UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

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Definitive Proxy Statement

 

Definitive Additional Materials

 

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CONSOL ENERGY INC.

(Name of Registrant as Specified in its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO


 

ANNUAL MEETING OF STOCKHOLDERS — APRIL 26, 2022

 

 

 

LOGO

 

1000 CONSOL Energy Drive, Suite 100

Canonsburg, Pennsylvania 15317

Telephone (724) 416-8300

 

 

Dear Fellow Stockholder:

 

On behalf of the entire Board of Directors of CONSOL Energy Inc. (“CEIX”), we invite you to attend CEIX’s fifth Annual Meeting of Stockholders. The Annual Meeting will be held solely via live webcast at www.virtualshareholdermeeting.com/CEIX2022 on April 26, 2022, at 9:00 a.m. Eastern Time.

You will be asked to vote on the following items for the Annual Meeting: (i) the election of our directors, (ii) ratification of the appointment of our independent registered public accounting firm, and (iii) advisory approval of our 2021 executive compensation program. Detailed information about the director nominees, including their specific experience and qualifications, begins on page 12 of the proxy statement. Information about our independent registered public accounting firm begins on page 17 of the proxy statement. Our Compensation Discussion and Analysis, which explains our 2021 compensation decisions, begins on page 23 of the proxy statement. We encourage you to read the proxy statement carefully for more information.

During 2021, we took advantage of improving market conditions and resurgent domestic and global economies to achieve strong results and position ourselves for the future. At our flagship Pennsylvania Mining Complex (PAMC), we grew our PAMC coal revenue to $1,085 million for the year ended December 31, 2021 from $771 million for the year ended December 31, 2020. We also grew PAMC production from 18.8 million tons in 2020 to 23.9 million tons in 2021, improved our average revenue per ton sold from $41.31 in 2020 to $45.75 in 2021, and, although our total costs and expenses increased to $1,224 million from $1,031 million for the year ended December 31, 2021 compared to the year ended December 31, 2020, we reduced our cash cost of coal sold per ton* from $29.12 in 2020 to $28.25 in 2021, all while successfully managing inflationary pressures and the continued impacts of COVID-19 on our workforce, supply chain, and logistics partners. As a result, we were able to grow our PAMC average cash margin per ton sold* to $17.50 in 2021 from $12.19 in 2020, a 44% year-on-year increase. Moreover, we achieved these results while continuing to diversify our sales portfolio into export and non-power generation markets. During 2021, we exported a record 11 million tons from the PAMC, representing 47% of our total tons sold, and we placed approximately 37% of our total sales tons into industrial and metallurgical markets, which benefit from the characteristics of our high-quality PAMC product. This was enabled, in part, by our wholly-owned CONSOL Marine Terminal (CMT), which continued to serve as our strategic gateway to the seaborne market and achieved its second-highest throughput year on record and generated $32 million of net income and $43 million Adjusted EBITDA* attributable to the CMT segment for the year ended December 31, 2021. All of this was accomplished while maintaining a Total Recordable Incident Rate 54% lower than the national average for underground bituminous coal mines at the PAMC (based on preliminary Mine Safety and Health Administration (MSHA) data) and achieving another year of zero safety exceptions at the CMT.

Our financial performance reflected these strong operating and sales results, as we generated $306 million of net cash provided by operating activities and $186 million of free cash flow*. We also have reduced our total debt in every year since we were spun off as an independent publicly-traded company in 2017. While executing our de-levering goals, we have simultaneously capitalized on opportunities to access alternative sources of financing and capture the arbitrage versus our existing debt. Case in point, we raised $75 million in the tax-exempt municipal bond market in 2021, while also making payments of $101 million to reduce consolidated

indebtedness, including $17 million toward our higher-interest second lien notes. Our operating and financial performance continued to create value for CEIX stockholders, and our share price appreciated by more than 200% during the year. We see strong fundamentals carrying into 2022, and we stand near fully-contracted for 2022 PAMC sales at anticipated realizations that are substantially improved compared to our 2021 results.

Our continued success and positive near-term outlook have allowed us to make meaningful investments in our future. Chief among these is our Itmann mine project, which we reaccelerated in 2021. We are now on track to complete the relocation of a state-of-the-art preparation plant to the Itmann site and ramp up the mine to full production during the second half of 2022. Once operating at full capacity, we expect the mine and preparation plant to produce approximately 900,000 tons annually of high-quality low-vol metallurgical coal for sale in the domestic and international markets, with a cost structure that will allow it to generate meaningful cash flow across a wide range of market conditions. We also are investing in the development of a fifth longwall at the PAMC, which is targeted for completion by the end of 2022 and will improve our production optionality, including the opportunity to rapidly add incremental production in strong markets such as those we are currently experiencing.    

Coal remains the largest source of electricity and the second-largest source of primary energy globally, and looking ahead, we believe society will continue to rely on coal as a critical resource for electricity, infrastructure, and basic human needs as the energy transition plays out in the coming decades. Given this outlook, our goal is to lead the industry as a socially and environmentally responsible coal supplier, while continuing to sustainably grow and diversify our company. To that end, we expect to be releasing our fifth annual Corporate Sustainability Report in May, and we are proud to be among the first pure play coal companies to set greenhouse gas emission reduction targets. These include achieving a 50% reduction in our direct operating emissions by 2026 and achieving net zero emissions by 2040. Innovation will be paramount for realizing our financial, strategic, and ESG goals, and we continue to invest in a portfolio of new technologies, such as advanced carbon materials, waste coal utilization, and greenhouse gas emission reduction technologies, that are aligned with our priorities. We look forward to continuing to achieve Forward Progress in creating sustainable value for our stockholders in 2022 and beyond.

Finally, we remain committed to promoting diversity throughout our organization. Our Board believes in the value of diversity, has adopted a diversity policy relating to board membership and emphasizes the importance of diversity within our board when considering succession planning. Our Board likewise continues to promote diversity throughout our workforce by, among other things, ensuring that we have a diverse executive management team.

We are making our proxy materials for the Annual Meeting available to you via the Internet. We hope that this offers you convenience while allowing us to reduce the number of copies that we print.

Your vote is important to us. We hope that you will participate in the Annual Meeting, either by attending and voting at the meeting or by voting as promptly as possible through the Internet, by telephone or by completing and mailing a proxy card (following the process as further described in the proxy statement). Detailed instructions on “How to Vote” begin on page 9.

Thank you for your investment in CEIX, and we hope you will be able to join us at this year’s Annual Meeting.

 

 

    

           Sincerely,

 

  

 

LOGO

  

William P. Powell

Chair of the Board

 

LOGO

 

 

 

         LOGO

  

James A. Brock

President & CEO

 

LOGO

 

 

*

See Appendix A to this proxy statement for a reconciliation of cash cost of coal sold per ton (non-GAAP) to total costs and expenses (GAAP), average cash margin per ton sold (non-GAAP) to total coal revenue (GAAP), Adjusted EBITDA (non-GAAP) to net income (GAAP) and free cash flow (non-GAAP) to net cash provided by operating activities (GAAP).


 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

 

LOGO

 

 

    DATE:

 

 

    

 

 

 

April 26, 2022

 

 

    

 

 

    TIME:

 

   

 

 

9:00 a.m. Eastern Time

 

   

 

    PLACE:

 

   

 

Solely via live webcast at www.virtualshareholdermeeting.com/CEIX2022 (the “CEIX Meeting Website”)

 

   

    AGENDA:

   

1.

 

Elect directors for a one-year term;

 

   
   

2.

 

Ratify the appointment of Ernst & Young LLP as CEIX’s independent registered public accounting firm for the fiscal year ending December 31, 2022;

 

   
   

3.

 

Approve, on an advisory basis, the compensation paid to our named executive officers in 2021, as reported in this Proxy Statement;

 

   
   

4.

 

Transact such other business as may properly come before the meeting and at any adjournments or postponements of the meeting.

 

   

    RECORD DATE:

   

 

By resolution of the Board of Directors, we have fixed the close of business on March 4, 2022 as the record date for determining the stockholders of CEIX entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.

 

   

INFORMATION ABOUT THE MEETING:

We are delivering our proxy materials to stockholders via the Internet. On March 17, 2022, we mailed a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) to holders of record as of the record date, and posted our proxy materials on the website referenced in the Internet Notice. The Internet Notice explains how to access the proxy materials and our 2021 Annual Report, free of charge, through the website described in the Internet Notice. The Internet Notice and website also provide information regarding how you may request to receive proxy materials in printed form, by mail or electronically by e-mail for this meeting and on an ongoing basis. You may vote through any of the acceptable means described in the Proxy Statement. Instructions on how to vote begin on page 9.

Due to the ongoing public health considerations associated with the coronavirus outbreak (“COVID-19”), our annual meeting of stockholders (the “Annual Meeting”) will be held solely via live webcast on the CEIX Meeting Website and you will not be able to be physically present at the Annual Meeting. You will be able to participate virtually, vote your shares of CEIX Common Stock electronically, view the list of registered holders entitled to vote at the Annual Meeting and submit questions online during the Annual Meeting by logging on to the CEIX Meeting Website using the 16-digit control number included in your proxy card, vote instruction form or notice you previously received and following the directions on the CEIX Meeting Website. If you are not eligible to participate in the Annual Meeting, you may listen to a webcast of the Annual Meeting by logging on to the CEIX Meeting Website as a guest. Guests will not be able to ask questions or vote at the Annual Meeting. We encourage you to log on 15 minutes prior to the start time of the Annual Meeting. If you have difficulty accessing the Annual Meeting through the CEIX Meeting Website, please call the technical support number provided.

 

   

March 17, 2022

 

 

LOGO

Martha A. Wiegand

General Counsel and Secretary

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting

of Stockholders to be Held on April 26, 2022:

The Proxy Statement, 2021 Annual Report, Notice of Annual Meeting of Stockholders and related materials are available free of charge at www.proxyvote.com or may be obtained by contacting the Investor Relations department at the address and phone number on page 9 of the Proxy Statement.


 

TABLE OF CONTENTS

 

 

 

Proxy Summary      1  
Information About the Annual Meeting      7  
Proposal No. 1—Election of Directors      12  

Biographies of Director Nominees

  

 

13

 

Proposal No. 2—Ratification of Appointment of Independent Registered Public Accounting Firm      16  
Audit Committee and Audit Fees      17  

Audit Committee Report

  

 

17

 

Independent Registered Public Accounting Firm

  

 

18

 

Proposal No. 3—Advisory Approval of Executive Compensation      19  
Executive Officers      20  
Executive Compensation Information      22  

Compensation Discussion and Analysis

  

 

23

 

Compensation Committee Report

  

 

37

 

Summary Compensation Table

  

 

37

 

Grants of Plan-Based Awards – 2021

  

 

38

 

Understanding our Summary Compensation and Grants of Plan-Based Awards Tables

  

 

39

 

Outstanding Equity Awards at Fiscal Year-End for CEIX – 2021

  

 

40

 

Stock Vested Table – 2021

  

 

40

 

Pension Benefits Table – 2021

  

 

41

 

Understanding Our Pension Benefits Table

  

 

41

 

Potential Payments Upon Termination or Change in Control Tables

  

 

43

 

Understanding Our Change in Control and Employment Termination Tables and Information

  

 

47

 

Human Capital Management

  

 

51

 

Pay Ratio Disclosure

  

 

51

 

Securities Authorized for Issuance under the CONSOL Energy Inc. Equity Compensation Plan

  

 

52

 

Board of Directors and Compensation Information      53  

Board of Directors and its Committees

  

 

53

 

Director Compensation Table—2021

  

 

60

 

Understanding Our Director Compensation Table

  

 

61

 

Beneficial Ownership of Securities      62  
Related Person Transaction Policy and Procedures and Related Person Transactions      64  
Additional Matters      65  
Appendix A—Reconciliation of Non-GAAP Measures      A-1  
 

 

 

  LOGO  – 2022 Proxy Statement  


 

PROXY SUMMARY

 

 

 

This Proxy Summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting. On March 17, 2022, we mailed the Internet Notice to holders of record as of the record date, and posted our proxy materials on the website referenced in the Internet Notice.

2022 ANNUAL MEETING OF STOCKHOLDERS

 

DATE AND TIME:

April 26, 2022

9:00 a.m. Eastern Time

 

 

    

 

 

PLACE:

Solely via live webcast at www.virtualshareholdermeeting.com/CEIX2022

 

 

 

    

 

RECORD DATE:

March 4, 2022

PROPOSALS REQUIRING YOUR VOTE

Stockholders are being asked to vote on the following proposals at the Annual Meeting. Your vote is very important to us. Please cast your vote immediately on all of the proposals to ensure that your shares are represented.

 

Item

 

Proposal

 

Board
Recommendation

Page 

 

1

Election of Directors

 

 

FOR EACH
NOMINEE

12

 

The election of director nominees for a one-year term ending in 2023.

 

2

 

Ratification of Appointment of Ernst & Young LLP

 

 

FOR

16

 

The Audit Committee appointed Ernst & Young LLP as CEIX’s independent registered public accounting firm for fiscal year 2022. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s appointment of the independent registered public accounting firm.

 

3

Advisory Approval of 2021 Named Executive Officers’ Compensation

 

Stockholders are being asked to approve, on an advisory basis, the compensation paid to CEIX’s named executive officers in 2021. CEIX’s executive compensation programs are designed to create a direct linkage between stockholder interests and management with incentives specifically tailored to the achievement of financial, operational and stock performance goals.

 

 

FOR

19

 

 

  LOGO  – 2022 Proxy Statement       1


 

   PROXY SUMMARY

 

CURRENT BOARD OF DIRECTORS

The following table provides summary information about our current Board of Directors as of March 15, 2022. All of our directors, whose terms expire at the Annual Meeting, are nominees for election at the Annual Meeting, each for a one-year term ending in 2023.

 

Name

Age

Director

Since

Occupation

 

Term

    Expiring    

    Independent    

Committee

    Memberships    

 

 

William P. Powell†    

 

 

 

 

 

66

 

 

 

 

 

 

 

2017

 

 

 

 

    Managing Partner of 535 Partners LLC

 

 

2023

 

 

Yes

 

 

  AC

  CC

  HSE

 

Sophie Bergeron

 

 

 

44

 

 

 

 

2019

 

 

    Managing Director of Diamonds, Technical and HSEC of Rio Tinto

 

2023

 

Yes

 

  NCG

  HSE††

           

 

James A. Brock

 

 

 

65

 

 

 

 

2017

 

 

    President and Chief Executive Officer of CEIX

 

2023

 

No

 

  HSE

 

John T. Mills

 

 

 

74

 

 

 

 

2017

 

 

    Former Chief Financial Officer of Marathon Oil

    Corporation

 

2023

 

Yes

 

  AC††

  CC

  HSE

 

Joseph P. Platt

 

 

 

74

 

 

 

 

2017

 

 

    General Partner of Thorn Partners LP

 

2023

 

Yes

 

  CC††

  NCG

  HSE

 

Edwin S. Roberson

 

 

 

77

 

 

 

 

2017

 

 

    Former Chief Executive Officer of Christ Community

    Health Services

 

2023

 

Yes

 

  AC

  NCG††

  HSE

 

AC    Audit Committee
CC    Compensation Committee
HSE    Health, Safety and Environmental Committee
NCG    Nominating and Corporate Governance Committee
   Chair of the Board
††    Committee Chair
 

 

BUSINESS/STRATEGIC 2021 HIGHLIGHTS

 

   

The Right Team. We have an experienced and focused senior executive team and Board of Directors that can navigate and capitalize on future opportunities in the mining and energy space.

 

   

Bottom Line. We generated a GAAP net income of $34.1 million in 2021 compared to a GAAP net loss of $13.2 million in 2020. Notably, our Adjusted EBITDA for 2021 was $378.2 million* compared to $261.5 million* for 2020, representing a 45% improvement compared to 2020.

 

   

Strong Operational Performance.

 

   

Total PAMC coal shipments of 23.7 million tons, a 27% improvement compared to 2020. Approximately 37% of 2021 PAMC coal shipments were used in non-power generation applications.

 

   

PAMC coal revenue of $1,085 million for 2021 compared to $771 million for 2020.

 

   

Average cash margin per ton sold of PAMC coal sales of $17.50* for 2021 versus $12.19* for 2020, a 44% improvement year-over-year.

 

   

Our Bailey Preparation Plant and CONSOL Marine Terminal each had ZERO employee recordable incidents in 2021. Our Total Recordable Incident Rate at the PAMC was approximately 54% below the national average (based on preliminary MSHA data).

 

   

Net Cash Provided by Operating Activities of $305.6 million in 2021 compared to $129.3 million in 2020.

 

   

Generated free cash flow of $186.4 million* in 2021 compared to $53.2 million* in 2020, of which $101.2 million was used towards reducing consolidated indebtedness, including reducing Term Loan A, Term Loan B, second lien notes and equipment-financed debt outstanding by $25.0 million, $30.9 million, $17.1 million and $28.2 million, respectively.

 

2       LOGO  – 2022 Proxy Statement


 

   PROXY SUMMARY

 

 

 

   

Secured alternative sources of financing by issuing $75.0 million in the tax-exempt municipal bond market, of which $46.1 million is available in escrow as restricted cash, and strengthened the CEIX balance sheet by making net payments toward debt of approximately $101.2 million.

 

   

Positioning for the Future.

 

   

ESG. Announced a big step toward our Forward Progress Sustainability Initiative by establishing greenhouse gas (GHG) emission reduction targets, which include a 50% reduction in direct operating GHG emissions in 5 years and Net Zero direct operating GHG emissions by 2040. This establishes CEIX as a leader among its global coal peers and affirms its commitment to being a responsible operator for its stakeholders.

 

   

Recommenced the Itmann metallurgical coal project with an expanded scope to accelerate our diversification strategy. The project is expected to produce approximately 900,000 product tons/year of high-quality low-vol metallurgical coal with commissioning expected in the second half of 2022. Furthermore, under the expanded scope, the project creates additional growth opportunity and higher revenue potential by adding third-party processing capacity of up to 750 thousand to 1 million product tons per year.

 

   

Own a ~25% equity interest in CFOAM Corp., which produces carbon foam products from coal for high-performance materials science applications and moved forward in partnerships with Ohio University and OMNIS Bailey LLC to develop technologies that have the potential to diversify our revenue streams and create new, sustainable end-uses for coal.

 

   

Advancing our 21st Century Power Plant project, which is evaluating a next-generation power plant at the PAMC that would be fueled by waste coal and biomass and equipped with carbon dioxide (CO2) capture and storage to achieve net neutral or negative CO2 emissions.

 

*

See reconciliation of average cash margin per ton sold (non-GAAP) to PAMC coal revenue (GAAP), Adjusted EBITDA (non-GAAP) to net income (loss) (GAAP) and free cash flow (non-GAAP) to net cash provided by operating activities (GAAP) in Appendix A to this Proxy Statement.

 

COMPENSATION HIGHLIGHTS

 

  Independent Compensation

  Consultant

  

Continued use by our Compensation Committee of an independent compensation consultant that reports directly to the Compensation Committee.

  Say on Pay Results   

97% of the shares voted at our 2021 Annual Meeting of Stockholders approved our executive compensation program.

  Compensation Program

  Design

  

Designed an overall compensation program with 75.4% of compensation for named executive officers (“NEOs”) contingent on performance goals, reinforcing our pay-for-performance culture, which aligns risk-taking with sustainability and the long-term financial health of our company.

  Short-Term Incentive Compensation

  (“STIC”) Annual Performance

  

Met and exceeded target performance level for 2021 STIC resulting in annual STIC payouts to our NEOs at over 100% of target performance.

 

  LOGO  – 2022 Proxy Statement       3


 

   PROXY SUMMARY

 

  Long-Term Incentive Compensation

  (“LTIC”) Performance-Based Restricted

  Stock Unit Awards (“PSUs”)

  

Met and exceeded target performance level for 2021 tranche resulting in the vesting of performance-based cash awards granted to the NEOs under the 2021-2023 LTIC program.

  Pay Ratio Results   

Determined the ratio of the total annual compensation of our Chief Executive Officer (“CEO”), as compared to the total annual compensation of our median employee, to be 55:1. Based upon data collected by Mercer, our independent compensation consultant, in 2020 the average ratio of the compensation of the Chief Executive Officer to median employee of 494 of the companies included in the S&P 500 Index was 282 to 1 and among 76 companies that have reported such ratio as of March 2, 2022 with respect to 2021 compensation, the average ratio of Chief Executive Officer to median employee compensation was 367 to 1.

  Board Size and Director

  Compensation

  

Maintained Board size and non-employee director compensation at current levels with no increases since the inception of the company in 2017.

  Governance Practices   

Continued adherence to good governance practices, including but not limited to, anti-hedging, recoupment, compensation risk assessment, and stock ownership/holding and equity grant practices.

 

4       LOGO  – 2022 Proxy Statement


 

   PROXY SUMMARY

 

 

 

CORPORATE GOVERNANCE HIGHLIGHTS

Our Board and management are committed to strong corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability and helps build public trust in our company. This Proxy Statement describes our governance framework, which includes the following highlights:

 

   

Independent Directors. A majority of our directors must be independent. Currently, all of our directors other than James A. Brock are independent, and our Audit, Nominating and Corporate Governance, and Compensation Committees consist exclusively of independent directors.

 

   

Majority Voting Requirement. Our Second Amended and Restated Bylaws (the “bylaws”) require that any nominee for election to the Board who receives a greater number of “withheld” votes from his or her election than votes cast in favor of that director’s election to the Board in an uncontested election must tender his or her resignation to the Board. The Nominating and Corporate Governance Committee will make a recommendation on the tendered resignation, and the Board will then accept or reject the offer of resignation within 90 days.

 

   

Annual Election of Directors. As of the 2022 annual meeting, our Board is no longer classified and all of our directors will be subject to annual re-election to the Board.

 

   

No Supermajority Vote Requirements. In 2020, we amended our Certificate of Incorporation and bylaws to eliminate supermajority vote requirements with respect to the removal of directors beginning with our 2022 annual meeting.

 

   

Independent Chair; Lead Director. Currently, our Chair of the Board is independent of management. In addition, in the event that our Chief Executive Officer would also serve as the Chair, our corporate governance guidelines require a Lead Director position with specific responsibilities to ensure independent oversight of management.

 

   

Regular Meetings of Independent Directors. Our independent directors regularly meet in executive sessions with no members of management present. Such executive sessions are presided over by our Chair of the Board.

 

   

Robust Strategy, Risk and Safety Oversight by the Board and Committees. Our Board and committees have implemented a robust framework to actively oversee the strategy and risks relating to the operation and management of a publicly-traded coal company. In addition, our Board has a strong commitment to the safety of our workers and the environments in which we operate and has formed a separate Board level committee to oversee these core company values.

 

   

Diversity on Board. We believe in diversity and value the benefits diversity can bring to our Board. In 2018, our Board adopted a policy regarding diversity of its members. Effective March 1, 2019, Sophie Bergeron was elected as a director to fill the vacancy resulting from a retiring director.

 

   

Diversity in Executive Management. We seek to promote diversity throughout our workforce by, among other things, emphasizing diversity among our executive management team.

 

   

Emphasis on Ethics Compliance. We believe strongly in, and provide training and awareness surrounding, our Code of Business Conduct and Ethics and the CONSOL Ethics Compliance Hotline. We provide annual training on our Code of Business Conduct and Ethics. It is our policy to comply with all applicable laws and adhere to the highest level of ethical conduct, including anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar laws in other jurisdictions. In that regard, in 2018 we adopted a Foreign Corrupt Practices Act Policy that has been distributed to all of our employees, directors and officers. In addition to these persons certifying compliance with the policy, we provide training on compliance with the FCPA and our policy. It is important that all of our business activities reflect our commitment to the highest standards of integrity and accountability.

 

   

Stock Ownership and Retention Guidelines. As further described on pages 35 and 61, our Board has adopted stock ownership and retention guidelines that apply to the Board and our executive officers.

 

  LOGO  – 2022 Proxy Statement       5


 

   PROXY SUMMARY

 

   

Consistent Stockholder Outreach. Our management team spends a significant amount of time meeting and speaking to our stockholder base. We have initiated an integrated effort to interact and receive feedback from the proxy teams at our stockholder base to incorporate best governance, compensation and oversight practices.

 

   

Sustainability. We provide transparency into our operations through the regular publishing of corporate sustainability reports. We anticipate that our Corporate Sustainability Report for 2021, which will be the fifth such report we have published, will be posted on our website in May 2022.

 

   

Human Rights Policy. In February 2019, we adopted a human rights policy. This policy reinforces our commitment and responsibility to respect all human rights, including those of our employees, suppliers, vendors, subcontractors and other partners, and individuals in communities in which we operate. Our policy addresses promoting health and safety, eliminating compulsory labor and human trafficking, abolishing child labor, eliminating harassment and unlawful discrimination in the workplace, and providing competitive compensation.

 

   

Strong Commitment to Robust Corporate Governance Practices. As a relatively new public company, our Board is continuing to carefully evaluate and consider additional corporate governance practices to ensure that we have a strong corporate governance platform tailored to our company.

LEARN MORE ABOUT OUR COMPANY

You can learn more about our company by visiting our website, www.consolenergy.com.

 

6       LOGO  – 2022 Proxy Statement


 

INFORMATION ABOUT THE ANNUAL MEETING

 

 

 

 

LOGO

CONSOL Energy Inc.

1000 CONSOL Energy Drive, Suite 100

Canonsburg, Pennsylvania 15317

Telephone (724) 416-8300

GENERAL: Proxies are being solicited by the Board to be voted at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on April 26, 2022, at 9:00 a.m., Eastern Time solely via live webcast at www.virtualshareholdermeeting.com/CEIX2022. The specific proposals to be considered and voted upon at the Annual Meeting are summarized in the Notice of Annual Meeting of Stockholders. Each proposal is described in more detail in this Proxy Statement.

PROPOSALS, BOARD RECOMMENDATION AND VOTE REQUIRED:Stockholders are being asked to vote on the proposals discussed on the following page at the Annual Meeting. The table on the following page also outlines the Board’s recommendation on how to vote for each proposal and the vote required with respect to each proposal.

VOTE TABULATION: In accordance with our governing documents and applicable state law, in tabulating the voting result for any particular proposal, votes that are withheld or shares that constitute broker non-votes (described below) are not considered entitled to vote on that proposal and have no effect on the outcome. Abstentions have the same effect as votes against the matter, except in the case of Proposal No. 1, where abstentions would not have an effect on the outcome.

RECORD DATE AND QUORUM: The record date with respect to this solicitation is March 4, 2022. All holders of record of CEIX common stock as of the close of business on the record date are entitled to vote at the Annual Meeting and any adjournment or postponement thereof. As of the record date, CEIX had 34,813,754 shares of common stock outstanding. Each share of common stock is entitled to one vote for each matter to be voted on at the Annual Meeting. Stockholders do not have cumulative voting rights. In order to hold the Annual Meeting, a quorum representing the holders of a majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting must be present in person or represented by proxy.

 

  LOGO  – 2022 Proxy Statement       7


INFORMATION ABOUT THE ANNUAL MEETING

 

Item

  

Proposal

 

 

Board

Recommendation 

 

Vote Required

 

 

1

  

 

 

Election of Directors

Election of director nominees for a one-year term ending at the Company’s annual meeting of stockholders in 2023.

 

 

 

FOR EACH
NOMINEE

 

 

 

Plurality of the votes cast. Under this plurality vote standard, the director nominees who receive the highest number of “for” votes cast are elected as directors. Under our bylaws, if a director nominee receives a greater number of “withheld” votes from his or her election than votes cast in favor of his or her election, then the director must tender his or her resignation to the Board.

 

 

2

  

 

 

Ratification of Appointment of Ernst & Young LLP

The Audit Committee appointed Ernst & Young LLP as CEIX’s independent registered public accounting firm for fiscal year 2022. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s appointment of the independent registered public accounting firm.

 

 

 

FOR

 

 

 

Affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the meeting and entitled to vote on the matter.

 

 

3

  

 

Advisory Approval of 2021 Named Executive Officers’ Compensation

Stockholders are being asked to approve, on an advisory basis, the compensation paid to CEIX’s named executive officers in 2021. CEIX’s executive compensation programs are designed to create a direct linkage between stockholder interests and management with incentives specifically tailored to the achievement of financial, operational and stock performance goals.

 

 

 

FOR

 

 

Affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the meeting and entitled to vote on the matter.

 

8       LOGO  – 2022 Proxy Statement


INFORMATION ABOUT THE ANNUAL MEETING

 

PROXY MATERIALS AND INFORMATION ABOUT THE MEETING: We mailed to all stockholders of record entitled to vote at the Annual Meeting the Internet Notice on or about March 17, 2022.

We are utilizing a Securities and Exchange Commission (“SEC”) rule that allows companies to furnish their proxy materials via the Internet rather than in paper form. This rule allows a company to send some or all of its stockholders the Internet Notice regarding Internet availability of proxy materials. The Internet Notice contains instructions on how to access the proxy materials over the Internet or how to request a paper copy of proxy materials.

An electronic copy of this Proxy Statement, the 2021 Annual Report and the Notice of Annual Meeting of Stockholders are available at www.proxyvote.com.

Copies of our 2021 Annual Report furnished to our stockholders do not contain copies of exhibits to our Annual Report on Form 10-K for the year ended December 31, 2021. You can obtain copies of these exhibits electronically at the website of the SEC at www.sec.gov or by mail from the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. The exhibits are also available as part of the Form 10-K for the year ended December 31, 2021, which is available on CEIX’s corporate website at www.consolenergy.com. Stockholders may also obtain copies of our Annual Report on Form 10-K for the year ended December 31, 2021, or the exhibits thereto, without charge by contacting our Investor Relations department by telephone at (724) 416-8300 or by mail at CONSOL Energy Inc., Investor Relations department, 1000 CONSOL Energy Drive, Suite 100, Canonsburg, Pennsylvania 15317 (or 275 Technology Drive, Canonsburg, Pennsylvania 15317 if such correspondence is sent after March 31, 2022).

PROXIES AND VOTING: A proxy is your legal designation of another person to vote the CEIX common shares that you owned as of the record date. The person that you designate to vote your shares is called a “proxy” and when you designate someone to vote your shares in a written document, that document is also called a “proxy” or “proxy card”. The Board has appointed several officers of the company to serve as proxies on the proxy card.

If a proxy is properly executed and is not revoked by the stockholder, the shares it represents will be voted at the Annual Meeting in accordance with the instructions provided by the stockholder. If a proxy card is signed and returned without specifying choices, the shares will be voted in accordance with the recommendations of the Board. Accordingly, if no contrary instructions are given, the proxies named by the Board intend to vote the shares represented by such proxies as follows:

 

   

in favor of the election of those persons nominated as set forth in this Proxy Statement to serve as directors of CEIX (Proposal No. 1);

 

   

in favor of the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm of CEIX for the fiscal year ending December 31, 2022 (Proposal No. 2);

 

   

in favor of approval, on an advisory basis, of the compensation paid to our named executive officers in 2021 (Proposal No. 3); and

 

   

in accordance with their judgment on any other matters which may properly come before the Annual Meeting.

The Board does not know of any other business to be brought before the Annual Meeting other than as indicated in the Notice of Annual Meeting of Stockholders.

HOW TO VOTE: There are four ways for stockholders of record to vote:

 

   

VIA THE INTERNET BY PROXY: Stockholders who have received the Internet Notice by mail may submit proxies over the Internet at www.proxyvote.com. Stockholders who received a voting instruction form by mail or e-mail from their bank, broker or other nominee may submit proxies over the Internet by following the instructions on the voting instruction form provided by their bank, broker or other nominee.

 

   

VIA TELEPHONE BY PROXY: Registered stockholders of record may submit proxies by telephone by calling 1-800-690-6903 and following the instructions. Stockholders must have the 16-digit control number that appears on their Internet Notice when voting. Stockholders who have received a voting instruction form by mail or e-mail from their bank, broker or other nominee should check the voting instruction form for telephone voting availability. If available, those stockholders may vote by phone by calling the number specified on the voting instruction form provided by the bank, broker or other nominee.

 

  LOGO  – 2022 Proxy Statement       9


INFORMATION ABOUT THE ANNUAL MEETING

 

   

VIA MAIL BY PROXY: Stockholders who have received a paper copy of a proxy card or voting instruction form by mail may submit proxies by completing, signing and dating their proxy card or voting instruction form and mailing it in the accompanying pre-addressed envelope.

 

   

BY PARTICIPATING IN THE ANNUAL MEETING: Stockholders of record may vote by participating in the virtual Annual Meeting via the CEIX Meeting Website and voting electronically during the virtual Annual Meeting.

BENEFICIAL OWNERSHIP AND BROKER NON-VOTES: If you hold shares beneficially in street name, then you must provide your voting instructions to your bank, broker or other nominee. If you do not provide your bank, broker or other nominee with voting instructions, your shares may be treated as “broker non-votes.”

Generally, broker non-votes occur on a matter when a bank, broker or other nominee is not permitted to vote on that matter without instructions from the beneficial owner and such instructions are not given. Banks, brokers or other nominees that have not received voting instructions from their clients cannot vote on their clients’ behalf on “non-routine” proposals, such as Proposal Nos. 1 and 3, although they may vote their clients’ shares on “routine matters,” such as Proposal No. 2.

REVOCATION OF PROXY: If you are the stockholder of record of shares of our common stock as of the close of business on the record date, you can revoke your proxy at any time before its exercise by:

 

   

sending a written notice to CEIX at 1000 CONSOL Energy Drive, Suite 100, Canonsburg, Pennsylvania 15317 (if such notice is sent on or before March 31, 2022) or 275 Technology Drive Canonsburg, Pennsylvania 15317 (if such notice is sent after March 31, 2022) attention: Secretary, bearing a date later than the date of the proxy, that is received prior to the Annual Meeting, stating that you revoke your proxy;

 

   

submitting your voting instructions again by telephone or over the Internet;

 

   

signing another valid proxy card bearing a later date than the proxy initially received and mailing it so that it is received by CEIX prior to the Annual Meeting; or

 

   

participating in and voting electronically via the CEIX Meeting Website during the virtual Annual Meeting.

If you hold your shares through a bank, broker or other nominee, you must follow the instructions found on your voting instruction form, or contact your bank, broker or other nominee, in order to revoke your previously delivered proxy. Attendance at the Annual Meeting without a request to revoke a proxy will not by itself revoke a previously executed and delivered proxy.

 

10       LOGO  – 2022 Proxy Statement


INFORMATION ABOUT THE ANNUAL MEETING

 

ATTENDING THE MEETING: Due to the ongoing public health considerations associated with the coronavirus outbreak (“COVID-19”), the Annual Meeting will be held solely via live webcast at www.virtualshareholdermeeting.com/CEIX2022, on April 26, 2022 at 9:00 a.m. Eastern Time and you will not be able to be physically present at the Annual Meeting. You will be able to participate virtually, vote your shares of CEIX common stock electronically and submit questions online during the Annual Meeting.

To participate in the virtual Annual Meeting, you will need the 16-digit control number included on your proxy card, vote instruction form or notice you previously received. The Annual Meeting webcast will begin promptly at 9:00 a.m. Eastern Time on April 26, 2022, and CEIX stockholders will be able to log in beginning at 8:45 a.m. Eastern Time. The virtual Annual Meeting platform is fully supported across browsers (Firefox, Chrome, Edge and Safari). Participants in the Annual Meeting should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the Annual Meeting. We encourage participants in the virtual Annual Meeting to log on to the CEIX Meeting Website 15 minutes prior to the start time of the Annual Meeting and ensure that they can hear streaming audio.

ASKING QUESTIONS DURING THE MEETING: During the live question and answer portion of the Annual Meeting, CEIX stockholders may submit questions, which will be answered as they come in, as time permits. If you wish to submit a question, you may do so by logging in to the CEIX Meeting Website, and under the “Ask a Question” heading, selecting a question topic in the question topic dropdown menu, typing your question in the field titled “Enter Question” and then clicking “Submit”. Only questions pertinent to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints.

TECHNICAL SUPPORT FOR ACCESSING THE MEETING: We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting via the CEIX Meeting Website. If you encounter any difficulties accessing the CEIX Meeting Website during the check-in or meeting time, please call the technical support number that will be posted on the CEIX Meeting Website log in page.

PROXY SOLICITATION: All costs relating to the solicitation of proxies will be borne by CEIX. Georgeson LLC has been retained by CEIX to aid in the solicitation of proxies at an estimated cost of $10,000, plus reimbursement of out-of-pocket expenses. Proxies may also be solicited by officers, directors and employees personally, by mail, or by telephone, facsimile transmission or other electronic means. None of these directors, officers or employees will receive any additional or special compensation for soliciting proxies. Upon request, CEIX will reimburse banks, brokers and other nominees for their reasonable expenses in sending proxy materials to their customers who are beneficial owners of CEIX’s common stock.

CONFIDENTIALITY IN VOTING: As a matter of policy, proxies, ballots and voting tabulations that identify individual stockholders are held confidentially by CEIX. Such documents are available for examination only by the inspectors of election and certain employees who assist in the tabulation of votes. The vote of any individual stockholder will not be disclosed except as may be necessary to meet applicable legal requirements.

 

  LOGO  – 2022 Proxy Statement       11


 

PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

 

 

The Nominating and Corporate Governance Committee has recommended, and the Board has nominated, our current directors, Sophie Bergeron, James A. Brock, William P. Powell, John T. Mills, Joseph P. Platt and Edwin S. Roberson, whose terms expire at the Annual Meeting, for re-election by the stockholders as directors at the Annual Meeting. Upon election, each such director will serve a one-year term until the 2023 annual meeting of stockholders or until his or her successor is elected and qualified, or his or her earlier death, resignation or removal.

To be elected, each nominee must receive a plurality of the votes cast (i.e., the director nominees who receive the highest number of “for” votes cast, up to the maximum number of directors to be elected, are elected as directors). If any nominee should for any reason become unable to serve, all shares represented by valid proxies will be voted for the election of such other person as the Board may designate, as recommended by the Nominating and Corporate Governance Committee. Alternatively, the Board may reduce the number of directors to eliminate the vacancy.

Our bylaws provide that if an incumbent director receives a greater number of votes “withheld” from his or her election than votes “for” such director nominee’s election, the director must tender his or her resignation promptly to the Board. The Nominating and Corporate Governance Committee will make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. The Board will act on the tendered resignation, taking into account the Nominating and Corporate Governance Committee’s recommendation, and publicly disclose its decision and the underlying rationale in a press release, a filing with the SEC or other broadly disseminated means of communication within 90 days from the date of the certification of the election results.

The biographies included in this Proxy Statement below include information concerning the nominees for director and the continuing directors, including their recent employment, positions with CEIX, other directorships, board committee memberships and ages as of March 15, 2022.

 

12       LOGO  – 2022 Proxy Statement


PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees

 

Biographies of Director Nominees

 

 

 

SOPHIE BERGERON

 

  

 

LOGO

 

  

 

MANAGING DIRECTOR - DIAMONDS, TECHNICAL AND HSEC, RIO TINTO

 

Director Since: 2019

Age: 44

Term Expires: 2022

  

 

CEIX Committees:

  Nominating and Corporate Governance

  Health, Safety and Environmental (Chair)

BACKGROUND:

Sophie Bergeron joined the Board on March 1, 2019. She currently serves as a member of our Board’s Health, Safety and Environmental Committee, which she chairs, and Nominating and Corporate Governance Committee. On January 1, 2022, Ms. Bergeron began her current position as Managing Director - Diamonds, Technical and HSEC for Rio Tinto. Prior to this position, she held the position of Vice President - HSEC – Energy and Minerals since April 2020 for Rio Tinto. Prior to her employment with Rio Tinto, she worked for Goldcorp Inc., a gold production company headquartered in Vancouver, British Columbia, Canada, which she joined in 2010. At Goldcorp Inc., Ms. Bergeron worked across the company’s project portfolio and mining operations in the Americas. She served as the General Manager of Éléonore Mine (James Bay, Québec), a position she held from November 2017 to February 2020, a period during which Goldcorp, Inc. agreed to a merger acquisition by Newmont Mining Corporation. Prior to the Eleonore Mine role, she worked as the Project Manager for the Century Project (Timmins, Ontario), a position she held from December 2016 to October 2017 and as the Operations Manager for Goldcorp Inc.’s Hoyle Pond Mine (Timmins, Ontario) from February 2015 to February 2016. Previously, she held the position of Operations Manager for the Mine Ramp-Up (Cerro Negro, Argentina) from July 2014 to February 2015. Her other positions at Goldcorp, Inc. included Director, Health and Safety from November 2012 to June 2014 and Senior Mining Engineer from September 2010 to November 2012. Prior to joining Goldcorp, Inc. in 2010, Ms. Bergeron held various positions with Xstrata Nickel (Xstrata), a nickel producer headquartered in Toronto, Canada. During her time at Xstrata, Ms. Bergeron rose to the position of Continuous Improvement Superintendent, completed her Six Sigma certification and earned a certificate in business optimization from Melbourne University in Australia. Ms. Bergeron sat on the board of directors of the Québec Mining Association from 2018-2019.

 

 

QUALIFICATIONS:

 

With a degree in Mining Engineering from École Polytechnique de Montréal and extensive management experience in the mining industry, Ms. Bergeron has gained considerable expertise in the mining sector, which provides significant value and insight to the Board, particularly with respect to operating and strategic issues. Ms. Bergeron has extensive expertise in health and safety, mine operations management and continuous improvement.

 

 

 

 

JAMES A. BROCK

 

  

 

LOGO

 

  

 

PRESIDENT & CHIEF EXECUTIVE
OFFICER OF CEIX

 

Director Since: 2017

Age: 65

Term Expires: 2022

  

 

CEIX Committees:

  Health, Safety and Environmental

BACKGROUND:

James A. Brock has served as our Chief Executive Officer since June 2017, and as our President since December 2017, and he has been a member of our Board since November 28, 2017. He currently serves as a member of our Board’s Health, Safety and Environmental Committee. Mr. Brock previously served as the Chief Operating Officer-Coal of CNX Resources Corporation (“CNX”), CEIX’s former parent, from December 10, 2010 until November 28, 2017, when CEIX separated from CNX. Since May of 2015, Mr. Brock also served as Chief Executive Officer and Chairman of the board of directors of the general partner of PA Mining Complex LP (“PAMC LP”) (formerly known as CONSOL Coal Resources LP) during such time as PAMC LP was a publicly-traded master limited partnership and he continues to serve in such roles now that PAMC LP is a wholly-owned subsidiary of the Company. Previously, he served as Senior Vice President-Northern Appalachia-West Virginia Operations of CNX from 2007 to 2010, and as Vice President-Operations of CNX from 2006 to 2007. Mr. Brock began his career with CNX in 1979 at the Matthews Mine and since then has served at various locations in many positions including Section Foreman, Mine Longwall Coordinator, General Mine Foreman and Superintendent. Mr. Brock’s achievements in mining were recognized with him being named 2010 Coal Safety Leader of the Year in West Virginia and his induction into the West Virginia Coal Hall of Fame in 2016. Mr. Brock also currently serves as the Treasurer of the Pennsylvania Coal Alliance board of directors, as a member of the boards of directors of the National Coal Council and the American Coalition for Clean Coal Electricity and as a member and chair of the board of directors of the National Mining Association.

 

 

QUALIFICATIONS:

 

With a career in coal spanning five decades, we believe Mr. Brock’s extensive knowledge of our industry and our operations gained during his years of service with CNX, and now CEIX, provides our Board with valuable experience.

 

 

  LOGO  – 2022 Proxy Statement       13


PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees

 

 

 

JOHN T. MILLS

 

  

 

LOGO

 

  

 

FORMER CHIEF FINANCIAL OFFICER
MARATHON OIL CORPORATION

 

Director Since: 2017

Age: 74

Term Expires: 2022

 

  

 

CEIX Committees:

  Audit (Chair)

  Compensation

  Health, Safety and Environmental

BACKGROUND:

John T. Mills joined the Board on November 14, 2017. He currently serves as a member of our Board’s Audit Committee, which he chairs, Compensation Committee and Health, Safety and Environmental Committee. Mr. Mills previously served as a member of the board of directors of CNX from March 2006 until November 28, 2017, when CEIX separated from CNX. From December 2007 until August 2015, he served on the board of directors of Cal Dive International Inc., a marine contractor providing manned diving, derrick, pipelay and pipe burial services to the offshore oil and natural gas industry, where he served as lead independent director, and as a member of the audit, compensation, and corporate governance and nominating committees. From January 2008 through June 2010, Mr. Mills was a member of the board of directors and audit, conflicts and risk management committees of Regency GP, LLC, the general partner of Regency GP, LP, the general partner of Regency Energy Partners LP, a natural gas gathering, processing and transportation master limited partnership. Mr. Mills joined the board of directors of Horizon Offshore, Inc., a marine construction company, in June 2002 and served as the chairman of the board of directors from September 2004 until December 2007, when Horizon Offshore, Inc. was acquired by Cal Dive International, Inc. Mr. Mills was the Chief Financial Officer of Marathon Oil Corporation, an integrated energy company, from January 2002 until his retirement in December 2003. In 2011, Mr. Mills attended the Harvard Business School program “Making Corporate Boards More Effective.”

 

 

 

  QUALIFICATIONS:

 

As a licensed attorney with over 40 years of business experience, including 16 years as an officer of Marathon Oil Corporation and U.S. Steel
Corporation, Mr. Mills brings significant knowledge and experience to our Board. In particular, Mr. Mills brings an in-depth understanding of the
evaluation of organic growth capital projects and acquisition and disposition opportunities, and the importance of maintaining a competitive
capital structure and liquidity. In addition, having previously served as Senior Vice President, Finance and Administration, and later Chief Financial
Officer of Marathon Oil Corporation, Mr. Mills has developed a wealth of financial knowledge with respect to the oversight of (i) the preparation of
consolidated financial statements, (ii) internal audit functions, and (iii) public accountants, skills which are critical to our company and particularly
our Audit Committee.

 

   

 

 

 

WILLIAM P. POWELL

 

  

 

LOGO

 

  

 

MANAGING PARTNER—535 PARTNERS LLC

 

Director Since: 2017

Age: 66

Term Expires: 2022

  

 

CEIX Committees:

  Audit

  Compensation

  Health, Safety and Environmental

BACKGROUND:

William P. Powell joined the Board on November 28, 2017 and has served as Chair of our Board since that time. He currently serves as a member of our Board’s Audit Committee, Compensation Committee and Health, Safety and Environmental Committee. Mr. Powell previously served as a member of the board of directors of CNX from January 2004 until November 28, 2017, when CEIX separated from CNX. Mr. Powell also previously was a director of Cytec Industries, a global specialty chemicals and materials company, from 1993 until its merger with Solvay SA in December 2015, where he served as lead independent director, as chair of the governance committee and as a member of the audit committee. From May 2001 until May 2007, Mr. Powell was a Managing Director of William Street Advisors, a New York City-based merchant banking boutique. Mr. Powell resigned from William Street Advisors to establish a family office, 535 Partners LLC, where he has served as Managing Partner since May 2007. Prior to his time at William Street Advisors, he served as a Managing Director of UBS Warburg LLC and its predecessor Dillon, Read & Co. Inc. since 1991.

 

 

QUALIFICATIONS:

 

With an MBA degree and over 30 years of financial, management and investment experience, Mr. Powell brings a wealth of knowledge to our Board. Having served on multiple public company boards for over 20 years, Mr. Powell also has significant expertise in corporate governance matters.

 

 

 

14       LOGO  – 2022 Proxy Statement


PROPOSAL NO. 1—ELECTION OF DIRECTORS | Biographies of Director Nominees

 

 

 

JOSEPH P. PLATT

 

  

 

LOGO

 

  

 

GENERAL PARTNER—THORN
PARTNERS LP

 

Director Since: 2017

Age: 74

Term Expires: 2022

 

  

 

CEIX Committees:

  Compensation (Chair)

  Nominating and Corporate Governance

  Health, Safety and Environmental

BACKGROUND:

Joseph P. Platt joined the Board on November 28, 2017. He currently serves as a member of our Board’s Compensation Committee, which he chairs, Nominating and Corporate Governance Committee and Health, Safety and Environmental Committee. Mr. Platt previously served as a member of the board of directors of CNX from May 2016 until November 28, 2017, when CEIX separated from CNX. He is the general partner at Thorn Partners LP, a family limited partnership, a position he has held since 1998. Mr. Platt’s career at Johnson and Higgins, a global insurance broker and employee benefits consultant (J&H), spanned 27 years until 1997, when J&H was sold to Marsh & McLennan Companies. At the time of the sale, Mr. Platt was an owner, director and executive vice president of J&H. Mr. Platt has served on the board of directors of Greenlight Capital Re, Ltd., a property and casualty reinsurer, since 2004 and has been its lead independent director since 2007. He also serves as an independent director of BlackRock’s Multi-Asset Funds and serves on the boards of various other nonpublic companies and not-for-profit institutions.

 

 

 

  QUALIFICATIONS:

 

  Mr. Platt brings significant financial, compensation and risk management expertise to our Board.

 

   

 

 

 

EDWIN S. ROBERSON

 

  

 

LOGO

 

  

 

FORMER CHIEF EXECUTIVE OFFICER
CHRIST COMMUNITY HEALTH SERVICES

 

Director Since: 2017

Age: 77

Term Expires: 2022

  

 

CEIX Committees:

  Audit

  Nominating and Corporate Governance (Chair)

  Health, Safety and Environmental

BACKGROUND:

Edwin S. Roberson joined the Board on November 28, 2017. He currently serves as a member of our Board’s Audit Committee, Nominating and Corporate Governance Committee, which he chairs, and Health, Safety and Environmental Committee. Mr. Roberson previously served as a member of the board of directors of CNX from May 2016 until November 28, 2017, when CEIX separated from CNX. From 2014 until his retirement on December 31, 2017, Mr. Roberson served as Chief Executive Officer of Christ Community Health Services, a health system of eight clinics providing high quality healthcare to the underserved in the Memphis, Tennessee community. Prior to that, Mr. Roberson served as Chief Executive Officer of various cancer research and biotech firms, and as President of Beacon Consulting, LLC, a business consulting firm, from 2006 to 2011. From 1991 to 2006, he worked at Conwood LLC, the nation’s second-largest manufacturer of smokeless tobacco products and a major seller and distributor of tobacco products manufactured by third parties, where he served in several roles, including Chief Financial Officer and, ultimately, President. After serving in the Army from 1969 to 1971, where he was awarded two Bronze Stars in Vietnam, Mr. Roberson, a certified public accountant, began his professional career at KPMG, an international accounting and consulting firm, where he was a tax partner until 1991. Mr. Roberson also served on the board of directors of Paragon National Bank, where he was chairman of the audit committee. Mr. Roberson currently serves on the board of directors of Infocare, Inc. (US), and on the boards of directors of several private companies. Additionally, he serves on the Board of Directors of the Sycamore Institute and the Gateway for Cancer Research.

 

 

QUALIFICATIONS:

 

Mr. Roberson received a BSBA in accounting from the University of North Carolina at Chapel Hill and an MBA from the University of Georgia. Mr. Roberson brings to the Board significant leadership skills and financial, accounting and strategy expertise. Further, Mr. Roberson is a certified public accountant, now retired.

 

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE ABOVE-NAMED DIRECTOR NOMINEES FOR RE-ELECTION TO THE BOARD OF DIRECTORS.

 

  LOGO  – 2022 Proxy Statement       15


 

PROPOSAL NO. 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of CEIX’s independent registered public accounting firm. The Audit Committee has appointed Ernst & Young LLP as the independent registered public accounting firm for CEIX for the fiscal year ended December 31, 2022. The Board now recommends that CEIX’s stockholders ratify this appointment.

Neither CEIX’s governing documents nor the law require stockholder ratification of the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm. However, the Board is submitting the appointment of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain that firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of CEIX and its stockholders.

Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to address the meeting and respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022.

 

16       LOGO  – 2022 Proxy Statement


 

AUDIT COMMITTEE AND AUDIT FEES

 

 

 

Audit Committee Report

The Audit Committee has reviewed and discussed with management and Ernst & Young LLP (“E&Y”), CEIX’s independent registered public accounting firm, the audited financial statements of CEIX for the fiscal year ended December 31, 2021 (the “Audited Financial Statements”). In addition, the Audit Committee has discussed with E&Y the matters required to be discussed under the auditing standards of the Public Company Accounting Oversight Board (“PCAOB”) (Auditing Standard No. 1301—Communications with Audit Committees) and the SEC relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of the registered public accounting firm’s activities or access to requested information and any significant disagreements with management.

The Audit Committee also has received the written disclosures and letter from E&Y regarding E&Y’s independence required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent registered public accounting firm that firm’s independence from CEIX and its subsidiaries.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the Audited Financial Statements be included in CEIX’s Annual Report on Form 10-K for the year ended December 31, 2021 for filing with the SEC.

Members of the Audit Committee:

John T. Mills, Chair

William P. Powell

Edwin S. Roberson

The foregoing Audit Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of CEIX under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that CEIX specifically incorporates the Audit Committee Report by reference therein.

 

  LOGO  – 2022 Proxy Statement       17


AUDIT COMMITTEE AND AUDIT FEES | Independent Registered Public Accounting Firm

 

Independent Registered Public Accounting Firm

The following table presents fees billed for professional audit services rendered by E&Y in connection with its audits of CEIX’s annual financial statements for the years ended December 31, 2021 and 2020 and fees for other services rendered by E&Y during those periods, excluding the fees billed to PA Mining Complex LP (formerly known as CONSOL Coal Resources LP).

 

 

2021

  (E&Y Fees)  

2020

  (E&Y Fees)  

Audit Fees

$

1,725,000

$

1,503,300

Audit-Related Fees

$

$

Tax Fees

$

$

All Other Fees

$

7,200

$

7,200

 

 

 

 

 

 

Total

$

1,732,200

$

1,510,500

As used in the table above, the following terms have the meanings set forth below.

Audit Fees

The fees for professional services rendered in connection with the audit of CEIX’s annual financial statements, for the review of the financial statements included in CEIX’s Quarterly Reports on Form 10-Q, and for services that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements.

Audit-Related Fees

There were no professional services for audit-related fees in 2021 or 2020.

Tax Fees

There were no professional services for tax-related work in 2021 or 2020.

All Other Fees

The fees for products and services provided, other than for the services reported under the headings “Audit Fees,” “Audit-Related Fees” and “Tax Fees.” These fees were for publications and online subscriptions.

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

The Audit Committee, or the Chair of the Audit Committee, must preapprove all audit and non-audit services provided to CEIX by its independent registered public accounting firm. The Audit Committee must consider whether such services are consistent with SEC rules on auditor independence. All of the services performed by E&Y in 2021 were pre-approved by the Audit Committee.

 

18       LOGO  – 2022 Proxy Statement


 

PROPOSAL NO. 3 — ADVISORY APPROVAL OF EXECUTIVE COMPENSATION

 

 

 

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), CEIX is required to provide its stockholders with the opportunity to cast a non-binding advisory vote on compensation paid to our named executive officers. Accordingly, we ask our stockholders to vote, on an advisory basis, “FOR” the compensation paid to our named executive officers in 2021 as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, and to adopt the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to CEIX’s named executive officers, as disclosed in this Proxy Statement, including the “Compensation Discussion and Analysis” compensation tables and narrative discussion, is hereby APPROVED on an advisory basis.”

As described in detail in the “Compensation Discussion and Analysis,” our executive compensation program is designed to attract, motivate and retain key executives who drive our success and industry leadership. We achieve these objectives through compensation that:

 

   

links a significant portion of total compensation to performance, which we believe will create long-term stockholder value;

 

   

includes long-term compensation, some of which is delivered in equity which encourages our named executive officers to act as owners of CEIX;

 

   

is tied to overall corporate performance and financial and operational goals (annual and long-term) such that our executives are paid for performance;

 

   

enhances retention in a highly competitive market by subjecting a significant portion of total compensation to multi-year vesting or performance conditions;

 

   

discourages unnecessary and excessive risk-taking; and

 

   

provides a competitive total pay opportunity.

The Compensation Committee reviews the compensation programs for our executive officers to ensure they achieve the desired goal of aligning our executive compensation structure with our stockholders’ interests and current market practices. Please read the “Compensation Discussion and Analysis” beginning on page 23, and the tabular compensation disclosures and accompanying narrative discussion beginning on page 37. The Compensation Discussion and Analysis discusses our executive compensation philosophy, programs and objectives, while the tabular compensation disclosures and accompanying narrative discussion provide detailed information on the compensation of our named executive officers.

We are asking our stockholders to indicate their support for the compensation paid to our named executive officers in 2021 as described in this Proxy Statement (including the Compensation Discussion and Analysis, the compensation tables and other related compensation disclosures required by Regulation S-K Item 402 and contained herein). This proposal is intended to give our stockholders the opportunity to express their views on the compensation paid to our named executive officers in 2021. This vote is not intended to address any specific item of compensation, but rather the overall compensation paid to our named executive officers, and the philosophy, policies and practices described in this Proxy Statement.

As an advisory vote, your vote will not be binding on CEIX, the Board or the Compensation Committee. However, our Board and our Compensation Committee, which are responsible for designing and administering CEIX’s executive compensation program, value the opinions of our stockholders and to the extent there is any significant vote against the compensation paid to our named executive officers in 2021, we will consider our stockholders’ concerns, if any, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

After our stockholders voted in 2018, on an advisory basis, on the frequency of this advisory vote on compensation, the Company elected to hold future advisory votes on compensation on an annual basis until the next stockholder advisory vote on frequency, which we expect will be conducted at our annual meeting of stockholders in 2024.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE, ON AN ADVISORY BASIS, “FOR” THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS IN 2021, AS DISCLOSED IN THIS PROXY STATEMENT, PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

 

  LOGO  – 2022 Proxy Statement       19


 

EXECUTIVE OFFICERS

 

 

 

CEIX’s executive officers are listed below. Each officer is appointed by the Board and holds office for the term set forth in the officer’s written employment agreement or until the officer’s successor has been elected and qualified, or until such officer’s earlier death, resignation or removal.

 

  Name

    Age    

  Executive  

Since

Position

James A. Brock

65

2017

President and Chief Executive Officer

Miteshkumar B. Thakkar

43

2020

Chief Financial Officer

John M. Rothka

44

2017

Chief Accounting Officer and, Controller

Kurt R. Salvatori

52

2017

Chief Administrative Officer

Martha A. Wiegand

51

2017

General Counsel and Secretary

The biographical information for Mr. Brock is provided under the caption “Proposal No. 1Election of Directors – Biographies of Director Nominees” on page 13.

 

 

LOGO

  

 

Miteshkumar B. Thakkar

 

Mr. Thakkar has served as our Chief Financial Officer since June 2020 and served as our interim Chief Financial Officer from January 2020 until his appointment as Chief Financial Officer in June 2020. Mr. Thakkar also served as the interim Chief Financial Officer of PA Mining Complex GP LLC (“PAMC GP”) (formerly known as CONSOL Coal Resources GP LLC), the general partner of PA Mining Complex LP (formerly known as CONSOL Coal Resources LP), from January 2020 to June 2020 and as the Chief Financial Officer of PAMC GP since June 2020, a role he continues to hold following the Company’s consummation of the merger transaction with CONSOL Coal Resources LP (the “CCR Merger”). Mr. Thakkar has also served as Director of Finance and Investor Relations of CEIX from November 2017 until June 2020 and as Director of Finance and Investor Relations of CONSOL Coal Resources LP from May 2015 until June 2020. He previously served in various roles in the equity research department of FBR Capital Markets Corporation (now part of B. Riley FBR, Inc.) from May 2007 through May 2015 where he provided equity research coverage for companies in the metals and mining sector starting as an intern and moving up to VP, Research Analyst from July 2011 to May 2015. Prior to his work at FBR, he served in various roles at Reliance Engineering Associates Pvt. Ltd. from September 2002 through June 2006 where he managed project planning and controls for various petrochemical and telecom-related projects. Mr. Thakkar holds a Bachelors of Engineering (Mechanical) degree from the Maharaja Sayajirao University of Baroda and a Masters in Business Administration degree from Texas A&M University.

 

 

 

LOGO

  

 

John M. Rothka

 

Mr. Rothka has served as our Chief Accounting Officer and Controller since November 2017. Mr. Rothka also has served as the Chief Accounting Officer of PAMC GP, a position he has held since August 2017 and a role he continues to hold following the consummation of the CCR Merger. Prior to his appointment as the Chief Accounting Officer of PAMC GP and beginning in July 2015, Mr. Rothka served as the Controller of the general partner. Mr. Rothka joined the Accounting Department of CNX in September 2005, where he served in positions of increasing responsibility, and was promoted to Senior Manager in February 2012, a position he served in until July 2015. Prior to joining CNX, Mr. Rothka began his professional career at the accounting firm of Aronson LLC, where he served from September 1999 to November 2002, before joining Deloitte from November 2002 to September 2005, where he held several positions of increasing responsibility in the audit and assurance groups. Mr. Rothka is a certified public accountant.

 

 

20       LOGO  – 2022 Proxy Statement


EXECUTIVE OFFICERS

 

 

LOGO

  

 

Kurt R. Salvatori

 

Mr. Salvatori has served as our Chief Administrative Officer since July 2017. Mr. Salvatori has also served as Vice President-Administration of CONSOL Pennsylvania Coal Company since January 2017. Previously, Mr. Salvatori served as Vice President-Shared Services for CNX from July 2016 to December 2017, and prior to that as Vice President-Human Resources for CNX from September 2011 to June 2016. Mr. Salvatori also served as a member of the Board of Directors of PAMC GP from November 2017 to December 2020. Mr. Salvatori joined CNX in April 1992 and held numerous positions at CNX and CNX Gas Corporation, including Director of Human Resources from April 2006 to September 2011, Manager of Human Resources from January 2005 to April 2006, and Supervisor of Retirement and Investment Plans from April 2002 to January 2005. Active in non-profit organizations, Mr. Salvatori currently serves as a trustee of the Washington County Community Foundation and was previously a trustee of the Washington County Community Foundation from 2010 through June 2019 and was re-elected as a trustee in 2020. He has also served as a trustee of the Monongahela Health System since 2014. Mr. Salvatori has also served as chairman of the CONSOL Energy Political Action Committee (PAC) since 2017. In 2019, Mr. Salvatori became a trustee of the newly founded CONSOL Cares Foundation.

 

 

LOGO

  

 

Martha A. Wiegand

 

Ms. Wiegand has served as our General Counsel and Secretary since July 2017. Ms. Wiegand has also served as General Counsel and Secretary of PAMC GP since March 2015, and as a member of the Board of Directors of PAMC GP since January 2, 2020, roles which she continues to hold following the consummation of the CCR Merger. Ms. Wiegand joined the legal department of CNX in December 2008 as Senior Counsel and was promoted to Associate General Counsel of CNX effective in 2012, where she was responsible for a variety of legal matters, including coal and natural gas marketing and transportation, labor and employment, financing arrangements and certain corporate transactions. Prior to joining CNX, Ms. Wiegand worked for approximately 10 years for several large Pittsburgh-based law firms, where she handled financing and corporate transactions for clients in the banking and energy industries, among others. She is licensed to practice law in Pennsylvania and is a member of the American Bar Association, the Pennsylvania Bar Association and the Energy & Mineral Law Foundation. Ms. Wiegand has also served on the America’s Power Policy’s Strategy Committee since 2018, including as vice chair since 2020, and on the Board of Trustees of the Energy & Mineral Law Foundation since 2019. She also served on the Committee of Unsecured Creditors in the Westmoreland Coal Company bankruptcy.

 

  LOGO  – 2022 Proxy Statement       21


 

EXECUTIVE COMPENSATION INFORMATION

 

 

 

Compensation Discussion and Analysis –

  Table of Contents

 

                      
   
   

Our Named Executive Officers (NEOs)

  

 

23

 

   
   
   

Executive Summary

  

 

23

 

   
   
   

Say-on–Pay Vote

  

 

25

 

   
   
   

CEIX Executive Compensation Policies and
Practices

  

 

25

 

   
   
   

CEIX Executive Compensation Philosophy

  

 

25

 

   
   
   

2021 Compensation Overview

  

 

26

 

   
   
   

Significant Changes in 2021

     26      
   

Elements of Total 2021 Compensation Program

  

 

27

 

   
   

Pay Mix

  

 

27

 

   
   

Our Compensation Committee and Management Roles

  

 

28

 

   
   

CEIX Compensation Consultant

  

 

28

 

   
   
   

2021 Compensation Actions and Programs in Effect

  

 

28

 

   
   

2021 Peer Group

  

 

28

 

   
   

Base Salaries

  

 

28

 

   
   

2021 Short-Term Incentive Compensation (STIC)

  

 

29

 

   
   

2021 Performance Highlights of Our NEOs

  

 

30

 

   
   

2021-2023 Long-Term Incentive Compensation (LTIC)

  

 

31

 

   
   

2021 to 2023 Payout for 2021 Tranche

  

 

32

 

   
   

2020 to 2022 Payout for 2021 Tranche

  

 

33

 

   
   

2019 to 2021 Payout for 2021 Tranche

  

 

33

 

   
   

CEO Employment Agreement

  

 

34

 

   
   

Change in Control Agreements for Other NEOs

  

 

34

 

   
   

Retirement Benefit Plans

  

 

34

 

   
   
   

Governance Policies

  

 

35

 

   
   
   

Clawback Policy

  

 

35

 

   
   

Stock Ownership Guidelines/Holding Requirements for NEOs

  

 

35

 

   
   

No Hedging/Pledging Policy

  

 

36

 

   
   

Equity Grant Practices Policy

  

 

36

 

   
   

Perquisites

  

 

36

 

   
   

Tax, Accounting and Regulatory Considerations

  

 

36

 

   
 

 

 

Compensation Risk Assessment

  

 

36

 

   

 

 

 

 

 

Named Executive Officers

 

LOGO

 

 

James A. Brock

 

 

President and

Chief Executive Officer

 

LOGO

 

 

 

Miteshkumar B. Thakkar

 

Chief Financial Officer

 

LOGO

 

Martha A. Wiegand

 

 

General Counsel and Secretary

 

LOGO

 

 

 

Kurt R. Salvatori

 

Chief Administrative Officer

 

 

 

LOGO

 

John M. Rothka

 

 

Chief Accounting Officer and Controller

 

 

 

22       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

Compensation Discussion and Analysis

As one of the major producers of high-Btu bituminous thermal and crossover metallurgical coal in the United States, we operate with a pay-for-performance philosophy in a challenging, highly competitive and rapidly evolving environment. This Compensation Discussion and Analysis (“CD&A”) discusses the compensation decisions made for the fiscal year 2021 with respect to our named executive officers (“NEOs”), who are listed below.

Our Named Executive Officers (NEOs)

 

Name

 

Title

 

  James A. Brock

 

President and Chief Executive Officer

 

  Miteshkumar B. Thakkar

 

Chief Financial Officer

 

  Martha A. Wiegand

 

General Counsel and Secretary

 

  Kurt R. Salvatori

 

Chief Administrative Officer

 

  John M. Rothka

 

Chief Accounting Officer and Controller

Executive Summary

 

 

HOW DID WE
PERFORM IN 2021?
  

 

  

 

—   Strong 2021 financial and operating results: GAAP net income of $34.1 million; Adjusted EBITDA of $378.2 million*; net cash provided by operating activities of $305.6 million; free cash flow of $186.4 million*

 

     

—   Strengthened the CEIX balance sheet by making net payments toward debt of approximately $101.2 million

 

     

—   Exceeded the pre-established target performance metrics for our 2021 STIC and the first tranche of our 2021 LTIC awards

 

     

—   Exceeded the pre-established target performance metrics for the second tranche of our 2020 LTIC awards and had below target performance with respect to the pre-established performance metrics for the third tranche of our 2019 LTIC awards

 

 

q

 

     

WHAT DID WE

CHANGE FOR

2021?

  

 

  

 

—   Amended our CEO’s Employment Agreement to ensure retention of our key leader through 2023 through increased base salary and series of cash retention bonuses

 

     

—   Redesigned 2021 equity grants to minimize the use of equity and promote executive retention through a combination of cash-settled Market Share Units (MSUs) based on stock performance and cash-settled Performance-Based Phantom Units (PBCs) based solely on internal financial performance metrics (Net Debt Level* and ICP Free Cash Flow*, each as defined below) to promote current strategic direction and financial objectives

 

     

—   Modified 2021 STIC to allow for STIC to be paid on a quarterly basis in order to help retain employees through regular acknowledgments of strong internal performance and further align STIC funding with financial results

 

 

q

 

     

HOW DO WE

DETERMINE PAY?

  

 

  

 

—   Design competitive pay programs to reward executives based on the Company’s achievement of pre-established financial and operational goals, mitigate material risks, and align executives’ interests with stockholders’ interests via equity-based and cash-based long-term incentive awards

 

     

—   Establish pay levels commensurate with performance and the need to retain high-quality talent, as well as to preserve internal equity among new NEOs

 

     

—   Consider many factors, including retention of our top talent, the advice of our Compensation Committee’s independent compensation consultant, internal pay equity among executives, input from stockholders and the alignment of total pay opportunity and pay outcomes with performance and external competitive market data relating to our peer group and general industry

 

 

  LOGO  – 2022 Proxy Statement       23


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

HOW DID WE PAY

OUR NEOS IN 2021?

  

 

  

 

—   Set base salaries to reflect each NEO’s role, responsibility, experience, market conditions and internal pay equity

 

     

—   Authorized above target payouts to our NEOs under our 2021 STIC to recognize above target performance against pre-established performance goals tied to Unit Cost per Ton*, ICP Free Cash Flow* and Environmental Incident Severity, each as defined below, with payments to NEOs on a quarterly basis to regularly acknowledge strong performance

 

     

—   LTIC awards granted to our NEOs with pre-established performance goals delivered through two types of performance-based cash awards that vary by target metrics

 

     

—   Vesting of 2021 LTIC awards as a result of above target performance against pre-established performance goals: stock price for the MSUs and ICP Free Cash Flow* and Net Debt Level*, each as defined below, for the traditional cash-based LTIC awards

 

     

—   Paid agreed upon cash retention bonus to our CEO for his service through 2021

 

 

q

 

     

HOW DO WE

ADDRESS

RISK AND

GOVERNANCE?

  

 

  

 

—   Provide an appropriate balance of short and long-term compensation with payouts based on the Company’s achievement of pre-established financial and operational goals, including a focus on sustainability and environmental compliance

 

     

—   Follow practices that promote good governance and serve the interests of our stockholders, with threshold and maximum payout caps for annual cash incentives and long-term performance awards, and policies on clawbacks, anti-pledging, anti-hedging, insider trading, stock ownership and equity grant practices

 

     

—   Solicit “say-on-pay” stockholder vote annually at stockholder meeting

 

     

—   Conduct an annual risk assessment of our compensation policies and practices through our Compensation Committee, with the assistance of an independent compensation consultant

 

     

—   Review our compensation program and practices with an independent compensation consultant that reports directly to our Compensation Committee

 

 

q

 

     

WHY YOU

SHOULD

APPROVE THE

SAY-ON-PAY

PROPOSAL

  

 

  

 

—   Fiscal year 2021 performance continued to support long-term stockholder value

 

     

—   Fiscal year 2021 annual and long-term incentive payouts for our NEOs are aligned with Company performance and reflect input from stockholders

 

     

—   Our pay program is aligned with stockholder interests, emphasizing achievement of strategic objectives both annually and over the long-term

 

 

24       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

Say-on-Pay Vote

We took into consideration the results of the say-on-pay voting by our stockholders last year when reviewing our current policies and practices related to compensation of our NEOs. Of the 24,026,826 votes cast by our stockholders, 97% were in favor of our 2020 executive compensation program. While we believe we have a fair and effective compensation program, we are gratified to receive the vote of confidence from our stockholders. However, in 2021, we continued to receive investor feedback that we should address dilution of our stock through the use of cash-based awards. Accordingly, we modified our compensation program to award performance-based cash in the form of cash-based performance units, the payment of which is dependent on the satisfactory achievement of performance metrics related to ICP Free Cash Flow* and Net Debt Level*, each as defined below, and cash-based market share units, the payment of which is dependent on the achievement of stock price targets. We commit to staying up-to-date on recommended best practices where appropriate. Our Compensation Committee and senior management will continue to consider stockholder input, including the advisory say-on-pay vote, as we evaluate the future design of our executive compensation programs and the specific compensation decisions for each of our NEOs.

CEIX Executive Compensation Policies and Practices

Our commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by our Compensation Committee and our Board, which include the following governance practices and policies:

 

 

  WHAT WE DO

 

  

 

WHAT WE DON’T DO

 

 

    Pay-for-Performance

 

     Meaningful Stock Ownership/Holding Requirements

 

     Anti-Hedging Policy

 

     Assess Compensation Risk

 

     Equity Grant Practices Policy

 

     Clawback Provisions in All Incentive Awards

 

     Double Trigger Cash Change in Control Provisions

 

     Independent Compensation Consultant

  

 

LOGO   No Excessive Perquisites

 

LOGO   No Income Tax Gross Ups

 

LOGO   No Backdating of Stock Options

 

LOGO   No Repricing of Stock Options

       (without stockholder approval)

 

LOGO   No Discounting of Stock Options

CEIX Executive Compensation Philosophy

Our compensation philosophy is designed to attract and retain key talent necessary for us to compete, promote a pay-for-performance culture, incentivize our NEOs to achieve desired financial and operating results, and create a balanced compensation program that aligns risk-taking with the sustainability and long-term financial health of our Company.

Our philosophy is founded on the following six guiding principles:

 

   

Compensation targets and the mix of pay based on market practices.

 

   

Actual compensation should align with results against performance objectives.

 

   

Incentives should promote above-median pay when performance exceeds Company and peer expectations and below-median pay when performance lags behind these indicators.

 

   

Compensation should be aligned with the long-term interests of our stockholders.

 

   

Compensation practices and policies should not encourage unreasonable risk-taking.

 

   

Compensation programs should align with our corporate values.

 

  LOGO  – 2022 Proxy Statement       25


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

Our compensation philosophy also reflects our commitment to enhancing management retention and leadership stability in a highly competitive market by subjecting a significant portion of total compensation to multi-year vesting or performance conditions described on pages 31-33, relating to our long-term compensation programs, and designing a specific retention structure for our CEO through amendments to his employment agreement.

2021 Compensation Overview

Significant Changes in 2021 to Retain Top Talent and Shift Most Payments from Equity to Cash

The Compensation Committee adopted several significant changes to the CEIX compensation program for 2021 to address CEIX’s significant decrease in stock price since mid-2018, take into account investor concerns about dilution from ongoing equity-settled awards and most importantly, retain critical key talent given the unintended impact on NEO compensation resulting from the steep decline in CEIX shares. The decrease in stock value from mid-2018 through mid-2021 was driven primarily, if not exclusively, by external events outside management’s control, including visible and intentional movement out of coal stocks by institutional investors. Importantly, CEIX is in a unique industry where stock price and financial results are sometimes disconnected. Although the CEIX stock price declined steeply in 2020 and into 2021, CEIX (led by its management team) generated strong operational and financial performance, including through extreme economic conditions in 2020 caused by the COVID-19 pandemic, continued to generate significant free cash flow* and significantly reduced its indebtedness in 2020 and 2021. The Compensation Committee also evaluated and addressed feedback from investors concerned with stock dilution.

Based on these factors and after consultation with its independent compensation consultant, the Compensation Committee acted to make the following significant modifications to the CEIX compensation program for our executives:

 

   

Amended our CEO’s employment agreement to increase his base compensation to $1,000,000 per year and to pay cash retention bonuses of $1,000,000 in 2021 and each of the following fiscal years so long as he continues to serve as CEO on each of December 31, 2021, December 31, 2022 and December 31, 2023, respectively.

 

   

Changed our STIC plan to provide for quarterly payments (instead of annual payments), based on pre-established quantitative measures, to reward employee loyalty and results.

 

   

Redesigned 2021 grants to minimize the use of equity and promote executive retention through a combination of cash-settled MSUs based on stock performance and our traditional Performance-Based Cash Units (PBCs) based on internal financial metrics (Net Debt Level* and ICP Free Cash Flow*, each as defined below) to promote current strategic direction and financial objectives.

 

   

Increased base salaries for certain of our NEOs with a view to internal pay equity with new NEOs.

 

26       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

Elements of Total 2021 Compensation Program. In 2021, our NEOs were compensated through the following elements of compensation.

 

   
  Compensation Element   Form of Compensation   Purpose
   

Base Salary

 

Cash

 

Fixed compensation element designed to attract and retain key executives

   

Retention Bonus (CEO Only)

 

Cash

 

Annual bonus to our CEO through 2023 to ensure retention of this key executive

   

2021 Short-Term Incentive Compensation (“STIC”)

 

Cash

 

At-risk compensation is designed to motivate NEOs to achieve goals relating to ICP Free Cash Flow*, Unit Cost per Ton* and Environmental Incident Severity, each as defined below

   

2021 Long-Term Incentive Compensation (“LTIC”)

 

Cash: Two types of performance-based cash award units that vest ratably over a 3-year period

 

At-risk compensation is designed to motivate NEOs to achieve goals relating to ICP Free Cash Flow* and Net Debt Level*, each as defined below, and the achievement of stock price targets. These targets promote investor alignment while preventing dilution in a volatile market environment and continue to address the dilution of our common stock and retention and equitable compensation of our leadership team

   

Change in Control and Non-CIC Severance Agreements

 

Cash severance including post-termination benefits

 

Attracts and retains NEOs, provides competitive benefits and ensures NEOs remain focused to act in best interest of the Company if faced with significant strategic event

   

Retirement Benefits

 

Active qualified 401(k) savings plan with company matching and discretionary contributions

 

Broad-based plan that provides income security through employee and Company contributions for all participants, including NEOs

         

Pay Mix. The charts below illustrate the target total direct compensation opportunity for 2021 for Mr. Brock (excluding any retention bonuses) and the average of our other NEOs; 83.4% of our CEO’s total direct compensation is performance-based.

 

CEO

 

16.6% Base; 25.0% STIC; 58.4% LTIC

 

 

Other NEOs

 

37.7% Base; 18.5% STIC; 43.8% LTIC

 

 

LOGO

 

 

 

 

LOGO

 

 

 

  LOGO  – 2022 Proxy Statement       27


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

Our Compensation Committee and Management Roles. Our Compensation Committee requests that the CEO be present at committee meetings where compensation and corporate performance are discussed and evaluated. The CEO is encouraged to provide insight, suggestions or recommendations regarding executive compensation if present during these meetings or at other times. However, only independent committee members are allowed to vote on decisions made regarding executive compensation. In making its determinations with respect to executive compensation, the committee is supported by CEIX’s Chief Administrative Officer, its General Counsel and Mercer, the committee’s independent compensation consultant. While the committee meets with the CEO to discuss his own compensation package, ultimately, decisions regarding the CEO’s compensation are made by the committee in executive session without the CEO or any other executive officer present, solely based upon the committee’s deliberations. Decisions regarding other NEOs who report directly to the CEO are also made by the committee (or Board, in the case of equity grants, absent a delegation to the committee or CEO) after considering recommendations from the CEO, Mercer and the Chief Administrative Officer.

CEIX Compensation Consultant. Our Compensation Committee retained Mercer as an independent compensation consultant directly, although in carrying out its assignments, Mercer also interacts with CEIX management when necessary and appropriate. Specifically, the Chief Administrative Officer, responsible for Human Resources matters, including executive compensation, interacts with the consultant to provide compensation data, best practices data, and executive compensation trends. In addition, Mercer may, in its discretion, seek input and feedback from executives regarding its consulting work product prior to the presentation to the Compensation Committee to ensure alignment with CEIX’s business strategy, to determine that additional data may need to be gathered, or to identify other issues, if any, prior to the presentation to the Compensation Committee. Annually, the Compensation Committee reviews with management the independence of any compensation consultant it retains. In February 2022, the Compensation Committee conducted an independence review of Mercer by analyzing the factors mandated by the listing standards of the New York Stock Exchange and concluded that there were no conflicts of interest arising from Mercer’s work. In 2021, CEIX paid Mercer $41,660 in connection with its work providing executive compensation consulting to the Compensation Committee.

Besides Mercer’s involvement with the Compensation Committee, it and its affiliates also provide other nonexecutive compensation services to us. Neither the Board nor the Compensation Committee reviewed or approved these other services, as these other services were approved by management in the ordinary course of business. The total amount paid for these other services provided in 2021 was $5,052,914, consisting of $2,657,015 paid to Mercer for health and wealth consulting services and $2,395,899 paid to Mercer’s parent company, Marsh & McLennan Companies, for property/casualty insurance consulting and brokerage services. The Compensation Committee determined that the other services provided did not raise any conflicts of interest.

2021 Compensation Actions and Programs in Effect

2021 Peer Group. The Compensation Committee selected the following 12 publicly-traded companies (the “Peer Group”) based on the recommendation of Mercer, which includes companies in the coal and energy industry similar in revenue size to CEIX and with industry and business characteristics comparable to CEIX in terms of revenue and market cap and with whom we compete for talent. The Compensation Committee does not target a particular percentile within the Peer Group in setting an NEO’s compensation, but uses the Peer Group compensation data as one of several reference points in determining the form and amount of compensation. The Compensation Committee also uses general industry competitive market data to evaluate our NEO total compensation packages.

 

Alliance Resources Partners, L.P.    Louisiana-Pacific Corporation
Arch Resources, Inc.    NACCO Industries, Inc.
Alpha Metallurgical Resources, Inc.    Natural Resources Partners L.P.
Cleveland-Cliffs Inc.    Peabody Energy Corporation
Compass Minerals International, Inc.    SunCoke Energy, Inc.
Hallador Energy Company    Warrior Met Coal, Inc.

Base Salaries. In January 2022, Mercer presented to the Compensation Committee its review of the compensation of our NEOs. Based on this review, the Compensation Committee determined to increase the base salaries for Mr. Thakkar, Mr. Salvatori, Ms. Wiegand and Mr. Rothka to align their base salaries with appropriate comparable levels of peer companies or comparable positions with other similar companies and also to adjust for internal pay

 

28       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

equity considerations. In addition, in connection with amending our CEO’s employment agreement, the Compensation Committee increased Mr. Brock’s base salary to $1,000,000 given his critical importance to the Company, strong leadership since becoming an independent public company in 2017, navigating the effects of the COVID-19 pandemic and steering the Company through challenging strategic issues.

2021 Short-Term Incentive Compensation (STIC). In February 2022, our Compensation Committee approved 2021 annual incentive awards for the performance period beginning January 1, 2021 and ending December 31, 2021, the payment of which were contingent on the Company’s successful achievement of performance goals related to (1) Unit Cost per Ton* (weighted at 35%), (2) ICP Free Cash Flow* (weighted at 35%), and (3) Environmental Incident Severity (weighted at 10%), each as defined below. These awards also were subject to modification influenced by each NEO’s contribution based on his or her individual performance (weighted at 20%) as determined by our President and CEO and approved by our Compensation Committee. At the time these performance goals were established, our Compensation Committee believed they would encourage our NEOs to stay focused on operational execution, balance sheet strength and environmental safety. The Compensation Committee also approved quarterly cash payments as the targets were achieved to reward performance and to retain our top talent.

The 2021 STIC award payout formula appears below:

 

Annual

Base Salary

               X  

Target

Opportunity

Percentage

(% of Base Salary)

  X          

(+/-

Up to 200%

Modifiers)

    =          

2021 STIC

Award
Payout

2021 STIC Performance Goals included a threshold, target and maximum payout with an additional 20% allocated to individual NEO performance. CEIX actual performance against the Company’s pre-established performance goals is described below:

 

Performance Goal

Unit Cost per
Ton
(35%)
ICP Free
Cash Flow
(35%)
Environmental
Incident Severity
(10%)

Threshold (50%)

$ 28.50 $ 78.9M   2.4

Target (100%)

$ 27.50 $ 116.2M   1.9

Maximum (200%)

$ 27.00 $ 145.9M   1.4

Actual Performance

$     28.25 * $     184.0M *   1.95

Unit Cost per Ton* is defined as the cost of coal sold, including idle costs incurred associated with the COVID-19 pandemic, less depreciation, depletion and amortization costs related to the Pennsylvania Mining Operation assets divided by the total tons of coal sold from the Pennsylvania Mining Operation assets. These costs exclude any indirect costs, such as selling, general and administrative costs, freight expenses, interest expenses, depreciation, depletion and amortization costs on non-production assets and other costs not directly attributable to the production of coal.

ICP Free Cash Flow* means Incentive Compensation Plan (ICP) Free Cash Flow, which is Adjusted EBITDA less capital expenditures less interest expense plus proceeds of non-EBITDA producing asset sales less the financial accounting impact of non-EBITDA producing asset sales.

Environmental Incident Severity means a weighted average of all of the Company’s environmental incidents, calculated by a numerator, which represents the sum of all of the Company’s environmental incidents after a rating of “1 to 5” is assigned, with a “1” rating representing little to no environmental impact and a “5” rating representing an incident that has a severe or persisting environmental or public health impact divided by the total number of environmental incidents.

In February 2022, the Compensation Committee evaluated the Company’s actual performance against the 2021 STIC pre-established performance goals and approved a formulaic payout percentage of 101.38% with respect to Company performance against goals.

 

  LOGO  – 2022 Proxy Statement       29


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

After applying the individual performance percentage to each NEO, the Compensation Committee approved the following STIC payments to our NEOs:

 

       

NEO

2021 Target
Opportunity
  Percentage (% of  
Base Salary)
2021 Target
Payout
Opportunity

NEO
Individual

Payout
  opportunity  

2021
Approved
Payout

Mr. Brock

 

150

%

 

$1,500,000

 

200

%

 

$2,120,625

Mr. Thakkar

 

50

%

 

$   200,000

 

180

%

 

$   274,750

Ms. Wiegand

 

60

%

 

$   255,000

 

155

%

 

$   337,556

Mr. Salvatori

 

50

%

 

$   167,500

 

170

%

 

$   226,753

Mr. Rothka

 

25

%

 

$     55,000

 

191

%

 

$   131,766

2021 Performance Highlights of Our NEOs.

 

   

James A. Brock. As our Chief Executive Officer, Mr. Brock continued to lead the Company through multiple challenges in 2021 including ongoing challenges and recovery from the COVID-19 pandemic, while leading CEIX to strong 2021 financial and operating results, and at the same time making sure that CEIX operates safely. Fiscal year 2021 highlights include reduction of CEIX’s overall debt level by $101.2 million, continued revenue diversification including increasing sales into the international market and ongoing success to move the Itmann Mine forward to planned full production in the second half of 2022. In 2021, CEIX also released its Scope 1 and 2 greenhouse gas reduction goals and continued to evaluate strategies to advance projects and diversify the Company’s business.

 

   

Miteshkumar B. Thakkar. As our Chief Financial Officer, Mr. Thakkar helped lead the Company’s financial strategy during 2021 as CEIX continued to navigate completing a number of critical actions. Key successes in 2021 include the successful pricing of $75 million of tax-exempt solid waste disposal revenue bonds to finance the ongoing expansion of the coal refuse disposal areas at the Company’s Bailey Preparation Plant, while also making payments of $101 million to reduce consolidated indebtedness, including $17 million toward our higher-interest second lien notes, and leading the team to execute strategic repurchases of longwall shields to achieve significant costs savings. Mr. Thakkar also led several strategic efforts to monetize a number of non-core assets during the year, further adding to CEIX’s 2021 financial success and strategy to diversify revenues.

 

   

Martha A. Wiegand. As the General Counsel and Secretary of CEIX, Ms. Wiegand has played a critical part in leading both internal and external teams of lawyers in her role of advising CEIX’s board on various corporate governance and other board-level issues, serving as the top legal advisor for the Pennsylvania Mining Complex and overseeing CEIX’s land, legal, health, safety and environmental, and internal audit functions. Under Ms. Wiegand’s leadership, the CEIX legal team successfully mitigated CEIX’s litigation risk exposure by negotiating several settlement agreements on behalf of the Company.

 

   

Kurt R. Salvatori. As our Chief Administrative Officer, Mr. Salvatori oversees the Company’s human resources, government affairs, information technology, cybersecurity and public relations functions. During 2021, these functions further developed and refined the Company’s enterprise resource planning system, led the efforts opposing Pennsylvania’s announced plan to participate in the Regional Greenhouse Gas Initiative, and continued the overall management of the Company’s long-term liability portfolio.

 

   

John M. Rothka. As our Chief Accounting Officer and Controller, Mr. Rothka leads CEIX’s accounting and financial reporting team. In this role, Mr. Rothka reports to the Audit Committee and also manages CEIX’s relationship with its independent accountants. In 2021, Mr. Rothka led his team in CEIX’s transition to reporting under the SEC’s new Regulation S-K 1300 rules.

 

30       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

2021-2023 Long-Term Incentive Compensation (LTIC). In February 2021, our Compensation Committee once again made design changes to the long-term incentive program for our NEOs to include grants of two types of performance-based cash units to our NEOs. The performance-based cash units vest ratably over a three-year period, although their vesting is subject to the Company’s satisfactory achievement of pre-established performance goals as follows:

 

 

Form of 2021 LTIC

   Performance Goal and Vesting Period
 

Performance-Based Cash Units (PBCs) (weighted at 50%)

  

Performance Goals

- 50% ICP Free Cash Flow*

- 50% Net Debt Level*

 

Performance-Based Cash Market Share Units (MSUs) (weighted at 50%)

   Stock price
      

Our Compensation Committee believes the PBCs and MSUs align the interests of our executives with those of our stockholders because (1) the vesting of the PBCs and MSUs supports executive retention, (2) the vesting of the PBCs is tied to the achievement of pre-established goals related to ICP Free Cash Flow* and Net Debt Level*, and (3) the vesting of the MSUs is tied to the level of our stock price. Our Compensation Committee also designs the targets for our future performance goals to be attainable but reasonably difficult to meet such that future performance must generally exceed current fiscal year performance. Net Debt Level* means the annual change in debt levels during each year of the applicable performance period, less the actual cash on hand at the end of the applicable performance period.

 

The target dollar value for the PBCs and the MSUs appear below. Each PBC is denominated in phantom units, which represent a fixed value equal to the closing stock price of the Company’s common stock on February 9, 2021, the date of grant. Each MSU is also denominated in phantom units; however, each MSU represents a value equal to the closing stock price of the Company’s common stock on the date on which vesting of the MSU is approved by the Compensation Committee.

 

   

Named Executive Officer

 

PBC Target
Grant ($)

 

MSU Target
Grant ($)

Mr. Brock

$

  1,750,000

$

  1,750,000

Mr. Thakkar

$

250,000

$

250,000

Ms. Wiegand

$

325,000

$

325,000

Mr. Salvatori

$

162,500

$

162,500

Mr. Rothka

$

62,500

$

62,500

The vesting of the PBCs will be calculated annually based on the pre-established equally weighted goals of ICP Free Cash Flow* and Net Debt Level* with a payout threshold equal to 50% of target and the aggregate payout capped at 200% of target.

The vesting of the MSUs will be calculated annually based on the average closing stock price of the Company’s common stock for the fifteen (15) trading days immediately before the last business day of the year in which the relevant performance period ends divided by the closing stock price of the Company’s common stock for the fifteen (15) trading days immediately prior to February 9, 2021, the date of the grant.

 

  LOGO  – 2022 Proxy Statement       31


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

2021 to 2023 Payout for 2021 Tranche

The PBCs target performance goals for the 2021 tranche performance period under the 2021-2023 LTIC appear below including actual performance against such goals for the 2021 performance period.

 

         

2021

Weight 50%
Target
100%
Target
200%
Target
Actual
Performance

ICP Free Cash Flow per Share

 

50%

 

 

$2.25

 

 

$3.32

 

 

$4.17

 

 

$5.34*

 

Net Debt Level

 

50%

 

 

$616.9m

 

 

$579.7m

 

 

$570.0m

 

 

$453.8m*

In February 2022, the Compensation Committee evaluated CEIX’s achievement against the above-described performance goals under the 2021-2023 LTIC and determined that our NEOs earned the following payouts with respect to the 2021 PBC tranche at 200.0% of target performance.

 

       
  Named Executive Officer

 

2021 PBC
Tranche
at Target

 

Target
Payout
(%)

 

2021 PBC
Tranche
Earned

 

Cash
Payout
Amount
+

Mr. Brock

 

59,102 units

 

200

%

 

118,204 units

$

1,166,673

Mr. Thakkar

 

8,443 units

 

200

%

 

16,886 units

$

166,665

Ms. Wiegand

 

10,976 units

 

200

%

 

21,952 units

$

216,666

Mr. Salvatori

 

5,488 units

 

200

%

 

10,976 units

$

108,333

Mr. Rothka

 

2,111 units

 

200

%

 

4,222 units

$

41,671

 

  + 

PBCs are settled in cash and have a fixed value of $9.87 per unit.

The MSUs target performance goals for the 2021 tranche performance period under the 2021-2023 LTIC appear below including actual performance against such goals for the 2021 performance period.

 

         

2021

Weight 50%
Target
100%
Target
200%
Target
Actual
Performance

Stock price

 

100%

 

 

$4.50

 

 

$9.00

 

 

$18.00

 

 

$22.73+

 

 

  + 

Represents the average closing stock price of the Company’s common stock for the 15 business days of 2021 immediately preceding the last business day of the year.

In February 2022, the Compensation Committee evaluated CEIX’s achievement against the above-described performance goals under the 2021-2023 LTIC and determined that our NEOs earned the following payouts with respect to the 2021 MSU tranche at 200.0% of target performance.

 

       
  Named Executive Officer

 

2021 MSU
Tranche
at Target

 

Target
Payout
(%)

 

2021 MSU
Tranche
Earned

 

Cash
Payout
Amount
+

Mr. Brock

 

59,102 units

 

200

%

 

118,204 units

$

2,830,986

Mr. Thakkar

 

8,443 units

 

200

%

 

16,886 units

$

404,420

Ms. Wiegand

 

10,976 units

 

200

%

 

21,952 units

$

525,750

Mr. Salvatori

 

5,488 units

 

200

%

 

10,976 units

$

262,875

Mr. Rothka

 

2,111 units

 

200

%

 

4,222 units

$

101,117

 

  + 

MSUs are settled in cash with a per unit value based on the closing stock price of the Company’s common stock on the date the Compensation Committee approves the vesting for such unit.

Prior Year LTICs

In February 2022, the Compensation Committee also evaluated CEIX’s performance against pre-established goals for the 2021 year related to the 2020 LTIC and 2019 LTIC.

 

32       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

2020 to 2022 Payout for 2021 Tranche

In February 2020, our Compensation Committee granted Performance-Based Shares (“PSUs”) to Mr. Brock and PBCs to the other NEOs. The PSU and PBC target performance goals for the 2021 tranche performance period under the 2020-2022 LTIC appear below including actual performance against such goals for the 2021 performance period.

 

         

2021

  Weight     50%
Target
    100%
Target
    200%
Target
    Actual
Performance
 

ICP Free Cash Flow per Share

 

 

50%

 

 

 

$5.08

 

 

 

$9.54

 

 

 

$12.67

 

 

 

$11.11*

 

Debt Level

 

 

50%

 

 

 

$684.0m

 

 

 

$646.0m

 

 

 

$596.3m

 

 

 

$603.7m*

 

TSR Modifier

 

 

+/-20%

 

 

 

25th Percentile

 

 

 

50th Percentile

 

 

 

75th Percentile

 

 

 

17.36%±

 

                                         

 

  ±

TSR Modifier performance at 72nd Percentile.

In February 2022, the Compensation Committee evaluated CEIX’s achievement against the above-described performance goals under the 2020-2022 LTIC and determined that our NEOs earned the following payouts with respect to the 2021 tranche at 196.74% of target performance.

 

       
  Named Executive Officer

 

2020 PSU
or PBC
Tranche
at Target

 

Target
Payout
(%)

 

2020 PSU
or PBC
Earned

 

Cash
Payout
Amount

Mr. Brock

 

73,949 shares

 

196.74

%

 

145,488 shares

 

N/A

Mr. Thakkar

 

1,061 units

 

196.74

%

 

2,087 units

$

  16,386

Ms. Wiegand

 

6,369 units

 

196.74

%

 

12,530 units

$

98,362

Mr. Salvatori

 

2,654 units

 

196.74

%

 

5,221 units

$

40,988

Mr. Rothka

 

1,061 units

 

196.74

%

 

2,087 units

$

16,386

2019 to 2021 Payout for 2021 Tranche

In February 2019, our Compensation Committee granted our NEOs PSUs. The PSU target performance goals for the 2021 tranche performance period under the 2019-2021 LTIC appear below including actual performance against such goals for the 2021 performance period.

 

           

2021

Weight 50%
Target
100%
Target
200%
Target
Actual
Performance
Score

Relative TSR

 

50%

 

 

25th Percentile

 

60th Percentile

 

75th Percentile

 

11th Percentile

 

0.00%

 

PSU Free Cash Flow

 

50%

 

 

$133m

 

$193m

 

$257m

 

$212.3m*

 

130.16%

 

In February 2022, the Compensation Committee evaluated CEIX’s achievement against the above-described performance goals under the 2019-2021 LTIC and determined that our NEOs earned the following payouts with respect to the 2021 tranche at 65.08% of target performance.

 

     

Named Executive Officer

 

2019 PSU
Tranche
at Target

 

Target
Payout
(%)

 

2019 PSU
Earned

Mr. Brock

 

20,286 units

 

65.08

%

 

13,202 units

Mr. Thakkar

 

214 units

 

65.08

%

 

139 units

Ms. Wiegand

 

2,330 units

 

65.08

%

 

1,516 units

Mr. Salvatori

 

1,456 units

 

65.08

%

 

948 units

Mr. Rothka

 

326 units

 

65.08

%

 

212 units

 

 

  LOGO  – 2022 Proxy Statement       33


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

CEO Employment Agreement. CEIX entered into an employment agreement with Mr. Brock, our President and CEO, effective as of February 15, 2018, which was amended in February 2021 and February 2022. Because the initial three-year term has run, the employment agreement automatically renews for additional one-year periods unless either party provides advance written notice within sixty days of the end of the term. The agreement sets Mr. Brock’s base salary to be at least $1,000,000 per year and provides additional compensation to Mr. Brock in the form of annual retention payments to ensure his continued employment with us through December 31, 2023. Under the terms of the February 2021 amendment, Mr. Brock received a cash lump-sum retention payment of $1,000,000 for continuing his employment with us on December 31, 2021. In addition, Mr. Brock will receive two additional $1,000,000 retention bonuses if he continues his employment on December 31, 2022 and December 31, 2023, respectively. In the event of Mr. Brock’s involuntary termination of employment absent “cause”, death or Permanent Disability (as defined in his employment agreement) prior to December 31, 2023, we will accelerate payment of any remaining retention payments to him. On Mr. Brock’s involuntary termination absent “cause”, whether or not in connection with a change in control (“CIC”), he will receive a lump-sum cash payment reflecting the cost of the Company’s continued health care coverage in lieu of continued participation in the Company’s plans, and the severance amount due Mr. Brock in the event of an involuntary termination of employment absent “cause” was revised to include a severance multiple of two times his (x) base salary and (y) target annual incentive under our STIC plan. In addition, Mr. Brock shall be considered fully vested in all then-outstanding and unvested time-based equity awards held by Mr. Brock if he continues his employment with CEIX through December 31, 2023. Finally, the agreement contains similar change-in-control and severance benefits and the same post-termination restrictive covenants relating to confidentiality, non-competition and non-solicitation described below for our other NEOs in “Change-in-Control Agreements”. The agreement does not include any gross up feature arising from the excise tax payable on an excess parachute payment.

Change in Control Agreements for Other NEOs. CEIX has severance and double trigger cash severance CIC agreements covering each of our other NEOs, all of which became effective on February 15, 2018 (except for Mr. Thakkar’s current CIC agreement which became effective on November 4, 2020). These agreements provide for non-CIC severance exclusively upon a termination of employment absent “cause.” In the case of a CIC scenario, each NEO is only entitled to cash severance if, following, or in connection with, a CIC, the NEO’s employment is terminated by CEIX absent “cause” or if the NEO resigns due to constructive termination within a specified period. The purpose of these agreements is to ensure that CEIX (a) offers a compensation package that is competitive with that offered by other companies with whom we compete for talent, (b) retains and relies upon the undivided focus of our senior executives immediately prior to, during and following a CIC, and (c) diminishes the inevitable distraction of our NEOs by virtue of personal uncertainties and risks created by the potential job loss following a CIC.

In addition to the double trigger severance CIC provisions, all of the agreements include post-termination restrictive covenants relating to confidentiality, non-competition and non-solicitation and also require each NEO to sign an appropriate release of claims. These agreements do not include any gross up feature arising from the excise tax payable on an excess parachute payment.

Retirement Benefit Plans. We maintain several retirement plans, the purpose of which is to attract and retain employees and to ensure an overall competitive compensation and benefits offering for all of our employees, including our NEOs. The maintenance of these plans also reflects commitments made at the time of our separation from our former parent that required us to assume certain plan liabilities as a result of the separation.

 

   

Qualified Defined Contribution Plan. We maintain a qualified Investment Plan which operates as a 401(k) savings plan for eligible employees of CEIX and its affiliates, including our NEOs. Plan participants may make before-tax and/or after-tax contributions of 1% to 75% of eligible compensation to the plan via payroll deductions. Plan participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions. A participant may also separately designate from 1% to 75% (not to exceed $10,000) of any incentive compensation payment as a before-tax and/or after-tax contribution. The Company matches 100% of a participant’s contribution up to 6% of eligible compensation. The plan also permits certain discretionary contributions ranging from 1% to 6%.

 

   

Qualified Defined Benefit Plan. We also maintain an Employee Retirement Plan, a qualified defined benefit plan under Section 401(a) of the Internal Revenue Code of the United States of America (the “Code”), which was initially frozen in 2014 for certain plan participants and then subsequently frozen to all remaining plan participants as of December 31, 2015. None of our named executive officers accrue any future benefit under this plan.

 

34       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

   

Non-Qualified Retirement Restoration Plan (the “Restoration Plan”). This plan is an unfunded deferred compensation plan maintained for the benefit of employees whose eligible compensation under the Pension Plan (defined below) exceeded limits imposed by the Code. This plan has been frozen since December 31, 2006. None of our named executive officers accrue any future benefit under this plan.

 

   

Non-Qualified Supplemental Retirement Plan (“SERP”). This plan includes certain obligations for participants under a company predecessor plan. The plan was frozen effective as of December 31, 2011, and none of our named executive officers accrue any future benefit under this plan.

 

   

Non-Qualified Defined Contribution Restoration Plan (the “New Restoration Plan”). This plan also includes obligations for certain participants arising from a predecessor company plan. However, this plan is not frozen and covers our current employees, including our NEOs. Eligibility for benefits under this plan is determined each calendar year, and participants whose eligible plan compensation exceeds the compensation limits imposed by section 401(a)(17) of the Code (up to $290,000 for 2021) are eligible for New Restoration Plan benefits. The amount of each participant’s benefit under this plan is equal to 9% times his or her eligible plan compensation, less 6% times the lesser of his or her annual base salary as of December 31 or the compensation limit imposed by the Code for such year ($290,000 for 2021).

Governance Policies

Clawback Policy. We maintain a clawback policy in our 2020 Omnibus Performance Incentive Plan (“Omnibus Plan”) that permits our Compensation Committee to recover any award (whether cash or equity-based), which is subject to recovery under any law, government regulation, and stock exchange listing requirement or Company policy. In addition, any awards made under our Omnibus Plan are subject to recoupment in the event an award recipient violates any restrictive covenant in his or her award agreement relating to confidentiality, non-competition or non-solicitation. During 2021, all CEIX incentive awards (whether cash or equity-based) were made under the terms of the Omnibus Plan and thus subject to recovery under our policy.

Stock Ownership Guidelines/Holding Requirements for NEOs. We initially adopted stock ownership guidelines applicable to each of our NEOs, which require that they own a minimum number of shares of CEIX stock, based upon a multiple of base salary alone. Because our stock has experienced extreme volatility, our Board of Directors amended our stock ownership guidelines to permit our executives to attain the levels described below under either a “multiple of salary approach” or a “fixed number of shares approach.” Under the multiple of salary approach, the executive ownership level for each officer category shall be the number of shares of CEIX stock equal to the product of the executive’s annual base salary times his or her multiple divided by the closing price of CEIX stock. In contrast, the “fixed number of shares approach” allows our executives to reach their ownership level if the number of CEIX shares held equals the product of the executive’s annual base salary times his or her multiple divided by $20.00. We further revised the current stock ownership guidelines in 2022 to clarify which shares are included in calculating compliance with these requirements: shares owned outright by the executive or his or her immediate family members residing in the same household; shares held in trust for the benefit of the executive or his or her immediate family members residing in the same household; vested shares of restricted stock; vested deferred stock units, restricted stock units or performance share units that may only be settled in shares, and unvested shares of restricted stock, deferred stock units, restricted stock units or performance share units, in each case when vesting is time-based rather than performance-based. The Board of Directors also amended the guidelines to allow the Compensation Committee to temporarily suspend the guidelines during periods of extreme market volatility.

 

 

Named Executive Officer

Ownership
    Requirement    

(As Multiple
of Base
Salary)

President and Chief Executive Officer

5x

Chief Financial Officer

2x

Chief Accounting Officer and Controller

2x

General Counsel and Secretary

2x

Chief Administrative Officer

2x

 

  LOGO  – 2022 Proxy Statement       35


EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

No Hedging/Pledging Policy. Our Corporate Governance Guidelines prohibit any executive officer (including an NEO) from entering into speculative transactions in CEIX securities, and similarly prohibit an executive officer from purchasing or selling puts, calls, options or other derivative securities based on CEIX securities. The policy also prohibits hedging or monetization transactions, such as forward sale contracts, in which the holder continues to own the underlying CEIX security without all the risks or rewards of ownership. In addition, directors and officers of CEIX are prohibited from holding CEIX securities in a margin account or otherwise pledging CEIX securities as collateral for a loan.

Equity Grant Practices Policy. We maintain a written policy for granting equity awards, which describes the Compensation Committee’s practices relating to equity grants to executives and the timing of such grants in relation to material and non-public information and which specifically prohibits the backdating of stock options. The policy also describes the Compensation Committee’s delegation of authority to the Chair and CEO to award equity to non-executive employees. We do not have a practice or policy of timing our grants in relation to the announcement of material non-public information. In accordance with the policy, all stock option grants must have an exercise price equal to the closing price of CEIX common stock on the date of grant.

Perquisites. We provide limited perquisites that we believe are reasonable, competitive and consistent with our compensation program, which are described more fully in the footnotes to the Summary Compensation Table that appears on pages 37 and 38.

Tax, Accounting and Regulatory Considerations. Our Compensation Committee believes that stockholder interests are best served if their discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses. However, our Compensation Committee does not anticipate a shift away from variable or performance-based compensation payable to our executive officers in the future, nor do we anticipate applying less rigor in the process by which we establish performance goals or evaluate performance against such pre-established goals, with respect to compensation paid to our NEOs. In addition, accounting considerations are one of many factors that our Compensation Committee considers in determining compensation mix and amount.

Compensation Risk Assessment. Annually, our Compensation Committee reviews the compensation programs and practices of CEIX. The CEIX pay philosophy provides for an effective balance in cash and equity mix, short and long-term performance periods, and financial and non-financial performance goals, and affords the Compensation Committee discretion to adjust payouts under the Company’s compensation plans. Further, CEIX policies to mitigate compensation-related risk include stock ownership guidelines, vesting periods on equity, insider trading prohibitions, a clawback policy, caps on the amount of compensation that may be earned and independent Compensation Committee oversight. In February 2022, the Compensation Committee determined that our plans and programs do not encourage unnecessary risk-taking and do not pose a material adverse effect on the Company. The review was conducted by CEIX management with the assistance of the Compensation Committee’s independent compensation consultant, Mercer.

 

*

This CD&A, which relates to 2021 compensation determinations, contains references to one or more financial measures that have not been calculated in accordance with GAAP (indicated by a *). Appendix A to this Proxy Statement contains a reconciliation of these disclosed non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, Unit Cost per Ton, ICP Free Cash Flow, ICP Free Cash Flow per Share, Net Debt Level, Debt Level and PSU Free Cash Flow to their most directly comparable GAAP financial measures.

 

36       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Compensation Committee Report

 

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section above with CEIX’s management and, based upon such review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into CEIX’s Annual Report on Form 10-K for the year ended December 31, 2021. The Compensation Committee’s charter is available on our website at www.consolenergy.com.

Members of the Compensation Committee:

Joseph P. Platt, Chair

John T. Mills

William P. Powell

The foregoing Compensation Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of CEIX under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that CEIX specifically incorporates the Compensation Committee Report by reference therein.

Summary Compensation Table

The following table discloses the compensation for our NEOs, which include Mr. Brock, the principal executive officer of CEIX, Mr. Thakkar, the principal financial officer of CEIX, and the other three most highly compensated executives of CEIX serving at fiscal year-end 2021: Ms. Wiegand, General Counsel and Secretary; Mr. Salvatori, Chief Administrative Officer and; Mr. Rothka, Chief Accounting Officer and Controller.

 

Name and

Principal Position

                 (a)

 

Year

(b)

   

Salary(1)

(c)

   

Bonus(2)

(d)

   

Stock

Awards(3)

(e)

   

Option

Awards

(f)

   

Non-Equity

Incentive

Compensation(4)

(g)

   

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings(5)

(h)

   

All Other

Compensation(6)

(i)

   

SEC

Total

(j)

 

 

James A. Brock

President and

Chief Executive Officer

 

    2021     $ 997,077     $ 1,000,000     $ 1,750,000           $ 3,287,298     $ 26,152     $ 54,986     $ 7,115,513   
    2020     $ 841,154           $ 3,483,000           $ 1,704,007     $ 674,326     $ 37,736     $ 6,740,223   
    2019     $ 803,231     $ 1,199,813     $ 3,773,887                 $ 733,841     $ 39,600     $ 6,550,372   

Miteshkumar B. Thakkar

Chief Financial Officer

    2021     $ 398,846           $ 250,000           $ 457,801     $ 32,766     $ 49,878     $ 1,189,291   

Martha A. Wiegand

General Counsel and Secretary

    2021     $ 424,615           $ 325,000           $ 652,584     $ 35,999     $ 47,800     $ 1,485,998   
    2020     $ 413,077           $ 600,000           $ 375,897     $ 61,116     $ 30,600     $ 1,480,690   
    2019     $ 347,855     $ 196,875     $ 433,371                 $ 42,756     $ 31,143     $ 1,052,000   

Kurt R. Salvatori

Chief Administrative Officer

    2021     $ 334,461           $ 162,500           $ 376,074     $     $ 47,800     $ 920,835   
    2020     $ 311,538           $ 250,000           $ 226,746     $ 306,961     $ 32,192     $ 1,127,437   
    2019     $ 298,731     $ 123,750     $ 270,876                 $ 278,960     $ 29,800     $ 1,002,117   

John M. Rothka

Chief Accounting Officer and Controller

    2021     $ 219,692     $     $ 62,500           $ 189,823     $ 9,721     $ 39,362     $ 521,098   

 

(1)

The amounts in this column represent base salaries before compensation reduction under any CEIX or affiliated company qualified retirement and/or 401(k) savings plan in effect during 2021. In addition, these salary amounts are not annualized but represent the amounts actually earned and paid to each NEO during 2021.

 

(2)

The amount shown in this column for Mr. Brock in 2021 represents a retention bonus, conditioned upon his continued employment through December 31, 2021, pursuant to the amendment of Mr. Brock’s employment agreement discussed in the “Compensation Discussion & Analysis” section above. The values in this column for 2019 reflect discretionary payouts under the 2019 STIC based on adjusted goals.

 

(3)

The 2021 values set forth in this column represent the aggregate grant date fair value of the MSUs granted in 2021 computed in accordance with FASB ASC Topic 718. The assumptions used in determining the grant date fair value of the stock awards are set forth in Notes 1 and 18 to our consolidated financial statements, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The values set forth in the table are based on achievement of target performance. MSUs granted in 2021 may pay out up to 200% of the target award, which would have amounted to the following grant date fair market values for each NEO: $3,500,000 for Mr. Brock, $500,000 for Mr. Thakkar, $650,000 for Ms. Wiegand, $325,000 for Mr. Salvatori, and $125,000 for Mr. Rothka.

 

 

  LOGO  – 2022 Proxy Statement       37


EXECUTIVE COMPENSATION INFORMATION | Summary Compensation Table

 

(4)

The 2021 amounts shown in this column represent cash payments made to the NEOs under the 2021 STIC of $2,120,625 for Mr. Brock, $274,750 for Mr. Thakkar, $337,556 for Ms. Wiegand, $226,753 for Mr. Salvatori, and $131,766 for Mr. Rothka. Also included in this column are cash payments for (i) the first tranche of the PBCs granted in 2021 in the amount of $1,166,673 for Mr. Brock, $166,665 for Mr. Thakkar, $216,666 for Ms. Wiegand, $108,333 for Mr. Salvatori and $41,671 for Mr. Rothka and (ii) the second tranche of the 2020 PBCs in the amount of $16,386 for Mr. Thakkar, $98,362 for Ms. Wiegand, $40,988 for Mr. Salvatori and $16,386 for Mr. Rothka. See the discussion on pages 29 through 33 in the “Compensation Discussion and Analysis” section for additional information regarding the 2021 plan design, 2021 performance and payouts authorized under the 2021 STIC, and 2021 performance and payouts under the LTIC.

 

(5)

Amounts in this column reflect the actuarial increase in the present value of each NEOs benefit under the CEIX Employee Retirement Plan, Retirement Restoration Plan, Supplemental Retirement Plan and New Restoration Plan between December 31, 2020 and December 31, 2021. These amounts were determined using the interest rate and mortality assumptions set forth in our consolidated financial statements, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. These amounts represent accounting values and were not realized by our NEOs during 2021. A zero is shown for Mr. Salvatori for 2021 because the actual change in pension value was a decrease in the amount of $58,139. This decrease is attributable to the change in the interest rate partially offset by an increase in accrued benefits.

 

(6)

The amounts shown in this column for 2021 are derived as follows:

 

Category

   BROCK      THAKKAR      WIEGAND      SALVATORI      ROTHKA  

CEIX 401(k) Plan Contributions(a)

  

$

17,400

 

  

$

17,400

 

  

$

17,400

 

  

$

17,400

 

  

$

13,181

 

Vehicle Allowance or Company Car

  

$

13,000

 

  

$

13,000

 

  

$

13,000

 

  

$

13,000

 

  

$

13,000

 

Executive Health Physical

  

$

2,186

 

  

$

2,078

 

  

 

 

  

 

 

  

 

 

Business and Country Club Dues

  

$

5,000

 

  

 

 

  

 

 

  

 

 

  

 

 

Discretionary Contribution to the CONSOL Pennsylvania Coal Company 401(k)(b)

  

$

17,400

 

  

$

17,400

 

  

$

17,400

 

  

$

17,400

 

  

$

13,181

 

 

  (a)

Annual employer contribution to the CONSOL Energy Inc. 401(k) plan.

 

  (b)

Discretionary contribution made by CONSOL Pennsylvania Coal Company LLC 401(k) Plan; due to the Code’s annual contribution limits on the amount that may be contributed to a qualified plan, a portion or all of the discretionary amount may be paid to plan participants (including an NEO) in cash; in Mr. Brock’s case, the full amount above was paid in cash to him.

Grants of Plan-Based Awards – 2021

The following table sets forth each grant made to an NEO in the 2021 fiscal year under plans established by CEIX.

 

                    Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
       

Estimated Future Payouts
Under Equity Incentive

Plan Awards

    Grant
Date Fair
Value of
Stock
 

Name

  Type of
Award
 

Grant

Date

    Number of
Underlying
Units
   

Threshold

($)

   

Target

($)

   

Maximum

($)

   

Threshold

(#)

   

Target

(#)

   

Maximum

(#)

    (Target)(4)  

James A. Brock

  Annual STIC(1)       $ 750,000     $ 1,500,000     $ 3,000,000            
  PBC(2)     2/9/21       177,305     $ 875,000     $ 1,750,000     $ 3,500,000            
  MSU(3)     2/9/21                                           88,652       177,304       354,608     $ 1,750,000  

Miteshkumar B. Thakkar

  Annual STIC(1)       $ 100,000     $ 200,000     $ 400,000            
  PBC(2)     2/9/21       25,329     $ 125,000     $ 250,000     $ 500,000            
    MSU(3)     2/9/21                                           12,665       25,329       50,658     $ 250,000  

Martha A. Wiegand

  Annual STIC(1)       $ 127,500     $ 255,000     $ 510,000            
  PBC(2)     2/9/21       32,928     $ 162,500     $ 325,000     $ 650,000            
    MSU(3)     2/9/21                                           16,464       32,928       65,856     $ 325,000  

Kurt R. Salvatori

  Annual STIC(1)       $ 83,750     $ 167,500     $ 335,000            
  PBC(2)     2/9/21       16,464     $ 81,250     $ 162,500     $ 325,000            
    MSU(3)     2/9/21                                           8,232       16,464       32,928     $ 162,500  

John M. Rothka

  Annual STIC(1)       $ 27,500     $ 55,000     $ 165,000            
  PBC(2)     2/9/21       6,332     $ 31,250     $ 62,500     $ 125,000            
    MSU(3)     2/9/21                                           3,166       6,332       12,664     $ 62,500  

 

(1)

These awards were made pursuant to the STIC, which is described in the “Compensation Discussion and Analysis” beginning on page 29.

 

(2)

These awards were made pursuant to the 2021 LTIC program, which is described in the “Compensation Discussion and Analysis” beginning on page 31. The numbers above reflect the threshold (50%), the target (100%) and the maximum (200%) performance levels for the PBCs.

 

(3)

These awards were made pursuant to the 2021 LTIC program, which is described in the “Compensation Discussion and Analysis” beginning on page 31. The numbers above reflect the threshold (50%), the target (100%) and the maximum (200%) performance levels for the MSUs.

 

(4)

The values set forth in this column reflect awards of MSUs (at target) for each of our NEOs and are based on the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. The values set forth in this table may not correspond to the actual values that ultimately will be realized by the NEOs upon vesting and settlement.

 

38       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Understanding our Summary Compensation and Grants of Plan-Based Awards Tables

 

Understanding our Summary Compensation and Grants of Plan-Based Awards Table

In addition to base salaries, our executive officers receive a mix of at-risk compensation, both short and long-term, for their services. Pursuant to various plans, our NEOs are eligible to receive annual cash incentive awards based on the achievement of certain performance targets. With respect to long-term awards, each of our NEOs is also eligible to receive equity and cash-settled long-term awards, which vary depending upon the year in which granted and include PBCs and MSUs. The PBCs and MSUs and the plans under which they are awarded are discussed below, and in greater detail in the “Compensation Discussion and Analysis” on pages 31-33.

STIC

Generally, to be eligible to receive an annual award under the STIC, an NEO must generally be an active, full-time employee on December 31 of the year for which the award was granted, unless otherwise provided for in a separation agreement. For more information on the STIC, see the discussion beginning on page 29 in the “Compensation Discussion and Analysis” section.

MSUs

MSUs were granted under our 2020 Omnibus Performance Incentive Plan. Our Compensation Committee determines the number of MSUs to be granted to each executive participant, the conditions under which the MSUs may be forfeited to CEIX, and the other terms and conditions of such awards. Each MSU represents the right to receive a cash payment based on the closing stock price of the Company’s common stock on the date the vesting of the unit is approved by the Compensation Committee. The MSUs vest in one-third increments on each December 31st following the grant date, subject to continuous service by the executive and the achievement of certain performance goals related to the closing stock price of the Company’s common stock on such vesting date. To the extent that the MSUs are subject to Section 409A of the Code, all such payments shall be made in compliance with the requirements of Section 409A of the Code. For more information on the MSU awards, see discussion beginning on page 31 of the “Compensation Discussion and Analysis” section.

PBCs

PBCs were also granted under our 2020 Omnibus Performance Incentive Plan. Our Compensation Committee determines the number of PBCs to be granted to each executive participant, the conditions under which the PBCs may be forfeited to CEIX, and the other terms and conditions of such awards. Each PBC represents the right to receive a cash payment based on the closing stock price of the Company’s common stock on the grant date of the PBC. The PBCs vest in one-third increments on each December 31st following the grant date, subject to continuous service by the executive and the achievement of certain performance goals related to ICP Free Cash Flow* and Net Debt Level*. To the extent that the PBCs are subject to Section 409A of the Code, all such payments shall be made in compliance with the requirements of Section 409A of the Code. For more information on the PBC awards, see discussion beginning on page 31 of the “Compensation Discussion and Analysis” section.

 

  LOGO  – 2022 Proxy Statement       39


EXECUTIVE COMPENSATION INFORMATION | Outstanding Equity Awards at Fiscal Year-End for CEIX – 2021

 

Outstanding Equity Awards at Fiscal Year-End for CEIX – 2021

The following table sets forth unvested RSU, PSU and MSU awards that have been awarded to our NEOs by CEIX and were outstanding as of December 31, 2021.

 

  Stock Awards

Name

Number of
Shares or
Units of
Stock
That
Have Not
Vested

(#)

Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($)
(1)
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not

Vested
($)
(1)

James A. Brock

  161,422 (2)  $ 3,665,894   73,949 (4)  $ 1,679,382
  145,488 (3)  $ 3,304,032   118,204 (5)  $ 2,684,413

Miteshkumar B. Thakkar

  6,513 (2)  $ 147,910   16,686 (5)  $ 378,939

Martha A. Wiegand

  39,771 (2)  $ 903,199   21,952 (5)  $ 498,530

Kurt R. Salvatori

  16,896 (2)  $ 383,708   10,976 (5)  $ 249,265

John M. Rothka

  7,073 (2)  $ 160,628   4,222 (5)  $ 95,882

 

(1)

The market value for RSUs and PSUs was determined by multiplying the closing market price for CEIX common stock on December 31, 2021 ($22.71) by the number of shares underlying the RSU / PSU awards.

 

(2)

This represents RSUs granted on February 7, 2019 and February 11, 2020 that vest in three equal installments (subject to rounding) beginning on the first anniversary of the grant date.

 

(3)

The performance period for the 2021 tranche of the 2020-2022 PSU award made to Mr. Brock was January 1, 2021 through December 31, 2021 and represents the second tranche of the 2020 PSU award that vests in three equal, annual installments beginning with the anniversary of the grant date, subject to the achievement of pre-established performance metrics relating to ICP Free Cash Flow*, Debt Level* and subject to further modification +/- 20% for TSR performance. This amount is based on the Company’s above target performance during the 2021 performance period at 196.74% of target performance.

 

(4)

This shows the number of unvested PSUs as of December 31, 2021. The performance period for the PSUs granted in 2020 is January 1, 2020 through December 31, 2022. The 2020 PSUs vest in three equal, annual installments beginning with December 31, 2020 and December 31, 2021, subject to the achievement of pre-established performance metrics relating to ICP Free Cash Flow*, Debt Level* and subject to further modification +/- 20% for TSR performance. The amounts presented for the PSU awards are based on achieving the target performance level.

 

(5)

This shows the number of unvested MSUs as of December 31, 2021. The performance period for the MSUs granted in 2021 is January 1, 2021 through December 31, 2023. The 2021 MSUs vest in three equal, annual installments beginning with December 31, 2021, subject to the achievement of pre-established performance metrics relating to the closing stock price of the Company’s common stock. The amounts presented for the MSU awards are based on achieving the target performance level.

Stock Vested Table – 2021

The following table sets forth information concerning any vesting of RSUs, PSUs and MSUs of CEIX during fiscal 2021.

 

  Stock Awards(1)

Name

Number of Shares
Acquired on Vesting
(#)

Value Realized

on Vesting

($)

James A. Brock

 

373,942

$

7,646,461

Miteshkumar B. Thakkar

 

20,503

$

444,439

Martha A. Wiegand

 

44,656

$

785,403

Kurt Salvatori

 

21,383

$

384,946

John M. Rothka

 

8,542

$

149,185

 

(1)

These amounts reflect the number of shares relating to the gross number of PSUs, RSUs, and MSUs that vested on the applicable vesting date, multiplied by the closing price of our common stock on the applicable vesting date, prior to the withholding of any shares to satisfy taxes for each of the NEOs affected. Values include the vesting of (i) RSU awards granted in 2018, 2019 and 2020, (ii) PSU awards granted in 2019 and 2020 and (iii) MSU awards granted in 2021.

 

40       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Pension Benefits Table – 2021

 

Pension Benefits Table – 2021

The following table provides information with respect to each plan that provides for specified retirement payments or benefits, or payments or benefits that will be provided primarily following retirement, including tax-qualified defined benefit plans and non-qualified defined benefit plans (which we refer to as the Retirement Restoration Plan, the Supplemental Retirement Plan and the New Restoration Plan), but excluding nonqualified defined contribution plans.

 

       

Name

  CEIX Plan Name

Number of

Years

Credited Service
(#)

Present
Value of
Accumulated
Benefit
(1)
($)

Payments During

Last Fiscal Year

($)

James A. Brock

  Employee Retirement Plan   34 $   1,665,696  
  Retirement Restoration Plan   25 $ 214,335  
  Supplemental Retirement Plan   20 $ 2,046,563  
  New Restoration Plan   10 $ 965,516  

Miteshkumar B. Thakkar

  Employee Retirement Plan   $  
  Retirement Restoration Plan   $  
  Supplemental Retirement Plan   $  
  New Restoration Plan   2 $ 58,680  

Martha A. Wiegand

  Employee Retirement Plan   6 $ 57,883  
  Retirement Restoration Plan   $  
  Supplemental Retirement Plan   $  
  New Restoration Plan   6 $ 165,405  

Kurt R. Salvatori

  Employee Retirement Plan   23 $ 693,613  
  Retirement Restoration Plan   $  
  Supplemental Retirement Plan   19 $ 460,387  
  New Restoration Plan   10 $ 184,202  

John M. Rothka

  Employee Retirement Plan   9 $ 42,178  
  Retirement Restoration Plan   $  
  Supplemental Retirement Plan   $  
  New Restoration Plan   1 $ 14,169  

 

(1)

The accumulated benefits included in this column were computed through December 31, 2021 using the assumptions stated in the financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (Note 15).

Understanding Our Pension Benefits Table

This section provides information regarding CEIX’s retirement programs, which include the following plans that were either adopted or assumed in connection with the separation:

 

   

Employee Retirement Plan;

 

   

Retirement Restoration Plan;

 

   

Supplemental Retirement Plan; and

 

   

New Restoration Plan.

Employee Retirement Plan (the “Pension Plan”)

CEIX assumed sponsorship of the CONSOL Energy Inc. Employee Retirement Plan (the “Pension Plan”), which was previously sponsored by our former parent and is a qualified defined benefit plan that pays retirement benefits based on years of service and compensation. The Pension Plan is a qualified plan, meaning that it is subject to a variety of Internal Revenue Service rules. Effective December 31, 2015, the Pension Plan was frozen and no employee, including any of our NEOs, is eligible for future accruals under the plan.

Eligibility. Historically, the Pension Plan covered employees of CEIX and affiliated participating companies classified as regular, full-time employees or that complete 1,000 hours of service during a specified twelve-month period. As mentioned above, the plan was frozen effective December 31, 2015 for all participants. As a result of these amendments, none of our NEOs have accrued any additional benefits under the Pension Plan after December 31, 2015.

 

  LOGO  – 2022 Proxy Statement       41


EXECUTIVE COMPENSATION INFORMATION | Understanding Our Pension Benefits Table

 

Incapacity Retirement. Employees who have attained age 40 with at least 10 years of service who are deemed disabled and consequently receive a Social Security disability award (proving the disability occurred while employed by CEIX or a participating affiliated company) are eligible for an incapacity retirement resulting in an unreduced benefit under the Pension Plan, payable in the form of an annuity, commencing the month following termination. Messrs. Brock, Salvatori and Rothka and Ms. Wiegand have satisfied the age and service conditions necessary to be eligible for incapacity retirement under the Pension Plan as of December 31, 2021, if any such person had incurred a qualifying disability as of that date.

Separation Retirement. Employees who terminate employment with five or more years of service prior to attaining age 50, or who have attained age 50 but have fewer than 10 years of service upon termination, qualify for separation retirement. The accrued vested benefit is payable at a reduced amount for payments commencing prior to age 65, or the full benefit may be paid at age 65. As of December 31, 2021, Mr. Rothka is eligible for separation retirement under the Pension Plan; provided, however, that he would not be entitled to payment until he attained age 50.

Early Retirement. Employees who have completed 10 or more years of service and are age 50 or older upon termination are eligible for early retirement. Under early retirement, an employee may elect to defer payment to age 65 or elect to begin receiving payment the first of any month up to age 65, subject to a reduction for age. Payments commencing prior to age 65 are reduced based on various early reduction schedules depending upon age at the payment commencement date and years of service at the time of termination. As of December 31, 2021, Mr. Salvatori and Ms. Wiegand are eligible for early retirement under the Pension Plan.

Normal Retirement. Employees who terminate employment and have attained age 65 qualify for normal retirement. Payment of the full benefit commences the month following termination. As of December 31, 2021, Mr. Brock is eligible for normal retirement under the Pension Plan.

Form of Payment. The portion of accrued pension benefits earned under the Pension Plan as of December 31, 2005 may be, upon the election of the participant, paid in the form of a lump-sum payment except in the case of an incapacity retirement as discussed above. Pension benefits earned after January 1, 2006 are payable in the form of a single life annuity, 50% joint and survivor annuity, 75% joint and survivor annuity or 100% joint and survivor annuity.

Calculation of Benefits. Pension benefits, which are now frozen, are based on an employee’s years of service and average monthly pay during the employee’s five highest-paid years while eligible for service under the Pension Plan. Average monthly pay for this purpose excludes compensation in excess of limits imposed by the Code. Since the Pension Plan is frozen, average monthly pay is based on pay as of December 31, 2014 for Ms. Wiegand and Mr. Rothka and as of December 31, 2015 for Messrs. Brock and Salvatori. Prior to January 1, 2006, pension benefits were calculated based on the average monthly pay during the employee’s three highest-paid years and included annual amounts payable under CEIX’s STIC, again excluding compensation in excess of limits imposed by the Code.

Retirement Restoration Plan (the “Restoration Plan”)

CEIX assumed the obligations for certain participants under our former parent’s Restoration Plan and adopted a new plan effective as of the separation under which it will meet its obligation to pay these restoration plan benefits. This plan is an unfunded deferred compensation plan maintained by the Company for the benefit of employees whose eligible compensation under the Pension Plan exceeded limits imposed by the federal income tax laws. This plan has been frozen since December 31, 2006.

 

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EXECUTIVE COMPENSATION INFORMATION | Understanding Our Pension Benefits Table

 

Supplemental Retirement Plan (“SERP”)

CEIX also assumed the obligations for certain participants from our former parent’s Supplemental Retirement Plan, and adopted a new plan effective as of the separation under which it will meet its obligation to pay these supplemental retirement plan benefits. This plan has been frozen since December 31, 2011. Supplemental Retirement Plan benefits are forfeited in certain events, including but not limited to a breach by the executive of any restrictive covenant agreement with CEIX. See page 48 for a description of the effect of termination of employment under different scenarios.

New Restoration Plan

CEIX also assumed obligations for certain participants arising from our former parent’s New Restoration Plan, which, unlike the plans discussed above, is not frozen and covers current CEIX employees, including our NEOs. Eligibility for benefits under this plan is determined each calendar year, and participants whose eligible plan compensation exceeds the compensation limits imposed by Section 401(a)(17) of the Code (up to $290,000 for 2021) are eligible for New Restoration Plan benefits. The amount of each participant’s benefit under this plan is equal to 9% times his or her eligible plan compensation, less 6% times the lesser of his or her annual base salary as of December 31 or the compensation limit imposed by the Code for such year ($290,000 for 2021). New Restoration Plan benefits are forfeited in certain events, including but not limited to a breach by the executive of any restrictive covenant agreement with CEIX. See page 49 for a description of the effect of termination of employment under different scenarios.

Potential Payments Upon Termination or Change in Control Tables

Except as otherwise provided, the following narrative and tables set forth the potential payments and the value of other benefits that would vest or otherwise accelerate vesting at, following, or in connection with any termination, including, without limitation, resignation, an incapacity retirement or an involuntary termination absent cause of one of our NEOs, or a CIC of CEIX as defined by applicable plans and agreements.

For each currently employed NEO, the payments and benefits detailed in the tables below are in addition to any payments under our plans and arrangements that are offered or provided generally to all salaried employees on a non-discriminatory basis. The tables also assume that employment termination and/or a CIC occurred on December 31, 2021 and are based only on agreements in place as of December 31, 2021.

 

  LOGO  – 2022 Proxy Statement       43


EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables

 

A description of the key elements of the plans, arrangements and agreements covered by the following tables and which provide for payments or benefits in connection with a termination of employment or CIC are described under “Compensation Discussion and Analysis” and further explained in the section following these tables entitled “Understanding our Change in Control and Employment Termination Tables and Information.” The footnotes to the tables also describe the assumptions that were used in calculating the amounts described below.

James A. Brock*

 

Payments Upon Termination:

Incapacity
Retirement
Involuntary
Termination
Absent
Cause
Death Disability CIC Termination(1)

Compensation:

Base Salary

        $ 3,000,000

Short-Term Incentive(2)

  $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 4,500,000

Non-CIC Severance(3)

  $ 2,000,000      

Long-Term Incentive Compensation:(4)

RSUs: Unvested

$ 3,665,894 $ 3,665,894 $ 3,665,894   $ 3,665,894

PBCs: Unvested

$ 1,166,673 $ 1,166,673 $ 1,166,673   $ 1,166,673

PSUs: Unvested

$ 2,140,077 $ 2,140,077 $ 2,140,077   $ 2,140,077

MSUs: Unvested

$ 2,684,413 $ 2,684,413 $ 2,684,413   $ 2,684,413

Benefits and Perquisites:

Outplacement service(5)

        $ 25,000

Healthcare Continuation(6)

  $ 25,914     $ 25,914

401(k) payment(7)

        $ 26,100

Supplemental Retirement Plan(8)

        $ 255,298

New Restoration Plan(9)

        $ 324,520

280G Cutback(10)

        $ (2,049,970 )

TOTAL

$ 9,657,057 $ 13,182,971 $ 11,157,057 $ 1,500,000 $ 15,763,919

 

*

Applicable footnotes follow the last table in this section of the Proxy Statement.

Miteshkumar B. Thakkar*

 

Payments Upon Termination:

Incapacity
Retirement
Involuntary
Termination
Absent
Cause
Death Disability CIC Termination(1)

Compensation:

Base Salary

        $ 800,000

Short-Term Incentive(2)

  $ 200,000 $ 200,000   $ 400,000

Non-CIC Severance(3)

  $ 400,000      

Long-Term Incentive Compensation:(4)

RSUs: Unvested

$ 62,975 $ 62,975 $ 62,975   $ 147,910

PBCs: Unvested

$ 75,556 $ 75,556 $ 75,556   $ 173,020

PSUs: Unvested

$ 4,042 $ 4,042 $ 4,042   $ 4,860

MSUs: Unvested

$ 157,891 $ 157,891 $ 157,891   $ 378,939

Benefits and Perquisites:

Outplacement service(5)

        $ 25,000

Healthcare Continuation(6)

  $ 29,522     $ 29,522

401(k) payment(7)

        $ 26,100

TOTAL

$ 300,464 $ 929,986 $ 500,464   $ 1,985,351

 

*

Applicable footnotes follow the last table in this section of the Proxy Statement.

 

44       LOGO  – 2022 Proxy Statement


EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables

 

Martha A. Wiegand*

 

Payments Upon Termination:

Incapacity
Retirement
Involuntary
Termination
Absent
Cause
Death Disability CIC Termination(1)

Compensation:

Base Salary

        $ 850,000

Short-Term Incentive(2)

  $ 255,000 $ 255,000   $ 541,246

Non-CIC Severance(3)

  $ 425,000      

Long-Term Incentive Compensation:(4)

RSUs: Unvested

$ 391,021 $ 391,021 $ 391,021   $ 903,199

PBCs: Unvested

$ 131,931 $ 131,931 $ 131,931   $ 266,663

PSUs: Unvested

$ 44,080 $ 44,080 $ 44,080   $ 52,914

MSUs: Unvested

$ 207,720 $ 207,720 $ 207,720   $ 498,530

Benefits and Perquisites:

Outplacement service(5)

        $ 25,000

Healthcare Continuation(6)

  $ 15,975     $ 15,975

401(k) payment(7)

        $ 26,100

New Restoration Plan(9)

        $ 69,988

280G Cutback(10)

        $ (242,007 )

TOTAL

$ 774,752 $ 1,470,727 $ 1,029,752   $ 3,007,608

 

*

Applicable footnotes follow the last table in this section of the Proxy Statement.

Kurt R. Salvatori*

 

Payments Upon Termination:

Incapacity
Retirement
Involuntary
Termination
Absent
Cause
Death Disability CIC Termination(1)

Compensation:

Base Salary

        $ 670,000

Short-Term Incentive(2)

  $ 167,500 $ 167,500   $ 394,497

Non-CIC Severance(3)

  $ 335,000      

Long-Term Incentive Compensation:(4)

RSUs: Unvested

$ 169,076 $ 169,076 $ 169,076   $ 383,708

PBCs: Unvested

$ 62,492 $ 62,492 $ 62,492   $ 129,167

PSUs: Unvested

$ 27,547 $ 27,547 $ 27,547   $ 33,066

MSUs: Unvested

$ 103,860 $ 103,860 $ 103,860   $ 249,265

Benefits and Perquisites:

Outplacement service(5)

        $ 25,000

Healthcare Continuation(6)

  $ 29,522     $ 29,522

401(k) payment(7)

        $ 26,100

Supplemental Restoration Plan(8)

        $ 640,396

New Restoration Plan(9)

        $ 47,242

280G Cutback(10)

        $ (462,360 )

TOTAL

$ 362,975 $ 894,997 $ 530,475   $ 2,165,603

 

*

Applicable footnotes follow the last table in this section of the Proxy Statement.

 

  LOGO  – 2022 Proxy Statement       45


EXECUTIVE COMPENSATION INFORMATION | Potential Payments Upon Termination or Change in Control Tables

 

John M. Rothka