Feds object to bankrupt coal company’s $11.9M in executive bonuses

The federal government is formally objecting to a bankrupt coal company’s plan to pay its executives bonuses worth up to $11.9 million. 

The Justice Department’s U.S. Trustee division filed an objection to Alpha Natural Resources’s executive bonus plan on Monday, the Casper Star-Tribune reports, saying the company couldn’t afford the bonuses while suffering severe financial problems and cutting employee benefits. 

{mosads}“According to Alpha, these executives need these bonuses as an incentive to do the very jobs they were hired to do, that they are already highly compensated for with generous salaries, and which their fiduciary duties compel them to do,” the agency wrote in its filing. 

“Such bonuses cannot be justified under the facts and circumstances of this case.”

Alpha filed for bankruptcy protection in August, looking to cut its $4.2 billion debt load.

The company initially looked to pay 17 executives up to $14.8 million in bonuses in 2016 but revised that down to $11.9 million for 15 executives after negotiations with creditors.

In a bankruptcy court filing of its own, Alpha said the bonuses were important for holding on to executive officials during bankruptcy proceedings. The bonuses are doled out based on a series of performance benchmarks, the Star-Tribune reported, including cutting costs and the company’s cash position. 

The U.S. Trustee program, which oversees bankruptcy cases in federal court, objected to another coal company’s bonus plan last year, but a judge ruled against the agency in that case. 

The United Mine Workers of America also objected to Alpha’s bonuses plan, calling it a “golden parachute” for management.