Whitesburg KY

Alpha boosts CEO’s pay over 50 percent


Coal producer Alpha Natural Resources raised the total compensation of its chief executive, Mike Quillen, more than 56 percent in 2008, largely through stock awards.

The value of Quillen’s 2008 compensation package totaled $5.7 million, based on an Associated Press calculation of figures disclosed in a regulatory filing. Quillen, 60, received compensation totaling $3.65 million from Abingdon, Va.-based Alpha in 2007.

Alpha is the parent firm of Enterprise Mining, which has extensive operations in Letcher County. Alpha officials said recently that 354 employees in Kentucky and 1,280 employees at its Paramont Coal and D-R Coal units in Virginia are being required to take furloughs for a week this month.

The Associated Press formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards.

The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflects the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Almost half Quillen’s 2008 compensation came from stock awards worth more than $2.5 million when granted Jan. 15, 2008. At the time, Alpha’s stock was trading at $29.52 a share, but has since slipped to the $18 range. The shares vest over time. In 2007, Alpha awarded Quillen about $1.9 million worth of stock.

Quillen likewise benefited from bigger bonuses in 2008. His nonequity incentive compensation rose 85 percent to $1.36 million, from $735,000 in 2007. And his cash bonus jumped to $996,433, from $205,200 in 2007.

The value of perks provided to Quillen rose nearly 50 percent to $154,338, mainly because of a larger contribution to his supplemental retirement account.

Quillen’s salary rose a more modest 3.9 percent to $689,423, up from $663,462 in 2007.

Compared with other coal industry chief executives, Quillen receives relatively modest pay. Canonsburg, Pa.-based Consol Energy chief Brett Harvey, for instance, received compensation totaling $11.9 million last year.

Alpha achieved mixed results in 2008. Its shares soared above $104 in July on strong international demand and high prices, but ended the year down nearly 50 percent.

Earnings totaled $165.5 million, compared with $27.7 million in 2007. And revenue jumped to $2.55 billion in 2008, from $1.88 billion the previous year.

Alpha operates approximately 60 mines and employs about 3,600 people in Kentucky, Virginia, West Virginia, and Pennsylvania.

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