New board, same executives as U.S. Steel transitions under Nippon
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After two years of negotiations and a heavily-politicized merger, the future of U.S. Steel under Nippon’s ownership is coming in to focus.
In filings with the Securities Exchange Commission (SEC), over the past week, Nippon laid out who will lead the historic steel producer now that it’s a subsidiary of the Japanese steel giant. The vast majority of U.S. Steel’s current executive officers will stay on, but U.S. Steel’s board of directors will see significant shakeups after Nippon closed its nearly $15 billion purchase on June 13.
Per the SEC filings, C-suite officers retaining their positions with U.S. Steel include CEO David Burritt and executive vice presidents James E. Bruno, Scott Buckiso and Daniel Brown. The only changes in U.S. Steel’s senior leadership are Chief Financial Officer Kevin Lewis and general counsel Scot Duncan, who replace Jessica Graziano and Duane Holloway, respectively.
However, the board of directors for the newly purchased U.S. Steel will look drastically different. An SEC filing dated June 25 says U.S. Steel’s entire board—Tracy Atkinson, Andrea Ayers, Alicia Davis, Terry Dunlap, John Engel, Murry Gerber, Paul Mascarenas, Michael McGarry and David Sutherland—has been removed.
David Burritt was retained as chairman of the board and joining him for now are Nippon executives Takahiro Mori, Naoki Sato and Hiroshi Ono. There will be five more board members added since a condition of the government allowing the sale to go through is that U.S. Steel have a majority American board and an American CEO.
Another condition of the sale is that President Donald Trump is allowed a “golden share” provision. That means he has the power to select a board member, and he has veto powers if the company intends to close plants or reduce its production. This presidential power over a private company’s decision making is largely unprecedented.
The new leaders of U.S. Steel will have plenty of decisions to make as the company transitions to its new status under Nippon. As part of the agreement, Nippon is also investing over $11 billion into U.S. Steel.
It’s unclear how much of that capital would be invested in Gary, where the Gary Works operation is one of the region’s largest employers. For most of the negotiating period before the deal was finalized, Nippon had pledged $2.7 billion in improvements to U.S. Steel plants, including close to $1 billion at Gary Works. The company has not publicly said how much of the larger $11 billion would come to northwest Indiana.
All together, U.S. Steel employs about 4,000 Hoosiers.
The change in leadership also includes some hefty stock cashouts for U.S. Steel executives. Outgoing CFO Jessica Graziano disclosed a $20 million stock cashout and a $3 million severance check. The company’s outgoing general counsel Duane Holloway similarly received $18.5 million in stock options and a $3.5 severance fee.
Those number pale in comparison to CEO David Burritt who sold $109 million in company stock in the deal, per SEC filings. That’s on top of $13 million in severance he’s owed if he’s removed as CEO in the next two years.