Gregory Boyce Retiring as Peabody CEO — How’d He Do?
by Joe Smyth
January 27, 2015
Boyce leaves behind a record of environmental destruction, injustice to communities and workers, laughably incorrect predictions, and dismal results for Peabody investors - all while pocketing tens of millions of dollars.
© Richard Clement / Greenpeace
Last week Peabody Energy, the largest private coal mining company in the world, announced that its CEO Gregory Boyce would be stepping down in May, replaced by Glenn Kellow. Boyce leaves behind a record of environmental destruction, injustice to communities and workers, laughably incorrect predictions, and dismal results for Peabody investors – all while pocketing tens of millions of dollars. As Rolling Stone put it, There’s no better example of how capitalism profits from overheating the planet than Boyce.
Lets look at a few of the highlights of Greg Boyces leadership at Peabody.
In 2009, Newsweeks green rankings named Peabody the number one “worst of the worst” polluting company. If that bothered him at all, he could probably find comfort in a substantial raise – Boyce took home $11.4 million that year, up from his first three years as CEO: Boyce received total compensation of $7.5 million in 2008, $6.5 million in 2007 and $3.7 million in 2006, Bloomberg reported.
In 2010, Boyce testified before the House Select Committee on Energy Independence and Global Warming, with his usual bluster: We have hundreds of billions of tons of coal in the U.S., trillions of tons in the world, we will use it all. Boyce then proceeded to dodge questions from then-congressman Ed Markey about climate change – perhaps not surprising when scientists tell us that the vast majority of coal reserves must never be burned, including 90% of US coal. The real action came when youth climate activists interrupted Boyce to make clear that coal has no role in our clean energy future. That year, Boyce took home $9.6 million.
Youth climate activists interrupt Peabody CEO Gregory Boyce during a 2010 Congressional hearing.
In 2011, Boyce confidently announced that Peabody would soon be exporting tens of millions of tons of coal to Asia through the proposed Gateway Pacific coal export terminal in Washington State. With global coal prices at record highs, Boyce had proclaimed I believe we are in the early stages of a long-term supercycle for coal – but in reality, those record prices were the peak of a bubble, as the Sightline Institute documented. Boyce probably also failed to consider the broad opposition from communities, tribes, and public officials in the Pacific Northwest to the coal industrys export plans.
In the second half of 2011, things started looking grim for Peabody investors as the companys share price started to fall precipitously. By the end of the year, the companys share price had lost nearly half its value, dropping 48% from where it had been in January 2011. Nevertheless, Boyce made even more that year – $10.2 million.
In 2012, Peabody was able to expand its North Antelope Rochelle mine in Wyoming, already the largest coal mine in the world, by adding the North Porcupine and South Porcupine tracts, taking advantage of the Interior Departments corrupt coal leasing program and paying just over $1 a ton. That deal unlocked over a gigaton of carbon pollution and cheated taxpayers out of an estimated $1.2 billion – meanwhile, Boyces compensation totaled $9.5 million in 2012.
In 2013, Peabody faced massive protests at its St. Louis headquarters from thousands of its own former workers, because of the companys role in spinning off Appalachian coal mines – along with promises to take care of union coal miners retirement and healthcare – to Patriot Coal, which soon declared bankruptcy. United Mine Workers President Cecil Roberts explained in a joint oped: Patriot Coals bankruptcy is different. It appears to be part of a cynical plot by Peabody and Archa scheme choreographed to maximize profits at the expense of their own workers. While retired Peabody coal miners were cheated out of their healthcare and retirement benefits, Boyce took home $10.8 million in 2013.
In 2014, Boyce launched an effort to rebrand coal called Advanced Energy for Life – or as David Roberts put it: Coal giant exploits the global poor to save its own hide. The effort is noteworthy for its dishonesty, even for a fossil fuel PR campaign: the UK Ad Council blocked Peabody from using a misleading ad as part of the campaign, and when (soon-to-be CEO) Glenn Kellow claimed the campaign had attracted support from nearly half a million people, observers quickly noticed that the company had likely just bought a bunch of Facebook likes. Its not too surprising the campaign hasnt attracted real support, since it is blatantly just about trying to prop up coal – while actual efforts to address global energy poverty focus on renewable energy, the Australia Institute notes: Peabodys only contribution to energy poverty is maintaining a website and social media page which promotes coal as the solution to the problem.
Most telling is that Wall Street seemed increasingly skeptical of Boyces hype about the prospects for the company and the coal industry. Goldman Sachs downgraded Peabody to sell and by September, the value of the company had shrunk so much that it was removed from the S&P 500. Peabody ended 2014 with a share price of only $7.74, an extraordinary 88% drop since January 2011. How did this affect Boyces compensation for 2014? Well, its too soon to say for sure, since the company hasnt yet filed the paperwork with the Securities and Exchange Commission that will make that public. But based on the history, Id guess that Boyce got many more millions of dollars, even as investors in the company were left with dwindling value.
And regardless of his 2014 compensation, Boyce will walk away with tens of millions of dollars – in case you werent keeping track, his compensation from 2006 to 2013 totaled $57.8 million.
What will 2015 hold for Peabody Energy, Gregory Boyce, and its new CEO Glenn Kellow? On Friday, Standard & Poors rating service downgraded Peabody to negative, based on our assumption that coal prices will remain depressed for at least another year. And as the company posted its results for 2014, it showed losses of hundreds of millions of dollars, and announced more bad news for investors by cutting its dividend to a token amount. Peabody’s share pricefellto new lows – by now they have fallen 90% since the beginning of 2011.
Boyce will no doubt spend his last months as CEO of Peabody trying to keep alive his vision of a future in which all the worlds coal reserves are burned – Coal always wins out he insists, in an effort to discourage the growing divestment movement. Does anyone still believe him?