1 | CLF 2023 PROXY STATEMENT
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VOTING MATTERS | BOARD VOTE RECOMMENDATION | PAGE REFERENCE (for more detail) |
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Proposal 1 | Election of Directors | FOR ALL Director Nominees | |
Proposal 2 | Approval, on an Advisory Basis, of Our Named Executive Officers' Compensation ("Say-on-Pay") | FOR | |
Proposal 3 | Approval, on an Advisory Basis, of the Frequency of Future Say-on-Pay Votes | EVERY YEAR | |
Proposal 4 | Ratification of Independent Registered Public Accounting Firm | FOR | |
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DIRECTOR NOMINEES RECOMMENDED BY THE BOARD | |
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NAME | AGE | DIRECTOR SINCE | POSITION | COMMITTEE MEMBERSHIPS (1) |
Lourenco Goncalves | 65 | 2014 | Chairman of the Board, President and Chief Executive Officer | Strategy and Sustainability* |
Douglas C. Taylor | 58 | 2014 | Lead Director | Compensation* Strategy and Sustainability |
John T. Baldwin | 66 | 2014 | Director | Audit* Compensation |
Robert P. Fisher, Jr. | 68 | 2014 | Director | Audit Governance |
William K. Gerber | 69 | 2020 | Director | Audit |
Susan M. Green | 63 | 2007 | Director | Governance |
Ralph S. Michael, III | 68 | 2020 | Director | Governance* Compensation |
Janet L. Miller | 69 | 2019 | Director | Governance |
Gabriel Stoliar | 69 | 2014 | Director | Strategy and Sustainability |
Arlene M. Yocum | 65 | 2020 | Director | Audit Strategy and Sustainability |
* Denotes committee chair (1)Full committee names are: Audit – Audit Committee; Compensation – Compensation and Organization Committee; Governance – Governance and Nominating Committee; and Strategy and Sustainability – Strategy and Sustainability Committee.
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SHAREHOLDER ENGAGEMENT (summary) | |
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We maintain open and proactive communications with the investment community. During 2022 and early 2023, we reached out to our top 25 shareholders, representing approximately 43% of our outstanding common shares (approximately 58% of the votes cast at our 2022 annual meeting), as well as major proxy advisory firms, to solicit their perspectives on our compensation program, financial performance, corporate governance, sustainability and other topics. These discussions included our independent Lead Director when requested. The feedback received from our outreach efforts is shared with and considered by our Board of Directors (the "Board"), and our engagement activities have generated valuable input that helps inform our decisions and strategy, when appropriate. See the section entitled "Shareholder Engagement" in the Compensation Discussion and Analysis ("CD&A") section for more details as to what we heard from our recent engagement activities and how we responded to that feedback. |
2 | CLF 2023 PROXY STATEMENT
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EXECUTIVE COMPENSATION PHILOSOPHY AND CORE PRINCIPLES | |
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Our guiding executive compensation principles, as established by the Compensation Committee for 2022, were as follows: 1.Align short-term and long-term incentives with results delivered to shareholders; 2.Be transparent, ensure that executives and shareholders understand our executive compensation programs, including the objectives, mechanics, compensation levels and opportunities provided; 3.Design an incentive plan that focuses on performance objectives tied to our business plan (including profitability-related and cost control objectives), relative performance objectives tied to market conditions (including relative total shareholder return, measured by share price appreciation plus dividends, if any) and performance against other key objectives tied to our business strategy (including safety); 4.Provide competitive fixed compensation elements over the short term (base salary) and long term (equity and retirement benefits) to encourage long-term retention of our key executives; and 5.Continue to structure programs to align with corporate governance best practices (such as not providing "gross-ups" related to change in control payments, using "double-trigger" vesting in connection with a change in control for equity awards, using Share Ownership Guidelines and maintaining a clawback policy related to incentive compensation for our executive officers). |
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2022 EXECUTIVE COMPENSATION SUMMARY | |
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The numbers in the following table showing the 2022 compensation of our named executive officers (the "NEOs") were determined in the same manner as the numbers in the corresponding columns in the 2022 Summary Compensation Table (the "SCT") (provided later in this proxy statement); however, they do not include information regarding changes in pension value and non-qualified deferred compensation earnings and information regarding all other compensation, each as required to be presented in the SCT under the rules of the U.S. Securities and Exchange Commission (the "SEC"). As such, this table should not be viewed as a substitute for the SCT. |
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NAME | PRINCIPAL POSITION (AS OF 12/31/2022) | SALARY ($) | BONUS ($) | STOCK AWARDS ($) | OPTION AWARDS ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($) | TOTAL ($) |
Lourenco Goncalves | Chairman, President and Chief Executive Officer | 2,035,000 | | — | | 9,260,335 | | — | | 6,924,868 | | 18,220,203 | |
Celso L. Goncalves Jr. | Executive Vice President, Chief Financial Officer | 660,000 | | — | | 2,167,293 | | — | | 714,669 | | 3,541,962 | |
Clifford T. Smith | Executive Vice President & President, Cleveland-Cliffs Steel | 826,000 | | — | | 2,364,331 | | — | | 1,699,684 | | 4,890,015 | |
Keith A. Koci | Executive Vice President & President, Cleveland-Cliffs Services | 683,000 | | — | | 2,167,293 | | — | | 1,103,769 | | 3,954,062 | |
James D. Graham | Executive Vice President, Human Resources, Chief Legal and Administrative Officer & Secretary | 647,083 | | — | | 1,733,872 | | — | | 948,324 | | 3,329,279 | |
Maurice D. Harapiak | Former Executive Vice President, Human Resources & Chief Administration Officer | 196,875 | | — | | 1,733,872 | | — | | 733,956 | | 2,664,703 | |
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
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As a matter of good corporate governance, we are asking our shareholders to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2023. |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | |
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This proxy statement contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. As a general matter, forward-looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to risks and uncertainties relating to our operations and business environment that are difficult to predict and may be beyond our control. Such risks and uncertainties may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Part I., Item 1A., "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2022, and those described from time to time in our future reports filed with the SEC. Except to the extent required by law, we do not undertake to update the forward-looking statements included in this proxy statement to reflect the impact of circumstances or events that may arise after the date the forward-looking statements were made. Forward-looking and other statements in this proxy statement regarding our greenhouse gas ("GHG") reduction plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current and forward-looking GHG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. |
3 | CLF 2023 PROXY STATEMENT
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QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING |
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1. What proposals are to be presented at the 2023 Annual Meeting?
The purpose of the 2023 Annual Meeting is to: (1) elect the ten directors nominated by the Board in this proxy statement; (2) approve, on an advisory basis, our NEOs' compensation; (3) approve, on an advisory basis, the frequency of shareholder votes on our NEOs' compensation; (4) ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm to serve for the 2023 fiscal year; and (5) conduct such other business as may properly come before the 2023 Annual Meeting.
2. What is the difference between a “shareholder of record” and a “beneficial owner"?
These terms describe the manner in which your shares are held. If your shares are registered directly in your name through Broadridge, our transfer agent, then you are the registered holder, or “shareholder of record." If your shares are held through a bank, broker, nominee or other shareholder of record, then you are considered the “beneficial owner” of those shares.
3. How does the Board recommend that I vote?
The Board unanimously recommends that you vote:
•FOR ALL of the ten individuals nominated by the Board for election as directors;
•FOR the approval, on an advisory basis, of our NEOs' compensation;
•EVERY YEAR for the approval, on an advisory basis, of the frequency of future shareholder votes to approve our NEOs' compensation; and
•FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm to serve for the 2023 fiscal year.
4. Who is entitled to vote at the 2023 Annual Meeting?
The record date for the 2023 Annual Meeting is March 20, 2023 (the "Record Date"). On the Record Date, we had outstanding 515,051,263 common shares, $0.125 par value per share. All common shareholders of record as of the Record Date are entitled to vote at the 2023 Annual Meeting. In this proxy statement, we refer to our common shares as our "shares" and the holders of such shares as our "shareholders."
5. How do I vote?
You may vote using any of the following methods:
Shareholders of Record. If your shares are registered in your name, you may vote online during the virtual 2023 Annual Meeting at www.virtualshareholdermeeting.com/CLF2023 or you may vote by proxy. If you decide to vote by proxy, you may do so over the Internet, by telephone or by mail.
•Over the Internet. After reading the proxy materials and with your proxy card in front of you, you may use a computer to access the website www.proxyvote.com. You will be prompted to enter your control number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote.
•By telephone. After reading the proxy materials and with your proxy card in front of you, you may call the toll-free number appearing on the proxy card, using a touch-tone telephone. You will be prompted to enter your control number from your proxy card. This number will identify you as a shareholder of record. Follow the simple instructions that will be given to you to record your vote.
•By mail. If you received a paper copy of the proxy card by mail, after reading the proxy materials, you may mark, sign and date your proxy card and return it in the prepaid and addressed envelope provided.
The Internet and telephone voting procedures have been set up for your convenience and have been designed to authenticate your identity, allow you to submit voting instructions and confirm that those instructions have been recorded properly.
Shares Held by Bank, Broker, Nominee or Other Shareholder of Record. If your shares are held by a bank, broker, nominee or other shareholder of record, that entity will provide you with separate voting instructions. All nominee share interests may view the proxy materials using the link www.proxyvote.com.
If your shares are held in the name of a brokerage firm, your shares may be voted on certain proposals presented at the 2023 Annual Meeting even if you do not provide the brokerage firm with voting instructions. Brokerage firms have the
4 | CLF 2023 PROXY STATEMENT
authority under applicable rules to vote shares for which their customers do not provide voting instructions on certain “routine” matters. When a proposal is not a routine matter and the brokerage firm has not received voting instructions from the beneficial owner of the shares with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. This is referred to as a “broker non-vote.” The ratification of Deloitte & Touche LLP as our registered independent public accounting firm is considered a routine matter for which a brokerage firm that holds your shares may vote your shares without your instructions. The election of directors; the approval, on an advisory basis, of our NEOs' compensation; and the approval, on an advisory basis, of the frequency of shareholder votes on our NEOs' compensation are not considered routine matters, and, therefore, a brokerage firm that holds your shares may not vote your shares for such proposals without your instructions.
6. What can I do if I change my mind after I vote?
You may revoke your proxy at any time before the polls are closed for voting at the 2023 Annual Meeting by: (i) executing and submitting a revised proxy bearing a later date; (ii) providing a written revocation to the Secretary of Cliffs; or (iii) voting online during the virtual 2023 Annual Meeting at www.virtualshareholdermeeting.com/CLF2023. If you do not hold your shares directly, you should follow the instructions provided by your bank, broker, nominee or other shareholder of record to revoke your previously voted proxy.
7. What vote is required to approve each proposal?
With respect to Proposal 1, the nominees receiving a plurality vote of the shares will be elected. However, under our majority voting policy (adopted by the Board), in an uncontested election, any director-nominee that is elected by a plurality vote but fails to receive a majority of the votes cast (excluding abstentions and broker non-votes) is expected to tender his or her resignation, which resignation will be considered by the Governance Committee and the Board.
With respect to Proposal 2, approval, on an advisory basis, of our NEOs' compensation requires the affirmative vote of a majority of the shares present, in person or represented by proxy, at the 2023 Annual Meeting and entitled to vote on the proposal.
With respect to Proposal 3, approval, on an advisory basis, of the frequency of future shareholder votes to approve our NEOs' compensation, the frequency receiving the greatest number of votes (every year, every two years or every three years) will be considered the frequency approved, on an advisory basis, by shareholders.
With respect to Proposal 4, the ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the 2023 fiscal year will pass with the affirmative vote of a majority of the shares present, in person or represented by proxy, at the 2023 Annual Meeting and entitled to vote on the proposal.
8. Can I attend the 2023 Annual Meeting in person?
The 2023 Annual Meeting will be held exclusively online, with no option to attend in person. If you plan to attend the 2023 Annual Meeting virtually, you will need to visit www.virtualshareholdermeeting.com/CLF2023 and use your 16-digit control number to log into the meeting. If you do not have a 16-digit control number, you may still attend the virtual 2023 Annual Meeting as a guest in listen-only mode. We encourage shareholders to log into the website and access the webcast early, beginning approximately 30 minutes before the 11:30 a.m. EDT start time. If you experience technical difficulties, please contact the technical support telephone number posted on www.virtualshareholdermeeting.com/CLF2023.
5 | CLF 2023 PROXY STATEMENT
The accompanying proxy is solicited by the Board for use at the 2023 Annual Meeting and any adjournments or postponements thereof. This proxy statement, the accompanying proxy card, and our 2022 Annual Report will be made available on or about April 3, 2023 to our shareholders of record as of the Record Date.
PROXY MATERIALS
Notice of Internet Availability of Proxy Materials
In accordance with rules adopted by the SEC, we are using the Internet as our primary means of furnishing proxy materials to our shareholders. Accordingly, most shareholders will not receive paper copies of our proxy materials.
We will instead send our shareholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials and voting electronically over the Internet or by telephone, also known as Notice and Access. The notice also provides information on how shareholders may request paper copies of our proxy materials. We believe electronic delivery of our proxy materials will help us reduce the environmental impact and costs of printing and distributing paper copies and improve the speed and efficiency by which our shareholders can access these materials.
On or about April 3, 2023, we will mail to each shareholder of record as of the Record Date (other than those shareholders who previously had requested paper delivery of proxy materials) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials, including this proxy statement and the 2022 Annual Report, on the Internet and how to access a proxy card to vote via the Internet or by telephone.
The close of business on March 20, 2023 has been fixed as the Record Date for the 2023 Annual Meeting, and only shareholders of record at that time will be entitled to vote.
The Notice of Internet Availability of Proxy Materials will contain a 16-digit control number that shareholders will need to access the proxy materials, to request paper or electronic copies of the proxy materials, and to vote their shares via the Internet or by telephone.
Householding
We are permitted to send a single copy of the Notice of Internet Availability of Proxy Materials or set of proxy materials (if paper delivery was previously requested) to shareholders who share the same last name and address. This procedure is called “householding” and is designed to reduce our printing and postage costs and reduce our environmental impact by printing fewer paper copies. If you are the beneficial owner, but not the record holder, of Cliffs shares, your bank, broker, nominee or other shareholder of record may only deliver one copy of the Notice of Internet Availability of Proxy Materials or set of proxy materials and, as applicable, any other proxy materials that are made available until such time as you or other shareholders sharing your address notify your nominee that you want to receive separate copies. Beneficial owners sharing an address who are receiving multiple copies of the Notice of Internet Availability of Proxy Materials or sets of proxy materials and who wish to receive a single copy or set in the future will need to contact their bank, broker, nominee or other shareholder of record. A shareholder who wishes to receive a separate copy of the Notice of Internet Availability of Proxy Materials or set of proxy materials, or shareholders who share the same address that are currently receiving multiple copies of the Notice of Internet Availability of Proxy Materials or sets of proxy materials and who wish to receive a single copy or set, either now or in the future, may submit this request by writing to our Secretary at Cleveland-Cliffs Inc., 200 Public Square, Suite 3300, Cleveland, Ohio 44114, or by calling our Investor Relations department at (800) 214-0739, and it will be delivered promptly.
Proxy Solicitation
We will bear the cost of solicitation of proxies. We have engaged Okapi Partners LLC to assist in the solicitation of proxies for fees and disbursements not expected to exceed approximately $65,000 in the aggregate. In addition, employees and representatives of the Company may solicit proxies, and we will request that banks and brokers or other similar agents or fiduciaries transmit the proxy materials to beneficial owners for their voting instructions, and we will reimburse them for their expenses in so doing.
Voting Rights
Shareholders of record on the Record Date are entitled to vote at the 2023 Annual Meeting. On the Record Date, there were outstanding 515,051,263 common shares entitled to vote at the 2023 Annual Meeting. A majority of the common shares entitled to vote must be represented at the 2023 Annual Meeting, in person or by proxy, to constitute a quorum and to transact business. Each outstanding share is entitled to one vote in connection with each item to be acted upon at the 2023 Annual Meeting. You may submit a proxy by electronic transmission via the Internet, by telephone or by mail, as explained on your proxy card.
6 | CLF 2023 PROXY STATEMENT
Voting of Proxies
The common shares represented by properly authorized proxies will be voted as specified. It is intended that the shares represented by properly authorized proxies on which no specification has been made will be voted: (1) FOR ALL of the ten director nominees named herein or such substitute nominees as the Board may designate; (2) FOR the approval, on an advisory basis, of our NEOs' compensation; (3) EVERY YEAR for the approval, on an advisory basis, of the frequency of shareholder votes on our NEOs' compensation; (4) FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm to serve for the 2023 fiscal year; and (5) at the discretion of the persons named as proxies on all other matters that may properly come before the 2023 Annual Meeting.
Cumulative Voting for Election of Directors
If notice in writing shall be given by any shareholder to the President, an Executive Vice President or the Secretary of the Company, not less than 48 hours before the time fixed for the holding of the 2023 Annual Meeting, that such shareholder desires that the voting for the election of directors shall be cumulative, and if an announcement of the giving of such notice is made upon the convening of the 2023 Annual Meeting by the Chairman or Secretary or by or on behalf of the shareholder giving such notice, each shareholder shall have the right to cumulate such voting power as such shareholder possesses at such election. Under cumulative voting, a shareholder may cast for any one nominee as many votes as shall equal the number of directors to be elected, multiplied by the number of such shareholder's shares. All such votes may be cast for a single nominee or may be distributed among any two or more nominees as such shareholder may desire. If cumulative voting is invoked, and unless contrary instructions are given by a shareholder who signs a proxy, all votes represented by such proxy will be cast in such manner and in accordance with the discretion of the person acting as proxy as will result in the election of as many of the Board’s nominees as is possible.
Counting Votes
The results of shareholder voting will be tabulated by the inspector of elections appointed for the 2023 Annual Meeting. We intend to treat properly authorized proxies as “present” for purposes of determining whether a quorum has been achieved at the 2023 Annual Meeting. Abstentions and broker non-votes will also be counted for purposes of determining whether a quorum is present.
Abstentions and broker non-votes will have no effect with respect to the election of directors and the advisory vote regarding the frequency of the shareholder vote on our NEOs' compensation. Abstentions will have the effect of votes against, and broker non-votes will have no effect with respect to, the advisory vote regarding the compensation of our NEOs. Abstentions will have the effect of votes against the ratification of Deloitte & Touche LLP as our independent registered public accounting firm. The ratification of Deloitte & Touche LLP as our independent registered public accounting firm is considered a routine matter and, as a result, we do not expect to have broker non-votes with respect to this proposal.
7 | CLF 2023 PROXY STATEMENT
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ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY |
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OUR COMMITMENT TO SUSTAINABILITY
As society transitions to a low-carbon economy, steel is expected to be the most needed raw material to develop the infrastructure for delivering cleaner technologies and power sources. As the largest flat-rolled steel and iron ore pellet producer in North America – and the only current producer of specialty electrical steels such as grain oriented and non-oriented in the U.S. – Cleveland-Cliffs is well positioned to play a critical role in this transition. We value being a good corporate citizen, actively demonstrating our commitment to the environment, our employees, and ethical and responsible business practices. As an iron and steel producer, environmental compliance is critical to managing our business. Our dedicated and hardworking employees are key to our success. Engaging with our neighboring communities will sustain Cleveland-Cliffs over the long term. And, above all, leading with integrity and employing ethical business practices are foundational to our Company. We believe this well-rounded approach to sustainability will create shared value for our stakeholders for future generations.
Steel for a Sustainable Society
Cleveland-Cliffs operates a strategic portfolio of iron and steel technologies, including efficient blast furnaces and basic oxygen furnaces ("BOFs"), electric arc furnaces ("EAFs"), and a modern direct reduction plant to produce hot briquetted iron ("HBI") in North America. Our extensive experience with modern steelmaking through our vertically-integrated value chain ensures we will continue to meet the growing demand for steel made sustainably. As society transitions to a low-carbon future, we firmly believe that the infrastructure needed to deliver new and cleaner technologies and power sources, such as an efficient electrical grid; renewable electricity; electric vehicle ("EV") motors; carbon capture and sequestration; and alternative fuels such as clean hydrogen, will all require steel. Today, Cliffs produces the advanced and specialty grades of steel necessary for these emerging decarbonization solutions, doing our part as we collectively move toward a low-carbon economy.
Cliffs has demonstrated its commitment to sustainable steelmaking pathways, engaging with suppliers, customers, technology providers, government agencies and academia to explore opportunities for collaboration. We are utilizing methods for emissions reduction, such as optimizing recycled content, while maintaining the product quality specifications our customers need. Through our wholly owned subsidiary, Ferrous Processing and Trading Company ("FPT"), we source and process prime scrap to enable a closed-loop steel recycling business that allows us to optimize productivity at our furnaces. And with a limited supply of prime scrap, the most demanding steel grades need high-purity sources of iron, a demand that we can fulfill with our U.S.-based, vertically-integrated footprint of iron ore pellets and HBI.
In 2022, we introduced our MOTOR-MAX™ product line of non-oriented electrical steels for high frequency motors and generators in the North American market. MOTOR-MAX High Frequency Non-Oriented Electrical Steels brand of electrical steels are designed for high-speed motors, EV traction motors, aircraft generators and other rotating equipment. From research to production, Cleveland-Cliffs has the experience and capabilities to produce the quality electrical steels necessary for these distinctive high-performance applications to meet a broad range of customer technical requirements.
Environmental and Sustainability Management
Cleveland-Cliffs is committed to operating our business in an environmentally responsible manner by minimizing our impacts and doing our part to reduce our GHG emissions. Acting responsibly begins with a foundation of strong corporate governance and leadership. Our Strategy and Sustainability Committee – chaired by our Chairman, President and CEO – oversees our strategic plan and annual management objectives, as well as the implementation of our sustainability strategy, which includes review of major environmental, social and governance ("ESG") risks and opportunities. Our Executive Vice President, Environmental & Sustainability, is responsible for the environmental compliance and sustainability functions of our business and leads collaborative efforts across our operating footprint to ensure that all relevant departments within our Company are engaged in supporting our sustainability initiatives, including those concerning climate-related risks and opportunities. Cleveland-Cliffs takes great pride in our environmental management program and efforts. Our business is highly regulated, and we understand the importance of maintaining compliance and going beyond what is expected to ensure we are a good neighbor to our local communities and retain our social license to operate.
8 | CLF 2023 PROXY STATEMENT
ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY
Climate and Greenhouse Gas Emissions
![clf-20230403_g5.jpg](https://content.edgar-online.com/edgar_conv_img/2023/04/03/0000764065-23-000063_clf-20230403_g5.jpg)
We regularly track our progress against our goal of 25% reduction of combined absolute Scope 1 and 2 emissions by 2030 from 2017 levels. In 2022, Cliffs’ Scope 1 and 2 emissions were already below our reduction goal well ahead of the target year of 2030. This was achieved through strategic actions, such as optimizing our asset footprint and raw material mix, particularly our unique practice of using significant amounts of HBI in our blast furnaces, along with production levels of crude steel. Previously announced upgrades to existing on-site energy recovery for power generation and the addition of renewable energy are important to manage Cliffs' emissions levels below our GHG reduction goal. While we are proud of these results, we will continue to focus our GHG reduction efforts by prioritizing our efficient operations and actionable, commercially viable technologies and solutions. We have dedicated resources for research and development of decarbonization technologies for the primary iron and steel sector. We are working with commercial and academic partners to investigate and advance projects focused on improving energy efficiency, industrial electrification, carbon capture utilization and storage, and clean electricity and fuels, such as hydrogen.
Since 2021, Cliffs has actively participated in an Expert Advisory Group for the global steel sector, convened by the Science Based Targets initiative ("SBTi"), to develop a Steel Sectoral Decarbonization Approach ("SDA") toward near zero GHG emissions by 2050 in alignment with the Paris Agreement. The SDA intends to outline a methodology for setting science-based targets and a decarbonization pathway. Currently, Cliffs continues to participate in the Expert Advisory Group and looks forward to the finalized SDA for evaluation.
Cleveland-Cliffs tracks and reports our absolute GHG emissions in our sustainability report, as well as to government regulatory agencies and third-party sustainability ratings platforms. We also report select GHG intensities for our business. Cliffs discloses these metrics and additional GHG and climate-related information, such as our supplier climate engagement and upstream Scope 3 emissions, in our annual Climate Change submission to CDP, an international non-profit organization that manages the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. In 2022, Cleveland-Cliffs maintained a ‘B’ score for our Climate Change response and improved to an 'A-' score for our Supplier Engagement response.
9 | CLF 2023 PROXY STATEMENT
ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY
Energy
Many of our operations produce valuable byproduct gases from our manufacturing processes. We recover energy from these gases to generate steam and electricity from on-site powerhouses for use in our operations. This energy recovery practice reduces the amount of purchased electricity and fuels and lowers the carbon footprint of the facility. Over the last few years, we have invested in our powerhouses to increase efficiency of on-site power-generating capacity. This further reduces flaring of blast furnace gas, the amount of purchased electricity and associated Scope 2 emissions.
Four of our iron ore mining and pelletizing operations are served by Minnesota Power ("MP"). As of the most recent estimate available, MP's overall renewables percentage for retail customers in 2021 was 50%, which equates to just over one million megawatt hours ("MWh") of renewable energy for the grid that supplies these Minnesota facilities. Separately, we have a target to purchase two million MWh of renewable power annually. We continue to develop our renewable energy portfolio with wind and solar projects that are to be newly installed and green the power grid. We committed to participate in three regulated utilities’ voluntary renewable energy programs, and in December 2022, Cliffs executed a 15-year power purchase agreement with EDP Renewables SA for 180 megawatts of the Headwaters III Wind Farm in Randolph County, Indiana. The wind farm is expected to be operational in 2025 and annually power the equivalent of more than 54,000 Indiana homes.
Key Partnerships
To further demonstrate our commitment to reducing our carbon footprint, we joined the U.S. Department of Energy’s ("DOE") Better Climate Challenge, a government-sponsored effort to set ambitious GHG emission reduction goals for energy-intensive organizations such as ours. Similar to our corporate-wide GHG reduction goal, when joining the Better Climate Challenge, we committed to a 25% reduction in GHG emissions within ten years. We are proud to be the first and only steel company to join the challenge. Additionally, many of our steel assets have improved plant and energy efficiency through participation in programs like the DOE’s Better Plants program and the U.S. Environmental Protection Agency’s Energy Star program. With our longstanding focus on plant and energy efficiency, we aim to build on our previous successes across our integrated enterprise.
We continue to pursue opportunities such as carbon capture and the use of hydrogen within our facilities. These opportunities could benefit our own environmental footprint while combating the global impacts of climate change. We have been engaging in various discussions with other companies, universities and national research laboratories with the goal of leveraging potential funding available under the DOE's Regional Clean Hydrogen Hubs Funding Opportunity Announcement to develop and implement clean hydrogen solutions for our industrial applications in place of carbon-based natural gas.
Human Capital Management
With a large workforce – currently approximately 27,000 employees strong – investing in our people’s safety and success is a top priority. We are focused on attracting and retaining a highly-skilled workforce to help us achieve our business and sustainability goals and objectives. Working closely with our labor partners, our hourly employees receive competitive compensation and benefits, along with wide-ranging opportunities for training, development and growth. We are proud to report that our median employee compensation is well above industry average. We strongly feel that maintaining positive working relationships with our labor unions is key to safe production, efficient operations and the long-term viability of our business, and we successfully negotiated and renewed the ten labor agreements that expired in 2022 covering over 15,000 represented employees.
Health and Safety
Safe Production is the most important Core Value at Cleveland-Cliffs. We strive for safety excellence through proper training and protective equipment to ensure our people go home safely to their families every day. We strive toward zero injuries according to our corporate Safety Policy and compliance with all applicable regulations of the Occupational Safety and Health Administration and the Mine Safety and Health Administration. A large part of this effort includes diligent monitoring and tracking of our safety performance, as well as best practice sharing for continuous improvement. Cliffs focuses on proactive safety training and specific initiatives to achieve progress against our internal objectives and external benchmarks. In 2022, several of our mining operations were recognized for their commitment to safety, including the Midwest Regional Award for tailings storage safety and the prestigious Sentinels of Safety Award for outstanding safety performance.
Community Engagement
We value the communities where we operate and their contributions to Cleveland-Cliffs. We believe it is vitally important to listen to and work with our stakeholders. Through two-way dialogue, Cliffs can keep a pulse on what is important to our communities to ensure we act as a good neighbor. Various groups throughout our Company regularly engage with a range of internal and external stakeholders to build and maintain this dialogue with our host communities, public officials and neighbors. Each year, Cliffs enhances our outreach efforts to ensure fairness and inclusivity of different stakeholder perspectives. This helps us prioritize activities and more effectively address issues important to our stakeholders.
10 | CLF 2023 PROXY STATEMENT
ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY
An important tool in helping us support our communities is our Community Inquiry Program, which helps foster dialogue and provides us valuable information when community stakeholders have questions regarding our operations. In addition, we held five community open houses near our largest steel mills during 2022 to continue facilitating thoughtful dialogue with our neighbors. Cliffs occasionally brings members of our neighboring communities into our operations, where appropriate, such as through National Manufacturing Day and Family Days.
Charitable Giving
Cleveland-Cliffs conducts charitable giving through a number of vehicles: The Cleveland-Cliffs Foundation (the "Foundation"); site-specific programs and events, such as employee volunteering; and strategic partnerships. Through the Foundation, we create tangible impact by providing significant financial support to like-minded organizations. In 2022, we donated more than $7 million to our local communities, including over $434 thousand in matching contributions via our Employee Giving and Matching Gift Program.
2022 ESG Highlights
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Exceeding our GHG emissions goal of 25% reduction ahead of 2030 target year from 2017 levels | | ~70% Union membership | | B score for CDP Climate Change |
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Committed to 1.08M MWh of purchased renewable energy annually | | Cleveland-Cliffs' Core Values are at the heart of everything we do. | |
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| 100% of our steel contains recycled steel scrap | | $7 million donated to communities by Cleveland-Cliffs and our charitable foundation |
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References to our sustainability reports and the contents thereof do not constitute incorporation by reference of the information contained in our sustainability reports, and such information is not part of this proxy statement.
11 | CLF 2023 PROXY STATEMENT
BOARD LEADERSHIP STRUCTURE
The Chairman of the Board is Lourenco Goncalves, who is also our President and CEO. Pursuant to our Corporate Governance Guidelines, when the positions of Board Chair and CEO are held by one individual, or if the Board Chair is a Cliffs executive, then the Governance Committee recommends to the Board a Lead Director. Douglas C. Taylor currently serves as our Lead Director. The Board believes that this leadership structure is the optimal structure to guide our Company and to maintain the focus to achieve our business goals and represents our shareholders' best interests.
Under this leadership structure, Mr. Goncalves, as Chairman, is responsible for overseeing and facilitating communications between our management and the Board, for setting the meeting schedules and agendas, and for leading discussions during Board meetings. In his combined role, Mr. Goncalves has the benefit of Cliffs personnel to help with extensive meeting preparation, responsibility for the process of recordkeeping of all Board deliberations, and the benefit of direct daily contact with management and the internal audit department. The Chairman works closely with the Lead Director in setting meeting agendas and in ensuring that essential information is communicated effectively to the Board.
The Lead Director’s responsibilities include: chairing executive session meetings of the independent directors; leading the Board’s processes for evaluating the CEO; presiding at all meetings of the Board at which the Chairman is not present; serving as a liaison between the Chairman and the independent directors; and meeting separately at least annually with each director.
This leadership structure provides our Chairman with the readily available resources to manage the affairs of the Board while allowing our Lead Director to provide effective and timely advice and guidance. Our governance process is based on our Corporate Governance Guidelines, which are available on our website at www.clevelandcliffs.com under "Investors" then "Governance".
In accordance with the corporate governance listing standards of the New York Stock Exchange (the "NYSE"), our non-management directors meet at regularly scheduled executive sessions without management present. These meetings take place at least quarterly.
BOARD'S ROLE IN RISK OVERSIGHT
The Board as a whole oversees our enterprise risk management ("ERM") process. The Board executes its risk oversight role in a variety of ways. The full Board regularly discusses the key strategic risks facing Cliffs.
The Board delegates oversight responsibility for certain areas of risk to its committees. Generally, each committee oversees risks that are associated with the purpose of and responsibilities delegated to that committee. For example, the Audit Committee oversees risks related to accounting and financial reporting, as well as information security risks. In addition, pursuant to its charter, the Audit Committee periodically reviews our ERM process. The Compensation Committee monitors risks related to development and succession planning for the CEO and other executive officers, as well as compensation and related policies and programs for executive and non-executive officers and management. The Governance Committee handles risks with respect to Board composition, membership and structure, and corporate governance matters. The Strategy and Sustainability Committee oversees, advises on, and monitors risks and opportunities relating to our strategic plan and ESG matters, including sustainability goals and initiatives, climate-related risks and decarbonization opportunities. As appropriate, the respective committees’ Chairpersons provide reports to the full Board.
Management is responsible for the day-to-day management of our risks. The ERM process includes the involvement of management in the identification, assessment, mitigation and monitoring of a wide array of potential risks, from strategic to operational to compliance-related risks throughout the Company. Executive management regularly reports to the Board or relevant committees regarding Cliffs’ key risks and the actions being taken to manage these risks.
The Company believes that its leadership structure supports the risk oversight function of the Board. Each committee is involved in carrying out the Board's risk oversight function and, except for the Strategy and Sustainability Committee, independent directors chair each of our committees.
12 | CLF 2023 PROXY STATEMENT
BOARD MEETINGS AND COMMITTEES
Our directors discharge their responsibilities in a variety of ways, including reviewing reports to directors, visiting our facilities, corresponding with the CEO, and conducting telephone conferences with the CEO and other directors regarding matters of interest and concern to Cliffs. In addition, our directors have regular access to our senior management. All committees regularly report their activities, actions and recommendations to the full Board.
During 2022, our Board held ten meetings. Each director attended, either in person or by telephone conference, at least 94% of the Board and committee meetings held while serving as a director or committee member in 2022. Pursuant to Board policy, all serving directors are expected to attend all Board and committee meetings, as well as our annual meeting of shareholders. All of our then-serving directors who were standing for re-election attended the 2022 Annual Meeting.
The Board currently has four standing committees: the Audit Committee, the Compensation Committee, the Governance Committee, and the Strategy and Sustainability Committee. Each of these four committees has a charter that can be found on our website at www.clevelandcliffs.com under "Investors" then "Governance". A biographical overview of the members of our committees can be found beginning on page 22. Board Committees
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AUDIT COMMITTEE |
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MEMBERS: 4 | INDEPENDENT: 4 | 2022 MEETINGS: 9 |
AUDIT COMMITTEE FINANCIAL EXPERTS: The Board has determined that each of John T. Baldwin, Robert P. Fisher, Jr., William K. Gerber and Arlene M. Yocum is an "audit committee financial expert" within the meaning of Item 407 of Regulation S-K under the federal securities laws. |
RESPONSIBILITIES: |
▪Reviews with our management, the internal auditors and the independent registered public accounting firm, the adequacy and effectiveness of our system of internal control over financial reporting ▪Reviews significant accounting matters ▪Reviews quarterly unaudited financial information prior to public release ▪Approves the audited financial statements prior to public distribution ▪Oversees and monitors risks related to accounting, financial reporting and information security ▪Approves our assertions related to internal controls prior to public distribution ▪Reviews any significant changes in our accounting principles or financial reporting practices ▪Evaluates our independent registered public accounting firm; discusses with the independent registered public accounting firm its independence; and considers the compatibility of non-audit services with such independence ▪Annually selects and retains our independent registered public accounting firm to examine our financial statements, and reviews and approves the services performed by our independent registered public accounting firm ▪Establishes and maintains, with the Governance Committee, procedures to review related party transactions ▪Approves management’s appointment, termination or replacement of the head of Internal Audit ▪Periodically evaluates ethical and legal compliance |
CHAIR: John T. Baldwin | MEMBERS: Robert P. Fisher, Jr., William K. Gerber and Arlene M. Yocum |
13 | CLF 2023 PROXY STATEMENT
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COMPENSATION COMMITTEE |
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MEMBERS: 3 | INDEPENDENT: 3 | 2022 MEETINGS: 8 |
RESPONSIBILITIES: |
▪Oversees development and implementation of Cliffs' compensation policies and programs for officers ▪Develops criteria for awards under incentive plans that appropriately relate to Cliffs' strategic plan and operating performance objectives, and approves equity-based awards ▪Reviews and evaluates CEO and other executive officer performance and approves compensation (with the CEO's compensation being subject to ratification by the independent members of the Board) ▪Recommends to the Board the election of officers ▪Assists with management development and succession planning ▪Reviews and approves employment and severance arrangements with officers and oversees regulatory compliance regarding compensation matters and related party transactions ▪Reviews and recommends the CD&A and the Compensation Committee report for inclusion in appropriate Cliffs securities filings ▪Obtains the advice of outside experts with regard to compensation matters ▪May, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee and may delegate certain equity award grant authority to certain officers of Cliffs, subject to applicable law For more information about the role of executives and outside advisers in our executive compensation process, see the CD&A section of this proxy statement. |
CHAIR: Douglas C. Taylor | MEMBERS: John T. Baldwin and Ralph S. Michael, III |
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GOVERNANCE COMMITTEE |
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MEMBERS: 4 | INDEPENDENT: 4 | 2022 MEETINGS: 5 |
RESPONSIBILITIES: |
▪Oversees annual review of our Corporate Governance Guidelines and periodically reviews external developments in corporate governance matters generally ▪Periodically reviews and makes recommendations regarding our officers' authorized levels for corporate expenditures ▪Establishes and maintains, with the Audit Committee, procedures for review of related party transactions that relate to Board members ▪Reviews the qualifications of incumbent directors and proposed Board candidates, and recommends to the Board as director-nominees those candidates possessing the experience, skills and qualifications consistent with Board-approved criteria, our Corporate Governance Guidelines and other criteria deemed important by the Governance Committee ▪Monitors the Board governance process and provides guidance on Board governance and other matters ▪Recommends changes in membership and responsibility of Board committees and reviews and makes recommendations regarding any conditional resignations tendered by directors ▪Reviews and administers our director compensation plans and benefits, and makes recommendations to the Board with respect to compensation plans, equity-based plans and share ownership guidelines for directors ▪Other responsibilities include oversight of annual evaluation of the Board and CEO, as well as monitoring risks associated with Board organization, membership, structure and succession planning |
CHAIR: Ralph S. Michael, III | MEMBERS: Robert P. Fisher, Jr., Susan M. Green and Janet L. Miller |
14 | CLF 2023 PROXY STATEMENT
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STRATEGY AND SUSTAINABILITY COMMITTEE |
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MEMBERS: 4 | INDEPENDENT: 3 | 2022 MEETINGS: 5 |
RESPONSIBILITIES: |
▪Oversees Cliffs’ strategic plan and annual management objectives ▪Acts in an advisory capacity with respect to Cliffs' sustainability strategies, its commitment to environmental stewardship, its focus on health and safety of employees and other stakeholders, and its corporate social responsibility initiatives ▪Monitors risks and opportunities relevant to Cliffs' strategy, including operational, safety, environmental, social and governance risks, as well as climate-related risks and decarbonization opportunities ▪Provides advice and assistance with developing our current and future strategy ▪Provides follow-up oversight with respect to the comparison of actual results with estimates for major projects and post-acquisition integration efforts ▪Assesses Cliffs’ overall capital structure and its capital allocation priorities ▪Assists management in determining the resources necessary to implement Cliffs’ strategic and financial plans ▪Considers the merits and risks of potential acquisitions, joint ventures, emerging growth opportunities and strategic alliances ▪Reviews and approves any sustainability reports that Cliffs may publish from time to time |
CHAIR: Lourenco Goncalves | MEMBERS: Gabriel Stoliar, Douglas C. Taylor and Arlene M. Yocum |
IDENTIFICATION AND EVALUATION OF DIRECTOR CANDIDATES
Shareholder Nominees
The policy of the Governance Committee is to consider properly submitted shareholder nominations for candidates for membership on the Board as described below under “Identifying and Evaluating Nominees for Director.” In evaluating nominations, the Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth below under “Board Diversity and Director Qualifications.” Any shareholder nominations proposed for consideration by the Governance Committee should include: (i) complete information as to the identity and qualifications of the proposed nominee, including name, address, present and prior business and/or professional affiliations, education and experience, and particular fields of expertise; (ii) an indication of the nominee’s consent to serve as a director if elected; and (iii) the reasons why, in the opinion of the recommending shareholder, the proposed nominee is qualified and suited to be a director. Shareholder nominations should be addressed to Cleveland-Cliffs Inc., 200 Public Square, Suite 3300, Cleveland, Ohio 44114, Attention: Secretary. Our Regulations provide that, at any meeting of shareholders at which directors are to be elected, only persons nominated as candidates will be eligible for election.
Board Diversity and Director Qualifications
The Governance Committee considers board diversity as it deems appropriate and consistent with our Corporate Governance Guidelines, the Governance Committee charter and other criteria established by the Board. The Governance Committee’s goal in selecting directors for nomination to the Board generally is to seek to create a well-balanced team that combines diverse experience, skill and intellect of seasoned directors in order to enable us to pursue our strategic objectives. The Governance Committee has not reduced the qualifications for service on the Board to a checklist of specific standards or minimum qualifications, skills or qualities. Rather, the Governance Committee seeks, consistent with the vacancies existing on the Board at any particular time and the interplay of a particular candidate’s experience with the experience of other directors, to select individuals whose business experience, knowledge, skills, diversity and integrity would be considered a desirable addition to the Board and any committees thereof. In addition, the Governance Committee annually conducts a review of incumbent directors in order to determine whether a director should be nominated for re-election to the Board.
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Identifying and Evaluating Nominees for Director
The Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Governance Committee regularly reviews the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the Governance Committee considers various potential candidates for director. Applicable considerations include: whether the current composition of the Board is consistent with the criteria described in our Corporate Governance Guidelines; whether the candidate submitted possesses the qualifications that generally are the basis for selection of candidates to the Board; and whether the candidate would be considered independent under the rules of the NYSE and our standards with respect to director independence. Candidates may come to the attention of the Governance Committee through current Board members, professional search firms, shareholders or other persons. As described above, the Governance Committee considers properly submitted shareholder nominations for candidates for the Board. Following verification of the recommending shareholder’s status, recommendations are considered by the Governance Committee at its next regularly scheduled meeting. Final approval of any candidate is determined by the full Board.
COMMUNICATIONS WITH DIRECTORS
Shareholders and other interested parties may communicate with the Lead Director, our non-management directors as a group or the Board by writing to the Lead Director at Cleveland-Cliffs Inc., 200 Public Square, Suite 3300, Cleveland, Ohio 44114. As set forth in the Corporate Governance Guidelines, the Lead Director will report to the Board periodically regarding any bona fide requests from external constituencies or employees to meet with the Board. The Secretary routinely filters communications that are solicitations, complaints, unrelated to Cliffs or Cliffs' business, inappropriate or determined to pose a possible security risk to the addressee.
CODE OF BUSINESS CONDUCT AND ETHICS
We have adopted a Code of Business Conduct and Ethics (the "Code of Conduct Policy"), which applies to all of our directors, officers and employees. The Code of Conduct Policy is available on our website at www.clevelandcliffs.com under "Investors" then "Governance" and then "Governance Documents". We intend to post amendments to or waivers from the Code of Conduct Policy (to the extent applicable to our principal executive officer, principal financial officer or principal accounting officer) on our website. References to our website and the contents thereof do not constitute incorporation by reference of the information contained on our website, and such information is not part of this proxy statement.
INDEPENDENCE AND RELATED PARTY TRANSACTIONS
Of our current directors, the Board has determined that each of Messrs. Baldwin, Fisher, Gerber, Michael, Stoliar and Taylor and Mses. Green, Miller and Yocum has no material relationship with us (either directly or as a partner, shareholder or officer of an organization that has a relationship with us) and is independent within the NYSE director independence standards. Mr. Goncalves is our Chairman, President and CEO and, as such, is not considered independent.
We have a written Related Party Transactions Policy (our "RPT Policy"), pursuant to which we will enter into a related party transaction only if our CEO and Chief Legal Officer determine that the transaction is comparable to those that could be obtained in arm’s length dealings with an unrelated third party. If the transaction is approved by our CEO and Chief Legal Officer, then the transaction also must be approved by the disinterested members of our Audit Committee. Under our RPT Policy, any related party transactions are reviewed by the Audit Committee at each quarterly meeting. After review, the disinterested members of the Audit Committee either approve or disapprove the proposed transaction. Management is responsible for updating the Audit Committee at each quarterly meeting as to any material changes to those transactions that the Audit Committee has previously approved. For purposes of our RPT Policy, we define a related person as any person who is a director, executive officer, nominee for director or an immediate family member of a director, an executive officer or a nominee for director. We define a related party transaction as a transaction, agreement or relationship in which Cliffs was, is or will be a participant, the amount of the transaction exceeds $120,000, and a related person has or will have a direct or indirect material interest. However, compensation paid by Cliffs for service as a director or executive officer of the Company is not deemed to be a related party transaction, even if the aggregate amount involved exceeds $120,000.
We describe below those transactions during 2022 in which Cliffs was a participant and the amount involved exceeded $120,000 and in which a related person had or will have a direct or indirect material interest. We recognize that transactions between us and any of our directors or executive officers can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations other than the best interests of our shareholders.
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1. Mr. Celso Goncalves, our Executive Vice President, Chief Financial Officer ("CFO"), is the son of Mr. Lourenco Goncalves, our Chairman, President and CEO, both of whom are NEOs. The compensation arrangements between the Company and each of Mr. Celso Goncalves and Mr. Lourenco Goncalves could be considered related party transactions under our RPT Policy and have been reviewed and approved by our Audit Committee in accordance with our RPT Policy. For details on the compensation arrangements between the Company and each of Mr. Celso Goncalves and Mr. Lourenco Goncalves, please see the Executive Compensation Tables and Narratives beginning on page 52. 2. Certain of our subsidiaries have contracted on an arm's length basis for work with Morgan Engineering Systems, Inc. ("Morgan Engineering"), which is a company owned by Mr. Mark Fedor. Mr. Mark Fedor is the brother of Mr. Terry Fedor, who serves as our Executive Vice President, Operations. Our subsidiaries may determine to continue to engage Morgan Engineering in the ordinary course of business to provide services on an arm's length basis in future years, and such services may exceed the $120,000 annual threshold under our RPT Policy. For example, during 2022, Morgan Engineering was paid approximately $8.2 million for work performed for our subsidiaries. Mr. Terry Fedor was not involved in engaging Morgan Engineering and has agreed to abstain from any future actions related to Morgan Engineering. In accordance with our RPT Policy, during 2022, the CEO and the Chief Legal Officer, as well as the Audit Committee, approved and ratified transactions with Morgan Engineering.
We have entered into indemnification agreements with each current member of the Board and each of our officers. The form and execution of the indemnification agreements were approved and adopted by the Board on April 24, 2019. The indemnification agreements essentially provide that, to the fullest extent permitted or required by Ohio law and as the law may change to increase the scope of indemnification, we will indemnify the indemnitee against all expenses, costs, liabilities and losses (including attorneys’ fees, judgments, fines or settlements) incurred or suffered by the indemnitee in connection with any suit in which the indemnitee is a party or otherwise involved as a result of his or her service as a member of the Board or as an officer of the Company. Under these agreements, to the extent that the indemnification is unavailable, we shall contribute to the payment of any and all indemnifiable claims or losses in an amount that is fair and reasonable under the circumstances. In connection with the indemnification agreements with each current member of the Board, we have a trust agreement with KeyBank National Association pursuant to which the parties to the indemnification agreements may be reimbursed with respect to enforcing their respective rights under the indemnification agreements.
In 2004, we reached an agreement with the United Steelworkers ("USW"), pursuant to which the USW may designate a member to the Board provided that the individual is acceptable to the Board Chair, is recommended by the Board Affairs Committee (now known as the Governance Committee), and is then approved by the full Board to be considered a director nominee. In 2007, Susan Green was first proposed by the USW, elected to the Board by Cliffs’ shareholders in July 2007, and re-elected in each of the years 2008 through 2013. As a result of the proxy contest in 2014, Ms. Green was not re-elected but was asked by the reconstituted Board to re-join the Board and was subsequently appointed on October 15, 2014 and re-elected each year since 2015.
17 | CLF 2023 PROXY STATEMENT