Walter J. Scheller, III
WARRIOR MET COALAbout Walter J. Scheller, III
Walter J. “Walt” Scheller, III is CEO and Director of Warrior Met Coal (HCC) since 2016; age 64; tenure on the Board is 9 years . Education: B.S. Mining Engineering (West Virginia University), J.D. (Duquesne University), MBA (University of Pittsburgh) . Under his leadership, 2024 performance included net income of $250.6M and Adjusted EBITDA of $447.9M, with annual incentives paid at ~180% of target and PSUs at ~190% based on operational and safety metrics . In 2024, Warrior’s TSR was approximately -9.69% versus peer median -29.72%, reflecting relative outperformance despite price pressure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Warrior Met Coal | CEO and Director | 2016–present | Led execution on Blue Creek development; operational efficiency focus; labor and HR oversight |
| Walter Energy, Inc. | CEO; President & COO, Jim Walter Resources subsidiary | CEO 2011–2016; President & COO 2010–2011 | Steered metallurgical coal operations; transitioned assets that became Warrior’s predecessor |
| Peabody Energy Corporation | SVP, Strategic Operations | 2006–2010 | Strategy and operations leadership in coal |
| CONSOL Energy Inc. & affiliates | VP, Operations and other exec roles | 1984–2006 | Senior operational leadership in coal and energy |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Walter Energy, Inc. | Director | 2011–2016 | Metallurgical coal producer |
| Other current public company boards | — | — | None (matrix shows 0) |
Fixed Compensation
| Component | FY 2024 | Notes |
|---|---|---|
| Base Salary (approved, effective 3/1/2024) | $900,000 | 7.7% increase YoY to align with peer medians and retention needs |
| Salary Paid (SCT) | $887,939 | Reflects actual 2024 salary paid |
| Perquisites (SCT “All Other”) | $350,396 total; includes $18,000 car allowance and dividends on vested RSUs | No tax gross-ups; limited perqs policy |
| 401(k) Company Contribution | $17,250 | All executives eligible; immediate vesting |
Performance Compensation
Annual Cash Incentive (FY 2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout Contribution |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 20% | $386,986,300 | $442,270,100 | $497,553,800 | $491,732,700 | 37.89% |
| Capital Expenditures (certain capex) | 20% | $119,857,600 | $113,864,700 | $107,871,800 | $106,943,600 | 40.00% |
| Metric Tons of Production | 20% | 6,556,000 | 6,724,100 | 7,060,400 | 7,481,800 | 40.00% |
| Cash Cost per Metric Ton | 20% | Confidential | Confidential | Confidential | ~11% better than target | 40.00% |
| Safety (TRIR) | 20% | 4.39 | 1.54 | 1.46 | 1.53 | 21.66% |
| Total Payout | — | 50% | 100% | 200% | — | 179.55% |
| CEO Actual Annual Bonus Paid | — | — | — | — | — | $1,992,867 |
Notes:
- Cash cost per metric ton target levels are confidential to avoid competitive harm; the plan uses mine-weighted targets and straight-line interpolation .
Long-Term Equity Incentives (RSUs)
| Grant Date | Type | Target Shares | Vest/Earn Schedule | 2024 Earned | Fair Value / Market Value |
|---|---|---|---|---|---|
| 2/8/2024 | Time-based RSUs | 11,923 | 1/3 ratable on each of first 3 anniversaries | — | Grant-date fair value $720,030 |
| 2/8/2024 | Performance-based RSUs | 15,896 | 1/3 eligible each of 2024–2026; 0–200% payout | 30,274 | Grant-date fair value $1,037,850; issued 2/10/2025, market value included in total |
| 2/8/2023 | Performance-based RSUs | 23,824 | As above | 45,373 | — |
| 2/17/2022 | Performance-based RSUs | 27,518 | As above | 52,408 | — |
| 2024 Stock Vested (all RSUs) | — | — | — | 149,221 shares | $8,183,155 value realized |
Performance metrics for PSUs and 2024 outcomes:
- Longwall feet of advance (25%): ~12% > target; 50.00% payout contribution
- Continuous miner feet of advance (25%): ~6% > target; 40.45% payout contribution
- Cash cost per metric ton (25%): ~13% better than target; 50.00% payout contribution
- TSR vs peer group (25%): Company -9.69% vs peer median -29.72%; 50.00% payout contribution
2024 Total Compensation (SCT)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 887,939 | 4,677,448 | 1,992,867 | 350,396 | 7,908,650 |
| 2023 | 829,492 | 3,753,490 | 1,762,671 | 322,142 | 6,667,795 |
| 2022 | 781,149 | 3,453,483 | 1,952,873 | 321,271 | 6,508,776 |
Blue Creek Transformational Retention/Incentive Award (one-time; granted April 2023):
- CEO eligibility up to 130% of $4.0M max, with thresholds starting at $1.0M; metrics: on-time project completion (25%), capital expenditures (25%), production tonnes (50%); award cancelled if Blue Creek doesn’t commence production by April 25, 2028; double-trigger CoC provision for CEO .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 413,149 shares (CEO) |
| Shares Outstanding (Record Date) | 52,559,285 |
| Ownership as % of Outstanding | ~0.79% (computed from cited figures) |
| Unvested Time-based RSUs | 6,880 (2022 grant); 11,912 (2023); 11,923 (2024) |
| Unearned Performance-based RSUs (at target) | 23,824 (2023 grant); 31,794 (2024 grant) |
| 2024 RSUs Vested/Earned | 149,221 shares; $8,183,155 value realized |
| Hedging/Pledging | Prohibited; none of directors/executives have pledged company stock |
| Stock Ownership Guidelines | CEO: 5x base salary; retain net shares until compliant; 5-year compliance window |
Insider trading plans:
- No new or terminated Rule 10b5-1 trading arrangements by directors or officers in Q3 2025 (Item 408 disclosure) .
Employment Terms
| Provision | CEO Terms |
|---|---|
| Contract Term | Indefinite; employment agreement at hire; minimum base salary; annual bonus opportunity |
| Severance (No Cause / Good Reason) | 1x base salary paid over 1 year; pro-rated bonus if termination after Q3; vesting of awards within 30 days of scheduled vest date |
| Change-in-Control Severance | 2x base salary (lump sum) for CEO; double trigger (must have qualifying termination within 12 months) |
| Non-Compete | 12 months post-termination |
| Non-Solicit | 24 months post-termination |
| Clawbacks | Company Incentive Recoupment Policy; SEC/NYSE-compliant Dodd-Frank clawback adopted Oct 2023; applies to erroneously awarded incentive comp over 3-year lookback; Board can also recoup after misconduct |
| Equity Award Repricing | Prohibited under 2017 Equity Plan |
| Options | Company does not grant stock options as a regular practice; none exercised in 2024 |
Potential payments table (as of 12/31/2024 scenario):
- CEO: Change in Control equity acceleration value $12,058,367; CIC termination total $17,858,367 (includes 2x salary cash) .
Board Governance
- Board Service: Director since 2016; member of Sustainability, Environmental, Health and Safety (SEHS) Committee .
- Independence: CEO is not independent; Board policy separates Chair and CEO; independent Chair since 2023 .
- Committee Independence: Audit, Compensation, Nominating & Corporate Governance are 100% independent .
- Meeting Attendance: In 2024, none of the directors attended fewer than 75% of Board and committee meetings; all directors attended the 2024 Annual Meeting .
Director Compensation
- CEO receives no additional compensation for Director service; non-employee director compensation includes cash retainers and RSUs; CEO excluded from director comp table .
Performance & Track Record
- 2024 production and sales volumes increased 8% and 6% respectively; cash from operations $367.4M; capex $488.3M with $350.5M invested in Blue Creek .
- 2024 TRIR safety rate 1.53 vs U.S. underground coal mines 4.36 (65% lower) .
- Blue Creek milestone: Commenced longwall operations in October 2025, eight months ahead of schedule and on budget; raised FY guidance; strategic federal lease win (58M short tons) extends mine life potential (management commentary) .
Compensation Committee Analysis
- 2024 say-on-pay support: ~66% for NEO pay; Board expanded outreach and committed to double-trigger vesting on future equity awards and no additional off-cycle awards during Transformational Award vesting period .
- Peer Group: Includes Arch, CONSOL, Alpha Met, Peabody, and other metals/mining/industrial peers; updated in 2024 to add ATI and Carpenter Technology, remove Haynes International .
Related Party & Risk Indicators
- Related party transactions: None above $120,000 since Jan 1, 2024 beyond compensation .
- Hedging/pledging prohibited; clawbacks in place; no option repricing .
- Labor relations: 2021–2023 UMWA strike history noted in stockholder proposal; Board commissioned third-party human rights assessment (to be disclosed in 2025 CSR) .
Financial Context for Pay-for-Performance
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 1,707,579,000 | 1,647,992,000 | 1,499,980,000 |
| EBITDA ($) | 940,158,000* | 681,228,000* | 414,655,000* |
| Net Income ($) | 641,298,000 | 478,629,000 | 250,603,000 |
- Values retrieved from S&P Global.
Investment Implications
- Strong alignment: High at-risk mix (≈84% of CEO target comp), rigorous operational/safety metrics, double-trigger CIC protections, and robust clawbacks reduce agency risk .
- Retention dynamics: 2023 Transformational Award retains leadership through Blue Creek completion with forfeiture risk if milestones missed; creates potential future cash outflow upon achievement; investors should monitor project progress and TSR modifier effects .
- Insider supply considerations: Significant RSU vesting (149,221 shares in 2024); no options; hedging/pledging prohibited; recent period shows no new 10b5-1 adoptions, reducing mechanical selling signals in Q3 2025 .
- Performance-risk balance: 2024 annual and PSU payouts were elevated due to outperformance on production, cost, and safety amidst weaker price environment, suggesting pay is responsive to operating execution rather than commodity price beta .