Our mission is to create superior value for

shareholders as the leading global supplier

of coal, which enables economic prosperity

and a better quality of life.

Our Values

Peabody Plaza

701 Market Street

St. Louis, Missouri 63101

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 10, 2018

Peabody Energy Corporation (the “company”) will hold its 2018 Annual Meeting of Stockholders (the “2018 Annual Meeting”) at the Sheraton Clayton Plaza Hotel, 7730 Bonhomme Ave., Clayton, MO 63105 on Thursday, May 10, 2018, at 10:00 a.m., Central time, to:

The foregoing items of business are more fully described in the proxy statement accompanying this notice. The board of directors has fixed the close of business on March 19, 2018 as the record date for determining stockholders of the company entitled to receive notice of and vote at the 2018 Annual Meeting and any adjournment or postponement thereof.

WHETHER OR NOT YOU EXPECT TO ATTEND THE 2018 ANNUAL MEETING, WE URGE YOU TO VOTE YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR OVER THE INTERNET, AS PROVIDED IN THE ENCLOSED MATERIALS. IF YOU REQUESTED A PROXY CARD BY MAIL, YOU MAY SIGN, DATE AND MAIL THE PROXY CARD IN THE ENVELOPE PROVIDED.

By Order of the Board of Directors,

A. Verona Dorch

Executive Vice President, Chief Legal Officer, Government Affairs and Corporate Secretary

March 28, 2018

Dear Fellow Stockholder:

It is my pleasure to invite you to attend our annual meeting of stockholders on Thursday, May 10 in St. Louis. This will be our first annual meeting following a year of significant change and accomplishment for Peabody.

We believe that stockholders in BTU benefited in multiple ways following the company’s emergence from restructuring in April 2017. The share price increased 79 percent from its modified plan value, 2018 deleveraging targets were achieved a year ahead of schedule, the ongoing share buyback program continues to be implemented, and the board authorized a dividend program early this year. These benefits accompany Peabody’s multiple operational and financial achievements that are outlined in our annual report and other communications.

The completed restructuring process was necessary given the unparalleled issues and extended downturn for the coal industry. At the same time, we recognize this action created difficult challenges for many of our stakeholders. We believe that the substantial accomplishments since the company emerged are tangible signs of the commitment that management and the new board have toward creating value for the long term for our stockholders.

At Peabody, we also believe that how we behave is just as important as what we do. Peabody has been frequently recognized for our environmental, social and governance practices, and we invite you to further explore our approach through our Corporate and Social Responsibility Report, our Statement on Energy and Climate Change, our performance in safety and sustainability and the other elements around what we call “Coal Done Right.”

As Peabody relisted in 2017, we did so with a focus on strong governance and oversight, and we believe our approach on this front has been successful. I am proud to have been asked by my fellow directors to lead the newly constituted board, which includes eight of nine directors who are independent. They are thoughtful and engaged, and come from leading companies with global reach and experience across many industries. In addition to providing oversight on good governance, strategy and risk management, our board also has designed a compensation program that is consistent with best practices and peers and aligns management with stockholders. That alignment carries through to the entire Peabody team, and all employees at all levels were offered emergence grants in 2017.

We believe there is much to like about our company in 2018 and beyond, and we begin the year with an emphasis on delivering results and generating value. Our financial approach will continue to be focused on generating cash, maintaining financial strength, investing wisely and returning cash to stockholders.

On behalf of our board of directors and management team, we thank you for your support of Peabody. Your vote is important to us, and we encourage you to submit your vote either electronically, via telephone or in person as described in these materials.

Bob Malone

Chairman of the Board

TABLE OF CONTENTS

PROXY SUMMARY

This summary highlights certain information contained in the Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy Statement before voting. For more complete information regarding the company’s 2017 performance, please review the company’s Annual Report on Form 10-K for the year ended December 31, 2017.

ROADMAP OF VOTING MATTERS

Stockholders are being asked to vote on the following matters at the 2018 Annual Meeting:

GOVERNANCE HIGHLIGHTS

We are committed to corporate governance, which we believe promotes the long-term interests of stockholders. The Corporate Governance section beginning on page 21 describes our governance framework, which includes the following highlights:

DIRECTOR NOMINEES

2017 PERFORMANCE AT A GLANCE

2017 marked a year of both considerable change and significant improvement for Peabody. We substantially increased revenues, Adjusted EBITDA¹ and cash flows while reducing debt, buying back stock and executing on our stated financial approach.

Key safety, financial and operational highlights include:

¹ Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix B.

EXECUTIVE COMPENSATION HIGHLIGHTS

On April 3, 2017 (the “Effective Date”), the company successfully emerged from Chapter 11 reorganization (the “Emergence”). Prior to Emergence, our executive compensation reflected a combination of performance-based cash incentives and Emergence stock grants approved by our major creditors and the Bankruptcy Court. Soon after Emergence, the new Peabody board of directors (the “Board”) established the 2017 executive compensation program for our named executive officers (“Named Executive Officers” or “NEOs”).

¹ Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix B.

Executive Compensation Timeline

The two compensation programs in place during the year – the 2017 executive compensation program and Chapter 11 related compensation – are summarized in the following table:

² Adjusted EBITDAR and Adjusted EBITDA are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure in Appendix B.

³ Free Cash Flow per Share is a non-GAAP measure defined as net cash provided by operating activities less net cash used in investing activities, divided by weighted average diluted shares outstanding. Free Cash Flow per Share is used by management as a measure of our financial performance and our ability to generate excess cash flow from our business operations on a per share basis. Free Cash Flow per Share is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

⁴ Consolidated Adjusted EBITDAR (excluding Australia), Australian Adjusted EBITDAR and Consolidated Cash Flow (before Restructuring Costs) are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure in Appendix C.

The table below highlights our current executive compensation practices, including practices we have implemented because we believe they drive performance, and the practices we have not implemented because we do not believe they would serve our stockholders’ long-term interests.

QUESTIONS AND ANSWERS

Please see the Questions and Answers section in Appendix A beginning on page 71 for important information about the proxy statement, the 2018 Annual Meeting, the proposals and voting. Additional questions may be directed to the Corporate Secretary at Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101 or by calling (314) 342-3400.

PROPOSAL 1 – ELECTION OF DIRECTORS

The Board has nominated Nicholas J. Chirekos, Stephen E. Gorman, Glenn L. Kellow, Joe W. Laymon, Teresa S. Madden, Bob Malone, Kenneth W. Moore, Michael W. Sutherlin and Shaun A. Usmar for election as directors, each to serve for a term of one year and until his or her successor is duly elected and qualified. Each nominee is currently serving as a director and has consented to serve for the new term. Should any of them become unavailable for election, your proxy authorizes us to vote for such other person, if any, as the Board may recommend.

Overview of Director Election Process

Pursuant to the Amended and Restated Bylaws (“bylaws”), the Board shall consist of at least three members and no more than 15, and may be fixed from time to time by a resolution adopted by the Board or by the stockholders. At present, the Board has nine members. Directors need not be stockholders but are subject to certain share ownership requirements as described below.

Each director to be elected by stockholders shall be elected by a majority vote of the stockholders, except that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by a plurality of votes. There is no cumulative voting in the election of directors. Directors may be removed, with or without cause, by a majority vote of our voting stock.

All directors will be in one class and serve for a term ending at the annual meeting following the annual meeting at which the director was elected. Our current class of directors is subject to reelection at our 2018 Annual Meeting.

The Board recommends that you vote “FOR” the director nominees named below.

Director Selection and Evaluation Process

Selection of Directors in 2017

On April 13, 2016 (the “Petition Date”), the company and a majority of the company’s wholly owned domestic subsidiaries and one international subsidiary in Gibraltar (collectively with the company, the “Debtors”), filed voluntary petitions under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Missouri (the “Bankruptcy Court”). The Debtors’ Chapter 11 cases (collectively, the “Chapter 11 Cases”) were jointly administered under the caption In re Peabody Energy Corporation, et al., Case No. 16-42529 (Bankr. E.D. MO.).

On December 22, 2016, the Debtors filed with the Bankruptcy Court a Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and a related Disclosure Statement, and, on January 25, 2017, the Debtors filed with the Bankruptcy Court the First Amended Joint Plan of Reorganization and the First Amended Disclosure Statement. On January 27, 2017, the Debtors filed with the Bankruptcy Court the Second Amended Joint Plan of Reorganization (as amended, the “Plan”) and the Second Amended Disclosure Statement to address certain modifications after a hearing before the Bankruptcy Court on January 26, 2017. On January 27, 2017, the Bankruptcy Court entered the Order: (i) Approving Second Amended Disclosure Statement, (ii) Establishing Procedures for Solicitation and Tabulation of Votes to Accept or Reject Second Amended Plan of Reorganization, (iii) Scheduling Hearing on Confirmation of Second Amended Joint Plan of Reorganization and (iv) Approving Related Notice Procedures, which authorized the Debtors to solicit creditors’ votes on the Plan. On March 6, 2017 and March 15, 2017, the Debtors filed supplements to the Plan with the Bankruptcy Court.

On March 17, 2017, the Bankruptcy Court entered the Order Confirming Second Amended Joint Plan of Reorganization of Debtors and Debtors in Possession as Revised on March 15, 2017 (the “Confirmation Order”), which approved and confirmed the Plan.

On the Effective Date, the Debtors satisfied the conditions to effectiveness set forth in the Plan. As a result, the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases.

Pursuant to the Plan, our current Board consists of our President and CEO, Glenn L. Kellow, and eight independent directors: Bob Malone (Chair), Nicholas J. Chirekos, Stephen E. Gorman, Joe W. Laymon, Teresa S. Madden, Kenneth W. Moore, Michael W. Sutherlin and Shaun A. Usmar. The directors of the company were selected pursuant to the Plan as follows: (a) the CEO; (b) the Debtors designated one independent director – Bob Malone; (c) Contrarian Capital Management, L.L.C. (“Contrarian”), PointState Capital Management, LP (“PointState”), Panning Capital Management, LP (“Panning”), as creditors, together designated one independent director – Kenneth W. Moore; (d) Elliott Management Corp. (“Elliott”) selected one independent director – Shaun A. Usmar; and (e) a selection committee comprising the chief executive officer of the company, a representative of Elliott and one nominee acting on behalf of Contrarian, PointState, and Panning, acting as a selection committee, retained a top-tier, international search firm to identify and recommend the remaining five independent directors, which were then selected by such selection committee.

Each of the current directors of the Board was appointed effective on the Effective Date in connection with the Plan and process outlined above, and each was determined by the company’s Nominating and Corporate Governance Committee and full Board to be qualified to serve on the Board. The term for all the directors expires at the upcoming 2018 Annual Meeting, and all directors will be elected annually.

On the Effective Date, the following persons ceased to serve as directors of the company: William A. Coley, William E. James, Robert B. Karn III, H. E. Lentz, William C. Rusnack, John F. Turner, Sandra A. Van Trease and Heather A. Wilson.

Overview of Director Nominating Process

The Board believes one of its primary goals is to advise management on strategy and to monitor our performance. The Board also believes the best way to accomplish this goal is by choosing directors who possess a diversity of experience, knowledge and skills that are particularly relevant and helpful to us. As such, current Board members and director nominees possess a wide array of skills and experience in the coal industry, related energy industries and other important areas, including engineering, finance and accounting, operations, environmental affairs, international affairs, governmental affairs and administration, public policy, corporate governance, board service and executive management. When evaluating potential members, the Board seeks to enlist the services of candidates who possess high ethical standards and a combination of skills and experience which the Board determines are the most appropriate to meet its objectives. The Board believes all candidates should be committed to creating value over the long term and to serving our best interests and the best interests of our stockholders.

The Nominating and Corporate Governance Committee is responsible for identifying, evaluating and recommending qualified candidates for election to the Board. The Nominating and Corporate Governance Committee will consider director candidates submitted by stockholders. Any stockholder wishing to submit a candidate for consideration should send the following information to the Corporate Secretary, Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101:

The Corporate Secretary will promptly forward such materials to the Committee Chair and the Chairman of the Board. The Corporate Secretary also will keep copies of such materials for future reference by the Nominating and Corporate Governance Committee when filling Board positions.

Stockholders may submit potential director candidates at any time in accordance with these procedures. The Nominating and Corporate Governance Committee will consider such candidates if a vacancy arises or if the Board decides to expand its membership, and at such other times as the Nominating and Corporate Governance Committee deems necessary or appropriate. We recently modified our bylaws to implement “proxy access,” a means for stockholders to include stockholder-nominated director candidates in our proxy materials for annual meetings of stockholders. Separate procedures apply if a stockholder wishes to nominate a director candidate at the 2018 Annual Meeting. Those procedures are described below under the heading “Process for Stockholder Proposals and Director Nominations.”

Under its charter, the Nominating and Corporate Governance Committee must review with the Board, at least annually, the requisite qualifications, independence, skills and characteristics of Board candidates, members and the Board as a whole. When assessing potential new directors, the Committee considers individuals from various and diverse backgrounds. While the selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, the Nominating and Corporate Governance Committee believes candidates should generally meet the criteria listed below under the heading “Director Qualifications.”

The Nominating and Corporate Governance Committee will consider candidates submitted by a variety of sources (including, without limit, incumbent directors, stockholders, management and third-party search firms) when filling vacancies and/or expanding the Board. If a vacancy arises or the Board decides to expand its membership, the Nominating and Corporate Governance Committee generally asks each director to submit a list of potential candidates for consideration. The Nominating and Corporate Governance Committee then evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he/she is potentially qualified to serve on the Board. At that time, the Nominating and Corporate Governance Committee also will consider potential candidates submitted by stockholders in accordance with the procedures described above. The Committee seeks to identify and recruit the best available candidates, and it intends to evaluate qualified stockholder nominees on the same basis as those submitted by Board members or other sources.

After completing this process, the Nominating and Corporate Governance Committee will determine whether one or more candidates are sufficiently qualified to warrant further investigation. If the process yields one or more desirable candidates, the Nominating and Corporate Governance Committee will rank them by order of preference, depending on their respective qualifications and our needs. The Committee Chair, or another director designated by the Committee Chair, will then contact the preferred candidate(s) to evaluate their potential interest and to set up interviews with members of the Nominating and Corporate Governance Committee. All such interviews are held in person, and include only the candidate and the independent Nominating and Corporate Governance Committee members. Based upon interview results and appropriate background checks, the Nominating and Corporate Governance Committee then decides whether it will recommend the candidate’s nomination to the full Board.

The Nominating and Corporate Governance Committee believes this process will consistently produce highly qualified, independent Board members. However, the Committee may choose, from time to time, to use additional resources (including independent third-party search firms) after determining that such resources could enhance a particular director search.

Director Qualifications

Under its charter, the Nominating and Corporate Governance Committee reviews with the Board, at least annually, the requisite qualifications, independence, skills and characteristics of Board candidates, members and the Board. While the selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, the Nominating and Corporate Governance Committee believes that candidates should generally meet the following criteria:

The Board believes that all our directors meet these criteria. In addition, as outlined below, each director brings a strong and unique background and set of skills to the Board, giving the Board competence and experience in a wide variety of areas, including mining and related industries, end-user segments (energy/steel), M&A, finance and accounting, human capital and organizational health, restructuring, global operations, health, safety and environmental affairs, international, governmental affairs and administration, public policy, corporate governance, legal and regulatory, board service and executive management.

We believe the Board as a whole and each of our directors individually possess the necessary qualifications and skills to effectively advise management on strategy, monitor our performance and serve our best interests and the best interests of our stockholders.

The following chart highlights each director nominee’s specific skills, knowledge and experience that the Nominating and Corporate Governance Committee and Board relied upon when determining whether to nominate the individual for election. A particular nominee may possess other valuable skills, knowledge, or experience even though they are not indicated below.

Diversity

Peabody is an equal opportunity employer and, in addition, one of our core values is to offer an inclusive workplace. Our policies and practices support diversity of thought, perspective, sexual orientation, gender identity and expression, race, ethnicity, culture and professional experience, among others. While the Board does not have a formal policy of considering diversity when evaluating director candidates, the Board does believe that its members should reflect diversity in professional experience, cultural experience, gender and ethnic background. These factors, together with the director qualifications criteria noted above, are considered by the Nominating and Corporate Governance Committee in assessing potential new directors.

Board Evaluations

The Board conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. Pursuant to its charter, the Nominating and Corporate Governance Committee is responsible for developing and administering an annual review process to evaluate the performance of the Board. This annual review process includes the annual solicitation of comments from all directors, after which the Nominating and Corporate Governance Committee reports to the Board with an assessment of the Board’s performance, which is discussed by the full Board. The Board has confirmed that each committee and the Board as a whole is functioning effectively.

Board Training and Development

From time to time, the Board members attend ongoing training and development sessions. For instance, in early 2018, the Board members attended training on various topics facilitated by the National Association of Corporate Directors.

ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS

Committee Overview

Committee Role and Responsibilities

The specific roles and responsibilities of the Board’s Audit, Compensation, Nominating and Corporate Governance, Executive and Health, Safety, Security and Environmental Committees are delineated in written charters adopted by the Board for each committee. Each member of the Audit, Compensation and Nominating and Corporate Governance Committees is independent in accordance with our Corporate Governance Guidelines, which applies the independence standards (the “Independence Standards”) included in the New York Stock Exchange (“NYSE”) Listed Company Manual and the Exchange Act (as defined herein). Our Corporate Governance Guidelines and the charters of each of the Board’s committees are available on the Corporate Governance page under the Investors section of our website at: www.peabodyenergy.com. As provided in their charters, each committee is authorized to engage or consult from time to time, as appropriate, at our expense, with outside independent legal counsel or other experts or advisors it deems necessary, appropriate or advisable to discharge its duties.

Director Attendance

The Board met 15 times in fiscal 2017. Seven of such meetings were held post-Emergence and eight were held pre-Emergence. During fiscal 2017, each incumbent director attended 75% or more of the aggregate number of meetings of the Board and the committees on which he or she served, and their average attendance was 96%.

In accordance with our Corporate Governance Guidelines, the non-management directors meet in executive session at least quarterly. During fiscal 2017, our non-management directors met in executive session five times. Our Chairman, Mr. Malone, chaired these executive sessions.

Under Board policy, each director is expected to attend our annual meetings of stockholders in person, subject to occasional excused absences due to illness or unavoidable conflicts. Although the company did not hold an annual meeting of stockholders in 2017, all our director nominees are expected to attend the 2018 Annual Meeting.

Board’s Role in Risk Oversight

The Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to enhance long-term organizational performance and

stockholder value. A fundamental part of risk management is not only understanding the risks we face, how those risks may evolve over time, and what steps management is taking to manage and mitigate those risks, but also understanding what level of risk tolerance is appropriate for us. Management is responsible for the day-to-day management of the risks we face, while the Board, as a whole and through its committees, is responsible for the oversight of risk management.

In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board regularly reviews information regarding marketing, operations, safety performance, trading, finance and business development as well as the risks associated with each. In addition, the Board holds strategic planning sessions with management to discuss our strategies, key challenges, and risks and opportunities. The full Board receives reports on our enterprise risk management initiatives on at least an annual basis.

While the Board is ultimately responsible for risk oversight, Board committees also have been allocated responsibility for specific aspects of risk oversight. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls, risk assessment and risk management. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the risks arising from our compensation policies and programs. The Health, Safety, Security and Environmental Committee assists the Board in fulfilling its oversight responsibilities with respect to the risks associated with our health, safety, security and environmental objectives, policies and performance. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the risks associated with board organization, membership and structure, ethics and compliance, political contributions and lobbying expenditures, succession planning for our directors and executive officers, and corporate governance.

Board Independence

In accordance with our Corporate Governance Guidelines, a majority of our Board must be independent as defined by the NYSE listing standards and the Exchange Act. As required by the NYSE listing standards, the Board evaluates the independence of its members at least annually, and at other appropriate times when a change in circumstances could potentially impact the independence or effectiveness of one or more directors (such as in connection with a change in employment status or other significant status changes). This process is administered by the Nominating and Corporate Governance Committee, which consists entirely of directors who are independent under applicable NYSE rules. After carefully considering all relevant relationships, the Nominating and Corporate Governance Committee submits its recommendations regarding independence to the full Board, which then makes a determination with respect to each director.

On January 18, 2018, the Board determined that all the current members except for Mr. Kellow are independent. In making independence determinations, the Nominating and Corporate Governance Committee and the Board consider all relevant facts and circumstances, including (1) the nature of any relationships with us, (2) the significance of the relationship to us, the other organization and the individual director, (3) whether or not the relationship is solely a business relationship in the ordinary course of our and the other organization’s businesses and does not afford the director any special benefits, and (4) any commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships. For purposes of this determination, the Board generally deems any relationships that have expired for more than three years to be immaterial. The Board also considered the relationships described below in “Review of Related Person Transactions.” The Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are each comprised of independent directors.

Board Leadership Structure

Our bylaws and Corporate Governance Guidelines permit the roles of Chairman and CEO to be filled by different individuals. Effective May 1, 2017, the Board elected Mr. Malone to the role of non-executive Chairman of the Board.

Our Board leadership structure provides for strong oversight by independent directors. The Board is currently comprised of Mr. Kellow and eight independent directors. All Board committees are chaired by and composed entirely of independent directors, except for the Executive Committee, of which Mr. Kellow is a member.

Effective May 1, 2017, Mr. Malone became the non-executive Chairman of the Board. As Chairman, Mr. Malone’s duties are to:

Corporate Governance

Good corporate governance is a priority at Peabody. Our key governance practices are outlined in our Corporate Governance Guidelines, committee charters, and Code of Business Conduct and Ethics. These documents can be found on our website (www.peabodyenergy.com) by clicking on “Investor Info” and then “Corporate Governance.” Information on our website is not considered part of this Proxy Statement.

The Nominating and Corporate Governance Committee is responsible for reviewing the Corporate Governance Guidelines from time to time and reporting and making recommendations to the Board concerning corporate governance matters. Each year, the Nominating and Corporate Governance Committee, with the assistance of

outside experts, reviews our corporate governance practices, not only to ensure that they comply with applicable laws and NYSE listing requirements, but also to ensure that they continue to reflect what the Nominating and Corporate Governance Committee believes are best practices and promote our best interests and the best interests of our stockholders.

Director Service on Other Public Company Boards

As stated above, when reviewing qualifications, independence, skills and characteristics of Board candidates and nominees, the Nominating and Corporate Governance Committee examines whether such candidates or nominees have any material outside commitments (e.g., memberships on other boards and committees, charitable foundations, etc.) which might adversely affect their performance as a director on the Board. Current directors are required to advise the Chairman of the Board and the Chair of the Nominating and Corporate Governance Committee prior to accepting an invitation to serve on another public company board.

It is the current view of the Board that no director should serve on more than four other public company boards in addition to the Board. Except in extraordinary circumstances, and only after the Board has determined that such simultaneous service would not impair the ability of the director to serve effectively on the company’s Audit Committee, no member of the company’s Audit Committee shall serve simultaneously on the audit committee of more than two other public companies. For purposes of this guideline and as provided under NYSE rules, (i) service on the boards of multiple funds within a single fund complex shall be deemed as service on one public company board, and (ii) service on multiple audit committees within a single fund complex shall be deemed as service on one public company audit committee.

Majority Voting and Mandatory Director Resignation Policy

Our bylaws provide for majority voting in the election of directors. In the case of uncontested elections, in order to be elected, the number of shares voted in favor of a nominee must exceed 50% of the number of votes cast with respect to that nominee’s election at any meeting of stockholders for the election of directors at which a quorum is present. Votes cast include votes against or votes to withhold authority with respect to that nominee’s election, but exclude abstentions and broker non-votes.

If a nominee is an incumbent director and does not receive a majority of the votes cast with respect to the nominee’s election, such director is expected to promptly tender his or her resignation to the Chairman of the Board following certification of the stockholder vote. The Nominating and Corporate Governance Committee will promptly consider the resignation submitted by such director and will recommend to the Board whether to accept or reject the tendered resignation. In considering whether to accept or reject the tendered resignation, the Nominating and Corporate Governance Committee will consider all factors deemed relevant by its members. The Board will act on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days following the date of the stockholders’ meeting where the election occurred. In considering the Nominating and Corporate Governance Committee’s recommendation, the Board will consider the factors considered by the Nominating and Corporate Governance Committee and such additional information and factors the Board deems to be relevant. Any director who tenders his or her resignation under our Corporate Governance Guidelines will not participate in the Nominating and Corporate Governance Committee recommendation or Board consideration regarding whether to accept the tendered resignation.

In the case of contested elections, directors will be elected by a plurality of the votes of the shares present in person or by proxy and voting for nominees in the election of directors at any meeting of stockholders for the election of directors at which a quorum is present. For these purposes, a contested election is any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected.

Code of Business Conduct and Ethics

We have adopted a code of ethics, the “Code of Business Conduct and Ethics” which can be found on our website (www.peabodyenergy.com) by clicking on “Investor Info” and then “Corporate Governance.” The Code of Business Conduct and Ethics applies to all our directors, officers and salaried employees.

Succession Planning

Pursuant to the Corporate Governance Guidelines, our CEO provides the Nominating and Corporate Governance Committee with an annual report on succession planning and related development recommendations. The report includes a short-term succession plan which delineates temporary delegation of authority in the event that the CEO or any other executive officer is unable to perform his or her duties. The Nominating and Corporate Governance Committee, working with the CEO, then presents its recommendations with respect to succession planning to the full Board (except for any employee directors who could potentially be impacted by such succession planning processes).

Director Compensation

Compensation of non-employee directors for 2017 consisted of cash compensation (specifically, annual Board and committee retainers) and equity compensation. Each of these components is described in more detail below. Any director who is also our employee receives no additional compensation for serving as a director.

The Board consists of nine directors, including our CEO and eight independent directors. Our Board adopted the following compensation structure for our non-employee directors who were members of our post-Emergence Board:

The initial post-Emergence equity award for our non-employee directors was comprised of deferred stock units (“DSUs”), and was granted effective May 2, 2017. The number of DSUs granted to each non-employee director was determined by dividing $130,000 by the closing price per share of the company’s Common Stock on the grant date (and rounding down to the nearest whole DSU). DSUs generally vest monthly over 12 months. However, the underlying shares are generally not distributed until the earlier of (1) three years after the grant date and (2) the director’s separation from service.

Other Elements of Board Compensation

In addition to the compensation described above, we pay travel and accommodation expenses of our non-employee directors to attend meetings and other integral corporate functions. Non-employee directors do not receive meeting attendance fees. Non-employee directors may be accompanied by a spouse/partner when traveling on company business on our aircraft or charter aircraft. Non-employee directors also have the opportunity to participate in our charitable contribution matching gifts program at the same level and based on the same guidelines applicable to our full-time employees.

Primary Elements of Compensation of Pre-Emergence Board

Our Board, with the approval of the Bankruptcy Court, adopted the following compensation structure for our non-employee directors who were members of the Board prior to our emergence from the Chapter 11 Cases:

Upon our Emergence, any then-existing prior equity-based holdings of our directors were canceled, including DSUs.

The following table sets forth compensation for each director (other than Mr. Kellow) who served on the Board in 2017:

Non-Employee Director Share Ownership Requirements

Under our share ownership requirements for directors, each non-employee director is required to acquire and retain Common Stock having a value equal to at least five times his or her annual cash retainer.

If at any time a non-employee director does not meet his or her ownership requirement, the director must retain (1) any Common Stock owned by the director (whether owned directly or indirectly) and (2) any net shares received as the result of the exercise, vesting or payment of any equity award until the ownership requirement is met, in each case unless otherwise approved in writing by the Compensation Committee. For this purpose, “net shares” means the shares of Common Stock that remain after shares are sold or withheld, as the case may be, to (1) pay the exercise price for a stock option award or (2) satisfy any tax obligations, including withholding taxes, arising in connection with the exercise, vesting or payment of an equity award.

Compliance with these requirements is evaluated as of December 31 of each year. The value of an individual’s share ownership as of such date is determined by multiplying the number of shares of our Common Stock or other eligible equity interests held by the individual by the closing price of our stock as of the business day immediately preceding the date of determination.

For purposes of determining stock ownership levels, only the following forms of equity interests are included:

COMPENSATION DISCUSSION AND ANALYSIS

Overview

On April 3, 2017, the company successfully emerged from Chapter 11 reorganization. Prior to Emergence, our executive compensation reflected a combination of performance-based cash incentives and stock grants approved by our major creditors and the Bankruptcy Court. Soon after Emergence, the Board established the 2017 executive compensation program for our Named Executive Officers (“NEOs”).

Named Executive Officers

This Compensation Discussion and Analysis (the “CD&A”) explains the key elements of the compensation of the company’s NEOs and describes the objectives and principles underlying the company’s executive compensation program and decisions made in 2017. For the 2017 fiscal year, our NEOs were:

Business Highlights for 2017

As discussed in the proxy summary, in April 2016, we and certain of our subsidiaries filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Bankruptcy Code. On April 3, 2017, the Plan became effective and we successfully emerged from Chapter 11. During 2017, our financial and operating performance was strong.

Key safety, financial and operational highlights include:

Executive Compensation Highlights for 2017

Overall, our 2017 executive compensation reflects a combination of salary, cash incentives and equity awards. While in Chapter 11, compensation was part of comprehensive plans approved by our major creditors. The program was in line with compensation programs of comparable companies that undertook financial restructuring under the Bankruptcy Code. The Plan received 93% approval overall and unanimous acceptance by all 20 voting classes. Following Emergence, our new Compensation Committee approved certain changes as described under “Post-Emergence Compensation.”

Executive Compensation Timeline

Compensation Decisions During Chapter 11

While in Chapter 11, all incentives for our NEOs were negotiated with the various stakeholders in the Chapter 11 Cases, including the Creditors’ Committee and the U.S. Trustee for the Eastern District of Missouri, and were approved by the Bankruptcy Court. This included the following:

On our emergence from the Chapter 11 Cases, all the outstanding equity awards and equity held by our NEOs were canceled without payment prior to the Emergence RSU Award.

Compensation Decisions After Emergence

In May 2017, after Emergence, the new Compensation Committee, and as it relates to our CEO, the Special Committee (the “Committees”), approved the following for the NEOs:

Executive Compensation Programs

The following discussion provides details of our executive compensation program for each of our NEOs during the Chapter 11 process and following Emergence.

Chapter 11 Compensation

Base Salaries

Base salaries for the NEOs, indicated as follows, were unchanged from 2016 levels as the company began 2017: Mr. Kellow, $1,007,475; Ms. Schwetz, $500,000; Mr. Meintjes, $555,500; Mr. Williamson, $505,000 and Ms. Dorch, $460,000.

2017 Executive Leadership Team STIP (“2017 ELT-STIP”)

The 2017 ELT-STIP was intended to motivate our NEOs to meet and exceed certain operational goals critical for the Debtors’ Chapter 11 restructuring and key to enhancing the value of the enterprise. The maximum payout under the 2017 ELT-STIP was set at 150% of target as a result of negotiations with the various stakeholders in the Chapter 11 Cases, including the Creditors’ Committee and the U.S. Trustee for the Eastern District of Missouri. The target opportunity, expressed as a percentage of base salary, for each of the NEOs was as follows: Mr. Kellow, 110%; Ms. Schwetz, 80%; Mr. Meintjes, 80%; Mr. Williamson, 80%; and Ms. Dorch, 80%. The Committees established these opportunities through an analysis of compensation for comparable positions in companies of similar size and complexity, and the opportunities were intended to provide a competitive level of compensation if performance objectives were achieved.

⁶ Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix B.

The table below shows the initial underlying performance metrics established under the 2017 ELT-STIP:

Payouts with respect to each metric would have been at 40% of target if threshold performance was achieved, 100% of target if target performance was achieved and 150% of target if maximum performance or greater was achieved. Ultimately, no payments were made under the Bankruptcy Court approved 2017 ELT-STIP as a new STIP was approved upon Emergence.

Key Employee Incentive Plan

Due to our Chapter 11 Cases, we were not permitted to vest or settle equity awards granted prior to the Petition Date. A KEIP was developed during the pendency of the Chapter 11 Cases and approved by the Bankruptcy Court in August 2016. The KEIP was a performance-based cash incentive program intended to incent our NEOs to drive value for stakeholders and expedite the emergence from Chapter 11. The KEIP was comprised of one performance period running from the Petition Date through Emergence.

Shown below are the performance metrics, weights and payout opportunities under the KEIP:

⁷ 2017 ELT-STIP Adjusted EBITDAR is a non-GAAP financial metric and is defined as Adjusted EBITDA (as defined and reconciled in Appendix B) further adjusted to exclude the impact of certain employee compensation programs related to the Chapter 11 Cases, restructuring charges, the UMWA VEBA Settlement and corporate hedging. 2017 ELT-STIP Adjusted EBITDAR and Adjusted EBITDA are not recognized terms under GAAP and are not, and do not purport to be an alternative to operating income or net income as determined in accordance with GAAP as a measure of profitability. Because these measures are not calculated identically by all companies, our calculation may not be comparable to similarly titled measures of other companies.

⁸ Consolidated Adjusted EBITDAR (excluding Australia), Australian Adjusted EBITDAR and Consolidated Cash Flow (before Restructuring Costs) are not recognized terms under GAAP. These measures are defined and reconciled to the nearest GAAP measure in Appendix C.

The table below provides a definition and the purpose of the performance metrics:

The target incentive opportunity was established through an analysis of target total direct compensation in analogous companies that undertook a financial restructuring under the Bankruptcy Code. The opportunities were intended to provide an appropriate level of compensation when performance objectives are achieved. In the event performance fell below the minimum threshold amount for a metric, the NEOs were not eligible for an incentive award related to that metric.

⁹ Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix C.

The threshold, target and maximum goals for the KEIP metrics were designed to fluctuate based upon the quarter in which Emergence occurred. Because Emergence occurred on April 3, 2017, the goals for Q1 2017 were ultimately applicable. Based on our performance over the applicable period, our NEOs earned KEIP payouts of 150% of target, as shown in the table below.

The following table shows the KEIP awards earned by each NEO while the company was in Chapter 11:

Emergence Compensation

Cancellation of Equity Awards

Upon emergence from Chapter 11, all the equity awards held by our NEOs were canceled without payment. The table below summarizes the aggregate grant date fair values of these canceled equity awards. Our NEOs received no value for any of these awards:

Emergence RSU Awards

Under the Peabody Energy Corporation 2017 Incentive Plan (“2017 Incentive Plan”), we granted Emergence RSU Awards to all active employees, including the NEOs. For the NEOs, these Emergence RSU Awards generally vest ratably on each of the first three anniversaries of the grant date, subject to continued employment. The Emergence RSU program, including the total value, allocation to our NEOs, and award terms were part of a comprehensive plan approved by our major creditors in advance of successfully emerging from Chapter 11.

The amounts of the Emergence RSU Awards were determined based primarily on the following factors:

The actual Emergence RSU Awards for the NEOs were as follows:

To receive the Emergence RSU Awards, the NEOs were required to execute restrictive covenant agreements that generally require the recipient to (1) maintain confidentiality of our information; (2) refrain from competing for a period of 12 months following term of employment; and (3) refrain from soliciting employees or customers for a period of 12 months following term of employment.

Post-Emergence Compensation

As outlined above, in April 2017, the company emerged from Chapter 11 with a newly established board of directors determined to lead Peabody to a successful future. A new Compensation Committee and, as it relates to the CEO, the Special Committee (as defined above), were formed. The Committees modified the annual compensation program of the company’s executives to reflect priorities and align with shareholders’ interests. Decisions regarding executive compensation made by the Committees during 2017 reflect our industry fundamentals, operating environment and results.

Base Salaries

The Committees approved a 1.5% base salary increase for each NEO effective April 1, 2017. This increase was consistent with a 1.5% increase provided to all salaried employees. The Compensation Committee also approved a 13.3% market adjustment for Ms. Schwetz, to bring her base salary closer to the market median. The following chart summarizes the base salary changes for our NEOs.

STIP

The STIP is designed to incent our NEOs to maximize current year profitability while encouraging management to continue to improve upon our excellent safety record. In May 2017, following our emergence from Chapter 11, the Committees approved three changes to the program:

¹¹ Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix B.

The table below provides a definition and the purpose of the performance metrics:

Summarized in the table below are the weights for each performance metric; threshold, target and maximum performance expectations; actual results; and the achievement percent for each performance objective.

¹² Adjusted EBITDAR is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix B.

The following table summarizes the individual objectives achievement level earned by each NEO and their key accomplishments.

¹³ Adjusted EBITDA is not a recognized term under GAAP. This measure is defined and reconciled to the nearest GAAP measure in Appendix B.

The Committees reviewed and approved the achievement and payouts for the NEOs as summarized in the table below: