UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A​

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.      )

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Best of BothSM

Growth Strategy

CREATING LONG-TERM STOCKHOLDER VALUE

In 2018 we launched our Best of Both strategy to become the best steel company by leveraging the advantages of integrated steelmaking — iron ore and product innovation – with the advantages of mini mills – process innovation and cost efficiency. Our strategy is to create long-term stockholder value by pursuing a business model that is resilient to market volatility and is profitable through the business cycle.

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Competitive assets with distinct advantages deploying fit for purpose processes

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Long-term cash flow generation through higher earnings and lower sustaining capex

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Variable cost structure that drives through cycle cash generation

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Our Strategy Supports Customers With:

​	TALENTED PEOPLE.​	​
​	Creating an environment of innovation and creativity, filling it with talented people and then empowering them to do what they do best.	​

​	POWERFUL PARTNERSHIPS.	​
​	Collaborative teams who understand our customers’ objectives and become an indispensable extension of their capabilities.	​

​	TRANSFORMATIVE SOLUTIONS.	​
​	Continuously reimagining what steel can be and creating transformative solutions that help customers create new products for the next generation.	​

​	BEST OF BOTH.	​
​	Offering the best of both integrated and mini mill technology to deliver what our customers need, when and where they need it.	​

 

 

U. S. Steel Tower
600 Grant Street
Pittsburgh, PA 15219​

Notice of 2021
Annual Meeting
of Stockholders

​	When:	​
​	Tuesday, April 27, 2021, 8:00 a.m. Eastern Time	​
​	Record Date:	​
​	March 1, 2021	​
​	Where:	​
​	Virtual Meeting www.virtualshareholdermeeting.com/X2021	​

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Your Vote Matters: How to Vote

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​		​	​	Online	​
			​	Prior to the Annual Meeting, visit www.proxyvote.com and use the control number that appears on your proxy card when you access the webpage.	​

​		​	​	Mail	​
			​	Complete and sign the proxy card and return it in the enclosed postage pre-paid envelope.	​

​		​	​	Phone	​
			​	If your shares are held in the name of a broker, bank or other nominees, follow the telephone voting instructions provided on your voting instruction card. If your shares are registered in your name, call 1-800-690-6903 and follow the telephone voting instructions. You will need the 16-digit control number that appears on your proxy.	​

​		​	​	At the Meeting	​
			​	Stockholders as of March 1, 2021 (the “record date”) may attend the virtual Annual Meeting and vote by using the 16-digit control number found on the proxy card, voting instructions or notice you previously received.	​

Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting of Stockholders to be held on Tuesday, April 27, 2021: Our Proxy Statement and 2020 Annual Report are available free of charge on our website at www.ussteel.com or www.proxyvote.com.

 

DEAR FELLOW U. S. STEEL STOCKHOLDERS:

2020 was also a year of great resiliency, community and innovation across the globe, including at U. S. Steel. In its 120-year history, U. S. Steel has been an icon of American industry and has sustained itself through national and global crises. This past year proved no different, as we were tested by the global pandemic and its far-reaching impact. We emerged from 2020 stronger, more focused on our customers, confident in the future, and on a trajectory towards sustainable change. We completed 2020 with a 48% total shareholder return for the year, and we are well poised to generate long-term value for years to come.

At the onset of the pandemic, we quickly implemented our crisis response plan and articulated our priorities throughout our organization and to our stakeholders: protect lives and livelihoods; prioritize cash and liquidity; and remain focused, but flexible, in achieving our Best of Both strategy to secure our future. Guided by our S.T.E.E.L. Principles, these goals were the anchor in all our decision-making.

Shortly before penning this letter, we announced that U. S. Steel completed the acquisition of Big River Steel and executed on the cornerstone of our Best of Both strategy to produce the most advanced sustainable steel products. Adding Big River Steel to our footprint propels us forward in all of our critical success factors – moving up the talent curve, moving down the cost curve and winning in strategic markets – as well as towards achievement of our sustainability goals. We proved to ourselves and our stakeholders that despite the severe market downturn, our strategy is the right one for U. S. Steel and our stockholders, and we have a strong and resilient business foundation in place upon which to execute, even in a volatile and uncertain market environment.

Protecting Lives and Livelihoods

Safety First has always been the north star by which we operate, and while the pandemic created a new set of health and safety issues to address, our strong safety culture and processes already in place allowed us to respond quickly and effectively. As a critical infrastructure industry, U. S. Steel was deemed an essential industry and we continued to operate in the U.S. and Slovakia, without disruption for the entirety of 2020. Ensuring our employees had the information and equipment necessary to protect themselves was a top priority. We immediately implemented enhanced sanitization protocols, provided necessary protective equipment, and issued regular and consistent communications. For our employees who work in our administrative offices and headquarters, we quickly moved to a full-time work from home schedule, a cultural and technological shift that was completed in a matter of weeks. Many of the changes we made to respond to the pandemic will likely remain part of our culture, as we’ve discovered that we can be physically distant but socially connected and incredibly productive. We’re also using technology to connect with our customers, as well as engage our employees. We are leveraging technology to work smarter, safer and more sustainably. You can read more about our health and safety response to the pandemic on page 7.

We also remained focused on our day-to-day safety measures. Our robust safety management system serves as the foundation for our operations. In 2020, we achieved a record-breaking safety performance, with 0.07 Days Away from Work. This remarkable performance bests industry standards and is a testament to the commitment of our employees to achieve a zero-injury environment.

Prioritizing Cash and Liquidity

Market uncertainty and demand challenges in 2020 also necessitated financial discipline. During the first and second quarters, many of our large automotive customers had stopped production due to the pandemic. Other industry customers were experiencing significant decline in demand, and our Tubular customers were dealing with disruptions in the oil and gas market. We were on a path to use a significant amount of cash, but quickly focused the organization around difficult but necessary decisions to temporarily idle facilities, pursue working capital actions and reduce capital spending. We were also able to monetize certain excess and non-core assets to generate additional cash by selling real estate and entering into long-term iron ore pellet supply agreements. By taking these disciplined actions and focusing on ensuring sufficient balance sheet strength, we were able to navigate the market decline and emerged 2020 in a much stronger cash and liquidity position than expected, able to execute our strategy and respond to our customers’ changing needs.

Remaining Focused, but Flexible, in Achieving our Best of Both Strategy

We remained unwavering in our commitment to achieve our Best of Both strategy. In 2019, we took the first step in uniting the most advantageous elements of the integrated and mini mill technologies by taking a minority interest in Big River Steel. We completed 2020 by exercising our option to purchase the remaining interest in Big River. This acquisition allows us to complement our innovative products with the Big River cost efficiency and process innovations to provide an unmatched value for our customers. This past year we also completed construction on EAF#1 at our Fairfield operations, adding electric arc furnace capability to our footprint to support our Tubular operations. And, we completed construction of the continuous galvanizing line at our PRO-TEC joint venture, which will provide superior finishing capabilities for our differentiated line of advanced high strength steels. These investments will fundamentally change our business model and allow us to manufacture the steels of the future – ones that are produced with less carbon, and are lightweight and environmentally friendly, while maintaining the strength and durability our customers, and their customers, need.

Representing and Responding to our Stockholders

This last year also provided us many opportunities to engage with our stockholders through a variety of platforms to understand your views and priorities, and to update you on our progress to create long-term value for all our stakeholders. We believe in rewarding strong individual and company performance and use these engagements to ensure our stockholders understand how we construct and implement a strong pay for performance alignment. We’ve also enhanced our proxy disclosure in this regard. You can read more about our robust stockholder engagement on page 30.

The Board, in representing your interests, is constructively engaged with management in our overall strategy and business priorities. Active board refreshment has brought new ideas and added breadth of perspectives and experiences to address emerging issues and ensure effective corporate governance and strategic oversight. This past year we welcomed Jeh Johnson and Tracy Atkinson to our Board. We are also grateful for the service of Patricia Diaz Dennis, Dan Dinges and Stephen Girsky, each retiring from our Board as of the 2021 annual meeting.

Your Vote Matters

In consideration of the ongoing health and safety concerns related to the pandemic, we are holding our 2021 annual meeting virtually. We encourage you to read the accompanying proxy statement for more information about U. S. Steel and vote your shares on the proposals discussed in line with the recommendations made by our Board of Directors. Your support is important to the future of our corporation.

In closing, thank you for your interest in U. S. Steel. As we look toward the future, we are confident in our strategy and know the actions we are taking now are making U. S. Steel better for our many stakeholders, including our customers, suppliers, employees, communities and all of you, our stockholders.

Now let’s get back to work – safely.

Sincerely,

David B. Burritt

 

Contents

​	Proxy Summary	​	​	​	​	1	​	​
​	Proposal 1: Election of Directors	​	​	​	​	8	​	​
​	Corporate Governance	​	​	​	​	18	​	​
​	U. S. Steel’s Sustainability Framework	​	​	​	​	26	​	​
​	Director Compensation	​	​	​	​	31	​	​
​	Related Person Transactions Policy	​	​	​	​	33	​	​
​	Proposal 2: Advisory Vote on Executive Compensation	​	​	​	​	35	​	​
​	Compensation & Organization Committee Report	​	​	​	​	36	​	​
​	Compensation Discussion and Analysis (see detailed table of contents p. 37)	​	​	​	​	37	​	​
​	Executive Compensation Tables	​	​	​	​	63	​	​
​	Potential Payments Upon Termination or Change in Control	​	​	​	​	70	​	​
​	CEO Pay Ratio	​	​	​	​	77	​	​
​	Proposal 3: Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm	​	​	​	​	78	​	​
​	Audit Fees	​	​	​	​	79	​	​

​	Audit Committee Report	​	​	​	​	79	​	​
​	Proposal 4: Approval of Amended and Restated 2016 Omnibus Incentive Compensation Plan	​	​	​	​	80	​	​
​	Stock Ownership of Directors and Executive Officers	​	​	​	​	88	​	​
​	Delinquent Section 16(A) Reports	​	​	​	​	89	​	​
​	Certain Legal Matters	​	​	​	​	89	​	​
​	Stock Ownership of Certain Beneficial Owners	​	​	​	​	89	​	​
​	Questions and Answers About the Annual Meeting and Voting	​	​	​	​	90	​	​
​	Important Additional Information	​	​	​	​	94	​	​
​	Appendix A – Use of Non-GAAP Financial Measures	​	​	​	​	A-1	​	​
​	Appendix B – Definitions of Compensation Metrics	​	​	​	​	B-1	​	​
​	Appendix C – Amended and Restated 2016 Omnibus Incentive Compensation Plan	​	​	​	​	C-1	​	​

Cautionary note regarding forward-looking statements

This document contains information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “forecast,” “aim,” “should,” “will,” “may” and similar expressions or by using future dates in connection with any discussion of, among other things, operating performance, trends, events or developments that we expect or anticipate will occur in the future and statements expressing general views about future operating results. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are not historical facts, but instead represent only the Corporation’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Corporation’s control. It is possible that the Corporation’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Corporation undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Corporation’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to the risks and uncertainties described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, and those described from time to time in our future reports filed with the Securities and Exchange Commission (“SEC”). References to “we,” “us,” “our,” the “Corporation,” and “U. S. Steel,” refer to United States Steel Corporation and its consolidated subsidiaries.

 

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Proxy Summary​

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The Virtual Annual Meeting will be held: Tuesday, April 27, 2021 8:00 a.m. Eastern Time Record Date: March 1, 2021

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​	​	​	​	​	​	For more information	​	​	Board Recommendation	​
Proposal 1	​	​	Election of Directors	​	​	Page 8	​	​	FOR each Nominee	​
Proposal 2	​	​	Advisory Vote on the Compensation of Named Executive Officers	​	​	Page 35	​	​	FOR	​
Proposal 3	​	​	Ratification of the Appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm	​	​	Page 78	​	​	FOR	​
Proposal 4	​	​	Approval of the Amended and Restated 2016 Omnibus Incentive Compensation Plan	​	​	Page 80	​	​	FOR	​

​	WHAT’S NEW​				​
​	–  Strategic Acquisition: In December 2020 we exercised our option to acquire the remaining interest in Big River Steel, and closed on the transaction in January 2021, the cornerstone of our Best of BothSM strategy. Big River Steel operates the newest flat-rolled steel production and only LEED-certified facility in North America, designed with a focus on environmental sustainability and energy efficiency. ​  –  Board Refreshment: In the last two years, four new directors have joined our Board bringing important skills, experiences and diversity to our Board. ​	​	​	–  Updated Sustainability Report: We have issued a Sustainability report each of the last two years, with continued disclosure and transparency into our Sustainability program. ​  –  Enhanced Proxy Disclosure: For this 2021 proxy statement and in response to stockholder feedback, we have enhanced our disclosure in many areas, including the general readability of this report, individual performance evaluation of our Named Executive Officers NEOs, stockholder engagement, and our Sustainability program. ​	​

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U. S. Steel Committees

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Director Nominee

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Age

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Director Since

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Principal Occupation/Experience

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Other Public Company Boards

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Audit

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Compensation & Organization

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Corporate Governance & Sustainability

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Executive

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Tracy A. Atkinson

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56

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2020

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Ret. EVP and Chief Administration Officer, State Street Corporation

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David B. Burritt

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65

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2017

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President and CEO, United States Steel Corporation

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John J. Engel

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59

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2011

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Chairman, President and CEO, WESCO International, Inc.

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John V. Faraci

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71

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2019

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Executive Chairman, Carrier Corp. and Ret. Chairman and CEO, International Paper Co.

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Murry S. Gerber

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68

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2012

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Ret. Chairman and CEO, EQT Corporation

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Jeh C. Johnson

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63

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2020

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Partner, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Fmr. Secretary, Dept. of Homeland Security

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Paul A. Mascarenas

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59

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2016

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Ret. Chief Technical Officer, Ford Motor Company

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Michael H. McGarry

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63

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2019

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Chairman & CEO, PPG Industries Inc.

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Eugene B. Sperling

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62

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2017

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President, Sperling Economic Strategies and Fmr. Director of the National Economic Council

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David S. Sutherland (Chairman of the Board)

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71

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2008

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Ret. President and CEO, IPSCO, Inc.

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Patricia A. Tracey

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70

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2007

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Ret. VP, Homeland Security and Defense Services, HP Enterprise Services

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​	The Corporation is committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability, and helps build public trust in the Corporation. Our governance highlights include:				​
​	– Annual election of directors ​ – 10 of our 11 director nominees are independent, including the Chairman of the Board ​ – Independent Audit, Compensation & Organization, and Corporate Governance & Sustainability committees ​ – Regular executive sessions of independent directors ​ – Robust risk oversight by full Board and committees ​ – Annual Board and committee self-evaluations ​ – Executive compensation driven by pay-for-performance philosophy ​ – Active Board refreshment approach to ensure Board composition aligns with corporate strategy ​	​	​	– Proxy access right in line with market standards ​ – Stock ownership and holding guidelines for directors and executives ​ – A robust Code of Ethical Business Conduct that is based on the Corporation’s S.T.E.E.L. Principles ​ – Annual stockholder engagement ​ – Best in class compliance commitment ​ – Regular review of Chief Executive Officer (“CEO”) and senior management succession planning ​ – Ability of our Board and its committees, at their sole discretion, to hire independent advisors, including counsel, at the Corporation’s expense ​	​

​	OUR COMMITMENT TO STOCKHOLDER ENGAGEMENT​				​
​	In 2020, we contacted stockholders representing approximately 40% of our outstanding shares and held meetings with eight investors holding approximately 20% of our shares. Our stockholders provided constructive feedback and were generally supportive of our current governance, sustainability and compensation practices.				​
​	Topics covered in our engagement meetings:				​
​	– Response to COVID-19 to ensure health and safety of employees, prioritize cash and liquidity and accelerate execution of our Best of Both strategy ​ – Sustainability program focused on driving the company towards its future as a sustainable solutions provider ​ – Executive Compensation program that aligns pay for performance and incents behaviors to deliver long-term stockholder value ​	​	​	– Human Capital Management, including initiatives to enhance inclusion and diversity and ensure employees feel psychologically and physically safe ​ – Board Composition and Effectiveness to oversee risk and grounded in good governance ​	​

​	Comprehensive and Effective Response to COVID-19 Pandemic	​	​	– Implemented robust crisis response, including stringent COVID-19 protocols to ensure safety of employees and continuity of operations ​ – Idled blast furnaces safely and temporarily, while remaining flexible to support customers in the recovery ​ – Expedited production and delivery to support customers’ production of medical supplies ​ – Donated goods, time and services to support communities in time of crisis and change ​	​
​	Record Setting Safety Performance	​	​	– All-time best days away from work (DAFW) safety performance at 0.07, which is 8 times better than the industry average reported by the U.S. Bureau of Labor Statistics ​ – Best contractor DAFW safety performance since 2009 (when measurement began) ​	​
​	Executing Against our Strategic Priorities	​	​	– Accelerated acquisition of Big River Steel, the cornerstone of our Best of Both strategy ​ – Completed construction of electric arc furnace at our Tubular facility ​ – Monetized excess iron ore assets to deliver $100 million of cash in 2020 with an option for incremental $500 million in future ​ – Positive operating cash flow of  $138 million in 2020 and strong year-end liquidity of approximately $3.2 billion, including approximately $2.0 billion of cash, to support the execution of our strategy ​	​
​	Delivering Long-Term Value to our Stockholders	​	​	– Achieved 48% total shareholder return ​ – Achieved record low 24-day cash conversion cycle time, demonstrating intense focus on cash efficiency ​ – Reduced 2020 capital spending to enable future execution of Best of Both investments ​ – Generated approximately $160 million in cash proceeds through the sale of non-core real estate assets. ​	​
​	Demonstrating our Commitment to Environmental Stewardship	​	​	– Released enhanced and updated Sustainability Report, with materiality assessment and commitment to setting KPIs for top six material topics ​ – Trialed 11 U. S. Steel grades of steel at Big River Steel, with its low carbon emissions intensity production process, in furtherance of our commitment to support our sustainability goals and those of our customers ​	​
​	Investing in our People and our Community	​	​	– Awarded a perfect “100” score by the Human Rights Campaign® Corporate Equality Index for the second straight year ​ – Sponsored two fellows for the CEO Action for Diversity & Inclusion™ ​ – Doubled participation in our employee resource groups ​ – Leveraged technology to enhance engagement with our employees ​	​

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​	The spread of the novel coronavirus designated as COVID-19 (“COVID-19”) pandemic across the globe significantly impacted global markets and nearly every industry, U. S. Steel included. We quickly recognized the uncertainty and potential severity the pandemic would cause and implemented our crisis response plan. Overseen by our Board of Directors, and led by our executive team, we implemented a comprehensive and adaptive response to the pandemic focused on protecting lives and livelihoods, preserving cash and liquidity, remaining nimble to execute our strategy and supporting our customers and communities, all in line with our foundational S.T.E.E.L. Principles. Some of the measures we implemented and continue to practice include:				​
​	– Issuing weekly communication, including preventive tips, and a dedicated website for employees and their families ​ – Providing employees with protective equipment, masks, and sanitizing and cleaning supplies and enhanced cleaning frequency ​ – Limiting outside visitors to our facilities, restricting access for non-essential vendors, suppliers and contractors ​	​	​	– Actively managing physical distancing while at work, including no meetings or gatherings of greater than 10 individuals ​ – Working from home for employees in our administrative offices and headquarters ​ – Intensifying our focus on preserving cash and proactively raising approx. $1.7 billion of incremental capital to support our balance sheet ​	​

Proposal 1:
Election of Directors

​	Stockholders are being asked to elect 11 direct nominees for a one-year term.	​
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​	Board Recommendation:				​
​		​	​	The Board of Directors recommends a vote “FOR’’ the election of each nominee.	​
​		​	​	​	​

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 and until his or her successor is duly elected and qualified. All of the nominees are presently members of the Board of Directors. Ms. Atkinson was elected to the Board of Directors in July 2020 by the Board to fill a vacancy. The Board is recommending that all eleven nominees be elected. Messrs. Dinges and Girsky decided not to stand for re-election, and their terms will expire as of our Annual Meeting. Ms. Diaz Dennis will not stand for re-election, and in accordance with our director retirement age policy, will retire from the Board at our Annual Meeting.

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.

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If a nominee who is currently serving as a director is not re-elected, then 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.

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If the director fails to receive a majority of the votes cast in an election that is not a contested election, then that director must tender an irrevocable offer to resign from the Board, contingent upon acceptance of such offer of resignation by the Board of Director.

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If an incumbent director fails to receive a majority of the votes cast in an election that is not a contested election, then the Corporate Governance & Sustainability Committee, or another independent committee designated by the Board of Directors, must make a recommendation to the Board as to whether to accept or reject the offer of resignation of the incumbent director, or to take other action.

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The Board must act on the offer of resignation, taking into account the committee’s recommendation, within 90 days following certification of the election results. The Corporate Governance & Sustainability Committee, in making its recommendation, and the Board, in making its decision, may consider such factors and other information as it may consider appropriate and relevant to the circumstances.

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. However, the CEO 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. All directors who undergo a significant change in their business or professional careers must volunteer to resign from the Board. Ms. Patricia Diaz Dennis, a current director, will retire from our Board at the Annual Meeting under this policy.

 

PROPOSAL 1: ELECTION OF DIRECTORS DIRECTOR INDEPENDENCE

DIRECTOR INDEPENDENCE

A brief description of the background and qualifications of each nominee is provided on pages 12-17. No nominee has a familial relationship to any other director, nominee for director or executive officer. The independence of directors and nominees and other information related to the Board of Directors is described under the heading, “Corporate Governance—​Director 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.

DIRECTOR LIMITATIONS ON OTHER BOARDS

Our Corporate Governance Principles limit the number of other public company boards our directors may serve on to five, and for currently serving public company CEOs, to three. Our Board of Directors waived this limit for Stephen Girsky, who serves as Chief Executive Officer of VectoIQ Acquisition Corp. II, a special purpose acquisition company (SPAC) listed on NASDAQ, as of January 2021. In making this determination, our Board considered many factors, including the significant differences in a SPAC CEO and a public operating company CEO. The SPAC has no employees and no assets other than invested cash. It does not require the same day-to-day management as a traditional public company operating company does. Additionally, the SPAC position inherently is time-limited, and once an investment partner is selected, Mr. Girsky does not intend to serve as CEO of the surviving public company. Mr. Girsky decided not to stand for re-election and his term will expire as of the Annual Meeting.

SELECTION OF DIRECTOR NOMINEES

The Corporate Governance & Sustainability Committee is responsible for identifying nominees for election to the Board. The Corporate Governance & Sustainability 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 & Sustainability 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 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.

 

PROPOSAL 1: ELECTION OF DIRECTORS SELECTION OF DIRECTOR NOMINEES​

These director qualification standards are evaluated by the Corporate Governance & Sustainability Committee each time a new candidate is considered for Board membership. The Corporate Governance & Sustainability Committee and the Board may take into account 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 Committee reviews the qualifications of each director nominee, including currently serving Board members, and reports its findings to the Board. On February 23, 2021, the Corporate Governance & Sustainability 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 for Director Nominees

The Corporate Governance & Sustainability Committee will consider director nominees recommended by stockholders. Notice of a recommendation must be sent in writing to the Chair of the Corporate Governance & Sustainability Committee, c/o the Corporate Secretary of United States Steel Corporation, 600 Grant Street, Suite 1884, Pittsburgh, PA 15219. The recommendation must include:

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the candidate’s name, address, occupation and share ownership;

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any other biographical information that will enable the Corporate Governance & Sustainability Committee to evaluate the candidate in light of the criteria described above; and

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information concerning any relationship between the candidate and the stockholder making the recommendation.

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The recommendation must also identify the writer as a stockholder of U. S. Steel and provide sufficient detail for the Corporate Governance & Sustainability Committee to consider the recommended individual’s qualifications. The Committee will evaluate the qualifications of candidates recommended by stockholders using the same criteria as used for other Board-nominated 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.

 

PROPOSAL 1: ELECTION OF DIRECTORS DIRECTOR NOMINEE SKILL MATRIX

DIRECTOR NOMINEE SKILL MATRIX

We consider current Board skills, background, experience, tenure and anticipated retirements to identify gaps that may need to be filled through the Board refreshment process. The following chart summarizes the core competencies that the Board considers valuable to effective oversight of the Corporation and illustrates how the current Board members individually and collectively represent these key competencies. The lack of an indicator for a particular item does not mean that the director does not possess that qualification, skill, or experience rather, the indicator represents that the item is a core competency that the director brings to the Board.

 

PROPOSAL 1: ELECTION OF DIRECTORS 2021 Director Nominees

2021 Director Nominees

For the upcoming Annual Meeting, the Board, based on the recommendation of the Corporate Governance & Sustainability Committee, is recommending 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. 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.

A brief biography about the background and qualifications of each director nominee is provided on the following pages.

 

PROPOSAL 1: ELECTION OF DIRECTORS 2021 Director Nominees

 

PROPOSAL 1: ELECTION OF DIRECTORS 2021 Director Nominees

 

PROPOSAL 1: ELECTION OF DIRECTORS 2021 Director Nominees

 

PROPOSAL 1: ELECTION OF DIRECTORS 2021 Director Nominees

 

PROPOSAL 1: ELECTION OF DIRECTORS 2021 Director Nominees

 

CORPORATE
GOVERNANCE

Corporate governance is a continuing focus at U. S. Steel, embraced by the Board of Directors, management, and all employees. We have 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.

OUR GOVERNANCE FRAMEWORK

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.

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During the fiscal year ended December 31, 2020, the Board held eight meetings and numerous interim conference calls.

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All of the directors attended in excess of 75% of the meetings of the Board and the committees on which they served.

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All but one of the then-serving directors attended the 2020 Annual Meeting of Stockholders.

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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.

 

CORPORATE GOVERNANCE OUR GOVERNANCE FRAMEWORK

Corporate Governance at A Glance

 

CORPORATE GOVERNANCE BOARD LEADERSHIP STRUCTURE

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, then the independent directors will elect from among themselves a Lead Director. The Chairman (or Lead Director) is elected annually by the Board. If the Chairman of the Board is independent, then the Chairman’s duties also include the duties of the Lead Director.

 

CORPORATE GOVERNANCE BOARD’S ROLE IN RISK OVERSIGHT

BOARD’S ROLE IN RISK OVERSIGHT

The Board of Directors is responsible for the oversight of the assessment and management of risks impacting U. S. Steel. 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 its 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.

 

CORPORATE GOVERNANCE BOARD OVERSIGHT OF STRATEGY

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 on our long-term strategic planning. The Board also devotes significant time to reviewing our capital allocation strategy aligned with the Best of Both 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, generate strong returns and improve sustainability performance.

The primary goal of our capital allocation strategy is to create long-term stockholder value driven by three priorities for cash:

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investing in new, lower capital intensity technologies and innovation to achieve our Best of Both strategy;

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reinvesting in our current assets to advance operational excellence to deliver high-quality products and service to our customers; and

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maintaining our balance sheet priorities that are supportive of the Corporation’s strategic objectives.

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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 operating segments, 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. Our Board discusses succession planning at each of its quarterly meetings. 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. The Board and the Compensation Committee are responsible for monitoring our management succession and leadership development plans. Our Corporate Governance Principles require all executive officers to retire at age 65. The Compensation Committee may, in its discretion, waive that requirement, and did waive it for Mr. Burritt and Ms. Breves.

BOARD OVERSIGHT OF CULTURE AND HUMAN CAPITAL MANAGEMENT

Moving up the talent curve is a critical success factor to achieving our corporate strategy. Because we believe U. S. Steel will only be able to successfully execute on its strategic priorities with the full engagement of a talented workforce, the Board and its committees oversee human capital management. The Board receives periodic reports on the results of employee engagement or inclusion surveys, the collective bargaining process and relationship between management and the United Steelworkers, relevant workforce metrics, including related to inclusion and diversity, talent development, and pay equity analysis and hiring practices.

The Board also believes that visits to facilities enable it to judge the Corporation’s culture first-hand. While safety concerns have limited visitation to our facilities, as part of our onboarding process, each new director elected in 2020 visited our Mon Valley Works facility. These experiences enable the Board to judge whether the Corporation is adopting business practices that create the engaged and stable workforce needed to achieve its long-term strategy.

 

CORPORATE GOVERNANCE BOARD AND COMMITTEE EVALUATION PROCESS

BOARD AND COMMITTEE 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. 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 process is designed and overseen by the Corporate Governance & Sustainability Committee.

Annual Board and Committee Self-Evaluations

BOARD REFRESHMENT

Our Board maintains a robust process to identify, consider and evaluate potential board candidates. Our Corporate Governance & Sustainability 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 U. S. Steel. A primary goal is to ensure sufficient Board diversity so that its membership consists of individuals with a variety of backgrounds, skills, experience and attributes.

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 Board has been undergoing a deliberate refreshment effort over the past several years to add important skills, experience and diversity, to oversee our corporate strategy.

In the last four years, five highly qualified independent directors have joined our Board. The following shows our board refreshment process:

 

CORPORATE GOVERNANCE BOARD COMMITTEES

BOARD COMMITTEES

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Director

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Audit Committee

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Compensation & Organization Committee

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Corporate Governance & Sustainability Committee

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Executive Committee

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Tracy A. Atkinson

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David B. Burritt

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Patricia Diaz Dennis

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Dan O. Dinges

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John J. Engel

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John V. Faraci

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Murry S. Gerber

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Stephen J. Girsky

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Jeh C. Johnson

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Paul A. Mascarenas

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Michael H. McGarry

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Eugene B. Sperling

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David S. Sutherland (Chairman of Board)

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Patricia A. Tracey

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TOTAL MEETINGS HELD IN 2020:

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5

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6

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5

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CORPORATE GOVERNANCE BOARD COMMITTEES

 

CORPORATE GOVERNANCE U. S. STEEL’s SUSTAINABILITY FRAMEWORK

U. S. STEEL’s SUSTAINABILITY FRAMEWORK

U. S. Steel is an integrated steel producer of high-quality, value added steel products that serve as the building blocks of a sustainable future. With differentiated products and a goal of low impact manufacturing, we are doing our part to realize a low carbon economy. U. S. Steel is empowering its people to innovate new solutions that manufacture products with a low carbon footprint, all the while decreasing the impact on human health and the environment. Outside of the organization, U. S. Steel is engaging the community and working with local leaders to develop a better neighborhood for the communities where we operate.

Our Board oversees our sustainability program primarily through the Corporate Governance & Sustainability Committee. The Corporate Governance & Sustainability Committee reviews sustainability as a standing agenda item at each quarterly meeting, including reports and discussions on sustainability strategic priorities, implementation of the greenhouse gas (GHG) emissions intensity reduction target, and the use of reporting and disclosure frameworks. It also makes recommendations to the Board and monitors compliance with the Corporation programs and practices regarding government relations and political contributions, corporate philanthropy and stockholder engagement.

 

CORPORATE GOVERNANCE U. S. STEEL’s SUSTAINABILITY FRAMEWORK

Employee Health & Safety

At U. S. Steel, we have a long-standing commitment to the safety and health of the men and women who work in our facilities. Every employee deserves to return home safely at the end of every day, and we are working to eliminate all injuries and incidents. In addition, the psychological safety of all employees is important to us. We have combined physical safety and psychological safety into the construct of 360° safety. Ensuring a safe workplace also improves productivity, quality, reliability and financial performance. By making safety and health a personal responsibility, our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensure safe working conditions for everyone. A “Safety First” mindset is as essential to our success as the tools and technologies we rely on to do business. This past year, we relied on our strong safety culture to ensure the health and safety of our employees during the COVID-19 pandemic.

Our objective is to attain a sustainable zero harm culture supported by leadership and owned by an engaged and highly skilled workforce, empowered with the capabilities and resources needed to assess, reduce, and eliminate workplace risks and hazards. In support of these objectives, we have developed an enhanced Safety Management System, initiated new safety communication methods and enhanced contractor safety processes. One of our most important safety protocols is our fatality prevention audit program. These proactive assessments of the processes and protocols we have in place, and adherence to them, to avoid fatalities and severe injuries are conducted annually at the enterprise level and more frequently at each of our facilities. We assess our safety performance through a variety of lagging and leading indicators, including OSHA DAFW. This measurement allows us to evaluate the frequency of injuries sustained at our facilities requiring an employee to stay at home for more than one day. U. S. Steel has achieved record-safety performance in this measurement in the last several years, routinely achieving performance better than industry benchmarks.

For 2020, we had a corporate DAFW rate of 0.07, which is 8x better than the U.S. Bureau of Labor Statistics' Iron and Steel benchmark DAFW rate of 0.60.

Protection of the Environment

U. S. Steel is committed to effective environmental stewardship. We have implemented and continue to develop business practices that are environmentally effective. We believe part of being a good corporate citizen requires a dedicated focus on how our industry affects the environment. We continue to work on the promotion of cost-effective environmental strategies through the development of appropriate air, water and waste laws and regulations at the local, state, national and international levels. We are committed to reducing our emissions and are investigating, creating and implementing innovative, best practice solutions throughout our operations to improve our environmental performance and to manage and reduce energy consumption.

In 2020 alone, U. S. Steel recycled 3.0 million tons of purchased and produced steel scrap. Because of steel’s physical properties, our products can be recycled at the end of their useful life without loss of quality, contributing to steel’s high recycling rate and affordability. Many of our major production facilities have Environmental Management Systems that are certified to the ISO 14001 Standard. This standard, published by the International Organization for Standardization (ISO), provides the framework for the measurement and improvement of environmental impacts of the certified facility.

By using the blast furnace and coke oven gas generated in our cokemaking and steelmaking activities to power our facilities, we avoided consuming natural gas and other fuels from 2018 to 2020 to heat more than 3.4 million households each year. In 2020, we recycled approximately 3.3 million tons of blast furnace slag and 0.4 million tons of steel slag by selling it for use as aggregate and in highway construction.

 

CORPORATE GOVERNANCE U. S. STEEL’s SUSTAINABILITY FRAMEWORK

Human Capital Management

At U. S. Steel, we are focused on attracting and retaining the top talent needed to support our strategic transformation and meet our customers’ evolving needs as a sustainable steel solutions provider. The support and development of our people is foundational to achieving our Best of Both strategy. We refer to this strategic talent pillar as “Moving Up the Talent Curve.”

Our focus on people extends to our current and future employees. We aim to have an engaged and diverse workforce to promote new ideas and innovation, reflect the communities where we operate, and deliver exceptional customer service. We seek to build an inclusive environment where people feel free to bring their whole selves to work. To achieve the Best of Both strategy, we must have the “Best from All.” More about our focus on people and human capital management can be found in our Sustainability Report, available on our website (www.ussteel.com).

Ethics & Compliance

Our culture is based on our S.T.E.E.L. Principles: Safety First; Trust and Respect; Environmentally Friendly Activities; Ethical Behavior; and Lawful Business Conduct. We expect our employees and members of our Board to take personal responsibility to “do what’s right,” and our Code of Ethical Business Conduct serves as the foundation for the actions of our employees and directors. To further ensure that employees understand the Corporation’s expectations and all applicable rules, we provide formal ethics and compliance training to our employees and have frequent communication with information about key compliance topics, which include messages from senior management underscoring the importance of doing business with integrity. Employees also receive summaries of current events that demonstrate the need to do business lawfully that include reminders of the Corporation’s expectations for all employees. In addition, through our annual policy certification process, employees and directors certify their ongoing compliance with our Code of Ethical Business Conduct.

 

CORPORATE GOVERNANCE U. S. STEEL’s SUSTAINABILITY FRAMEWORK

TALENT DEVELOPMENT AND RETENTION

We believe that development and retention of talent is essential to our success, and we seek to provide opportunities for continuous learning and development. All of our employees at a director-level and above have a formal professional development plan that is assessed at least annually. In addition, we proactively measure our attrition rates, and take targeted actions to ensure our highest potential and performing employees are incentivized to remain with the Corporation. Over the past five years, our regrettable voluntary turnover rate has been at or below 5%.

 

CORPORATE GOVERNANCE COMMITMENT TO STOCKHOLDER ENGAGEMENT

LABOR RELATIONS

Approximately 80% of our employees in North America and Slovakia are covered by collective bargaining agreements. We work closely with union representatives to provide safe and productive workplaces that enable our employees to deliver high-quality products and meet the needs of our customers. Our partnership with the United Steelworkers includes not only a commitment to safety programs, but also a common approach to combating the unfairly traded imports that threaten our industry, our company, and ultimately the jobs of our employees.

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 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 & Sustainability Committee and the Compensation & Organization Committee.

Our Engagement Process

 

CORPORATE GOVERNANCE DIRECTOR COMPENSATION

Actions Taken by the Board Following Stockholder Engagement

The feedback we receive from our stockholder during our engagements is thoughtfully considered by management and the Board, and has led to modifications in our sustainability, executive compensation programs and governance practices and disclosure. Some of the actions we have taken that are informed by stockholder feedback and insights over the last several years include:

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 1884, Pittsburgh, PA 15219 or by email at boardofdirectors@uss.com.

DIRECTOR COMPENSATION

The goal of U. S. Steel’s director compensation programs is to attract and retain individuals of substantial accomplishment with demonstrated leadership capabilities to serve as directors . 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. Directors who are employees of U. S. Steel receive no compensation for their service on the Board.

2020 Director Compensation

For 2020, the Board maintained the annual retainer of  $265,000 after following a robust benchmarking review process, described below. Each committee chair received an additional $20,000 and the Chairman of the Board received an additional $100,000 retainer. No meeting fees or committee membership fees are paid. In response to the challenges of the pandemic, the Board temporarily decreased their annual retainer for half the year by 20% for the maximum cash portion.

Deferred Compensation Program

Under our Deferred Compensation Program for Non-Employee Directors, each non-employee director is required to defer a minimum of 55% 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

 

CORPORATE GOVERNANCE DIRECTOR COMPENSATION

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.

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 six months following the first date of his or her service on the Board.

Compensation Review Process

The Corporate Governance & Sustainability 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 peer 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 following table shows the compensation of non-employee directors in 2020:

DIRECTOR COMPENSATION

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(1)

The amount shown represents the cash portion of the 2020 annual retainer paid to directors. Messrs. Girsky, Johnson and Sutherland elected to receive 100% of their 2020 retainer as deferred common stock.

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(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, 2020 included in the Corporation’s annual report on Form 10-K for 2020. All of the 2020 stock awards represent Common Stock Units under the Deferred Compensation Program for Non-Employee Directors.

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CORPORATE GOVERNANCE RELATED PERSON TRANSACTIONS POLICY

RELATED PERSON TRANSACTIONS POLICY

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 & Sustainability Committee.

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.

Under the policy, certain transactions are deemed to be automatically pre-approved and do not need to be brought to the Corporate Governance & Sustainability Committee for individual approval.

 

CORPORATE GOVERNANCE DIRECTOR INDEPENDENCE

DIRECTOR INDEPENDENCE

The Board affirmatively determined that all non-employee director nominees for 2021 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. U. S. Steel has incorporated the NYSE and SEC independence standards into our own categorical standards for independence. The Board has affirmatively determined that none of the directors or nominees for director, other than our CEO, Mr. Burritt, has a material relationship with the Corporation. The Board made this determination based on all relevant facts and circumstances.

AUDIT COMMITTEE The Board also determined that each member of the Audit Committee: (1) did not accept directly or indirectly any consulting, advisory, or other compensatory fee from the Corporation or any of its subsidiaries, and (2) was not an affiliated person of the Corporation or any of its subsidiaries. Therefore each member satisfied the NYSE’s enhanced independence standards for audit committee members.

COMPENSATION COMMITTEE The Board also determined that 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. Therefore, each member of the Compensation Committee satisfied the independence requirements of NYSE listing standards.

For more information, our standards of director independence are located in our “Corporate Governance Principles,” available on our website at www.ussteel.com.

 

Proposal 2:
Advisory Vote on Executive Compensation

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INFORMATION ABOUT THIS PROPOSAL Stockholders are being asked to approve, on an advisory basis, the 2020 compensation of our five named executive officers as described in the Compensation Discussion & Analysis and the Executive Compensation Tables.

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​		​	​	The Board of Directors recommends a vote “FOR” the resolution approving the compensation of our Named Executive Officers.	​
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Pursuant to Section 14A of the Securities Exchange Act of 1934, we are seeking an advisory vote from our stockholders on the following resolution to approve the compensation of the named executive officers (“NEOs”) listed in the compensation tables of this proxy statement:

RESOLVED, that the stockholders of United States Steel Corporation (the “Corporation”) approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in the Corporation’s proxy statement for the 2021 Annual Meeting of Stockholders, including the Compensation Discussion and Analysis, compensation tables and narrative discussions.

We intend to offer this non-binding advisory vote at each of our annual meetings. Although it is not binding, we and the Board welcome our stockholders’ views on our NEOs’ compensation and will carefully consider the outcome of this advisory vote consistent with the best interests of all stockholders.

Say-on-Pay Advisory Vote Discussion

At the 2020 Annual Meeting of Stockholders, approximately 74.8% of the votes cast were “For” our advisory vote on executive compensation. We value the feedback we receive from regular engagement with our stockholders and are encouraged by the support we have received over the past several years for our compensation program and recognition of our responsiveness to stockholders.

The Board of Directors recommends a vote FOR this proposal based on the efforts of the Compensation & Organization Committee and the Board to design an executive compensation program that:

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Aligns the interests of U. S. Steel executives with our stockholders;

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Provides market-aligned pay opportunities that attract, reward and retain key talent needed to drive outstanding corporate performance and create long-term stockholder value; and

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Reflects the input received from stockholders on our executive compensation program through our robust engagement program.

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In considering this advisory vote, we encourage you to read the Compensation Discussion and Analysis, the compensation tables and other relevant information in this proxy statement for additional details on our executive compensation programs and the 2020 compensation paid to our NEOs.

 

PROPOSAL 2: Advisory Vote on Executive Compensation COMPENSATION & ORGANIZATION COMMITTEE REPORT

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, 2020.

 

​		​	​	David B. Burritt President & Chief Executive Officer	​	​		​	​	Christine S. Breves Senior Vice President & Chief Financial Officer	​
​		​	​	James E. Bruno Senior Vice President — European Solutions & President, USSK	​	​		​	​	Scott D. Buckiso Senior Vice President & Chief Manufacturing Officer, NAFR	​
​		​	​	Duane D. Holloway Senior Vice President, General Counsel and Chief Ethics & Compliance Officer	​	​			​

​	CONTENTS​	​
​	To assist stockholders in finding important information in the CD&A, we’re providing this highlighted page summary.	​

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​	BEST OF BOTH STRATEGY	​
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​	Comprehensive and Effective Response to COVID-19 Pandemic	​	​	– Implemented robust crisis response, including stringent COVID-19 protocols to ensure safety of employees and continuity of operations ​ – Idled blast furnaces safely and temporarily, while remaining flexible to support customers in the recovery ​ – Expedited production and delivery to support customers’ production of medical supplies ​ – Donated goods, time and services to support communities in time of crisis and change ​	​
​	Record Setting Safety Performance	​	​	– All-time best days away from work (DAFW) safety performance at 0.07, which is 8 times better than the industry average reported by the U.S. Bureau of Labor Statistics ​ – Best contractor DAFW safety performance since 2009 (when measurement began) ​	​
​	Executing Against our Strategic Priorities	​	​	– Accelerated acquisition of Big River Steel, the cornerstone of our Best of Both strategy ​ – Completed construction of electric arc furnace at our Tubular facility ​ – Monetized excess iron ore assets to deliver $100 million of cash in 2020 with an option for incremental $500 million in future ​ – Positive operating cash flow of  $138 million in 2020 and strong year-end liquidity of approximately $3.2 billion, including approximately $2.0 billion of cash, to support the execution of our strategy ​	​
​	Delivering Long-Term Value to our Stockholders	​	​	– Achieved 48% total shareholder return ​ – Achieved record low 24-day cash conversion cycle time, demonstrating intense focus on cash efficiency ​ – Reduced 2020 capital spending to enable future execution of Best of Both investments ​ – Generated approximately $160 million in cash proceeds through the sale of non-core real estate assets. ​	​
​	Demonstrating our Commitment to Environmental Stewardship	​	​	– Released enhanced and updated Sustainability Report, with materiality assessment and commitment to setting KPIs for top six material topics ​ – Trialed 11 U. S. Steel grades of steel at Big River Steel, with its low carbon emissions intensity production process, in furtherance of our commitment to support our sustainability goals and those of our customers ​	​
​	Investing in our People and our Community	​	​	– Awarded a perfect “100” score by the Human Rights Campaign® Corporate Equality Index for the second straight year ​ – Sponsored two fellows for the CEO Action for Diversity & Inclusion™ ​ – Doubled participation in our employee resource groups ​ – Leveraged technology to enhance engagement with our employees ​	​

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PROTECT LIVES AND LIVELIHOOD Our strong safety culture provided a solid foundation upon which we implemented additional cleaning, sanitizing, and protective protocols to ensure the health and safety of our employees and the continuity of our operations.

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PRIORITIZE CASH AND LIQUIDITY To bolster liquidity in the uncertain environment, we heightened our focus on managing the business to preserve cash, and we accessed the capital markets to raise an additional $1.7 billion of capital. We also quickly adjusted our capital spending to align with market conditions.

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REMAIN FOCUSED, BUT FLEXIBLE TO ACHIEVE OUR BEST OF BOTH STRATEGY The uncertain and challenging environment strengthened our resolve to execute our Best of Both strategy as quickly as prudently possible. The need to support our customers, continue to innovate and move towards the future was highlighted by the pandemic, and management decisively executed this goal through disciplined, focused and intentional actions.

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​	2020 COVID-19 Compensation-Related Actions	​
​	– As part of our cash preservation efforts, our executive officers volunteered to temporarily reduce their base salaries for half the year by 25% for our CEO and 10% for other executives, and suspended all company contributions to our 401(k) plan for salaried employees. These recommendations were endorsed by the Compensation Committee. ​ – In response to the challenges of the pandemic, our Board of Directors temporarily decreased their annual retainer for half the year by 20% for the maximum cash portion. ​ – The significant impact of the pandemic on our business resulted in a below threshold performance level for the Annual Incentive Compensation Plan EBITDA performance goal. This performance was monitored throughout the year, but given the ongoing uncertainty in the business, no goal changes were made. The Compensation Committee considered alternative methods for evaluating performance, and ways to ensure management was compensated commensurate with the performance in exceptionally challenging circumstances, while balancing the interests of all stakeholders, and awarded our NEOs (other than the CEO) a one-time award, as described on page 46. ​	​

​	Element	​	​	Overview and Key Performance Metrics				​	​	Purpose	​
​	FIXED​										​
​	Base Salary	​	​	Fixed cash baseline compensation takes into account the scope and complexity of the NEO’s role, individual qualifications and experiences, and internal value to the Corporation.				​	​	Base salaries are set at market competitive levels to attract and retain highly qualified executives to lead and implement our strategy.	​
​	VARIABLE​										​
​	Annual Incentive Compensation Plan (AICP) Payout Range: 0%-230% of target for corporate performance and individual performance adjustments	​	​	EBITDA (75%) A financial performance measure intended to focus the organization on operating at sustainable, profitable levels Cash Conversion Cycle (25%) A financial liquidity measure intended to focus the organization on the number of days that it takes to convert resource inputs into cash flows				​	​	Performance-based annual cash incentive opportunities support achieving goals that are crucial to our strategic plan.	​
			​	Individual Performance (-15% to 30%) In addition to their role in achieving enterprise financial goals, NEOs are evaluated on their individual performance in four categories.	​	​	SAFETY • NEOS are expected to demand strict compliance to our safety protocols, facilitate safe work practices, and ensure a psychologically safe environment for our employees . ​ EXECUTION OF THE STRATEGY • NEOs all contribute to the achievement of our strategic goals to create long-term stockholder value. They are expected to act with an enterprise mindset and facilitate alignment throughout the organization with our Best of Both strategy. ​ ADVANCING CRITICAL SUCCESS FACTORS • NEOs all work towards improving on the three areas that are critical to our long-term success: ​ – Moving Down the Cost Curve ​ – Moving up the Talent Curve ​ – Winning in Strategic Markets ​ LEADERSHIP • NEOs are expected to demonstrate value-based tone at the top and exemplify our S.T.E.E.L. Principles, ensuring engagement and development within their respective areas of responsibility. ​				​
​	Long-Term Incentive Program (LTIP) Payout Range: 0%-200% of target for corporate performance	​	​	Corporate Performance Metrics (60% of LTIP) Relative TSR (50%) TSR performance awards are based on relative performance, with the payout determined based on the rank of U.S. Steel’s TSR compared to the TSR of its peer group companies over the three-year performance period, as well as for each year within the performance period. Return On Capital Employed (ROCE) (50%) ROCE performance awards are based on our weighted average cost of capital, over the three-year performance period, with weighting increasing in the second and third years. Vests after three-year performance period if ROCE performance metrics are achieved.				​	​	Variable long-term performance-based compensation motivates and rewards executives for achieving multi-year strategic priorities.	​
			​	Time-Based Restricted Stock Units (RSUs) (40%of LTIP) RSUs provide the best retention benefits among our long-term incentives, especially during times of challenging economic and industry conditions. Awarding RSUs facilitates stock ownership and executive retention, and promotes stockholder alignment. RSUs vest ratably over three years.				​	​	RSUs support retention of highly qualified executives to lead and implement our strategy. They align with stockholder interests as the value fluctuates with stock price performance.	​

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NEO

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2020 Base Salary ($)

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AICP Award and OneTime Bonus ($)

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LTIP Grant Target Award ($)

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LTIP 2018 2020 Payout ($)

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Total Actual and Awarded Compensation ($)

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Burritt

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1,112,500

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1,530,000

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8,000,000

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0

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10,642,500

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Breves

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666,500

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687,000

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2,000,000

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0

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3,353,500

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Bruno

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551,000

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795,130

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1,300,000

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0

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2,646,130

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Buckiso

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551,000

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445,100

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1,300,000

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0

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2,296,100

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Holloway

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561,500

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431,100

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1,300,000

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0

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2,292,600

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​	​	​	Annual Incentive	​	​	Restricted Stock Units(1)	​	​	Performance Awards(2)	​
Year	​	​	% of Target Award Paid	​	​	Value as a % of Grant Value	​	​	Award Payout as a % of Target	​
2020	​	​	50%	​	​	190%	​	​	40%	​
2019	​	​	84%	​	​	70%	​	​	40%	​
2018	​	​	187%	​	​	38%	​	​	0%	​