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
| TIME 8 a.m. Eastern Time | DATE April 30, 2024 | PLACE Solely via live webcast at www.virtualshareholdermeeting.com/CEIX2024 |
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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 | BoardRecommendation | Page |
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| 1 | Election of Directors | FOR EACHNOMINEE | 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 |
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 aone-year term ending at our annual meeting in 2025.
| Name | Age | Director Since | Occupation | Independent | Committee Memberships(2) |
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| Valli Perera | 66 | 2023 | Former Partner of Deloitte LLP | Yes | • AC • CC • NCG†† • HSE |
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| James A. Brock†(1) | 67 | 2017 | Chairman and Chief Executive Officer of CEIX | No | • HSE |
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| John T. Mills | 76 | 2017 | Former Chief Financial Officer of Marathon Oil Corporation; Lead Independent Director of CEIX | Yes | • AC†† • CC • HSE |
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| Joseph P. Platt | 76 | 2017 | General Partner of Thorn Partners LP | Yes | • CC†† • NCG • HSE |
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| Cassandra Pan | 65 | 2023 | Former President of Fenner Dunlop Americas | Yes | • AC • NCG • HSE†† |
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| AC | Audit Committee |
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| CC | Compensation Committee |
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| HSE | Health, Safety and Environmental Committee |
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| NCG | Nominating and Corporate Governance Committee |
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| † | Chairman of the Board |
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| †† | Committee Chair |
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| (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. |
| • | 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. |
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| 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. |
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| 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. |
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| 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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| 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. |
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| 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. |
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| 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. |
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| 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. |
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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.
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. · PageNo. |
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| ✓ 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 |
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 ourhigh-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.
LEARN MORE ABOUT OUR COMPANY
You can learn more about our company by visiting our website, www.consolenergy.com.
