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FACTBOX-How Peabody Energy plans to pay big bankruptcy exit bonuses
February 28, 2017 / 6:04 AM / 9 months ago

FACTBOX-How Peabody Energy plans to pay big bankruptcy exit bonuses

    CHICAGO, Feb 28 (Reuters) - Peabody Energy Corp,
the world's largest private-sector coal miner, expects to exit
Chapter 11 bankruptcy in April with an executive bonus plan
worth hundreds of millions of dollars.            
    The following are the main terms of the bonus package:
    
    * Peabody set aside 10 percent of new common stock - which
the company estimates to be worth $310 million - in a pool to be
used as grants for executives, employees and consultants.
    * 25.8 percent of the pool, or $80 million, will be awarded
in the form of restricted stock on the day Peabody emerges from
bankruptcy. Half of that amount will be split among six top
executives, and the rest will be split among Peabody's 7,000
employees.
    * A portion of the emergence award for the top executives
will vest on each of the first three anniversaries of the
bankruptcy exit if the manager remains with the company.
    * The board has the discretion to award the remaining stock
from the incentive pool as compensation to executives or
employees.
    * The stock incentive plan comes in addition to a $11.9
million cash bonus package, about 41 percent of which will be
awarded to Peabody's top six executives upon Chapter 11
emergence. The remaining cash will be allocated according to
2016 and 2017 performance benchmarks.
    
    VALUATION CONFLICT
    The market value of Peabody's long-term incentive plan
varies with the price of its stock.
    Peabody estimated the value of the company's stock at $3.1
billion, but a group of dissenting creditors proposed a
reorganization plan valuing Peabody at $5.4 billion. Some
shareholders objecting to the company's bankruptcy exit plan
argue the stock will be worth double or triple Peabody's
estimate. 
    Here's a breakdown of the amount each executive stands to
receive under Peabody's estimated $3.1 billion market
capitalization and a high-end shareholder estimate of $9
billion. 
    
 Name              Title        Peabody's  Shareholders'
                                estimate   estimate
 Glenn Kellow      President    $15 mln    $43.5 mln
                   and CEO                 
 Charles Meintjes  President,   $5 mln     $14.5 mln
                   Australia               
 Kemal Williamson  President,   $5 mln     $14.5 mln
                   Americas                
 Amy Schwetz       Executive    $5.2 mln   $15.1 mln
                   Vice                    
                   President               
                   and Chief               
                   Financial               
                   Officer                 
 Verona Dorch      Executive    $3.5 mln   $10.2 mln
                   Vice                    
                   President,              
                   legal and               
                   government              
                   affairs                 
 Bryan Galli       Group        $3 mln     $8.7 mln
                   Executive               
                   of                      
                   Marketing               
                   and Trading             
 
    
 (Reporting by Tracy Rucinski; editing by Brian Thevenot)
  

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