CHICAGO (Reuters) - Peabody Energy Corp BTUUQ.PK, the world's largest private-sector coal miner, expects to exit Chapter 11 bankruptcy in April with an executive bonus plan worth hundreds of millions of dollars.
The following are the main terms of the bonus package:
* Peabody set aside 10 percent of new common stock - which the company estimates to be worth $310 million - in a pool to be used as grants for executives, employees and consultants.
* 25.8 percent of the pool, or $80 million, will be awarded in the form of restricted stock on the day Peabody emerges from bankruptcy. Half of that amount will be split among six top executives, and the rest will be split among Peabody’s 7,000 employees.
* A portion of the emergence award for the top executives will vest on each of the first three anniversaries of the bankruptcy exit if the manager remains with the company.
* The board has the discretion to award the remaining stock from the incentive pool as compensation to executives or employees.
* The stock incentive plan comes in addition to a $11.9 million cash bonus package, about 41 percent of which will be awarded to Peabody’s top six executives upon Chapter 11 emergence. The remaining cash will be allocated according to 2016 and 2017 performance benchmarks.
The market value of Peabody’s long-term incentive plan varies with the price of its stock.
Peabody estimated the value of the company’s stock at $3.1 billion, but a group of dissenting creditors proposed a reorganization plan valuing Peabody at $5.4 billion. Some shareholders objecting to the company’s bankruptcy exit plan argue the stock will be worth double or triple Peabody’s estimate.
Here’s a breakdown of the amount each executive stands to receive under Peabody’s estimated $3.1 billion market capitalization and a high-end shareholder estimate of $9 billion.
Reporting by Tracy Rucinski; editing by Brian Thevenot
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