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Tuesday, February 11, 2025

Piedmont Lithium pays executives $1.3M to avoid ‘golden parachute’ consequences

Belmont-based Piedmont Lithium paid out hundreds of thousands of dollars early to three executives to avoid dire consequences of the so-called “Golden Parachute Payments” in the Internal Revenue Code.

The payouts – $807,248 to CEO Keith Phillips, and $269,083 each to CFO Michael White and Chief Legal Officer Bruce Czachor – represent the acceleration of the payout of a portion of the 2024 annual cash bonuses that would have otherwise been paid in the first quarter of 2025, according to an SEC filing. Also, Piedmont accelerated vesting of 6,285 restricted stock units held each by Czachor and White that were otherwise scheduled to vest on Dec. 31.

The actions on Dec. 11 are related to the merger of Piedmont Lithium with Australian-based Sayona Mining, which the companies announced on Nov. 18. Only Phillips’ payment required board approval.

In connection with the transactions related to the merger, Piedmont executives could become “entitled to payments and benefits that could be subject to Section 280G of the Internal Revenue Code.” Section 280G is known as Golden Parachute Payments by the IRS. Those payments “potentially become non-deductible for tax purposes for the Company (Piedmont Lithium) and potentially cause such payments to be subject to an additional excise tax of 20% to the executive officers,” according to the filing.

Any additional bonus earned for the trio will be paid in the first quarter of 2025, according to the filings. Both Czachor and White reported they sold a fraction of the Piedmont Lithium stock each owns. Czachor sold 3,216 shares at $11.44, valued at $36,791. Czachor still owns 29,263 shares. White sold 2,474 shares at the same price, valued at $28,302. White still owns 28,635 shares. 

Piedmont and Sayona jointly own a lithium project in Quebec. Having a combined firm will create the largest North American lithium producer, the companies reported in November. The two companies say they remain committed to opening a lithium mine in northwest Gaston County, about 25 miles west of Charlotte.

In April, Piedmont disclosed that the state had approved it for a mining permit for the construction and operation of the proposed Gaston County mine. However, the company has not proceeded with its Gaston County plans because it still lacks a zoning change from the county’s Board of Commissioners. Piedmont submitted its application for a state permit to the N.C. Department of Environmental Quality’s Division of Energy, Mineral, and Land Resources on Aug. 30, 2021.

Piedmont Lithium has more than halved the number of its employees this year to cut costs. Piedmont Lithium reported it had 63 employees as of Dec. 31, 2023, all in the U.S. except for two people in Canada, according to its annual report. Piedmont reported its workforce was down into the “mid 20s,” according to information provided by the company Nov. 13.

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