may be, upon the election of the participant, paid in the form of a lump-sum payment except in the case of an incapacity retirement as discussed above. Pension benefits earned after January 1, 2006 are payable in the form of a single life annuity, 50% joint and survivor annuity, 75% joint and survivor annuity, or 100% joint and survivor annuity.
Calculation of Benefits. Pension benefits, which are now frozen, are based on an employee’s years of service and average monthly pay during the employee’s five highest-paid years while eligible for service under the Pension Plan. Average monthly pay for this purpose excludes compensation in excess of limits imposed by the Code. Since the Pension Plan is frozen, average monthly pay is based on pay as of December 31, 2014 for Ms. Wiegand and Mr. Rothka and as of December 31, 2015 for Messrs. Brock and Salvatori. Prior to January 1, 2006, pension benefits were calculated based on the average monthly pay during the employee’s three highest-paid years and included annual amounts payable under CEIX’s STIC, again excluding compensation in excess of limits imposed by the Code.
Retirement Restoration Plan (the “Restoration Plan”)
CEIX assumed the obligations for certain participants under our former parent’s Restoration Plan and adopted a new plan effective as of the separation under which it will meet its obligation to pay these restoration plan benefits. This plan is an unfunded deferred compensation plan maintained by the Company for the benefit of employees whose eligible compensation under the Pension Plan exceeded limits imposed by the federal income tax laws. This plan has been frozen since December 31, 2006.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Pension Benefits Table
Supplemental Retirement Plan (“SERP”)
CEIX also assumed the obligations for certain participants from our former parent’s Supplemental Retirement Plan, and adopted a new plan effective as of the separation under which it will meet its obligation to pay these
| - 2024 Proxy Statement | 61 |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Pension Benefits Table
supplemental retirement plan benefits. This plan has been frozen since December 31, 2011. Supplemental Retirement Plan benefits are forfeited in certain events, including but not limited to a breach by the executive of any restrictive covenant agreement with CEIX. See page 4867 for a description of the effect of termination of employment under different scenarios.
New Restoration Plan
CEIX also assumed obligations for certain participants arising from our former parent’s New Restoration Plan, which, unlike the plans discussed above, is not frozen and covers current CEIX employees, including our NEOs. Eligibility for benefits under this plan is determined each calendar year, and participantsemployees whose eligible plan compensation exceeds the compensation limits imposed by Section 401(a)(17) of the Code (up to $290,000$330,000 for 2021)2023) are eligible for New Restoration Plan benefits. The amount of each participant’s benefit under this plan is equal to 9% timesof his or her eligible plan compensation, less 6% timesof the lesser of (i) his or her annual base salary as of December 31 or (ii) the compensation limit imposed by the Code for such year ($290,000330,000 for 2021)2023). New Restoration Plan benefits are forfeited in certain events, including but not limited to a breach by the executive of any restrictive covenant agreement with CEIX. See page 4967 for a description of the effect of termination of employment under different scenarios.
Potential Payments Upon Termination or Change in Control Tables
Except as otherwise provided, the following narrative and tables set forth the potential payments and the value of other benefits that would vest or otherwise accelerate vesting at, following, or in connection with any termination, including, without limitation, resignation, an incapacity retirement or an involuntary termination absent cause of one of our NEOs, or a CIC of CEIX as defined by applicable plans and agreements.
For each currently employed NEO, the payments and benefits detailed in the tables below are in addition to any payments under our plans and arrangements that are offered or provided generally to all salaried employees on a non-discriminatory basis. The tables also assume that employment termination and/or a CIC occurred on December 31, 20212023, and are based only on agreements in place as of December 31, 2021.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables
2023.
A description of the key elements of the plans, arrangements and agreements covered by the following tables and which provide for payments or benefits in connection with a termination of employment or CIC are described under “Compensation Discussion and Analysis” and further explained in the section following these tables entitled “Understanding our Change in Control and Employment Termination Tables and Information.” The footnotes to the tables also describe the assumptions that were used in calculating the amounts described below.
James A. Brock*
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Payments Upon Termination: | Incapacity Retirement | Involuntary Termination Absent Cause | Death | Disability | CIC Termination(1) | Incapacity Retirement | Incapacity Retirement | Involuntary Termination Absent Cause | Involuntary Termination Absent Cause | Death | Death | Disability | Disability | CIC Termination(1) | CIC Termination(1) | |||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | — | — | — | $ | 3,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive(2) | — | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | $ | 4,500,000 | |||||||||||||||||||||||||||||||||||||||||
Non-CIC Severance(3) | — | $ | 2,000,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Compensation:(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs: Unvested | $ | 3,665,894 | $ | 3,665,894 | $ | 3,665,894 | — | $ | 3,665,894 | |||||||||||||||||||||||||||||||||||||||||
PBCs: Unvested | $ | 1,166,673 | $ | 1,166,673 | $ | 1,166,673 | — | $ | 1,166,673 | |||||||||||||||||||||||||||||||||||||||||
PSUs: Unvested | $ | 2,140,077 | $ | 2,140,077 | $ | 2,140,077 | — | $ | 2,140,077 | |||||||||||||||||||||||||||||||||||||||||
MSUs: Unvested | $ | 2,684,413 | $ | 2,684,413 | $ | 2,684,413 | — | $ | 2,684,413 | |||||||||||||||||||||||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement service(5) | — | — | — | — | $ | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||
Healthcare Continuation(6) | — | $ | 25,914 | — | — | $ | 25,914 | |||||||||||||||||||||||||||||||||||||||||||
401(k) payment(7) | — | — | — | — | $ | 26,100 | ||||||||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan(8) | — | — | — | — | $ | 255,298 | ||||||||||||||||||||||||||||||||||||||||||||
New Restoration Plan(9) | — | — | — | — | $ | 324,520 | ||||||||||||||||||||||||||||||||||||||||||||
280G Cutback(10) | — | — | — | — | $ | (2,049,970 | ) | |||||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 9,657,057 | $ | 13,182,971 | $ | 11,157,057 | $ | 1,500,000 | $ | 15,763,919 | ||||||||||||||||||||||||||||||||||||||||
|
Miteshkumar B. Thakkar*
Payments Upon Termination: | Incapacity Retirement | Involuntary Termination Absent Cause | Death | Disability | CIC Termination(1) | ||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||
Base Salary | — | — | — | — | $ | 800,000 | |||||||||||||||||||
Short-Term Incentive(2) | — | $ | 200,000 | $ | 200,000 | — | $ | 400,000 | |||||||||||||||||
Non-CIC Severance(3) | — | $ | 400,000 | — | — | — | |||||||||||||||||||
Long-Term Incentive Compensation:(4) | |||||||||||||||||||||||||
RSUs: Unvested | $ | 62,975 | $ | 62,975 | $ | 62,975 | — | $ | 147,910 | ||||||||||||||||
PBCs: Unvested | $ | 75,556 | $ | 75,556 | $ | 75,556 | — | $ | 173,020 | ||||||||||||||||
PSUs: Unvested | $ | 4,042 | $ | 4,042 | $ | 4,042 | — | $ | 4,860 | ||||||||||||||||
MSUs: Unvested | $ | 157,891 | $ | 157,891 | $ | 157,891 | — | $ | 378,939 | ||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||
Outplacement service(5) | — | — | — | — | $ | 25,000 | |||||||||||||||||||
Healthcare Continuation(6) | — | $ | 29,522 | — | — | $ | 29,522 | ||||||||||||||||||
401(k) payment(7) | — | — | — | — | $ | 26,100 | |||||||||||||||||||
TOTAL | $ | 300,464 | $ | 929,986 | $ | 500,464 | — | $ | 1,985,351 | ||||||||||||||||
| * | Applicable footnotes follow the last table in this section of the Proxy Statement. |
| |
EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables
Martha A. Wiegand*Mitesh B. Thakkar*
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Payments Upon Termination: | Incapacity Retirement | Involuntary Termination Absent Cause | Death | Disability | CIC Termination(1) | Incapacity Retirement | Incapacity Retirement | Involuntary Termination Absent Cause | Involuntary Termination Absent Cause | Death | Death | Disability | Disability | CIC Termination(1) | CIC Termination(1) | |||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | — | — | — | $ | 850,000 | ||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive(2) | — | $ | 255,000 | $ | 255,000 | — | $ | 541,246 | ||||||||||||||||||||||||||||||||||||||||||
Non-CIC Severance(3) | — | $ | 425,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Compensation:(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs: Unvested | $ | 391,021 | $ | 391,021 | $ | 391,021 | — | $ | 903,199 | |||||||||||||||||||||||||||||||||||||||||
PBCs: Unvested | $ | 131,931 | $ | 131,931 | $ | 131,931 | — | $ | 266,663 | |||||||||||||||||||||||||||||||||||||||||
PSUs: Unvested | $ | 44,080 | $ | 44,080 | $ | 44,080 | — | $ | 52,914 | |||||||||||||||||||||||||||||||||||||||||
MSUs: Unvested | $ | 207,720 | $ | 207,720 | $ | 207,720 | — | $ | 498,530 | |||||||||||||||||||||||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement service(5) | — | — | — | — | $ | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||
Healthcare Continuation(6) | — | $ | 15,975 | — | — | $ | 15,975 | |||||||||||||||||||||||||||||||||||||||||||
401(k) payment(7) | — | — | — | — | $ | 26,100 | ||||||||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan(8) | ||||||||||||||||||||||||||||||||||||||||||||||||||
New Restoration Plan(9) | — | — | — | — | $ | 69,988 | ||||||||||||||||||||||||||||||||||||||||||||
280G Cutback(10) | — | — | — | — | $ | (242,007 | ) | |||||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 774,752 | $ | 1,470,727 | $ | 1,029,752 | — | $ | 3,007,608 | |||||||||||||||||||||||||||||||||||||||||
| * | Applicable footnotes follow the last table in this section of the Proxy Statement. |
Kurt R. Salvatori*Martha A. Wiegand*
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Payments Upon Termination: | Incapacity Retirement | Involuntary Termination Absent Cause | Death | Disability | CIC Termination(1) | Incapacity Retirement | Incapacity Retirement | Involuntary Termination Absent Cause | Involuntary Termination Absent Cause | Death | Death | Disability | Disability | CIC Termination(1) | CIC Termination(1) | |||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | — | — | — | $ | 670,000 | ||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive(2) | — | $ | 167,500 | $ | 167,500 | — | $ | 394,497 | ||||||||||||||||||||||||||||||||||||||||||
Non-CIC Severance(3) | — | $ | 335,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Compensation:(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs: Unvested | $ | 169,076 | $ | 169,076 | $ | 169,076 | — | $ | 383,708 | |||||||||||||||||||||||||||||||||||||||||
PBCs: Unvested | $ | 62,492 | $ | 62,492 | $ | 62,492 | — | $ | 129,167 | |||||||||||||||||||||||||||||||||||||||||
PSUs: Unvested | $ | 27,547 | $ | 27,547 | $ | 27,547 | — | $ | 33,066 | |||||||||||||||||||||||||||||||||||||||||
MSUs: Unvested | $ | 103,860 | $ | 103,860 | $ | 103,860 | — | $ | 249,265 | |||||||||||||||||||||||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement service(5) | — | — | — | — | $ | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||
Healthcare Continuation(6) | — | $ | 29,522 | — | — | $ | 29,522 | |||||||||||||||||||||||||||||||||||||||||||
401(k) payment(7) | — | — | — | — | $ | 26,100 | ||||||||||||||||||||||||||||||||||||||||||||
Supplemental Restoration Plan(8) | — | — | — | — | $ | 640,396 | ||||||||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan(8) | ||||||||||||||||||||||||||||||||||||||||||||||||||
New Restoration Plan(9) | — | — | — | — | $ | 47,242 | ||||||||||||||||||||||||||||||||||||||||||||
280G Cutback(10) | — | — | — | — | $ | (462,360 | ) | |||||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 362,975 | $ | 894,997 | $ | 530,475 | — | $ | 2,165,603 | |||||||||||||||||||||||||||||||||||||||||
| * | Applicable footnotes follow the last table in this section of the Proxy Statement. |
| |
EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables
Kurt R. Salvatori*
| Payments Upon Termination: | Incapacity Retirement | Involuntary Termination Absent Cause | Death | Disability | CIC Termination(1) | ||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||
Base Salary | — | — | — | — | $ 810,700 | ||||||||||||||||||||
Short-Term Incentive(2) | — | $ 283,745 | $ 283,745 | — | $ 567,490 | ||||||||||||||||||||
Non-CIC Severance(3) | — | $ 405,350 | — | — | — | ||||||||||||||||||||
Long-Term Incentive Compensation:(4) | |||||||||||||||||||||||||
RSUs: Unvested | $ 371,659 | $ 371,659 | $ 371,659 | — | $ 1,055,163 | ||||||||||||||||||||
PBCs: Unvested | $ 250,119 | $ 250,119 | $ 250,119 | — | $ 609,011 | ||||||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||
Outplacement service(5) | — | — | — | — | $ 25,000 | ||||||||||||||||||||
Healthcare Continuation(6) | — | $ 35,340 | — | — | $ 35,340 | ||||||||||||||||||||
401(k) payment(7) | — | — | — | — | $ 29,700 | ||||||||||||||||||||
Supplemental Restoration Plan(8) | — | — | — | — | $ 387,913 | ||||||||||||||||||||
New Restoration Plan(9) | — | — | — | — | $ 53,449 | ||||||||||||||||||||
280G Cutback(10) | — | — | — | — | $ | (403,912) | |||||||||||||||||||
TOTAL | $ 621,778 | $ 1,346,213 | $ 905,523 | — | $ 3,169,854 | ||||||||||||||||||||
| * | Applicable footnotes follow the last table in this section of the Proxy Statement. |
John M. Rothka
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments Upon Termination: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Payments Upon Termination: | Incapacity Retirement | Involuntary Termination Absent Cause | Death | Disability | CIC Termination(1) | Incapacity Retirement | Incapacity Retirement | Involuntary Termination Absent Cause | Involuntary Termination Absent Cause | Death | Death | Disability | Disability | CIC Termination(1) | CIC Termination(1) | |||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | — | — | — | $ | 330,000 | ||||||||||||||||||||||||||||||||||||||||||||
Short-Term Incentive(2) | — | $ | 55,000 | $ | 55,000 | — | $ | 82,500 | ||||||||||||||||||||||||||||||||||||||||||
Non-CIC Severance(3) | — | $ | 220,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Compensation:(4) | ||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs: Unvested | $ | 73,557 | $ | 73,557 | $ | 73,557 | — | $ | 160,628 | |||||||||||||||||||||||||||||||||||||||||
PBCs: Unvested | $ | 24,301 | $ | 24,301 | $ | 24,301 | — | $ | 50,000 | |||||||||||||||||||||||||||||||||||||||||
PSUs: Unvested | $ | 6,154 | $ | 6,154 | $ | 6,154 | — | $ | 7,403 | |||||||||||||||||||||||||||||||||||||||||
MSUs: Unvested | $ | 39,950 | $ | 39,950 | $ | 39,950 | — | $ | 95,882 | |||||||||||||||||||||||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement service(5) | — | — | — | — | $ | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||
Healthcare Continuation(6) | — | $ | 29,522 | — | — | $ | 29,522 | |||||||||||||||||||||||||||||||||||||||||||
401(k) payment(7) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Restoration Plan(8) | ||||||||||||||||||||||||||||||||||||||||||||||||||
New Restoration Plan(9) | ||||||||||||||||||||||||||||||||||||||||||||||||||
280G Cutback(10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 143,962 | $ | 448,484 | $ | 198,962 | — | $ | 780,935 | |||||||||||||||||||||||||||||||||||||||||
| (1) | In the event of a qualifying termination in connection with a CIC, each of our NEOs would be entitled to a lump-sum cash payment equal to a multiple of base salary plus a multiple of incentive pay (the multiple for Mr. Brock is 3.0, for Mr. Thakkar is |
| (2) | In the event of death, each NEO would earn a pro rata portion of his or her short-term incentive award. In the event of a qualifying termination in connection with a CIC, each NEO would also be entitled to a |
| 64 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables
| (3) | Under the CIC and severance agreements adopted in 2018, each NEO, except Mr. Brock, is entitled to a cash lump-sum benefit equal to his or her base salary, but only in the event the executive is involuntarily terminated by the company absent cause. Under the terms of the 2018 amendment to Mr. Brock’s employment agreement, Mr. Brock is entitled to a cash lump-sum benefit equal to two times the sum of his base salary and target bonus, but only in the event the executive is involuntarily terminated by the company absent cause. |
| (4) | Under the terms of the CIC and severance agreements |
| (5) | Represents the lump-sum payment due each NEO for outplacement services under their CIC agreements assuming a qualifying termination related to a CIC event on December 31, |
| (6) | Represents the lump-sum payment due each NEO for the continuation of medical, drug and dental coverage for 18 months under their CIC agreements assuming a qualifying termination without cause absent a CIC or a qualifying termination related to a CIC event on December 31, |
| (7) | Represents the supplemental 401(k) contribution due each NEO under their CIC and severance agreements assuming a qualifying termination related to a CIC event on December 31, |
| (8) | Represents the benefit due Messrs. Brock and Salvatori under the Supplemental Retirement Plan in the event of a qualifying termination related to a CIC event on December 31, |
| (9) | Represents the benefit due each NEO under the terms of the New Restoration Plan in the event of a qualifying termination related to a CIC event on December 31, |
| (10) | This calculation is an estimate for proxy disclosure purposes only. Note that the actual payment for |
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION |Understanding Our Change in Control and Employment Termination Tables and Information
Understanding Our Change in Control and Employment Termination Tables and Information
This section provides certain information regarding some of our agreements, plans and programs, which provide for benefits to be paid to our NEOs in connection with employment termination and/or a CIC of the company with respect to each of our NEOs.
RSUs
RSU Awards. For RSU awards issued by CEIX after our separation from our former parent, such awards vest on a pro rata basis only in the event of a termination of employment other than for “cause” as follows:
Incapacity Retirement under the CEIX Pension Plan (or “Disability” as defined by the Omnibus Plan);
| • | Incapacity Retirement under the CEIX Pension Plan (or “Disability” as defined by the Omnibus Plan); |
Death;
| • | Death; |
Involuntary termination of NEO’s employment by CEIX absent “cause” (as defined by the Omnibus Plan); or
| • | Involuntary termination of NEO’s employment by CEIX absent “cause” (as defined by the Omnibus Plan); or |
Attainment of age 60 with 20 years of service with CEIX or an affiliate.
| • | Attainment of age 60 with 20 years of service with CEIX or an affiliate. |
In these circumstances, the NEO is entitled to retain a prorated portion of the RSUs based on the ratio of the number of completed months that the NEO worked during the vesting period. Any remaining portion of the award is forfeited. If an NEO is terminated for “cause” or breaches the restrictive covenants relating to confidentiality, non-competition or non-solicitation, all unvested shares covered by the award are immediately forfeited and any vested shares are subject to recoupment by CEIX within one year after CEIX’s discovery of the NEO’s breach of any covenant.
Full vesting of RSU awards will occur in a CIC scenario as described below. If an acquirer assumes the RSU awards, and within two years following the CIC, the NEO terminates employment by reason of death, Disability (as defined in the Omnibus Plan), after reaching age 60 with 20 years of service with CEIX or an affiliate, or if the
| - 2024 Proxy Statement | 65 |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
assuming company terminates the NEO’s employment without cause, the RSUs will vest in full. In the event of a CIC where the RSUs are not assumed, the RSUs will immediately vest and be settled as soon as practicable.
PSUs
PSU Awards. PSUs granted by CEIX vest on a pro rata basis upon a termination of employment other than for “cause” (as defined in the Omnibus Plan) related to:
Attainment of age 60 with 20 years of service with CEIX or an affiliate;
| • | Attainment of age 60 with 20 years of service with CEIX or an affiliate; |
Death;
| • | Death; |
Disability (as defined in the Omnibus Plan) or;
| • | Disability (as defined in the Omnibus Plan) or; |
Change in Control (as defined in the Omnibus Plan).
| • | Change in Control (as defined in the Omnibus Plan). |
In all cases (other than a CIC), the NEO will be entitled to retain the PSUs and receive payment therefor,therefore, only to the extent that the PSUs are earned and payable, as approved by the Compensation Committee after evaluating the company’s actual performance against the performance goals attached to such awards at the end of the performance period. The pro rata portion of the PSUs that vest will be determined by multiplying the number of PSUs earned based on the ratio of the number of completed months that the NEO worked in the performance period against the number of months in the full performance period.
In the event of a CIC, the PSUs will vest on a pro rata basis (as described above) and be deemed earned in an amount equal to the greater of (x) the target performance level, or (y) the level of achievement of the performance goals for the PSUs as determined by the Compensation Committee through the date of the CIC, if determinable.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
Omnibus Performance Incentive Plan Definitions
The following definitions and provisions are set forth in our Omnibus Plan:
“Cause” is defined unless(unless otherwise defined in the applicable award agreement,agreement) as a determination by the Compensation Committee that a person has committed an act of embezzlement, fraud, dishonesty or breach of fiduciary duty to CEIX, deliberately and repeatedly violated the rules of CEIX or the valid instructions of the Board or an authorized officer of CEIX, made any unauthorized disclosure of any previously undisclosed material secrets or confidential information of CEIX, or engaged in any conduct that could reasonably be expected to result in material loss, damage or injury to CEIX.
“Change in control” meansis defined (unless otherwise provided for in an equity award agreement) as the earliest to occur of:
any one person (other than the company, trustee or other fiduciary holding securities under an employee benefit plan of the company and any company owned, directly or indirectly, by the stockholders of the company in substantially the same proportions as their ownership of company stock), or more than one person acting as a group, is or becomes the “beneficial owner” of shares that, together with the shares held by that person or group, possess more than 50% of the total fair market value or total voting power of the company’s shares;
| • | any one person (other than the company, trustee or other fiduciary holding securities under an employee benefit plan of the company and any company owned, directly or indirectly, by the stockholders of the company in substantially the same proportions as their ownership of company stock), or more than one person acting as a group, is or becomes the “beneficial owner” of shares that, together with the shares held by that person or group, possess more than 50% of the total fair market value or total voting power of the company’s shares; |
a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or
| • | a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or |
the sale of all or substantially all of the company’s assets; provided, however, that in addition to the foregoing, such event must also qualify as a CIC event within the meaning of Treas. Reg. Section 1.409A-3(i)(5)(i) with respect to the company.
| • | the sale of all or substantially all of the company’s assets; provided, however, that in addition to the foregoing, such event must also qualify as a CIC event within the meaning of Treas. Reg. Section 1.409A-3(i)(5)(i) with respect to the company. |
“Disability” is defined unless(unless otherwise defined in the applicable award agreement,agreement) as an award recipient’s inability, because of physical or mental incapacity or injury (that has continued for a period of at least
| 66 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
12-consecutive calendar months), to perform for CEIX or an affiliate of CEIX substantially the same services as he or she performed prior to incurring the incapacity or injury.
Supplemental Retirement Plan (“SERP”)
If a participant’s employment with CEIX or any subsidiary terminates for cause (which is defined in the Supplemental Retirement Plan to include a violation of any non-solicitation, non-competition or non-disclosure provision contained in any agreement entered into by and between a participant and CEIX or any subsidiary), no benefits will be payable under the Supplemental Retirement Plan. Additionally, each participant agrees by participating in the Supplemental Retirement Plan that within 10 days after the date we provide the participant with a notice that there has occurred a termination on account of “cause,” the participant will pay to us in cash an amount equal to any and all distributions paid to or on behalf of such participant under the plan within the six months prior to the date of the earliest breach. A forfeiture of Supplemental Retirement Plan benefits will also occur for certain “cause” events even if the event does not occur or is not discovered until after any termination of employment. Cause includes a breach by an executive of any restrictive covenant agreement with CEIX. Benefits under the Supplemental Retirement Plan will immediately vest upon death or disability of a participant or upon a CIC (as described below).
Further, the participant will be entitled to receive the vested benefits in a lump-sum payment if the participant’s employment is terminated after, or in connection with, a change of control (as defined in the Supplemental Retirement Plan) on account of:
an involuntary termination associated with a CIC within the two-year period after the CIC, or
| • | an involuntary termination associated with a CIC within the two-year period after the CIC, or |
a termination by CEIX other than for cause or due to the participant’s death or disability that (A) occurs not more than three months prior to the date on which a CIC occurs or (B) is required by a third-party who initiates a CIC.
| • | a termination by CEIX other than for cause or due to the participant’s death or disability that (A) occurs not more than three months prior to the date on which a CIC occurs or (B) is required by a third-party who initiates a CIC. |
The benefit will be calculated as if the participant terminated on the date of the CIC, but the participant will be considered only for purposes of applying the appropriate actuarial reduction to have a minimum age of 55 and a minimum of 20 years of credited service. Additional service credit will also be provided for the term of any payments under a participant’s CIC Agreement, if any, with CEIX. See “Understanding our Pension Benefits Table” beginning on page 4361 for more information regarding the Supplemental Retirement Plan.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
New Restoration Plan
In the event a participant in the New Restoration Plan terminates employment with CEIX and its subsidiaries in connection with a change in control (CIC) (as defined in the New Restoration Plan), the participant is entitled to a contribution to the New Restoration Plan for the year in which the termination occurs. If such termination occurs prior to September 30 of a calendar year, then such contribution will be based upon the participant’s base salary and target bonus for the year and, if such termination occurs on or after September 30 of a calendar year, such contribution will be based upon the participant’s base salary and actual bonus for the year. Notably, the same contribution treatment applies for participants who incur an involuntary termination of employment due to death, disability, incapacity retirement or reduction in force, and the same compensation treatment for terminations that occur on or after September 30 applies to participants who voluntarily resign from employment. If a participant’s employment terminates on account of “cause” (as defined in the New Restoration Plan), no benefits will be payable under the plan. Cause includes a breach by an executive of any restrictive covenant agreement with CEIX. Additionally, each participant agrees by participating in the New Restoration Plan that within 10 days after the date we provide the participant with a notice that there has occurred a termination on account of “cause,” the participant will pay to us in cash an amount equal to any and all distributions paid to or on behalf of such participant under the plan within the six months prior to the date of the earliest breach. A forfeiture of New Restoration Plan benefits will also occur for certain “cause” events even if the event does not occur or is not discovered until after any termination of employment.
| - 2024 Proxy Statement | 67 |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
Agreements in Place During 20212023 (Change in Control and Non-CIC Severance)
As of December 31, 2021,2023, all of our NEOs were covered by an agreement providing for CIC protection.
20212023 Change in Control Agreements for Messrs. Rothka, Salvatori, Thakkar and Ms. WiegandandEmployment Agreement forMr. Brock, as amended in 20212022. During 2018, CEIX entered into severance and CIC agreements with all of our NEOs (except for Mr. Thakkar’s current CIC agreement which became effective on November 4, 2020). In addition, CEIX entered into an individual employment agreement with our CEO and President that includes CIC severance protection, which was amended in 2021.2022.
The agreements for the NEOs (including the CEO employment agreement and its 20212022 amendment) provide for both (i) non-CIC cash severance and (ii) CIC cash severance exclusively upon a termination of employment absent “cause,” subject to the following requirements. In the case of a “CIC scenario,” the agreement is “double trigger” and each executive is only entitled to cash severance if, following, or in connection with, a CIC, the executive’s employment is terminated by CEIX absent “cause” or if the executive resigns due to constructive or good reason termination within 90 days prior to the CIC or within two years following the CIC. These agreements (including the CEO employment agreement and its 20212022 amendment) do not include any gross up feature arising from the excise tax payable on an excess parachute payment.
Under these agreements, each NEO would be entitled to receive:
for each NEO other than Mr. Brock, a lump-sum cash payment equal to the NEO’s base salary in a non-CIC involuntary termination of employment absent “cause”, and for Mr. Brock, a lump-sum cash payment equal to two times (2x) the sum of Mr. Brock’s base salary and target bonus;
a lump-sum cash payment equal to a multiple of base salary plus a multiple of annual incentive pay in an involuntary termination of employment or constructive (or good reason) termination related to a CIC absent “cause” (3x for Mr. Brock; 2x for Ms. Wiegand; 2x for Mr. Salvatori; 2x for Mr. Thakkar; and 1.5x for Mr. Rothka);
a prorated payment of the executive’s annual incentive compensation for the year in which the termination occurs in both a CIC and non-CIC termination;
accelerated vesting of any outstanding long-term incentive compensation upon the second trigger related to a CIC termination event; provided, however, that any outstanding performance-based awards will be settled at the greater of target or actual performance (if ascertainable at the CIC) and prorated for service to the date of the CIC;
continued healthcare for 18 months for both a CIC and non-CIC termination absent “cause”;
outplacement assistance in the form of a cash payment equal to $25,000 in a CIC termination only;
| • | for each NEO other than Mr. Brock, a lump-sum cash payment equal to the NEO’s base salary in a non-CIC involuntary termination of employment absent “cause”, and for Mr. Brock, a lump-sum cash payment equal to two times (2x) the sum of Mr. Brock’s base salary and target bonus; |
| • | – 2022 Proxy Statement a lump-sum cash payment equal to a multiple of base salary plus a multiple of annual incentive pay in an involuntary termination of employment or constructive (or good reason) termination related to a CIC absent “cause” (3x for Mr. Brock; 2x for Ms. Wiegand; 2x for Mr. Salvatori; 2.5x for Mr. Thakkar; and 1.5x for Mr. Rothka); |
| • | a prorated payment of the executive’s annual incentive compensation for the year in which the termination occurs in both a CIC and non-CIC termination; |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
a cash payment equal to the total amount the executive would have received under the CONSOL Energy 401(k) plan assuming he or she continued employment for a period of eighteen (18) months in a CIC termination only; and
| • | accelerated vesting of any outstanding long-term incentive compensation upon the second trigger related to a CIC termination event; provided, however, that any outstanding performance-based awards will be settled at the greater of target or actual performance (if ascertainable at the CIC) and prorated for service to the date of the CIC; |
| • | continued healthcare for 18 months for both a CIC and non-CIC termination absent “cause”; |
a pension enhancement in the form of a cash payment equivalent to the difference between the present value of the executive’s accrued benefit at his or her actual termination date under CEIX’s qualified defined benefit plan and (if eligible) any plans sponsored by the Company or any of its affiliates providing non-qualified retirement benefits, the present value of the accrued benefit the executive would have received assuming he or she continued employment for 18 months in a CIC termination only.
| • | outplacement assistance in the form of a cash payment equal to $25,000 in a CIC termination only; |
| • | a cash payment equal to the total amount the executive would have received under the CONSOL Energy 401(k) plan assuming he or she continued employment for a period of eighteen (18) months in a CIC termination only; and |
| • | a pension enhancement in the form of a cash payment equivalent to the difference between the present value of the executive’s accrued benefit at his or her actual termination date under CEIX’s qualified defined benefit plan and (if eligible) any plans sponsored by the Company or any of its affiliates providing non-qualified retirement benefits, the present value of the accrued benefit the executive would have received assuming he or she continued employment for 18 months in a CIC termination only. |
The agreements also contain confidentiality, non-competition and non-solicitation obligations for each of our NEOs (including the employment agreement for Mr. Brock) pursuant to which NEOs have agreed not to compete with the business for two years, or to solicit customers or employees for one year following a termination of employment.
| 68 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Understanding Our Change in Control and Employment Termination Tables and Information
No payment or benefits are provided under any of these agreements (including the CEO’s employment agreement) unless the NEO executes, and does not revoke, a written release of any and all claims (other than entitlements under the terms of the agreements or which may not be released under applicable law).
For purposes of these agreements, the following definitions apply:
“Cause” is defined as a determination by a majority of the Board of Directors of CEIX that the executive has:
| (a) | engaged in gross negligence in the performance of his or her duties; |
| (b) | been convicted of or entered a plea of guilty or nolo contendere to a felony or any misdemeanor involving fraud, theft or embezzlement; |
| (c) | failed or refused to perform his or her duties and responsibilities with the company (with an opportunity to cure); |
| (d) | breached a material restrictive covenant relating to non-competition, non-solicitation or confidentiality; |
| (e) | willfully violated any material provision of the company’s code of conduct; or |
| (f) | willfully engaged in conduct demonstrably and materially injurious to the company. |
“Change in control” generally means:
| (a) | an individual, entity or group acquires beneficial ownership of more than 25% of the total fair market value of the common stock of the company or combined voting power of the company; |
| (b) | the board composition is modified so less than a majority of the board pre-CIC remains in control; |
| (c) | the consummation of or reorganization, merger or consolidation of the company or other business combination involving the sale of all or substantially all of the assets of the company; or |
| (d) | a complete liquidation of the company. |
“Constructive” or “good reason” termination”termination means:
| (a) | a material adverse change in position or material diminution in duties and responsibilities; |
| (b) | a material reduction in base salary (excluding generally a reduction applicable to all executive officers); or |
| (c) | the relocation of the executive’s principal work location that increases his or her commute by 50 or more miles. |
The individual employment agreement between Mr. Brock and CEIX provides for a three-year initial term of employment automatically renewed for additional one-year periods unless either party provides advance written notice within 60 days of the end of the term.
| – 2022 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION |Human Capital Management
We invest in our human capital by providing a wide range of benefits and programs that speak to our commitment to help our employees better manage their physical and financial health, as well as their work/life balance and professional development. Our annual incentive program is designed to reward all Company employees (including our senior management team) for their commitment to our values with respect to a variety of performance factors including safety, sustainability and environmental compliance. We offer a 401(k) plan that matches employee contributions and permits a discretionary profit-sharing contribution in years where the Company exhibits extraordinary performance. We also offer competitive group health, benefits, prescription drug, dental and vision, coverage, shortshort- and long-term disability, a Health Savings Account (HSA), group accident, critical illness, tuition reimbursement and identity theft benefits coverage. In an effort to encourage employees to invest in their own well-being, we also offer a voluntary wellness program. Finally, we provide opportunities for professional growth and development and offer affordable benefits and programs that meet the diverse needs of our employees and their families.
| - 2024 Proxy Statement | 69 |
56.
70 | |
Year | Summary Compensation Table total for CEO (1) ($) | Average Summary Compensation Table total for other NEOs (2) ($) | Compensation actually paid to CEO (3) ($) | Average compensation actually paid to other NEOs (3) ($) | TSR (4) ($) | Peer group TSR (4) ($) | Net income (loss) ($ in thousands) | ICP Free Cash Flow* ($in thousands) | ||||||||
2023 | 13,194,665 | 2,231,481 | 20,455,474 | 3,162,417 | 740.94 | 653.90 | 655,892 | 845,846 | ||||||||
2022 | 9,963,103 | 1,477,694 | 33,755,260 | 3,694,785 | 462.15 | 454.34 | 466,979 | 585,224 | ||||||||
2021 | 7,115,513 | 1,029,306 | 20,081,272 | 2,158,019 | 156.56 | 204.93 | 34,110 | 184,001 | ||||||||
2020 | 6,740,223 | 1,547,535 | 4,862,793 | 1,293,669 | 49.70 | 65.60 | (13,214) | 108,937 | ||||||||
Year | Executive(s) | Summary compensation table total for covered year ($) | Pension Valuation Adjustments | Equity Award Adjustments | ||||||||||||||
Deduct change in pension value during covered year ($) | Include pension service cost adjustment during covered year ($) | Deduct stock award value as reported in SCT for covered year ($) | Add year-end valueof awards granted in covered year and outstanding and unvested as of covered year-end ($) | Change in value as of covered year-end (ascompared to prior year-end) of equity awards granted prior to covered year and outstanding and unvested as of covered year-end ($) | Change in value as of vesting date (as compared to prior year-end) of equity awards granted prior to covered year that vested during covered year ($) | |||||||||||||
2023 | CEO | 13,194,665 | (147,121) | 0 | (3,000,000) | 5,179,263 | 1,799,614 | 3,429,052 | ||||||||||
| Other NEOs | 2,231,481 | (65,387) | 12,461 | (513,398) | 886,275 | 232,933 | 378,053 | |||||||||||
2022 | CEO | 9,963,103 | 0 | 0 | (2,000,000) | 4,670,771 | 15,927,406 | 5,193,980 | ||||||||||
| Other NEOs | 1,477,694 | (4,171) | 13,558 | (258,884) | 604,560 | 1,267,074 | 594,955 | |||||||||||
2021 | CEO | 7,115,513 | (26,152) | 0 | (1,750,000) | 7,645,348 | 6,752,916 | 343,646 | ||||||||||
| Other NEOs | 1,029,306 | (19,622) | 12,726 | (200,000) | 873,751 | 427,475 | 34,383 | |||||||||||
2020 | CEO | 6,740,223 | (674,326) | 47,818 | (3,483,000) | 2,680,799 | (350,716) | (98,005) | ||||||||||
| Other NEOs | 1,547,535 | (122,692) | 16,289 | (533,333) | 437,603 | (40,393) | (11,340) | |||||||||||
- 2024 Proxy Statement | 71 |
| Net Income | Free Cash Flow* | |
| TSR | Net (Cash)/Debt Level* | |
| ICP Free Cash Flow* | Average Cash Cost of Coal Sold per Ton* | |
| Adjusted EBITDA* | ||
72 | - 2024 Proxy Statement |
EXECUTIVE COMPENSATION INFORMATION | Securities Authorized for Issuance Under the CONSOL Energy Inc. Equity Compensation Plan
Securities Authorized for Issuance Under the CONSOL Energy Inc. Equity Compensation Plan
The following table summarizes CEIX’s equity compensation plan information as of December 31, 2021.2023.
Equity Compensation Plan Information | ||||||||||||||||||||||||||||||
| Equity Compensation Plan Information | ||||||||||||||||||||||||||||||
Plan Category | Number of securities to be issued upon exercise | Weighted- options, warrants and rights | Number of securities remaining available for future issuance | Number of securities to be issued upon exercise | Number of securities to be issued upon exercise |
Weighted- options, warrants and rights |
Weighted- options, warrants and rights | Number of securities remaining available for future issuance | Number of securities remaining available for future issuance | |||||||||||||||||||||
| (a) | (b) | (c) | (a)
| (a)
| (b)
| (b)
| (c)
| (c)
| ||||||||||||||||||||||
Equity compensation plans approved by security holders as of December 31, 2021
|
| 1,161,234
| (1)
|
| —
|
|
| 3,367,709
|
| |||||||||||||||||||||
Equity compensation plans approved by security holders as of December 31, 2023 | ||||||||||||||||||||||||||||||
Equity compensation plans approved by security holders as of December 31, 2023 | ||||||||||||||||||||||||||||||
Equity compensation plans approved by security holders as of December 31, 2023 | ||||||||||||||||||||||||||||||
Equity compensation plans approved by security holders as of December 31, 2023 | ||||||||||||||||||||||||||||||
Equity compensation plans approved by security holders as of December 31, 2023 | ||||||||||||||||||||||||||||||
Equity compensation plans not approved by security holders
|
| —
|
|
| —
|
|
| —
|
| |||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||||||||||||||||
Total
|
| 1,161,234
| (1)
|
| —
|
|
| 3,367,709
|
| |||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||
| (1) | Of this total, |
No options have been granted under the Plan, since it was originally adopted on November 22, 2017, to any current NEO, current executive officer, non-employee director or any associate of such person, nor to any other employee or person.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee has served as an officer or employee of CEIX at any time. During the last completed fiscal year, no CEIX executive officer served as a member of the compensation committeeCompensation Committee or on the board of directors of any company at which a member of CEIX’s Compensation Committee or Board of Directors served as an executive officer.
| | 73 |
|
Board of Directors and Its Committees
Board of Directors
The business and affairs of CEIX are managed under the direction of our Board. Our Board currently consists of six directors. Under our Certificate of Incorporation, beginning with the 2022 annual meeting of stockholders, our board is no longer classified and all directors will be subject to election annually.
We do not have a formal policy regarding directors’ attendance at our annual meetings of stockholders; however, all directors are encouraged to attend. All of CEIX’s directors attended the 2021 Annual Meeting of Stockholders, and all of the directors are expected to attend this year’s Annual Meeting.
Board Leadership Structure
Our Board is currently structured with separate Chair and Chief Executive Officer positions. Our Corporate Governance Guidelines provide that the Board will determine whether to have a joint Chair and Chief Executive Officer or separate these offices as part of the succession planning process when it elects a Chief Executive Officer or at other appropriate times. The Board believes that the most effective leadership structure for our company at this time is to have Mr. Powell serve as independent Chair and Mr. Brock to serve as Chief Executive Officer. The Board believes these separate positions can facilitate Mr. Brock’s focus on the operation of our company and implementation of our strategy and business plans, while ensuring effective oversight and focus by the Board on accountability of management, oversight and corporate governance matters.
Determination of Director Independence
The New York Stock Exchange (NYSE) listing standards require a majority of our directors and each member of our Audit, Compensation and Nominating and Corporate Governance Committees to be independent. In February 2022, our Board evaluated the relevant relationships between each director or director nominee (and his or her immediate family members and affiliates) and CEIX, and affirmatively determined that each of our directors, other than Mr. Brock (who is the President and Chief Executive Officer of CEIX), had no material relationship with CEIX and is “independent” under the corporate governance rules of the NYSE codified in Section 303A of the NYSE Listed Company Manual. In February 2022, the Board also determined that each member of the Audit Committee meets the independence standards required for audit committee members under the NYSE listing standards and the SEC rules, and considered the additional factors under the NYSE rules relating to members of the Compensation Committee before determining that each of them is independent.
Membership and Meetings of the Board of Directors and its Committees
In 2021, all of our incumbent directors attended 100% of the meetings held by our Board and all of the six incumbent directors attended 100% of the meetings held by all Board committees on which he or she served.
Committee membership as of March 15, 2022, and the number of meetings held during 2021 by each committee, are shown in the following table:
| Board of Directors | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | Health, Safety and Environmental Committee | |||||||||||||||||||||
William P. Powell | Chair | ● | ● | ● | |||||||||||||||||||||
Sophie Bergeron | ● | ● | Chair | ||||||||||||||||||||||
James A. Brock | ● | ● | |||||||||||||||||||||||
John T. Mills | ● | Chair | ● | ● | |||||||||||||||||||||
Joseph P. Platt | ● | Chair | ● | ● | |||||||||||||||||||||
Edwin S. Roberson | ● | ● | Chair | ● | |||||||||||||||||||||
No. of 2021 Meetings | 10 | 7 | 6 | 5 | 6 | ||||||||||||||||||||
| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
Board Skills and Experience
The Nominating and Corporate Governance Committee seeks to cultivate a Board with the appropriate skill sets and diversity of experiences to discharge its responsibilities effectively. Each director possesses a unique background and, in the aggregate, we believe the Board encompasses the skills and experiences deemed important to effectively oversee our business.
The table below summarizes some of the key skills and experiences that the Nominating and Corporate Governance Committee currently believes should be represented on the Board, as well as the number of directors who possess each skill.
| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
Board’s Role in Risk Management
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| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
Committees of the Board of Directors
Our Board has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Health, Safety and Environmental. Our committees regularly make recommendations and report on their activities to the entire Board. All members of each of the Audit, Compensation and Nominating and Corporate Governance Committees are independent under the current listing standards of the NYSE and other applicable regulatory requirements, as described above under “Determination of Director Independence”. Our Board, considering the recommendations of our Nominating and Corporate Governance Committee, reviews committee membership at least annually. The responsibilities of each of the four committees are summarized below.
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Our Audit Committee was established pursuant to Section 3(a)(58)(A) of the Exchange Act. Our Board has determined that all members of the Audit Committee are financially literate within the meaning of SEC rules and under the current listing standards of the NYSE. Our Board has also determined that each of the members of the Audit Committee qualify as an “audit committee financial expert.” A copy of the Audit Committee’s report for the 2021 fiscal year is included in this Proxy Statement.
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| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
Our Compensation Committee’s charter generally permits it to delegate its authority, duties and responsibilities or functions to one or more members of the Compensation Committee or to CEIX’s officers, except where otherwise prohibited by law or applicable listing standards. The terms of our Omnibus Performance Incentive Plan (the “Omnibus Plan”) also permit our Compensation Committee to delegate any power and authority granted to it by the Board under the Omnibus Plan to our officers.
Our Compensation Committee periodically reviews the compensation paid to our non-employee directors and the principles upon which their compensation is determined. The Compensation Committee also periodically reports to the Board on how our non-employee director compensation practices compare with those of other similarly situated public corporations and, if the Compensation Committee deems it appropriate, recommends changes to our director compensation practices to our Board for approval.
For additional information regarding the Compensation Committee’s processes and procedures for reviewing and determining executive officer compensation, see page 28 of the “Compensation Discussion and Analysis” section.
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Director Nomination Process. The Nominating and Corporate Governance Committee annually reviews and assesses the Board’s membership needs, with the assistance of a consultant when appropriate. When assessing Board composition or identifying suitable candidates for appointment or re-election to the Board, the Nominating and Corporate Governance Committee will consider candidates based on the needs of the Board at the time, having due regard to the benefits of diversity. The Nominating and Corporate Governance Committee seeks to maintain a Board that is comprised of individuals who possess the following skills, experience and/or attributes:
general industry knowledge;
accounting and finance;
ability to make sound business decisions;
management;
leadership;
knowledge of international markets;
business strategy;
crisis management;
innovation;
environmental, social and corporate governance concerns;
prior board experience;
| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
diversity; and
risk management.
The Nominating and Corporate Governance Committee seeks to identify director candidates with leadership experience in positions with a high degree of responsibility. Director nominees are expected to be selected based upon contributions that they can make to CEIX.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, although a formal policy has not been adopted with respect to consideration of such candidates because stockholder recommendations may be submitted and considered by the Nominating and Corporate Governance Committee under its charter. Director candidates recommended by stockholders will be evaluated by the Nominating and Corporate Governance Committee using the same criteria as candidates identified by the Board or the Nominating and Corporate Governance Committee for consideration. Stockholders may submit names of director candidates to Secretary, CONSOL Energy Inc., 1000 CONSOL Energy Drive, Suite 100, Canonsburg, Pennsylvania 15317 (or 275 Technology Drive, Canonsburg, Pennsylvania 15317 if such correspondence is sent after March 31, 2022). See “Additional Matters” on page 65 for more information on making director nominations.
Board Diversity and Inclusion. The Board has adopted a policy regarding the diversity of its members, which is included in our Corporate Governance Guidelines. CEIX believes in diversity and values the benefits diversity can bring to its Board and to the Company. For the purposes of Board composition, diversity includes, but is not limited to, business experience, geography, age, gender and ethnicity. Board diversity promotes the inclusion of different perspectives and ideas, and ensures that the Company has the opportunity to benefit from all available talent. The promotion of a diverse Board makes prudent business sense and makes for better corporate governance.
CEIX seeks to maintain a Board comprised of talented and dedicated directors with a diverse mix of expertise, experience, skills and background. The skills and backgrounds collectively represented on the Board should reflect the diverse nature of the business environment in which CEIX operates. CEIX will periodically assess the composition of the Board in light of the needs of the Board at the time, including the extent to which the current composition of the Board reflects a diverse mix of knowledge, experience, skills and backgrounds.
CEIX is committed to a Board composition that promotes a diverse and inclusive culture, that solicits multiple perspectives and views, and which is free of conscious or unconscious bias and discrimination.
Process for Board Assessment and Future Candidates. Set forth below is a summary of the process the Nominating and Corporate Governance Committee and Board intend to use in reviewing Board needs and future candidates.
| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees
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Corporate Governance Web Page and Available Documents
We maintain a corporate governance page on our website at www.consolenergy.com. The following documents are currently included on the corporate governance page of our website:
Corporate Governance Guidelines;
Code of Business Conduct and Ethics which applies to all employees, officers, service providers, contractors and directors of the Company;
Related Person Transaction Policy and Procedures;
Charters of the Audit, Nominating and Corporate Governance, Compensation, and Health, Safety and Environmental Committees;
Related Person Transaction Policy; and
Human Rights Policy.
These documents address important principles and corporate governance processes. In addition, we anticipate that our annual Corporate Sustainability Report will be posted on our website in May 2022.
We will provide a printed copy of any of these documents free of charge upon request to stockholders who contact our Investor Relations department in writing at CONSOL Energy Inc., 1000 CONSOL Energy Drive, Suite 100, Canonsburg, Pennsylvania 15317 (or 275 Technology Drive, Canonsburg, Pennsylvania 15317 if such correspondence is sent after March 31, 2022).
Communication with the Board of Directors
Stockholders and other interested persons who wish to communicate with the Board may do so by writing to the Board at Secretary, CONSOL Energy Inc., 1000 CONSOL Energy Drive, Suite 100, Canonsburg, Pennsylvania 15317 (or 275 Technology Drive, Canonsburg, Pennsylvania 15317 if such correspondence is sent after March 31, 2022), or by sending an e-mail to directors@consolenergy.com. The Secretary will relay all such communications to the Board in its entirety or to individual directors (as appropriate) at the next regularly scheduled Board meeting (or earlier as necessary) except for spam, junk mail, mass mailings, solicitations, résumés, job inquiries or other matters unrelated to CEIX. Communications that are intended specifically for the independent directors should be marked “Confidential” and sent to the street address noted above, to the attention of the Independent Directors in care of the Chair of the Board. Information concerning how to communicate with the Board is also included on CEIX’s website at www.consolenergy.com.
| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Director Compensation Table—2021
Director Compensation Table—2021
The following table sets forth the compensation elements of our non-employee directors for the 2021 fiscal year:
Name(1) | Fees Earned or Paid in Cash(2) | Stock Awards(3), (7) | All Other Compensation | Total | ||||||||||||||||
Sophie Bergeron(4) | $ | 130,000 | $ | 150,000 | $ | 0 | $ | 280,000 | ||||||||||||
John T. Mills | $ | 150,000 | $ | 150,000 | $ | 0 | $ | 300,000 | ||||||||||||
Joseph P. Platt | $ | 140,000 | $ | 150,000 | $ | 0 | $ | 290,000 | ||||||||||||
William P. Powell(5) | $ | 207,500 | $ | 300,000 | $ | 0 | $ | 507,500 | ||||||||||||
Edwin S. Roberson(6) | $ | 137,500 | $ | 150,000 | $ | 0 | $ | 287,500 | ||||||||||||
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| – 2022 Proxy Statement |
BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Understanding Our Director Compensation Table
Understanding Our Director Compensation Table
Each non-employee director is entitled to receive an annual equity award in the form of RSUs valued at $150,000 (other than the Board Chair whose RSUs are valued at $300,000) as of the close of business on the date of the grant, which in 2021 was May 4, 2021. The RSU awards vest on the first anniversary of the grant date. Each non-employee director is also entitled to receive a cash Board Retainer, and if he or she serves as a Committee Chair, an Audit Committee member or the Board Chair, an additional cash retainer for his or her services as follows:
Element of Compensation | Dollar Value of Board Compensation | ||||
Chair Retainer | $ | 200,000 | (1) | ||
Board Retainer | $ | 120,000 | |||
Committee Chair Retainer (other than Audit & Compensation) | $ | 10,000 | |||
Audit Committee Chair | $ | 30,000 | |||
Compensation Committee Chair | $ | 20,000 | |||
Audit Committee Member | $ | 7,500 | |||
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During 2021, the Compensation Committee of the Board reviewed with its independent compensation consultant the current director compensation program and concluded that (1) the mix of cash and equity compensation continues to be appropriate and consistent with broadly observed market practices, (2) the compensation levels are reasonable and in line with peer practices given the small size of the Board, and (3) the aggregate board compensation (reflecting the “total cost of governance”) is reasonably positioned as compared to the Company’s peer group members. The basic non-employee director compensation elements remain unchanged from 2017.
Deferred Compensation Plan for Non-Employee Directors
Our Non-Employee Director Deferred Compensation Plan authorizes our non-employee directors to defer all or a portion of their annual cash and/or stock compensation, effective with respect to deferrals of compensation during the calendar year. Participation in the plan is voluntary and at the election of each individual director. Amounts deferred under the plan (whether cash or equity–based) are payable in the form of deferred stock units and are generally settled within thirty days of the director’s termination of service, but in no event later than the fifth anniversary of such termination date. The plan is an unfunded and unsecured liability of CEIX and any benefits paid to our non-employee directors will be paid from CEIX’s general assets.
Stock Ownership Guidelines
Our Board has adopted stock ownership guidelines to align the interest of our non-employee directors with those of our stockholders. The guidelines require each of our non-employee directors to hold CEIX common stock with a value equal to five times their annual cash retainer based on the closing price of our common stock on a particular date, or five times the director’s annual cash retainer divided by $20.00. Each director is required to meet the guidelines on or before the fifth anniversary of becoming a Board member. Shares counted towards the guidelines include: shares owned outright by the director or his or her immediate family members residing in the same household; shares held in trust for the benefit of the director or his or her immediate family members residing in the same household; vested shares of restricted stock; vested deferred stock units, restricted stock units or performance share units that may only be settled in shares; and unvested shares of restricted stock, deferred stock units, restricted stock units or performance share units, in each case whose vesting is time-based rather than performance-based.
| – 2022 Proxy Statement |
BENEFICIAL OWNERSHIP OF SECURITIES
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The following tables set forth information with respect to the beneficial ownership of CEIX’s common stock, as of March 4, 2022,2024, by:
beneficial owners of more than 5% of CEIX’s common stock based upon information filed with the SEC; and
| • | beneficial owners of more than 5% of CEIX’s common stock based upon information filed with the SEC; and |
each director and each nominee for director, each named executive officer and all directors and executive officers of CEIX as a group.
| • | each director and each nominee for director, each named executive officer and all directors and executive officers of CEIX as a group. |
Amounts shown below include options that are currently exercisable or that may become exercisable within 60 days of March 4, 20222024 (i.e., May 3, 2022)2024) and the shares underlying RSUs and deferred stock units that may be settled for common stock on or before May 3, 2022.2024. Unless otherwise indicated, the named person has the sole voting and dispositive power with respect to the shares of CEIX common stock set forth opposite such person’s name. Fractional shares have been rounded to the nearest whole share for the purposes of the tables below.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||||
azValor Asset Management, SGIIC, SA(2) Paseo de la Castellana 110 28046, Spain |
| 3,213,566 |
| 9.23 | % | |||||
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 |
| 5,209,727 |
| 14.96 | % | |||||
Dimensional Fund Advisors LP(4) Building One 6300 Bee Cave Road Austin, TX 78746 |
| 1,854,660 |
| 5.33 | % | |||||
Greenlight Capital, Inc.(5) 140 East 45th Street, 24th Floor New York, New York 10017 |
| 1,877,021 |
| 5.39 | % | |||||
State Street Corporation(6) State Street Financial Center One Lincoln Street Boston, MA 02111 |
| 2,818,110 |
| 8.09 | % | |||||
The Vanguard Group(7) 100 Vanguard Boulevard Malvern, PA 19355 |
| 1,916,989 |
| 5.51 | % | |||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | ||||||||
BlackRock, Inc.(2)
50 Hudson Yards
New York, NY 10001
| 4,462,441 | 15.07% | ||||||||
The Vanguard Group(3)
100 Vanguard Boulevard
Malvern, PA 19355
| 2,437,023 | 8.23% | ||||||||
Dimensional Fund Advisors LP(4)
Building One
6300 Bee Cave Road
Austin, TX 78746
| 2,140,738 | 7.23% | ||||||||
Greenlight Capital, Inc.(5)
140 East 45th Street, 24th Floor
New York, NY 10017
| 2,105,577 | 7.11% | ||||||||
State Street Corporation(6)
State Street Financial Center
1 Congress Street, Suite 1
Boston, MA 02114
| 1,813,503 | 6.12% | ||||||||
Name | CONSOL Beneficially | Percent of Class(1) | CONSOL Beneficially | Percent of Class(1) | ||||||||||||
Sophie Bergeron(8) |
| 25,789 |
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James A. Brock |
| 392,072 |
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| 1.13% |
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| 468,635 |
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| 1.58% |
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John T. Mills(9) |
| 72,497 |
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| * |
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John T. Mills(7) |
| 54,217 |
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Cassandra Pan(8) |
| 2,626 |
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Valli Perera(9) |
| 2,626 |
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| * |
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Joseph P. Platt |
| 38,775 |
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| 33,957 |
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William P. Powell(10) |
| 90,915 |
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| 130,088 |
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Edwin S. Roberson(11) |
| 57,488 |
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John M. Rothka |
| 12,442 |
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| * |
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| 10,423 |
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| * |
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Kurt R. Salvatori |
| 21,321 |
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| 3,121 |
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| * |
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Miteshkumar B. Thakkar |
| 11,922 |
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| * |
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Mitesh B. Thakkar |
| 21,769 |
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| * |
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Martha A. Wiegand |
| 44,284 |
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| * |
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| 24,492 |
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| * |
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All current directors and current executive officers as a group (total of 10) |
| 767,505 |
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| 2.20% |
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| 751,954 |
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| 2.54% |
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| * | Indicates less than 1% ownership. |
| (1) | As of March 4, |
| (2) |
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| – 2022 Proxy Statement |
BENEFICIAL OWNERSHIP OF SECURITIES
BlackRock, Inc. has sole voting power with respect to |
| 74 | - 2024 Proxy Statement |
BENEFICIAL OWNERSHIP OF SECURITIES
| (3) |
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| (4) | Dimensional Fund Advisors LP has sole voting power with respect to 2,132,760 shares and sole dispositive power with respect to 2,140,738 shares. This information is based solely on the reporting person’s most recent Schedule 13G filed with the SEC on February 9, 2024, as updated for shares outstanding as of March 4, 2024. |
| (5) | According to a Schedule 13G/A filed with the SEC on February 14, |
| (6) | State Street Corporation has shared voting power with respect to |
| (7) |
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Includes |
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| (8) | Includes 2,626 vested RSUs for which Ms. Pan has elected to defer delivery. |
| (9) | Includes 2,626 vested RSUs for which Ms. Perera has elected to defer delivery. |
| (10) | Includes |
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RELATED PERSON TRANSACTION POLICY
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Our Board adopted a written Related Person Transaction Policy and Procedures providing for the review and approval or ratification of related person transactions with directors, nominees for director and executive officers and certain of their family members (the “related persons”). A copy of the policy is available on our website at www.consolenergy.com.
Under the policy, prior to entering into a potential related person transaction (which generally is a transaction in excess of $120,000 involving CEIX and a related person), the director, director nominee or executive officer must notify our Chief Financial Officer and General Counsel of the material facts regarding the transaction. If our Chief Financial Officer and General Counsel determine that the proposed transaction is in fact a related person transaction, the details of the transaction are presented to our Audit Committee (or if it is not practicable or desirable to wait until the next Audit Committee meeting, to the Chair of the Audit Committee) for approval. The Audit Committee or its Chair, as applicable, will consider all relevant facts and circumstances available, including the terms of the transaction and terms that would be available to unrelated parties, the benefits to the company, and, if the transaction involves an independent director, any impact the transaction would have on such director’s independence. The Audit Committee or its Chair, as applicable, will also inform our Nominating and Corporate Governance Committee of any related person transactions involving directors or nominees. Since the SEC’s related person rules also apply to directors’ and executive officers’ family members, as well as entities in which they may be deemed to have an indirect material interest, it is possible that related person transactions could occur without a director or executive officer being aware of them and seeking approval in accordance with the policy. When we become aware of a related person transaction that has not been previously approved, the policy provides that the details of the transaction will be presented to our Audit Committee or its Chair, as applicable, for ratification or other action. Our Audit Committee also reviews, on an annual basis, ongoing related person transactions having a remaining term of more than six months or that are in excess of $120,000. We also require that officers and directors complete annual director and officer questionnaires and adhere to written codes of business conduct and ethics regarding various topics, including conflicts of interest, the receipt of gifts, service in outside organizations, political activity and corporate opportunities. Officers and directors must certify compliance with these codes in writing each year.
No reportable transactions existed during 20212023 and there are currently no such proposed transactions.
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In addition to providing stockholders with the opportunity to cast a non-binding advisory vote on compensation paid to our named executive officers in Proposal No. 3 above, in accordance with SEC rules, CEIX is also required to provide its stockholders with the opportunity to cast an advisory vote to determine the frequency of future advisory stockholder votes on compensation paid to the named executive officers. By voting on this Proposal No. 4, stockholders may indicate whether they would prefer an advisory vote on named executive officer compensation once every one, two or three years.
After careful consideration, the Compensation Committee and the Board believe that an annual frequency (i.e., every year) is the optimal frequency for the advisory vote on compensation of our named executive officers. We believe this frequency will continue to enable our stockholders to vote, on an advisory basis, on the most recent executive compensation information that is presented in our Proxy Statement, leading to more meaningful and timely communication between CEIX and our stockholders on the compensation of our named executive officers.
Stockholders are not voting to approve or disapprove the Board’s recommendation. Instead, you may cast your vote on your preferred voting frequency by choosing any of the following four options with respect to this proposal: “1 year,” “2 years,” “3 years,” or “abstain.”
This say-on-frequency vote is advisory, and therefore not binding on CEIX, the Board, or the Compensation Committee. However, the Board and the Compensation Committee value the opinions expressed by stockholders, and will consider the option that receives the most votes in determining the frequency of future advisory votes on compensation of our named executive officers.
The Board of Directors recommends stockholders vote for a frequency of every “1 year”.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR A FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION OF EVERY “1 YEAR”.
| - 2024 Proxy Statement | 77 |
PROPOSAL NO. 5 — APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION FOR EXCULPATION OF OFFICERS |
The Board is asking stockholders to consider and vote upon a proposal to approve an amendment (the “Exculpation Amendment”) to our Certificate of Incorporation to reflect recent Delaware law provisions regarding exculpation of officers.
Effective August 1, 2022, Section 102(b)(7) of the General Corporation Law of the State of Delaware (“DGCL”) was amended to enable Delaware companies to limit the liability of certain of their officers in limited circumstances. In light of this update to the DGCL, the Board approved and declared advisable the Exculpation Amendment to amend a provision of the Certificate of Incorporation to limit the liability of certain of the Company’s officers to the extent permitted under the DGCL.
The Exculpation Amendment would amend our Certificate of Incorporation’s existing provision with respect to exculpation of directors to reflect new Delaware law provisions regarding exculpation of officers to add the double underlined text in blue font as follows:
“Limitation of Liability of Directors and Certain Officers. To the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, a director or officer of the Corporation shall not be personally liable either to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty as a director or officer. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation existing immediately prior to the time of such amendment, modification or repeal. If the DGCL hereafter is amended to further eliminate or limit the liability of a director or officer, then the liability of a director or officer of the Corporation shall be further limited or eliminated to the full extent permitted by the DGCL as so amended. For purposes of this Section 8.2 of Article VIII, “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL, as it presently exists or may hereafter be amended from time to time.”
The Board believes that including the exculpation provision as provided in the Exculpation Amendment is advisable to more closely align the protections available to eligible officers with those already afforded to our directors, and is necessary to continue to attract and retain experienced and qualified officers. The Board believes that in the absence of such protection, qualified officers might be deterred from serving as officers of the Company due to exposure to personal liability and the risk that substantial expense may be incurred in defending lawsuits, regardless of merit. Further, the Board believes that the Exculpation Amendment would not negatively impact stockholders’ rights, particularly taking into account the narrow class and type of claims for which officers’ liability would be exculpated.
Key Features of the Amendment
The Exculpation Amendment would allow for the exculpation of certain officers of the Company only in connection with direct claims brought by stockholders, including class actions, but would not eliminate such officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by stockholders in the name of the Company.
As is currently the case with respect to directors of the Company, the Exculpation Amendment would also not limit the liability of officers for (i) any breach of the duty of loyalty to the Company or its stockholders, (ii) any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, and (iii) any transaction from which the officer derived an improper personal benefit.
| 78 | - 2024 Proxy Statement |
PROPOSAL NO. 5 — APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION FOR EXCULPATION OF OFFICERS
Stockholder Approval
The Exculpation Amendment requires the affirmative vote of holders of a majority of the shares of our common stock outstanding and entitled to vote thereon. Abstention from or failure to vote, either by proxy or in person, will have the same effect as a vote against the approval of this Proposal No. 5. This Proposal No. 5 is considered a “non-routine” matter, and accordingly, brokerage firms are prohibited from voting in their discretion on behalf of their clients if such clients have not furnished voting instructions. Therefore, broker “non-votes” will have the same effect as a vote against this Proposal No. 5. Unless instructions to the contrary are specified in a proxy properly voted and returned through available channels, the proxies will be voted FOR this Proposal No. 5.
If the requisite shareholder vote is obtained, we intend to file the Exculpation Amendment in the form attached hereto as Appendix B with the Delaware Secretary of State as soon as practicable thereafter. The Exculpation Amendment will become effective upon filing with the Delaware Secretary of State.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION FOR EXCULPATION OF OFFICERS.
| - 2024 Proxy Statement | 79 |
ADDITIONAL MATTERS |
Stockholder Proposals for Inclusion in Next Year’s Proxy Statement or Presentation at Next Year’s Annual Meeting
Any proposal submitted by a stockholder for inclusion in the proxy statement and form of proxy for the 20232025 annual meeting must (a) conform to the requirements of Rule 14a-8 promulgated under the Exchange Act and (b) be received by the Secretary of CEIX at our principal executive office no later than November 17, 2022.December 2, 2024. Any such proposal should be addressed to Secretary, CONSOL Energy Inc., 1000 CONSOL Energy275 Technology Drive, Suite 100, Canonsburg, Pennsylvania 15317 or, if such proposal is sent after March 31, 2022, 275 Technology Drive,101, Canonsburg, Pennsylvania 15317. Please see additional information below regarding the content of proposals.
CEIX’s advance notice provisions in their bylaws require that all stockholder matters to be submitted for consideration at the 20232025 annual meeting, but not included in CEIX’s proxy statement, including any stockholder proposal not submitted under Rule 14a-8 or any director nomination, be received by the Secretary of CEIX by written notice no later than the close of business on January 26, 2023,30, 2025, and no earlier than the close of business on December 27, 2022,31, 2024, together with certain information specified in the bylaws.
If the date of the 20232025 annual meeting is more than 30 days before or more than 60 days after the anniversary date of the 20222024 Annual Meeting, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to the annual meeting and not later than the close of business on the later of the 90th day prior to the annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of the meeting is first made by CEIX. In addition, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also comply with the additional requirements of Rule 14a-19(b).
General Information Regarding the Requirements for Stockholder Nominations of Directors
Any stockholder desiring to nominate an individual for election as a director of CEIX must follow the process described above and submit to the Secretary the information required by Sections 2.9 and 2.10 of the bylaws (a copy of which will be provided to any stockholder upon written request to the Secretary), including, but not limited to, (i) the proposing person’s notice, (ii) the nominee’s written questionnaire with respect to the background and qualifications of such nominee and the background of any other person or entity on whose behalf, directly or indirectly, the nomination is being made, and (iii) a written representation and agreement of the nominee in the form provided by the Secretary upon written request.
In addition, CEIX may require the stockholder to provide such further information as it may reasonably request.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address and the same last name by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. CEIX and some brokers household proxy materials, delivering a single copy of the Internet Notice (or proxy statement and annual report) to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once stockholders have received notice from their broker or CEIX that materials will be sent in the householding manner to the stockholder’s address, householding will continue until otherwise notified or until the stockholder revokes such consent. If, at any time, stockholders no longer wish to participate in householding and would prefer to receive a separate proxy statement, they should notify their broker if shares are held in a brokerage account or CEIX if holding registered shares. CEIX will deliver promptly upon written or oral request a separate copy of the Internet Notice (or annual report or proxy statement), as applicable, to a stockholder at a shared address to which a single copy of the documents was delivered.
| 80 | - 2024 Proxy Statement |
ADDITIONAL MATTERS
To request householding, stockholders should notify their broker or CEIX. Requests to CEIX should be addressed to the Investor Relations department of CONSOL Energy Inc., 1000 CONSOL Energy Drive, Suite 100, Canonsburg,
| – 2022 Proxy Statement |
ADDITIONAL MATTERS
Pennsylvania 15317 (or 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317 if such request is sent after March 31, 2022), or may be made by calling CEIX at (724) 416-8300:
to receive a separate copy of the Internet Notice (or the annual report and proxy statement) for this meeting;
| • | to receive a separate copy of the Notice (or the annual report and proxy statement) for this meeting; |
to receive separate copies of those materials for future meetings; or
| • | to receive separate copies of those materials for future meetings; or |
| • | if stockholders sharing an address wish to request delivery of a single copy of the Notice (or annual report and proxy statement) if now receiving multiple copies of such materials. |
if stockholders sharing an address wish to request delivery of a single copy of the Internet Notice (or annual report and proxy statement) if now receiving multiple copies of such materials.
Other
The Board knows of no other proposals that may properly be presented for consideration at the Annual Meeting but, if other matters do properly come before the Annual Meeting, the persons named in the proxy will vote your shares according to their best judgment.
By the Order of the Board of
Directors of CONSOL Energy Inc.
| | 81 |
|
Reconciliation of Non-GAAP Measures
Our management team uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability, and include financial measures that have not been calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). The metrics include: (i) adjusted EBITDA, a non-GAAP financial measure; (ii) coal production and sales volumes andvolumes; (iii) realized coal revenue, a non-GAAP financial measure; (iv) cost of coal sold, a non-GAAP financial measure; (v) cash cost of coal sold, a non-GAAP financial measure; (vi) average realized coal revenue per ton sold; (ii)sold, an operating ratio derived from non-GAAP financial measures; (vii) average cash cost of coal sold per ton, an operating ratio derived from non-GAAP financial measures; (viii) average cash margin per ton sold, an operating ratio derived from non-GAAP financial measures, (iii)measures; (ix) free cash flow, a non-GAAP financial measure, (iv) Adjustedmeasure; (x) Itmann Mine Operating EBITDA, a non-GAAP financial measure, (v)measure; (xi) Baltimore Terminal Operating EBITDA, a non-GAAP financial measure; (xii) ICP Free Cash Flow and ICP Free Cash Flow per share, non-GAAP financial measures, (vi) Unit Cost per Ton, a non-GAAP financial measure, (vii) cost of coal sold, a non-GAAP financial measure, (viii) Cash Cost of Coal Sold, a non-GAAP financial measure, (ix) Debt Level, a non-GAAP financial measure, (x) Net Debt Level, a non-GAAP financial measure, and (xi) PSU Free Cash Flow, a non-GAAP financial measure.
We believe cost of coal sold, cash cost of coal sold, average cash margin per ton sold, free cash flow ICP free cash flow,and ICP free cash flow per share, unit cost per ton, PSU free cash flow,non-GAAP financial measures; (xiii) debt level, a non-GAAP financial measure; (xiv) net (cash)/debt level, a non-GAAP financial measure; and Adjusted EBITDA are useful measures of our operating performance because they normalize the volatility contained within comparable GAAP measures by adjusting certain non-operating or non-cash transactions. (xv) total recurring revenues and other income, a non-GAAP financial measure.
We believe that Adjusted EBITDA provides a helpful measure of comparing our operating performance with the performance of other companies that have different financing, capital structures and tax rates than ours. We believe realized coal revenue, average realized coal revenue per ton sold, cost of coal sold, cash cost of coal sold, average cash cost of coal sold per ton, average cash margin per ton sold, free cash flow, Itmann Mine operating EBITDA, Baltimore Terminal operating EBITDA, ICP free cash flow, ICP free cash flow per share and total recurring revenues and other income are useful measures of our operating performance because they normalize the volatility contained within comparable GAAP measures by adjusting for certain non-operating or non-cash transactions. We believe realized coal revenue and average realized coal revenue per ton sold provide useful information to investors because they better reflect our earnings by including the settled costs (or gains) of our commodity derivatives for the period. Each of these non-GAAP metrics are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;
| • | our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis, tax rates or capital structure; |
the ability of our assets to generate sufficient cash flow;
| • | the ability of our assets to generate sufficient cash flow; |
our ability to incur and service debt and fund capital expenditures;
| • | our ability to incur and service debt and fund capital expenditures; |
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities; and
| • | the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities; and |
| • | the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities. |
the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.
In addition, managementManagement believes that the non-GAAP measure of free cash flow is meaningful to investors because management reviews cash flows generated from operations and non-core asset sales after taking into consideration capital expenditures due to the fact that these expenditures are considered necessary to maintain and expand CEIX’s asset base and are expected to generate future cash flows from operations. It is important to note that free cash flow as defined in our compensation program (ICP free cash flow) differs slightly from the measure of free cash flow disclosed in our quarterly earnings releases and that free cash flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.
Additionally, management believes that the non-GAAP measure measures of Debt Leveldebt level and net Debt Level is(cash)/debt level are meaningful to investors because management reviews our cash and cash equivalents and our long-term debt obligationobligations since these are important measures to monitor leverage and evaluate the balance sheet.
| - 2024 Proxy Statement | A-1 |
APPENDIX A
Non-GAAP financial measures should not be considered an alternative to operating and other costs, total coal revenue, total costsrevenue and expenses,other income, net income, operating cash flow, or any other measure of financial performance or liquidity presented in accordance with GAAP. These measures exclude some, but not all, items that affect net income or net cash,measures presented in accordance with GAAP, and these measures and the way we calculate them may vary from those of other companies. As a result, the items presented below may not be comparable to similarly titled measures of other companies.
| – 2022 Proxy Statement |
APPENDIX A
This Proxy Statement contains references to certain non-GAAP measures, including in the CD&A section discussing the targets under the 20212023 STIC program.program and the LTIC programs. The non-GAAP measures discussed in this Proxy Statement and their definitions are provided below.
| • | Realized Coal Revenue, Average Realized Coal Revenue per Ton Sold and Average Cash Margin |
| • | Free Cash Flow. We define free cash flow as net cash provided by operating activities plus proceeds from sales of |
| • | Adjusted EBITDA. Adjusted EBITDA is defined as (i) net income (loss) plus income taxes, interest expense and depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as stock-based compensation, loss on debt extinguishment and fair value adjustments of commodity derivative instruments. The GAAP measure most directly comparable to Adjusted EBITDA is net income (loss). |
| • | ICP Free Cash Flow. ICP free cash flow means incentive compensation plan (“ICP”) free cash flow, which is defined as Adjusted EBITDA less capital expenditures less interest expense plus proceeds of non-EBITDA producing asset sales less the financial accounting impact of non-EBITDA producing asset sales. The GAAP measure most directly comparable to ICP free cash flow is net income (loss). |
| • | ICP Free Cash Flow per |
| • | Cost of Coal Sold, Cash Cost of Coal Sold and |
| • |
|
|
|
|
|
|
|
| – 2022 Proxy Statement |
APPENDIX A
Debt Level. Debt |
| • | Net (Cash)/Debt Level. Net |
| A-2 | - 2024 Proxy Statement |
APPENDIX A
| • | Total |
| • | Itmann Mine Operating EBITDA. Itmann Mine operating EBITDA is defined as Adjusted EBITDA plus general and administrative costs and other costs not directly attributable to operations. |
| • | Baltimore Terminal Operating EBITDA. Baltimore Terminal operating EBITDA is defined as Adjusted EBITDA plus general and administrative costs and other costs not directly attributable to operations. |
The reconciliation of each of these non-GAAP measures to its closest GAAP measure follows immediately below.
REALIZED COAL REVENUE, AVERAGE REALIZED COAL REVENUE PER TON SOLD AND AVERAGE CASH MARGIN PER TON SOLD
The following table presents a reconciliation for the PAMC segment of realized coal revenue, average realized coal revenue per ton sold and average cash margin per ton sold to total coal revenue, from our Pennsylvania Mining Complex, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
| Years Ended December 31, | ||||||||||
| 2021 | 2020 | |||||||||
Total Coal Revenue (PAMC Segment)
|
$
|
1,085,080
|
|
$
|
771,363
|
| ||||
Operating and Other Costs
|
| 743,340
|
|
|
667,595
|
| ||||
Less: Other Costs (Non-Production)
|
|
(74,528
|
)
|
|
(124,739
|
)
| ||||
|
|
|
| |||||||
Total Cash Cost of Coal Sold
|
|
668,812
|
|
|
542,856
|
| ||||
Add: Depreciation, Depletion and Amortization
|
|
224,583
|
|
|
210,760
|
| ||||
Less: Depreciation, Depletion and Amortization (Non-Production)
|
|
(29,355
|
)
|
|
(39,668
|
)
| ||||
|
|
|
| |||||||
Total Cost of Coal Sold
|
$
|
864,040
|
|
$
|
713,948
|
| ||||
|
|
|
| |||||||
Total Tons Sold |
|
23,720
|
|
|
18,672
|
| ||||
Average Revenue per Ton Sold
|
$
|
45.75
|
|
$
|
41.31
|
| ||||
Average Cash Cost of Coal Sold per Ton
|
|
28.25
|
|
|
29.12
|
| ||||
Depreciation, Depletion and Amortization Costs per Ton Sold
|
|
8.18
|
|
|
9.12
|
| ||||
|
|
|
| |||||||
Average Cost of Coal Sold per Ton
|
|
36.43
|
|
|
38.24
|
| ||||
|
|
|
| |||||||
Average Margin per Ton Sold
|
|
9.32
|
|
|
3.07
|
| ||||
Add: Depreciation, Depletion and Amortization Costs per Ton Sold
|
|
8.18
|
|
|
9.12
|
| ||||
|
|
|
| |||||||
Average Cash Margin Per Ton Sold
|
$
|
17.50
|
|
$
|
12.19
|
| ||||
| Years Ended December 31, | ||||||||||
2023
| 2022
| |||||||||
Total Coal Revenue (PAMC Segment) | $ | 2,024,610 | $ | 1,973,884 | ||||||
Less: Settlements of Commodity Derivatives | - | (289,228 | ) | |||||||
|
|
|
| |||||||
Realized Coal Revenue | $ | 2,024,610 | $ | 1,684,656 | ||||||
Operating and Other Costs | 1,120,065 | 949,222 | ||||||||
Less: Other Costs (Non-Production and non-PAMC) | (180,173 | ) | (114,817 | ) | ||||||
|
|
|
| |||||||
Cash Cost of Coal Sold | $ | 939,892 | $ | 834,405 | ||||||
|
|
|
| |||||||
Total Tons Sold | 26,042 | 24,103 | ||||||||
Average Realized Coal Revenue per Ton Sold | $ | 77.74 | $ | 69.89 | ||||||
Less: Average Cash Cost of Coal Sold per Ton | 36.10 | 34.56 | ||||||||
|
|
|
| |||||||
Average Cash Margin per Ton Sold | $ | 41.64 | $ | 35.33 | ||||||
|
|
|
| |||||||
| – 2022 Proxy Statement |
APPENDIX A
COST OF COAL SOLD,FREE CASH COST OF COAL SOLD AND UNIT COSTS PER TONFLOW
The following table presents a reconciliation of cash cost of coal sold and average unit cost per ton to total costs and expenses, the most directly comparable GAAP financial measure, for each of the periods indicated (in thousands, except per ton information).
| Years Ended December 31, | ||||||||||
| 2021 | 2020 | |||||||||
Total Costs and Expenses
|
$
|
1,223,540
|
|
$
|
1,030,885
|
| ||||
Less: Freight Expense
|
|
(103,819
|
)
|
|
(39,990
|
)
| ||||
Less: Selling, General and Administrative Costs
|
|
(89,113
|
)
|
|
(72,706
|
)
| ||||
Less: Gain on Debt Extinguishment
|
|
657
|
|
|
21,352
|
| ||||
Less: Interest Expense, Net
|
|
(63,342
|
)
|
|
(61,186
|
)
| ||||
Less: Other Costs (Non-Production)
|
|
(74,528
|
)
|
|
(124,739
|
)
| ||||
Less: Depreciation, Depletion and Amortization (Non-Production)
|
|
(29,355
|
)
|
|
(39,668
|
)
| ||||
|
|
|
| |||||||
Cost of Coal Sold
|
$
|
864,040
|
|
$
|
713,948
|
| ||||
Less: Depreciation, Depletion and Amortization (Production)
|
|
(195,228
|
)
|
|
(171,092
|
)
| ||||
Cash Cost of Coal Sold
|
$
|
668,812
|
|
$
|
542,856
|
| ||||
Plus: Idle Mine Costs
|
|
—
|
|
|
35,873
|
| ||||
|
|
|
| |||||||
Total Unit Costs
|
$
|
668,812
|
|
$
|
578,729
|
| ||||
|
|
|
| |||||||
Total Tons Sold
|
|
23,720
|
|
|
18,672
|
| ||||
Average Cost of Coal Sold per Ton
|
$
|
36.43
|
|
$
|
38.24
|
| ||||
Less: Depreciation, Depletion and Amortization Costs per Ton Sold
|
|
(8.18
|
)
|
|
(9.12
|
)
| ||||
Average Cash Cost of Coal Sold per Ton
|
$
|
28.25
|
|
$
|
29.12
|
| ||||
Plus: Idle Mine Costs per Ton
|
|
—
|
|
|
1.93
|
| ||||
|
|
|
| |||||||
Average Unit Cost per Ton
|
$
|
28.25
|
|
$
|
31.05
|
| ||||
FREE CASH FLOW & PSU FREE CASH FLOW
The following table presents a reconciliation of free cash flow and PSU free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, on a historical basis, for each of the periodperiods indicated (in thousands).
| Year Ended December 31, 2021 | Year Ended 2020 | |||||||||
Net Cash Provided by Operating Activities | $305,569 | $129,331 | ||||||||
Capital Expenditures | (132,752 | ) | (86,004 | ) | ||||||
Proceeds from non-EBITDA Producing Asset Sales | 13,572 | 9,899 | ||||||||
|
|
|
| |||||||
Free Cash Flow | $186,389 | $53,226 | ||||||||
Inorganic Capital Expenditures | 25,959 | 10,445 | ||||||||
|
|
|
| |||||||
PSU Free Cash Flow | $212,348 | $63,671 | ||||||||
| Year Ended December 31, 2023 | Year Ended 2022 | |||||||||
Net Cash Provided by Operating Activities | $ | 857,949 | $ | 650,990 | ||||||
Capital Expenditures | (167,791 | ) | (171,506 | ) | ||||||
Proceeds from Sales of Assets | 4,255 | 21,538 | ||||||||
Investments in Mining-Related Activities | (7,481 | ) | - | |||||||
|
|
|
| |||||||
Free Cash Flow | $ | 686,932 | $ | 501,022 | ||||||
|
|
|
| |||||||
| | A-3 |
APPENDIX A
CASH COST OF COAL SOLD, COST OF COAL SOLD, AND AVERAGE CASH COST OF COAL SOLD PER TON
The following table presents a reconciliation for the PAMC segment of cash cost of coal sold, cost of coal sold and average cash cost of coal sold per ton to operating and other costs, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
| Years Ended December 31, | ||||||||||
| 2023 | 2022 | |||||||||
Operating and Other Costs | $ | 1,120,065 | $ | 949,222 | ||||||
Less: Other Costs (Non-Production and non-PAMC) | (180,173 | ) | (114,817 | ) | ||||||
|
|
|
| |||||||
Cash Cost of Coal Sold | $ | 939,892 | $ | 834,405 | ||||||
Add: Depreciation, Depletion and Amortization (PAMC Production) | 190,962 | 189,857 | ||||||||
|
|
|
| |||||||
Cost of Coal Sold | $ | 1,130,854 | $ | 1,024,262 | ||||||
|
|
|
| |||||||
Total Tons Sold | 26,042 | 24,103 | ||||||||
Average Cost of Coal Sold per Ton | $ | 43.42 | $ | 42.49 | ||||||
Less: Depreciation, Depletion and Amortization Costs per Ton Sold | 7.32 | 7.93 | ||||||||
|
|
|
| |||||||
Average Cash Cost of Coal Sold per Ton | $ | 36.10 | $ | 34.56 | ||||||
|
|
|
| |||||||
| A-4 | - 2024 Proxy Statement |
APPENDIX A
ADJUSTED EBITDA, ITMANN MINE OPERATING EBITDA, BALTIMORE TERMINAL OPERATING EBITDA, ICP FREE CASH FLOW AND ICP FREE CASH FLOW PER SHARE
The following tables present a reconciliation of Adjusted EBITDA (including Adjusted EBITDA attributable to the CMT segment), Itmann Mine operating EBITDA (Itmann is included in the Company’s Other segment in the table below), Baltimore Terminal operating EBITDA, ICP free cash flow and ICP Free Cash Flowfree cash flow per share to net income (loss), the most directly comparable GAAP financial measure, on a historical basis, for each of the periodperiods indicated (in thousands, except per share amounts).
| Year Ended December 31, 2021 | Year Ended December 31, 2023 | Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||
| PA Mining Complex | CONSOL Marine Terminal (CMT) | Other | Total Company | PA Mining Complex | PA Mining Complex | CONSOL Marine Terminal (CMT) | CONSOL Marine Terminal (CMT) | Other | Other | Total Company | Total Company | |||||||||||||||||||||||||||||
Net Income (Loss) | $ | 94,161 | $ | 32,251 | $ | (92,302 | ) | $ | 34,110 | |||||||||||||||||||||||||||||||
Add: Income Tax Expense |
| — |
| — |
| 1,297 |
| 1,297 | ||||||||||||||||||||||||||||||||
Add: Interest Expense, net |
| 1,710 |
| 6,141 |
| 55,491 |
| 63,342 | ||||||||||||||||||||||||||||||||
Add: Interest Expense | ||||||||||||||||||||||||||||||||||||||||
Less: Interest Income |
| (90 | ) |
| — |
| (3,197 | ) |
| (3,287 | ) | (2,344 | ) | — | (11,253 | ) | (13,597 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Earnings (Loss) Before Interest & Taxes (EBIT) | $ | 95,781 | $ | 38,392 | $ | (38,711 | ) | $ | 95,462 | |||||||||||||||||||||||||||||||
Add: Depreciation, Depletion & Amortization |
| 206,727 |
| 4,834 |
| 13,022 |
| 224,583 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA) | $ | 302,508 | $ | 43,226 | $ | (25,689 | ) | $ | 320,045 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | $ | 5,768 | $ | 265 | $ | 599 | $ | 6,632 | ||||||||||||||||||||||||||||||||
Gain on Debt Extinguishment |
| — |
| — |
| (657 | ) |
| (657 | ) | ||||||||||||||||||||||||||||||
Pension Settlement |
| — |
| — |
| 22 |
| 22 | ||||||||||||||||||||||||||||||||
Unrealized Loss on Commodity Derivative Instruments |
| 52,204 |
| — |
| — |
| 52,204 | ||||||||||||||||||||||||||||||||
Add: Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||||||
Add: Loss on Debt Extinguishment | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Total Pre-tax Adjustments |
| 57,972 |
| 265 |
| (36 | ) |
| 58,201 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 360,480 | $ | 43,491 | $ | (25,725 | ) | $ | 378,246 | $ | 1,019,161 | $ | 80,322 | $ | (51,795 | ) | $ | 1,047,688 | ||||||||||||||||||||||
Add: General and Administrative Costs | ||||||||||||||||||||||||||||||||||||||||
Add: Other Non-Operating Costs | ||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||
Operating EBITDA | ||||||||||||||||||||||||||||||||||||||||
Less: Capital Expenditures |
| (132,752 | ) | ||
Less: Interest Expense, net |
| (63,342 | ) | ||
Less: Gain on Sale of Non-EBITDA Producing Assets |
| (11,723 | ) | ||
Plus: Proceeds on Non-EBITDA Producing Assets Sales |
| 13,572 | |||
|
| ||||
ICP Free Cash Flow | $ | 184,001 | |||
Outstanding Shares as of December 31, 2021 |
| 34,480 | |||
|
| ||||
ICP Free Cash Flow per Share | $ | 5.34 | |||
Outstanding Shares as of December 31, 2021 |
| 34,480 | |||
Less: Shares issued in connection with CCR Merger |
| (7,967 | ) | ||
|
| ||||
ICP Shares – 2020 Award |
| 26,513 | |||
ICP Free Cash Flow per Share – 2020 Award | $ | 6.94 | |||
ICP Free Cash Flow per Share for the year ending December 31, 2020 | $ | 4.17 | |||
|
| ||||
Cumulative ICP Free Cash Flow per Share – 2020 Award |
| $11.11 |
Less: Capital Expenditures | (167,791 | ) | |||
Less: Interest Expense | (29,325 | ) | |||
Less: Gain on Sale of Non-EBITDA Producing Assets | (8,981 | ) | |||
Plus: Proceeds on Non-EBITDA Producing Asset | 4,255 | ||||
|
| ||||
ICP Free Cash Flow | $ | 845,846 | |||
Weighted Average Outstanding Shares as of December 31, 2023* | 32,639 | ||||
|
| ||||
ICP Free Cash Flow per Share – 2023 Award | $ | 25.87 | |||
Cumulative ICP Free Cash Flow per Share – 2022 Award as of December 31, 2022 | $ | 16.84 | |||
|
| ||||
Cumulative ICP Free Cash Flow per Share – 2022 Award | $ | 42.71 | |||
Cumulative ICP Free Cash Flow per Share – 2021 Award as of December 31, 2022 | $ | 5.34 | |||
|
| ||||
Cumulative ICP Free Cash Flow per Share – 2021 Award | $ | 48.05 | |||
|
| * | Does not include unvested restricted or performance stock awards in which all necessary contingent conditions have been satisfied. |
| | A-5 |
APPENDIX A
| Year Ended December 31, 2020 | Year Ended December 31, 2022 | Year Ended December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
PA Mining | CONSOL Marine Terminal (CMT) | Other | Total Company | PA Mining | PA Mining | CONSOL Marine Terminal (CMT) | CONSOL Marine Terminal (CMT) | Other | Other | Total Company | Total Company | |||||||||||||||||||||||||||||
Net Income (Loss) | $ | 16,185 | $ | 32,537 | $ | (61,936 | ) | $ | (13,214 | ) | ||||||||||||||||||||||||||||||
Add: Income Tax Expense |
| — |
| — |
| 3,972 |
| 3,972 | ||||||||||||||||||||||||||||||||
Add: Interest Expense, net |
| 1,236 |
| 6,166 |
| 53,784 |
| 61,186 | ||||||||||||||||||||||||||||||||
Add: Interest Expense | ||||||||||||||||||||||||||||||||||||||||
Less: Interest Income |
| (10 | ) |
| — |
| (1,220 | ) |
| (1,230 | ) | (1,857 | ) | — | (4,174 | ) | (6,031 | ) | ||||||||||||||||||||||
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Earnings (Loss) Before Interest & Taxes (EBIT) | $ | 17,411 | $ | 38,703 | $ | (5,400 | ) | $ | 50,714 | |||||||||||||||||||||||||||||||
Add: Depreciation, Depletion & Amortization |
| 198,272 |
| 5,095 |
| 7,393 |
| 210,760 | ||||||||||||||||||||||||||||||||
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Earnings Before Interest, Taxes and DD&A (EBITDA) | $ | 215,683 | $ | 43,798 | $ | 1,993 | $ | 261,474 | ||||||||||||||||||||||||||||||||
Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA) | ||||||||||||||||||||||||||||||||||||||||
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Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Stock/Unit-Based Compensation | $ | 9,905 | $ | 558 | $ | 1,116 | $ | 11,579 | ||||||||||||||||||||||||||||||||
CCR Merger Fees |
| 2,623 |
| — |
| 7,199 |
| 9,822 | ||||||||||||||||||||||||||||||||
Gain on Debt Extinguishment |
| — |
| — |
| (21,352 | ) |
| (21,352 | ) | ||||||||||||||||||||||||||||||
Add: Stock-Based Compensation | ||||||||||||||||||||||||||||||||||||||||
Add: Loss on Debt Extinguishment | ||||||||||||||||||||||||||||||||||||||||
Add: Equity Affiliate Adjustments | ||||||||||||||||||||||||||||||||||||||||
Less: Fair Value Adjustment of Commodity Derivative Instruments | (52,204 | ) | — | — | (52,204 | ) | ||||||||||||||||||||||||||||||||||
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Total Pre-tax Adjustments |
| 12,528 |
| 558 |
| (13,037 | ) |
| 49 | (45,576 | ) | 316 | 10,069 | (35,191 | ) | |||||||||||||||||||||||||
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Adjusted EBITDA | $ | 228,211 | $ | 44,356 | $ | (11,044 | ) | $ | 261,523 | $ | 773,095 | $ | 52,259 | $ | (18,621 | ) | $ | 806,733 | ||||||||||||||||||||||
DEBT LEVEL AND NET (CASH)/DEBT LEVEL
The following table presents a reconciliation of Debt Leveldebt level and net Debt Level(cash)/debt level to total long-term debt, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands).
| As of December 31, 2021 | As of December 31, 2023 | As of December 31, 2023 | As of December 31, 2022 | As of December 31, 2022 | |||||||||||
Total Long-Term Debt | $ | 594,650 | |||||||||||||
Current Portion of Long-Term Debt | 57,332 | ||||||||||||||
|
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| ||||||||||||
Total Debt | 651,982 | ||||||||||||||
Less: Restricted Cash | (48,293 | ) | |||||||||||||
Less: Restricted Cash, PEDFA Bonds | (12,177 | ) | (35,516 | ) | |||||||||||
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Debt Level | $ | 603,689 | $ | 184,996 | $ | 348,665 | |||||||||
Less: Cash and Cash Equivalents | (149,913 | ) | |||||||||||||
Less: Cash and Cash Equivalents and Other Restricted Cash | (231,091 | ) | (291,436 | ) | |||||||||||
Less: Short-Term Investments | |||||||||||||||
Less: Share Repurchases | |||||||||||||||
|
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Net Debt Level | $ | 453,776 | |||||||||||||
Net (Cash)/Debt Level | $ | (527,406 | ) | $ | 57,229 | ||||||||||
| A-6 | |
APPENDIX A
TOTAL RECURRING REVENUES AND OTHER INCOME
The following table presents a reconciliation of total recurring revenues and other income to total revenue and other income, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands).
| Year Ended December 31, 2023 | Year Ended 2022 | |||||||||
Total Revenue and Other Income | $ | 2,568,877 | $ | 2,101,937 | ||||||
Less: Fair Value Adjustments of Commodity Derivatives | — | (52,204 | ) | |||||||
Less: Gain on Sale of Assets | (8,981 | ) | (34,589 | ) | ||||||
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Total Recurring Revenues and Other Income | $ | 2,559,896 | $ | 2,015,144 | ||||||
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| - 2024 Proxy Statement | A-7 |
APPENDIX B |
Certificate of Amendment to Amended and Restated Certificate of Incorporation
SECOND CERTIFICATE OF AMENDMENT
TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CONSOL ENERGY INC.
CONSOL ENERGY INC. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware hereby certifies as follows:
FIRST: That at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted setting forth proposed amendments to the Amended and Restated Certificate of Incorporation of the Corporation, declaring said amendments to be advisable and directing that the amendments be considered at the next annual meeting of the stockholders of the Corporation.
The text of the amendments to the Amended and Restated Certificate of Incorporation as set forth in such resolution is as follows:
Section 8.2 of the Amended Restated Certificate of Incorporation is hereby amended and restated in its entirety to read as follows:
“Limitation of Liability of Directors and Certain Officers. To the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, a director or officer of the Corporation shall not be personally liable either to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty as a director or officer. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation existing immediately prior to the time of such amendment, modification or repeal. If the DGCL hereafter is amended to further eliminate or limit the liability of a director or officer, then the liability of a director or officer of the Corporation shall be further limited or eliminated to the full extent permitted by the DGCL as so amended. For purposes of this Section 8.2 of Article VIII, “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL, as it presently exists or may hereafter be amended from time to time.”
SECOND: That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. The foregoing amendments shall be effective upon filing with the Secretary of State of the State of Delaware.
THIRD: All other provisions of the Amended and Restated Certificate of Incorporation shall remain in full force and effect.
(Signature Page Follows.)
IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this day of , 2024.
| By: | ||
| Name: | ||
| Title: |
| - 2024 Proxy Statement | B-1 |
CONSOLENERGYINC. ATTENTION: GENERAL COUNSEL AND SECRETARY
275 TECHNOLOGY DRIVE, SUITE CANONSBURG, PA |
VOTE BY INTERNET BeforeTheMeeting - Go to www.proxyvote.comorscantheQRBarcodeabove
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on April
DuringtheMeeting -Go to www.virtualshareholdermeeting.com/
You may participate in the meeting via the Internet and vote electronically during the meeting. Have your proxy card in hand when you access the web site and follow the instructions.
ELECTRONICDELIVERYOF FUTUREPROXYMATERIALS If you would like to reduce the costs incurred by CONSOL Energy Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on April
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/oBroadridge, 51 Mercedes Way, Edgewood, NY 11717. |
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
| KEEP THIS PORTION FOR YOUR RECORDS |
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
| DETACH AND RETURN THIS PORTION ONLY | ||
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | ||
CONSOL ENERGY INC.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR all the nominees listed, |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
1. Election of Directors: | For | Withhold | ||||||||||||||||||||||||||||||||||||||||||||||||||
1a. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
| ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||
1b. John T. Mills | ☐ | ☐ | 1 Year | 2 Years | 3 Years | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||
1c. Cassandra Pan | ☐ | ☐ | 4. Approval, on an Advisory Basis, of the Frequency of Future Advisory Votes on Executive Compensation. | |||||||||||||||||||||||||||||||||||||||||||||||||
| ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||
1d. Valli Perera | ☐ | ☐ | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||||||||||||
1e. Joseph P. Platt | ☐ | |||||||||||||||||||||||||||||||||||||||||||||||||||
☐ |
| ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||
| For | Abstain | |||||||||||||||||||||||||||||||||||||||||||||||||||
2. Ratification of Appointment of Ernst & Young LLP as CONSOL Energy Inc.’s Independent Registered Public Accounting Firm for the Year Ending December 31, | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||||||
3. Approval, on an Advisory Basis, of the Compensation Paid to CONSOL Energy Inc.’s Named Executive Officers in | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||||||||||||||||||||||
Please sign exactly as name(s) appear(s) hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX]
| Date | Signature (Joint Owners)
| Date
| ||||||||||||||||||||||||||||||||
Important notice regarding the Internet availability of proxy materials for the
Annual Meeting of Stockholders.
The material is available at: www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —— — — — — — — — — — — — —— — ——— — — — — — —
D71038-P68313V37370-P06434
|
Proxy - CONSOL Energy Inc.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James A. Brock, Kurt R. Salvatori and Martha A. Wiegand, and each of them, as proxies with power of substitution and power to act alone to vote on behalf of the undersigned all shares, on all matters designated on the reverse side or otherwise properly presented at the Annual Meeting of Stockholders of CONSOL Energy Inc., as the undersigned may be entitled to vote at the Annual Meeting of Stockholders of CONSOL Energy Inc. to be held on April
This Proxy when properly executed will be voted in the manner directed herein. If no direction is made, this Proxy will be voted
(Items to be voted appear on reverse side)
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