FOR IMMEDIATE RELEASE
APRIL 26, 2024
UMWA and AFL-CIO Conclude Historic Proxy Contest at Warrior Met Coal, Inc.
Urging Corporate Governance Reform and Respect for Freedom of Association
The United Mine Workers of America (the “UMWA”) and the American Federation of Labor and Congress of Industrial Organizations (the “AFL-CIO”) concluded a historic proxy solicitation for the Warrior Met Coal, Inc. annual meeting of stockholders on April 25, 2024. The UMWA and AFL-CIO sought stockholder support for a package of good corporate governance stockholder proposals.
The proxy solicitation follows an unfair labor practice strike between April 2021 and February 2023 by Warrior Met’s unionized mineworkers. The UMWA and the AFL-CIO estimate that if Warrior Met had maintained its 2019 pre-COVID production levels between 2021 and 2023, the additional production could have been worth $1.3 billion in revenue.
“This strike, the longest in Alabama history, could have been avoided had Warrior Met negotiated in good faith to reach an agreement with the UMWA to pay competitive wages and benefits,” said UMWA International President Cecil E. Roberts. “We are concerned that Warrior Met’s management has been insulated from the costs of the strike to the company, its shareholders, and its unionized employees.”
The UMWA and AFL-CIO proxy solicitation for the annual meeting urged stockholders to adopt five proposals: Recommending that the Board of Directors adopt a “poison pill” bylaw provision; a “proxy access” bylaw provision; a “blank check” preferred stock amendment; a “golden parachute” severance agreement policy; and a third-party assessment of Warrior Met’s respect for workers’ rights.
Based on the certified vote totals provided by the Inspector of Election, a substantial percentage of voting stockholders (46%) supported the UMWA and AFL-CIO’s stockholder proposal on freedom of association and collective bargaining. This stockholder support for such a proposal is second only to a majority vote at the Starbucks Corporation in 2023.
Proxy advisors Institutional Shareholder Services and Glass Lewis both recommended a vote for this stockholder proposal. In June 2023, a National Labor Relations Board administrative law judge determined that Warrior Met had engaged in unfair labor practices by withholding requested information for contract negotiations.
“This is a win in our eyes. This means a near majority of the shareholders believe that Warrior Met should conduct a review of its human rights and collective bargaining practices,” said Roberts. “An NLRB administrative law judge has already determined that Warrior Met has engaged in unfair labor practices, so clearly the company has work to do in this area.”
The proxy access stockholder proposal was adopted by nearly all voting stockholders (99%) after Warrior Met’s Board of Directors recommended in favor of the proposal. A majority of voting stockholders (51%) also supported a stockholder proposal recommending stockholder approval of poison pills, a management entrenchment device that can insulate corporate executives from the risk of a hostile takeover.
A significant percentage of stockholders (22%) also voted in favor of requiring stockholder approval of the use of preferred stock for defensive purposes. The stockholder proposal requesting a vote on senior executive’s golden parachutes received 4% support after the Board of Directors responded to the proposal prior to the Annual Meeting by adopting new limits on Warrior Met’s senior executive severance benefits.
The UMWA’s and AFL-CIO’s proxy solicitation was hailed by outside observers for its innovative approach to holding Warrior Met’s management accountable. Global Proxy Watch called the proxy solicitation an “innovative tactic,” Activist Investor described the proxy solicitation as “a clever way to pursue shareholder proposals,” and the Corporate Counsel termed it a “shrewd use” of the SEC’s proxy rules.
“We will be watching how Warrior Met’s Board of Directors responds to these historic votes,” said Roberts. “In the UMWA, our motto is one day longer, one day stronger. Going forward, we will keep all our options on the table for holding the Board of Directors accountable.”
Warrior Met Coal is expected to release final vote results within four business days in a Form-8-K filing with the Securities and Exchange Commission.
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