PROPOSAL 1: ELECTION OF DIRECTORS
|
At
the Annual Meeting, eleven director nominees are up for election for a one-year term. Each nominee elected will serve until our next annual meeting of stockholders. All of the nominees, other than
Mr. Faraci, are presently members of the Board of Directors. Mr. Faraci's nomination was recommended by an incumbent director. The Board is recommending that all eleven nominees be elected.
Except
in the case of contested elections, each director nominee is elected if a majority of the votes are cast for that director's election. The term "a majority of the votes cast" means that the
number of votes cast "for" a director's election exceeds the number of votes cast "against" the director's election, with abstentions and broker non-votes not counted as votes cast either "for" or
"against" the director's election. A "contested election" is one in which the number of nominees exceeds the number of directors to be elected at the meeting.
If
a nominee who is currently serving as a director is not re-elected, Delaware law provides that the director would continue to serve on the Board until the director's successor is duly elected and
qualified or until the director's earlier resignation or removal. Under our by-laws, in order for any incumbent director to become a nominee for election by the stockholders as a director, that
director must tender an irrevocable offer to resign from the Board of Directors, contingent upon acceptance of such offer of resignation by the Board of Directors, if the director fails to receive a
majority of the votes cast in an election that is not a contested election. If an incumbent director fails to receive a majority of the votes cast in an election that is not a
contested
election, the Corporate Governance & Public Policy Committee, or such other independent committee designated by the Board of Directors, must make a recommendation to the Board of
Directors as to whether to accept or reject the offer of resignation of the incumbent director, or to take other action.
The
Board of Directors must act on the offer of resignation, taking into account the committee's recommendation, within 90 days following certification of the election results. Each of the
Corporate Governance & Public Policy Committee, in making its recommendation, and the Board of Directors, in making its decision, may consider such factors and other information as it may
consider appropriate and relevant to the circumstances.
A
brief statement about the background and qualifications of each nominee is provided on the following pages. No director has a familial relationship to any other director, nominee for director or
executive officer. The independence of Board members and other information related to the Board of Directors is described under the heading, "Corporate Governance Independence" in
this proxy statement. If any nominee for whom you have voted becomes unable to serve, your proxy may be voted for another person designated by the Board.
|
|
|
|
|
The Board recommends a vote "FOR" the election of each nominee.
|
Selection of Director Nominees
The
Corporate Governance & Public Policy Committee is responsible for identifying nominees for election to the Board. The Corporate Governance & Public Policy Committee may consider
nominees suggested by several sources, including outside search firms, incumbent Board members and stockholders.
As
provided in its charter, the Corporate Governance & Public Policy Committee seeks candidates with experience and abilities relevant to serving as a director of the Corporation
and who will represent the best interests of stockholders as a whole, and not any specific interest group or constituency.
The
Corporate Governance & Public Policy Committee, with input from the Chairman of the Board and other directors, evaluates the qualifications of each director candidate in accordance with the
criteria described in the director qualification standards section of our Corporate Governance Principles. In evaluating the qualifications of director nominees, the Corporate Governance &
Public Policy
Committee
considers factors including, but not limited to, the following:
Independence.
Directors should neither have, nor appear to have, a conflict of interest that would impair the director's ability to represent the
interests of all the Corporation's stakeholders and to fulfill the responsibilities of a director.
Commitment.
Directors should be able to contribute the time necessary to be actively involved in the Board and its decision making and should be
able and willing to prepare for and attend Board and committee meetings.
Diversity.
Though the Board does not have a formal policy regarding the consideration of diversity in identifying nominees for director, directors
should be selected so that the Board represents diverse experience at various policy making and executive levels in business, government, education and in industries that are relevant to the
Corporation's business operations. The Board considers the term "diversity" to include differences of viewpoint, professional experience, education, skill and other individual qualities and attributes
that contribute to Board heterogeneity.
United States Steel Corporation
|
2019 Proxy
Statement
|
1
Table of Contents
Proposal 1: Election of Directors
|
Experience.
Directors should be or have been in leadership positions in their field of endeavor and have a record of excellence in that field.
Integrity.
Directors should have a reputation of integrity and be of the highest ethical character.
Judgment.
Directors should have the ability to exercise sound business judgment on a large number of matters.
Knowledge.
Directors should have a firm understanding of business strategy, corporate governance, board operations and other relevant business
matters.
Skills.
Directors should be selected so that the Board has an appropriate mix of skills in critical core areas, including, but not limited to:
accounting, compensation, finance, government relations, legal, management, risk oversight and strategic planning.
These
director qualification standards are evaluated by the Corporate Governance & Public Policy Committee each time a new candidate is considered for Board membership. The Corporate
Governance & Public Policy Committee and the Board may take into account such other factors they consider to be relevant to the success of a publicly traded company operating in the steel
industry. As part of the annual nomination process, the Corporate Governance & Public Policy Committee reviews the qualifications of each director nominee, including currently serving Board
members, and reports its findings to the Board. On February 25, 2019, the Corporate Governance & Public Policy Committee determined that each director nominee satisfied the director
qualification standards and advised the Board that each of the director nominees listed under "Proposal 1: Election of Directors" was qualified to serve on the Board.
Stockholder Recommendations
|
The
Corporate Governance & Public Policy Committee will consider director nominees recommended by stockholders. Notice of such recommendation should be sent in writing to the Chair of the
Corporate Governance & Public Policy Committee, c/o the Corporate Secretary of United States Steel Corporation, 600 Grant Street, Suite 1500, Pittsburgh, PA 15219.
The recommendation must include: (i) the candidate's name, address, occupation and share ownership; (ii) any other biographical information that will enable the Corporate
Governance & Public Policy Committee to evaluate the candidate in light of the criteria described above; and (iii) information concerning any relationship between the candidate and the
stockholder making the recommendation. The recommendation must also identify the writer as a stockholder of the Corporation and
provide
sufficient detail for the Corporate Governance & Public Policy Committee to consider the recommended individual's qualifications. The Corporate Governance & Public Policy
Committee will evaluate the qualifications of candidates recommended by stockholders using the same criteria as used for other Board candidates.
Under
the collective bargaining agreement with the United Steelworkers (the "USW"), the USW has the ability to recommend up to two individuals to be considered for Board membership. The agreement
recognizes that every director has a fiduciary duty to the Corporation and all of its stockholders, and that each individual recommended by the USW must meet the criteria described above.
For purposes of the upcoming annual meeting, the Corporate Governance & Public Policy Committee has recommended the election of each nominee as a
director. Each nominee has informed the Board that he or she is willing to serve as a director. If any nominee should decline or become unable or unavailable to serve as a director for any reason,
your proxy authorizes the persons named in the proxy to vote for a replacement nominee, if the Board names one, as such persons determine in their best judgment.
It
is the intention of the proxyholders to vote proxies for the election of the nominees named in this proxy statement, unless such authority is withheld.
The
following is a brief description of the age, principal occupation, position and business experience, including other public company directorships, for at least the past five years, and major
affiliations of each of the nominees. Each nominee's biographical information includes a description of the director's experience, qualifications, attributes and skills that qualify him or her to
serve on the Board.
2
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Proposal 1: Election of Directors
|
United States Steel Corporation
|
2019 Proxy
Statement
|
3
Table of Contents
Proposal 1: Election of Directors
|
The Board of Directors recommends a vote
"FOR" the election of each of the following 2019 Director Nominees for a one-year term:
|
-
-
David B. Burritt
earned a bachelor's degree in accounting from Bradley
University and received a master's degree in business administration from the University of Illinois in Champaign. Mr. Burritt was appointed president and chief executive officer of United
States Steel Corporation in May 2017. At that time, Mr. Burritt was also named to the Corporation's Board of Directors. He had been elected president and chief operating officer in February
2017 with executive responsibility for all aspects of the Corporation's day-to-day business in the United States and Central Europe. Mr. Burritt joined U. S. Steel in September 2013 to serve as
executive vice president and chief financial officer with responsibility for all aspects of the Corporation's strategic and financial matters. In January 2015, he added executive leadership of U. S.
Steel's North American Flat-rolled commercial entities and corporate support services. Prior to joining U. S. Steel, Mr. Burritt, served as chief financial officer at Caterpillar Inc.
Mr. Burritt serves on the board of directors for Lockheed Martin, and also is a member of The Business Council, the National Safety Council, the American Iron & Steel Institute,
and the Allegheny Conference on Community Development.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
As the Chief Executive Officer, Mr. Burritt is responsible for all of the business and corporate affairs of U. S. Steel. He provides broad
insight with nearly four decades of experience in the understanding of complex strategic, financial and operational matters. As the only employee-director on the Board, Mr. Burritt is able to
provide the Board with an "insider's view" of what is happening in all facets of the Corporation. He shares not only his vision for the Corporation, but also his hands-on experience as a result of his
daily management of the Corporation and constant communication with employees, customers and stockholders. His insider's perspective provides the Board with invaluable information necessary to direct
the business and affairs of the Corporation.
-
-
Patricia Diaz Dennis
graduated from the University of California Los
Angeles and received her law degree from the Loyola Law School of Loyola Marymount University. Ms. Dennis has held three Senate-confirmed federal government appointments. President Ronald
Reagan named her to the National Labor Relations Board in 1983 and appointed her a commissioner of the Federal Communications Commission three years later. After becoming partner and head of the
communications section of Jones, Day, Reavis & Pogue, Ms. Dennis returned to public service in 1992 when President George H. W. Bush appointed her Assistant Secretary of State for Human
Rights and Humanitarian Affairs. Ms. Dennis served in a variety of executive positions with SBC Communications, Inc., which later became AT&T, including General Counsel and Secretary of
SBC West from May 2002 until August 2004 and Senior Vice President and Assistant General Counsel of AT&T from 2004 to 2008. Ms. Dennis currently serves on the board of Entravision
Communications Corporation and Amalgamated Bank, and previously served on the board of Massachusetts Mutual Life Insurance Company. She also is a trustee of the NHP Foundation, a member of the
Advisory Board for LBJ Family Wealth Advisors, and Chair of the World Affairs Council of San Antonio Board of Trustees.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Ms. Dennis' legal expertise and federal government public service contribute to her skills in the areas of risk management, compliance,
internal controls, employment, legislative and administrative issues. Additionally, her National Labor Relations Board experience brings significant union relations insight and expertise to the Board.
These factors, along with her long record of demonstrated executive leadership and integrity, provide valued insight and perspective to Board deliberations and oversight of the Corporation's
operations. Ms. Dennis' experience on the board of directors of a large insurance firm also demonstrates her experience with complex financial and operational issues. Ms. Dennis'
appointments to three federal government positions provide her with unique insight with respect to regulatory and public policy matters, both of which strengthen the Board's collective knowledge,
capabilities and experience.
4
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Proposal 1: Election of Directors
|
-
-
Dan O. Dinges
graduated from The University of Texas with a Bachelor of
Business Administration degree in Petroleum Land Management. Mr. Dinges began his career with Mobil Oil Corporation in 1978. From 1981 to 2001, Mr. Dinges worked in a variety of
management positions with Samedan Oil Corporation, a subsidiary of Noble Affiliates, Inc. (now Noble Energy Inc.). In September 2001, Mr. Dinges joined Cabot Oil & Gas
Corporation as its President and Chief Operating Officer, and assumed his current position as Chairman, President and Chief Executive Officer in May 2002. Mr. Dinges serves on the board of
directors of the American Petroleum Institute, Spitzer Industries, Inc., the American Exploration & Production Council, Houston Methodist Hospital Research Institute, Boy Scouts of
America, and Palmer Drug Abuse Program. Mr. Dinges previously served on the board of directors of Lone Star Technologies, Inc. Mr. Dinges is also a member of the All-American
Wildcatters Association and serves on the executive committee of the Kay Bailey Hutchison Center for Energy, Law and Business at The University of Texas at Austin.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Mr. Dinges has substantive experience in managing and overseeing strategic and operational matters as a result of his service as Chairman,
President and Chief Executive Officer of Cabot Oil & Gas Corporation. Mr. Dinges also possesses knowledge of and insight into the steel industry through his prior service as a director
of Lone Star Technologies, Inc. In addition, he provides the Board with an insightful perspective regarding the energy industry which is an important supplier to, and customer of, the
Corporation. Mr. Dinges' experience as Chairman, President and Chief Executive Officer of Cabot Oil & Gas Corporation demonstrates his leadership capability and general business acumen.
-
-
John J. Engel
graduated from Villanova University in 1984 with a
Bachelor of Science degree in mechanical engineering. He received his Master of Business Administration from the University of Rochester in 1991. Mr. Engel has served as Chairman, President and
Chief Executive Officer of WESCO International, Inc. since 2011. Previously, at WESCO International, Inc., Mr. Engel served as President and Chief Executive Officer from 2009 to
2011, and Senior Vice President and Chief Operating Officer from 2004 to 2009. Before joining WESCO in 2004, Mr. Engel served as Senior Vice President and General Manager of
Gateway, Inc.; Executive Vice President and Senior Vice President of Perkin Elmer, Inc.; and Vice President and General Manager of Allied Signal, Inc. Mr. Engel also held
various engineering, manufacturing and general management positions at General Electric Company. Mr. Engel is a member of the Business Roundtable and the Business Council, and is a member of
the board of directors of the National Association of Manufacturers.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
As a result of his service as Chairman, President and Chief Executive Officer of WESCO International, Inc. and working in a diverse range of
industries, Mr. Engel has skills and valuable experience managing the significant operational and financial issues that the Corporation is likely to face. Further, Mr. Engel's
demonstrated business acumen, strategic planning and risk oversight experience makes him a valued member of our Board.
United States Steel Corporation
|
2019 Proxy
Statement
|
5
Table of Contents
Proposal 1: Election of Directors
|
-
-
John V. Faraci
graduated from Denison University with a degree in
history and economics. He received his Master of Business Administration from the University of Michigan's Ross School of Business. Mr. Faraci is currently an Operating Partner with Advent
International.
-
-
Mr. Faraci
served as Chairman and Chief Executive Officer of International Paper from 2003 to 2014. During his 40-year career at International
Paper, Mr. Faraci served in a series of financial, planning and management positions, including President and Chief Executive Officer and Chief Financial Officer. Mr. Faraci is a member
of the board of directors of ConocoPhillips, PPG Industries, Inc., and United Technologies Corporation. He also serves on the board of the National Fish and Wildlife Foundation, is Chairman of
the Board of Trustees of Denison University, a member of the Royal Bank of Canada Advisory Board, a trustee of the American Enterprise Institute, and a member of the Council on Foreign Relations.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Mr. Faraci's career at International Paper provided him with extensive executive experience managing and overseeing strategic and
operational matters for a large, complex enterprise. Mr. Faraci's service on the boards of directors of Fortune 100 companies also demonstrates his knowledge of complex financial and
operational issues, all of which strengthen the Board's collective knowledge, capabilities and experience.
-
-
Murry S. Gerber
received a Bachelor's degree in geology from Augustana
College and a Master's degree in geology from the University of Illinois. From 1979 to 1998, Mr. Gerber served in a series of technical and management positions with Shell Oil Company,
including Chief Executive Officer of Coral Energy, L.P. (now Shell Trading North America) from 1995 to 1998. Mr. Gerber served as Chief Executive Officer and President of EQT Corporation
from June 1998 through February 2007; Chairman and Chief Executive Officer from May 2000 through April 2010; and Executive Chairman from April 2010 until May 2011. Mr. Gerber is also a member
of the boards of directors of BlackRock, Inc. and Halliburton Company.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Mr. Gerber has valuable experience in overseeing various managerial, financial and operational issues that a publicly held company faces as
a result of his service as Chairman and Chief Executive Officer of EQT Corporation. Mr. Gerber also provides the Board with knowledge and insight regarding the energy industry, an important
supplier to, and customer of, the Corporation. Mr. Gerber's experience on the boards of directors of publicly held companies demonstrates his knowledge of complex strategic financial and
operations matters.
6
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Proposal 1: Election of Directors
|
-
-
Stephen J. Girsky
received a Bachelor of Science degree in mathematics
from the University of California at Los Angeles and a Master of Business Administration from the Harvard Business School. Mr. Girsky is Managing Partner of VectoIQ, an independent advisory
firm based in New York, where he applies more than 30 years of experience working with senior corporate and board executives, labor leaders, OEM leaders, suppliers and dealers, and national and
local policy makers. Mr. Girsky served in a number of capacities at General Motors from November 2009 until July 2014, including GM Vice Chairman, having responsibility for global corporate
strategy, new business development, global product planning and program management, global connected consumer/OnStar, and GM Ventures LLC, Global Research & Development and Global
Purchasing and Supply Chain. Mr. Girsky served as Chairman of the Adam Opel AG Supervisory Board and was President of GM Europe for a period of time. Mr. Girsky is a director at
Brookfield Business Partners, VectoIQ Acquisition Corp., Drive.ai, and Valens Semiconductor Ltd. He served on the General Motors Board of Directors following its emergence from bankruptcy in
June 2009 until June 2016. He also served as the lead director of Dana Holdings Corp. from 2008 to 2009. Mr. Girsky has also served as president of Centerbridge Industrial Partners, an
affiliate of Centerbridge Partners, LP, and a multibillion dollar investment fund. Prior to Centerbridge, he was a special advisor to the CEO and CFO of General Motors Corporation from August
2005 to June 2006.
-
-
In
total, Mr. Girsky has more than 25 years of automotive experience, including serving as managing director at Morgan Stanley and as
senior analyst of the Morgan Stanley Global Automotive and Auto Parts Research Team. Prior to joining Morgan Stanley, he was managing director of PaineWebber's Automotive Group and worked as an
analyst on the overseas financial staff of GM.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Mr. Girsky's career at GM provided him with extensive experience in global corporate strategy, product development, program management,
research and development and business leadership. Mr. Girsky also brings to the Board expertise related to the automotive industry, finance, market and risk analysis, and labor relations which
add valuable insight and perspective to Board deliberations and in the oversight of the Corporation's operations. Mr. Girsky's service on the board of directors of a Fortune 100 company also
demonstrates his knowledge of complex financial and operational issues, all of which strengthen the Board's collective knowledge, capabilities and experience.
-
-
Paul A. Mascarenas
received a degree in mechanical engineering from
University of London, King's College in England and in June 2013, received an honorary doctorate degree from Chongqing University in China. Mr. Mascarenas served as President and Chairman of
the Executive Board of FISITA (Fédération Internationale des Sociétés d'Ingénieurs des Techniques de l'Automobile) from 2014
to 2016. Previously, Mr. Mascarenas worked for 32 years at Ford Motor Company, holding various development and engineering positions, and most recently serving as Chief Technical Officer
and Vice President, leading Ford's worldwide research organization, overseeing the development and implementation of the company's technology strategy and plans. Mr. Mascarenas is a fellow of
the Institution of Mechanical Engineers, and a fellow of the Society of Automotive Engineers. He served as general chairperson for the 2010 SAE World Congress and Convergence and has served on the
FISITA board since 2012. Mr. Mascarenas also currently serves on the board of directors at ON Semiconductor, Spartan Motors, Inc., and Borg Warner Inc., and is a Venture Partner
with Fontinalis Partners. In 2015, he was awarded an Order of the British Empire (OBE) by Her Majesty, Queen Elizabeth II, for his services to the automotive industry.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Mr. Mascarenas' long career at Ford provided him with extensive experience in product development, program management and business
leadership, as well as experience working in an international forum. Mr. Mascarenas also brings to the Board insight and expertise related to the automotive industry. This experience, along
with Mr. Mascarenas' record of demonstrated executive leadership, enables him to provide valued insight and perspective to Board deliberations and in the oversight of the Corporation's
operations. Mr. Mascarenas' service on the board of directors of public companies also demonstrates his knowledge of complex financial and operational issues, all of which strengthen the
Board's collective knowledge, capabilities and experience.
United States Steel Corporation
|
2019 Proxy
Statement
|
7
Table of Contents
Proposal 1: Election of Directors
|
-
-
Eugene B. Sperling
graduated from the University of Minnesota and Yale
Law School and attended Wharton Business School at the University of Pennsylvania. He currently heads Sperling Economic Strategies, which advises various companies, start-ups, philanthropies and
foundations and is a contributing editor for The Atlantic.
-
-
Mr. Sperling
served as Director of the National Economic Council (NEC) and Assistant to the President for Economic Policy in the White House under
President Clinton from 1997 to 2001 and under President Obama from 2011 to 2014, the first individual to hold both positions under two presidents. As NEC Director, he coordinated economic policy
development among the economic cabinet members. While serving in this role, he was influential in fiscal negotiations, passage of the payroll and low-income tax cuts, the Small Business Jobs Act and
formation of the American Jobs Act. He spearheaded the Manufacturing Innovation Hubs initiative and the renewal of the Advanced Manufacturing Partnership. Mr. Sperling was co-chair of the first
White House Manufacturing Council and helped launch the Select USA initiative.
-
-
Mr. Sperling
also served as counselor to Treasury Secretary Timothy Geithner at the U.S. Department of the Treasury and as a member of the
President's Auto Task Force. He was the founder and director, from 2002 to 2008, of the Center for Universal Education, which specializes in education for girls and boys in developing and
conflict-impacted nations. Mr. Sperling currently serves on the board of directors of Ripple Labs.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Stemming from his vast experience in government, Mr. Sperling brings to the Board valuable experience in public policy, economic policy,
governmental affairs, and governance. He also provides the Board with knowledge and insight regarding the economy, market and risk analysis, manufacturing and innovation, the automotive industry, and
labor relations, which add valuable insight and perspective to Board deliberations.
-
-
David S. Sutherland
earned a Bachelor of Commerce degree from the
University of Saskatchewan and a Master of Business Administration from the University of Pittsburgh's Katz Graduate School of Business. Mr. Sutherland retired as President and Chief Executive
Officer of the former IPSCO, Inc., a leading North American steel producer, in July 2007 after spending 30 years with the company and more than five as President and Chief Executive
Officer. Mr. Sutherland became the independent Chairman of the Board of U. S. Steel on January 1, 2014. Mr. Sutherland is a director of GATX Corporation and Imperial
Oil, Ltd. Mr. Sutherland is a former chairman of the American Iron and Steel Institute and served as a member of the boards of directors of IPSCO, Inc., the Steel Manufacturers
Association, the International Iron and Steel Institute, the Canadian Steel Producers Association and the National Association of Manufacturers.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
By virtue of his background and experience, Mr. Sutherland has an extraordinarily broad and deep knowledge of the steel industry. As a
former Chief Executive Officer, Mr. Sutherland understands the issues facing executive management of a major corporation. His prior experiences enable him to provide the Board with valuable
insights on a broad range of business, social and governance issues that are relevant to large corporations.
8
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Proposal 1: Election of Directors
|
-
-
Vice Admiral Tracey
holds a Bachelor of Arts degree in Mathematics from
the College of New Rochelle and a Master of Science in Operations Research and Systems Analysis from the Naval Postgraduate School. From 1970 to 2004, Vice Admiral Tracey served in increasingly
responsible operational and staff positions with the United States Navy, including Chief of Naval Education and Training from 1996 to 1998, Deputy Assistant Secretary of Defense (Military Personnel
Policy) from 1998 to 2001, and Director, Navy Headquarters Staff from 2001 to 2004. Vice Admiral Tracey served as a consultant on decision governance processes to the United States Navy from 2004 to
2005 and to the Department of Defense from 2005 to 2006. She took a position as a Client Industry Executive for business development and performance improvement with Electronic Data System Corporation
in 2006. Hewlett Packard Co. acquired Electronic Data Systems Corporation in August 2008. Vice Admiral Tracey left her position as Vice President, Homeland Security and Defense Services with HP
Enterprise Services in October 2016. She currently consults with Perspecta, Inc. She also serves on the board of trustees of Norwich University and the Board of Directors of Armed Forces
Benefits Association.
-
-
Particular experience, attributes or skills that qualify candidate for Board
membership:
Vice Admiral Tracey gained significant senior executive leadership experience over a 34-year career in the U.S. military, including a three star
assignment as the equivalent of chief executive officer of a $5B global enterprise responsible for industrial operations in support of live warfighting training. She brings deep experience in
governmental affairs, planning and executing large scale organization and workforce transformation strategies, occupational safety and environmental compliance, and governance. She brings insight
regarding information technology and cybersecurity gained from overseeing implementation of advanced solutions for Department of Defense and Homeland Security agencies.
United States Steel Corporation
|
2019 Proxy
Statement
|
9
Table of Contents
Corporate governance is a continuing focus at U. S. Steel, embraced by the Board of Directors, management, and all employees. The Corporation has a
long and rich tradition relating to corporate governance and public company disclosure, including being one of the first publicly traded
companies in United States history to hold an annual meeting of stockholders and to publish an annual report. In this section, we describe some of our key
governance policies and practices.
GOVERNANCE PRACTICES
U. S. Steel is committed to maintaining the highest standards of corporate governance and ethical conduct, which we believe are essential for
sustained success and long-term stockholder value. In light of this goal, the Board oversees, counsels and directs management in the long-term interests of the Corporation, its stockholders and its
customers. Our governance framework gives our highly-experienced directors the structure necessary to provide oversight, advice and counsel to U. S. Steel. The Board's responsibilities
include, but are not limited to:
-
-
overseeing the management of our business and the assessment of our business risks;
-
-
overseeing the processes for maintaining the integrity of our financial statements and other public disclosures, and compliance with laws and
ethical principles;
-
-
reviewing and approving our major financial objectives and strategic and operating plans;
-
-
overseeing our human capital management and succession planning for the CEO and other key executives; and
-
-
establishing an effective governance structure, including appropriate board composition and planning for board succession.
The
Board discharges its responsibilities through regularly scheduled meetings as well as through telephonic meetings, actions by written consent and other communications with management as
appropriate. U. S. Steel expects directors
to attend all meetings of the Board and the Board committees upon which they serve, and all annual meetings of the Corporation's stockholders. During the fiscal
year ended December 31, 2018, the Board held seven meetings and numerous interim conference calls. All of the directors attended in excess of 75% of the meetings of the Board and the committees
on which they served. All but one of the incumbent directors attended the 2018 Annual Meeting of Stockholders.
The
Board has long adhered to governance principles designed to assure excellence in the execution of its duties. The Board regularly reviews the Corporation's governance policies and practices, which
are responsive to stockholder feedback. These principles are outlined in our Corporate Governance Principles, which, in conjunction with our certificate of incorporation, by-laws, Board committee
charters and related policies, form the framework for the effective governance of the Corporation.
The
full text of the Corporate Governance Principles, by-laws, the charters for each of the Board committees, and the Corporation's Code of Ethical Business Conduct are available on the Corporation's
website, www.ussteel.com. These materials are also available in print to any person, without charge, upon written request to:
Corporate
Secretary,
United States Steel Corporation,
600 Grant Street, Suite 1500,
Pittsburgh, PA 15219.
10
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Corporate Governance At A Glance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leadership Structure
|
|
|
|
Our Chairman is
independent. He interacts closely with our Chief Executive Officer
The independent Board members elect our Chairman annually. Among other duties, our Chairman leads executive sessions of the independent directors to discuss certain matters
without management present
|
|
|
|
|
|
|
|
|
|
|
|
Board Composition
|
|
|
|
Currently, the Board has
fixed the number of directors at 11
The Board regularly assesses its performance through Board and committee self-evaluations
|
|
|
|
|
|
|
|
|
|
|
|
Board Independence
|
|
|
|
10 out of 11 of our
nominees are independent
Our
CEO is the only management director
|
|
|
|
|
|
|
|
|
|
|
|
Board Committees
|
|
|
|
We have four Board
committees Executive, Audit, Corporate Governance & Public Policy, and Compensation & Organization
With the exception of the Executive Committee (our Chairman and CEO serve on this committee), all other committees are composed entirely of
independent directors
|
|
|
|
|
|
|
|
|
|
|
|
Management
Succession Planning
|
|
|
|
The Board actively monitors
succession planning and talent development and receives regular updates on employee engagement, diversity and retention matters
At least twice per year, the Board reviews senior management succession and development plans
|
|
|
|
|
|
|
|
|
|
|
|
Director Stock Ownership
|
|
|
|
Our directors are required
to receive more than half of their annual retainer in shares of our common stock and must hold these shares during their entire tenure on the Board
|
|
|
|
|
|
|
|
|
|
|
|
Risk Oversight
|
|
|
|
Our full Board is
responsible for risk oversight, and has designated committees to have particular oversight of certain key risks
Our Board oversees management as management fulfills its responsibilities for the assessment and mitigation of risks and for taking appropriate risks
|
|
|
|
|
|
|
|
|
|
|
|
Accountability to
Stockholders
|
|
|
|
We use majority voting in
uncontested director elections
We have annual election of directors
We implemented a proxy access by-law provision in line with market standards, which enables certain of our stockholders to nominate directors and have their eligible nominees included in the proxy statement with our
nominees
We actively reach
out to our stockholders through our engagement program
Stockholders can contact our Board, our Chairman or management by regular mail
|
|
|
|
|
|
|
|
|
|
|
|
BOARD LEADERSHIP STRUCTURE
The Board regularly considers the appropriate leadership structure for the Corporation. It has concluded that the Corporation and its stockholders are best
served by the Board retaining discretion to determine whether the same individual should serve as both Chief Executive Officer and Chairman of the Board, or whether the Chairman of the Board should be
an independent director. The Board believes that it is important to retain the flexibility to make this determination at any given point in time based on what it believes will provide the best
leadership structure for the Corporation, taking into account the needs of the Corporation at that time. David S. Sutherland currently serves as the independent Chairman of the Board.
If
the Chairman of the Board is not independent, the independent directors annually elect from among themselves a Lead Director. If the Chairman of the Board is independent, the Chairman's duties also
include the duties of the Lead Director. The duties of the Lead Director are as follows:
-
-
chair executive sessions of the non-employee directors;
-
-
serve as a liaison between the Chief Executive Officer and the independent directors;
-
-
approve Board meeting agendas and, in consultation with the Chief Executive Officer and the independent directors, approve Board meeting
schedules to ensure there is sufficient time for discussion of all agenda items;
-
-
approve the type of information to be provided to directors for Board meetings;
-
-
be available for consultation and direct communication with the Corporation's stockholders;
-
-
call meetings of the independent directors when necessary and appropriate; and
-
-
perform other duties as the Board may from time to time designate.
United States Steel Corporation
|
2019 Proxy
Statement
|
11
Table of Contents
BOARD'S ROLE IN RISK OVERSIGHT
The Board of Directors is responsible for the oversight of the assessment and management of risks impacting the Corporation. The Board oversees the Corporation's
enterprise-wide
risk management approach. The Board relies on its standing committees to oversee specific risks related to that committee's functions.
The Board, as a whole, considers risk assessment and risk management. The Board annually reviews the Corporation's strategic plan which includes a review of
risks related to: safety, environmental, operating and competitive matters; political and regulatory issues; employee and labor issues; and financial results and projections. Although the Audit
Committee has primary responsibility for overseeing risk management, each of our other Board committees also considers the risks within their specific areas of responsibility. Each committee regularly
reports to the full Board on its respective activities, including, when appropriate, those activities related to risk assessment and risk management oversight.
The
Audit Committee is responsible for reviewing and discussing the Corporation's policies with respect to the assessment of risks and risk management, including the
following:
-
-
the guidelines and policies that govern the process by which the assessment and management of the Corporation's exposure to risk are handled by
senior management; and
-
-
the Corporation's major risk exposures and the steps management has taken to monitor and control such exposures.
The
Corporation's Internal Audit group provides regular reports to the Audit Committee on the results of various internal audit projects and provides recommendations for the enhancement of operational
functions in order to reduce certain risks.
The
Chief Risk Officer is responsible for the Corporation's financial and business risk management, including the assessment, analysis and monitoring of business risk and opportunities and the
identification of strategies for managing risk. The Chief Risk Officer provides regular reports to the Audit Committee on these matters.
The
Corporation believes that its leadership structure, as described above, supports the Board's role in risk oversight.
BOARD OVERSIGHT OF STRATEGY
A primary responsibility of our Board is oversight of our business strategy. At each regular Board meeting throughout the year, our Board reviews our strategy,
operating plans,
and overall financial performance, and progress on each, and provides significant guidance and feedback. In addition, at least one multi-day meeting each year is
dedicated to focus
12
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
on
our long-term strategic planning. The Board also devotes significant time to reviewing our capital allocation strategy. Annually, our Board reviews and approves our capital authorization and
spending budgets, which are designed to strategically deploy capital intended to facilitate investments required to achieve operational excellence, grow profitability and generate strong returns. The
primary goal of our capital allocation strategy is to create long-term stockholder value driven by three priorities for cash: maintaining a strong balance sheet supportive of the Corporation's
strategic
objectives;
investing in operational excellence, technology and innovation aligned with our critical success factors; and returning capital to stockholders. To oversee management's performance in
executing our strategy, the Board receives regular updates and actively engages in dialogue with our executive management team. Members of our Board also periodically visit our facilities to monitor
the execution of our strategy in our business units, and to assess areas for improvement or potential risk.
BOARD OVERSIGHT OF SUCCESSION PLANNING
Our Board and management consider succession planning and professional development to be an integral part of the Corporation's long-term strategy. The Board and
management have a robust, well-developed succession planning process that not only develops internal leadership candidates, but also considers external leadership candidates for top executive roles.
The Compensation Committee is responsible for monitoring our management succession and development plans and receives regular updates on employee engagement, diversity and retention matters, which are
reported to the full Board. Our Corporate Governance Principles require all executive officers to retire at age 65. The Compensation Committee may, in its discretion, waive that requirement. At
least twice
annually, our full Board reviews senior management succession and development plans with our CEO. Our CEO then presents to the independent directors his
evaluations and recommendation of future candidates for the CEO position and other senior leadership roles and potential succession timing for those positions, including under emergency circumstances.
The Board also reviews and discusses development plans for individuals identified as high-potential candidates for senior leadership positions.
BOARD EVALUATION PROCESS
Each year, the Board conducts annual self-evaluations to determine whether it and its committees are functioning effectively and whether its governing documents
continue to remain appropriate. Our Board's self-evaluation is facilitated by a wide range of questions related to topics including operations, composition of the board, responsibilities, governing
documents and resources. The Board evaluation also includes an assessment of whether the Board (i) has the appropriate mix of skills, experience and other characteristics, including those
described earlier, and (ii) is
made up of a sufficiently diverse group of people. The process is designed and overseen by the Corporate
Governance & Public Policy Committee, and the results of the evaluations are discussed by the full Board. In 2018, the Board enhanced its typical evaluation process by engaging in a robust
review of the effectiveness of the Board, conducted by an independent advisor. Each standing committee, other than the Executive Committee, annually reviews its own performance and reports the results
and any recommendations to the Board.
The
2018 Evaluation Process is described below:
United States Steel Corporation
|
2019 Proxy
Statement
|
13
Table of Contents
BOARD REFRESHMENT
Our Board maintains a robust process in which the members focus on identifying, considering and evaluating potential board candidates. Our Corporate
Governance & Public Policy Committee leads this process by considering prospective candidates at its meetings. In identifying appropriate candidates through a thoughtful evaluation, supported
by its outside consultants, the committee is focused on aligning the skills, experience and characteristics of our Board with the strategic development of the Corporation. Among other things, the
members aim to strike a balance between the knowledge that comes from longer-term service on the Board with the fresh insights that can come from adding new members to the Board. The following shows
our board refreshment process:
Identification of Candidates
The Corporate Governance & Public Policy Committee reviews candidates identified by an independent search firm or recommended by our
directors, officers or stockholders,
taking
into consideration the qualifications and requirements outlined in our Corporate Governance Principles, as well as the skills and experience already represented on the Board.
Assessment and Interviews
The committee seeks input from other Board members and senior management to evaluate nominees for director and interviews appropriate
candidates to confirm their qualifications, interest and availability for Board service.
Nomination and Election
Upon a recommendation from the Corporate Governance & Public Policy Committee, the Board determines whether to elect a director
candidate and optimal committee placement.
Onboarding
We conduct a comprehensive onboarding process for new directors, including site visits, to provide an understanding of our business,
opportunities and challenges.
INDEPENDENCE
The following non-employee director nominees are independent within the definitions of independence of both the New York Stock Exchange ("NYSE") listing
standards and the U.S. Securities and Exchange Commission ("SEC") standards for Audit Committee members: Patricia Diaz Dennis, Dan O. Dinges, John J. Engel, John V. Faraci, Murry S.
Gerber, Stephen J. Girsky, Paul A. Mascarenas, Eugene B. Sperling, David S. Sutherland and Patricia A. Tracey. The Corporation has incorporated the NYSE and SEC independence standards into its own
categorical standards for independence. The Board has affirmatively determined that none of the directors or nominees for director, other than Mr. Burritt, has a material relationship with the
Corporation. The Board made such determination based on all relevant facts and circumstances.
In
making its determination of director independence, the Board of Directors considered the fact that U. S. Steel purchased certain goods and services from WESCO
International, Inc. ("WESCO") in 2018. Mr. Engel is the Chairman, President and Chief Executive Officer of WESCO. The Board determined that Mr. Engel did not have a direct or
indirect material interest in these transactions and that the transactions were undertaken in the ordinary course of business. In addition, the value of materials purchased by
U. S. Steel in 2018 was less than 2% of WESCO's annual gross revenues. As a result, the Board concluded that these transactions would not affect Mr. Engel's independence.
Additionally,
the Board considered the fact that U. S. Steel indirectly sold products to Cabot Oil & Gas Corporation ("Cabot") in 2018. Mr. Dinges is the Chairman,
President and Chief Executive Officer of Cabot. The Board determined that Mr. Dinges did not have a direct or indirect material interest in these transactions and that the transactions were
undertaken in the ordinary course of business, and that the products sold by U. S. Steel were less than 2% of Cabot's annual gross revenues. Accordingly, the Board concluded that these
transactions would not affect Mr. Dinges' independence.
The
Board affirmatively determined that each member of the Audit Committee: (i) did not accept directly or indirectly any consulting, advisory, or other compensatory fee from the Corporation or
any of its subsidiaries, (ii) was not an affiliated person of the Corporation or any of its subsidiaries, and therefore (iii) satisfied the NYSE's enhanced independence standards for
audit committee members.
The
Board also determined that: (i) no member of the Compensation Committee has a relationship to the Corporation that is material to that director's ability to be independent from management
in connection with the duties of a compensation committee member, and (ii) each member of the Compensation Committee therefore satisfies the independence requirements of NYSE listing standards.
DIRECTOR RETIREMENT POLICY
Our Corporate Governance Principles require any non-employee director to retire at the first annual meeting of stockholders after he or she reaches the age of
74. However, the Board may grant exceptions to this policy on a case-by-case basis. Each employee director must retire from the Board when he or she ceases to be an executive officer of the
Corporation, except that the Chief Executive Officer may
remain on the Board after retirement as an employee, at the Board's request, through the last day of the month in which he or she turns 70. Our Corporate
Governance Principles also provide that directors who undergo a significant change in their business or professional careers shall volunteer to resign from the Board.
14
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
BOARD COMMITTEES
Under our by-laws and the general corporation law of the State of Delaware, U. S. Steel's state of incorporation, the business and affairs of
U. S. Steel are managed under the direction of the Board of Directors. The non-employee directors hold regularly scheduled executive sessions without management. The directors spend
considerable time preparing for Board and committee meetings.
The
Board has three principal committees, each of which is comprised exclusively of independent directors: (i) the Audit Committee; (ii) the Compensation & Organization Committee;
and (iii) the Corporate Governance & Public Policy Committee.
Each
of the principal committees has a written charter adopted by the Board, which is available on the Corporation's website (www.ussteel.com). The committee
charters
are regularly reviewed and updated to incorporate best practices and prevailing governance trends. The Board also has an Executive Committee that acts on, and reports to the Board on, routine
or delegated matters that arise between Board meetings.
Each
principal committee is required to have at least three members, each of whom is considered independent. Each of the principal committee charters require the committee to perform a self-evaluation
and review its charter annually. Each committee may in its sole discretion, retain or obtain the advice of outside advisors, including any consultant, independent legal counsel or other advisor, at
the Corporation's expense to assist the committee in fulfilling its duties and responsibilities.
The
table below shows the current committee memberships of our directors:
= Committee Chair.
*Chairman of the Board.
Pursuant to its charter, the Audit Committee's duties and responsibilities include:
-
-
reviewing and discussing with management and the independent registered public accounting firm matters related to the annual audited financial
statements, quarterly financial statements, earnings press releases and the accounting principles and policies applied;
-
-
reviewing and discussing with management and the independent registered public accounting firm matters related to the Corporation's internal
controls over financial reporting;
-
-
reviewing the responsibilities, staffing and performance of the Corporation's internal audit function;
-
-
reviewing issues that arise with respect to the Corporation's compliance with legal or regulatory requirements and corporate policies dealing
with business conduct;
-
-
being directly responsible for the appointment (subject to stockholder ratification), compensation, retention, and oversight of the work of the
Corporation's independent registered public accounting firm, while possessing the sole authority to approve all audit engagement fees and terms as well as all non-audit engagements with such firm; and
-
-
discussing policies with respect to risk assessment and risk management.
The
Audit Committee annually requests PriceWaterhouseCoopers LLP ("PwC") to prepare a self-assessment utilizing the Center for Audit Quality, External Auditor Assessment Tool. This best
practice assists the Audit Committee in its oversight role and annual evaluation of PwC to assess the quality of the audit and to recommend the retention of PwC. Based on this assessment, we believe
the quality of PwC's services, communication and interaction with the Audit Committee is of a high standard.
United States Steel Corporation
|
2019 Proxy
Statement
|
15
Table of Contents
The
charter also requires the Audit Committee to be comprised of at least three directors, each of whom is financially literate, and at least one of whom must have accounting or related financial
management expertise. Under the charter, no director who serves on the audit committees of more than two other public companies may serve on the Audit Committee, unless the Board determines that such
simultaneous service will not impair the ability of such
director
to effectively serve on the Audit Committee. No member of the Audit Committee serves on the audit committees of more than two other publicly traded companies. The Board has determined that
John J. Engel, Murry S. Gerber, the Committee's chairman, and Stephen J. Girsky meet the SEC's definition of audit committee financial expert.
Compensation & Organization Committee
|
The primary responsibilities of the Compensation & Organization Committee (the "Compensation Committee")
include:
-
-
determining and approving, with the Board, the CEO's compensation based on the evaluation of the CEO's performance;
-
-
determining and approving, with input from the CEO, the compensation of the other "executive officers" of the Corporation as defined under
Section 16 of the Securities Exchange Act of 1934;
-
-
reviewing the Corporation's executive management succession plans annually with the Board;
-
-
approving awards to the executive officers under the Corporation's short-term and long-term incentive plans;
-
-
assessing whether the Corporation's compensation and organization policies and practices are reasonably likely to create a risk that could have
a material adverse effect on the Corporation; and
-
-
considering the most recent stockholder advisory vote on executive compensation.
The
Compensation Committee has retained Pay Governance, LLC as its executive compensation consultant. A representative of the consultant attended all meetings of the Compensation Committee in
2018.
During
2018, Pay Governance performed the following specific services:
-
-
provided presentations on executive compensation trends, and best practices and recent developments;
-
-
prepared competitive assessments by position for each element of compensation and for compensation in the aggregate; and
-
-
reviewed the peer groups used for benchmarking compensation and measuring performance for purposes of the relative TSR Performance Awards.
The
consultant provided no services to management during 2018.
The
Compensation Committee has assessed the independence of the consultant pursuant to the NYSE listing standards and SEC rules and concluded that no conflict of interest exists that would prevent the
consultant from serving as an independent consultant to the Compensation Committee.
Committee
agendas are established in consultation with management, the Compensation Committee chair and the compensation consultant. The Compensation Committee meets in executive session without
management for a portion of each regular meeting.
Corporate Governance & Public Policy Committee
|
The Corporate Governance & Public Policy Committee serves as the Corporation's governance and nominating committee. Pursuant to its charter, the duties
and responsibilities of this committee include:
-
-
Identifying and evaluating nominees for director and selecting, or recommending that the Board select, the director nominees for the next annual
meeting of stockholders;
-
-
making recommendations to the Board concerning the appropriate size and composition of the Board and its committees;
-
-
making recommendations to the Board concerning the compensation of non-employee directors;
-
-
recommending to the Board a set of corporate governance principles applicable to the Corporation, reviewing such principles annually and
recommending appropriate changes to the Board;
-
-
reviewing relationships with, and communications to and from, the investment community, including the Corporation's stockholders;
-
-
reviewing matters and discussing risk relating to legislative, regulatory and public policy issues affecting the Corporation's businesses and
operations;
-
-
reviewing public policy issues likely to be of interest to various stakeholders of the Corporation, including employee health and safety,
environmental, energy and trade matters;
-
-
reviewing and approving codes of conduct applicable to employees and principal operating units; and
-
-
assessing and making recommendations concerning overall corporate governance to the extent specific matters are not the assigned responsibility
of other board committees.
The
Corporate Governance & Public Policy Committee's charter gives the committee the sole authority to retain and terminate any search firm to be used to identify director candidates, including
sole authority to approve the search firm's fees and other retention terms.
16
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
COMMITMENT TO STOCKHOLDER ENGAGEMENT
The Board, as well as management, prioritizes constructive communication with our stockholders to learn about their views regarding the Corporation and our
governance and compensation practices. Our CEO, CFO and Investor Relations team regularly communicate with our buy-side investors and the investment community generally regarding our business strategy
and financial performance. Additionally, we have maintained ongoing dialogue with our largest stockholders regarding our corporate governance and
executive
compensation program since 2012. The feedback we receive from these discussions is carefully considered by the Board, the Corporate Governance & Public Policy Committee and the
Compensation & Organization Committee. We believe the strong support we've received for our proposals, including director elections and say-on-pay, over the last few years demonstrates our
ability to decisively take action to incorporate our stockholders' perspectives in our programs.
In
2018, we contacted stockholders representing approximately 35% of our outstanding shares and held meetings with six investors. The topics covered included business strategy, human capital
management, executive compensation and the pay-for-performance alignment of our
executive
compensation program, board composition and oversight, and sustainability. Our stockholders provided constructive feedback and were supportive of our current governance, sustainability and
compensation practices.
United States Steel Corporation
|
2019 Proxy
Statement
|
17
Table of Contents
Corporate Social Responsibility
|
CORPORATE SOCIAL RESPONSIBILITY
|
The
safety and well-being of our employees, the communities in which we operate and our shared environment are, and will always be, our first and most important priority.
This
year, we enhanced our Code of Ethical Business Conduct to reinforce our environmental, social, and governance commitments. The Board and its committees oversee our sustainability and corporate
responsibility initiatives, as described more on page 12.
The
S.T.E.E.L.
principles
S
afety First,
T
rust and Respect,
E
nvironmentally Friendly Activities,
E
thical Behavior, and
L
awful Business Conduct form the foundation of our business. A
few of our recent achievements demonstrating these principles are set forth below.
18
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Our
Corporate Governance Principles provide that each non-employee director shall be paid compensation as the Board may determine from time to time. Directors who are employees of U. S. Steel receive
no compensation for their service on the Board. The objective of U. S. Steel's director compensation programs is to enable the Corporation to attract and retain as directors individuals of substantial
accomplishment with demonstrated leadership capabilities. In order to align the interests of directors with the interests of stockholders, our non-employee directors participate in the Deferred
Compensation Program for Non-Employee Directors and the Non-Employee Director Stock Program, each of which is described below.
2018 Director Compensation
For 2018, the Board set the annual compensation after following a robust benchmarking review process, described below.
No
meeting fees or committee membership fees are paid. Mr. Sutherland's annual retainer was temporarily increased by $150,000, effective March 1, 2018, in connection with his assumption
of additional duties.
Deferred Compensation Program
Under our Deferred Compensation Program for Non-Employee Directors, each non-employee director is required to defer a minimum of his or her
retainer in the form of Common Stock Units and may elect to defer up to 100%. A Common Stock Unit is what is sometimes referred to as "phantom stock" because initially no stock is actually issued.
Instead, we keep a book entry account for each director that shows how many Common Stock Units he or she has. When a director leaves the Board, he or she receives actual shares of common stock
corresponding to the number of Common Stock Units in his or her account. The ongoing value of each Common Stock Unit equals the market price of the common stock. When dividends are paid on the common
stock, we credit each account with equivalent amounts in additional
Common
Stock Units. If U. S. Steel were to undergo a change in control resulting in the removal of a non-employee director from the Board, that director would receive a cash payment equal to the value
of his or her deferred stock account. The Board and management believe that such deferral, by continually building each director's equity interest in the Corporation, provides a meaningful continued
interest in the Corporation that is tied to the stockholders' interest because the stock issued upon a director's departure from the Board reflects all changes in the market value of U. S. Steel
common stock from the date of deferral. Each non-employee director is in compliance with the requirement described in this paragraph.
Non-Employee Director Stock Program
Under our Non-Employee Director Stock Program, upon joining our Board, each non-employee director is eligible to receive a grant of up to 1,000
shares of common stock. In order to qualify, each director must first have purchased an equivalent number of shares in the open market during the 60 days following the first date of his or her
service on the Board.
Compensation Review Process
The Corporate Governance & Public Policy Committee reviews director compensation on an annual basis.
Annually,
Pay Governance, an independent compensation consultant, presents a benchmarking report on director compensation for the same comparator group of companies the Compensation &
Organization Committee uses for determining compensation for our executives, as well as for a larger general comparator group of 151 companies in a similar revenue range as the Corporation. After
reviewing the information presented by Pay Governance, as well as other public information on the topic, the committee evaluates the plan design and compensation levels to ensure they are consistent
with market trends and makes recommendations of any appropriate changes to the Board.
The
committee recommended, and the Board approved, an increase in the annual director compensation retainer to $265,000 beginning in 2019, and set the additional fee for the Chairman of the Board at
$100,000 (a reduction from 2018), in order to better align the compensation level with the median of both comparator groups. The $25,000 increase in the annual retainer is required to be paid in
deferred stock compensation. No increase was made to the additional amounts paid to committee chairs.
United States Steel Corporation
|
2019 Proxy
Statement
|
19
Table of Contents
Stock Ownership of Directors and Executive Officers
|
The
following table sets forth the compensation of non-employee directors in 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTOR COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Fees Earned
or Paid in
Cash
(1)
($)
|
|
|
Stock
Awards
(2)
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patricia Diaz Dennis
|
|
|
120,000.00
|
|
|
120,000.00
|
|
|
0
|
|
|
240,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dan O. Dinges
|
|
|
130,000.00
|
|
|
130,000.00
|
|
|
0
|
|
|
260,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John G. Drosdick
|
|
|
72,634.30
|
|
|
40,000.00
|
|
|
0
|
|
|
112,634.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Engel
|
|
|
123,333.33
|
|
|
123,333.33
|
|
|
0
|
|
|
246,666.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Murry S. Gerber
|
|
|
126,666.67
|
|
|
126,666.67
|
|
|
0
|
|
|
253,333.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Girsky
|
|
|
0.00
|
|
|
240,000.00
|
|
|
0
|
|
|
240,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul A. Mascarenas
|
|
|
48,000.00
|
|
|
192,000.00
|
|
|
0
|
|
|
240,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenda G. McNeal
|
|
|
40,018.31
|
|
|
40,000.00
|
|
|
0
|
|
|
80,018.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eugene B. Sperling
|
|
|
120,000.00
|
|
|
120,000.00
|
|
|
0
|
|
|
240,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert J. Stevens
|
|
|
17.69
|
|
|
80,000.00
|
|
|
0
|
|
|
80,017.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David S. Sutherland
|
|
|
62,250.00
|
|
|
352,750.00
|
|
|
0
|
|
|
415,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patricia A. Tracey
|
|
|
130,000.00
|
|
|
130,000.00
|
|
|
0
|
|
|
260,000.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
amount shown represents the cash portion of the 2018 annual retainer paid to directors, and, for Messrs. Drosdick and Stevens and Ms. McNeal, cash paid to
directors upon retirement in lieu of fractional shares. Mr. Drosdick's cash amount also includes payment related to a one-time director cash award granted in 2005.
-
(2)
-
The
amount shown represents the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification
Topic 718 (ASC 718), as described in the Corporation's financial statements for the year ended December 31, 2018 included in the Corporation's annual report on Form 10-K for 2018. All of
the 2018 stock awards represent Common Stock Units under the Deferred Compensation Program for Non-Employee Directors.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
|
The
following table sets forth the number of shares of U. S. Steel common stock beneficially owned as of March 4, 2019 by each director and director nominee, by each executive
officer named in the Summary Compensation Table
and
by all directors and executive officers as a group. No director or executive officer beneficially owned, as of the applicable date, any equity securities of U. S. Steel other than those shown.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Shares
Beneficially
Owned*
|
|
|
|
|
|
|
Kevin P. Bradley
(1)
|
|
|
165,840
|
|
|
|
|
|
|
David B. Burritt
(1)
|
|
|
484,795
|
|
|
|
|
|
|
Scott D. Buckiso
|
|
|
108,237
|
|
|
|
|
|
|
Patricia Diaz Dennis
(2)
|
|
|
33,165
|
|
|
|
|
|
|
Dan O. Dinges
(2)
|
|
|
62,092
|
|
|
|
|
|
|
John J. Engel
(2)
|
|
|
50,861
|
|
|
|
|
|
|
John V. Faraci
|
|
|
0
|
|
|
|
|
|
|
Murry S. Gerber
(2)
|
|
|
180,923
|
|
|
|
|
|
|
Stephen J. Girsky
(2)
|
|
|
36,887
|
|
|
|
|
|
|
Duane D. Holloway
|
|
|
36,654
|
|
|
|
|
|
|
Paul A. Mascarenas
(2)
|
|
|
25,716
|
|
|
|
|
|
|
Douglas R. Matthews
(1)
|
|
|
286,364
|
|
|
|
|
|
|
Eugene B. Sperling
(2)
|
|
|
15,407
|
|
|
|
|
|
|
David S. Sutherland
(2)
|
|
|
129,378
|
|
|
|
|
|
|
Patricia A. Tracey
(2)
|
|
|
55,648
|
|
|
|
|
|
|
All Directors and Executive Officers as a group (21 persons)
(1)(2)(3)
|
|
|
2,045,391
|
|
|
|
|
|
|
-
*
-
Does
not include fractional shares.
20
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Communications from Stockholders and Interested Parties
|
-
(1)
-
Includes
shares that may be acquired upon exercise of outstanding options that are or will become exercisable within 60 days of March 4, 2019 in the
following amounts: Mr. Burritt: 76,700; Mr. Bradley: 5,263; Mr. Matthews: 144,276; Mr. Buckiso: 48,493; and all executive officers as a group: 343,258.
-
(2)
-
Includes
those Common Stock Units granted under the Deferred Compensation Program for Non-Employee Directors that are convertible into shares of common stock upon
departure from the Board in the following amounts: Ms. Diaz Dennis: 32,165; Mr. Dinges: 60,092; Mr. Engel: 48,861; Mr. Gerber: 42,723; Mr. Girsky: 31,387;
Mr. Mascarenas: 25,716; Mr. Sperling: 13,407; Mr. Sutherland: 117,284; Vice Admiral Tracey: 53,990; and all directors as a group: 590,080.
-
(3)
-
The
total number of shares beneficially owned by all directors and executive officers as a group constitutes approximately 1.1% of the outstanding shares of common
stock of U. S. Steel.
COMMUNICATIONS FROM STOCKHOLDERS AND INTERESTED PARTIES
|
Stockholders and interested parties may send communications through the Secretary of the Corporation to the: (1) Board, (2) Committee Chairs,
(3) Chairman of the Board, or (4) outside directors as a group. The Secretary will collect, organize and forward to the directors all communications that are appropriate for
consideration by the directors. Examples of communications that would not be considered appropriate for consideration by the directors
include solicitations for products or services, employment matters, and matters not relevant to stockholders generally, to the functioning of the Board, or to
the affairs of the Corporation. The Secretary of the Corporation may be contacted at: Corporate Secretary, United States Steel Corporation, 600 Grant Street, Suite 1500,
Pittsburgh, PA 15219.
POLICY WITH RESPECT TO RELATED PERSON TRANSACTIONS
|
The Board of Directors of the Corporation has adopted a written policy that requires certain transactions with related persons to be approved or ratified by its
Corporate Governance & Public Policy Committee. For purposes of this policy, related persons include: (i) any person who is, or at any time since the beginning of the Corporation's last
fiscal year was, a director or executive officer of the Corporation or a nominee to become a director of the Corporation; (ii) any person who is the beneficial owner of more than 5% of any
class of the Corporation's voting securities; and (iii) any immediate family member of any person described in (i) or (ii). The types of transactions that are subject to this policy are
transactions, arrangements or relationships (or any series of similar transactions, arrangements or relationships) in which the Corporation, or any of its subsidiaries, was, is or will be a
participant and in which any related person had, has or will have a direct or indirect material interest and the aggregate amount involved will or may be expected to exceed $120,000. The standards
applied by the Corporate Governance & Public Policy Committee when reviewing transactions with related persons include: (a) the benefits to the Corporation of the transaction;
(b) the terms and conditions of the transaction and whether such terms and conditions are comparable to the terms available to an unrelated third party or to employees generally; and
(c) the potential for the transaction to affect the independence or judgment of a director or executive officer of the Corporation. Under the policy, certain transactions are
deemed to be automatically pre-approved and do not need to be brought to the Corporate Governance & Public Policy Committee for individual approval. The
transactions that are automatically pre-approved include: (i) transactions involving compensation to directors and executive officers of the type that is required to be reported in the
Corporation's proxy statement; (ii) indebtedness for ordinary business travel and expense payments; (iii) transactions with another company at which a related person's only relationship
is as an employee (other than an executive officer), a director or beneficial owner of less than 10% of any class of equity securities of that company, provided that the amount involved does not
exceed the greater of $1,000,000 or 2% of that company's consolidated gross annual revenues; (iv) transactions where the interest of the related person arises solely from the ownership of a
class of equity securities of the Corporation, and all holders of that class of equity securities receive the same benefit on a pro rata basis; (v) transactions where the
rates or charges involved are determined by competitive bid; (vi) transactions involving the rendering of services as a common or contract carrier or public utility at rates or charges fixed in
conformity with law or governmental regulation; and (vii) transactions involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture or similar
services. There were no transactions that required approval of the Corporate Governance & Public Policy Committee under this policy during 2018.
United States Steel Corporation
|
2019 Proxy
Statement
|
21
Table of Contents
COMPENSATION & ORGANIZATION COMMITTEE REPORT
|
The
Compensation & Organization Committee of the Board of Directors of the Corporation has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review
and discussion, the Compensation & Organization Committee recommended to
the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Corporation's Annual Report on
Form 10-K for the year-ended December 31, 2018.
|
|
|
Dan O. Dinges, Chairman
|
|
Paul A. Mascarenas
|
Patricia Diaz Dennis
|
|
Patricia A. Tracey
|
Stephen J. Girsky
|
|
|
22
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
COMPENSATION DISCUSSION AND ANALYSIS
|
This
Compensation Discussion and Analysis contains a discussion of the material elements of compensation awarded to, earned by, or paid to the Corporation's "Named Executive Officers" ("NEOs"),
including our principal
executive officer, the principal financial officer, and the next three most highly compensated executive officers of U. S. Steel in 2018.
|
|
|
U. S. Steel's Named Executive Officers in 2018
|
|
|
|
David B. Burritt
|
|
President & Chief Executive Officer
|
|
|
|
Kevin P. Bradley
|
|
Executive Vice President & Chief Financial Officer
|
|
|
|
Douglas R. Matthews
|
|
Senior Vice President Industrial, Service Center and Mining Solutions; Interim Head, Tubular
|
|
|
|
Duane D. Holloway
|
|
Senior Vice President, General Counsel, Chief Ethics & Compliance Officer and Corporate Secretary
|
|
|
|
Scott D. Buckiso
|
|
Senior Vice President Automotive Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Summary
|
|
|
|
|
|
|
Our executive compensation program is designed to attract, reward and retain executives who make significant contributions through operational and financial achievements aligned with the goals and philosophy of our
long-term strategy. The
|
|
Compensation & Organization Committee (the "Compensation Committee") is guided by five compensation principles discussed on page 32.
|
|
|
|
|
Executing our Strategy to Create Stockholder Value
|
|
|
|
|
Our strategy is to create long-term stockholder value through the business cycles by focusing on three simple, yet powerful drivers: winning in attractive markets, moving down the cost curve and moving up the talent
curve. We are focused on winning in attractive markets through a customer-focused business model. We have made significant progress and our goal remains to deliver high-quality, value-added products on time every time and to collaborate with
customers to develop innovative solutions that address their most challenging needs. To position the Corporation to increase profitability and win in attractive markets, we continue to enhance our cost structure and move down the cost curve. The next
phase of our operations transformation will be defined by our continued implementation of disciplined and standardized business and operations practices, continued investments in Asset Revitalization and Reliability Centered Maintenance and a renewed
focus on innovation and technology. Core to our strategy is moving up the talent curve. We know that we
|
|
must work to identify, attract and retain best-in-class diverse talent.
The steel industry has faced many challenges and endured significant change over
the past three years. Despite the volatility, we have remained focused on the things that we control. Our continued pursuit of operational excellence has translated into industry leading total stockholder return ("TSR") performance since 2016. While
our progress is noteworthy, we remain focused on creating value for our stockholders and believe the Corporation is well positioned to continue the positive momentum we have been building.
Our executive compensation program has been structured to closely align with our long-term strategy and to link compensation to corporate performance. We believe the pay
outcomes for executives demonstrate a strong link between compensation and performance.
|
|
|
|
|
Maintaining Pay-for-Performance through Industry Cycles
|
|
|
|
|
The Compensation Committee believes that in a challenging operating and unpredictable economic environment it is critical to align our compensation program with the goals of our strategic turnaround initiatives. Therefore, our compensation structure
balances the following:
a
strong pay-for-performance approach that links financial performance to the incentive opportunities realized by our executives;
measurable performance metrics in our incentive plans that support our strategic and financial goals;
alignment of management interests with the long-term interests of our
stockholders; and
|
|
our need to attract,
reward and retain executives best qualified to guide the Corporation through its transformation.
The elements of compensation provided to our executives
include: base salary, short-term annual incentive compensation, long-term incentive compensation, retirement benefits, and other compensation. The distribution of compensation among the various compensation elements is based on the Compensation
Committee's belief that to link pay to performance, most of an executive's compensation should be paid in the form of performance-based variable compensation with a greater emphasis on variable components for the most senior executives who have
greater responsibility for the performance of the business.
|
|
|
|
|
|
|
|
|
|
United States Steel Corporation
|
2019 Proxy
Statement
|
23
Table of Contents
Compensation Discussion and Analysis Executive Summary
|
Changes to the 2018 Compensation Program
The Compensation Committee made certain changes to the 2018 executive compensation program, described below, in order to better align executive
compensation with strategy and tighten the link between pay and performance. These revisions were briefly described in our 2018 proxy statement.
|
|
|
Compensation
Program Change
|
|
Committee Rationale
|
|
|
|
Annual Incentive Compensation Plan (AICP)
|
|
|
|
Replaced Cash Flow
Metric with Cash
Conversion Cycle (CCC)
|
|
Given the priority we have placed on capital intensive projects, such as the Asset Revitalization program, the Compensation Committee replaced the cash flow metric with a cash efficiency metric cash conversion cycle which is
measured in days; EBITDA remains the primary AICP metric.
|
|
|
|
Changed Weighting of
AICP Metrics
|
|
The Compensation Committee rebalanced the weighting of the two AICP metrics (which were previously equally weighted) to 70% EBITDA and 30% CCC to better reflect our focus on driving sustainable profitability.
|
|
|
|
Long-Term Incentive Compensation Program (LTIP)
|
|
|
|
ROCE Performance
Awards Granted in Stock
|
|
Since 2015 these awards have been granted in and paid out in cash, but in 2018, these awards were granted in equity to further align compensation with stockholder interests.
|
|
|
|
Eliminated Stock Options
|
|
The Compensation Committee eliminated stock options to help reduce volatility in payouts. Options previously comprised 20% of our long-term incentive award.
|
|
|
|
Revised Long-Term TSR
Goals
|
|
The Compensation Committee revised the goals to require relative TSR performance at the 55
th
percentile to achieve target payout and 80
th
percentile for a maximum payout. Revised goals require above-market performance
to achieve target payout and better align the Compensation Committee's objective of providing long-term compensation that is both rigorous and achievable.
|
Consideration of Most Recent "Say on Pay" Vote
|
|
|
Following our 2018 Annual Meeting of Stockholders, the Compensation Committee reviewed the results of the stockholder advisory vote on executive compensation (the "Say on Pay" Vote) that was held at the
meeting with respect to the 2017 compensation actions and decisions for Mr. Burritt and the other NEOs. Approximately 96% of the votes cast on the proposal were voted in support of the compensation of our NEOs.
|
|
|
24
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis Executive Summary
|
2018 Financial Performance
The continued focus of our executive team and employees on our long-term strategic goals of improving our balance sheet, enhancing operating
efficiency and reliability, and seeking robust enforcement of our trade laws, again led to a successful year and helped move us another step closer to achieving sustainable profitability. We made good
progress in 2018, and strive for greater achievement in the year ahead.
United States Steel Corporation
|
2019 Proxy
Statement
|
25
Table of Contents
Compensation Discussion and Analysis Executive Summary
|
Compensation Elements
The following chart highlights the key elements of our performance-based compensation structure and our CEO's target compensation.
Based on our strong pay-for-performance alignment, realizable compensation for our CEO over the last three years is 112% of target value granted during the
period.
CEO Realizable Pay
Three-Year (2016 - 2018) Aggregate CEO Compensation ($mm)*
-
*
-
Reflects
aggregate compensation of Mr. Mario Longhi, who served as our CEO during 2016 and part of 2017, and Mr. Burritt, who has served as CEO since May 2017.
26
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis Executive Summary
|
Compensation Outcomes: Payouts Reflect Corporate Performance
The Compensation Committee considers a mix of cash and equity awards over both the short-term and long-term as a critical balance in
reinforcing U. S. Steel's commitment to performance alignment. This strong pay-for-performance alignment is clearly reflected in amounts actually earned by our NEOs based on the achievement of metrics
established by the Compensation Committee for the annual and long-term incentive plans.
The
following table illustrates how our performance has affected the payout of our annual incentives and how the performance of our common stock affects the value of the long-term incentives that
would be received by our CEO based on our closing stock price of $18.24 on December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
Stock Options
|
|
|
Restricted Stock Units
(2)
|
|
|
Performance Awards
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
% of Target Award Paid
|
|
Exercise
Price
|
|
Intrinsic
Value
(1)
|
|
|
Value as a % of
Grant Value
|
|
|
Award Payout as a %
of Target
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
187%
|
|
N/A
|
|
|
|
|
41%
|
|
|
94%
|
|
2017
|
|
|
0%
|
|
$39.265
|
|
$0
|
|
|
46%
|
|
|
100%
|
|
2016
|
|
|
201%
|
|
$14.780
|
|
$3.46
|
|
|
123%
|
|
|
200%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
"Intrinsic Value" column shows the amount (if any) by which the market value of our shares underlying an option exceeds the exercise price at December 31,
2018. If the exercise price exceeds the market price, the stock options have no intrinsic value. Stock options were not granted in 2018.
-
(2)
-
The
"Restricted Stock Units" column shows the market value on December 31, 2018, of the shares underlying the restricted stock units as a percentage of the
market value on the grant date. To the extent that the market value has declined, the value of the restricted stock units reflected in the Summary Compensation Table will also decline.
-
(3)
-
The
"Performance Awards" column indicates the percentage of the performance awards that would be paid out based on our TSR as compared to the TSR of the peer group
companies and ROCE. The information in the table is determined as if the performance periods for the 2016, 2017 and 2018 performance awards ended on December 31, 2018.
Achievement
of significant increase in adjusted EBITDA from last year, improvement in cash efficiency and return on capital employed over the prior year, and industry-leading three-year total
stockholder return reflect the efforts of our executives to execute on our long-term strategy and validate above-target and maximum payouts under our incentive compensation plans.
United States Steel Corporation
|
2019 Proxy
Statement
|
27
Table of Contents
Compensation Discussion and Analysis Executive Summary
|
Commitment to Stockholder Engagement on Executive Compensation
In 2018, we continued our long-standing engagement efforts with our stockholders both during and outside of the proxy season. Last year we contacted
stockholders representing approximately 35% of our stock and we held telephonic meetings with six investors. These discussions focused primarily on our business strategy and the alignment of our
compensation program to our strategy and company performance. In addition, some stockholders indicated they did not believe a call was necessary.
The
Board, as well as management, prioritizes constructive communication with our investors to learn about their views of the Corporation and our governance and compensation practices. In addition to
the frequent communication our CEO and Investor Relations team has with our stockholders, we have maintained ongoing dialogue with our largest stockholders regarding our corporate governance and
executive compensation program since 2012. The feedback we receive from these discussions is carefully considered by the Board and the Compensation Committee, and we believe the strong support for our
say-on-pay proposal over the last
few years is evidence of the careful attention to stockholder feedback, and our ability to decisively take action and incorporate their perspectives in our
programs.
Based
on our 2018 meetings, we determined that our stockholders are supportive of the strong link between pay and performance embedded in our executive compensation program. Over the years, we have
implemented changes to our compensation practices to further align pay with performance and enhanced disclosure regarding the rationale behind certain compensation decisions.
Compensation Governance Practices
Our compensation program is designed to promote exceptional performance and align the interests of our executives with the interests of our
stockholders while discouraging executives from excessive risk-taking. Our executive compensation is directly aligned with corporate performance and measurable financial metrics.
|
|
|
|
|
✓
|
|
Consider results of say-on-pay votes when making compensation decisions
|
|
✓
|
|
Regularly engage with our stockholders about our executive compensation program
|
|
✓
|
|
Align pay and performance
|
|
✓
|
|
Cap annual and long-term incentive awards, including when TSR is negative
|
|
✓
|
|
Utilize an independent compensation consultant
|
|
✓
|
|
Require significant stock ownership of executive officers
|
|
✓
|
|
Utilize a market-based approach (competitive within our peer group) for determining NEO target pay levels
|
|
✓
|
|
Require a "double trigger" for change in control severance
|
|
✓
|
|
Provide for clawback of incentive awards if our financial statements are restated
|
|
✓
|
|
Annually review risks associated with our compensation programs
|
|
|
|
|
|
|
|
Pay excise tax gross ups for change in control payments
|
|
|
|
Guarantee minimum payout of annual or long-term performance awards
|
|
|
|
Reprice options
|
|
|
|
Allow directors or employees to engage in hedging transactions, short sales or pledge our common stock
|
28
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
2018 Compensation Decisions and Outcomes Demonstrate Alignment with Performance
|
The
Compensation Committee approved the following target compensation decisions in early 2018 based on several factors, including, among other criteria: the Corporation's 2017
performance; outlook for 2018 performance; continued development and execution of the Corporation's long-term strategy; and assumption of additional duties in connection with
executive leadership changes and responsibilities of each of our NEOs. Generally the Compensation Committee maintained target compensation levels for 2018, which are at or slightly below market
median. Actual AICP awards were made following 2018 and include assessment of individual performance.
|
|
|
David B. Burritt
|
|
Individual Performance Assessment
|
President & Chief Executive Officer
|
|
The Board determined that Mr. Burritt delivered outstanding performance with respect to the annual goals established at the beginning of 2018, relating to leadership of the organization, enhancing safety culture and performance, EBITDA growth,
more efficient cash management, improved customer service, and building a high performance organization in an environment of fairness and respect. The Board also determined that Mr. Burritt delivered outstanding progress toward the long-term
goals for the Corporation, including creation and implementation of a long-term strategy to improve the Corporation's competitive position.
In recognition of the Board's confidence in Mr. Burritt and to ensure the Corporation continues to benefit from his continued leadership,
business acumen and experience, the Compensation Committee recommended, and the Board agreed, to waive the Corporation's policy regarding mandatory retirement age with respect to Mr. Burritt. Under our Corporate Governance Principles,
Mr. Burritt would have been required to retire on December 31, 2020.
|
|
2018 Compensation Decisions
|
|
|
|
2018 Base Salary:
$1,000,000
No change from 2017
2018 AICP Bonus Target:
140%
No change from
2017
2018 Target LTIP Award:
$6,100,000
No change from 2017
|
|
2018 Annual Cash Incentive Award: $2,620,800 or 187% of target
Mr. Burritt's AICP award is based on achievement of total
corporate EBITDA and CCC goals, as described on page 34, in addition to his individual performance.
|
|
|
|
|
|
|
United States Steel Corporation
|
2019 Proxy
Statement
|
29
Table of Contents
Compensation Discussion and Analysis
|
|
|
|
Kevin P. Bradley
|
|
Individual Performance Assessment
|
Executive Vice President & Chief Financial Officer
|
|
The Committee Compensation determined that Mr. Bradley delivered strong performance leading the finance, treasury, investor relations, financial planning and analysis, tax and real estate functions. Under his leadership, the balance sheet and
capital structure of the Corporation have been materially transformed. Mr. Bradley has also improved the Corporation's financial planning and analysis capabilities in order to support the execution of the strategic plan.
|
|
|
|
|
2018 Compensation Decisions
|
|
|
|
2018 Base Salary: $700,000
No change from 2017
2018 AICP Bonus Target: 100%
No change from
2017
2018 Target LTIP Award: $2,100,000
No change from 2017
|
|
2018 Annual Cash Incentive Award: $1,092,012 or 156% of target
Mr. Bradley's AICP award is based on achievement of total
corporate EBITDA and CCC goals, as described on page 34, in addition to his individual performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas R. Matthews
|
|
Individual Performance Assessment
|
Senior Vice President Industrial Service Center & Mining Solutions & Interim Head, Tubular
|
|
The Compensation Committee determined that Mr. Matthews had excellent performance in his role leading one of the NAFR segment's commercial entities. He oversaw the successful restart of our Granite City Works and was an essential contributor to
the successful negotiations with the USW. Mr. Matthews also accepted leadership of the Tubular segment early in the year.
|
|
2018 Compensation Decisions
|
|
|
|
2018 Base Salary: $541,000
No change from 2017
2018 AICP Bonus Target: 80%
No change from
2017
2018 Target LTIP Award: $1,115,000
No change from 2017
|
|
2018 Annual Cash Incentive Award: $749,826 or 173% of target
Mr. Matthews' AICP award is based on achievement of total
corporate EBITDA (35%), Flat-Rolled segment EBITDA (35%) and CCC goals, as described on page 34, in addition to his individual performance.
In consideration for Mr. Matthews' continued service with the Corporation, the Corporation entered into a letter agreement, providing Mr. Matthews with certain pension make-whole and retention
payments.
|
30
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
|
|
|
|
|
|
Duane D. Holloway
Senior Vice President, General Counsel,
Chief Ethics & Compliance Officer and Corporate Secretary
|
|
Individual Performance Assessment
The Compensation Committee determined that Mr. Holloway had outstanding performance in his oversight of the
legal, compliance and regulatory functions. Mr. Holloway demonstrated execution excellence in managing legal affairs and serving as a valued business partner due to his strong business acumen, operational rigor, and ability to inspire and
implement change.
|
|
2018 Compensation Decisions
|
|
|
|
2018 Base Salary: $550,000
2018 AICP Bonus Target: 75%
2018 Target LTIP Award: $1,250,000
Mr. Holloway joined the Corporation in April 2018, and therefore, amounts shown on the Summary Compensation Table reflect compensation earned or awarded based on the partial year.
|
|
2018 Annual Cash Incentive Award: $548,507 or 187% of target
Mr. Holloway's AICP award is based on achievement of total
corporate EBITDA and CCC goals, as described on page 34, in addition to his individual performance. Mr. Holloway's AICP award is based on base salary earned, as he joined the Corporation in April 2018.
Other Awards: $250,000 new hire grant
Mr. Holloway was awarded a $250,000 cash award as a new hire award.
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott D. Buckiso
|
|
Individual Performance Assessment
|
Senior Vice President Automotive Solutions
|
|
The Compensation Committee determined that Mr. Buckiso had outstanding performance in his role as leader of the European and automotive commercial entities. Under his leadership USSK excelled in safety and customer quality and delivery
performance.
|
|
|
|
|
2018 Compensation Decisions
|
|
|
|
2018 Base Salary: $470,000
Increased from $425,000 in 2017
2018 AICP Bonus Target: 70%
Increased from 60%
in 2017
2018 Target LTIP Award: $675,000
Increased from $500,000 in 2017
Each of the
elements of Mr. Buckiso's compensation were adjusted for 2018 to a more market competitive level and to reflect his responsibilities as a commercial entity leader.
|
|
2018 Annual Cash Incentive Award: $592,203 or 184% of target
Mr. Buckiso's AICP award is based on achievement of total
corporate EBITDA (35%), segment EBITDA (35%) and CCC goals, as described on page 34, in addition to his individual performance. Mr. Buckiso's segment EBITDA was prorated between the European and Flat-rolled segments, based on the time spent
prior to October 1, 2018 in his role as SVP European Solutions and in his current role as SVP Automotive Solutions.
|
|
|
|
|
|
|
United States Steel Corporation
|
2019 Proxy
Statement
|
31
Table of Contents
Compensation Discussion and Analysis
|
Executive Compensation in Detail
|
Compensation Principles
Our
executive compensation program is designed to attract, reward and retain executives who make significant contributions through the achievement of operational and financial goals that are aligned
with our long-term strategy and the interests of our stockholders. The following five
principles
support these objectives and guide the design of our compensation program. These principles were reaffirmed by the Compensation Committee in 2018 and are consistent with prior years.
|
|
|
Compensation Principle
|
|
Compensation Design
|
|
|
|
Align Pay with Stockholder Interests
|
|
Approximately 60% of target
compensation opportunity is performance based for our CEO (average of 53% for other NEOs).
Equity incentives comprise a significant portion of an executive's compensation.
Executives are subject to rigorous stock ownership and holding
requirements.
Performance
metrics, applied to 60% of our long-term program, align with our annual and long-term strategic objectives.
|
|
|
|
Pay Fair and Competitive Compensation
|
|
Executive compensation is
targeted to be competitive with our peer group.
Our compensation programs are focused on objective corporate performance measures and individual performance.
|
|
|
|
Link Compensation to Corporate Performance and Strategy
|
|
Balance of compensation
elements that focus on both short-term and long-term performance and goals.
Short-term incentives are based on annual financial performance (i.e., EBITDA and CCC), and individual performance.
Long-term incentives are tied to the Corporation's relative TSR and
ROCE.
|
|
|
|
Retain Executives
|
|
Our long-term incentive
grants include restricted stock units that may retain some value in a period of stock market decline.
|
|
|
|
Provide Equity-Focused and Tax-Efficient Rewards
|
|
The largest portion of an
executive's compensation is in the form of long-term equity incentives, which preserves cash.
|
Compensation Program Elements
The
following table highlights the key elements of our performance-based compensation structure. Goals for each incentive component are set at the beginning of the
performance
period and above market performance is required for the target payout to be made under the relative TSR metric.
|
|
|
|
|
|
|
Element
|
|
Form
|
|
Description
|
|
Alignment to Corporate Strategy
|
|
|
|
|
|
|
|
Base Salary
|
|
Fixed Cash
|
|
Baseline compensation level that takes into account scope and complexity of role, individual qualifications and experiences, and internal value to the Corporation
|
|
Base salaries set at market competitive levels allow the Corporation to attract and retain highly qualified executives to lead and implement our strategy
|
|
|
|
|
|
|
|
Annual Incentive Compensation Plan (AICP)
|
|
Performance-Based Cash
|
|
Provides an additional cash-based incentive opportunity to executives if pre-established EBITDA and CCC goals are achieved
|
|
Focuses management on achieving crucial annual objectives that align to our strategic plan as well as providing reward opportunity for individual performance
|
|
|
|
|
|
|
|
Long-Term Incentive Program (LTIP)
|
|
Performance-Based Equity Award (60%)
|
|
Performance-based awards reinforce accountability by linking vesting metrics to TSR and ROCE goals of corporate strategy
|
|
Focuses management on driving attractive returns on the capital we employ and on increasing stockholder value
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units (RSUs) (40%)
|
|
RSUs vest ratably over three years
|
|
Supports retention of highly qualified executives to lead and implement our strategy; aligned with stockholder interests as the value fluctuates with stock price performance
|
32
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
Base salary is designed to compensate for the required day-to-day activities and responsibilities of each position. Base salary is set at a market competitive
level to enable the Corporation to attract and retain talent. Actual salary levels
take
into account such factors as the contribution of the incumbent, individual qualifications and experiences, and internal value to the Corporation. Base salary is paid in cash.
Annual Incentive Compensation Plan
|
The
purpose of our Annual Incentive Compensation Plan (AICP) is to align our executive officers' compensation with the achievement of annual performance goals that support our business strategy.
Typically, the annual incentive awards are paid in cash, but the Compensation Committee retains discretion to provide the award in cash, stock, or a combination of both. The AICP is designed to focus
executives primarily on efficient cash management and profitability.
Actual
amounts earned are based on the formula illustrated below, with predetermined performance goals based on the achievement of cash conversion cycle and earnings before interest, taxes,
depreciation and amortization (EBITDA) performance measures. Final awards may be increased or decreased based on individual performance. The Compensation Committee determined that EBITDA and CCC were
the appropriate measures to drive the transformation required to achieve our goal of sustainable profitability.
2018 AICP Incentive Formula
The
target award under the AICP for each NEO is equal to the target percentage applied to the executive's base salary. The following table shows the actual amount awarded by the Compensation Committee
after consideration of the executive's individual performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 Annual Incentive Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Target Award
as % of
Base Salary
(1)
|
|
|
Target
Award
(2)
|
|
|
Corporate
Payout
Rate
(3)
|
|
|
Actual
Amount
Awarded
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
|
140%
|
|
$
|
1,400,000
|
|
|
156%
|
|
$
|
2,620,800
|
|
Bradley
|
|
|
100%
|
|
$
|
700,008
|
|
|
156%
|
|
$
|
1,092,012
|
|
Matthews
|
|
|
80%
|
|
$
|
432,800
|
|
|
165%
|
|
$
|
749,826
|
|
Holloway
|
|
|
75%
|
|
$
|
293,006
|
|
|
156%
|
|
$
|
548,507
|
|
Buckiso
|
|
|
70%
|
|
$
|
321,125
|
|
|
152%
|
|
$
|
592,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
"Base
Salary" for purposes of determining the AICP award is the actual salary earned for 2018.
-
(2)
-
The
"Target Award" is the amount that would be paid to the executive assuming the Corporation achieves its target performance objectives and before consideration of
individual performance. Mr. Holloway served for a portion of the year, and the table above reflects the prorated target AICP award.
-
(3)
-
The
"Corporate Payout Rate" is determined by the Corporation's actual performance measured against the 2018 performance metrics and before individual performance is
considered. Differences in the payout rate are the result of variances in EBITDA weighting for the business segments, as described on pages 30-31.
-
(4)
-
The
"Actual Amount Awarded" is the amount awarded by the Compensation Committee after consideration of individual performance.
United States Steel Corporation
|
2019 Proxy
Statement
|
33
Table of Contents
Compensation Discussion and Analysis
|
AICP Performance Measures
|
|
|
|
|
Performance Measure
|
|
How it Works
|
|
Rationale/Description
|
EBITDA*
|
|
Determines 70% of corporate payout rate
|
|
Financial performance measure intended to focus the organization on operating at sustainable, profitable levels
|
|
|
|
|
|
Cash Conversion Cycle*
|
|
Determines 30% of corporate payout rate
|
|
Financial liquidity measure intended to focus the organization on the number of days that it takes to convert resource inputs into cash flows
|
|
|
|
|
|
Individual Performance
|
|
Modifier; The Compensation Committee may increase award up to 30% or reduce or eliminate based on individual performance
|
|
Based on an assessment of the executive's individual performance, including the contribution to overall corporate results and attainment of operational and strategic goals, and the priorities of safety, profitability, customer focus, operational
excellence and building a high performing organization, as well as internal equity fairness, and the impact of significant research, development and innovation
|
-
*
-
See
Appendix B for definitions and calculations of financial metrics.
Setting Corporate Performance Goals and Determining Results
The Compensation Committee strives to set challenging operational and financial performance targets that drive and motivate executives to achieve short- and
long-term success. For 2018, the Compensation Committee broadened the minimum-maximum goal range to set goals that are rigorous, but achievable.
The
target annual incentive award opportunity for our NEOs represents a percentage of base salary, which is set based on market data from our executive compensation peer group. Target annual incentive
award levels are reviewed annually to ensure alignment with our compensation philosophy and business strategy.
The
Compensation Committee set the target goals for AICP purposes in the first quarter of 2018, utilizing an approach that considers prior year's performance, expected 2018 financial performance and
the annual operating plan, the impact of planned strategic activities, and fluctuations in global steel prices and other macroeconomic factors. For 2018, the corporate EBITDA target goal required
substantial improvement over 2017 performance. The Compensation Committee determined that a sufficient degree of stretch existed in the target. In general, the maximum performance goals were set at an
amount that would require the Corporation to achieve a substantial level of operational improvements through asset revitalization and at a level that would generate sufficient earnings to pay the
incremental
cost
of the incentive payments while maintaining an equivalent amount of cash on the Corporation's balance sheet. The maximum goal was set well above the 2017 maximum goal, and also considered
possible impacts of Presidential actions on trade. The goals were considered rigorous when set.
In
addition to determining corporate performance targets, the Compensation Committee approved EBITDA goals for each NEO. For the CEO, CFO and General Counsel, the EBITDA goal is based on the total
corporate results, which generally measures the operational results of all business segments. For executives assigned to a specific segment, the EBITDA goal is 50% based on the EBITDA goal for that
segment and 50% based on total corporate EBITDA (see pages 30-31 for the allocation for Messrs. Buckiso and Matthews). This segment allocation of the EBITDA goal is intended to create
stronger corporate, business segment and individual accountability by tying an executive's award to the performance of the segments for which he or she is directly responsible.
The
corporate payout rate (prior to adjustment for individual performance) was determined based on achievement of the performance measures described in the table below. This payout rate demonstrates
the performance alignment design of our plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 AICP Corporate Performance Targets And Results
($ are in Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measure
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
Actual
(1)
|
|
|
Payout Result
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Conversion Cycle
|
|
|
45 days
|
|
|
39-35 days
|
|
|
28 days
|
|
|
28 days
|
|
|
175%
|
|
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flat-Rolled
|
|
$
|
408
|
|
$
|
815
|
|
$
|
1,223
|
|
$
|
1,232
|
|
|
175%
|
|
Tubular
|
|
$
|
32
|
|
$
|
63
|
|
$
|
95
|
|
$
|
(13
|
)
|
|
0%
|
|
Europe
|
|
$
|
194
|
|
$
|
387
|
|
$
|
581
|
|
$
|
446
|
|
|
123%
|
|
Total EBITDA
|
|
$
|
663
|
|
$
|
1,325
|
|
$
|
1,988
|
|
$
|
1,740
|
|
|
147%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Management
elected to exclude one of the adjustments to our EBITDA from the results used to determine AICP performance. This resulted in a lower payout result.
-
(2)
-
The
payout result is 100% at target increasing to 175% of target for performance at the maximum level and decreasing to 50% of target for performance at the minimum
threshold level.
34
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
Individual Performance Goals and Results
In determining the annual incentive awards, the Compensation Committee considers, among other things, the NEO's individual performance in delivering results for
the established value creation drivers of profitability, customer focus, operational excellence and high performing organization as well as enhancing our culture of prioritizing safety. The CEO's
individual performance objectives are reviewed by the Compensation Committee and approved by the Board. A similar evaluation is performed by the CEO with
respect
to all other executive officers using similar measures and objectives. The Compensation Committee uses its business judgment in reviewing each of these individual items and does not assign
specific quantitative weighting to such items.
A
description of each NEO's individual performance is included on pages 29-31.
Long-Term Incentive Program
|
Equity
awards under the long-term incentive program (LTIP) are allocated among performance-based awards (60% of the LTIP award in 2018) and restricted stock units (RSUs) (40% of the LTIP award in
2018).
The
Compensation Committee believes that these long-term incentive vehicles best accomplish the objectives of aligning pay with performance and retaining executives.
|
|
|
|
|
|
|
Award Type / Performance Measure
|
|
% of LTIP Award
|
|
Description
|
|
Vesting
|
Performance-Based Awards
Return on Capital Employed (ROCE)
|
|
Comprises 30% of LTIP award
|
|
Measured over a three-year period, with greater weighting placed on the third year
|
|
Vests after three-year performance period if ROCE performance metrics are achieved
|
|
|
|
|
|
|
|
Performance-Based Awards
Relative TSR
|
|
Comprises 30% of LTIP award
|
|
Measured over a three-year period; requires above market performance compared to our peer group for target payout to be made
|
|
Vests after three-year performance period if TSR performance metrics are achieved
|
|
|
|
|
|
|
|
Time-Based RSUs
|
|
Comprises 40% of LTIP award
|
|
Supports retention and linked to stock price performance
|
|
Vests ratably over three years
|
On
February 27, 2018, the Compensation Committee granted the long-term incentive awards set forth in the table below.
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Awards Granted in 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Target
Equity-Based
Performance
Awards
|
|
|
Restricted
Stock
Units
|
|
|
Grant Date
Fair Value
of Equity
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
|
70,250
|
|
|
55,470
|
|
$
|
6,099,985
|
|
Bradley
|
|
|
24,180
|
|
|
19,100
|
|
$
|
2,099,904
|
|
Matthews
|
|
|
12,840
|
|
|
10,140
|
|
$
|
1,115,061
|
|
Holloway
(1)
|
|
|
20,010
|
|
|
15,050
|
|
$
|
1,249,888
|
|
Buckiso
|
|
|
7,770
|
|
|
6,140
|
|
$
|
674,921
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Mr. Holloway's
awards were granted on April 30, 2018, shortly following his date of hire.
Performance-Based Awards (60% of LTIP Award Value)
Performance awards provide an incentive for executives to earn shares based on our performance over a three-year performance period, with goals
set at the beginning of each performance period. The performance awards do not pay dividends or carry voting privileges prior to vesting. In 2018, the three-year performance period began on
January 1, 2018, and will end on December 31, 2020 (the "2018 Performance Period"). The value of the performance awards
granted
for the 2018 Performance Period was divided equally between relative TSR performance awards and ROCE performance awards. The performance awards were granted in equity.
TSR Performance Awards
TSR performance awards are based on relative performance, with the payout determined based on the rank of the Corporation's TSR compared to the
TSR of peer group companies over the three-year performance period (see the "Performance Peer Group" on page 40).
United States Steel Corporation
|
2019 Proxy
Statement
|
35
Table of Contents
Compensation Discussion and Analysis
|
As
noted in the table below, above market performance at the 55th percentile is required for target payout, and no payout is made for performance below the 30th percentile.
|
|
|
|
|
|
|
TSR Performance Award Goals
|
|
|
|
|
|
|
|
|
Level
|
|
2018
Relative TSR Ranking
|
|
|
Award Payout as a %
of Target
(1)
|
|
|
|
|
|
|
|
|
|
|
<30th percentile
|
|
|
0%
|
|
Threshold
|
|
30th percentile
|
|
|
50%
|
|
Target
|
|
55th percentile
|
|
|
100%
|
|
Maximum
|
|
³
80th percentile
|
|
|
200%
|
|
|
|
|
|
|
|
|
-
(1)
-
Interpolation
is used to determine actual awards between the threshold, target, and maximum levels.
In
order to address any potential pay for performance disconnect should the Corporation's TSR be negative over the performance period (regardless of relative performance) payouts are capped as
follows:
-
-
Payout is capped at target if the Corporation's TSR is 0% to -5% on a compound annual growth rate ("CAGR") basis;
-
-
Payout is capped at threshold if the Corporation's TSR is between -5% to -10% on a CAGR basis; and
-
-
Payout is forfeited if the Corporation's TSR is lower than -10% on a CAGR basis.
ROCE Performance Awards
The payout is determined based on our weighted average cost of capital (noted as return on capital employed or "ROCE"), over the three-year
performance period. ROCE is measured based on our consolidated worldwide EBIT, as adjusted, divided by our consolidated worldwide capital employed, as adjusted, over the three-year performance period.
The weighted average ROCE is a three-year
performance
metric calculated based on the ROCE achieved in the first, second, and third years of the performance period, weighted at 20%, 30%, and 50% respectively. The ROCE awards payout at 50% at
the threshold level, 100% at the target level, and 200% at the maximum level. ROCE performance goals are not disclosed during an ongoing performance period due to competitive reasons.
2016 Performance Awards
The performance period for the performance awards granted in 2016 ended on December 31, 2018. The value of the 2016 performance awards
was equally divided between relative TSR performance awards and ROCE performance awards. The 2016 ROCE performance awards were granted in cash. Both the relative TSR performance and ROCE performance
met the maximum performance goals, resulting in an overall payout of 200% of the target award. Messrs. Bradley and Holloway did not receive a payout because they were not employed by the
Corporation when the grant was made. Each of the relative TSR and ROCE goals, results and payouts are described below.
2016 TSR Performance Awards
The Corporation's relative annualized TSR compared to the selected peer group for the performance period was above the 90th percentile, and
resulted in a payout at 200% of the target award. The payout for our NEOs is shown below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 TSR Performance Award Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Granted
at Target
|
|
|
Payout Rate
|
|
|
Shares vested as a
result of payout
|
|
|
Fair Value of
Performance Awards
Upon vesting*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
|
44,300
|
|
|
200%
|
|
|
88,600
|
|
$
|
2,119,312
|
|
Matthews
|
|
|
17,960
|
|
|
200%
|
|
|
35,920
|
|
$
|
859,206
|
|
Buckiso
|
|
|
6,690
|
|
|
200%
|
|
|
13,380
|
|
$
|
320,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Performance awards vested on February 26, 2019.
2016 ROCE Performance Awards
The Corporation's ROCE for the performance period was above maximum performance target for payment, resulting in a payout at 200% of the target
award.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016-2018 Return on Capital Employed (ROCE) Performance Targets and Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Targets
|
|
|
|
|
|
|
Actual Results and Weighting
|
|
|
Payout Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
3%
|
|
|
|
Year 1 (20%)
|
|
|
0.0%
|
|
|
|
|
Target
|
|
|
6%
|
|
|
|
Year 2 (30%)
|
|
|
10.3%
|
|
|
|
|
Maximum
|
|
|
10%
|
|
|
|
Year 3 (50%)
|
|
|
19.1%
|
|
|
|
|
|
|
|
|
|
|
|
2016-2018 Period
|
|
|
12.6%
|
|
|
200.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
|
|
|
|
|
|
|
|
|
|
|
2016 ROCE Performance Award Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value at Target
|
|
|
Payout rate
|
|
|
Delivered Value
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
$
|
825,000
|
|
|
200%
|
|
$
|
1,650,000
|
|
Matthews
|
|
$
|
334,500
|
|
|
200%
|
|
$
|
669,000
|
|
Buckiso
|
|
$
|
124,500
|
|
|
200%
|
|
$
|
249,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units (40% of LTIP Award Value)
Restricted stock units (RSUs) are awards that deliver shares of common stock and accumulated dividends upon vesting. RSUs generally vest ratably on each of the
first, second and third anniversaries of the grant date, subject to the executive's continued employment on each vesting date.
The
Compensation Committee believes that RSUs provide the best retention benefits among our long-term incentives, especially during times of challenging economic and industry conditions. They also
enable our executives to build ownership in the Corporation, which addresses a key compensation objective. Additionally, because of the downside risk of owning stock, restricted stock units discourage
executives from taking excessive risks that would not be in the best long-term interest of stockholders.
RAP Incentive Program
In 2018, the Compensation Committee approved the RAP (Realistically Achievable Potential) Incentive Program to drive transformational
breakthroughs in the North-American Flat-Rolled operations of the Corporation by setting certain aspirational, stretch objectives known as "RAP Targets." Payouts are designed to reward sustained
improvements in operational performance. The RAP Targets are established by the Compensation Committee at the plant level based on Total Cost per Ton. The RAP Target Awards shall be in the form of
three-year cliff vested RSUs, the number of which
shall be determined based on the results for each calendar quarter, with no payout for partial achievement. Mr. Matthews participated in the RAP program
in 2018 but did not receive a RAP target award.
Changes to the 2019 Compensation Program
The Compensation Committee annually reviews our compensation design to ensure it aligns with the business strategy and guiding compensation
principles. For 2019, the Compensation Committee approved the following changes:
-
-
Increased the Weighting of the EBITDA AICP Metric
to place greater emphasis on financial
performance and profitability
-
-
Changed the AICP Individual Component from a multiplier to an additive amount
to allow for
recognition of exceptional individual performance independent of corporate financial performance
-
-
Revised the calculation for relative TSR performance awards
to incorporate multiple measurement
periods within the three-year performance period, as shown below, to address volatility seen in our stock price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relative TSR Weighting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year 1: 20%
|
|
|
|
Year 2: 20%
|
|
|
|
Year 3: 20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-year period: 40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Compensation and Benefits
|
Benefits
NEOs participate in many of the benefits provided to non-represented employees generally, including vacation and holiday benefits, insurance
benefits, disability benefits, and medical and prescription drug programs. We believe these benefits support our overall retention objectives.
Retirement Programs
We provide the retirement benefits described below in order to attract and retain talented executives. We believe our retirement programs are
reasonable in light of competitive pay practices and the total compensation of our executives.
Tax-Qualified Plans
The Corporation maintains the following tax-qualified retirement programs (together, the "Qualified
Plans"):
-
-
United States Steel Corporation Plan for Employee Pension Benefits, Revision of 2003 (the "Pension Plan"), which is a defined benefit plan; and
-
-
United States Steel Corporation Savings Fund Plan for Salaried Employees (the "Savings Plan"), which is a 401(k) defined contribution plan.
Participation
in the Pension Plan was closed to new entrants on July 1, 2003 and benefits under the plan were frozen for all non-represented participants on December 31, 2015.
Messrs. Matthews and Buckiso were the only NEOs covered by the Pension Plan and the Non Tax-Qualified Pension Plan described below. Mr. Matthews is the only NEO covered by the
Supplemental Pension Program described below.
In
2018, all of the NEOs received matching contributions and Retirement Account contributions under the Savings Plan and participated in the related non-qualified plans.
Non Tax-Qualified Plans
The Corporation maintains the following non tax-qualified programs (together, the "Non-Qualified Plans") that are
United States Steel Corporation
|
2019 Proxy
Statement
|
37
Table of Contents
Compensation Discussion and Analysis
|
designed
to provide retirement benefits to executives and other high-level employees of the Corporation and its affiliates:
-
-
United States Steel Corporation Non Tax-Qualified Pension Plan (the "Non Tax-Qualified Pension Plan");
-
-
United States Steel Corporation Executive Management Supplemental Pension Program (the "Supplemental Pension Program");
-
-
United States Steel Corporation Supplemental Thrift Program (the "Supplemental Thrift Program");
-
-
United States Steel Corporation Non Tax-Qualified Retirement Account Program (the "Non Tax-Qualified Retirement Account Program"); and
-
-
United States Steel Corporation Supplemental Retirement Account Program (the "Supplemental Retirement Account Program").
Benefits
under the Non Tax-Qualified Pension Plan and Supplemental Pension Program were frozen on December 31, 2015 when the tax qualified Pension Plan was frozen for all non-represented
participants.
The
purpose of the Supplemental Thrift Program and the Non Tax-Qualified Retirement Account Program is to provide benefits that are not permitted to be provided under the Savings Plan due to certain
limits under the Internal Revenue Code.
The
purpose of the Supplemental Retirement Account Program is to provide benefits based upon compensation paid under our annual incentive compensation plans, which is excluded under the Savings Plan.
We provide a retirement benefit based on incentive pay to enable our executives (who receive more of their pay in the form of incentive compensation) to receive a comparable retirement benefit.
To
support our retention objectives, benefits under the Supplemental Pension Program and the Supplemental Retirement Account Program are subject to service-based and age-based restrictions. Unless the
Corporation consents, benefits under the Supplemental Pension Program are not payable if the executive voluntarily terminates employment prior to age 60 and benefits under the Supplemental Retirement
Account Program are not payable if the executive voluntarily terminates employment (i) prior to age 55 or before completing 10 years of service (or, if earlier, attaining age 65), or
(ii) within 36 months of the date coverage under the program commenced. For more information on our retirement programs, see the
Pension
Benefits
table and
Non-Qualified Deferred Compensation
table later in this proxy statement.
Perquisites and Security
We provided a limited number of modest perquisites to our NEOs in 2018. The perquisites facilitate the ability of our executives to do their
jobs without undue distractions or delays and have clear business-related purposes. As described in the footnotes to the Summary
Compensation Table on page 43 of this proxy statement, the perquisites include:
-
-
financial and tax planning services to ensure accurate tax reporting of our compensation programs and promote international assignments;
-
-
security services (including transportation) for employees who are the subject of a credible and specific threat on account of his or her role
with the Corporation;
-
-
club memberships for business purposes;
-
-
aircraft usage;
-
-
personal use of corporate automobile;
-
-
relocation benefits; and
-
-
executive physicals.
In
general, the level of security provided depends upon the nature of the threat. In 2018, Messrs. Burritt and Buckiso were the only NEOs provided with security services.
We
do not provide gross-up payments to cover personal income taxes that may be attributable to any of the perquisites except for (i) relocation, (ii) tax equalization and
(iii) expenses and travel related to expatriate assignments. These gross-ups are also provided to non-executive employees.
Change in Control Arrangements
The Corporation's Change in Control Severance Plan (the "CIC Plan") generally provides for the payment of severance benefits to certain
eligible executives, including each of the named executive officers, in the event their employment with the Corporation terminates involuntarily following a change in control of the Corporation.
The
CIC Plan enables our executives to evaluate corporate transactional opportunities that may be in the best interests of the Corporation's stockholders, while limiting concerns about the potential
impact of such opportunities on their job security. Under the CIC Plan, payments require a "double trigger," meaning the named executive officer is eligible for change in control severance payments
and benefits in the event that he or she is terminated without cause or voluntarily for good reason in connection with a change in control. In general, upon a change in control and termination each of
our NEOs are entitled to a payment equivalent to a multiple of his or her salary and annual incentive award. For Messrs. Burritt and Bradley, the severance payment multiple is 2.5x, and for
Messrs. Matthews, Buckiso and Holloway, is 2x. We do not provide gross-up payments to cover personal income taxes that may be attributable to payments under the CIC Plan. See "Potential
Payments Upon Termination or Change in Control" for additional information regarding the quantification of these potential payments and benefits.
Letter Agreements
In general, the Corporation does not enter into long-term employment agreements with its executives, but may enter into agreements for a
limited period of time to attract or retain experienced professionals for high level positions. For Messrs. Bradley and Holloway, the Corporation agreed to severance provisions in their offer
letters, which provide for a severance payment of twelve months' annual base salary and one-year annual target bonus if terminated without cause prior to July 27, 2019 for Mr. Bradley
and April 16, 2020 for Mr. Holloway. The Corporation entered into a letter agreement with Mr. Matthews in December 2018 providing Mr. Matthews with certain pension
make-whole, retention and other payments
38
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
in
consideration for his continued employment with the Corporation beyond the date on which he was eligible for an immediate retirement under the Pension Plan and the Non-Qualified Plan. Under the
terms of a letter agreement with
Mr. Buckiso, which expired on November 20, 2018, Mr. Buckiso would have become entitled to a payment of up to 3.5x salary and target annual
incentive award upon the occurrence of certain events.
Independent Consultant and Management Input
The Compensation Committee retained Pay Governance, LLC as its independent consultant to assist in the
evaluation of executive compensation programs and in setting executive officers' compensation. The use of an independent consultant provides additional assurance that the Corporation's executive
compensation programs are reasonable and consistent with the Corporation's objectives. The consultant reports directly to the Compensation Committee and does not perform services for management
without the express approval of the Compensation Committee. There were no services performed by the consultant for management in 2018.
The
consultant participates in the Compensation Committee meetings, including executive sessions, and regularly advises the Compensation Committee with respect to compensation trends and best
practices, plan design, and the reasonableness of individual compensation awards.
With
respect to the CEO's compensation, the Compensation Committee makes its determinations based upon its evaluation of the CEO's performance and with input from its consultant. Each year, the
Compensation Committee reviews with the Board of Directors the CEO's goals and objectives, and the evaluation of the CEO's performance with respect to the prior year's goals and objectives. The CEO
does not participate in the presentations to, or discussions with, the Compensation Committee in connection with the setting of his compensation.
Tally Sheets
The Compensation Committee uses tally sheets to evaluate the total compensation and projected payments to the named executive officers under
various termination scenarios. This analysis is undertaken annually to assist the Compensation Committee in determining whether the compensation package of each NEO is appropriately aligned with our
compensation philosophy and the compensation practices of our peers.
Peer Groups
The Compensation Committee also considers relevant market pay practices in its decision making process. The Compensation Committee uses the
peer group data below as a frame of reference to guide executive compensation decisions. The Corporation utilizes two peer groups as described below:
-
-
Executive Compensation Peer Group.
This peer group is used to benchmark and assess the
competitiveness of the compensation of our NEOs.
-
-
Performance Peer Group.
This peer group, which is more industry focused, is used to evaluate the
long-term performance of the Corporation for purposes of the relative TSR performance award. The performance peer group is
being utilized to evaluate our performance against a targeted group of companies in our industry that we believe we need to outperform to be successful over the
long term.
Executive Compensation Peer Group
The
executive compensation peer group is used to serve as a market reference when making compensation decisions and designing program features, and to assess the competitiveness of each element of
compensation and compensation in total. We also use this peer group as a reference when analyzing pay-for-performance alignment.
The
executive compensation peer group was selected based on the following criteria:
-
-
large companies primarily from the Materials sector or Industrials sector within the Global Industry Classification Standard (GICS)
classification codes;
-
-
companies similar in complexity specifically, companies that have:
-
-
revenues that range from half to double that of the Corporation;
-
-
capital intensive businesses as indicated by lower asset turnover ratios;
-
-
market capitalization reasonably aligned with the Corporation; and
-
-
similar employee levels
-
-
acceptable levels of financial and stockholder performance and a higher company stock price volatility (referred to as "beta") to align with
that of the Corporation; and
-
-
elimination of companies with unusual compensation practices (e.g., company founders who receive little or no compensation and companies
that are subsidiaries of other companies).
In
setting the executive compensation peer group, the Compensation Committee considered a set of broader, industrial peers who might compete with the Corporation for talent as well as companies
outside of the material/industrial industry who might attract our executives that have skills transferable outside of the metals industry.
The
2018 executive compensation peer group consists of the following companies:
-
-
AK Steel Holding Corporation
-
-
Alcoa Corporation
-
-
Allegheny Technologies Incorporated
-
-
Arconic Inc.
-
-
Cleveland-Cliffs Inc.
-
-
Commercial Metals Company
United States Steel Corporation
|
2019 Proxy
Statement
|
39
Table of Contents
Compensation Discussion and Analysis
|
-
-
Cummins Inc.
-
-
Eastman Chemical Company
-
-
Eaton Corporation plc
-
-
Freeport-McMoRan Inc.
-
-
Illinois Tool Works Inc.
-
-
Ingersoll-Rand Plc
-
-
Lear Corporation
-
-
Masco Corporation
-
-
Navistar International Corporation
-
-
Nucor Corporation
-
-
Parker-Hannifin Corporation
-
-
PPG Industries, Inc.
-
-
Reliance Steel & Aluminum Co.
-
-
Steel Dynamics, Inc.
-
-
Terex Corporation
-
-
Textron Inc.
-
-
The Goodyear Tire & Rubber Company
-
-
Weyerhaeuser Co.
-
-
Whirlpool Corporation
For
2018, Alcoa Corporation was added to the executive compensation peer group. No changes were made to the executive compensation peer group for 2019.
Performance Peer Group
The Compensation Committee believes the use of a performance peer group is appropriate because executive compensation arrangements and
practices are influenced by business complexity and company size, and many of our industry competitors are much smaller than U. S. Steel.
The
performance peer group consists of twelve domestic companies in the steel industry. The use of a second peer group or index for evaluating TSR is a common practice among our peers. Because steel
industry companies have traded differently from many of our large industrial peers since 2012, the use of a second peer group is more appropriate when evaluating relative TSR performance. Peers were
selected based on criteria that included:
-
-
specific domestic steel or steel-related industry;
-
-
five-year stock price correlation greater than 0.50; and
-
-
stock price beta greater than 1.0.
The
2018 performance peer group consists of the following companies:
-
-
AK Steel Holding Corporation
-
-
Allegheny Technologies Inc.
-
-
Carpenter Technology Corporation
-
-
Cleveland-Cliffs Inc.
-
-
Commercial Metals Company
-
-
Nucor Corporation
-
-
Olympic Steel Inc.
-
-
Reliance Steel & Aluminum Co.
-
-
Schnitzer Steel Industries, Inc.
-
-
Steel Dynamics Inc.
-
-
TimkenSteel Corporation
-
-
Worthington Industries, Inc.
No
changes were made to the performance peer group for 2018 or 2019.
Compensation Policies and Other Considerations
|
Stock Ownership and Holding Guidelines
We have comprehensive stock ownership and holding guidelines designed to align the interests of our executive officers with those of the
Corporation's stockholders. As shown in the table below, our executives are required to accumulate and retain a minimum level of ownership in the Corporation's common stock based upon their base
salary. The stock ownership guidelines require that an executive must retain 100% of the after-tax value of stock acquired upon the vesting of restricted stock units and performance awards and 100% of
the after-tax value of shares issued upon the exercise of stock options until the ownership requirement is satisfied. All of the NEOs are in compliance with the terms of the policy.
|
|
|
Executive
|
|
Ownership Requirement*
|
|
|
|
Burritt
|
|
6x base salary
|
Bradley
|
|
3x base salary
|
Matthews
|
|
3x base salary
|
Holloway
|
|
3x base salary
|
Buckiso
|
|
3x base salary
|
|
|
|
* Unvested restricted stock units count towards the ownership requirement.
Anti-Hedging and Pledging
We have a policy that prohibits all directors and employees, including the NEOs, from engaging in any transaction that is designed to hedge or offset any
decrease in our stock price. Our anti-pledging policy prohibits directors and executive
officers, including the NEOs, from pledging our stock as collateral for a loan or holding shares in a margin account.
40
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Compensation Discussion and Analysis
|
Clawback Policy
The Board has adopted a policy setting forth procedures to recover payment if an executive engaged in any fraud or misconduct, including gross
negligence that caused or partially caused the need for a material restatement of the Corporation's publicly filed financial results. For any periods as to which a performance-based award was paid or
credited to the executive, such award shall be subject to reduction, cancellation or reimbursement to the Corporation at the Board's discretion. This policy is set forth in our Corporate Governance
Principles which are available on our website www.ussteel.com.
Compensation and Risk Management
The Compensation Committee's compensation consultant annually performs a risk assessment of our executive compensation program and, based on
its most recent review, the consultant has determined that our compensation program contains a variety of features that mitigate unnecessary risk taking, including the
following:
-
-
Compensation Mix: Executive officers receive a mixture of short-term and long-term incentives in addition to base salary. Long-term incentives,
which are awarded in equity, make up the majority of our executives' compensation;
-
-
Capped Awards: Payments under our AICP are capped at 227% of target and our performance awards are capped at 200% of target;
-
-
Performance Metrics: Different metrics are used in the annual and long-term incentive programs; and
-
-
Stock Ownership: Executive officers are required to own a significant amount of common stock determined as a multiple of their base salary.
For
these reasons, the Compensation Committee concluded that our 2018 compensation and organization policies and practices are not reasonably likely to create a risk that could have a material adverse
effect on the Corporation.
Accounting and Tax Considerations
In determining executive compensation, the Compensation Committee considers, among other factors, the possible tax consequences to the
Corporation. Tax consequences, including but not limited to tax deductibility by the Corporation, are subject to many factors (such as changes in the tax laws and regulations or interpretations
thereof) that are beyond the control of the
Corporation. In addition, the Compensation Committee believes that it is important for it to retain maximum flexibility in designing compensation programs that meet its stated objectives. For these
reasons, the Compensation Committee, while considering tax deductibility as one of the factors in determining compensation, does not limit compensation to those levels or types of compensation that
will be deductible by the Corporation. For a detailed discussion of the accounting impacts on various elements of long-term incentive compensation, see footnote 15 to the Financial Statements included
in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 15, 2019.
United States Steel Corporation
|
2019 Proxy
Statement
|
41
Table of Contents
Executive Compensation Tables
|
EXECUTIVE COMPENSATION TABLES
|
The
titles of executives used in the compensation tables of this proxy statement reflect the current titles of each executive.
Summary Compensation Table
The following table sets forth certain compensation information for U. S. Steel's Chief Executive Officer (CEO), Chief Financial Officer (CFO)
and the three other most highly compensated executive officers (referred to as "Named Executive Officers" or "NEOs") who rendered services to U. S. Steel and its subsidiaries during 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
(1)
|
|
Salary
(2)
($)
|
|
Bonus
(3)
($)
|
|
Stock
Awards
(4)(5)
($)
|
|
Option
Awards
(4)(6)
($)
|
|
Non-Equity
Incentive
Compensation
(7)
($)
|
|
Change in
Pension
Value &
Nonqualified
Deferred
Compensation
Earnings
(8)
($)
|
|
All Other
Compensation
(9)
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David B. Burritt
|
|
|
2018
|
|
$
|
1,000,000
|
|
|
|
|
|
$
|
6,099,985
|
|
|
|
|
|
$
|
4,270,800
|
|
|
|
|
|
$
|
219,288
|
|
|
$
|
11,590,073
|
|
President & Chief
Executive Officer
|
|
|
2017
|
|
$
|
929,710
|
|
|
|
|
|
$
|
2,459,987
|
|
|
$
|
983,960
|
|
|
|
|
|
|
|
|
$
|
320,543
|
|
|
$
|
4,694,200
|
|
|
|
|
2016
|
|
$
|
800,000
|
|
|
|
|
|
$
|
891,720
|
|
|
$
|
447,864
|
|
|
$
|
1,820,000
|
|
|
|
|
|
$
|
116,000
|
|
|
$
|
4,075,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin P. Bradley
|
|
|
2018
|
|
$
|
700,008
|
|
|
|
|
|
$
|
2,099,904
|
|
|
|
|
|
$
|
1,092,012
|
|
|
|
|
|
$
|
177,275
|
|
|
$
|
4,069,199
|
|
Executive Vice
President & Chief
Financial Officer
|
|
|
2017
|
|
$
|
300,003
|
|
|
$
|
125,000
|
|
|
$
|
437,707
|
|
|
$
|
174,918
|
|
|
$
|
273,003
|
|
|
|
|
|
$
|
56,382
|
|
|
$
|
1,367,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas R. Matthews
|
|
|
2018
|
|
$
|
541,000
|
|
|
|
|
|
$
|
1,115,061
|
|
|
|
|
|
$
|
1,418,826
|
|
|
$
|
52,174
|
|
|
$
|
127,090
|
|
|
$
|
3,254,151
|
|
Senior Vice President -
Industrial, Service Center
|
|
|
2017
|
|
$
|
541,000
|
|
|
|
|
|
$
|
557,285
|
|
|
$
|
222,954
|
|
|
$
|
409,429
|
|
|
$
|
162,208
|
|
|
$
|
162,752
|
|
|
$
|
2,055,628
|
|
and Mining Solutions; Interim Head - Tubular
|
|
|
2016
|
|
$
|
541,000
|
|
|
|
|
|
$
|
361,605
|
|
|
$
|
181,580
|
|
|
$
|
833,140
|
|
|
$
|
225,984
|
|
|
$
|
91,565
|
|
|
$
|
2,234,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane D. Holloway
Senior Vice President,
General Counsel,
Chief Ethics &
Compliance Officer
and Corporate Secretary
|
|
|
2018
|
|
$
|
390,675
|
|
|
$
|
250,000
|
|
|
$
|
1,249,888
|
|
|
|
|
|
$
|
548,507
|
|
|
|
|
|
$
|
83,725
|
|
|
$
|
2,522,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott D. Buckiso
|
|
|
2018
|
|
$
|
458,750
|
|
|
|
|
|
$
|
674,921
|
|
|
|
|
|
$
|
841,203
|
|
|
$
|
|
|
|
$
|
502,588
|
|
|
$
|
2,477,462
|
|
Senior Vice President -
Automotive Solutions
|
|
|
2017
|
|
$
|
412,500
|
|
|
|
|
|
$
|
250,171
|
|
|
$
|
100,027
|
|
|
$
|
324,968
|
|
|
$
|
48,226
|
|
|
$
|
539,827
|
|
|
$
|
1,675,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In 2018 the Compensation Committee granted the portion of the long-term incentive award tied to ROCE performance in equity. For the prior three years, this award
had been granted in cash and will be disclosed in the Summary Compensation Table in the final year of the performance period. While the Compensation Committee believes that the change was appropriate
in order to more fully align the interests of our executives and stockholders, the change impacts the timing of the disclosure of the award. The Summary Compensation Table values for 2018 thus reflect
both the grant of the 2018-2020 performance award in equity (the actual payout of which is unknown and dependent on a three year performance metric) and the cash payout resulting from the 2016-2018
performance award, which resulted in a maximum payout following a three year performance of exceptional return on capital employed.
-
(1)
-
Amounts
are not reported for 2016 and 2017 if the executive was not an NEO in those years. Mr. Bradley was hired in 2017. Mr. Holloway was hired in
2018, and Mr. Buckiso was not a NEO in 2016.
-
(2)
-
Salaries
provided reflect the actual amount earned in each year. Salary in 2018 for Mr. Holloway reflects a partial year based on his hire date of
April 16, 2018. The 2017 salary for Mr. Burritt reflects the partial year he served as our CFO. Salary in 2017 for Mr. Bradley reflects a partial year based on his hire date of
July 27, 2017.
-
(3)
-
Bonus
represents new hire cash award.
-
(4)
-
Stock
and option award grant date values are computed in accordance with Accounting Standard Codification Topic 718 (ASC 718), as described in footnote 15 to the
financial statements included in the Corporation's Annual Report on Form 10-K for the year-ended December 31, 2018 which was filed with the SEC on February 15, 2019. The Stock
Awards column includes restricted stock units and performance awards that are reported at the target number of shares and the grant date fair value of such awards includes a factor for the probable
performance outcome of the performance awards which are based on TSR, and excludes the effect of estimated forfeitures. The maximum payout for the performance awards is 200% of target. TSR-based
performance equity awards granted in 2016 paid at maximum resulting in payments for the portion of the stock awards column that is allocated to performance awards of: $879,798 for Mr. Burritt,
$356,686 for Mr. Matthews, and $132,864 for Mr. Buckiso. Messrs. Bradley and Holloway did not receive the 2016 performance award grant. In the event that TSR-based performance
awards meet the maximum goal, the potential maximum payouts in 2017 would be: $2,951,826 for Mr. Burritt, $525,292 for Mr. Bradley, $668,520 for Mr. Matthews, and $300,092 for
Mr. Buckiso. Mr. Holloway did not receive the 2017 performance award grant. The potential maximum payouts in 2018 would be: $7,319,720 for Mr. Burritt, $2,519,390 for
Mr. Bradley, $1,338,006 for Mr. Matthews, $809,644 for Mr. Buckiso, and $1,499,854 for Mr. Holloway. These amounts do not include the value of restricted stock units
included in the stock awards column.
-
(5)
-
The
grant date fair market value used to calculate compensation expense in accordance with ASC 718 for the NEOs is $43.99 for our 2018 restricted stock unit grants,
$39.27 per share for our 2017 restricted stock unit grants, and $14.78 for our 2016 restricted stock unit grants. Performance award grants were granted in two portions, one equity grant based on a
3-year weighted average return on capital employed (ROCE) measure and disclosed in the Grants of Plan-Based Awards table, and the second equity grant based on a relative total stockholder return (TSR)
measure. The grant date fair market value used to calculate the 2018 performance awards based on TSR is $63.87; $49.52 per share for our 2017 performance awards based on TSR; and $10.02 per share for
our 2016 TSR shares. The grant date fair market value used to calculate the 2018 performance
42
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Executive Compensation Tables
|
awards
based on ROCE is $43.99. Mr. Holloway received a 2018 new hire grant of equity which consisted of 15,050 restricted stock units, 8,720 performance shares based on TSR, and 11,290
performance shares based on ROCE. The grant date fair market value used to calculate compensation expense in accordance with ASC 718 for Mr. Holloway's grant is $33.22 per share for the
restricted stock units and for the performance award based on ROCE and $42.99 per share for the performance award based on TSR. For further detail, see our Annual Report on Form 10-K for the
year-ended December 31, 2018, financial statement footnote 15. Mr. Burritt received a 2017 annual grant of equity in conjunction with his promotion to President and Chief Executive
Officer which consisted of 20,980 restricted stock units and 35,530 performance shares based on TSR. The grant date fair market value used to calculate compensation expense in accordance with ASC 718
for Mr. Burritt's grant is $20.69 per share for the restricted stock units and $18.32 per share for the performance award based on TSR. Mr. Bradley received a 2017 new hire grant of
equity which consisted of 7,580 restricted stock units and 13,080 performance shares based on TSR. The grant date fair market value used to calculate compensation expense in accordance with ASC 718
for Mr. Bradley's grant is $23.10 per share for the restricted stock units and $20.08 per share for the performance award based on TSR.
-
(6)
-
The
grant date fair market value used to calculate compensation expense in accordance with ASC 718, is $18.32 per share for our 2017 stock option grants, and $6.24
per share for our 2016 stock option grants. For further detail, see our Annual Report on Form 10-K for the year-ended December 31, 2018, financial statement footnote 15. The grant
date fair market value used to calculate compensation expense in accordance with ASC 718 for Mr. Bradley's 2017 grant is $11.12 per share for the stock options.
-
(7)
-
The
Non-Equity Incentive Compensation column represents the aggregate amount of incentive awards earned pursuant to the Corporation's Annual Incentive Compensation
Plan ("AICP"), and the cash-based long-term incentive award payout based on ROCE performance for the 2016-2018 performance period.
-
(8)
-
These
amounts represent the aggregate increase in actuarial value on an accumulated benefit obligation (ABO) basis that accrued to each Named Executive Officer in
2018 under the Corporation's retirement plans and programs, calculated using the same assumptions used for the Corporation's annual financial statements except that retirement age is assumed to be the
normal retirement age for the respective plans. Key assumptions, and the present value of the accumulated benefits for each executive reflecting all benefits earned as of December 31, 2018 by
the executive under each plan and letter agreement, are shown under the 2018 Pension Benefits table. The values reported in the earnings column of the 2018 Nonqualified Deferred Compensation table are
not included here because the earnings are not above-market and are not preferential. These amounts exclude any benefits to be paid from plans of formerly affiliated companies.
-
(9)
-
Components
of "All Other Compensation" are as follows: See All Other Compensation Table and Footnotes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALL OTHER COMPENSATION IN 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
U. S. Steel
Savings
Plan
Contributions
(a)
|
|
|
Non Qualified
Defined
Contribution Plan
Accruals
(b)
|
|
|
International Tax
Gross Ups &
Reimbursements
(c)
|
|
|
Perquisites
(d)
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
$
|
33,333
|
|
$
|
111,667
|
|
|
|
|
$
|
74,288
|
|
$
|
219,288
|
|
Bradley
|
|
$
|
38,500
|
|
$
|
86,206
|
|
|
|
|
$
|
52,569
|
|
$
|
177,275
|
|
Matthews
|
|
$
|
26,148
|
|
$
|
87,098
|
|
|
|
|
$
|
13,844
|
|
$
|
127,090
|
|
Holloway
|
|
$
|
36,394
|
|
$
|
16,773
|
|
|
|
|
$
|
30,558
|
|
$
|
83,725
|
|
Buckiso
|
|
$
|
30,950
|
|
$
|
63,191
|
|
$
|
378,438
|
|
$
|
30,009
|
|
$
|
502,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(a)
-
U.
S. Steel Savings Plan Contributions include: (i) employer matching contributions that were made in the form of the Corporation's common stock and
(ii) other non-elective employer contributions known as Retirement Account contributions that were made to the executive's 401(k) account in the U. S. Steel Savings Plan (a federal income
tax-qualified defined contribution plan also known as a "401(k) plan") during the most recently completed fiscal year.
-
(b)
-
The
Non Qualified Defined Contribution Plan Accruals include accruals under the following programs:
-
-
The Supplemental Thrift Program, in which benefits accrue in the form of phantom shares of U. S. Steel common stock
equal to the portion of the Corporation's matching contributions to the U. S. Steel Savings Plan that cannot be provided due to the statutory limits on covered compensation and annual contributions.
-
-
The Non Tax-Qualified Retirement Account Program, which provides book accruals equal to the amount of Retirement Account
contributions that cannot be provided under the U. S. Steel Savings Plan due to the statutory limits on covered compensation and annual contributions.
-
-
The Supplemental Retirement Account Program, which provides book accruals equal to the applicable Retirement Account contribution
rate (8.5% for all NEOs) under the U. S. Steel Savings Plan multiplied by incentive compensation paid under our annual incentive compensation program.
-
(c)
-
Payments
related international assignment. For Mr. Buckiso this includes taxes paid on his behalf to his host country tax jurisdiction of $190,591, housing
benefits of $49,364, U.S. tax gross-ups of $63,820, an international assignment premium, goods and services differential, tax equalization and home leave benefits.
-
(d)
-
The
amount shown for Mr. Burritt includes $61,113 for personal aircraft use, dues for a club membership used for business purposes, and security services. The
aggregate incremental cost of the personal use of corporate aircraft is calculated using the rate per flight hour for the type of corporate aircraft used. The rates are published twice per year by a
nationally recognized and independent service. The calculated incremental costs for personal flights include the costs related to all flight hours flown in connection with the personal use. The
Corporation consistently applies allocation methods for flights that are not entirely either business or personal. Mr. Bradley received relocation benefits in the amount of $52,569, which
includes a tax gross up amount of $15,270. The amount shown for Mr. Matthews includes personal aircraft use, financial planning services, and tax preparation services. The amount shown for
Mr. Buckiso includes personal security, the cost of a company provided automobile, tax preparation services, and relocation expenses. Mr. Holloway received relocation benefits in the
amount of $30,558, which includes a tax gross up amount of $9,314.
United States Steel Corporation
|
2019 Proxy
Statement
|
43
Table of Contents
Executive Compensation Tables
|
Grants of Plan-Based Awards
The following table summarizes the grant of non-equity incentive compensation and equity-based incentive compensation to each Named Executive
Officer in 2018. No options were granted in 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(7)
(#)
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(3)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(6)
|
|
|
|
|
|
|
|
|
|
|
|
Closing
Price on
Grant
Date
($/Share)
|
|
Grant Date
Fair Value
of Stock
Awards
(8)
($)
|
|
Name
|
|
Plan
Name
(1)
|
|
Grant
Date
(2)
|
|
Threshold
(4)
($)
|
|
Target
($)
|
|
Maximum
(5)
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
AICP
|
|
|
2/27/2018
|
|
$
|
700,000
|
|
$
|
1,400,000
|
|
$
|
3,185,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
35,125
|
|
|
70,250
|
|
|
140,500
|
|
|
55,470
|
|
$
|
44.00
|
|
$
|
6,099,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bradley
|
|
AICP
|
|
|
2/27/2018
|
|
$
|
350,004
|
|
$
|
700,008
|
|
$
|
1,592,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
12,090
|
|
|
24,180
|
|
|
48,360
|
|
|
19,100
|
|
$
|
44.00
|
|
$
|
2,099,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthews
|
|
AICP
|
|
|
2/27/2018
|
|
$
|
216,400
|
|
$
|
432,800
|
|
$
|
984,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
6,420
|
|
|
12,840
|
|
|
25,680
|
|
|
10,140
|
|
$
|
44.00
|
|
$
|
1,115,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holloway
|
|
AICP
|
|
|
2/27/2018
|
|
$
|
146,503
|
|
$
|
293,006
|
|
$
|
666,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
|
|
|
4/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
10,005
|
|
|
20,010
|
|
|
40,020
|
|
|
15,050
|
|
$
|
33.83
|
|
$
|
1,249,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buckiso
|
|
AICP
|
|
|
2/27/2018
|
|
$
|
160,563
|
|
$
|
321,125
|
|
$
|
730,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
3,885
|
|
|
7,770
|
|
|
15,540
|
|
|
6,140
|
|
$
|
44.00
|
|
$
|
674,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
AICP
refers to the Corporation's Annual Incentive Compensation Plan and LTIP refers to the Long-Term Incentive Compensation Program, under the
United States Steel Corporation 2016 Omnibus Incentive Compensation Plan.
-
(2)
-
The
grant date for the AICP represents the date that the Compensation Committee established the annual incentive targets for the 2018 performance period.
-
(3)
-
Our
NEOs received non-equity incentive awards under the AICP in 2018. For a discussion of the 2018 award amounts, see the Annual Incentive Compensation Plan section
in the "Compensation Discussion and Analysis" included in this proxy statement. Amounts shown reflect the amount that would be paid to each executive at each performance level, before consideration of
individual performance.
-
(4)
-
The
threshold level for the AICP award is 50% of target, which is based on earnings before interest, taxes, depreciation, and amortization (EBITDA) (70% of target)
and cash conversion cycle (30% of target). In addition, individual performance is also considered and can increase an award by up to 30% or reduce or eliminate the award.
-
(5)
-
The
maximum level for the AICP award is 175% of the target award multiplied by the maximum personal performance adjustment of 130%.
-
(6)
-
Performance
award grants were made on February 27, 2018 to all NEOs except for Mr. Holloway, whose award was granted on April 30, 2018, shortly
following his date of hire. For 2018, performance awards represent approximately 60% of the total annual grant value, with half of the award value granted in equity long-term incentives based on the
Corporation's three-year weighted average return on capital employed (ROCE) as the performance measure, and the other half of the award value granted in equity based on total stockholder return (TSR).
ROCE weighted average return is based on 20% weighting of year one of the performance period, 30% weighting on the second year of the performance period and 50% weighting on the third year of the
performance period. Vesting is performance-based and will occur, if at all, following the end of the three-year performance period (the "performance period") on the date the Compensation Committee
meets to determine the Corporation's actual performance for the performance period. The payout is based upon the three-year weighted average ROCE for the period, and the rank of our TSR compared to
the TSR for the companies in the performance peer group. Performance awards do not pay dividends or carry voting privileges.
-
(7)
-
Restricted
stock unit grants were made on February 27, 2018 to all NEOs except Mr. Holloway. Restricted stock unit grants were made on April 30,
2018 to Mr. Holloway following his hire date. The units are time-based awards subject to ratable vesting over a three-year period, subject in each case to continued employment through the
vesting dates.
-
(8)
-
This
column represents the full grant date fair market value for the equity incentive awards, stock awards, calculated in accordance with ASC 718 based on the
average of the high and low stock price on the date of the grant. The restricted stock units accrue dividends at a non-preferential rate ($0.05) per share (as of the last announced dividend) that are
paid when the underlying restricted stock units vest. The value of these dividends is reflected in the fair market value of the restricted stock unit grant. Restricted stock units carry no voting
privileges. The target number of TSR performance awards is also based on the fair market value on the date of grant and includes a factor predicting the probable outcome of the performance goal for
the grant. The factor for the February 27, 2018 performance award grant was 63.8669% and the factor for the April 30, 2018 performance award grant was 42.9909% as determined by a
third-party consultant using a Monte Carlo valuation model. The maximum payout for the ROCE performance awards is 200% of target. Accordingly, if maximum share payouts were achieved for such
performance awards, the aggregate grant date fair value for such awards would be twice the target amount disclosed in the table related to such performance awards.
44
|
United
States Steel Corporation
|
2019 Proxy
Statement
Table of Contents
Executive Compensation Tables
|
Outstanding Equity Awards at 2018 Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Grant
Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(1)
(#)
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Number of
Shares or
Units of
Stock
That Have
Not
Vested
(2)
(#)
|
|
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
(3)
($)
|
|
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That
Have Not
Vested
(4)
(#)
|
|
|
Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(3)(4)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
|
2/24/2015
|
|
|
18,260
|
|
|
|
|
$
|
24.780
|
|
|
2/24/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,300
|
|
$
|
1,616,064
|
|
|
|
|
5/31/2016
|
|
|
23,917
|
|
|
23,917
|
|
$
|
14.780
|
|
|
5/31/2026
|
|
|
10,100
|
|
$
|
184,224
|
|
|
|
|
|
|
|
|
|
|
2/28/2017
|
|
|
10,006
|
|
|
20,014
|
|
$
|
39.265
|
|
|
2/28/2027
|
|
|
9,340
|
|
$
|
170,362
|
|
|
16,660
|
|
$
|
|
|
|
|
|
5/31/2017
|
|
|
14,510
|
|
|
29,020
|
|
$
|
20.690
|
|
|
5/31/2027
|
|
|
13,987
|
|
$
|
255,123
|
|
|
35,530
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,470
|
|
$
|
1,011,773
|
|
|
28,650
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,600
|
|
$
|
1,426,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bradley
|
|
|
8/1/2017
|
|
|
5,243
|
|
|
10,487
|
|
$
|
23.095
|
|
|
8/1/2027
|
|
|
5,054
|
|
$
|
92,185
|
|
|
13,080
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,100
|
|
$
|
348,384
|
|
|
9,860
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,320
|
|
$
|
491,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthews
|
|
|
5/26/2009
|
|
|
11,660
|
|
|
|
|
$
|
29.805
|
|
|
5/26/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/25/2010
|
|
|
7,680
|
|
|
|
|
$
|
45.650
|
|
|
5/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/2011
|
|
|
10,730
|
|
|
|
|
$
|
45.805
|
|
|
5/31/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/29/2012
|
|
|
19,960
|
|
|
|
|
$
|
22.305
|
|
|
5/29/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/28/2013
|
|
|
22,080
|
|
|
|
|
$
|
25.000
|
|
|
5/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/27/2014
|
|
|
22,450
|
|
|
|
|
$
|
24.285
|
|
|
5/27/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/2015
|
|
|
22,210
|
|
|
|
|
$
|
24.780
|
|
|
2/24/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,960
|
|
$
|
655,181
|
|
|
|
|
5/31/2016
|
|
|
19,393
|
|
|
9,697
|
|
$
|
14.780
|
|
|
5/31/2026
|
|
|
4,097
|
|
$
|
74,729
|
|
|
|
|
|
|
|
|
|
|
2/28/2017
|
|
|
4,056
|
|
|
8,114
|
|
$
|
39.265
|
|
|
2/28/2027
|
|
|
3,787
|
|
$
|
69,075
|
|
|
6,750
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,140
|
|
$
|
184,954
|
|
|
5,240
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,600
|
|
$
|
260,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holloway
|
|
|
4/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,050
|
|
$
|
274,512
|
|
|
8,720
|
|
$
|
|
|
|
|
|
4/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,290
|
|
$
|
387,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buckiso
|
|
|
5/25/2010
|
|
|
1,890
|
|
|
|
|
$
|
45.650
|
|
|
5/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/31/2011
|
|
|
3,250
|
|
|
|
|
$
|
45.805
|
|
|
5/31/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/29/2012
|
|
|
7,410
|
|
|
|
|
$
|
22.305
|
|
|
5/29/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/28/2013
|
|
|
7,240
|
|
|
|
|
$
|
18.640
|
|
|
5/28/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/27/2014
|
|
|
8,970
|
|
|
|
|
$
|
24.285
|
|
|
5/27/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/2015
|
|
|
8,880
|
|
|
|
|
$
|
24.780
|
|
|
2/24/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,690
|
|
$
|
244,051
|
|
|
|
|
5/31/2016
|
|
|
7,213
|
|
|
3,607
|
|
$
|
14.780
|
|
|
5/31/2026
|
|
|
1,524
|
|
$
|
27,798
|
|
|
|
|
|
|
|
|
|
|
2/28/2017
|
|
|
1,820
|
|
|
3,640
|
|
$
|
39.265
|
|
|
2/28/2027
|
|
|
1,700
|
|
$
|
31,008
|
|
|
3,030
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,140
|
|
$
|
111,994
|
|
|
3,170
|
|
$
|
|
|
|
|
|
2/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,600
|
|
$
|
157,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
All
options vest ratably over three years on the anniversaries of the date of grant, subject in each case to employment on the respective vesting dates or to pro
rata vesting for retirement during the vesting period.
-
(2)
-
All
restricted stock units vest ratably over three years on the anniversaries of the date of grant, subject in each case to employment on the respective vesting
dates or to pro rata vesting for retirement during the vesting period.
-
(3)
-
Value
is based on $18.24 per share, which was the closing price of the stock on December 31, 2018.
-
(4)
-
The
performance LTIP was split between an equity award based on TSR relative to a peer group and a long-term performance award based on ROCE. The 2016 performance
period ended on December 31, 2018. Using stock prices and dividends reported since the beginning of the performance period, we determined that, through December 31, 2018, the Corporation
has performed at the 93
rd
percentile relative to our performance peer group which resulted in a final award of 200% of target for the relative TSR portion. The 2016 ROCE cash
award performance exceeded the maximum goal, and is valued at 200% of target as of December 31, 2018. Based on performance through December 31, 2018, the 2017 TSR equity award is
estimated to payout at 0% of target and based on the first year of the performance period, the 2018 TSR equity award is estimated to payout at 0% of target. The ROCE cash award for 2017 is not shown
on this table. Based on performance through December 31, 2018 the 2017 ROCE cash award is estimated to achieve the maximum performance target and the 2018 ROCE equity awards are estimated to
achieve above target results.
United States Steel Corporation
|
2019 Proxy
Statement
|
45
Table of Contents
Executive Compensation Tables
|
Option Exercises and Stock Vested in 2018
The following table illustrates for each NEO, on an aggregate basis, the value realized from the exercise of stock options and from the vesting
of restricted stock unit awards and performance awards in 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Number of
Shares
Acquired
on Exercise
(#)
|
|
|
Value
Realized on
Exercise
(1)
($)
|
|
|
Number of
Shares
Acquired
on Vesting
(#)
|
|
|
Value
Realized on
Vesting
(2)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Burritt
|
|
|
58,956
|
|
$
|
1,281,999
|
|
|
53,658
|
|
$
|
2,261,797
|
|
Bradley
|
|
|
|
|
|
|
|
|
2,526
|
|
$
|
91,088
|
|
Matthews
|
|
|
|
|
|
|
|
|
18,923
|
|
$
|
809,834
|
|
Holloway
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buckiso
|
|
|
3,960
|
|
$
|
30,928
|
|
|
3,573
|
|
$
|
148,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Represents
the difference between the market value on the date of exercise and the exercise price for the number of shares exercised.
-
(2)
-
Represents
the market value on the vesting date of time-vested restricted awards and performance awards that had met the performance criteria. Value shown is before
taxes.
-
(3)
-
Due
to being hired in 2018, Mr Holloway has not yet vested in any stock awards.