Heath A. Lovell
HALLADOR ENERGYAbout Heath A. Lovell
Heath A. Lovell, age 50, is President of Hallador Power (since 2022) and President of Sunrise Coal (since June 2024). He has 25+ years in mining, with an MBA and a B.S. in Electrical Engineering from the University of Kentucky, and previously led development of River View Coal in 2009 with nine units and $270 million of initial capital investment . Company pay-versus-performance disclosures show compensation actually paid declined 83% from 2022 to 2023 while TSR decreased 12% and net income increased 147%, highlighting use of operational and financial metrics in incentive design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Alliance Coal, LLC | Vice President – Public Affairs | 2017–2022 | External affairs for a major U.S. coal producer |
| Alliance Coal (IL/IN/W. KY) | Vice President of Operations | 2006–2017 | Operational leadership across multi-state footprint |
| River View Coal, LLC | General Manager | 2009 (development year) | Led development of River View with nine units; $270M initial capex |
| Webster County Coal, LLC | General Manager | n/a | Mine operations leadership |
| Dodge Hill Mining, LLC | Vice President & Partner | pre-2006 | Executive and ownership role in mining venture |
External Roles
| Organization | Role | Years |
|---|---|---|
| Kentucky Coal Association | Chairman, Board of Directors | n/a |
| West Virginia Coal Association | Chairman, Board of Directors | n/a |
| Indiana Coal Association | Chairman, Board of Directors | n/a |
| Reliable Energy, Inc. | Board of Directors | n/a |
| American Coal Council | Board Member | n/a |
| National Coal Council | Appointed Member | n/a |
Fixed Compensation
Summary Compensation (reported)
| Metric | 2023 | 2024 |
|---|---|---|
| Salary ($) | $400,000 | $436,539 |
| Discretionary Bonus ($) | $120,000 | $110,000 |
| Non-Equity Incentive Plan ($) | $120,000 | $120,000 |
| Stock Awards ($) | — | $700,000 |
| All Other Compensation ($) | $13,200 (401k match) | $13,800 (401k match) |
| Total ($) | $653,200 | $1,380,339 |
Executive Officer Plan Settings (April 1, 2024 – March 31, 2026)
| Component | Amount |
|---|---|
| Annual Base Salary | $450,000 |
| Annual Target Bonus | $300,000 |
| Biennial RSU Grant Value | $700,000 |
Performance Compensation
Incentive Design and Targets (2024–2025 performance sub-period)
| Metric | Base Points | Threshold | Target | Maximum | Payout at Target ($) | Payout at Max ($) |
|---|---|---|---|---|---|---|
| Safety (Sunrise) – Severity vs. national avg. | 5 | 100.00% | 89.00% | 78.00% | $15,000 | $30,000 |
| Safety (Sunrise) – Violations per inspection day | 5 | 0.50 | 0.42 | 0.34 | $15,000 | $30,000 |
| Safety (Power) – Incident rate | 5 | 5.40% | 4.50% | 3.60% | $15,000 | $30,000 |
| Safety (Power) – Inspection rate | 5 | 1.00 | 1.25 | 1.50 | $15,000 | $30,000 |
| Adjusted EBITDA ($mm) | 60 | $34.30 | $49.00 | $63.70 | $180,000 | $360,000 |
| Discretionary | 20 | — | — | — | $60,000 | $120,000 |
2024 Actual Payouts and Results (paid April 2025)
- Sunrise severity measure: 84% vs national average → 200% of target payout .
- Sunrise violations per inspection day: below 0.34 (max) → 200% of target payout .
- Hallador Power safety goals: threshold achieved → bonus earned .
- Adjusted EBITDA: did not meet goal → no EBITDA payout .
- Discretionary: maximum payout awarded .
| Item | 2024 Outcome |
|---|---|
| Annual Target Bonus | $300,000 |
| Annual Bonus Paid (April 2025) | $230,000 |
2023 Actual Payouts under 2022 Executive Officer Plan
- Sunrise severity measure: 0.0% of national average → 200% of target payout .
- Sunrise violations per inspection day: below 0.34 (max) → 200% of target payout .
- Hallador Power safety thresholds: not achieved → no payout on those goals .
- Adjusted EBITDA: exceeded maximum → 200% of target payout .
- Discretionary: maximum payout awarded .
| Item | 2023 Outcome |
|---|---|
| Annual Target Bonus | $300,000 |
| Annual Bonus Paid | $240,000 |
2025 Target Reset (risk control amid restructuring)
| Metric | Base Points | Threshold | Target | Maximum |
|---|---|---|---|---|
| Adjusted EBITDA ($mm) – reset Mar 2025 | 60 | $25.60 | $32.00 | $38.40 |
The Compensation Committee reset 2025 EBITDA targets due to weak power prices and Sunrise Coal restructuring (including idling certain mines) .
Equity Ownership & Alignment
Beneficial Ownership
| Date (Record) | Shares Beneficially Owned | Percent of Outstanding |
|---|---|---|
| April 10, 2024 | 68,032 | Less than 1% (“**”) |
| April 9, 2025 | 129,952 | Less than 1% (“**”) |
Outstanding Unvested RSUs and Vesting
| As of | Grant Date | Unvested RSUs | Market Value | Vesting Terms |
|---|---|---|---|---|
| 12/31/2023 | 11/11/2022 | 115,942 | $1,024,927 (at $8.84/sh) | Vest ratably on Mar 31, 2024 and Mar 31, 2025 |
| 12/31/2024 | 11/11/2022 | 57,971 | $663,768 (at $11.45/sh) | Vests on Mar 31, 2025 |
| 12/31/2024 | 9/6/2024 | 122,592 | $1,403,678 (at $11.45/sh) | Vests ratably annually over 3 years beginning Mar 31, 2025 |
- RSU plan pays one share per RSU upon vesting; accelerated vesting occurs if awards are not assumed in a change-in-control or upon certain terminations; awards are subject to the Company’s clawback policy .
Equity Plan Capacity (context)
| As of | Unvested RSUs Outstanding | Shares Available for Future Grants |
|---|---|---|
| 12/31/2023 | 858,363 | 415,459 |
| 12/31/2024 | 1,034,486 | 54,084 (pre-proposal) |
- Second Amended & Restated RSU Plan proposed to add 2,000,000 shares and extend term to May 29, 2035 .
Hedging/Pledging and Ownership Guidelines
- Anti-hedging and anti-pledging policy; Audit Committee has granted no pledging exemptions .
- No formal stock ownership guidelines for NEOs; equity alignment occurs via RSU vesting and direct holdings .
- Company does not currently grant stock options .
Employment Terms
Severance and Change-in-Control Economics (Lovell)
| Scenario | Cash Severance | Additional Cash | RSU Treatment |
|---|---|---|---|
| Termination by Company without cause or resign for good reason | 18 months base salary + prior-year annual bonus; estimated ~$855,000 if as of Dec 31, 2024 | — | Accelerated vesting upon termination without cause or good reason resignation |
| Resignation without good reason | 9 months of total compensation (salary + prior-year bonus); estimated ~$427,500 if as of Dec 31, 2024 | — | Not specified beyond standard plan terms |
| Change in Control (retention) – remains employed through closing | Lump-sum retention payment $787,500 | Pro-rated prior-year bonus for service in the closing year | If awards are not assumed/continued, immediate vesting at closing; otherwise plan may provide accelerated vesting; issuance at closing |
| Change in Control – not engaged to work for acquirer | Lump-sum retention payment $900,000 | Pro-rated prior-year bonus for service in the closing year | As above |
- If either change-in-control or qualifying termination occurred on Dec 31, 2024, estimated accelerated RSU values realizable for Lovell: $2,067,446 (unvested RSUs × $11.45/sh) .
- Retention payments may be conditioned on agreeing to work for acquirer for up to 3 months with pay protections and an additional retention payment equal to 25% of the most recent performance bonus .
Performance & Track Record
- Led the 2009 development of River View Coal (nine operating units; $270M initial capital), demonstrating large-project execution capability .
- 2025 financial target reset reflects proactive response to market weakness and operational restructuring (Sunrise mine idlings), signaling realistic goal-setting amid cyclical power pricing pressure .
Board Governance (Compensation Committee)
| Director | Role |
|---|---|
| Charles R. Wesley IV | Chair, Compensation Committee |
| David C. Hardie | Member, Compensation Committee |
| David J. Lubar | Member, Compensation Committee |
Equity Ownership & Alignment – Beneficial Owners (context)
- Company’s largest holder Lubar & Co controls 12.69% (5,452,019 shares) as of April 9, 2025; executives and directors as a group hold 23.73% (10,200,353 shares), indicating high insider alignment .
Investment Implications
- Strong safety metrics drove maximum payouts in 2023 and 2024 while EBITDA goals fluctuated; 2025 EBITDA target reset lower (from $49.0M target to $32.0M), reducing difficulty and potentially increasing near-term bonus certainty if market conditions stabilize .
- Alignment is primarily via time-based RSUs with scheduled vesting beginning March 31, 2025 and anti-hedging/anti-pledging restrictions; no stock options, and a formal clawback policy is in place, limiting misalignment and hedging-related risk .
- Retention risk is mitigated by robust severance (18 months salary + prior-year bonus) and meaningful change-in-control retention payments ($787,500–$900,000), plus accelerated RSU vesting on CIC/qualifying termination, which secures continuity but elevates CIC cash obligations and potential dilution via RSU issuance .
- Ownership is <1% individually but has risen from 68,032 to 129,952 shares (2024→2025), with significant unvested RSUs ($1.404M market value at YE 2024), reinforcing skin-in-the-game and creating predictable vest events that can affect insider Form 4 flow and settlement around late March annually .