Table of Contents
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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
 
 
Filed by the Registrant ☒       Filed by a party other than the Registrant ☐
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant to
§240.14a-12
CONSOL ENERGY INC.
(Name of Registrant as Specified in its Charter)
Not applicable.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
  No fee required.
  Fee paid previously with preliminary materials.
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
 
 


Table of Contents

LOGO


Table of Contents

 

ANNUAL MEETING OF STOCKHOLDERS — APRIL 30, 2024

 

 

 

LOGO

275 Technology Drive, Suite 101

Canonsburg, Pennsylvania 15317

Telephone (724) 416-8300

 

 

Dear Fellow Stockholder:

 

On behalf of the entire Board of Directors (Board) of CONSOL Energy Inc. (“CEIX”), we invite you to attend CEIX’s seventh Annual Meeting of Stockholders. The Annual Meeting will be held solely via live webcast at www.virtualshareholdermeeting.com/CEIX2024 on April 30, 2024, at 8 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, (iii) advisory approval of our 2023 executive compensation program, (iv) the frequency of future advisory votes on executive compensation and (v) an amendment to our Certificate of Incorporation to provide for liability exculpation of certain of our officers as further described herein. Detailed information about the director nominees, including their specific experience and qualifications, begins on page 13 of the proxy statement. Information about our independent registered public accounting firm begins on page 29 of the proxy statement. Our Compensation Discussion and Analysis, which explains our 2023 compensation decisions, begins on page 37 of the proxy statement. A summary of why we are seeking stockholder input on say-on-pay vote frequency is on page 77 of the proxy statement. Information about the amendment to our Amended and Restated Certificate of Incorporation begins on page 78 of the proxy statement. We encourage you to read the proxy statement carefully for more information.

Our company delivered a strong operational and financial performance during 2023 as we achieved our third consecutive year of production and sales volume growth while also generating record total revenue and other income, net income and adjusted EBITDA*. This success was enabled in large part by our expanding global market reach and reliable world-class mining and logistics operations. In 2023, we also accomplished our strategic priority of pivoting sales away from traditional power-generation markets and toward growing demand from industrial and metallurgical customers in Asia, Africa, and South America. We exported a company record 16.2 million tons of coal in 2023 and derived 70% of our total recurring revenues and other income* from export sales. Additionally, 60% of our total recurring revenues and other income* came from sources other than sales to coal-fired power plants.

At our flagship operation, the Pennsylvania Mining Complex (PAMC), we grew our coal revenue for the third consecutive year. This resulted in a record average realized coal revenue per ton sold* in 2023. Despite continued market volatility contributing to a high inflationary environment and global supply chain difficulties, both of which influenced our total costs and expenses, we ended 2023 with a record PAMC average cash margin per ton sold*.

Our CONSOL Marine Terminal (CMT) also achieved record operational and financial performance during the year and transloaded a record 19 million tons of coal. The CMT has worked without a recordable safety incident since June 2014, surpassing 1 million man hours worked without a recordable safety incident.

At our newly-developed Itmann Mining Complex, we also made meaningful progress by expanding its total sales tonnage, including third-party sales, by 152% compared to 2022 levels to an aggregate 515 thousand tons. Moving forward, we expect to increase the Itmann Mining Complex’s sales volume in 2024 compared to 2023, and we expect to continue to ramp up production throughout 2024.

The success of our core business also led to multiple record financial results for the Company. We took advantage of our strong net cash provided by operating activities and free cash flow* to advance some of our key strategic initiatives in 2023, including (a) achieving our debt reduction goals, including fully retiring our Term Loan B and Second Lien Notes, (b) returning meaningful capital to our shareholders through the retirement of 5.5 million shares of CEIX common stock from year-end 2022 through January 31, 2024 and $75 million in dividends, and (c) enhancing our liquidity through cash generation and upsizing our revolving credit facility by an incremental $95 million to an aggregate amount of $355 million.

Looking ahead, we believe we have a continuing critical role to play in meeting global energy and resource needs as the energy transition plays out in the coming decades. We expect the demand for high-BTU content fuels, particularly in industrial applications,

will grow significantly in the coming years in developing economies in Asia and Africa, which we are well-positioned to serve through our high-quality products and ownership in the CONSOL Marine Terminal. Additionally, increasing demand for data centers due to the deployment of artificial intelligence technologies, growth of commercial factories, and increasing deployment of electric vehicles are causing electricity usage to soar across the United States. As such, utilities and grid operators are increasing their forecasts for U.S. electricity growth for the next 5 years, well above historical demand trends. This gives us confidence in our ability to continue to contract future domestic business for our products as well. Against this backdrop, we have spearheaded a public awareness campaign called “Not So Fast” designed to educate the public, elected officials and corporate leaders about the truth involving many of the myths being spoken about coal. We believe the world is too quickly moving away from coal and other proven, fossil-fuel-based sources of energy, in favor of intermittent sources like wind and solar power. The campaign advocates for a more measured, realistic, and moral approach to the energy policies of our country. More information about this campaign is available at www.thecoalhardtruth.com.

Furthermore, we remain focused on leading the industry as a socially and environmentally responsible coal supplier, helping to ensure that global electricity, infrastructure, and basic human needs are met during these dynamic times. As such, we continue to advance toward our voluntary goals of reducing our direct operating greenhouse gas emissions by 50% by 2026 and achieving net zero direct operating greenhouse gas emissions by 2040. We also were excited to formally establish CONSOL Innovations, which is dedicated to developing alternative uses of coal and reimagining its application as a building block to meet humanity’s evolving future needs. These efforts are described more fully alongside our broader sustainability initiatives as part of our 2023 Corporate Sustainability Report, which was released earlier this month. We remain excited about our future and the role we play as a responsible and innovative supplier of crucial global resources, and we look forward to continuing to expand our capability to return value to our shareholders and create sustainable opportunities for our future.

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 11.

We are profoundly saddened to announce the sudden passing of William (Bill) P. Powell, Chairman of the Board, on March 21, 2024. The entire CEIX family mourns his loss, as we extend our deepest sympathies to the Powell family. Bill was a friend and mentor and has been a valued member of the CEIX team, including serving as Chairman from November 2017 through March 2024. Bill was a driving force in bringing CEIX to where it is today, and thanks to his dedication, wisdom and guidance, we are operating from a position of strength and have assembled an experienced management team that will continue executing the Company’s strategy. His contributions to CEIX are immeasurable, and we are thankful for his exemplary leadership. His passing is a tremendous loss to all of us at CEIX, the energy industry and community. Our thoughts and prayers are with his family and friends at this difficult time.

In light of Bill’s sudden passing, the Board determined it was in the best interests of the Company and its stockholders that I assume the position of Chairman and John T. Mills assume the role of Lead Independent Director effective as of March 27, 2024. Mr. Mills has deep knowledge of the Company and its business and we believe this board structure will provide an effective balance between strong company leadership and oversight by active, independent directors. Additionally, Cassandra Pan and Valli Perera joined the Audit Committee and Compensation Committee, respectively, effective as of March 27, 2024.

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   

 

James A. Brock

Chairman and Chief Executive Officer

 

LOGO

 

 

*

See Appendix A to this Proxy Statement for a reconciliation of adjusted EBITDA (non-GAAP) to net income (GAAP), total recurring revenues and other income (non-GAAP) to total revenue and other income (GAAP), average realized coal revenue per ton sold (non-GAAP) to total coal revenue (GAAP), average cash margin per ton sold (non-GAAP) to total coal revenue (GAAP) and free cash flow (non-GAAP) to net cash provided by operating activities (GAAP).


Table of Contents

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

 

LOGO

 

 

 

 DATE:

 

 

  

 

 

 

 

April 30, 2024

 

   

 

 

 TIME:

 

   

 

 

8 a.m. Eastern Time

 

   

 

 PLACE:

 

   

 

Solely via live webcast at www.virtualshareholdermeeting.com/CEIX2024 (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, 2024;

 

   
   

3.

  

Approve, on an advisory basis, the compensation paid to our named executive officers in 2023, as reported in this Proxy Statement;

 

   
   

4.

  

Approve, on an advisory basis, the frequency of future advisory votes on executive compensation;

 

   
   

5.

  

Consider and act upon a proposal to approve an amendment to our Certificate of Incorporation to provide for exculpation of certain officers; and

 

   
   

6.

  

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 1, 2024 as the record date for determining the stockholders of CEIX entitled to this Notice of Annual Meeting of Stockholders (the “Notice”) and to vote at the Annual Meeting and any adjournment or postponement thereof.

 

   

 

 MAILING DATE:

 

   

 

On or about April 1, 2024

 

   

INFORMATION ABOUT THE MEETING:

We are mailing our proxy materials to stockholders entitled thereto via the full set delivery option. The approximate date on which the Proxy Statement and proxy card are intended to be first sent or given to the Company’s stockholders entitled thereto is April 1, 2024. This delivery will be by mail or, if a stockholder has previously agreed, by e-mail. In addition to delivering proxy materials to stockholders entitled thereto, we must also post all proxy materials on a publicly accessible website and provide information to stockholders about how to access that website. These proxy materials include this Notice, the Proxy Statement, the proxy card and our 2023 Annual Report. These materials are available free of charge on our website at www.consolenergy.com by following the link for “Investors” and also at www.proxyvote.com. You may vote through any of the acceptable means described in the Proxy Statement. Instructions on how to vote begin on page 11.

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, 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 or vote instruction form 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. If you are not a stockholder, you 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.

 

   

April 1, 2024

 

 

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 30, 2024:

We have elected to utilize the full set delivery option and are delivering paper copies to all stockholders entitled thereto of all proxy materials, as well as providing access to those proxy materials on a publicly accessible website. The Proxy Statement, the proxy card, and our 2023 Annual Report are available free of charge at www.consolenergy.com by following the link for “Investors” and also at www.proxyvote.com.


Table of Contents

 

TABLE OF CONTENTS

 

 

 

Proxy Summary      1  
Information About the Annual Meeting      7  
Proposal No. 1—Election of Directors      13  

Biographies of Director Nominees

  

 

14

 

Board of Directors and Compensation Information      18  

Board of Directors and its Committees

  

 

18

 

Director Compensation Table—2023

  

 

27

 

Understanding Our Director Compensation Table

  

 

28

 

Proposal No. 2—Ratification of Appointment of Independent Registered Public Accounting Firm      29  
Audit Committee and Audit Fees      30  

Audit Committee Report

  

 

30

 

Independent Registered Public Accounting Firm

  

 

31

 

Proposal No. 3—Advisory Approval of Executive Compensation      32  
Executive Officers      33  
Executive Compensation Information      36  

Compensation Discussion and Analysis

  

 

37

 

Compensation Committee Report

  

 

55

 

Summary Compensation Table

  

 

56

 

Grants of Plan-Based Awards – 2023

  

 

57

 

CEO Employment Agreement

  

 

58

 

Outstanding Equity Awards at Fiscal Year-End for CEIX – 2023

  

 

59

 

Stock Vested Table – 2023

  

 

59

 

Pension Benefits Table – 2023

  

 

60

 

Understanding Our Pension Benefits Table

  

 

60

 

Potential Payments Upon Termination or Change in Control Tables

  

 

62

 

Understanding Our Change in Control and Employment Termination Tables and Information

  

 

65

 

Human Capital Management

  

 

69

 

Pay Ratio Disclosure

  

 

70

 

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

  

 

73

 

Beneficial Ownership of Securities      74  
Related Person Transaction Policy and Procedures and Related Person Transactions      76  
Proposal No. 4—Frequency of Future Advisory Votes on Executive Compensation      77  
Proposal No. 5—Approval of an Amendment to Our Certificate of Incorporation for Exculpation of Certain Officers      78  
Additional Matters      80  
Appendix A—Reconciliation of Non-GAAP Measures      A-1  
Appendix B—Certificate of Amendment to Amended and Restated Certificate of Incorporation      B-1  
 

 

  LOGO  - 2024 Proxy Statement  


Table of Contents

 

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 or about April 1, 2024, we commenced mailing the Proxy Statement, the proxy card, and our 2023 Annual Report to holders of record of our common stock as of the record date, and posted our proxy materials on the websites referenced in the Notice.

2024 ANNUAL MEETING OF STOCKHOLDERS

 

LOGO

 

TIME

8 a.m. Eastern Time

   

 

LOGO

 

DATE

April 30, 2024

 

   

 

LOGO

 

PLACE

Solely via live webcast at www.virtualshareholdermeeting.com/CEIX2024

 

     

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

 

13

 

2

 

Ratification of Appointment of Ernst & Young LLP

 

FOR

 

29

 

3

Advisory Approval of 2023 Named Executive Officers’ Compensation

 

FOR

 

32

 

4

 

Advisory Approval of the Frequency of Future Advisory Votes on Executive Compensation

 

FOR EVERY

YEAR

 

77

 

5

Amendment to Our Certificate of Incorporation to Provide for Exculpation of Certain Officers

 

 

FOR 78

 

 

  LOGO  - 2024 Proxy Statement    1


Table of Contents

PROXY SUMMARY

 

CURRENT BOARD OF DIRECTORS

The following table provides summary information about our current Board of Directors as of March 27, 2024. All of our directors’ terms expire at the Annual Meeting and are nominees for election at the Annual Meeting, each for a one-year term ending at our annual meeting in 2025.

Name

Age

Director

Since

Occupation   Independent  

Committee

   Memberships(2)  

 Valli Perera   66   2023  Former Partner of Deloitte LLP Yes

  AC

  CC

  NCG††

  HSE

 

 James A. Brock†(1)

 

 

 

67

 

 

 

 

2017

 

 

  Chairman and Chief Executive Officer of CEIX

 

No

  HSE

 

 John T. Mills   76   2017

 Former Chief Financial Officer of Marathon Oil

 Corporation; Lead Independent Director of CEIX

Yes

  AC††

  CC

  HSE

 

 Joseph P. Platt   76   2017  General Partner of Thorn Partners LP Yes

  CC††

  NCG

  HSE

 

 Cassandra Pan   65   2023  Former President of Fenner Dunlop Americas Yes

  AC

  NCG

  HSE††

 

 

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

 

(1)

In connection with William P. Powell’s sudden passing, the Board appointed James A. Brock to replace Mr. Powell as Chairman of the Board and John T. Mills was appointed to be the Lead Independent Director, effective as of March 27, 2024.

 

(2)

Effective as of March 27, 2024, Cassandra Pan was appointed to the Audit Committee and Valli Perera was appointed to the Compensation Committee.

BUSINESS/STRATEGIC 2023 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 GAAP net income of $656 million in 2023 compared to $467 million in 2022. Notably, our adjusted EBITDA* for 2023 was $1,048 million compared to $807 million for 2022, representing a 30% improvement compared to 2022.

 

 

   

Strong Operational and Financial Performance.

 

   

Total PAMC coal shipments of 26.0 million tons in 2023 versus 24.1 million tons in 2022.

 

 

   

PAMC total coal revenue of $2,025 million for 2023 compared to $1,974 million for 2022.

 

 

   

Average cash margin per ton sold* of PAMC coal sales of $41.64 for 2023 versus $35.33 for 2022.

 

 

   

Record annual terminal net income of $69 million, adjusted EBITDA* of $80 million for the CONSOL Marine Terminal and CMT throughput volume of 19.0 million tons, including 15.7 million tons of PAMC coal shipments.

 

 

   

Our Bailey Preparation Plant and CONSOL Marine Terminal each had ZERO employee recordable incidents in 2023. Our 2023 total recordable incident rate across our coal mining segment was approximately 33% below the national average for underground bituminous coal mines (based on the latest available MSHA data).

 

 

   

Generated net cash provided by operating activities of $858 million in 2023 compared to $651 million in 2022, and free cash flow* of $687 million in 2023 compared to $501 million in 2022.

 

 

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PROXY SUMMARY

 

   

Improving Risk Profile and Shareholder Returns.

 

   

Reduced total debt outstanding by $189 million, including $99 million and $64 million to fully retire our Second Lien Notes and Term Loan B, respectively.

 

 

   

73% of 2023 free cash flow* returned to shareholders via 5.5 million shares repurchased at a weighted average price of $76.91 per share and dividends for an aggregate $501 million from January 1, 2023 through January 31, 2024.

 

 

   

Positioning for the Future.

 

   

Targeting to return an aggregate of approximately 75% of free cash flow* to shareholders.

 

 

   

Committed to investing approximately $30 million for 2023-2026, including $4 million in 2023 and an expectation of $12 million in 2024, to advance our sustainability goals by mitigating methane emissions from our mines. These steps will advance us toward our goal of voluntarily reducing our scope 1 & 2 greenhouse gas emissions by 50% compared to 2019 base levels.

 

 

   

Continue to expand in the metallurgical coal markets by further ramping up the Itmann Mining Complex and growing the sales of our crossover metallurgical product from the PAMC.

 

 

   

Continue to focus on transitioning and diversifying our revenue mix. Derived 66% of our coal sales revenue from export sales, up from 53% in 2022. Additionally, 59% of our total revenues derived from contracts with customers came from sources other than sales to coal-fired power plants.

 

 

   

Focus on creating long-term growth and diversification opportunities using sustainable innovations in carbon products and materials through CONSOL Innovations. We are also expanding our research and development activities to focus on using coal and coal mining/preparation plant waste streams for battery applications, including the development of battery electrode materials.

 

 

   

Educate the public, elected officials and corporate leaders about the truth involving many of the myths being spoken about coal. We believe the world is too quickly moving away from proven, fossil-fuel-based sources of energy, like coal, in favor of intermittent sources like wind and solar power. The “Not-So-Fast” campaign advocates for a more measured, realistic and moral approach to the energy policies of our country.

 

 

  *

See reconciliation of adjusted EBITDA (non-GAAP) to net income (GAAP), average cash margin per ton sold (non-GAAP) to total coal revenue (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 Stockholder

 Engagement

  

Engaged in stockholder outreach regarding our compensation programs which informed the Compensation Committee’s decision-making for program changes for 2023 regarding our CEO’s employment agreement and long-term incentive awards for executives.

 Compensation Program

 Design

  

Designed an overall compensation program with 84.6% of compensation for our CEO and 70.2% 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 2023 STIC resulting in annual STIC payouts to our NEOs at approximately 100% of target performance.

 

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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 105:1. Based upon data collected by Mercer, our independent compensation consultant, in 2022 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 258 to 1 and among 67 companies that have reported such ratio as of February 21, 2024 with respect to 2023 compensation, the average ratio of Chief Executive Officer to median employee compensation was 310 to 1.

 Board Size and Director

 Compensation

  

Maintained Board size in 2023 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. Adopted a new Clawback Policy and a revised Insider Trading Policy in 2023.

 

Forward-Looking Statements

 

Certain statements, estimates, and projections in this Proxy Statement are “forward-looking statements” within the meaning of the federal securities laws. With the exception of historical matters, certain other matters discussed in this Proxy Statement are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) that involve risks and uncertainties that could cause actual results to differ materially from results projected in or implied by such forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” “target,” or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe our expectations with respect to our operations or any other strategy that involves risks or uncertainties, we are making forward-looking statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Specific risks, contingencies and uncertainties are discussed in more detail in our filings with the Securities and Exchange Commission. The forward-looking statements in this Proxy Statement speak only as of the date of this Proxy Statement and CEIX disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

 

 

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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:

 

           
   

Page No.

    

Page
No.

  
 

All non-employee directors are independent

  18   

Clawback Policy

  25   
 

Annual Election of Directors

  13   

No Supermajority Vote Requirements

    
 

Three fully independent standing Board committees

  22   

Diversity in Board and Executive Management

  24   
 

Annual review of Board leadership structure

  18   

Emphasis on Ethics Compliance

  26   
 

Independent directors meet regularly in executive session

  19   

Meaningful stock ownership and retention guidelines for the Board and executive officers

  28   
 

Risk and safety oversight by the full Board

and its committees

  21   

Annual corporate sustainability reports

  25   
 

Insider Trading Policy

 

 

25

 

  

Human Rights Policy

 

 

25

 

  
           

 

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PROXY SUMMARY

 

SUSTAINABILITY

At CEIX, we strive to be the most responsible coal company in the world. Excellence is our goal, and we endeavor to operate our business in a manner that meets or exceeds the expectations of our employees, communities, regulators and stockholders. Our approach to sustainability is underscored by our dedication to compliance, ethical business practices, and the communities where we live and work. We provide transparency into our operations through the regular publishing of corporate sustainability reports. Our Corporate Sustainability Report for 2023 has been posted to our website.

We believe long-term utilization of our high-Btu coal is essential in the quest to expand access to affordable and reliable electricity throughout the world. We are committed to employing technology and innovation across our operations that will further enhance employee safety, reduce our environmental footprint, increase operational efficiencies, and support continued coal production into the future.

LOGO  LEARN MORE ABOUT OUR COMPANY

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

 

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INFORMATION ABOUT THE ANNUAL MEETING

 

 

 

LOGO

CONSOL Energy Inc.

275 Technology Drive, Suite 101

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 30, 2024, at 8 a.m., Eastern Time solely via live webcast at www.virtualshareholdermeeting.com/CEIX2024. 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 Nos. 1 and 4, where abstentions would not have an effect on the outcome.

RECORD DATE AND QUORUM: The record date with respect to this solicitation is March 1, 2024. 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 29,608,369 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.

 

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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 2025.

 

 

 

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 for 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. 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, within 90 days from the date of the certification of the election results.

 

 

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 2024. 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 2023 Named Executive Officers’ Compensation

Stockholders are being asked to approve, on an advisory basis, the compensation paid to CEIX’s named executive officers in 2023. 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.

 

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INFORMATION ABOUT THE ANNUAL MEETING

 

Item

 

  

Proposal

 

 

 

Board

Recommendation

 

Vote Required

 

 

 

4

  

 

 

Advisory Approval of the Frequency of Future Advisory Votes on Executive Compensation

In accordance with the rules of the Securities and Exchange Commission (SEC), CEIX is required to provide its stockholders with the opportunity to cast an advisory vote to determine the frequency of future advisory stockholder votes on compensation paid to our named executive officers.

 

 

 

FOR EVERY
YEAR

 

 

 

The frequency (one, two or three years) receiving the most votes will be deemed the preference of the stockholders.

 

 

5

  

 

 

Approval of an Amendment to Our Certificate of Incorporation to Provide for Exculpation of Certain Officers

Effective August 1, 2022, Section 102(b)(7) of the General Corporation Law of the State of Delaware (“DGCL”) was amended to enable Delaware companies to limit the liability of certain of their officers in limited circumstances. The Board believes that including the exculpation provision as provided in the Exculpation Amendment is necessary to continue to attract and retain experienced and qualified officers.

 

 

 

FOR

 

 

 

Affirmative vote of holders of a majority of the shares of our common stock outstanding and entitled to vote thereon.

 

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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 this Proxy Statement, the proxy card, and our 2023 Annual Report on or about April 1, 2024.

We are utilizing a SEC rule that allows companies to mail all proxy materials to its stockholders. This delivery can be by mail or, if a stockholder has previously agreed, by e-mail. In addition to delivering proxy materials to stockholders, the Company must also post all proxy materials on a publicly accessible website and provide information to stockholders about how to access that website. These proxy materials include this Proxy Statement, the proxy card, and our 2023 Annual Report and are available free of charge on CEIX’s corporate website at www.consolenergy.com by following the link for “Investors” and also at www.proxyvote.com.

Copies of our 2023 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, 2023. You can obtain copies of these exhibits electronically at the website of the SEC at www.sec.gov. The exhibits are also available as part of the Form 10-K for the year ended December 31, 2023, which is available on CEIX’s corporate website at www.consolenergy.com. Stockholders may also obtain copies of the exhibits without charge by contacting our Investor Relations department by telephone at (724) 416-8300 or by mail at CONSOL Energy Inc., Investor Relations department, 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317.

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, 2024 (Proposal No. 2);

 

   

in favor of approval, on an advisory basis, of the compensation paid to our named executive officers in 2023 (Proposal No. 3);

 

   

in favor of, on an advisory basis, every year as the frequency of future advisory votes on executive compensation (Proposal No. 4);

 

   

in favor of an amendment to our certificate of incorporation for exculpation of certain officers (Proposal No. 5); 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.

 

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INFORMATION ABOUT THE ANNUAL MEETING

 

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

 

LOGO

  

VIA THE INTERNET BY PROXY: Stockholders who received a proxy card may still submit proxies over the Internet at www.proxyvote.com until 11:59 p.m. Eastern Time on April 29, 2024. 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.

 

LOGO

  

VIA TELEPHONE BY PROXY: Registered stockholders of record may submit proxies by telephone until 11:59 p.m. Eastern Time on April 29, 2024 by calling 1-800-690-6903 and following the instructions. Stockholders must have the 16-digit control number that appears on their proxy card 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

  

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.

LOGO

  

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, 3, 4 and 5, 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 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317, 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.

 

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INFORMATION ABOUT THE ANNUAL MEETING

 

ATTENDING THE MEETING: The Annual Meeting will be held solely via live webcast at www.virtualshareholdermeeting.com/CEIX2024 on April 30, 2024 at 8 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 8:00 a.m. Eastern Time on April 30, 2024, and CEIX stockholders will be able to log in beginning at 7:45 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 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. Morrow Sodali Global LLC has been retained by CEIX to aid in the solicitation of proxies at an estimated cost of $12,000, plus reimbursement of certain reasonable 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.

 

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

 

 

The Nominating and Corporate Governance Committee has recommended, and the Board has nominated, James A. Brock, John T. Mills, Cassandra Pan, Valli Perera, and Joseph P. Platt, whose terms expire at the Annual Meeting, for election by the stockholders as directors at the Annual Meeting. Upon election, each such director will serve a one-year term until the 2025 annual meeting of stockholders or until his or her successor is elected and qualified, or his or her earlier death, resignation or removal. In light of William P. Powell’s sudden passing, the Board appointed Mr. Brock to replace Mr. Powell as Chairman of the Board and Mr. Mills was appointed to be the Lead Independent Director, effective as of March 27, 2024. Concurrently with this transition, the Board reduced the size of the Board to five directors from six directors, effective as of March 27, 2024. For this reason, this Proxy Statement includes only five director nominees and stockholders may not vote for a greater number of persons than the number of nominees named.

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, including their recent employment, positions with CEIX, other directorships, board committee memberships and ages as of March 27, 2024.

 

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

 

Biographies of Director Nominees

 

 

 

JAMES A. BROCK

 

  

 

LOGO

 

  

 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF CEIX

 

Director Since: 2017

Age: 67

Term Expires: 2024

  

 

CEIX Committees:

  Health, Safety and Environmental

 

 

BACKGROUND:

James A. Brock has served as our Chief Executive Officer since June 2017, previously served as our President from December 2017 to January 2023, and he has been a member of our Board since November 28, 2017 and was appointed our Chairman on March 27, 2024. 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 Chairman 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 an executive committee member of the board of directors of the National Mining Association. Mr. Brock also previously served on the board of directors of West Virginia Coal 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.

 

 

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

 

 

 

JOHN T. MILLS

 

  

 

LOGO

 

  

 

FORMER CHIEF FINANCIAL OFFICER
MARATHON OIL CORPORATION

 

LEAD INDEPENDENT DIRECTOR OF CEIX

 

Director Since: 2017

Age: 76

Term Expires: 2024

  

 

CEIX Committees:

  Audit (Chair)

  Compensation

  Health, Safety and Environmental

 

 

BACKGROUND:

John T. Mills joined the Board on November 14, 2017 and was appointed to be the Lead Independent Director of the Board on March 27, 2024. 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.

 

 

 

 

JOSEPH P. PLATT

 

  

 

LOGO

 

  

 

GENERAL PARTNER—THORN
PARTNERS LP

 

Director Since: 2017

Age: 76

Term Expires: 2024

  

 

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 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.

 

 

  LOGO  - 2024 Proxy Statement    15


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

 

 

 

VALLI PERERA

 

  

 

 

LOGO

 

  

 

FORMER PARTNER OF DELOITTE

 

Director Since: 2023

Age: 66

Term Expires: 2024

  

 

CEIX Committees:

  Nominating and Corporate Governance (Chair)

  Audit

  Compensation

  Health, Safety and Environmental

 

 

BACKGROUND:

Valli Perera joined the Board on March 22, 2023. She currently serves as a member of our Board’s Nominating and Corporate Governance Committee, which she chairs, Audit Committee, Compensation Committee and Health, Safety and Environmental Committee. Ms. Perera is a seasoned executive with over 40 years of professional services and corporate experience. She retired from Deloitte, as a senior partner in June 2019. During her tenure at Deloitte, Ms. Perera advised and led client service teams in areas of finance, mergers and acquisitions, technology transformation and business growth. She also worked with transitioning chief financial officers at Deloitte’s CFO Transition Lab program. Ms. Perera’s tenure at Deloitte spanned over 25 years, including: her elevation to the partnership in 1997, senior roles such as Managing Director for Global Services and Global Mergers & Acquisition, Deloitte’s Global and U.S. Service Innovation Board and the firm’s global digital transformation, talent and development, diversity and inclusion, and member firm standards and governance. Further, from 2014 to 2020, she served on the board of directors of Make-A-Wish® Illinois, a non-profit organization.

Since 2020, Ms. Perera has served on the board of directors for Midmark Corporation, a clinical environmental design private company, and is a member of its audit and compensation committees. Moreover, since 2012, Ms. Perera has served on the board of directors for Communities in Schools of Chicago, a non-profit organization and is the Chair of its governance committee. She received a Master of Science degree in Taxation from Drexel University and a graduate degree in journalism from Northwestern University. Ms. Perera is credentialed by the Chartered Institute of Management Consultants, United Kingdom. Further, she is a retired Certified Public Accountant.

 

 

QUALIFICATIONS:

 

With an extensive tenure spanning over 40 years as a seasoned business leader partnering with executive teams of private and Fortune 500 publicly traded signature companies to define high-value strategies for top- and bottom-line growth and providing specialized services in finance, governance, and organizational development, as well as global insight and direct experience across several continents, skills in finance, accounting, tax, acquisitions, and technology and substantive board directorship experience, Ms. Perera brings significant expertise to the Board.

 

 

16    LOGO  - 2024 Proxy Statement


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

 

 

 

CASSANDRA PAN

 

  

 

 

LOGO

 

  

 

FORMER PRESIDENT OF FENNER DUNLOP AMERICAS

 

Director Since: 2023

Age: 65

Term Expires: 2024

  

 

CEIX Committees:

  Health, Safety and Environmental (Chair)

  Audit

  Nominating and Corporate Governance

 

 

BACKGROUND:

Cassandra Pan joined the Board on March 22, 2023. She currently serves as chair of our Board’s Health, Safety and Environmental Committee and on the Audit Committee and Nominating and Corporate Governance Committee. Ms. Pan has extensive entrepreneurial and executive experience in North America, China and internationally. She is currently self-employed as a business consultant and strategic advisor. From 2009 to 2015 based in Pittsburgh, Pennsylvania, she was the President of Fenner Dunlop Americas (formerly a subsidiary of Fenner plc and now a part of the Michelin group of companies) where she led that company’s Engineered Conveyor Solutions business in North and South America. Prior to her elevation to President of the Americas, she served as Managing Director of Greater China at Fenner plc from 1998 to 2009, where she oversaw Fenner’s wholly-owned and joint venture investments in China relating to the manufacture of conveyor belting and specialty polymer businesses for use in the servicing of underground coal mines, construction equipment and in various automotive and industrial markets. Since 2016, Ms. Pan serves as a mentor at AlphaLab Gear, a hardware accelerator program of Innovation Works. From 2010 to 2016, she served as a member of the Advisory Committee of International Center for Energy, Environment and Sustainability (InCEES) at Washington University in St. Louis, Missouri. Since 2015, she has served on the board of directors of WQED Multimedia, a not-for-profit education-focused public media organization, where she also serves as chair of the Audit Committee and a member of the Finance, Business & Operations Committee. She is a member of the International Women’s Forum, Pittsburgh Chapter since 2012.

 

 

QUALIFICATIONS:

 

With nearly two decades of experience in leading global engineering business units in Asia and the Americas for a publicly traded company specializing in helping clients in the underground and surface mining industries in China, North America and South America to meet their engineering and material handling requirements, Ms. Pan brings significant expertise to the board of directors. Her professional experience in addressing a variety of operational and strategic aspects relating to the business, finances, engineering challenges, health, safety and environmental risks, sales and marketing efforts and human resource matters of mining companies brings important and relevant competencies and skills to the Board.

 

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  - 2024 Proxy Statement    17


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION

 

 

 

Board of Directors and Its Committees

Board of Directors

The business and affairs of CEIX are managed under the direction of our Board. Under our Certificate of Incorporation all directors are subject to election annually.

We do not have a formal policy regarding directors’ attendance at our annual meetings of stockholders; however, all directors are encouraged to attend. All of CEIX’s directors attended the 2023 Annual Meeting of Stockholders, and all of the directors are expected to attend this year’s Annual Meeting.

Board Leadership Structure

Our Corporate Governance Guidelines provide that the Board will determine from time to time (at least annually) whether to have a joint Chairman and Chief Executive Officer or whether to separate these offices as part of the succession planning process when it elects a Chief Executive Officer or at other appropriate times. In the event that the Board decides to have our Chief Executive Officer also serve at any time as the Chairman, our Corporate Governance Guidelines require that the Board also appoint a Lead Independent Director with specific responsibilities outlined in the Corporate Governance Guidelines. This structure ensures independent Board oversight of management including our Chief Executive Officer. In light of William P. Powell’s sudden passing on March 21, 2024, the Board determined that the most effective leadership structure for our Company at this time is to have Mr. Brock serve as both Chairman of the Board and Chief Executive Officer and to have John T. Mills serve as our Lead Independent Director. This change became effective on March 27, 2024. As described above, Mr. Brock has spent his entire career working for CEIX or its former parent. The Board believes that in light of Mr. Brock’s deep knowledge and experience with CEIX and its operations, he will be a strong and effective bridge between management and the Board as the Board oversees management of the Company and its strategic initiatives. The Board believes that Mr. Brock’s service as Chairman will be well balanced and supported by Mr. Mills serving as our Lead Independent Director. Mr. Mills also has deep knowledge of the Company and its business after serving as a director for approximately 16 years with CEIX and our former parent company. Mr. Mills also has strong prior experience serving as a lead independent director for the board of directors of another publicly traded company.

As noted in our Corporate Governance Guidelines, the Lead Independent Director’s duties and responsibilities include, among other things:

 

   

presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;

 

   

alongside the Chairman, reviewing and approving the schedule of meetings, meeting agendas and meeting topics for Board meetings;

 

   

the authority to direct the CEO or Corporate Secretary to call a special meeting of the independent directors;

 

   

consulting directly with major stockholders, when requested and as appropriate; and

 

   

performing other duties as delegated by the Board from time-to-time.

Determination of Director Independence

The New York Stock Exchange (NYSE) listing standards require a majority of our directors and each member of our Audit, Compensation and Nominating and Corporate Governance Committees to be independent. In February 2024, our Board evaluated the relevant relationships between each director or director nominee (and his or her immediate family members and affiliates) and CEIX, and affirmatively determined that each of our directors, other than Mr. Brock (who is the Chief Executive Officer of CEIX), had no material relationship with CEIX and is “independent” under the corporate governance rules of the NYSE codified in Section 303A of the NYSE Listed Company Manual. In February 2024, the Board also determined that each member of the Audit Committee meets the independence standards required for audit committee members under the NYSE listing standards and the SEC rules, and considered the additional factors under the NYSE rules relating to members of the Compensation Committee before determining that each of them is independent.

 

 

18    LOGO  - 2024 Proxy Statement


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Our independent directors regularly meet in executive sessions with no members of management present. Such executive sessions are presided over by our Chairman, if independent, or Lead Independent Director of the Board.

Term Limits

Pursuant to our Corporate Governance Guidelines, the Board has not established term limits for directors. While term limits facilitate Board refreshment, they can also result in the loss of experience and expertise that is critical to effective operation of the Board. Longer tenured directors can provide valuable insight into the Company and its operations. To ensure that the Board continues to evolve and benefit from fresh perspectives and ideas, the Nominating and Corporate Governance Committee evaluates qualifications and contributions of each incumbent director before recommending the nomination of such director for an additional term.

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. See “Board’s Role in Risk Management” on page 21 for further information of the Board’s role in risk management.

 

  LOGO  - 2024 Proxy Statement    19


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Board Skills and Experience

The Nominating and Corporate Governance Committee seeks to cultivate a Board with the appropriate skill sets and diversity of experiences to discharge its responsibilities effectively. We believe that our Board should be conversant and equipped to tackle matters facing public company boards and to effectively oversee our business. As such, our slate of nominees possesses a unique background and, in the aggregate, provides a well-balanced array of experience, skills, and knowledge in our industry, leadership, public company experience, management, service, and public relations, making them well seasoned members for our Board. The table below summarizes some of the key skills and experiences that the Nominating and Corporate Governance Committee currently believes should be represented on the Board, as well as the number of director nominees who possess each skill. The demographic information presented below is based on voluntary self-identification by each nominee.

 

 

Skills, Experience and

Attributes

 

 

Valli Perera

 

 

 

James A.
Brock

 

 

 

John T.

Mills

 

 

 

Cassandra
Pan

 

 

 

Joseph
P. Platt

 

LOGO    Industry Experience       LOGO   LOGO   LOGO   LOGO
LOGO    Senior Leadership Experience   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO    Financial Experience   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO    Public Company Board   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO    Operations, Environmental, Social, Health & Safety       LOGO   LOGO   LOGO   LOGO
LOGO    Risk Management   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO    International, Sales and Marketing   LOGO   LOGO       LOGO   LOGO
LOGO    Strategy/M&A   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO    Human Capital Management   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO   

Information Technology/

Cybersecurity

  LOGO   LOGO   LOGO   LOGO   LOGO
LOGO    Government Relations   LOGO   LOGO   LOGO   LOGO   LOGO
    

Race/Ethnicity

                   
    

African American

                   
    

Asian/Pacific Islander

  LOGO           LOGO    
    

White/Caucasian

   

 

  LOGO   LOGO    

 

   

 

    

Hispanic/Latino

   

 

   

 

   

 

   

 

   

 

    

Native American

   

 

   

 

   

 

   

 

   

 

    

Gender

   

 

   

 

   

 

   

 

   

 

    

Male

   

 

  LOGO   LOGO    

 

   

 

    

Female

  LOGO    

 

   

 

  LOGO    

 

 

20    LOGO  - 2024 Proxy Statement


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Board’s Role in Risk Management

 

Among the Board’s most important functions is overseeing risk management. Our risk management framework fosters close interaction among the Board, its committees and our management.

The Company faces a variety of risks, including operational, financial, strategic, and reputational risks. The Board oversees the Company’s processes for assessing and managing these risks, through both the whole Board and its committees, while management is responsible for the day-to-day management of these risks. In furtherance of the Board’s oversight responsibilities and the Company’s day-to-day management of risk, CEIX representatives meet periodically with external advisors with respect to our risk management processes, as well as identified and emerging risks.

 

LOGO

 

  LOGO  - 2024 Proxy Statement    21


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Membership and Meetings of the Board of Directors and its Committees

In 2023, three of the six incumbent directors attended 100% of the meetings held by our Board and by all Board committees on which he or she served, and in each case, during the periods that he or she served. The remaining three of the six incumbent directors attended at least 80% of the meetings held by our Board and by all Board committees on which he or she served, and in each case, during the periods that he or she served.

Committee membership and the number of meetings held during 2023 by each committee are shown in the following table:

 

  Board of
Directors
Audit
Committee
Compensation
Committee
Nominating
and
Corporate
Governance
Committee
Health, Safety
and
Environmental
Committee

James A. Brock

John T. Mills

Chair

Cassandra Pan

Chair

Valli Perera

Chair

Joseph P. Platt

Chair

William P. Powell

Chair

No. of 2023 Meetings

13 6 6 6 5

Committees of the Board of Directors

Our Board has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Health, Safety and Environmental. 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. Our committees regularly make recommendations and report on their activities to the entire Board. All members of each of the Audit, Compensation and Nominating and Corporate Governance Committees are independent under the current listing standards of the NYSE and other applicable regulatory requirements, as described above under “Determination of Director Independence”. Our Board, considering the recommendations of our Nominating and Corporate Governance Committee, reviews committee membership at least annually. The responsibilities of each of the four committees are summarized below.

 

 

 Audit Committee

 

 Three Independent Director

 Members

  

 

   Assists our Board in its oversight of, among other things, the integrity of CEIX’s financial statements, CEIX’s compliance with legal and regulatory requirements, CEIX’s risk management policies and practices, and CEIX’s information technology security and risks;

 

   Oversees the appointment, compensation, and retention of CEIX’s independent auditor, and oversees the work done by CEIX’s independent auditor and any other registered public accounting firm hired to perform audit-related functions;

 

   Reviews and discusses with CEIX’s management and its independent auditor annual and quarterly financial statements, including those disclosures that appear under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in CEIX’s Form 10-Ks and Form 10-Qs;

 

   Provides general oversight over the accounting principles employed in CEIX’s financial reporting and the effectiveness of CEIX’s internal controls over financial reporting;

 

   Prepares any required Audit Committee Report; and

 

   Oversees CEIX’s internal audit function.

 

Our Audit Committee was established pursuant to Section 3(a)(58)(A) of the Exchange Act. Our Board has determined that all members of the Audit Committee are financially literate within the meaning of SEC rules and under the current listing standards of the NYSE. Our Board has also determined that each of the members of the

 

22    LOGO  - 2024 Proxy Statement


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Audit Committee during the 2023 fiscal year qualified as an “audit committee financial expert.” As of March 27, 2024, two of our three audit committee members qualify as an “audit committee financial expert.” A copy of the Audit Committee’s report for the 2023 fiscal year is included in this Proxy Statement.

 

 

 Compensation Committee

 

 Three Independent Director

 Members

  

 

   Establishes and reviews CEIX’s compensation philosophies, policies, plans and programs, consistent with CEIX’s objectives and stockholder interests, for our non-employee directors and executive officers;

 

   Reviews executive officer compensation against peer group benchmark data and sets compensation levels for executive officers;

 

   Reviews the performance of our executive officers and awards incentive compensation;

 

   Reviews and discusses with management the Compensation Discussion and Analysis required to be included in our proxy statement;

 

   Oversees CEIX’s policies on structuring compensation programs for executive officers;

 

   Reviews and monitors our management development and succession plans and activities;

 

   Engages and oversees the outside compensation consultant;

 

   Reviews and oversees the risk assessment related to CEIX’s compensation programs; and

 

   Prepares the Compensation Committee Report for full Board review.

 

Our Compensation Committee’s charter generally permits it to delegate its authority, duties and responsibilities or functions to one or more members of the Compensation Committee or to CEIX’s officers, except where otherwise prohibited by law or applicable listing standards. The terms of our Omnibus Performance Incentive Plan (the “Omnibus Plan”) also permit our Compensation Committee to delegate any power and authority granted to it by the Board under the Omnibus Plan to our officers.

Our Compensation Committee periodically reviews the compensation paid to our non-employee directors and the principles upon which their compensation is determined. The Compensation Committee also periodically reports to the Board on how our non-employee director compensation practices compare with those of other similarly situated public corporations and, if the Compensation Committee deems it appropriate, recommends changes to our director compensation practices to our Board for approval.

For additional information regarding the Compensation Committee’s processes and procedures for reviewing and determining executive officer compensation, see the “Compensation Discussion and Analysis” section beginning on page 37.

 

 Nominating and Corporate

 Governance Committee

 

 Three Independent Director

 Members

  

 

   Identifies qualified individuals for nomination, election or appointment to the Board;

 

   Ensures appropriate Board and committee composition, and recommends appropriate Board structure and operations;

 

   Oversees and assesses CEIX’s corporate governance system, including the responsibilities of Board members and committees, and related policies and procedures;

 

   Oversees annual evaluation of the Board, committees and management;

 

   Recommends each director nominee to our Board for nomination for election at the annual meetings, taking into account candidates whose names are submitted by stockholders; and

 

   Annually reviews CEIX’s Corporate Governance Guidelines.

 

 

  LOGO  - 2024 Proxy Statement    23


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Director Nomination Process. The Nominating and Corporate Governance Committee annually reviews and assesses the Board’s membership needs, with the assistance of a consultant when appropriate. When assessing Board composition or identifying suitable candidates for appointment or re-election to the Board, the Nominating and Corporate Governance Committee will consider candidates based on the needs of the Board at the time, having due regard to the benefits of diversity. The Nominating and Corporate Governance Committee seeks to maintain a Board that is comprised of individuals who possess the following skills, experience and/or attributes:

 

   

general industry knowledge;

 

   

accounting and finance;

 

   

ability to make sound business decisions;

 

   

management;

 

   

leadership;

 

   

knowledge of international markets;

 

   

business strategy;

 

   

crisis management;

 

   

information technology and cybersecurity;

 

   

innovation;

 

   

environmental, social and corporate governance concerns;

 

   

operations, health and safety;

 

   

prior board experience;

 

   

government relations;

 

   

diversity; and

 

   

risk management.

The Nominating and Corporate Governance Committee seeks to identify director candidates with leadership experience in positions with a high degree of responsibility. Director nominees are expected to be selected based upon contributions that they can make to CEIX.

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, although a formal policy has not been adopted with respect to consideration of such candidates because stockholder recommendations may be submitted and considered by the Nominating and Corporate Governance Committee under its charter. Director candidates recommended by stockholders will be evaluated by the Nominating and Corporate Governance Committee using the same criteria as candidates identified by the Board or the Nominating and Corporate Governance Committee for consideration. Stockholders may submit names of director candidates to Secretary, CONSOL Energy Inc., 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317. See “Additional Matters” on page 80 for more information on making director nominations.

Board Diversity and Inclusion. We believe in diversity and value the benefits diversity can bring to our Board and to the Company. The Board has adopted a policy regarding the diversity of its members, which is included in our Corporate Governance Guidelines.

For the purposes of Board composition, diversity includes, but is not limited to, business expertise, experience, skills, geographic location, age, gender, ethnicity and tenure with the Company. Board diversity promotes the inclusion of different perspectives and ideas, and ensures that the Company has the opportunity to benefit from all available talent. The promotion of a diverse Board makes prudent business sense and makes for better corporate governance.

CEIX seeks to maintain a Board comprised of talented and dedicated directors with a diverse mix of expertise, experience, skills and background. The skills and backgrounds collectively represented on the Board should reflect the diverse nature of the business environment in which CEIX operates. CEIX will periodically assess the composition of the Board in light of the needs of the Board at the time, including the extent to which the current composition of the Board reflects a diverse mix of expertise, experience, skills and backgrounds.

 

24    LOGO  - 2024 Proxy Statement


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

CEIX is committed to a Board composition that promotes a diverse and inclusive culture, that solicits multiple perspectives and views, and which is free of conscious or unconscious bias and discrimination. Additionally, we seek to promote diversity throughout our workforce by, among other things, emphasizing diversity among our executive management team.

Process for Board Assessment and Future Candidates. Set forth below is a summary of the process the Nominating and Corporate Governance Committee and Board intend to use in reviewing Board needs and future candidates.

 

 

 

LOGO

 

 

 Health, Safety and

 Environmental Committee

 

 Five Director Members

 (Four Independent)

  

 

   Oversees CEIX’s monitoring and enforcement of its policies to protect the health and safety of employees, contractors, customers, the public and the environment;

 

   Reviews CEIX’s strategy, including objectives and policies, relative to the protection of the safety and health of employees, contractors, customers, the public and the environment;

 

   Reviews material compliance issues or pending or threatened proceedings regarding health, safety or environmental matters, and management’s response to the same;

 

   Reviews any significant health, safety and environmental public policy and legislative, political and social issues and trends, including but not limited to environmental, social and governance initiatives such as Bettercoal;

 

   Reviews CEIX’s sustainability report on an annual basis and assists management in the formulation and oversight of policies and procedures designed to foster the sustainable development of the company; and

 

   Reviews CEIX’s policies and procedures relative to potential employee strikes and/or terrorist activity and the protection of CEIX’s assets against damage, destruction and/or theft.

 

We provide transparency into our operations through the regular publishing of corporate sustainability reports. Our Corporate Sustainability Report for 2023 has been posted to our Company website. 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.

Additionally, in 2023, we adopted a new Clawback Policy that complies with SEC and NYSE requirements and we revised our Insider Trading Policy to align with recent amendments to SEC rules on insider trading.

 

  LOGO  - 2024 Proxy Statement    25


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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Board of Directors and Its Committees

 

Corporate Governance Web Page and Available Documents

We maintain a corporate governance page on our website at www.consolenergy.com. The following documents are currently included on the corporate governance page of our website:

 

   

Corporate Governance Guidelines;

 

   

Code of Business Conduct and Ethics which applies to all employees, officers, service providers, contractors and directors of the Company;

 

   

Charters of the Audit, Nominating and Corporate Governance, Compensation, and Health, Safety and Environmental Committees;

 

   

Related Person Transaction Policy;

 

   

Human Rights Policy;

 

   

Insider Trading Policy; and

 

   

Clawback Policy.

These documents address important principles and corporate governance processes. We will provide a printed copy of any of these documents free of charge upon request to stockholders who contact our Investor Relations department in writing at CONSOL Energy Inc., 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317.

Ethics and Compliance Program

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.

Communication with the Board of Directors

Stockholders and other interested persons who wish to communicate with the Board may do so by writing to the Board, to the attention of Secretary, CONSOL Energy Inc., 275 Technology Drive, Suite 101, Canonsburg, Pennsylvania 15317, or by sending an e-mail to directors@consolenergy.com. The Secretary will relay all such communications to the Board in its entirety or to individual directors (as appropriate) at the next regularly scheduled Board meeting (or earlier as necessary) except for spam, junk mail, mass mailings, solicitations, résumés, job inquiries or other matters unrelated to CEIX. Communications that are intended specifically for the independent directors should be marked “Confidential” and sent to the street address noted above, to the attention of the Independent Directors in care of the Lead Independent Director of the Board. Information concerning how to communicate with the Board is also included on CEIX’s website at www.consolenergy.com.

 

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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Director Compensation Table—2023

 

Director Compensation Table—2023

The following table sets forth the compensation elements of our non-employee directors for the 2023 fiscal year:

 

 Name(1)

 

Fees Earned or
Paid in Cash(2)

 

Stock Awards(3), (7)

 

All Other
Compensation

 

Total 

 

Cassandra Pan(4)

$100,272 $164,795 $0 $265,067 

John T. Mills

$150,000 $150,000 $0 $300,000 

Joseph P. Platt

$140,000 $150,000 $0 $290,000 

William P. Powell(5)

$207,500 $300,000 $0 $507,500 

Valli Perera(6)

$106,057 $164,795 $0 $270,852 

 

(1)

While Mr. Brock, our Chief Executive Officer, is a member of our Board, his name does not appear in this table and his compensation is reported in the Summary Compensation Table and other sections of the Proxy Statement. In 2023, he did not receive any additional compensation in connection with his service on our Board.

 

(2)

Amounts shown in this column represent the cash retainer to each of our non-employee directors (including additional Committee Chair, Board Chair and Audit Committee member retainers). During 2023, Mr. Mills served as the Chair of our Audit Committee and was a member of our Compensation Committee and Health Safety and Environmental Committee; Mr. Platt served as the Chair of our Compensation Committee and was a member of our Nominating and Corporate Governance Committee and Health, Safety and Environmental Committee; Mr. Powell served as the Chair of our Board and was a member of our Audit Committee, Compensation Committee and Health, Safety and Environmental Committee; Ms. Perera served as the Chair of our Nominating and Corporate Governance Committee and was a member of our Audit Committee and Health, Safety and Environmental Committee; Ms. Pan served as the Chair of our Health, Safety and Environmental Committee and was a member of our Nominating and Corporate Governance Committee.

 

(3)

This includes the value of the 2023 annual restricted stock unit (“RSU”) award made to each of our non-employee directors on May 2, 2023 and March 22, 2023 for Ms. Pan and Ms. Perera. These amounts represent the aggregate grant date fair value of stock units granted in 2023 to non-employee directors computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value is computed based upon the closing price per share of CEIX stock on the date of grant. A discussion of the relevant assumptions made in the valuation of these stock awards is provided 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, 2023.

 

(4)

Ms. Pan elected to defer receipt of her RSU award for the 2023-2024 year, covering 2,626 RSUs, until April 21, 2026.

 

(5)

Mr. Powell elected to defer receipt of his RSU award for the 2023-2024 year, covering 4,694 RSUs, until his termination of service with the Board.

 

(6)

Ms. Perera elected to defer receipt of her RSU award for the 2023-2024 year, covering 2,626 RSUs, until her termination of service with the Board.

 

(7)

The outstanding equity awards held by our non-employee directors on December 31, 2023, are set forth below:

 

 Name

 

No. of Shares 

or Units of
Stock That
Have not
Vested

 

Cassandra Pan

2,626

John T. Mills

2,347

Joseph P. Platt

2,347

William P. Powell

4,694

Valli Perera

2,626

 

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BOARD OF DIRECTORS AND COMPENSATION INFORMATION | Understanding Our Director Compensation Table

 

Understanding Our Director Compensation Table

Each non-employee director is entitled to receive an annual equity award in the form of RSUs valued at $150,000 (other than the Board Chairman whose RSUs are valued at $300,000) as of the close of business on the date of the grant, which in 2023 was May 2, 2023. The RSU awards vest on the first anniversary of the grant date. Each non-employee director is also entitled to receive a cash Board Retainer, and if he or she serves as a Committee Chair, an Audit Committee member or the Board Chair, an additional cash retainer for his or her services as follows:

 

 Element of Compensation

 

Dollar Value of Board
Compensation

 

Chairman Retainer

  $200,000 (1) 

Board Retainer

  $120,000

Committee Chair Retainer (other than Audit & Compensation)

  $ 10,000

Audit Committee Chair

  $ 30,000

Compensation Committee Chair

  $ 20,000

Audit Committee Member

  $  7,500

 

(1)

This value includes both the annual cash retainer of $120,000 and the additional $80,000 retainer paid to the Chairman.

During 2023, the Compensation Committee of the Board reviewed with its independent compensation consultant the current director compensation program and concluded that (1) the mix of cash and equity compensation continues to be appropriate and consistent with broadly observed market practices, (2) the compensation levels are reasonable and in line with peer practices given the small size of the Board, and (3) the aggregate board compensation (reflecting the “total cost of governance”) is reasonably positioned as compared to the Company’s peer group members. The basic non-employee director compensation elements remain unchanged from 2017.

Deferred Compensation Plan for Non-Employee Directors

Our Non-Employee Director Deferred Compensation Plan authorizes our non-employee directors to defer all or a portion of their annual cash and/or stock compensation, effective with respect to deferrals of compensation during the calendar year. Participation in the plan is voluntary and at the election of each individual director. Amounts deferred under the plan (whether cash or equity–based) are payable in the form of deferred stock units and are generally settled within thirty days of the director’s termination of service, but in no event later than the fifth anniversary of such termination date. The plan is an unfunded and unsecured liability of CEIX and any benefits paid to our non-employee directors will be paid from CEIX’s general assets.

Stock Ownership Guidelines

Our Board has adopted stock ownership guidelines to align the interest of our non-employee directors with those of our stockholders. The guidelines require each of our non-employee directors to hold CEIX common stock with a value equal to five times their annual cash retainer based on the closing price of our common stock on a particular date, or five times the director’s annual cash retainer divided by $20.00. Each director is required to meet the guidelines on or before the fifth anniversary of becoming a Board member. Shares counted toward the guidelines include: shares owned outright by the director or his or her immediate family members residing in the same household; shares held in trust for the benefit of the director 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 whose vesting is time-based rather than performance-based. As of February 2024, each of Mr. Powell, Mr. Mills and Mr. Platt were in compliance with our stock ownership guidelines and Ms. Pan and Ms. Perera were within the five-year transition period.

 

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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, 2024. 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, 2024.

 

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AUDIT COMMITTEE AND AUDIT FEES

 

 

 

Audit Committee Report

The Audit Committee 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, 2023 (the “Audited Financial Statements”). In addition, the Audit Committee 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 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 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, 2023 for filing with the SEC.

 

  

  

  

Members of the Audit Committee:

     

John T. Mills, Chair

Valli Perera

William P. Powell

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.

 

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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, 2023 and 2022 and fees for other services rendered by E&Y during those periods.

 

    

2023

(E&Y Fees)

    

2022

(E&Y Fees)

 
 

Audit Fees

   $ 2,045,000      $ 1,880,000  
 

Audit-Related Fees

   $      $ 45,000  
 

Tax Fees

   $ 11,200      $  
 

All Other Fees

   $      $ 7,200  
        
 

Total

   $ 2,056,200      $ 1,932,200  

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 provided for audit-related work in 2023. The fees for professional services rendered in 2022 were in connection with the audit of CEIX’s Department of Energy grants.

Tax Fees

The fees for professional services rendered in 2023 were in connection with certain tax planning services. There were no professional services for tax-related work in 2022.

All Other Fees

There were no fees incurred for other professional services in 2023. The fees for products and services provided in 2022, other than for the services reported under the headings “Audit Fees,” “Audit-Related Fees” and “Tax 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 2023 were pre-approved by the Audit Committee.

 

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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 2023 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, the majority 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 37, and the tabular compensation disclosures and accompanying narrative discussion beginning on page 56. 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 2023 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 2023. 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 2023, we will consider our stockholders’ concerns, if any, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

The Company elected to hold annual advisory votes on compensation paid to our named executive officers following a 2018 advisory vote by our voting stockholders on the frequency of advisory votes on compensation. We are required to hold the next stockholder advisory vote on frequency of advisory votes on compensation at this Annual Meeting of stockholders in 2024. See “Proposal No. 4 - Frequency of Future Advisory Votes on Executive Compensation” for more information.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE, ON AN ADVISORY BASIS, “FOR” THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS IN 2023, AS DISCLOSED IN THIS PROXY STATEMENT, PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.

 

32    LOGO  - 2024 Proxy Statement


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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

   67    2017   

Chairman and Chief Executive Officer

Mitesh B. Thakkar

   45    2020   

President and Chief Financial Officer

John M. Rothka

   46    2017   

Chief Accounting Officer and Controller

Kurt R. Salvatori

   54    2017   

Chief Administrative Officer

Martha A. Wiegand

   53    2017   

General Counsel and Secretary

 

   

LOGO

  

James A. Brock

 

James A. Brock has served as our Chief Executive Officer since June 2017, previously served as our President from December 2017 to January 2023, and he has been a member of our Board since November 28, 2017 and was appointed our Chairman on March 27, 2024. 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 Chairman 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 an executive committee member of the board of directors of the National Mining Association. Mr. Brock also previously served on the board of directors of West Virginia Coal Association.

 

  LOGO  - 2024 Proxy Statement    33


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EXECUTIVE OFFICERS

 

   
LOGO   

Mitesh B. Thakkar

 

Mr. Thakkar has served as our President since January 19, 2023 and as our Chief Financial Officer since June 2020. He previously 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 Bachelor of Engineering (Mechanical) degree from the Maharaja Sayajirao University of Baroda and a Master of 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 has also 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 holds a Bachelor of Arts (Accounting) degree from Washington and Jefferson College and is also a certified public accountant.

 

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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 2016, 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 graduated from Cornell University with an A.B in Economics as a Cornell National Scholar. She graduated cum laude from Duquesne University School of Law in 2000. 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 and Strategy Committee since 2018, including as vice chair from 2020 to 2021 and chair in 2022 and 2023, and on the Board of Trustees of the Energy & Mineral Law Foundation since 2019 and on the board of the Quaker Valley Hockey Association since 2022. She is a past president of the Junior League of Pittsburgh and a former board member of Big Brothers Big Sisters of Greater Pittsburgh. She also served on the Committee of Unsecured Creditors in the Westmoreland Coal Company bankruptcy.

 

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EXECUTIVE COMPENSATION INFORMATION

 

 

 

Compensation Discussion and Analysis –

 Table of Contents

 

   

Our Named Executive Officers (NEOs)

 

  

 

37

 

       
   

Executive Summary

 

  

 

37

 

   
   

CEIX Executive Compensation Philosophy

 

  

 

38

 

   
   
   

CEIX Executive Compensation Practices

  

 

39

 

   
   
   

Compensation Process: Roles and Responsibilities

  

 

42

 

   
   
   

2023 Elements of Total Compensation

  

 

43

 

   
   

Detailed Review of 2023 Compensation Components

  

 



44

 


 

   
   
   

Base Salaries

     44      
   

2023 STIC

  

 

44

 

   
   

Bonus Targets

  

 

45

 

   
   

Company-wide Performance Measures

  

 

45

 

   
   

Individual Performance Measure

  

 

47

 

   
   

2023 STIC Payouts

  

 

48

 

   
   

2023 LTIC Award Design

  

 

49

 

   
   

Payout of Awards Granted in Prior Years

  

 

51

 

   
   

Looking Forward to 2024

  

 

52

 

   
   

Other Considerations Important to Our Compensation Program

  

 

53

 

   
   

Retirement Benefit Plans

  

 

53

 

   
   
   

Governance Policies

  

 

54

 

   
   

Stock Ownership Guidelines/Holding Requirements for NEOs

  

 

54

 

   
   

Perquisites

  

 

54

 

   
   

Tax, Accounting and Regulatory Considerations

  

 

54

 

   
 

 

 

Compensation Risk Assessment

  

 

55

 

 

 

 

 

 

Named Executive Officers  

 

LOGO

 

 

James A. Brock

 

Chief Executive Officer

 

   

LOGO

 

  Mitesh B. Thakkar
 

President and 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

 

 

 

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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 and a producer of low-vol metallurgical coal at the Itmann mine and preparation plant, 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 2023 with respect to our named executive officers (“NEOs”) listed below.

Our Named Executive Officers (NEOs)

 

Name

 

Title

 

 James A. Brock

 

Chief Executive Officer

 

 Mitesh B. Thakkar

 

President and 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

Compensation Philosophy and Overview

 

   

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.

Select 2023 Financial and Business Highlights

 

   

Strong 2023 financial and operating results: GAAP net income of $656 million; adjusted EBITDA* of $1,048 million; net cash provided by operating activities of $858 million; and free cash flow* of $687 million;

 

   

Strengthened the CEIX balance sheet by making net payments toward debt of approximately $189 million; and

 

   

73% of 2023 free cash flow* returned to shareholders via 5.5 million shares repurchased at a weighted average price of $76.91 per share and dividends for an aggregate $501 million from January 1, 2023 through January 31, 2024.

Summary of Key Compensation Considerations and Decisions in 2023

During 2023, the Compensation Committee engaged in important decisions and considerations with respect to executive compensation. When making its compensation decisions, the Compensation Committee considered that CEIX is in a unique industry where stock price and financial results are sometimes disconnected. For example, 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 each year since 2020. The Compensation Committee also reviewed the approximately 94.1% approval with respect to our 2023 say-on-pay vote, which followed our shareholder engagement and responses after our unfavorable 2022 say-on-pay results.

 

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This section highlights key aspects of our 2023 compensation considerations and decisions made by the Compensation Committee based on these factors and after consultation with its independent compensation consultant:

 

   

The Compensation Committee continued using a mix of performance-based and time-based restricted stock units in the long-term incentive compensation program.

 

   

The Compensation Committee changed the weighting of the long-term incentive program to provide for 75% of each NEO’s award to be stock-settled (up from 50% in 2022).

 

   

The Compensation Committee incorporated EBITDA targets into certain location-based performance goals for the short-term incentive program and added non-power generation revenue as a performance goal in the long-term incentive program.

 

   

The Compensation Committee increased base salaries for certain of our NEOs with a view toward internal pay equity and NEO retention.

Pay-for-Performance Emphasis

Our executive compensation program is focused on pay-for-performance. As a result, we link a significant portion of each NEO’s total compensation to the achievement of specified performance goals that we believe indicate both short- and long-term financial performance. The charts below illustrate how the majority of compensation that may be earned by our NEOs is tied to achievement of performance goals and/or fluctuates with the underlying value of our common stock (restricted stock units).

 

CEO

 

15.4% Base; 23.0% STIC; 61.6% LTIC

 

Other NEOs (in the aggregate)

 

29.8% Base; 22.9% STIC; 47.3% LTIC

 

LOGO

CEIX Executive Compensation Philosophy

Our commitment to strong corporate governance practices extends to the compensation plans, principles, programs and policies established by our Compensation Committee and our Board. 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 both short-term and long-term financial health of our Company.

 

 

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Our philosophy is founded on the following guiding principles:

 

   

Compensation targets and the mix of pay based on market practices

 

   

Actual compensation should align with results against performance objectives

 

   

Compensation should enable us to attract and retain top talent and reflect the value of the job in the marketplace

 

   

Incentives should promote pay-for-performance by resulting in 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

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 48-53, relating to our long-term compensation programs, and designing a specific retention structure for our CEO through amendments to his employment agreement.

CEIX Executive Compensation Practices

Our compensation programs, practices, and policies are reviewed and re-evaluated regularly and are subject to change from time to time in line with market best practices. Listed below are some of our more significant practices and policies that were in effect during fiscal year 2023, which are designed to drive performance and to align our executives’ interests with those of our stockholders.

 

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What We Do and What We Don’t Do.

 

 

LOGO

 

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2023 Compensation Policies.

As noted above, we maintain the following compensation policies to provide accountability to our Company and our stockholders.

 

LOGO

 

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Compensation Process: Roles and Responsibilities

Our Compensation Committee has a number of processes and collects information from a variety of sources to assist it in ensuring our executive compensation programs are in line with our compensation philosophy and achieve our objectives. As described in greater detail below, the Compensation Committee, our management team, and an independent compensation consultant are all engaged in these processes.

 

 

 

   
Our Management Team   

Our Compensation Committee may request 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 when present during these meetings or at other times. However, the Compensation Committee and the Board make all final decisions regarding executive compensation.

 

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 if 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 January 2024, 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 2023, CEIX paid Mercer $64,269 in connection with its work providing executive compensation consulting to the Compensation Committee.

 

Besides Mercer’s involvement with the Compensation Committee, Mercer 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 2023 was $6,096,650, consisting of $2,075,140 paid to Mercer for health and wealth consulting services and $3,957,241 paid to Mercer’s sister company, Marsh, for property/casualty insurance consulting and brokerage services. The Compensation Committee determined that these other services provided did not raise any conflicts of interest.

 

   
Peer Group Data   

The Compensation Committee selected the following 13 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.

Arch Resource Partners, L.P.

Alpha Metallurgical Resources, Inc.

Cleveland-Cliffs Inc.

Compass Minerals International, Inc.

Hallador Energy Company

 

  

 

Louisiana-Pacific Corporation

NACCO Industries, Inc.

Natural Resources Partners L.P.

Peabody Energy Corporation

Ramaco Resources, Inc.

SunCoke Energy, Inc.

Warrior Met Coal, Inc.

 

Compensation

Committee

  

As noted above, in making its determinations with respect to executive compensation, the committee is supported by CEIX’s management team (including the CEO, Chief Administrative Officer, and General Counsel) and Mercer, the committee’s independent compensation consultant. The committee also periodically reviews matters such as succession planning and business environment when making compensation decisions.

 

Decision Making Process

 

While the Compensation Committee meets with the CEO to discuss his own compensation package, ultimately, decisions regarding the CEO’s compensation are recommended by the Compensation Committee and approved by the Board in executive session without the CEO or any other executive officer present, solely based upon the Compensation Committee’s deliberations. Decisions regarding other NEOs who report directly to the CEO are also made by the Compensation Committee (or by the Board, in the case of equity grants, absent a delegation to the committee or CEO) after considering recommendations from the CEO, the Chief Administrative Officer and Mercer.

 

Establishment of Performance Measures

 

At the beginning of each year, our Compensation Committee establishes the Company-wide and any other performance measures on which our NEO’s short- and long-term incentive compensation is largely based. These measures are intended to reflect targets that encourage performance and align executive and stockholder interests.

 

Assessment of Company Performance

 

At the end of the performance period, the Compensation Committee reviews and certifies achievement of previously determined performance measures and considers whether any adjustments to the performance criteria and/or calculations are appropriate.

 

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2023 Elements of Total Compensation

In 2023, our NEOs were compensated through the following key elements of compensation.

 

   

Compensation Element

   Description    Purpose
   

Base Salary

   Fixed compensation that is reviewed annually and is based on performance, experience, responsibilities, skillset, and market value   

Provide a base level of compensation that corresponds to position and responsibilities

 

Attract, retain, reward and motivate qualified and experienced executives

   

Retention Bonus (CEO Only)

   At-risk compensation earned by the CEO based on continued service and, for 2023, the achievement of set performance goals    Promote stability among leadership and succession planning and continued reduction in company debt
   

2023 Short-Term Incentive Compensation (“STIC”)

  

At-risk compensation earned based on the achievement of identified financial and operational performance goals

 

80% of each NEO’s award is tied to company-wide performance and the remaining 20% is tied to individualized goals

   Incentivize executives to achieve annual goals that ultimately contribute to long-term company growth and stockholder returns
   

2023 Long-Term Incentive Compensation (“LTIC”)

  

At-risk compensation in the form of restricted stock units whose value fluctuates according to stockholder value

 

50% of the award vests based on continued service, with settlement in shares of CEIX stock

 

50% of the award vests based on achievement of pre-established performance goals, with settlement in 50% cash and 50% shares of CEIX stock

  

Incentivize executives to achieve goals that drive company performance over the long-term

 

Align executive and stockholder interests

 

Reward continuous service with the company to encourage executive retention

   

Severance and Change in Control Protections

   Cash severance, including post-termination benefits   

Provide market-competitive, post-employment compensation

 

Allow executives to focus on generating stockholder value if faced with a significant strategic event

   

Other Benefits

   Broad-based benefit plans provided to our employees (e.g., medical insurance), a qualified 401(k) retirement plan, and other personal benefits where appropriate    Provide a total compensation package that is market-competitive and provides retirement income security

 

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Detailed Review of 2023 Compensation Components

The following discussion outlines the targeted 2023 executive compensation program and what we paid our NEOs in 2023.

Base Salaries.

In January 2023, 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. Salvatori, Ms. Wiegand and Mr. Rothka, as described below, 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 equity considerations. Effective January 19, 2023, Mr. Thakkar was named President, while Mr. Brock retained the Chief Executive Officer title and role. In connection with this transition, Mr. Thakkar’s compensation was revised to align with comparable positions. With the agreement of Mr. Brock, his base salary remained the same as in 2022.

 

     
 Name 2022 Base Salary 2023 Base Salary
   

Mr. Brock

$1,000,000 $1,000,000
   

Mr. Thakkar

$485,000 $600,000
   

Ms. Wiegand

$450,000 $472,500
   

Mr. Salvatori

$368,500 $405,350
   

Mr. Rothka

$230,000 $253,000

2023 Short-Term Incentive Compensation (STIC).

The STIC is an annual incentive bonus program designed to align our executive officers’ goals with our performance targets for the current year and to encourage meaningful contributions to our future financial performance. Under the STIC, target bonus amounts, expressed as a percentage of base salary, are established for participants at the beginning of each year. Funding of the STIC bonus amounts is determined based on attainment of predetermined financial performance measures (weighted at 80%) along with an assessment of each participant’s individual performance (weighted at 20%).

For 2023, to emphasize retention of our key executives as well as other employees, the Compensation Committee once again approved interim quarterly goals and payouts for the financial performance measures but not for individual performance. At the end of each of the first, second, and third quarter, the Compensation Committee approves achievement against the quarterly financial performance measurement goals. Following the end of the fiscal year, the Compensation Committee reviews and certifies achievement against annual financial performance goals and determines individual performance results. After determining the annual payout amount based on both financial and individual performance, the Compensation Committee approves the payment of any additional amounts owed under the STIC in excess of amounts already received in the first, second, or third quarter.

 

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Bonus Targets.

Bonus targets are established based on job responsibilities and comparable market data. For the 2023 STIC award with a performance period beginning January 1, 2023 and ending December 31, 2023, our Compensation Committee established the following bonus targets:

 

   
 Name    2023 Target Bonus Opportunity
   

Mr. Brock

   150% of base salary
   

Mr. Thakkar

   100% of base salary
   

Ms. Wiegand

   75% of base salary
   

Mr. Salvatori

   70% of base salary
   

Mr. Rothka

   37% of base salary

Company-Wide Performance Measures.

The company-wide portion of 2023 STIC awards were based 30% on PAMC Production, 20% on PAMC Average Cash Cost of Coal Sold per Ton*, 10% on Itmann Mine Operating EBITDA*, 10% on Baltimore Terminal Operating EBITDA*, and 10% on Permit Effluent Exceedances. For the 2023 STIC, our Compensation Committee retained the Permit Effluent Exceedances performance measure; however, they also added more specific performance measures to ensure focus on a variety of operational goals. Our Compensation Committee removed Incentive Compensation Plan (ICP) Free Cash Flow* as a performance measure for the 2023 STIC program in response to shareholder feedback that it was a duplicative performance measure under the long-term incentive program. The Compensation Committee believes achievement of these performance measures will drive our business and, in turn, lead to increased stockholder value.

 

   

Performance Measure

   What it Measures    What it Does
   

PAMC Production

(weighted at 30%)

   Total coal production from the Pennsylvania Mining Complex   

  Focuses executives on maximizing the productive capability of the Pennsylvania Mining Complex

     

PAMC Average Cash Cost of Coal Sold per Ton* (weighted at 20%)

   Cost of coal sold, 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 and other costs not directly attributable to the production of coal.   

  Focuses executives on the effective management of our controllable costs

   

Itmann Mine Operating EBITDA* (weighted at 10%)

   Adjusted EBITDA*; plus general and administrative costs and other costs not directly attributable to operations   

  Rewards executives for the continued development of a pure-play metallurgical asset

 

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Performance Measure

   What it Measures    What it Does
   

Baltimore Terminal Operating EBITDA*

(weighted at 10%)

   Adjusted EBITDA*; plus general and administrative costs and other costs not directly attributable to operations   

  Rewards executives for the continued maximization of the throughput of the Company’s shipping terminal in order to continue to grow the Company’s export sales portfolio

   

Permit Effluent Exceedances (weighted at 10%)

   Number of instances of non-compliance with water discharge quality limitations prescribed by the Company’s National Pollution Discharge Elimination System permit requirements.   

  Promote and protect our Social License to Operate

The Compensation Committee reviewed and certified achievement of these annual company-wide performance measures based on threshold, target and maximum payouts, as follows:

 

Performance Measure    Annual
Threshold (50%)
   Annual Target
(100%)
   Annual
Maximum
(200%)
   Annual Actual
Performance
         

PAMC Production

   25.2M tons    26.4M tons    26.7M tons    26.1M tons
         

PAMC Average Cash Cost of Coal Sold per Ton*

   $36.12    $34.12    $32.12    $36.10
         

Itmann Mine Operating EBITDA*

   $15.8M    $48.2M    $79.7M    ($17.0M)
         

Baltimore Terminal Operating EBITDA*

   $59.0M    $62.0M    $67.0M    $84.9M
         

Permit Effluent Exceedances

   10    8    6    9

In January 2024, the Compensation Committee evaluated the Company’s actual performance against the 2023 STIC pre-established annual performance goals and approved a formulaic payout percentage of 63.4% with respect to these annual company-wide performance goals.

For interim quarterly payments in each of the first three quarters, the sub-goals were as follows:

 

Performance Measure 1st Qtr. Threshold
(50%)
1st Qtr. Target
(100%)
1st Qtr. Maximum
(200%)
1st Qtr. Actual
Performance
         

PAMC Production

6.8M tons 7.2M tons 7.3M tons 7.0M tons
         

PAMC Average Cash Cost of Coal Sold per Ton*

$34.91 $32.91 $30.91 $33.61
         

Itmann Mine Operating EBITDA*

$2.3M $7.1M $11.8M ($3.1M)
         

Baltimore Terminal Operating EBITDA*

$15.2M $16.0M $17.2M $21.4M
         

Permit Effluent Exceedances

3 2 1.5 3

 

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Performance Measure 2nd Qtr. Threshold
(50%)
2nd Qtr. Target
(100%)
2nd Qtr. Maximum
(200%)
2nd Qtr. Actual
Performance
   

PAMC Production

  6.5M tons   6.8M tons   6.9M tons   6.3M tons
   

PAMC Average Cash Cost of Coal Sold per Ton*

  $34.95   $32.95   $30.95   $36.33
   

Itmann Mine Operating EBITDA*

  $4.7M   $14.4M   $23.9M   ($6.9M)
   

Baltimore Terminal Operating EBITDA*

  $15.0M   $15.7M   $17.0M   $25.0M
   

Permit Effluent Exceedances

  3   2   1.5   4

Performance Measure 3rd Qtr. Threshold
(50%)
3rd Qtr. Target
(100%)
3rd Qtr. Maximum
(200%)
3rd Qtr. Actual
Performance
   

PAMC Production

  5.9M tons   6.2M tons   6.3M tons   6.1M tons
   

PAMC Average Cash Cost of Coal Sold per Ton*

  $37.68   $35.68   $33.68   $38.36
   

Itmann Mine Operating EBITDA*

  $4.6M   $13.9M   $23.1M   ($2.9M)
   

Baltimore Terminal Operating EBITDA*

  $12.1M   $12.8M   $14.0M   $16.3M
   

Permit Effluent Exceedances

  3   2   1.5   0

Individual Performance Measure

STIC 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 CEO (or for our CEO, the Compensation Committee) and approved by our Compensation Committee.

 

   

James A. Brock. As our CEO during 2023, Mr. Brock continued to lead the Company. Under his leadership, CEIX generated net cash provided by operating activities of $858 million and posted record financial results, such as generating record free cash flow* of $687 million. With these proceeds, the Company was able to further fortify its balance sheet by significantly reducing its long-term debt by $189 million, while at the same time returning 73% of 2023 free cash flow* to shareholders via share repurchases (5.5 million shares repurchased at a weighted average price of $76.91 per share) and in the form of dividends to shareholders in the aggregate amount of $501 million from January 1, 2023 through January 31, 2024. Additionally, Mr. Brock oversaw the efficient shift of repositioning the Company’s sales portfolio away from traditional power-generation markets and toward the growing demand from industrial and metallurgical customers in Asia, Africa and South America.

 

   

Mitesh B. Thakkar. As our President and Chief Financial Officer, Mr. Thakkar led CEIX’s Finance, Marketing, Strategy, and Environmental and Sustainability initiatives in 2023. Throughout 2023, Mr. Thakkar led several initiatives to move forward CEIX’s strategy of strengthening its balance sheet, improving liquidity, and diversifying its revenue mix. Mr. Thakkar and the finance team helped reduce the Company’s net debt by $189 million while expanding its access to capital. During 2023, the finance team expanded CEIX’s revolving credit facility from $260 million to $355 million by bringing in two new banks and additional commitments from existing banks. Mr. Thakkar and the marketing team also achieved a key strategic priority of achieving more than 50% of revenue from non-power generating coal sales by expanding into export industrial and steel-making coal markets including into three new countries. Also, during 2023, the marketing team achieved the highest revenue per ton for PAMC coal.

 

   

Martha A. Wiegand. As our General Counsel and Secretary, Ms. Wiegand served as the top legal adviser to the Company in 2023 and played a key role in counseling CEIX’s Board regarding various corporate governance matters and other board-level issues. Throughout 2023, Ms. Wiegand also served as a member of the Company’s Risk Management Committee and oversaw the Company’s legal, land, and internal audit functions. With a focus on compliance and continuous improvement in 2023, Ms. Wiegand and the CEIX team met with numerous stakeholders and interested parties, including Glass Lewis and ISS, to discuss

 

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mutual areas of interest. Ms. Wiegand and the legal team continued to provide timely advice to the CEO and the executive management team on critical legal and business matters, with an emphasis on risk mitigation and management. Ms. Wiegand additionally oversaw the review and adoption of a number of Company policies, guidelines and training in the areas of Foreign Corrupt Practices Act, clawbacks, insider trading and other relevant areas of law consistent with best practices in such areas.

 

   

Kurt R. Salvatori. As our Chief Administrative Officer, Mr. Salvatori oversees the Company’s human resources, government affairs, information technology, cybersecurity and public relations, along with overseeing the operation of the Company’s coal shipping terminal in Baltimore, Maryland. In 2023, the terminal posted record throughput of 19 million tons as part of the Company’s shift from traditional power markets to new export markets focused on industrial and metallurgical customers globally.

 

   

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 2023, Mr. Rothka led several strategic and synergistic integrations in various diversifying business endeavors.

2023 STIC Payouts

After determining the company-wide performance measure achievement level and applying the individual performance percentage to each NEO, the Compensation Committee approved the following total STIC payments to our NEOs for the 2023 fiscal year:

 

Name    2023 STIC Target
Aggregate Payout
Opportunity
   2023 STIC
Aggregate Award
Payout

Mr. Brock

     $  1,500,000      $  1,551,000

Mr. Thakkar

     $ 600,000      $ 608,400

Ms. Wiegand

     $ 354,375      $ 345,161

Mr. Salvatori

     $ 283,745      $ 282,043

Mr. Rothka

     $ 92,927      $ 88,838

*As described above, the NEOs received the 2023 STIC payments quarterly. The interim quarterly payments were as follows per quarter for each of the first, second, and third quarters of fiscal year 2023: $567,296 for Mr. Brock, $226,919 for Mr. Thakkar, $134,024 for Ms. Wiegand, $107,312 for Mr. Salvatori, and $35,144 for Mr. Rothka. The remainder of the aggregate award payout is attributable to the fourth quarter, which included the remaining company performance component as well as the 20% individual performance component attributable to the entire year.

Long-Term Incentive Compensation Program (LTIC)

Our LTIC aligns our NEOs’ interests with those of our stockholders by providing the opportunity to earn incentive compensation based on our Company’s long-term success. The Compensation Committee continues to believe that a mix between time-based awards and performance-based awards provides an appropriate balance between incentivizing our executives to continue their employment, which provides greater stability, and ensuring they are focused on long-term financial performance, which directly generates stockholder value.

Moreover, the Compensation Committee favors restricted stock units because the value of these awards is linked to our stock price, providing a significant degree of alignment between our executives’ and stockholders’ interests.

 

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2023 LTIC Award Design

The 2023 LTIC included two types of grants to our NEOs: stock-settled, time-based restricted stock units (RSUs) and performance-based restricted stock units (PSUs), granted as follows:

 

LOGO

The table below shows the amount of time-based RSUs and PSUs our Compensation Committee awarded our NEOs in 2023.

 

 Name Time-Based RSUs PSUs

Mr. Brock

32,025 32,026

Mr. Thakkar

9,607 9,608

Ms. Wiegand

6,245 6,246

Mr. Salvatori

4,868 4,868

Mr. Rothka

1,200 1,201

Time-Based RSUs

The time-based RSUs granted in 2023 generally vest in three, equal installments on February 7 in each of 2024, 2025, and 2026, subject to an executive’s continuous employment through the applicable vesting date. The Compensation Committee believes these time-based RSUs provide an important role in promoting retention of our executive officers.

PSUs

The PSUs vest ratably over a three-year period, subject to the executive’s continuous employment through the applicable vesting date and the Company’s achievement of pre-established performance goals. One-half of the total PSUs settle in stock and the remaining 50% settles in cash.

For purposes of the 2023 LTIC, the Compensation Committee, with input from Company management and the independent compensation consultant, reviewed the design and performance measures used for the LTIC program. After review, the Compensation Committee decided to retain the use of ICP Free Cash Flow per Share* and Scope 1 & 2 Greenhouse Gas (GHG) Reduction (tons emitted), adjusting the weighting to 60% and 10% respectively for 2023. The Compensation Committee determined to replace the Net Debt Level* performance measure used in 2022 under the performance-based restricted stock units with a revenue generation performance measure that relates to revenue generated outside of sales to coal-fired power plants, weighted at 30%. This change was intended to focus management on further de-risking the Company by further diversifying

 

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its revenues into non-power generation markets. After determining performance based on the goals outlined above, the Compensation Committee applies a total shareholder return (TSR) modifier of +/-20%.

 

   
Performance Measure    What it Measures    What it Does

ICP Free Cash Flow per Share*

(weighted at 60%)

   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   

 Rewards executives for the overall financial performance of the Company

Non-Power Revenue Generation

(weighted at 30%)

   Annual percentage of total revenue derived from sales to customers in all markets, excluding sales to coal-fired power plants   

 Encourages the de-risking of the company’s revenues by expanding the Company’s sales portfolio into industrial and metallurgical markets

Scope 1 & 2 GHG Reduction (tons emitted)

(weighted at 10%)

   Annual change in direct operating GHG emissions   

 Focuses on the achievement of stated sustainability goals in the form of GHG emissions reductions

Relative TSR

(+/- 20% modifier)

   TSR modifier is determined by measuring the relative TSR of the Company using the 10-day average closing stock price of the Company ending on the last day of the performance period as compared to the TSR for the S&P Oil and Gas Exploration and Production EFT (XOP) index   

 Adjusts executive LTIC payouts based on the relative return of Company stock versus peers in the energy industry

Payout of 1st Tranche of 2023 PSUs

The vesting of the PSUs is calculated annually based on pre-established, weighted goals. Our Compensation Committee 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. The table below summarizes the target performance goals for the first tranche of the 2023 PSUs as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance.

 

Performance Measure

Threshold

(50% Payout)

Target

(100% Payout)

Maximum

(200% Payout)

Actual
Performance

ICP Free Cash Flow per Share*

$16.97 $30.19 $35.18 $25.87

Non-Power Revenue Generation

43% 45% 48% 59%

Scope 1 & 2 GHG Reduction (tons emitted)

7,347,000 6,939,000 6,531,000 6,998,000

TSR Modifier

25th percentile

(-20%)

50th percentile

(0%)

75th percentile

(+20%)

64th percentile

 

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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

In January 2024, the Compensation Committee evaluated and certified our achievement against the above-described performance measures and determined that our NEOs earned the following payouts with respect to the first tranche of the 2023 PSUs at 132.9% of target performance. The units earned were settled in cash and the cash payout amount was determined based on $94.60, our closing stock price on January 31, 2024.

 

Name Units at Target Units Earned in
2023

Shares

Earned

Mr. Brock

  10,674 units   7,092 units   7,093

Mr. Thakkar

  3,202 units   2,128 units   2,128

Ms. Wiegand

  2,082 units   1,383 units   1,383

Mr. Salvatori

  1,622 units   1,078 units   1,078

Mr. Rothka

  400 units   266 units   266

Payout of Awards Granted in Prior Years

This was the second performance year for the 2022 LTIC program as well as the third and final year for the 2021 LTIC program. The tables below describe the payouts earned by our NEOs with respect to these awards granted in prior years.

Payout of 2nd Tranche of 2022 LTIC Program – PBCUs.

The table below summarizes the target performance goals for the second tranche of the 2022 performance-based cash-settled restricted stock units (PBCUs) as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance.

 

Performance Measure

Threshold

(50% Payout)

Target

(100% Payout)

Maximum

(200% Payout)

Actual
Performance

ICP Free Cash Flow per Share*

$14.78 $19.11 $20.94 $42.71

Net (Cash)/Debt Level*

$86.8M $(44.6M) $(95.1M) $(527.4M)

Scope 1 & 2 GHG Reduction (tons emitted)

7,347,000 6,939,000 6,531,000 6,998,000

TSR Modifier

25th percentile

(-20%)

50th percentile

(0%)

75th percentile

(+20%)

90th percentile

In January 2024, the Compensation Committee evaluated and certified our achievement against the above-described performance measures and determined that our NEOs earned the following payouts with respect to the second tranche of the 2022 PBCUs at 200% of target performance. The units earned were settled in cash and the cash payout amount was determined based on $94.60, our closing stock price on January 31, 2024.

 

Name    Units at Target      Units Earned in
2023
 

Mr. Brock

     24,438 units        48,876 units  

Mr. Thakkar

     4,444 units        8,888 units  

Ms. Wiegand

     4,539 units        9,078 units  

Mr. Salvatori

     2,814 units        5,628 units  

Mr. Rothka

     855 units        1,710 units  

 

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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

Payout of 3rd Tranche of 2021 LTIC Program—PBCUs.

The table below summarizes the target performance goals for the third tranche of the 2021 PBCUs as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance.

 

Performance Measure

Threshold

(50% Payout)

Target

(100% Payout)

Maximum

(200% Payout)

Actual
Performance

ICP Free Cash Flow per Share*

$8.29 $11.38 $14.05 $48.05

Net (Cash)/Debt Level*

$456.0M $347.4M $303.2M $(527.4M)

In January 2024, the Compensation Committee evaluated and certified our achievement against the above-described performance measures and determined that our NEOs earned the following payouts with respect to the third tranche of the 2021 PBCUs at 200% of target performance. The units earned were settled in cash and the cash payout was determined based on $9.87, the stock price identified at the time of grant.

 

     
Name    Units at Target      Units Earned in 2023  

Mr. Brock

     59,101 units        118,202 units  

Mr. Thakkar

     8,443 units        16,886 units  

Ms. Wiegand

     10,976 units        21,952 units  

Mr. Salvatori

     5,488 units        10,976 units  

Mr. Rothka

     2,110 units        4,220 units  

Payout of 3rd Tranche of 2021 LTIC Program—Market Share Units (MSUs).

The table below summarizes the target performance goals for the third tranche of the 2021 MSUs as well as the threshold (50% of target) and the maximum (200% of target) goals compared to actual performance.

 

Performance Measure

Threshold

(50% Payout)

Target

(100% Payout)

Maximum

(200% Payout)

Actual
Performance

Stock Price

$4.50 $9.00 $18.00 $100.57*

* Represents the average closing stock price of the Company’s common stock for the 10 business days of 2023 immediately preceding the last business day of the year.

In January 2024, the Compensation Committee evaluated and certified our achievement against the above-described performance goals and determined that our NEOs earned the following payouts with respect to the third tranche of the 2021 MSUs at 200% of target performance. The units earned paid out in cash and the cash payout amount was determined based on $94.60, our closing stock price on January 31, 2024.

 

Name    Units at Target      Units Earned in 2023  

Mr. Brock

     59,101 units        118,202 units  

Mr. Thakkar

     8,443 units        16,886 units  

Ms. Wiegand

     10,976 units        21,952 units  

Mr. Salvatori

     5,488 units        10,976 units  

Mr. Rothka

     2,110 units        4,220 units  

Looking Forward to 2024

For the 2024 STIC, our Compensation Committee retained the 2023 performance measures but adjusted the weighting to allow for an additional performance measure focused on overall environmental compliance.

 

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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

For the 2024 LTIC Program, the Compensation Committee determined to replace Non-Power Revenue Generation Growth with performance measures specific to Innovations revenue growth and capital expenditure management.

Other Considerations Important to Our Compensation Program

Severance and Change in Control Benefits for NEOs.

CEIX has severance and double trigger cash severance CIC agreements covering each of our 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 and was subsequently amended on February 6, 2023). 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 are 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 (“Investment 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, Roth, 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. The Company matches 100% of a participant’s contribution up to 6% of eligible compensation. The Plan also permits certain discretionary employer contributions ranging from 1% to 6% of eligible compensation.

 

   

Qualified Defined Benefit Plan (“Employee Retirement 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 NEOs accrue any future benefit under this plan.

 

   

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

 

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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

   

Non-Qualified Defined Contribution Restoration Plan (“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 $330,000 for 2023) 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 ($330,000 for 2023).

Governance Policies

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 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:

(i) 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; and (ii) 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 also amended the guidelines to allow the Compensation Committee to temporarily suspend the stock ownership guidelines during periods of extreme market volatility. As of the date of this Proxy Statement, all of our NEOs are in compliance with our stock ownership guidelines.

 

 Named Executive Officer

Ownership
Requirement

(As Multiple
of Base
Salary)

 

Chief Executive Officer

5x

President and Chief Financial Officer

2.5x

Chief Accounting Officer and Controller

2x

General Counsel and Secretary

2x

Chief Administrative Officer

2x

Perquisites.

We provide limited perquisites (described more fully in the footnotes to the Summary Compensation Table that appears on pages 56 and 57) which we believe are reasonable, competitive and consistent with our compensation program.

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 for federal income tax purposes. However, our Compensation Committee does not

 

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EXECUTIVE COMPENSATION INFORMATION | Compensation Discussion and Analysis

 

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.

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, 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, the CEIX policies in place to mitigate compensation-related risk include stock ownership guidelines, equity vesting periods, insider trading prohibitions, a clawback policy, caps on the amount of compensation that may be earned, and independent Compensation Committee oversight. In January 2024, the Compensation Committee determined that our plans and programs do not encourage unnecessary risk-taking and do not pose a potential 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 2023 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, Itmann Mine Operating EBITDA, Baltimore Terminal Operating EBITDA, Free Cash Flow, Average Cash Cost of Coal Sold per Ton, ICP Free Cash Flow, ICP Free Cash Flow per Share, and Net (Cash)/Debt Level to their most directly comparable GAAP financial measures.

Compensation Committee Report

The Compensation Committee (which consisted of Mr. Platt and Mr. Mills at the time of the review) reviewed and discussed the Compensation Discussion and Analysis section above with CEIX’s management and, based upon such review and discussion, 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, 2023. 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

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.

 

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Table of Contents

EXECUTIVE COMPENSATION INFORMATION | Summary Compensation Table

 

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 executive officers of CEIX serving at fiscal year-end 2023: Ms. Wiegand, General Counsel and Secretary; Mr. Salvatori, Chief Administrative Officer; and Mr. Rothka, Chief Accounting Officer and Controller.

 

Name and

Principal Position

   Year      Salary(1)      Bonus(2)     

Stock

Awards(3)

    

Non-Equity

Incentive

Compensation(4)

    

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings(5)

    

All Other

Compensation(6)

    

SEC

Total

 

James A. Brock

Chief Executive

Officer

     2023      $ 1,000,000      $ 1,000,000      $ 3,000,000      $ 8,012,309      $ 147,121      $ 35,235      $ 13,194,665  
     2022      $ 1,000,000      $ 1,000,000      $ 2,000,000      $ 5,898,172      $      $ 64,931      $ 9,963,103  
     2021      $ 997,077      $ 1,000,000      $ 1,750,000      $ 3,287,298      $ 26,152      $ 54,986      $ 7,115,513  

Mitesh B. Thakkar

President and Chief Financial Officer

     2023      $ 595,577             $ 900,000      $ 1,817,342      $ 67,940      $ 44,430      $ 3,425,289  
     2022      $ 483,365             $ 363,750      $ 1,069,912      $ 16,685      $ 49,600      $ 1,983,312  
     2021      $ 398,846             $ 250,000      $ 457,801      $ 32,766      $ 49,878      $ 1,189,291  

Martha A. Wiegand

General Counsel and

Secretary

     2023      $ 472,067             $ 585,074      $ 1,551,484      $ 57,478      $ 45,919      $ 2,712,022  
     2022      $ 449,519             $ 371,475      $ 1,152,140      $      $ 51,976      $ 2,025,110  
     2021      $ 424,615             $ 325,000      $ 652,584      $ 35,999      $ 47,800      $ 1,485,998  

Kurt R. Salvatori

Chief Administrative

Officer

     2023      $ 404,641             $ 456,019      $ 1,024,747      $ 120,016      $ 44,956      $ 2,050,379  
     2022      $ 367,856             $ 230,312      $ 754,038      $      $ 49,600      $ 1,401,806  
     2021      $ 334,461             $ 162,500      $ 376,074      $      $ 47,800      $ 920,835  

John M. Rothka

Chief Accounting

Officer and Controller

     2023      $ 252,558             $ 112,500      $ 317,400      $ 16,113      $ 39,661      $ 738,232  
     2022      $ 229,808             $ 70,000      $ 335,123      $      $ 40,576      $ 675,507  
     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 2023. In addition, these salary amounts are not annualized but represent the amounts actually earned and paid to each NEO during 2023.

 

(2)

The amount shown in this column for Mr. Brock represents a retention bonus, conditioned upon his continued employment through December 31, 2023 and achievement of set performance goals.

 

(3)

The 2023 amounts shown in this column represent the aggregate grant date fair value of the time-based restricted stock unit awards granted in 2023 and 50% of the PSUs granted in 2023 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, 2023. The fair value per share is equal to the closing price of our common stock on the NYSE on the date of grant.

 

(4)

The 2023 amounts shown in this column represent:

 

 

Cash payments made to the NEOs under the 2023 STIC of $1,551,000 for Mr. Brock, $608,400 for Mr. Thakkar, $345,161 for Ms. Wiegand, $282,043 for Mr. Salvatori, and $88,838 for Mr. Rothka;

 

 

Cash payments for (i) 50% of the first tranche of the PSUs granted in 2023 in the amount of $670,986 for Mr. Brock, $201,283 for Mr. Thakkar, $130,878 for Ms. Wiegand, $101,962 for Mr. Salvatori and $25,145 for Mr. Rothka; (ii) the second tranche of the PBCUs granted in 2022 in the amount of $4,623,670 for Mr. Brock, $840,994 for Mr. Thakkar, $858,779 for Ms. Wiegand, $532,409 for Mr. Salvatori and $161,766 for Mr. Rothka; and (iii) the third tranche of the PBCUs granted in 2021 in the amount of $1,166,654 for Mr. Brock, $166,665 for Mr. Thakkar, $216,666 for Ms. Wiegand, $108,333 for Mr. Salvatori and $41,651 for Mr. Rothka.

See the discussion on pages 44 through 52 in the “Compensation Discussion and Analysis” section for additional information regarding the 2023 plan design, 2023 performance and payouts authorized under the 2023 STIC, and 2023 performance and payouts under the LTIC.

 

(5)

Amounts in this column reflect the actuarial increase in the present value of each NEO’s benefit under the Employee Retirement Plan, Restoration Plan, SERP, and New Restoration Plan between December 31, 2022, and December 31, 2023. 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, 2023. These amounts represent accounting values and were not realized by our NEOs during 2023. A zero is shown for 2022 because the actual change in pension value was a decrease in the amount of $1,006,752 for Mr. Brock, $27,890 for Ms. Wiegand, $499,045 for Mr. Salvatori and $13,024 for Mr. Rothka. A zero is shown in 2021 for Mr. Salvatori due to a decrease in the pension value in the amount of $58,139. These decreases are attributable to the change in the interest rate partially offset by an increase in accrued benefits.

 

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EXECUTIVE COMPENSATION INFORMATION | Summary Compensation Table

 

(6)

The amounts shown in this column for 2023 are derived as follows:

 

 Category BROCK THAKKAR WIEGAND SALVATORI ROTHKA

CEIX 401(k) Plan Matching Contributions(a)

$ 19,800 $ 19,800  $ 19,800  $ 19,800  $ 15,154 

Vehicle Allowance or Company Car

$ 13,000 $ 13,000  $ 13,000  $ 13,000  $ 13,000 

Executive Health Physical

$ 1,885   —  $ 1,612    —    — 

Business and Country Club Dues

$ 550   —    —    —    — 

Spousal Travel

    —    —  $ 649    — 

Financial Planning

  $ 11,630  $ 11,507  $ 11,507  $ 11,507 

 

  (a)

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

Grants of Plan-Based Awards – 2023

The following table sets forth each grant made to an NEO in the 2023 fiscal year under plans established by CEIX.

 

                   

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards

   

 

   

Estimated Future Payouts

Under Equity Incentive

Plan Awards

   

All Other

Stock

Awards:
Number of

Shares of

Stock or

Units

   

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              
  PSU(2)     2/7/23       32,025     $  1,000,000     $ 2,000,000     $ 4,000,000              
    RSU(3)     2/7/23                                                                       32,026     $  2,000,000  
Mitesh B.   Annual STIC(1)       $ 300,000     $ 600,000     $ 1,200,000              
Thakkar   PSU(2)     2/7/23       9,607     $ 300,000     $ 600,000     $ 1,200,000              
    RSU(3)     2/7/23                                                                       9,608     $ 600,000  
Martha A.   Annual STIC(1)       $ 177,187     $ 354,375     $ 708,750              
Wiegand   PSU(2)     2/7/23       6,245     $ 195,024     $ 390,049     $ 780,098              
    RSU(3)     2/7/23                                                                       6,246     $ 390,049  
Kurt R.   Annual STIC(1)       $ 141,872     $ 283,745     $ 567,490              
Salvatori   PSU(2)     2/7/23       4,868     $ 152,006     $ 304,012     $ 608,024              
    RSU(3)     2/7/23                                                                       4,868     $ 304,013  
John M.   Annual STIC(1)       $ 46,463     $ 92,927     $ 185,854              
Rothka   PSU(2)     2/7/23       1,200     $ 37,500     $ 75,000     $ 150,000              
    RSU(3)     2/7/23                                                                       1,201     $ 75,000  

 

(1)

These awards were made pursuant to the 2023 STIC program, which is described in the “Compensation Discussion and Analysis” beginning on page 44.

 

(2)

These awards were made pursuant to the 2023 LTIC program, which is described in the “Compensation Discussion and Analysis” beginning on page 48. The numbers above reflect the threshold (50%), the target (100%) and the maximum (200%) performance levels for the PSUs, which settle 50% in cash and 50% in stock.

 

(3)

These awards were made pursuant to the 2023 LTIC program, which is described in the “Compensation Discussion and Analysis” beginning on page 48. The numbers above reflect the time-based RSUs.

 

(4)

The values set forth in this column reflect awards of RSUs (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.

 

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Table of Contents

EXECUTIVE COMPENSATION INFORMATION | CEO Employment Agreement

 

CEO Employment Agreement

CEIX entered into an employment agreement with Mr. Brock, our CEO, effective as of February 15, 2018, which was amended in February 2021, February 2022, and February 2023. 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 not later than sixty days prior to the end of the applicable term. Effective in 2023, Mr. Brock is no longer President of the Company but remains the CEO. The agreement set 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 agreement, as amended, Mr. Brock received a cash lump-sum retention payment of $1,000,000 for continuing his employment with us on each of December 31, 2021 and December 31, 2022. In addition, Mr. Brock received an additional $1,000,000 retention bonus for continuing his employment with the Company through December 31, 2023 and achieving set performance goals. In the event of Mr. Brock’s involuntary termination of employment absent Cause, death, or Permanent Disability (each as defined in his employment agreement) prior to December 31, 2023, he was entitled to accelerated 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 employee benefit plans. The severance amount due to 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 is considered fully vested in all then-outstanding and unvested time-based equity awards held by Mr. Brock as he continued 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.

 

58    LOGO  - 2024 Proxy Statement


Table of Contents

EXECUTIVE COMPENSATION INFORMATION | Outstanding Equity Awards at Fiscal Year-End for CEIX – 2023

 

Outstanding Equity Awards at Fiscal Year-End for CEIX – 2023

The following table sets forth unvested RSU, PSU, PBCU and MSU awards that have been awarded to our NEOs by CEIX and were outstanding as of December 31, 2023.

 

  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

  80,901 (2)  $ 8,132,978   45,789(3)   $ 4,603,168

Mitesh B. Thakkar

  18,496 (2)  $ 1,859,403   10,850(3)   $ 1,090,750