Alpha Natural Resources’ employee package intended to help it retain scarce coal miners
- June 1, 2008
Historically, coal mining companies haven’t had the best reputation for employee relations, but Abingdon-based Alpha Natural Resources Inc., hopes to change that stereotype. In early May, executives from the nation’s leading supplier of metallurgical coal announced a three-year retention package of bonuses, incentives and perks for its 3,600 employees.
The offer includes: 25 shares of company stock for each employee (and extra dollars to cover the related taxes); a bonus of up to 12 percent of salary for each employee paid out over three years; an additional bonus of up to $6,000 over three years for volunteer members of mine rescue teams; elimination of any employee responsibility for premiums on health, dental and vision insurance; and a $30 per month gasoline allowance. The package in the first year will cost the company $13 million.
Thanks to rising demand for energy and steel in the U.S. and overseas, Alpha Natural Resources has enjoyed significant growth. Company revenues reached $1.87 billion last year, and its net income has increased fifty-fold since 2003. Alpha Natural Resources’ stock value surged 130 percent in 2007 and rose another 50 percent in the first four months of 2008.
“To us, the first order of business was that we wanted to share some of that success with our employees in the form of a thank you,” says Kevin Crutchfield, president of Alpha Natural Resources. “And we’ll keep looking for ways we can continue to show our appreciation.”
Self-interest was also at play in the gesture, Crutchfield admits. The company wants to foster an environment that will enable the company to not only retain skilled coal miners but recruit them as well.
The coal industry declined in the 1990s when coal prices fell 45 percent and the number of operating mines decreased by 60 percent. Many workers left the industry and never returned.
“It’s just very difficult if not impossible to find skilled coal miners,” Crutchfield explains, noting that recruiting can only be achieved by raiding other companies or training from the ground up. “We wanted to provide positive incentives to let people know that we appreciate them, because we think that people with good morale who feel appreciated are going to be better employees, more productive and stay with the company longer.”