US coal producer Alpha Natural Resources (NYSE:ANR) is offering its two top executives $2 million apiece to stay with the company.
CEO Kevin Crutchfield and President Paul Vining each received $500,000 upfront and the rest will be paid out over two years, on the condition that they stay with the struggling firm.
The retention bonuses are meant to incentivise Crutchfield and Vining to stay with the miner “through particularly difficult market and regulatory conditions which could affect the Company and the coal industry generally in the coming years.”
Crutchfield has been CEO since 2009 and Vining has held the Presidency since 2012.
“The Committee and Board recognized the challenges ahead for the Company and determined that the Retention Bonuses were necessary to retain the Company’s two top executives who are critical to the Company’s execution of strategic priorities given current and anticipated market and business conditions,” the SEC filing reads.
Business has indeed been difficult for Alpha, the country’s second biggest coal producer.
Last week the miner was ordered to pay a $27 million fine as part of a legal settlement with the US Environmental Protection Agency (EPA) relating to more than 6,000 permit violations committed between 2006 and 2013.
This is the largest-ever water pollution penalty handed down in the US. The company must also spend an additional $200 million on wastewater treatment systems and upgrades to reduce pollution from coal.
The US coal industry in general has been struggling. Demand among US consumers is waning and environmental regulations are forcing many coal-fired power plants to shut down. The industry has accused the current administration of waging a ‘war on coal.’
Alpha’s share price has dropped considerably over the past 12 months, going from around $8 per share in March 2013 to $4.5 today.