Although not all the news on United States Steel Corp. (X) has been rosy lately (last week Standard & Poor’s lowered its outlook from stable to negative), it has been decidedly more exciting for Mario Longhi, the company’s new Executive Vice President and Chief Operating Officer.
Sure, Longhi has to move to Pittsburgh, but – based on the terms outlined in the 8-K and Offer Letter filed July 2 – it definitely looks like the relocation will compensate him well for pulling up roots in Florida.
For starters, Longhi is getting a salary of $820,000 per year, and he can earn between $820,000 – $1.76 million more through the Annual Incentive Compensation Program. For “retention purposes,” the company is also giving him a hiring grant of restricted stock units with a value of $200,000, although it comes with a 3-year cliff vesting requirement. He gets another $200,000 hiring grant in the form of performance awards, but the criteria for vesting on those requires that the company achieve certain performance measures, in addition to the 3-year cliff vesting provision.
And, of course, we mustn’t forget the Long-Term Incentive Compensation Program, which instantly boosts Longhi’s net worth nicely. According to the filing:
“The Committee determined that Mr. Longhi’s 2012 LTIP award will be valued at $2,101,500 on the date of grant, which will be July 3, with 40 percent of the value received in the form of performance awards, 30 percent of the value in the form of stock options and 30 percent of the value in the form of restricted stock units (RSUs).”
Other goodies abound in his employment package, a couple of which seemed noteworthy. They include the company’s establishing a Supplemental Account, under which “Longhi will be eligible for book accruals equal to 8.5% of the awards paid (or payable) to him under the Corporation’s Annual Incentive Compensation Program…”, as well as terms that will protect him if there’s a change in control or he is terminated without cause.
Longhi has a lot of experience in the industry: He spent 6 years at Gerdau Ameristeel Corp. (the last 5 years as CEO), and he racked up 23 years before that climbing through the ranks at aluminum giant Alcoa, Inc. (AA). With U. S. Steel’s stock price trading nearly 54% lower than it did just a year ago, however, investors are surely hoping that Longhi will put all that operational experience to good use and help guide the company to a more profitable position.
Image source: Stack of steel tubing, via Shutterstock
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