Alpha Natural Resources Inc. CEO Kevin Crutchfield received a pay package valued at about $6.2 million in 2012, down 8 percent from the previous year, according to an Associated Press analysis of a regulatory filing.
The pay package came in a year the Bristol, Va.-based coal company’s loss widened to $2.44 billion from $730.5 million in 2011 on impairment and restructuring charges, as well as expenses related to its June 2011 acquisition of Massey Energy Co. Revenue fell 2 percent to $6.97 billion and coal shipments rose 2.4 percent to 108.8 million tons.
Coal producers have been hit by a double whammy of weak demand. Utilities have needed less thermal coal to produce electricity because of mild weather and lower power generation, while construction overseas has slowed the appetite for metallurgical coal to make steel. Many coal companies in the U.S. and around the world have cut back production and shuttered mines to reduce costs.
The compensation deal was disclosed April 8 in an annual proxy filing with the Securities and Exchange Commission.
Crutchfield’s salary increased 4 percent to $1.07 million, he received a performancebased bonus $523,710, and the value of his stock awards fell 9 percent to $4.43 million. The 52-year-old also received other compensation worth $163,911.
In 2011, Crutchfield’s compensation was valued at more than $6.7 million.
Alpha Natural Resources also announced that it will hold its annual meeting on May 22 in Abingdon, where shareholders will elect nine directors to its board.
The company operates more than 130 mines and processing plants in Letcher County and elsewhere in Kentucky, Pennsylvania, Virginia, West Virginia and Wyoming. It employs about 12,400 people through its affiliates.
The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive’s stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.