Equity-Based Incentive Plans

12 Months Ended

Dec. 31, 2023

Equity-Based Incentive Plans

Equity-Based Incentive Plans

Note 6. Equity-Based Incentive Plans

2023 Equity Incentive Plan

In May 2023, the company’s shareholders approved the 2023 Equity Incentive Plan (2023 Plan), which supersedes the prior Amended and Restated 2015 Equity Incentive Plan. The 2023 Plan is designed to attract, motivate and retain qualified persons that are able to make important contributions to the company’s success. To accomplish these objectives, the 2023 Plan provides for awards of equity-based incentives through granting of restricted stock units (RSUs), deferred stock units (DSUs), restricted stock awards (of which none have been granted), stock options (of which

Note 6. Equity-Based Incentive Plans (Continued)

none have been granted), unrestricted stock awards (of which none have been granted), stock appreciation rights (SARs), and performance awards, such as long-term incentive compensation program (LTIP). Under the 2023 Plan, 9.0 million shares of common stock were reserved for grant through December 31, 2033. The 2023 Plan uses a fungible share concept under which any awards that are not a full-value award, such as stock options and stock-settled SARs, will be counted against the share reserve as one share for each share of common stock, and awards that are full-value awards, such as RSUs, DSUs, restricted and unrestricted stock awards, and performance awards, will be counted against the share reserve as 2.09 shares for each share of common stock. The SARs the company has granted to date can only be settled in cash, and thus, do not count against the share reserve. At December 31, 2023, there were 7.5 million shares still available for issuance.

Substantially all of the company’s full-time, non-union, U.S. team members receive RSUs, which are granted annually in November at no cost to employees and vest 100% over the shorter of two years from grant date or upon the recipient reaching retirement eligible age (59½ years). During 2023, 2022, and 2021, certain senior leadership of the company received RSUs in February which vest over a period of 2 to 4 years. The stock is issued to employees upon vesting. The company satisfies RSUs with newly issued shares, and satisfies restricted and unrestricted stock awards, DSUs, and performance awards with treasury shares. In addition to the RSUs and LTIP awards granted during the three-year period ended December 31, 2023, presented below, the company awarded 18,000, 20,000 and 25,000 DSUs in 2023, 2022 and 2021, respectively; and 171,200 SARs in 2021. No SARs awards were granted in 2023 and 2022. The 77,000 SARs awards outstanding at December 31, 2023, for which no shares of common stock can be issued because the awards must be cash-settled upon exercise, have a weighted-average exercise price of $38.74.

Restricted Stock Units

A summary of the company’s RSU activity and outstanding RSUs as of December 31, 2023, are presented below (dollars in thousands except grant date fair value):

		Weighted		Aggregate
	Number	Average Grant		Intrinsic		Unrecognized
	of RSUs	Date Fair Value		Value		Compensation
Outstanding RSUs as of January 1, 2021	1,698,579	$	31.44	$	62,627	$	35,821
Granted	627,973		59.38
Vested	(895,706)		32.30
Forfeited	(82,588)		32.47
As of December 31, 2021	1,348,258	$	43.82	$	83,686	$	39,657
Granted	481,926		98.29
Vested	(786,622)		37.38
Forfeited	(70,011)		46.82
As of December 31, 2022	973,551	$	71.80	$	94,765	$	44,394
Granted	433,810		108.95
Vested	(517,041)		64.03
Forfeited	(40,829)		78.70
As of December 31, 2023 (nonvested)	849,491	$	99.13	$	101,480	$	43,073

The weighted average remaining life before vesting of the outstanding RSUs as of December 31, 2023, is 1.6 years. The fair value of RSUs vesting during 2023, 2022, and 2021 was $58.3 million, $79.1 million, and $56.5 million, respectively, and was net-share settled such that the company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld in 2023, 2022, and 2021 were approximately 342,000, 249,000, and 290,000 shares, respectively, and were based on the value of the RSUs on their vesting dates as determined by the company’s closing stock price.

Note 6. Equity-Based Incentive Plans (Continued)

Long-Term Incentive Compensation Program (LTIP)

The company maintains an LTIP performance-based program directed toward key senior leadership of the company, as determined at the discretion of the Compensation Committee of the Board of Directors. Awards are in shares of the company’s common stock using the stock price on the first day of the performance period to convert each key senior executive’s predetermined multiple of annual base salary. The performance period is generally three years; however, transition awards can be issued with a shorter performance period. Performance is measured in terms of equal portions of four growth and profitability measures, as compared to the same measures, similarly treated, of a pre-established group of steel sector competitors. Awards earned can range from zero to 100% of the shares awarded, and award shares vest immediately once earned on the basis of performance.

The Compensation Committee granted the following three-year performance period awards and transition awards, which have been earned and have or will be issued as follows:

	Maximum
	Shares That	Award
	Could Be Issued	Earned	Award Issued/Issuable
2020 LTIP Award:
Three-year performance period award	405,922	356,845	356,845	March 2023
Two-year performance period transition award	9,764	8,300	8,300	March 2022
2021 LTIP Award:
Three-year performance period award	360,189	324,173	324,173	March 2024
2022 LTIP Award:
Three-year performance period award	249,759	*	*
2023 LTIP Award:
Three-year performance period award	193,946	*	*
Two-year performance period transition award	5,517	*	*
One-year performance period transition award	3,678	2,759	2,759	March 2024

* Not yet earned as performance period not complete.

2018 Executive Incentive Compensation Plan (2018 Executive Plan)

The 2018 Executive Plan provides for eligibility of certain senior leadership of the company to receive cash and stock bonuses based on predetermined formulas. The company’s shareholders approved the 2018 Executive Plan in May 2018 and 2.0 million shares of company stock were reserved for grant through February 28, 2028. At times a portion of the bonus may be distributed in shares of the company’s stock, of which one-third of the shares vest immediately and the remaining shares vest in equal annual installments over an additional two-year service-based vesting period requirement. At December 31, 2023, 2022, and 2021, 1.3 million, 1.4 million, and 1.4 million shares, respectively, under the 2018 Executive Plan remained available for grant. Pursuant to the 2018 Executive Plan, 29,000, 26,000, and 157,000 shares were awarded with a market value of $3.5 million, $3.2 million, and $8.7 million for the 2023, 2022, and 2021 award years, respectively.