Peabody, at Taxpayer Expense, Pays Out Millions in Executive Bonuses

first_img FacebookTwitterLinkedInEmailPrint分享Dave Roberts for Vox:Two recent items from the news are likely to add fuel to the Peabody-hating fire.Item 1: Peabody is heading into bankruptcy, workers are getting screwed, and executives are profitingThis week, Peabody signaled that it is likely to file for bankruptcy.It’s not a huge surprise; the company has not been doing well. After a peak share price of $1,079 in 2011 (during the heady market for metallurgical coal), its stock has fallen, and fallen, and fallen, all the way to $2.19 a share.Naturally, Peabody has been laying off lots of workers — more than 20 percent of its global workforce between 2012 and 2015.But that’s not all it’s been doing.You see, Peabody made promises to its US workers. In exchange for doing the dangerous, unhealthy work of mining coal, they would have pensions and health benefits for life.But those obligations are expensive, especially with employees’ propensity to develop black lung. Peabody needed a way to get them off the books.So in 2007, Peabody created a new entity, Patriot Coal. Reporter Alec MacGillis tells the story in the New Republic:[Peabody] transferred to [Patriot] 13 percent of its coal reserves. It also transferred to it about 40 percent of its health care liabilities—the obligations for 8,400 former Peabody employees. A year later, Patriot Coal was loaded up with even more liabilities when it acquired Magnum Coal, an offshoot of the country’s second-largest mining company, Arch Coal. This left Patriot with responsibility for another 2,300 retirees, and, by last year, total liabilities of $1.37 billion.Eventually Patriot Coal was larded up with more than $3 billion in liabilities from Peabody and Arch, representing 22,000 miners, retirees, and spouses.“Oddly, for a 5-year-old company,” labor journalist Mike Elk wrote, “Patriot wound up with nearly three times as many retirees as active employees, more than 90 percent of whom never worked for the company.”Can you guess what happened next?Yup, Patriot Coal filed for bankruptcy in 2012. And it wasted no time asking a bankruptcy judge to let it jettison all those health care liabilities. (The judge said yes, just as she said yes two weeks prior when Patriot asked for permission to pay their executives almost $7 million in “retention bonuses.”)Patriot had no loyalty to these retirees, of course. For the most part, they’d never even worked for Patriot. According to a 2013 story in the Wall Street Journal, “90 percent of retirees listed as Patriot’s obligation today never worked for Patriot, but were once employed by Peabody or Arch.”What about Peabody? Doesn’t it have any loyalty to the workers who gave it so much of their lives? The Wall Street Journal asked:A spokesman for Peabody, the nation’s largest coal company by production, said Peabody has lived up to its obligations. “This is a matter solely between the union and Patriot Coal,” the spokesman said.Damn, that’s cold.(The coal employee pension funds have since sued Peabody and Arch, accusing them of designing Patriot to fail as a way of escaping their obligations.)Ditching its obligations to workers — “restructuring,” in the antiseptic language of corporate law — didn’t save Patriot. It filed for bankruptcy again in 2015. Its efforts to escape its liabilities are ongoing.Dumping liabilities onto Patriot didn’t save Peabody either, which is now on the verge of going under itself. It currently has hundreds of millions in unfunded liabilities, which are likely to be jettisoned in some future deal between a corporate restructuring lawyer and a bankruptcy judge.But have no fear! The Peabody executives who oversaw all those mergers and big bets on metallurgical coal — and the subsequent destruction of virtually all the company’s value — are in no danger. In fact, they’re doing great.This 2015 report from the Institute for Energy Economics and Financial Analysis reveals that the top five Peabody executives pulled down about $27 million in compensation in 2011, when the stock was at its peak.In 2014, after the company’s stockholders had lost $16 billion in value, thousands of workers had been laid off and Peabody was headed for bankruptcy, they pulled down about … $25 million.To atone for his sins, the compensation of Boyce, the CEO, was reduced from $10 million in 2011 to $11 million in 2014.(The, er, disjunct between corporate performance and executive compensation is a familiar tale in US coal these days.)So that’s the first item regarding Peabody’s enduring status as the Worst. Now here’s the second.Item 2: Peabody has been heavily subsidized by federal taxpayersTurns out US taxpayers are helping to pay for all this.According to a new report from Greenpeace, based on Department of Interior data obtained via FOIA, Peabody relies heavily on coal mined from federal land. In fact, the three biggest US coal companies all rely heavily on it.coal corporate welfare(Greenpeace)Here’s the thing about coal on federal land: For decades, the US public has been letting coal companies mine it for dirt cheap, well beneath market rates. Over time that adds up to a lot of foregone revenue.In his 2014 piece on coal leasing, Brad Plumer wrote about a study by Tom Sanzillo of the Institute for Energy Economics and Financial Analysis that “argued that the federal government had foregone as much as $28.9 billion in revenue over the past 30 years by getting below-market value for its coal in these non-competitive auctions.”And that’s to say nothing of the social costs imposed by the coal thus mined. Consider this statistic from a previous Greenpeace report:A ton of publicly owned coal leased during the Obama administration will, on average, cause damages estimated at between $22 and $237, using the federal government’s social cost of carbon estimates — yet the average price per ton for those coal leases was only $1.03.This amounts to the American people subsidizing their own suffering.How your taxes ended up enriching coal executives who are betraying their workers Peabody, at Taxpayer Expense, Pays Out Millions in Executive Bonuseslast_img

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