Bankrupt coal company to pay millions to its top executives
Coal miners who are being stripped of medical benefits due to a string of coal company bankruptcies are furious over one firm’s plan to pay millions in bonuses to the executives who managed the company as it failed financially.
United Mine Workers of America (UMWA) International President Cecil E. Roberts called the move by bankrupt Alpha Natural Resources “greed in its most raw and ugly form.”
“I am constantly amazed that our nation’s laws allow the very people who drove a company into bankruptcy to get thousands, if not millions, of dollars in bonuses as part of the bankruptcy process,” said Roberts. “The companies say they need to pay these bonuses to keep key management employees. Well, if they presided over a bankruptcy, are they the people you should be keeping around?”
The UMWA has filed an objection to the bid by Alpha to pay its top management personnel nearly $12 million in bonuses.
"Bounties" for destroying workers lives
“The outrageous bonuses Alpha intends to pay will be based on how much executives cut costs, which will provide extra incentives to cut hourly workers’ jobs and eliminate long-term obligations to retirees. These are not bonuses. They are bounties for destroying workers and retirees lives.”
In its filing, the UMWA points out that, “The [bonus plan] is an attempt by the Debtors to hand golden parachutes to members of management that are already being adequately paid for their services in these cases… and adversely incentivizes the Debtors’ management insiders to quickly acquiesce to a plan process demanded by the First Lien Lenders that could harm the Debtors’ employees and retirees.”
The union’s filing also notes that, “Given that the Debtors are insolvent, a payout of up to $11.9 million….to 15 members of management on top of base salaries is neither fair or nor reasonable.”
Justice Department agrees
The UMWA is joined in its objection to these bonuses by the U.S. Department of Justice, which said that, “According to Alpha, these executives need these bonuses as an incentive to do the very jobs they were hired to do, that they are already highly compensated for with generous salaries, and which their fiduciary duties compel them to do. Such bonuses cannot be justified under the facts and circumstances of this case.”