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
Filed by the Registrantx ☒
Filed by a Party other than the Registrant¨
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| Definitive Proxy Statement | |
| Definitive Additional Materials | |
| Soliciting Material Pursuant to §240.14a-12 |
NUCOR CORPORATION
Nucor Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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1915 Rexford Road Charlotte, North Carolina 28211 Phone704/366-7000 Fax704/362-4208
NOTICE OF 20162018 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
ANNUAL MEETING
The 20162018 annual meeting of stockholders (the “Annual Meeting”) of Nucor Corporation (“Nucor”) will be held in Thethe Morrison Ballroom of the Charlotte Marriott SouthPark, 2200 Rexford Road, Charlotte, North Carolina 28211, at 10:00 a.m., Eastern Time, on Friday,Thursday, May 13, 2016,10, 2018, for the following purposes:
To elect the eightseven directors nominated by the Board of Directors;
To ratify the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for the year ending December 31, 2016;
To approve, the amendment toon an advisory basis, Nucor’s Restated Certificate of Incorporation to adopt a majority vote standard, eliminate cumulative voting and remove obsolete provisions;
To consider and vote on twoa stockholder proposals;proposal; and
To conduct such other business as may properly come before the meeting or any adjournment or postponement thereof.
Stockholders as of record at the close of business on March 14, 201612, 2018 are entitled to notice of and to vote at the meeting.Annual Meeting.
It is important that you vote. To ensure that youThis year we will be represented atusing the meeting, please vote by oneSecurities and Exchange Commission rule that allows us to provide our proxy materials to our stockholders via the Internet. By doing so, most of our stockholders will only receive a notice of the following three methods: (1) via mail by completing, signing, dating and promptly returningAnnual Meeting containing instructions on how to access the enclosed proxy card or voting instruction form in the enclosed envelope; (2) via telephone using the toll-free number and instructions shown on the enclosed proxy card or voting instruction form; or (3)materials via the Internet and vote online, by usingtelephone or by mail. If you would like to request a paper or e-mail copy of the website information andproxy materials, you should follow the instructions listed onin the enclosed proxy card or voting instruction form. Your prompt attention is requested.
notice for requesting a copy.
By order of the Board of Directors,
A. Rae Eagle
General Manager and
Corporate Secretary
March 17, 2016
23, 2018
Important Notice Regarding the Availability of
Proxy Materials for the Annual Meeting of Stockholders
to be Held on May 13, 201610, 2018
The Notice of Annual Meeting and Proxy Statement and the 2017 Annual Report to Stockholders are available atwww.proxyvote.com.
The proxy statement and annual report to stockholders are available at https://materials.proxyvote.com/670346.
YOUR VOTE IS VERY IMPORTANT. TO ENSURE THAT YOU WILL BE REPRESENTED AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURNSUBMIT YOUR PROXY AS SOON AS POSSIBLE VIA THE ENCLOSED PROXY CARD OR VOTING
INSTRUCTION FORM IN THE ENCLOSED ENVELOPE, OR VOTE VIAINTERNET, TELEPHONE OR INTERNET.MAIL.
i
This summary highlights information contained elsewhere in this Proxy Statement. As this summary does not contain all of the information that you should consider, please refer to the complete Proxy Statement before voting.
Annual Meeting of Stockholders
10:00 a.m., Eastern Time, May 10, 2018 | ||
Place: | Charlotte Marriott SouthPark Morrison Ballroom 2200 Rexford Road Charlotte, North Carolina 28211 | |
Record Date: | March 12, 2018 | |
Who Can Vote: | Stockholders as of the close of business on the record date are entitled to |
Voting Matters
Proposals
| Board Vote Recommendation
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Page # for Additional Information
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1.
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FOR each nominee
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6
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2. |
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FOR |
22 | |||
3.
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Advisory vote to approve named executive officer compensation
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FOR
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46
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4.
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Stockholder proposal regarding political lobbying report
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AGAINST
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47
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Director Nominees (page 6)
Name
| Age
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Director Since
| Professional Background
| Independent
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Lloyd J. Austin III
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64
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2017
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Retired four-star general, U.S. Army
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Yes
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Patrick J. Dempsey
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53
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2016
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President and CEO, Barnes Group Inc.
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Yes
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John J. Ferriola
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65
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2011
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Chairman, CEO and President, Nucor Corporation
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No
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Victoria F. Haynes, Ph.D.
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70
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1999
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Retired President and CEO, RTI International
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Yes
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Christopher J. Kearney |
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62 |
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2008 |
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Retired Chairman, President and CEO, SPX FLOW, Inc.
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Yes | ||||
Laurette T. Koellner |
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63 |
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2015 |
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Retired President, Boeing International
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Yes | ||||
John H. Walker |
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60 |
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2008 |
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Non-Executive Chairman, Global Brass and Copper Holdings, Inc.
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Yes |
2018 Proxy Statement 1
Corporate Governance Highlights (page 12)
Our commitment to good corporate governance stems from our belief that a strong governance framework creates long-term value for our stockholders. Our governance framework includes the following highlights:
Board and Governance Information | ||||||||||
Size of Board | Average director tenure | 7 Years | ||||||||
Number of independent directors | 7 | All directors stand for annual election | Yes | |||||||
Average age of directors | 62 | Supermajority threshold for mergers | Yes | |||||||
Number of Board meetings in 2017 | 4 | Proxy access | No | |||||||
Mandatory retirement age for directors | 72 | Stockholder action by written consent | Yes | |||||||
Percentage of women and minority Board members | 38% | Poison pill | No | |||||||
Majority vote resignation policy in uncontested director elections | Yes | Stock ownership guidelines fornon-employee directors and executive officers | Yes | |||||||
Separate Chairman and CEO | No | Antihedging and short-selling policies | Yes | |||||||
Independent lead director | Yes | Executive officer incentive compensation recoupment policy | Yes |
2 2018 Proxy Statement
The enclosed proxy is being solicited by the Board of Directors (the “Board of Directors” or the “Board”) of Nucor Corporation (“Nucor”, “we”Nucor,” the “Company,” “we,” “us” or the “Company”“our”) for use at the 20162018 annual meeting of stockholders (the “Annual Meeting”) to be held at 10:00 a.m., Eastern Time, on Friday,Thursday, May 13, 2016, and any adjournment or postponement thereof. The proxy may be revoked by10, 2018 at the stockholder by letter to Nucor’s Corporate SecretaryCharlotte Marriott SouthPark (Morrison Ballroom) located at 19152200 Rexford Road, Charlotte, North Carolina 28211 received before the meeting, by timely submitting another proxy, or by attending and voting at the meeting.28211. Directions to the meeting location of the Annual Meeting may be obtained by calling(704) 366-7000.
Delivery of Proxy Materials and Annual Report
We have elected to distribute a notice regarding the availability of proxy materials on the Internet, rather than sending a full set of these materials in the mail, to most of our stockholders. The 2015 annual reportnotice, or a full set of Nucor, including financial statements, is being mailed to all stockholders of record together withthe proxy materials (including this proxy statementProxy Statement and form of proxy), as applicable, was sent to stockholders beginning March 23, 2018, and the proxy materials were posted on or about March 17, 2016. The 2015 annual report and other information about the Company is available on ourinvestor relations portion of the Company’s website, atwww.nucor.com/investor., and on the website referenced in the notice on the same day. Utilizing this method of proxy delivery expedites receipt of proxy materials by stockholders and lowers the cost of the Annual Meeting. If you would like to receive a paper ore-mail copy of the proxy materials, you should follow the instructions in the notice for requesting a copy. The information on our website is not a part of this proxy statement.
Proxy Statement.
Shares Entitled to Vote; Quorum
The record date for the annual meetingAnnual Meeting is March 14, 2016.12, 2018. Only holders of record of Nucor’s common stock atas of the close of business on that date will be entitled to vote at the annual meeting.Annual Meeting. As of the record date, 317,925,310318,091,361 shares of Nucor common stock were outstanding. The presence, in person or by proxy, of the holders of a majority of the shares of Nucor common stock issued, outstanding and entitled to vote at the annual meetingAnnual Meeting is necessary to constitute a quorum.quorum for the transaction of business at the Annual Meeting.
Voting Rights and Procedures
Each share of Nucor common stock outstanding on the record date is entitled to one vote except with respect to the election of directors. With respect to the election of directors, each share of Nucor common stock is entitled to cumulative voting rights, which means that when voting for director nominees for director each share is entitled to a number of votes equal to the number of nominees for election as directors. Accordingly, when voting for director nominees, for director, all of the votes to which a share of Nucor common stock is entitled may be voted in favor of one nominee or may be distributed among the nominees. The holders of the enclosed proxy will have the discretionary authority to cumulate votes in the election of directors.
Stockholders of record who wish to cumulate their votes must submit a proxy card or cast a ballot and make an explicit statement of their intent to do so, either by so indicating on the proxy card or by indicating in writing on their ballot when voting at the annual meeting.Annual Meeting. If a person who is the beneficial owner of shares held in street name wishes to cumulate votes, the stockholder will need to contact the broker, bank, trustee or other nominee who is the record owner of the shares.
Votes Required to Approve Each Proposal
The following are the voting requirements for each proposal:
Proposal 1, Election of Directors. ForDirectors shall be elected by a plurality of the election of directors,votes cast (meaning that the eightseven director nominees receivingwho receive the highest number of all votes cast for directors at the annual meeting“for” their election will be elected as directorsdirectors), subject to serve untila Corporate Governance Principle adopted by the next annual meeting of stockholders.Board as described below.
Proposal 2, Ratification of the Appointment of Independent Registered Public Accounting Firm. Approval of the ratificationRatification of the appointment of PricewaterhouseCoopers LLP as theNucor’s independent registered public accounting firm of the Company for fiscal year 20162018 requires the affirmative vote of the holders of a majority of the total votes of all shares of common stock present in person or represented by proxy and entitled to vote on the proposal (meaning that of the shares represented at the annual meeting.Annual Meeting and entitled to vote, a majority of them must be voted “for” the proposal for it to be approved).
Proposal 3, Advisory Vote to Approve Named Executive Officer Compensation. Approval, on an advisory basis, of the Amendment to our Restated Certificate of Incorporation to Adopt a Majority Voting Standard, Eliminate Cumulative Voting and Remove Obsolete Provisions. The proposal to amend our Restated Certificate of Incorporation to adopt a majority voting standard, eliminate cumulative voting and remove obsolete provisions requires the affirmative vote of the holders of 80%a majority of the outstanding shares present in person or
2018 Proxy Statement 3
GENERAL INFORMATION
represented by proxy and entitled to vote in electionson the proposal (meaning that of directors in orderthe shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted “for” the proposal for the matterit to be adopted.
approved).
ProposalsProposal 4, and 5, Stockholder ProposalsProposal. Approval of each of the proposalsstockholder proposal requires the affirmative vote of the holders of a majority of the total votes of all shares of common stock present in person or represented by proxy and entitled to vote on the proposal (meaning that of the shares represented at the annual meeting.Annual Meeting and entitled to vote, a majority of them must be voted “for” the proposal for it to be approved).
Other Items. For any other matters, the affirmative vote of the holders of a majority of the total votes of all shares of common stock present in person or represented by proxy and entitled to vote on the item at the annual meeting will be required for approval.approval (meaning that of the shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted “for” the item for it to be approved).
Withhold“Withhold” Votes, Abstentions and Broker Non-Votes“Non-Votes”
Abstentions and broker “non-votes”“non-votes” are counted as present or represented for purposes of determining the presence or absence of a quorum for the annual meeting.Annual Meeting. A “non-vote”broker“non-vote” occurs when a nominee holding shares in street name for a beneficial owner votes on one proposal but does not vote on another proposal because, with respect to such other proposal, the nominee does not have discretionary voting power and has not received voting instructions from the beneficial owner.
Under the New York Stock Exchange rules and regulations (the “NYSE rules”), proposal 2, the proposal to ratifyratification of the appointment of thePricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for 2018, is considered a “discretionary”“routine” matter, which means that brokerage firms may vote in their discretion on this matterproposal on behalf of clients who have not furnished voting instructions. However, proposals 1, 3 and 4, the election of directors, the proposaladvisory vote to amend our Restated Certificate of Incorporationapprove Nucor’s named executive officer compensation in 2017 and the stockholder proposalsproposal, respectively, are “non-discretionary”“non-routine” matters under the NYSE rules, which means that brokerage firms that have not received voting instructions from their clients on these matters may not vote on these proposals.
With respect to proposal 1, the election of directors, only “for” and “withhold” votes may be cast. Broker“non-votes” are not considered votes cast for the foregoing purpose and broker non-votes will have no effect on the outcome of the proposal. Nucor’s“Withhold” votes will also generally have no effect on the outcome of the proposal. However, the Board of Directors has adopted a Corporate Governance Principle intended to give further effect to withheld“withheld” votes in uncontested director elections for directors under certain circumstances. This Corporate Governance Principle, which is set forthdescribed in more detail in this proxy statementProxy Statement under the heading “Proposal 1: Election of Directors” andDirectors,” requires, in an uncontested election, any nominee for director who receivedis an incumbent director and receives a greater number of votes “withheld” from his or her election than votes “for” suchhis or her election to promptly tender his or her resignation to the Secretary of the Company following certification of the stockholder vote for consideration by the Governance and Nominating Committee.
Board.
With respect to proposals 2, 43 and 5,4, the ratification of the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for fiscal 20162018, the advisory vote to approve Nucor’s named executive officer compensation in 2017 and the stockholder proposal, respectively, you may vote “for” or “against” the proposals, anor you may “abstain” from voting on the proposals. An abstention will be counted as a vote present or represented and entitled to vote on the proposals and will have the same effect as a vote against“against” the proposals, and a broker “non-vote”“non-vote” will not be considered entitled to vote on these proposals and will therefore have no effect on their outcome.
With As discussed above, because proposal 2, the ratification of the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for 2018, is considered a “routine” matter, we do not expect any broker“non-votes” with respect to proposal 3, the approval of the amendment to our Restated Certificate of Incorporation to adopt a majority voting standard, eliminate cumulative voting and remove obsolete provisions, abstentions and broker “non-votes” will have the same effect as votes against thethis proposal.
Voting of Proxies
Each valid proxy received and not revoked before the Annual Meeting will be voted at the meeting. To be valid, a written proxy card must be properly executed. Proxies voted by telephone or via the Internet must be properly completed pursuant to this solicitation. If you specify your vote regarding any matter presented at the
The
4 2018 Proxy Statement
GENERAL INFORMATION
Annual Meeting, your shares represented by each proxy you properly submit to us will be voted by one of the individuals indicated on the proxy as you direct.in accordance with your specification. If you submit a proxy but do not indicate how you wish tospecify your vote, your shares will be voted:
FOR the election of the eightseven director nominees;
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’sNucor’s independent registered public accounting firm for the year ending December 31, 2016;
Revoking Your Proxy or Changing Your Vote
You may revoke your proxy or change your vote at any time before the vote is taken at the Annual Meeting. If you are a stockholder of our Restated Certificaterecord, you may revoke your proxy or change your vote by (i) submitting a written notice of Incorporationrevocation to adoptNucor’s Corporate Secretary at Nucor Corporation, 1915 Rexford Road, Charlotte, North Carolina 28211; (ii) delivering a majorityproxy bearing a later date by telephone, the Internet or mail until the applicable deadline for each method; or (iii) attending the Annual Meeting and voting standard, eliminate cumulativein person. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request or vote in person at the Annual Meeting. For all methods of voting, the last vote cast will supersede all previous votes. If you hold your shares in street name and remove obsolete provisions;you have instructed your broker, bank, trustee or other nominee to vote your shares, you may change or revoke your voting instructions by following the specific instructions provided to you by your broker, bank, trustee or other nominee, or, if you have obtained a legal proxy from your broker, bank, trustee or other nominee, by attending the Annual Meeting and voting in person.
AGAINST the approval of the two stockholder proposals. 2018 Proxy Statement 5
ELECTION OF DIRECTORS
The number of directors is currently fixed at nine. Harvey B. Gantt, age 73,eight. Gregory J. Hayes is not standing for re-electionreelection at the 2016 annual meeting due to his having reached the mandatory retirement age under the Company’s Corporate Governance Principles.Annual Meeting. Mr. GanttHayes has been a Nucor director since 1999, served2014, serving as a member of the Audit, Compensation and Executive Development, and Governance and Nominating and Compensation committeesCommittees during such time, and as Chairman of the Audit Committee since 2014. Mr. Hayes has been an integral and invaluablevaluable member of the Nucor team. As a result of Mr. Gantt’s retirement, effectiveEffective on the date of the 2016 annual meeting,Annual Meeting, the size of the Board will be reduced to eightseven members.
On the recommendation of the Governance and Nominating Committee, the Board of Directors has nominated the eightseven persons named below for election as directors at the 2016 annual meeting.Annual Meeting. If elected, each nominee will serve until his or her term expires at the 20172019 annual meeting of stockholders or until his or her successor is duly elected and qualified.
All of the nominees are currently serving as directors and were elected to the Board at the 20152017 annual meeting of the Company’s stockholders except for Laurette T. Koellner,U.S. Army General (retired) Lloyd J. Austin III, who was elected to the Board in September 2015. Ms. Koellner2017. General Austin was initially identified to the Board as a potential director by Spencer Stuart, an executive search consulting firm retained by the Board.a non-management director. Each nominee has agreed to be named in this proxy statementProxy Statement and to serve if elected.
Shares represented by all proxies received by the Board of Directors and not marked to withhold authority to vote for the nominees will be voted for their election. The Board of Directors knows of no reason why any of these nominees should be unable or unwilling to serve, but if that should be the case, proxies received will be voted for the election of such other persons, if any, as Nucor’sthe Board of Directors may designate.
Nucor’s Board of Directors has adopted the followingMajority Voting in Uncontested Director Elections. We have a majority vote standard in uncontested director elections in order to address “holdover” terms for any incumbent directors. Under our Corporate Governance Principle entitled “Effect of Withheld Votes in Uncontested Elections for Director.”
Any nominee for directorPrinciples, in an uncontested election, any nominee for director who is an incumbent director and receives a greater number of votes “withheld” from his or her election than votes “for” suchhis or her election shallmust promptly tender his or her resignation to the Secretary of the Company following certification of the stockholder vote for consideration by the Governance and Nominating Committee. The Committee shall evaluate the director’s tendered resignation taking into account the best interests of the Company and its stockholders and shall recommend to the Board whether to accept or rejectBoard. In such resignation. In making its recommendation, the Committee may consider, among other things, the effect of the exercise of cumulative voting in the election. The Board shall actevent, within 120 days following certification of the stockholder vote, the Board will decide, after taking into account the recommendation of the Governance and Nominating Committee (in each case excluding the nominee(s) in question), whether to accept the resignation. The Governance and Nominating Committee and the Board may each consider all factors it deems relevant in deciding whether to accept a director’s resignation. Nucor will promptly disclose itsthe Board’s decision and the reasons therefor in an a Form8-K filing with the Securities and Exchange Commission (the “SEC”). Any director who tenders his or herThe resignation pursuantpolicy set forth in the Company’s Corporate Governance Principles does not apply to this principle shall not participate in any committee or Board consideration of it.
contested elections.
Vote Recommendation
Nucor’sThe Board of Directors recommends a vote FOR the election of each of the eightseven nominees listed below.Unless otherwise specified, proxies will be votedFOR each nominee.
6 2018 Proxy Statement
INFORMATION CONCERNING EXPERIENCE, QUALIFICATIONS,
ATTRIBUTES AND SKILLS OF
THE NOMINEES
LLOYD J. AUSTIN III Director Since: 2017 Age:64 | General Austin is a retired four-star general who served for 41 years in the U.S. Army. From March 2013 through March 2016, General Austin served as the commander of U.S. Central Command responsible for military strategy and joint operations throughout the20-country Central Region that includes Iraq, Syria, Iran, Afghanistan, Pakistan, Yemen, Egypt and Saudi Arabia. Prior to that, he served as the 33rd Vice Chief of Staff of the U.S. Army from January 2012 to March 2013 and as the Combined Forces Commander in Iraq from September 2010 through the completion of Operation New Dawn in December 2011. He is the recipient of numerous U.S. military awards, including the Silver Star, five Defense Distinguished Service Medals and the Legion of Merit. General Austin currently serves as a director of United Technologies Corporation and on the Board of Trustees of Guest Services, Inc.(non-public). General Austin brings to the Board a unique and valuable perspective from his years of proven leadership and management in the U.S. Army, including service at the most senior levels in the U.S. Armed Forces. | |||||
PATRICK J. DEMPSEY Director Since: 2016 Age:53 | Mr. Dempsey has served as the President and Chief Executive Officer of Barnes Group Inc., a global provider of highly engineered products, differentiated industrial technologies, and innovative solutions, serving a wide range of end markets and customers, since March 2013. Prior to this appointment, since February 2012, Mr. Dempsey served as Barnes Group’s Senior Vice President and Chief Operating Officer. Mr. Dempsey joined Barnes Group in October 2000 and has held a series of roles, including President, Windsor Airmotive; Vice President, Barnes Group; President, Barnes Aerospace; President, Barnes Distribution; and President, Logistics and Manufacturing Services. Prior to joining Barnes Group, Mr. Dempsey held leadership positions at United Technologies Corporation’s Pratt and Whitney Division and the Interturbine Group of Companies. Mr. Dempsey currently serves as a director of Barnes Group and also serves on the Board of Trustees of the Manufacturers Alliance for Productivity and Innovation. Mr. Dempsey brings to the Board extensive experience in the areas of business management, technology leadership, corporate strategy and development, and international business. | |||||
JOHN J. Director Since: 2011 Age:65 |
|
Mr. Ferriola has served as Chairman of Nucor since January 2014 and Chief Executive Officer and President of Nucor since January 2013. Previously, Mr. Ferriola served as President and Chief Operating Officer of Nucor from January 2011 to December 2012. Prior to that, Mr. Ferriola served as Chief Operating Officer of Steelmaking Operations of Nucor from 2007 to 2010, Executive Vice President from 2002 to 2007 and Vice President from 1996 to 2001. He currently serves as Vice Chairman of the World Steel Association and |
2018 Proxy Statement 7
INFORMATION CONCERNING EXPERIENCE, QUALIFICATIONS, ATTRIBUTESAND SKILLSOFTHE NOMINEES
VICTORIA F. HAYNES, PH.D. |
|
Director Since: 1999 |
Age:70 |
Dr. Haynes served as President and Chief Executive Officer of RTI International, an independent,non-profit corporation that performs scientific research and services and develops advanced technology, from 1999 until her retirement in 2012. Prior to joining RTI, she was Vice President of the Advanced Technology Group and Chief Technical Officer of Goodrich Corporation, a specialty chemicals and aerospace company, from 1992 to 1999. Dr. Haynes currently serves on the boards of directors of | ||||
CHRISTOPHER J. KEARNEY
Director Since:2008 Age:62 |
|
Mr. |
|
its managing partner since its formation. Mr. Kearney | ||||
LAURETTE T. KOELLNER
Director Since:2015 |
Age:63 |
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Ms. Koellner most recently served as Executive Chairman of International Lease Finance Corporation, an aircraft leasing subsidiary of American International Group, Inc. (“AIG”), from 2012 until its sale in 2014. Ms. Koellner is the former President of Boeing International, a division of The Boeing Company, |
8 2018 Proxy Statement
INFORMATION CONCERNING EXPERIENCE, QUALIFICATIONS, ATTRIBUTESAND SKILLSOFTHE NOMINEES
JOHN H. WALKER Director Since:2008 Age:60 |
|
Mr. |
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|
2018 Proxy Statement 9
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following tables below give information concerning the beneficial ownership of Nucor’s common stock as of February 29, 201628, 2018 by all directors and director nominees, each executive officer listed in the Summary Compensation Table, all directors and executive officers as a group, and the persons who are known to Nucor to be the owners of more than five percent5% of the outstanding common stock of Nucor. “Beneficial ownership” is determined in accordance with the rules of the SEC.
Executive Officers and Directors
Shares Owned | Shares Subject to Options (1) | Shares Underlying Restricted Stock Units (1) | Total Beneficial Ownership | Percent of Class (2) | ||||||||||||||||||||
Name | Sole Voting and Investment Power | Shared Voting and Investment Power | ||||||||||||||||||||||
James R. Darsey | 145,114 | — | 91,668 | 67,681 | 304,463 | * | ||||||||||||||||||
John J. Ferriola | 196,194 | — | 152,780 | 130,801 | 479,775 | * | ||||||||||||||||||
James D. Frias | 77,505 | (3) | — | 91,668 | 71,211 | 240,384 | * | |||||||||||||||||
Harvey B. Gantt | 13,368 | — | — | 23,515 | 36,883 | * | ||||||||||||||||||
Ladd R. Hall | 51,334 | (3) | 100,614 | 91,668 | 70,717 | 314,333 | * | |||||||||||||||||
Gregory J. Hayes | 6,991 | — | — | 2,765 | 9,756 | * | ||||||||||||||||||
Victoria F. Haynes | 10,320 | 250 | — | 23,515 | 34,085 | * | ||||||||||||||||||
Bernard L. Kasriel | 1,500 | — | — | 22,376 | 23,876 | * | ||||||||||||||||||
Christopher J. Kearney | 6,000 | — | — | 19,560 | 25,560 | * | ||||||||||||||||||
Laurette T. Koellner | — | — | — | — | — | * | ||||||||||||||||||
Raymond J. Milchovich | 21,667 | — | — | 8,514 | 30,181 | * | ||||||||||||||||||
R. Joseph Stratman | 11,848 | 133,050 | 91,668 | 70,717 | 307,283 | * | ||||||||||||||||||
John H. Walker | 2,645 | — | — | 20,896 | 23,541 | * | ||||||||||||||||||
All 16 directors and executive officers as a group | 602,759 | 259,807 | 519,452 | 618,063 | 2,000,081 | * |
Shares Owned | Shares | Shares Underlying Units (1) | Total | Percent of | ||||||||||||||||||
Name | Sole Voting and Power | Shared Voting and Power | ||||||||||||||||||||
Lloyd J. Austin III | — | — | — | — | — | * | ||||||||||||||||
James R. Darsey | 107,726 | — | 113,281 | 81,600 | 302,607 | * | ||||||||||||||||
Patrick J. Dempsey | — | — | — | 2,370 | 2,370 | * | ||||||||||||||||
John J. Ferriola | 169,198 | — | 647,746 | 163,541 | 980,485 | * | ||||||||||||||||
James D. Frias | 81,105 | (3) | — | 74,244 | 90,999 | 246,348 | * | |||||||||||||||
Ladd R. Hall | 75,415 | (3) | 42,201 | 74,244 | 84,636 | 276,496 | * | |||||||||||||||
Gregory J. Hayes | 6,991 | — | — | 8,003 | 14,994 | * | ||||||||||||||||
Victoria F. Haynes | 4,820 | 250 | — | 28,753 | 33,823 | * | ||||||||||||||||
Christopher J. Kearney | 6,000 | — | — | 24,798 | 30,798 | * | ||||||||||||||||
Laurette T. Koellner | — | — | — | 5,238 | 5,238 | * | ||||||||||||||||
R. Joseph Stratman | 23,304 | 120,604 | 74,244 | 84,636 | 302,788 | * | ||||||||||||||||
John H. Walker | 2,645 | — | — | 26,134 | 28,779 | * | ||||||||||||||||
All 16 directors and executive officers as a group | 552,855 | 185,846 | 1,052,407 | 752,827 | 2,543,935 | * |
* | Represents holdings of less than 1%. |
(1) | The number of shares beneficially owned subject to options or underlying restricted stock units (“RSUs”) includes shares of common stock that such person or group had the right to acquire on or within 60 days after February |
(2) | Based on |
(3) | Includes |
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SECURITY OWNERSHIPOF MANAGEMENTAND CERTAIN BENEFICIAL OWNERS
Principal Stockholders
Name and Address | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||||
State Farm Mutual Automobile Insurance Company and related entities One State Farm Plaza Bloomington, Illinois 61710 | 30,599,951 | (2) | 9.63 | % | ||||
BlackRock, Inc. 55 East 52nd Street New York, New York 10055 | 19,888,857 | (3) | 6.26 | % | ||||
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 19,190,256 | (4) | 6.04 | % | ||||
State Street Corporation State Street Financial Center One Lincoln Street Boston, Massachusetts 02111 | 19,125,793 | (5) | 6.02 | % |
Name and Address | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||||
State Farm Mutual Automobile Insurance Company and related entities One State Farm Plaza Bloomington, Illinois 61710 | 30,604,903 | (2) | 9.63 | % | ||||
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | 26,115,206 | (3) | 8.21 | % | ||||
BlackRock, Inc. 55 East 52nd Street New York, New York 10055 | 22,382,353 | (4) | 7.04 | % | ||||
State Street Corporation State Street Financial Center One Lincoln Street Boston, Massachusetts 02111 | 18,515,507 | (5) | 5.82 | % |
(1) | Based on |
(2) | Based on Schedule 13G filed with the SEC on February |
(3) | Based on Schedule 13G/A filed with the SEC on February |
(4) | Based on Schedule 13G/A filed with the SEC on February |
(5) | Based on Schedule 13G filed with the SEC on February |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), requires Nucor’s directors, executive officers and persons who beneficially own more than ten percent10% of the outstanding shares of Nucor’s common stock (collectively, the “reporting persons”) to file with the SEC initial reports of their beneficial ownership and reports of changes in their beneficial ownership of Nucor’s common stock with the SEC.stock. Based solely on a review of such reports and written representations made by Nucor’s directors and executive officers with respect to the completeness and timeliness of their filings, Nucor believes that the reporting persons complied with all applicable Section 16(a) filing requirements were met by the reporting personson a timely basis during its fiscal year ended December 31, 2015, except that James R. Darsey filed a late Form 5 to report the acquisition of 98.71 shares of Nucor’s common stock through an inheritance he received in fiscal 2014.
2018 Proxy Statement 11
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
Board of Directors.Our business and affairs are managed under the direction of ourthe Board of Directors. In exercising its fiduciary duties, the Board represents and acts on behalf of the Company’s stockholders. Our Bylaws provide that ourthe Board of Directors consists of a number of directors to be fixed from time to time by a resolution of the Board. OurThe Board of Directors currently has nineeight members, eightseven of whom are independent. If the director nominees are elected at the annual meeting,Annual Meeting, the Board of Directors will have eightseven members, sevensix of whom will be independent.
Corporate Governance Principles.The Board has adopted Corporate Governance Principles setting forth a framework for our corporate governance with respect to the role and composition of the Board and Nucor’s management, responsibilities of directors, director qualification standards, the functioning of the Board and its Committees, thecommittees, compensation of directors, and annual performance evaluations of the Board, its committees, individual directors and our Chief Executive Officer.
Codes of Ethics.Nucor The Board has adopted a Code of Ethics for Senior Financial Professionals that applies to the Company’s Chief Executive Officer, Chief Financial Officer, Corporate Controller and other senior financial professionals and includes guidelines relating to the ethical handling of actual or potentialapparent conflicts of interest, compliance with laws and accurate financial reporting. In addition, Nucorthe Board has adopted Standards of Business Conduct and Ethics, which apply to all employees, officers and directors of the Company. The Company intends to post any amendments or waivers to either of these codesdocuments (to the extent required to be disclosed pursuant to Form8-K) on the Company’s website atwww.nucor.com/governance.
Documents Available. All of the Company’s corporate governance materials, including the charters for the Audit Committee, the Compensation and Executive Development Committee and the Governance and Nominating Committee, the Corporate Governance Principles, the Code of Ethics for Senior Financial Professionals and the Standards of Business Conduct and Ethics, are publishedavailable on the Company’s website atwww.nucor.com/governance. Any modifications to these corporate governance materials will be reflected on the Company’s website. The information on our website is not a part of this proxy statement.
Director Independence.The Board believes that a majority of its members are independent under both the applicable NYSE rules and the applicable SEC rules and regulations (the “SEC rules”). Our Corporate Governance Principles provide that a majority of the members of Nucor’s Board of Directors must be “independent” under the NYSE rules. The NYSE rules provide that a director does not qualify as “independent” unless the Boardboard of Directorsdirectors affirmatively determines that the director has no material relationship with Nucorthe company (either directly or as a partner, stockholder or officer of an organization that has a relationship with Nucor)the company). The NYSE rules requirerecommend that a board of directors to consider all of the relevant facts and circumstances in determining the materiality of a director’s relationship with a company and permit the board to adopt and disclose standards to assist the board in making determinations of independence. Accordingly, thecompany. The Board has adopted categorical standards, which incorporate the independence standardsCategorical Standards for Determination of the NYSE rulesDirector Independence (the “Categorical Standards”), to assist the Board in determining whether a particular relationship a director has with the Company is a material relationship that would impair the director’s independence. TheseThe Categorical Standards establish thresholds at which directors’ relationships with the Company are deemed to be not material and, therefore, shall not disqualify any director or nominee from being considered “independent.” The Categorical Standards are:
Relationships involving (1) the purchase or sale of products or services, (2) the purchase, sale or leasing of real property or (3) lending, deposit, banking or other financial service relationships, either by orare included as an appendix to the Company or its subsidiaries and involving a director, his or her immediate family members, or an organization ofNucor’s Corporate Governance Principles, which the director or an immediate family member is a partner, shareholder, officer, employee or director if the following conditions are satisfied:
any payments made to, or payments received from, the Company or its subsidiaries in any single fiscal year within the last three years do not exceed the greater of (i) $1,000,000 or (ii) 2% of such other organization’s consolidated gross revenues;
the products and services are provided in the ordinary course of business andavailable on substantially the same terms and conditions, including price, as would be available to similarly situated customers;
the relationship does not involve consulting, legal or accounting services provided to the Company or its subsidiaries; and
any extension of credit was in the ordinary course of business and was made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other similarly situated borrowers.
Any other relationship between the Company or one of its subsidiaries and a company (including a limited liability company) or partnership to which a director is connected solely as a shareholder, member or partner as long as the director is not a principal shareholder or partner of the organization. For purposes of this categorical standard, a person is a principal shareholder of a company if he or she directly or indirectly, or acting in concert with one or more persons, owns, controls or has the power to vote more than 10% of any class of voting securities of the company. A person is a principal partner of a partnership if he or she directly or indirectly, or acting in concert with one or more persons, owns, controls or has the power to vote a 25% or more general partnership interest, or more than a 10% overall partnership interest. Shares or partnership interests owned or controlled by a director’s immediate family member who shares the director’s home are considered to be held by the director.
Contributions made or pledged by the Company, its subsidiaries or by any foundation sponsored by or associated with the Company or its subsidiaries to a charitable organization of which a director or an immediate family member is an executive officer, director or trustee if the following conditions are satisfied:
within the preceding three years, the aggregate amount of such contributions during any single fiscal year of the charitable organization did not exceed the greater of (i) $1,000,000 or (ii) 2% of the charitable organization’s consolidated gross revenues for that fiscal year; and
the charitable organization is not a family foundation created by the director or an immediate family member.
For purposes of this categorical standard, contributions made to any charitable organization pursuant to a matching gift program maintained by the Company or by its subsidiaries or by any foundation sponsored by or associated with the Company or its subsidiaries shall not be included in calculating the materiality threshold set forth above.
If the director, or an immediate family member, is an executive officer of another organization in which the Company owns an equity interest and if the amount of the Company’s interest is less than 10% of the total voting interest in the other organization.
A relationship involving a director’s relative who is not an immediate family member of the director.
In the last five years, the director has not been an executive officer, founder or principal owner of a business organization acquired by the Company, or of a firm or entity that was part of a joint venture or partnership including the Company.
website atwww.nucor.com/governance.
In February 2016,2018, the Board of Directors, with the assistance of the Governance and Nominating Committee, conducted an evaluation of director independence based on the Categorical Standards.Standards, the NYSE rules and the SEC rules. The Board considered all relationships and transactions between each director (and his or her immediate family and affiliates) and each of Nucor, its management and its independent registered public accounting firm, including (i) with respect to Mr. Kearney,Hayes, who serves as Chairman, of SPX FLOW, Inc. and a director of SPX Corporation (and wasPresident, Chief Executive Officer and President during fiscal 2015 of SPX FLOW, Inc. and of SPX Corporation prior to its spin-off of SPX FLOW, Inc. in fiscal 2015), that Nucor in the ordinary course of business purchased goods and services from SPX FLOW, Inc. and SPX Corporation in fiscal 2015 each in an amount less than 0.5% of the consolidated gross revenues of such entities, and (ii) with respect to Mr. Hayes, who serves as President, Chief Executive Officer anda director of United Technologies Corporation, that Nucor in the ordinary course of business purchased from and sold to United Technologies goods in fiscal 20152017 in an amount less than 0.5%0.75% of the consolidated gross revenues of United Technologies.Technologies; and (ii) with respect to Mr. Dempsey, who serves as President, Chief Executive Officer and a director of Barnes Group Inc., that Nucor in the ordinary course of business purchased from and sold to Barnes Group goods in 2017 in an amount less than 0.75% of the consolidated gross revenues of Barnes Group. As a result of this evaluation, the Board determined those relationships that do exist or did exist within the last three years (except for Mr. Ferriola’s in his capacity as Nucor’s Chairman, Chief Executive Officer and President) all fall well below the thresholds in the Categorical Standards. Consequently, the Board of Directors determined that General Austin and each of Messrs. Gantt,Dempsey, Hayes, Kasriel, Kearney Milchovich and Walker and Dr. Haynes and Ms. Koellner is an independent director under the Categorical Standards, the NYSE rules and the SEC rules. The Board also determined that each member of the Audit Committee, the Compensation and
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CORPORATE GOVERNANCEAND BOARDOF DIRECTORS
Executive Development Committee and the Governance and Nominating CommitteesCommittee (see membership information below under “Board Committees”) is independent, including that each member of the Audit Committee is “independent” as that term is defined under Rule10A-3(b)(1)(ii) of the 1934 Act, and that each member of the Compensation and Executive Development Committee is an “outside director” as defined under Section 162(m) of the Internal Revenue Code. Mr. Ferriola, the Company’s Chairman, Chief Executive Officer and President, is not independent due to his employment by the Company.
Board Leadership Structure. John J. Ferriola currently holds the positions of Chairman of the Board, Chief Executive Officer and President of the Company. The Corporate Governance Principles of the Company provide that whenever the Chairman of the Board is a member of management, there shall be a Lead Director. The Lead Director is an independent director appointed annually by the independent members of the Board, and he or she serves at the pleasure of the Board. In May 2015,February 2017, the Board reappointed Raymond J. Milchovichappointed John H. Walker to serve as Lead Director. The Board’s leadership structure is outlined in the Company’s Bylaws and Corporate Governance Principles, as described below:
Chairman of the Board | The Board has appointed the Company’s Chief Executive Officer and President as its Chairman. Appointing Mr. Ferriola as Chairman (i) enhances alignment between the Board and management in strategic planning and execution as well as operational matters, and (ii) streamlines Board process in order to conserve time for the consideration of the important matters the Board needs to address. | |
Lead Director | The Lead Director (i) provides leadership to the Board of Directors; (ii) chairs Board meetings in the absence of the Chairman; (iii) organizes, sets the agenda for and leads executive sessions of the non-employee directors and/or independent directors without the attendance of management; (iv) serves as a liaison between the Chairman, the non-employee directors and the independent directors; (v) consults with the Chairman and the Secretary of the Company to approve the agenda for each Board meeting and the information that shall be provided to the directors for each scheduled meeting; | |
Independent Directors | Independent directors comprise more than 85% of the Board and 100% of the Audit Committee, the Compensation and Executive Development Committee and the Governance and Nominating Committee. | |
Committee Chairs | All chairs of the Board’s committees are independent and are annually appointed by the Board, approve agendas and material for respective committee meetings and act as a liaison between committee members and the Board and senior management. |
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CORPORATE GOVERNANCEAND BOARDOF DIRECTORS
Board Committees. The Board of Directors has three standing committees: the Audit Committee, the Compensation and Executive Development Committee, and the Governance and Nominating Committee. Each of these committees acts pursuant to a written charter adopted by the Board of Directors. Committee members and committee chairs are appointed by the Board. The members of these committees are identified in the following table:table below:
Director | Audit Committee | Compensation and Executive Development Committee | Governance and Nominating | |||
Lloyd J. Austin III | X | X | X | |||
Patrick J. Dempsey | X | X | X | |||
John J. Ferriola | ||||||
| ||||||
Gregory J. Hayes | Chair | X | X | |||
Victoria F. Haynes | X | Chair | ||||
| X | |||||
Christopher J. Kearney | X | X | X | |||
Laurette T. Koellner | X | X | ||||
| ||||||
John H. Walker | X | X |
The following table below provides information about the operation and key functions of these committees:
Committee | Key Functions and Additional Information | Number of Meetings in | ||||
Audit Committee | • Assists the Board in its oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications and • Appoints, compensates, retains and oversees the Company’s independent registered public accounting firm • Reviews and discusses with management and the Company’s independent registered public accounting firm the annual and quarterly financial statements • Reviews and discusses with management the quarterly earnings releases • Considers and approves all auditing services, internal control-related services and permittednon-auditing services proposed to be provided by the Company’s independent registered public accounting firm • Monitors the adequacy of the Company’s reporting and internal controls • Assists the Board in its oversight of enterprise risk management | 7 | ||||
Compensation and Executive Development Committee | • Administers the compensation program for senior officers • Reviews, evaluates and determines compensation of the senior officers • Reviews and recommends to the Board compensation of the directors • Reviews and approves employment offers, arrangements and other benefits for senior officers • Reviews the Company’s executive succession and management development plans • Oversees regulatory compliance and risk regarding compensation matters | 4 |
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Committee | Key Functions and Additional Information | Number of Meetings in 2017 | ||||
Governance and Nominating Committee | • Develops and recommends to the Board for approval specific guidelines and criteria for selecting nominees for election to the Board • Identifies, evaluates and recommends to the Board nominees for election to the Board • • • Administers the Company’s policy and procedures for the review, approval or ratification of related • Considers and recommends to the Board actions relating to corporate governance | 4 |
The Board has determined that Mr. Hayes is an “audit committee financial expert” within the meaning of the SEC rules and that he has accounting and related financial management expertise within the meaning of the NYSE rules. All members of the Audit Committee are financially literate as determined by the Board, in its business judgment.
The Board may also establish other committees from time to time as it deems necessary.
Director Meetings.The Board of Directors held four meetings during fiscal 2015.2017. Each incumbent director attended 75% or more of the aggregate number of meetings of the Board and committees of the Board on which such director served during fiscal 2015.2017. Pursuant to the Corporate Governance Principles, the non-managementnon-employee directors all of whom are independent, meet in executive session prior to or after each quarterly Board meeting at regularly scheduled executive sessions and as necessary prior to or after other Board meetings. Mr. Milchovich,Walker, as Lead Director, presides over these executive sessions.
Attendance at Annual Meetings of Nucor’s Stockholders. Directors are expected to attend the Company’s annual meeting of stockholders. All nineeight of the Company’s directors in office at the time attended last year’s annual meeting.
Annual Evaluation of Directors and Committee Members. The Board of Directors evaluates the performance of each director, each committee of the Board, the Chairman, the Lead Director and the Board of Directors as a whole on an annual
basis. In connection with this annual self-evaluation, each director anonymously records his or her views on the performance of each director, standing for reelection, each committee of the Board, the Chairman, the Lead Director and the Board of Directors.Directors as a whole. The entire Board of Directors reviews these reports and determines what, if any, actions should be taken in the upcoming year to improve its effectiveness and the effectiveness of each director, each committee, the Chairman and committee.the Lead Director.
Board’s Role in Risk Oversight.The Board oversees the Company’s risk profile and management’s processes for assessing and managing risk, both as a whole Board and through its committees. At least annually, the full Board reviews strategic risks and opportunities facing the Company. Certain other important categories of risk are assigned to designated Board committees (which are comprised solely of independent directors) that report back to the full Board.
The Company’s Audit Committee is specifically charged with the responsibility of meeting periodically with management, general counselthe Company’s General Counsel and outside counsel to discuss the Company’s major risk exposures, including, but not limited to, legal and environmental claims and liabilities, risk management and other financial exposures, and the steps management has taken to monitor and control such exposures, including the Company’s risk
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CORPORATE GOVERNANCEAND BOARDOF DIRECTORS
assessment and risk management policies. The Company’s Corporate Controller annually conducts a risk assessment, which includes input from senior officers, and prepares for the Audit Committee’s review a report and a presentation identifying and evaluating the key risks facing the Company, how those risks interrelate, how they affect the Company and how management addresses those risks. After completing a review and analysis of the report and presentation, the Audit Committee meets with management to provide its comments on the report and presentation and to provide guidance on areas that the Audit Committee believes management and the Corporate Controller should consider in identifying and evaluating the risks facing the Company.
The Compensation and Executive Development Committee oversees Nucor’s compensation plans to ensure they do not incentivize excessive risk-taking by our senior officers. Although a significant portion of our executives’ compensation is performance-based, we believe our compensation plans are appropriately structured and do not pose a material risk to Nucor.
The Board believes that its ability to oversee risk is enhanced by having one person serve as the Chairman of the Board and the Chief Executive Officer. With hisin-depth knowledge and understanding of the Company’s operations, the Board believes Mr. Ferriola, as Chairman, Chief Executive Officer and President, is better able to bring key strategic and business issues and risks to the Board’s attention than would a non-executiveNon-Executive Chairman of the Board or anon-director Chief Executive Officer.
Compensation Consultant. The Compensation and Executive Development Committee has sole authority under its charter to retain compensation consultants and to approve such consultants’ fees and retention terms. In 2004, theThe Compensation and Executive Development Committee has retained Pearl Meyer & Partners, LLC (“Pearl Meyer”) to act as its independent advisor and to provide it with advice and support on executive compensation issues. The Compensation and Executive Development Committee has renewed this engagement each year since and has reviewed and confirmed the independence of Pearl Meyer as the Committee’s compensation consultant. Neither Pearl Meyer nor any of its affiliates provide any services to Nucor except for services related solely to executive officer and director compensation. Please see ““Executive Officer Compensation – Compensation Discussion and Analysis – 2017 Executive Compensation in Detail – Determination of 20152017 Compensation” on page 2228 of this proxy statementProxy Statement for a description of Nucor’s process for the consideration and determination of executive compensation and Pearl Meyer’s role in such process.
No Hedging or Short Selling.Nucor maintains policies that apply to all officers, certain designated employees and the members of the Board that prohibit hedging or short selling (profiting if the market price of the securities decreases) of Nucor securities.
Policy on Executive Officer Incentive Compensation Recoupment. The Company has a written policy to address the recoupment of performance-based compensation awarded to or earned by an executive officer if there is a restatement of the Company’s financial results due to material noncompliance of the Company with any financial reporting requirement under the federal securities laws. In the event of such a restatement, the Compensation and Executive Development Committee shall review the performance-based compensation awarded to or earned by the executive officers for the three-year period prior to the restatement event and, if the committeeCommittee determines in its reasonable discretion that any such performance-based compensation would not have been awarded to or earned by an executive officer based on the restated financial results, the committeeCommittee shall within 12 months of the restatement event, to the extent practicable, seek to recover from such executive officer any portion of the performance-based compensation that is greater than that which would have been awarded or earned had it been calculated on the basis of the restated financial results. A copy of the policy is available on our website atwww.nucor.com/governance/incentivegovernance.
Policy on Transactions with Related Persons. The Company has a written policy and procedures for the review, approval or ratification of any transactions that could potentially be required to be reported under the SEC rules for
disclosure of transactions with the Company’s directors, executive officers, business and other organizations with which its directors or executive officers are affiliated, executive officers, members of their immediate families and other related persons. This policy is administered by the Governance and Nominating Committee of the Board of Directors. The policy includes several categories ofpre-approved transactions that are based upon exceptions to the SEC’s rules for disclosure of such transactions. For transactions that are notpre-approved, the Governance and Nominating Committee, in determining whether to approve a transaction with a related person or an organization with which a related person is affiliated, takes into account, among other things, (i) the business reasons for entering into the transaction, (ii) whether the
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CORPORATE GOVERNANCEAND BOARDOF DIRECTORS
transaction is on terms no less favorable than terms generally available to an unaffiliated third party underwas undertaken in the same or similar circumstances andordinary course of business of the Company; (ii) the approximate dollar value of the transaction; (iii) the extentpurpose, and potential benefits to the Company, of the transaction; and (iv) the related person’s interest in the transaction, including whether the related person or his or her immediate family member participated in the negotiation of the terms of the transaction or received any special benefits from the transaction.
In 2015,2017, Smoot Enterprises, Inc. was paid approximately $3.74$4.14 million by Nucor to transport products and materials for Nucor. Michael Smoot, who is thebrother-in-law of Ladd R. Hall, an executive officer of Nucor, is an officer and greater than 10% owner of Smoot Enterprises, Inc. The foregoing was approved under Nucor’s policy on transactions with related persons.
In 2017, Danny Pantello, a melt shop supervisor at Nucor, was paid compensation of approximately $148,600. Mr. Pantello is a stepson of R. Joseph Stratman, an executive officer of Nucor. The foregoing was approved under Nucor’s policy on transactions with related persons.
Nominating Directors.Stockholders may recommend a director candidate for consideration by the Governance and Nominating Committee by submitting the candidate’s name in accordance with provisions of Nucor’s Bylaws that require advance notice to Nucor and certain other information. In general, under the Bylaws, the written notice must be delivered to, or mailed and received at, the Company’s principal executive offices not lesslater than the close of business on the 120 days and not moreth day before the first anniversary of the preceding year’s annual meeting of stockholders nor earlier than the close of business on the 150 daysth day before the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the tenth10th day following the day on which public announcement of the date of such meeting is first made by the Company.
The notice must contain certain information about both the nominee and the stockholder submitting the nomination including, (i) withas set forth in Nucor’s Bylaws. With respect to the nominee, the notice must contain, among other things, (i) the nominee’s name, age, business and residential address, principal occupation or employment,addresses, (ii) the nominee’s background and qualification, (iii) the number of shares or other securities of the Company which aredirectly or indirectly owned of record or beneficially by the nominee andor any Stockholder Associated Person (as defined in Nucor’s Bylaws), (iv) any derivative positions held of record or beneficially by the nominee related to,as well as any hedging transactions or similar agreements, (v) a written statement executed by the value of which is derived in whole or in part from, the valuenominee (A) acknowledging that as a director of the Company’s shares or other securities and whether andCompany, the extent to which any hedging or other transactions have been entered into by or on behalf of, or any other agreements, arrangements or understandings have been made, the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, the nominee will owe a fiduciary duty under Delaware law with respect to the Company’s sharesCompany and its stockholders, (B) disclosing whether the nominee or any Stockholder Associated Person is a party to an agreement, arrangement or understanding with, or has given any commitment or assurance to, any person or entity as to how the nominee, if elected, will act or vote on any issue or question, (C) disclosing whether the nominee or any Stockholder Associated Person is a party to an agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with the nominee’s service or action as a director of the Company, (D) agreeing to update continually the accuracy of the information required by the immediately preceding clauses (B) and (C) for as long as the nominee is a nominee or a director of the Company and (E) agreeing if elected as a director of the Company to comply with all corporate governance codes, policies and guidelines applicable to directors, and (vi) any other information regarding the nominee that would be required to be disclosed in a proxy statement or other securities and (ii)filings required to be made in connection with a contested solicitation of proxies for the election of directors. With respect to the stockholder submitting the nomination, the notice must contain: (1) the name and address, as they appear on our books, of that stockholder and any Stockholder Associated Person, (as defined in Nucor’s Bylaws) and(2) the number of shares or other securities of the Company which aredirectly or indirectly owned of record or beneficially by that stockholder or by any Stockholder Associated Person, and(3) any derivative positions held of record or beneficially by the stockholder or by any Stockholder Associated Person related to, or the value of which is derived in whole or in part from, the value of the Company’s shares or other securities and whether and the extent to whichas well as any hedging transactions or other transactions have been entered into by or on behalf of, orsimilar agreements, (4) any other agreements, arrangements or understandings have been made, the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of,information regarding that stockholder or any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with respecta contested solicitation of proxies for the election of directors and (5) a written statement whether either that stockholder or any Stockholder Associated Person will deliver a proxy statement and form of proxy to holders of the Company’s shares or other securities.voting shares. A stockholder who is interested in recommending a director candidate should request a copy of Nucor’s Bylaw
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CORPORATE GOVERNANCEAND BOARDOF DIRECTORS
provisions by writing to Nucor’s Corporate Secretary at Nucor’s executive offices,Nucor Corporation, 1915 Rexford Road, Charlotte, North Carolina 28211.
The Governance and Nominating Committee has a process of identifying and evaluating potential nominees for election as members of the Board. The Governance and Nominating Committee has a policy that potential nominees shall be evaluated no differently regardless of whether the nominee isnominees are recommended by a stockholder, a Board member or Nucor’s management. The Governance and Nominating Committee considers potential nominees from all these sources, develops information from many sources concerning the potential nominee,nominees, evaluates the potential nomineenominees as to the qualifications that the Committee and the Board have established and in light of the current skill, background and experience of the Board’s members and the future, ongoing needs of the Company and makes a decision whether to recommend any potential nominee for consideration for election as a member of the Board. In the past, Nucor has engaged third-party search firms to assist the Board of Directors in identifying and evaluating potential director nominees, for director.and Nucor may do so again in the future.
The Governance and Nominating Committee is committed to having diverse individuals from different backgrounds with varying perspectives, professional experience, education and skills serving as directors. In evaluating potential nominees for election and reelection
as members of the Board, the Governance and Nominating Committee considers persons with a variety of perspectives, professional experience, education and skills that possess the followingbelow minimum qualifications. The potential nominee must:
be a person of the highest integrity and must be committed to ethical standards of personal and corporate behavior;
have significant business experience or other organizational leadership experience that will allow the nominee to contribute significantly to the Company as a member of the Board;
if not a member of the Company’s management, not have any relationships, directly or through an immediate family member, with the Company that would make themhim or her not able to serve as an independent director within the meaning of any rules and laws applicable to the Company;
have a willingness and an ability to make the necessary time commitment to actively participate as a member of the Board; and
be able to represent the interests of all of Nucor’s stockholders and not merely those of one stockholder or a special interest group.
The Governance and Nominating Committee also believes there are certain specific qualities or skills that one or more members of the Board of Directors must possess. These include:
the skills and experience necessary to serve as an audit committee financial expert;
experience serving as the chief executive officer of, or in another senior management position with, a major manufacturing company;
significant and successful merger and acquisition experience; and
diversity in terms of race or gender.
How to Communicate with the Board of Directors andNon-Management Directors. Stockholders and other interested parties can communicate directly with ourthe Board of Directors by sending a written communication addressed to Mr. Ferriola, our Chairman, c/o Corporate Secretary toat Nucor Corporation, 1915 Rexford Road, Charlotte, North Carolina 28211. Stockholders and other interested parties wishing to communicate with Mr. Milchovich,Walker, as Lead Director, or with thenon-management directors as a group may do so by sending a written communication addressed to Mr. MilchovichWalker c/o Corporate Secretary at the above address. Stockholders and other interested parties wishing to communicate with an individual director may do so by sending a written communication addressed to such director c/o Corporate Secretary at the above address. Any communication addressed to any director that is received at the principal executive offices of Nucor will be delivered or forwarded to the individual director as soon as practicable. All such communications are promptly reviewed before being forwarded to the addressee. Nucor generally will not forward to directors a stockholder communication that Nucor determines to be primarily commercial in nature, relates to an improper or irrelevant topic or requests general information about Nucor.
18 2018 Proxy Statement
TheIn 2017, the Compensation and Executive Development Committee establishedengaged Pearl Meyer to evaluate Nucor’s director compensation against the industrial and materials companies listed in the table on page 26 used to benchmark executive compensation (except for Tyco International Ltd. which was acquired and removed from the peer group after the executive compensation benchmarking was completed). Director compensation survey data was also reviewed. Director pay was last changed in 2014. The benchmarking showed that the cash portion of director compensation had fallen below the market median. In order to bring the total director compensation near the market median, the following director compensation amounts which became effective June 1, 2014 and remained the same in 2015.May 11, 2017.
| ||||
| ||||
| ||||
| ||||
| ||||
|
Board/Committee Position | 2017 Annual Cash Fees ($) | 2016 Annual Cash Fees ($) | ||||||
Lead Director
|
|
157,000
|
|
|
127,000
|
| ||
Board Member(non-employee directors)
|
|
125,000
|
|
|
95,000
|
| ||
Audit Committee Chairman
|
|
25,000
|
|
|
25,000
|
| ||
Compensation and Executive Development Committee Chairman
|
|
20,000
|
|
|
17,000
|
| ||
Governance and Nominating Committee Chairman
|
|
15,000
|
|
|
14,000
|
|
Directors who are not senior officers of Nucor are granted each June 1 shares of Company stock under the Company’s 2014 Omnibus Incentive Compensation Plan.Plan (the “2014 Plan”). Directors may elect to receive their shares in the form of deferred stock units. Effective June 1, 2017 and unchanged since 2014, the number of shares of Company stock awarded was equal to the quotient of $140,000 divided by the closing price of a share of Nucor common stock on the grant date (rounded down to the next whole share). All directors other than Mr. Hayes, elected to receive their grant in the form of deferred stock units in 2015.2017. The deferred stock units are fully vested on the grant date, but are payable in the form of shares of Nucor common stock only after the termination of the director’s service on the Board of Directors.Board.
The following table below summarizes the compensation paid toof eachnon-employee director who served on the Board in 2017 for his or her Board and committee services during 2015.2017. Directors who are also employees of Nucor (currently Mr. Ferriola) do not receive compensation (other than their compensation as employees of Nucor) for their service on the Board.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) | |||||||||
(a) | (b) | (c) | (h) | |||||||||
Peter C. Browning | 47,500 | — | (2) | 47,500 | ||||||||
Harvey B. Gantt | 95,000 | 139,962 | (3) | 234,962 | ||||||||
Gregory J. Hayes | 120,000 | 139,962 | (4) | 259,962 | ||||||||
Victoria F. Haynes | 112,000 | 139,962 | (3) | 251,962 | ||||||||
Bernard L. Kasriel | 95,000 | 139,962 | (3) | 234,962 | ||||||||
Christopher J. Kearney | 95,000 | 139,962 | (3) | 234,962 | ||||||||
Laurette T. Koellner | 47,500 | — | (5) | 47,500 | ||||||||
Raymond J. Milchovich | 141,000 | 139,962 | (3) | 280,962 | ||||||||
John H. Walker | 95,000 | 139,962 | (3) | 234,962 |
Name | Cash Fees ($) | Stock Awards ($) (1) | Total ($) | |||||||||
(a) | (b) | (c) | (h) | |||||||||
Lloyd J. Austin III
|
|
35,666
|
|
|
—
|
(2)
|
|
35,666
|
| |||
Patrick J. Dempsey
|
|
117,500
|
|
|
139,996
|
(3)
|
|
257,496
|
| |||
Gregory J. Hayes
|
|
142,500
|
|
|
139,996
|
(3)
|
|
282,496
|
| |||
Victoria F. Haynes
|
|
136,750
|
|
|
139,996
|
(3)
|
|
276,746
|
| |||
Bernard L. Kasriel
|
|
117,500
|
|
|
139,996
|
(3)
|
|
257,496
|
| |||
Christopher J. Kearney
|
|
117,500
|
|
|
139,996
|
(3)
|
|
257,496
|
| |||
Laurette T. Koellner
|
|
117,500
|
|
|
139,996
|
(3)
|
|
257,496
|
| |||
Raymond J. Milchovich
|
|
44,474
|
|
|
—
|
(4)
|
|
44,474
|
| |||
John H. Walker
|
|
157,606
|
|
|
139,996
|
(3)
|
|
297,602
|
|
(1) | The amounts shown represent the grant date fair value of annual equity awards. Our policy and assumptions made in the valuation of share-based payments are contained in notes 2 and |
(2) |
(3) | The number of deferred stock units granted and fully vested on June 1, |
(4) |
2018 Proxy Statement 19
DIRECTOR COMPENSATION
The following table below summarizes the total number of vested deferred stock units granted to thenon-employee directors under the Company’s 2014 Omnibus Incentive Compensation Plan, the 2010 Stock Option and Award Plan (the “2010 Plan”) and the 2010 and 2005 Stock Option and Award Plans.
Plan (the “2005 Plan”) that were outstanding as of December 31, 2017.
Outstanding Equity Awards at FiscalYear-End
Name | Number of Vested Stock Units (#) (1) | Market Value of Stock Units ($) (2) | ||||||
Harvey B. Gantt | 23,515 | 947,655 | ||||||
Gregory J. Hayes | 2,765 | 111,430 | ||||||
Victoria F. Haynes | 23,515 | 947,655 | ||||||
Bernard L. Kasriel | 22,376 | 901,753 | ||||||
Christopher J. Kearney | 19,560 | 788,268 | ||||||
Raymond J. Milchovich | 8,514 | 343,114 | ||||||
John H. Walker | 20,896 | 842,109 |
Name | Number of Vested Stock Units (#) (1) | Market Value of Stock Units ($) (2) | ||||||
Lloyd J. Austin III
|
|
—
|
|
|
—
|
| ||
Patrick J. Dempsey
|
|
2,370
|
|
|
150,685
|
| ||
Gregory J. Hayes
|
|
8,003
|
|
|
508,831
|
| ||
Victoria F. Haynes
|
|
28,753
|
|
|
1,828,116
|
| ||
Bernard L. Kasriel (3)
|
|
27,614
|
|
|
1,755,698
|
| ||
Christopher J. Kearney
|
|
24,798
|
|
|
1,576,657
|
| ||
Laurette T. Koellner
|
|
5,238
|
|
|
333,032
|
| ||
John H. Walker
|
|
26,134
|
|
|
1,661,600
|
|
(1) | Deferred stock units are granted June 1 each year and are fully vested on the grant date, but are payable in the form of shares of Nucor common stock only after the termination of the director’s service on the Board of Directors. |
(2) |
(3) | Mr. Kasriel retired as a director effective January 5, 2018. |
Director Stock Ownership Guidelines. To ensure thatnon-employee directors become and remain meaningfully invested in Nucor common stock, eachnon-employee director is required to own 7,000 shares of Nucor common stock (including deferred stock units). Anon-employee director must meet the stock ownership requirement within five years of becoming a member of the Board. As of December 31, 2017, all of thenon-employee directors were in compliance with the ownership requirement or in the first five years after becoming a director.
20 2018 Proxy Statement
The Audit Committee’s report with respect to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 20152017 is as follows:
1. | The Audit Committee has reviewed and discussed the audited consolidated financial statements with Nucor’s management. |
2. | The Audit Committee has discussed with PricewaterhouseCoopers LLP (“PwC”), the Company’s independent registered public accounting firm, the audited consolidated financial statements and the matters required to be discussed by Auditing Standard No. |
3. | The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC that firm’s independence. |
4. | The Audit Committee has reviewed and discussed with management and PwC management’s report on Nucor’s internal control over financial reporting and PwC’s attestation report on the effectiveness of Nucor’s internal control over financial reporting. |
5. | Based on the reviews and the discussions referred to in paragraphs (1) through (4) above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form10-K for the |
THE AUDIT COMMITTEE
Gregory J. Hayes, Chairman
Harvey B. GanttLloyd J. Austin III
Patrick J. Dempsey
Victoria F. Haynes
Bernard L. Kasriel
Christopher J. Kearney
Raymond J. Milchovich
John H. Walker
Fees Paid to Independent Registered Public Accounting Firm
For the fiscal years ended December 31, 20152017 and 20142016 fees billed for services provided by PwC were as follows:
2015 | 2014 | |||||||
Audit Fees (1) | $ | 3,746,100 | $ | 3,742,200 | ||||
Audit-Related Fees (2) | 23,100 | — | ||||||
Tax Fees (3) | 3,500 | 3,400 | ||||||
All Other Fees (4) | 5,100 | 5,400 |
2017 | 2016 | |||||||
Audit Fees (1) | $ | 4,004,500 | $ | 3,796,900 | ||||
Audit-Related Fees (2) | 57,600 | 206,300 | ||||||
Tax Fees (3) | 3,900 | 3,800 | ||||||
All Other Fees (4) | 4,500 | 3,600 |
(1) | Audit fees consist of fees billed for professional services rendered in connection with the audit of Nucor’s annual consolidated |
(2) | Audit-related fees consist of fees billed for the performance of apre-implementation systems internal controls |
(3) | Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning. |
(4) | All other fees consist of fees billed for financial reporting literature. |
2018 Proxy Statement 21
REPORTOFTHE AUDIT COMMITTEE
The Audit Committee’s policy is topre-approve all audit and permissiblenon-audit services to be performed by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. All such services provided for fiscal year 20152017 werepre-approved by the Audit Committee. The Audit Committee concluded that the provision of such services by PwC was compatible with the maintenance of that firm’s independence. The Audit Committee has delegated its authority to approve in advance all permissiblenon-audit services to be provided by PwC to the Chairman of the Audit Committee; provided, however, any such services approved by its Chairman shall be presented to the full Audit Committee at its next regularly scheduled meeting.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed the firm of PricewaterhouseCoopers LLP to serve as the independent registered public accounting firm of Nucor for the fiscal year ending December 31, 2016.2018. PricewaterhouseCoopers LLP has acted in such capacity for Nucor since 1989. Representatives
The Company expects that representatives of PricewaterhouseCoopers LLP are expected towill be present at the annual meeting,Annual Meeting, and the representatives will have thean opportunity to make a statement if they so desire and are expected to do so. The Company also expects that the representatives will be available to respond to appropriate questions.
questions from stockholders.
Stockholder ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise. TheNevertheless, the Board is submitting the appointment of PricewaterhouseCoopers LLP to the stockholders for ratification and will reconsider whether to retain PricewaterhouseCoopers LLP ifas a matter of good corporate governance. If the stockholders fail to ratify the appointment, the Audit Committee’s appointment. In addition, evenCommittee will reconsider its appointment of PricewaterhouseCoopers LLP. Even if the stockholders ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee, may in its discretion, appointmay direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change iswould be in the best interests of Nucor.
Nucor and its stockholders.
Vote Recommendation
Nucor’sThe Board of Directors recommends a vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.2018.Unless otherwise specified, proxies will be votedFOR the proposal.
22 2018 Proxy Statement
EXECUTIVE OFFICER COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion &and Analysis (“CD(referred to in this section and the “Executive Compensation Tables” section as the “CD&A”) outlines Nucor’s executive compensation philosophy, objectives and processes andprocesses. It also explains how the Compensation and Executive Development Committee of the Board (the(referred to in this section and the “Executive Compensation Tables” section as the “Committee”) made executive compensation decisions in fiscal year 2015,2017 for the data used in its deliberations and the reasoning behind the decisions that were made.
Following this CD&A are tables detailing the compensation of Nucor’s named executive officers (“Executive(the “Executive Officers”) along with descriptions and other narrative explaining the information in the tables. Also included is a section that presents the potential compensation Executive Officers would receive if they had been terminated on December 31, 2015.
Executive Summary
Nucor pays Executive Officers for results. The executive compensation plans are designed to pay well when performance is outstanding and provide compensation below the market median when performance is below Nucor’s peers.
Nucor’s compensation plans support the Company’s five drivers to profitable growth while maintaining our commitment to safe and environmentally friendly operations:listed below.
Executive Officer |
R. Joseph Stratman | Chief Digital Officer and Executive Vice President |
EXECUTIVE SUMMARY
2017 Business Overview
In 2017, Nucor delivered robust year-over-year profit growth and its highest earnings since the cyclical peak year of 2008. This performance shows that Nucor’s disciplined strategy for profitable growth continues to work. Our successful execution is evident in our strong cash flow generation and our industry-leading returns on capital through the challenging steel markets of recent years. Most importantly, we believe our strategic execution positions Nucor to deliver stronger profitability throughout the economic cycle.
Return on equity (“ROE”) and return on average invested capital (“ROAIC”) improved in 2017 both on an absolute basis and relative to our comparator groups. Our incentive compensation programs are designed to support these five drivers to build long-term earnings powerworked as intended as improved absolute and provide our stockholders with attractive returns on their valuable capital.relative performance resulted in larger year-over-year incentive payouts.
Say-on-Pay Vote and Feedback from Stockholders
Every three years,Beginning in 2018, Nucor submitswill submit its executive compensation program for the Executive Officers to an annual advisory say-on-pay vote of its stockholders. Nucor last asked in 2014, whenIn 2017, approximately 97%96% of the total votes cast at Nucor’s annual stockholders meeting supported the executive compensation program. The Committee believes that ourpays careful attention to any feedback it receives from stockholders about the program, including the say-on-pay vote. The Committee considered the strong stockholder endorsement in 2017 of the Committee’s decisions and policies and Nucor’s overall executive compensation program closely alignsin continuing the interestspay-for-performance program that is currently in place.
The Board of Directors recommends a vote for the Company with our stockholders’ interests. The positive results of theannual advisory vote on Executive Officer compensation (Proposal 3).
Share the Pain, Share the Gain: Nucor’s Approach to Executive Compensation
Nucor designed and built its executive compensation heldprogram with pay for performance at the 2014 annual meeting reinforces this belief.its core. The Committee determined, therefore,result is a program that no changesis highly leveraged – a significant portion of compensation is variable and directly linked to the compensation program were necessary.
In 2015, Nucor performed modestly when compared against other steel companies included in the Steel Comparator Group (as defined on page 23) in an environment of continuing challenging steel market conditions. Nucor’s executive compensation plans worked as designed in 2015. Executive Officers received a relatively modest annual incentive reflecting Nucor’s return on equityrelative performance and revenue performance comparedthe value delivered to the Steel Comparator Group. The long-term incentive plan rewarded Executive Officers for Nucor’s three-year performance ended December 31, 2015 relative to the Steel Comparator Group, but resulted in no payout for the three-year performance ended December 31, 2015 relative to the General Industry Comparator Group (as defined on page 23). In 2015, performance-based restricted stock units were granted based on Nucor’s return on equity performance for the preceding year. Stock ownership requirements and the designits stockholders. Here is an overview of the long-term incentives, which includes mandatory deferral until retirement of a portion of the shares earned, ensure that Nucor’s Executive Officers are significantly exposed to changes in stock price, thereby aligning their interests with stockholders.
Compensation Philosophy
Nucor’s executive compensation philosophy is based on and supports Nucor’s overall management philosophy, which is to:how it works:
2018 Proxy Statement 23
COMPENSATION DISCUSSIONAND ANALYSIS
› | Through a |
› | Nucor takes an egalitarian approach to providing benefits to our employees. In fact, certain benefits, such as Nucor’s Profit Sharing, Scholarship Program, Employee Stock Purchase Plan, Extraordinary Bonus and Service Awards Program, are not available to Executive Officers, and Executive Officers do not receive supplemental executive perquisites, such as company cars, country club memberships or personal use of corporate aircraft. |
Nucor’s compensation philosophy stressesThe bottom line is that Executive Officers share the pain and share the gain. Iffor any given year, if Nucor performs poorly, Executive Officers will be paid below the market median. If, however, overOn the business cycle, Nucor’sother hand, if performance is outstanding, Executive Officers will be paid above the market median. ThisBy providing this balanced compensation approach, Nucor provides the Executive Officers with a reasonable measure of security regarding the minimum level of compensation they are eligible to receive, while motivating them to focus on the business measures that will produce a consistently high level of performance for Nucor and return for its stockholders. Decisions with regard to the actual amount or value of compensation granted to each Executive Officer are based on actual Nucor performance. Individual performance is not taken into account.
2017 Compensation Overview
Nucor’s executive compensation plans worked as designed in 2017.
Nucor takes an egalitarian approach to providing benefits to its employees. In fact, certain benefits, such as Nucor’s Profit Sharing, Scholarship Program, Employee Stock Purchase Plan, Extraordinary Bonus and Service Awards Program, are not available to
Nucor believes that the compensation provided to Executive
The objectives of the compensation plans for Executive Officers are to:
Retain the services of Executive Officers.
Motivate Executive Officers to advance the interests of Nucor and build stockholder value.
Reward Executive Officers for their contributions to the success of Nucor and to the stockholder value they help create.
Measure the success of Nucor through Return on Equity (“ROE”), Return on Average Invested Capital (“ROAIC”) and revenue performance.
Reward Executive Officers as a team based on overall Nucor performance.
Executive Officer compensation at Nucor is highly leveraged, meaning that a significant portion of it is variable because the compensation is earned under incentive plans that are based on the performance of Nucor and the value delivered to its stockholders. Nucor and the Committee believe that variable compensation plays an important role in Nucor’s financial performance. The incentive plans are designed to function in a cyclical environment by measuring performanceperiod ended December 31, 2017 relative to two performance comparator groups: the Steel Comparator Group and(ranked second out of six), but resulted in a modest payout for the three-year performance period ended December 31, 2017 relative to the General Industry Comparator Group. The companies included in these comparator groups are reviewed annually by the Committee. The incentive plans are designed to pay well when performance is high and not pay any incentive if performance is poor.
The performance comparator groups are used to benchmark financial performanceGroup (ranked seventh out of 11). Please see “Performance Comparator Groups” on page 27 of this CD&A for incentive plan purposes. They are not used to benchmark compensation.
Base salaries are set below the mediandescriptions of data for similar size industrial and materials companies. Accordingly, the Committee recognizes the risk that Executive Officers may earn below median levels of compensation when Nucor performance is below its peers, even if an Executive Officer’s individual performance may be superior. This practice has resulted, and may in the future result, in Executive Officers earning less than their counterparts in steel company peers and other similar size industrial and materials companies.
The compensation Executive Officers may earn under Nucor’s incentive plans includes stock-based awards, a portion of which must be held until retirement. The Committee believes the requirement to hold a portion of the stock-based awards until retirement has been successful in meeting Nucor’s objectives of retention and succession planning, and strengthens the alignment of the interests of the Executive Officers with those of our stockholders. All Executive Officers have been with Nucor for more than 20 years.
Executive Officers have significant exposure to Nucor’s stock price through direct stock ownership, their target long-term incentive plan awards and the requirement that Executive Officers hold performance-based restricted stock unit awards until retirement. The Committee believes aligning the long-term interests of Executive Officers with the long-term interests of Nucor’s stockholders in a material way promotes superior long-term performance. It also means that if Nucor’s stock price declines then Executive Officers’ Nucor stock, options, long-term incentive plan awards and restricted stock units all decline in value.
Incentive Opportunity Levels and Mix of Components of Compensation. When the current annual and long-term incentive plans were developed and approved by Nucor’s stockholders in 2003, 2008 and 2013 and when the Nucor Corporation 2014 Omnibus Incentive Compensation Plan was developed and approved by stockholders in 2014, the Committee established the incentive opportunity levels and mix of compensation components based on a sensitivity analysis that assumed some years of lower performance where no payouts would be earned and some years where maximum payouts would be achieved. This variability was intended to reflect fluctuations in economic activity. The Committee intended that through a multi-year business cycle, total compensation for Executive Officers would be near the median of Nucor’s steel company peers and other similar size industrial and materials companies. The Committee periodically reviews actual performance and compares such performance to the parameters identified when the plans were originally established to ensure actual results over time are appropriate.
The Committee annually reviews the performance comparator groups to ensure that the comparator companies meet the plans’ requirements and the criteria the Committee has established for inclusion in the comparator groups. In addition, the Committee annually considers adjustment to base salaries (which impact incentive plan opportunities) and sets the threshold level of2017, performance RSUs were granted based on Nucor’s ROE performance underfor the annual incentive plan.
The Committee has the right to exercise discretion to reduce an incentive plan payout to ensure that payouts from any incentive plan produce their desired result. The Committee may not exercise discretion to increase a payout. For fiscal 2015,2017, the Committee reviewed the payouts and determined that the incentive plan payouts were appropriate and, therefore, did not reduce the incentive plan payouts.
24 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Best-Practice Compensation Governance Features
Our executive compensation program is grounded in the following policies and practices, which promote sound compensation governance, reflect our executive compensation philosophy and further align our Executive Officers’ interests with those of our stockholders.
What We Do | What We Don’t Do | |||||
✓ | Place a heavy emphasis on variable compensation | x | Provide “single trigger” change in control severance benefits | |||
✓ | Require significant stock ownership and holding requirements | x | Offer significant perquisites | |||
✓ | Subject incentive compensation to a clawback policy | x | Pay excise tax gross ups upon a change in control | |||
✓ | Conduct annual compensation risk assessments | x | Permit hedging or short selling of Company stock | |||
✓ | Use an independent compensation consultant | x | Change plan designs very often |
WHAT GUIDES OUR PROGRAM
Program Aligned with Strategy
Nucor’s executive compensation program supports the Company’s five drivers to profitable growth strategy while maintaining our commitment to safe and environmentally responsible operations:
1. | Strengthen our position as a low-cost producer; |
2. | Achieve market leadership positions in every product line in our portfolio; |
3. | Move up the value chain by expanding our capabilities to produce higher-quality, higher-margin products; |
4. | Expand and leverage our downstream channels to market to increase our steel mills’ baseload volume for sustained results; and |
5. | Achieve commercial excellence to complement our traditional operational strength. |
Our Compensation Philosophy
Nucor believes that executive compensation should be commensurate and aligned with the performance of Nucor and the creation of long-term stockholder value. To this end, our executive compensation program is designed to pay above the market median when performance is outstanding and provide compensation below the market median when performance is below Nucor’s peers. The following key principles form the core of our executive compensation philosophy:
Key Principle | Description | |
Pay for Performance | A significant portion of total compensation should be variable and dependent upon the attainment of certain specific and measurable annual and long-term performance objectives. | |
Attraction and Retention | The executive compensation program should enable the Company to attract highly-talented people with exceptional leadership capabilities and retain high-caliber talent. | |
Team-Based Incentives | All of Nucor’s incentives are team-based. Across the organization, Nucor teammates win and lose together. When Nucor performs well, all teammates earn more. When our performance is less than expected, our teammates earn less. Our pay programs support our team-based culture. | |
Stockholder Alignment | Executive Officers should be compensated through pay elements (base salaries and annual and long-term incentives) designed to create long-term value for our stockholders and reinforce a strong culture of ownership. |
2018 Proxy Statement 25
COMPENSATION DISCUSSIONAND ANALYSIS
Our compensation philosophy is supported by the following elements of our executive compensation program:
Compensation Element | Form | Description | ||
Base Salary | Cash (Fixed) | Provides a guaranteed rate of pay commensurate with an Executive Officer’s job scope, level of responsibilities, experience and tenure, but set below the market median of similar positions at industrial and materials companies. | ||
Annual Incentives | Cash (Variable) | Provides Executive Officers an opportunity to receive annual cash incentive awards based on Nucor’s annual ROE and ROAIC. | ||
Long-Term Incentives | Equity (mix of Fixed and Variable) and Cash (Variable) | Rewards performance over multi-year periods and growth in long-term stockholder value. |
These compensation elements provide a balanced mix of guaranteed compensation and variable,at-risk compensation with an emphasis on annual and long-term incentives. The Committee annually considers adjustment to base salaries (which impact incentive plan opportunities) and periodically reviews the level of annual and long-term incentive plansincentives to ensure that the mix of base salary and annual and long-term incentives, and the target incentive opportunities, at target and maximum are appropriate to accomplish the goal of paying near the market median total compensation of survey data for Nucor’s steel company peers and other industrial and materials companies of similar size over a multi-year business cycle.
The Role of Compensation Peer Companies and Performance Comparator Groups
Compensation Peer Companies. Nucor periodically benchmarks Executive Officer compensation to ensure that the compensation opportunities are reasonable. Nucor does not set compensation according to benchmark data. The Committee’s only formal relationship with benchmark data is to set base salaries below the market median.
For purposes of setting the 2017 base salary levels for the Executive Officers other than the Chief Executive Officer and the Chief Financial Officer, the Committee engagedreferred to the Pearl Meyer Executive Officer compensation benchmarking completed in 2015. For purposes of setting the 2017 base salary levels for the Chief Executive Officer and the Chief Financial Officer, the Committee reviewed information from the 2015 benchmarking that was aged to perform a benchmarking comparisonthe end of 2016.
In 2015, Pearl Meyer, at the direction of the Committee, benchmarked Nucor’s compensation to that ofagainst the 28 companies listed on page 23. Thein the table below. In addition to benchmarking Executive Officer compensation at target and actual levels of pay, the Committee reviewedcompleted an exercise to understand how Nucor’sthe compensation of Executive Officers compared to compensation of the compensation peer group at various levels of performance (threshold and below,(below threshold, threshold, target and maximum). See a discussion of this benchmarking in the “Compensation Benchmarking” section on page 23. Consistent with Nucor’s compensation philosophy Executive Officers can earn anis to pay below market when performance is below peers and to pay above median level of compensationmarket when Nucor’s performance is outstanding. If Nucor’s performanceThe intent is near targetto provide market levels of performance (defined ascompensation over the midpoint of the incentive program performance range), Executive Officers will receive below median levels of compensation.
In 2013, Nucor’s stockholders approved the senior officers annual and long-term incentive plans. These plans were similar to those approved by stockholders in 2003 and 2008. In 2014, Nucor’s stockholders approved the Nucor Corporation 2014 Omnibus Incentive Compensation Plan. The plans provide the Committee flexibility in adjusting the performance measures and the range of performance for which an incentive will be paid. For 2015, performance measures were the same as in past years. No plan design changes were made in 2015.
Say on Pay and Feedback from Stockholders. In 2014, Nucor submitted its executive compensation program to an advisory vote of its stockholders and received the support of approximately 97% of the total votes cast at Nucor’s annual stockholders meeting. The Committee pays careful attention to any feedback it receives from stockholders about the executive compensation program, including the say on pay vote. While there was not a vote on executive compensation in 2015, the Committee considered the strong stockholder endorsement in 2014 of the Committee’s decisions and policies and Nucor’s overall executive compensation program in continuing the pay-for-performance program that is currently in place. The next advisory vote on executive compensation will take place in 2017. In 2011, the stockholders also voted, on an advisory basis, to hold an advisory vote to approve executive compensation every three years. Based on the voting results, the Board of Directors adopted a policy that Nucor will include an advisory stockholder vote on executive compensation in its proxy materials on a triennial basis until the next required advisory vote on the frequency of stockholder votes on executive compensation, which will also take place in 2017.
Stock Ownership Guidelines. Executive Officers have an opportunity to earn a significant number of Nucor shares. The Committee believes that requiring Executive Officers to hold a significant number of shares aligns their interests with stockholders and has therefore adopted stock ownership guidelines for Nucor’s Executive Officers. In 2015, the Committee compared Nucor’s guidelines to those of Nucor’s steel company peers, other industrial and materials companies of similar size and published surveys and found that Nucor’s stock ownership guideline levels are much higher than other companies. The Committee considers executive stock ownership a key to the Nucor culture. As discussed below, some performance
based equity earned by management must be held until retirement; however, the Committee also understands the need to balance a share ownership requirement with executives’ individual needs as they near retirement. Therefore the Committee lowered the stock ownership guidelines as follows:business cycle.
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| PACCAR Inc. | |||
| Parker-Hannifin Corporation | |||
Arconic Inc. (f/k/a Alcoa Inc.) | Honeywell International Inc. | PPG Industries, Inc. | ||
Caterpillar Inc. | Huntsman Corporation | Praxair, Inc. | ||
Cummins Inc. | Illinois Tool Works Inc. | Raytheon Company | ||
Danaher Corporation | Ingersoll-Rand plc | Textron Inc. | ||
Deere & Company | International Paper Company | Tyco International Ltd.* | ||
E.I. du Pont de Nemours and Company* | L3 Techologies, Inc. | United States Steel Corporation | ||
Eaton Corporation | Monsanto Company | |||
Emerson Electric Co. | Northrop Grumman Corporation |
After reduction,26 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
* | Since the 2015 benchmarking, E.I. du Pont de Nemours and Company and Tyco International Ltd. have been acquired and removed from the peer group. |
Some of the above guidelines remain28 companies are included in the Steel Comparator Group or the General Industry Comparator Group used in the incentive plans as described below. However, these 28 companies were chosen based on size and industry, while the companies used in the incentive plans are all steel companies in the case of the Steel Comparator Group or met the criteria discussed below in the case of the General Industry Comparator Group. The Committee does not benchmark compensation levels and practices against the companies in the Steel Comparator Group because many of them are substantially smaller than Nucor. The Committee does not benchmark compensation to the General Industry Comparator Group because compensation data from these companies may result in above median benchmark data due to their higher than median performance.
Performance Comparator Groups. The Committee believes that performance should be measured both in absolute terms (meaning based on achieving or exceeding performance measures established by the median guidelinesCommittee) and relative to other companies. Two performance comparator groups are used to measure relative performance: the Steel Comparator Group and the General Industry Comparator Group. These comparator groups are used in the AIP and the LTIP – they are not used for Nucor’s steel company peers and other industrial and materials companiespurposes of similar size.benchmarking compensation.
The Committee reviews the performance comparator groups annually. Companies may be added or dropped from the performance comparator groups based on product mix (in the case of the Steel Comparator Group) or business changes, performance or product mix (in the case of the General Industry Comparator Group). The Committee designates the members of each performance comparator group at the beginning of each performance period. Since some of the performance periods are as long as three years, it is possible that the performance comparator group used for one performance period may differ from the group used in a different performance period.
The performance comparator groups for performance periods that began in 2017 are comprised of the following companies:
Comparator Group | Criteria | Who They Are | ||||
Steel | › Must be a group of not less than five steel industry competitors; and › Competitors defined as companies with product offerings similar to Nucor’s. | • AK Steel Holding Corporation • Commercial Metals Company • Steel Dynamics, Inc. • TimkenSteel Corporation* • United States Steel Corporation | ||||
General Industry | › Must be a group of not less than 10 companies in capital-intensive industries; and › Are well-respected, capital-intensive companies that have performed well over a long period of time. | • 3M Company • Caterpillar Inc. • Cummins Inc. • Emerson Electric Co.** • General Dynamics Corporation | • Illinois Tool Works Inc. • Johnson Controls International plc • Parker-Hannifin Corporation • PPG Industries, Inc. • United Technologies Corporation |
Under the guidelines, Executive Officers have five years to achieve ownership of the guideline number of shares. On an annual basis, the Committee monitors each Executive Officer’s compliance with the ownership guideline or, if applicable, the Executive Officer’s progress in achieving ownership of the guideline number of shares. If the Committee determines an Executive Officer is not in compliance or has not made sufficient progress toward achieving the ownership guideline, the Committee has the discretion to take action or adjust incentive award payments to concentrate payouts more heavily in Nucor common stock. All Executive Officers were in compliance with the stock ownership guidelines as of December 31, 2015.
* | Worthington Industries, Inc. was dropped from the Steel Comparator Group and TimkenSteel Corporation was added for 2017. Worthington is primarily a steel processor while TimkenSteel is a steel manufacturer. |
** | The Dow Chemical Company was dropped from the General Industry Comparator Group (due to its 2017 merger with DuPont) and Emerson Electric Co. was added for 2017. |
2018 Proxy Statement 27
COMPENSATION DISCUSSIONAND ANALYSIS
No Hedging or Short Selling. Nucor maintains policies that apply to all officers, certain designated employees and the members of the Board that prohibit hedging or short selling (profiting if the market price of the securities decreases) of Nucor securities.2017 EXECUTIVE COMPENSATION IN DETAIL
Internal Revenue Code Section 162(m). Internal Revenue Code Section 162(m) limits the amount of compensation paid to certain Executive Officers that may be deducted by Nucor for federal income tax purposes in any fiscal year to $1,000,000. “Performance-based” compensation that has been approved by Nucor’s stockholders is not subject to the $1,000,000 deduction limit. Nucor’s incentive plans have all been approved by Nucor’s stockholders, and awards under those plans, other than certain time-vesting restricted stock units, should constitute “performance-based” compensation that is not subject to the Section 162(m) deduction limit. The Committee has not adopted a formal policy that all compensation paid to Executive Officers must be deductible.
Determination of 20152017 Compensation
In making its determinations with respect to executive compensation for fiscal 2015,2017, the Committee was supported by A. Rae Eagle, Nucor’s General Manager and Corporate Secretary, and Donovan E. Marks, Nucor’s General Manager of Human Resources, and A. Rae Eagle, Nucor’s General Manager and Corporate Secretary.Resources. In addition, the Committee engaged the services of Pearl Meyer to serve as its independent compensation consultant and, in such capacity, to assist the Committee’s review and determination of the compensation package of the Chief Executive Officer and other Executive Officers. Pearl Meyer also was retained to assist the Committee with additional projects, including benchmarking Executive Officer compensation, benchmarking executive andnon-employee director compensation, reviewing and developing alternatives for the performance comparator groups, monitoring trends in executive andnon-employee director compensation, preparing tally sheets and assisting in the preparation of this CD&A.
The Committee retained Pearl Meyer directly although, in carrying out its assignments, Pearl Meyer also interacted with Nucor management when necessary and appropriate. Specifically, the General Manager of Human Resources and the General Manager and Corporate Secretary interacted with Pearl Meyer to provide compensation and performance data for Executive Officers and Nucor. In addition, Pearl Meyer may, in its discretion, seek input and feedback from the Chief Executive Officer and the Chief Financial Officer regarding its work product prior to presenting such work product to the Committee to confirm the work product’s alignment with Nucor’s business strategy, determine what additional data neededneeds to be gathered, or identify other issues, if any.
The Committee frequently requested Mr. Ferriola, as Chief Executive Officer, to be present at Committee meetings where executive compensation and Company performance were discussed and evaluated. Mr. Ferriola was free to provide insight, suggestions or recommendations regarding executive compensation during these meetings or at other times; however, only independent Committee members were allowed to vote on decisions made regarding executive compensation.
The Committee met separately with the Chief Executive Officer to discuss his compensation, but the Committee made decisions regarding Mr. Ferriola’s compensation in executive session, based solely upon the Committee’s deliberations. The Committee’s decisions regarding the compensation of other Executive Officers were made after considering recommendations from the Chief Executive Officer.
Compensation Benchmarking
Nucor periodically benchmarks Executive Officer compensation to ensure that the compensation opportunities are reasonable. Nucor does not set compensation according to benchmark data. The Committee’s only formal relationship with benchmark data is to set base salaries below the median.
In 2015, the Committee had Pearl Meyer benchmark Executive Officers’ compensation. In addition to benchmarking Executive Officer compensation at target and actual levels of pay, the Committee completed an exercise to understand how the compensation of Executive Officers compared to compensation of the peer group at various levels of performance. Nucor’s compensation philosophy is to pay below market when performance is below peers and to pay above market when performance is outstanding. In order to ensure the compensation programs achieve this desired result, the Committee had Pearl Meyer benchmark Nucor’s compensation against the 28 companies listed below at different levels of potential performance (below threshold, target and maximum).
Some of the above 28 companies are included in the Steel Comparator Group or the General Industry Comparator Group used in the incentive plans as described below. However, the 28 companies listed above were chosen based on size and industry while the companies used in the incentive plans are all steel companies in the case of the Steel Comparator Group or met the criteria discussed below in the case of the General Industry Comparator Group. The Committee does not benchmark compensation levels and practices against the companies in the Steel Comparator Group because most of them are substantially smaller than Nucor. The Committee does not benchmark compensation to the General Industry Comparator Group because compensation data from these companies may result in above median benchmark data due to their higher than median performance.
Incentive Plan Performance Comparator Groups
The Committee believes that performance should be measured both in absolute terms (meaning based on achieving or exceeding performance measures established by the Committee) and relative to other companies. Two performance comparator groups are used to measure relative performance, the Steel Comparator Group and the General Industry Comparator Group reflected below. These comparator groups are used in the annual and long-term incentive plans as discussed below. The Committee designates the members of each performance comparator group at the beginning of each performance period. Since some of the performance periods are as long as three years, it is possible that the performance comparator group used for one performance period may differ from the group used in a different performance period.
The performance comparator groups for performance periods that began in 2015 are comprised of the following companies:
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The Committee has used the following criteria for selecting the companies in the performance comparator groups:
The Steel Comparator Group must be a group of not less than five steel industry competitors.
The General Industry Comparator Group must be a group of not less than ten companies in capital intensive industries.
Steel competitors are defined as steel companies with product offerings similar to Nucor’s.
Companies included in the General Industry Comparator Group are well respected capital intensive companies that have performed well over a long time period.
The Committee reviews the performance comparator groups annually. Companies may be added or dropped from the performance comparator groups based on product mix (in the case of the Steel Comparator Group) or business changes, performance or product mix (in the case of the General Industry Comparator Group).
The Committee does not use the performance comparator groups for purposes of benchmarking compensation.
Components of Compensation for 2015
Nucor provides four compensation components to Executive Officers:
Base salary
Annual incentives
Long-term incentives
Benefits
As described above, these components provide a balanced mix of guaranteed compensation and variable, at-risk compensation with an emphasis on annual and long-term incentives. By providing this balanced compensation portfolio, the Committee provides Executive Officers a reasonable measure of security regarding the minimum level of compensation they are eligible to receive, while motivating them to focus on the business measures that will produce a high level of performance for Nucor.
Decisions with regard to the actual amount or value of compensation granted to each Executive Officer are based on actual Nucor performance. Individual performance is not taken into account.
Base Salary
The Committee’s goal is to set Executive Officers’ base salaries below the median base salary level for comparable positions at industrial and materials companies. The Committee sets base salaries below the median because of the Committee’s desire to orient the Executive Officers’ total pay significantly towards variable,at-risk incentive compensation. Base salaries for 20152017 were as follows:
2015 | 2014 | |||||||||||||||||||||||||||||
Executive Officer | Principal Position | Salary | Salary | Increase | Increase % | 2017 Base Salary | 2016 Base Salary | % Change | ||||||||||||||||||||||
John J. Ferriola | Chairman, Chief Executive Officer and President | $ | 1,200,000 | $ | 950,000 | $ | 250,000 | 26.3 | % | $ | 1,365,000 | $ | 1,300,000 | 5 | % | |||||||||||||||
James D. Frias | Executive Vice President, Treasurer and Chief Financial Officer | 467,000 | 426,500 | 40,500 | 9.5 | % | $ | 519,600 | $ | 490,350 | 6 | % | ||||||||||||||||||
James R. Darsey | Executive Vice President | 432,400 | 400,400 | 32,000 | 8.0 | % | $ | 472,350 | $ | 463,100 | 2 | % | ||||||||||||||||||
Ladd R. Hall | Executive Vice President | 454,000 | 442,900 | 11,100 | 2.5 | % | $ | 472,350 | $ | 463,100 | 2 | % | ||||||||||||||||||
R. Joseph Stratman | Executive Vice President | 454,000 | 442,900 | 11,100 | 2.5 | % | $ | 498,600 | $ | 488,800 | 2 | % |
Mr. Ferriola’s base salary adjustment reflected histhe Committee’s continuing commitment to bring the Chief Executive Officer’s salary being materially below the 25th percentile of the benchmark data. After adjustment, Mr. Ferriola’s 2015 base salary wascloser to, but still below, the median of the benchmark data. Mr. Frias’ salary adjustment also reflected his salary being materially below the 25th percentile of theaged benchmark data. After the adjustment, Mr. Frias’Ferriola’s 2017 base salary remainedwas near but still below the 25th percentile. However, as discussed below,median of the aged benchmark data (by approximately 1%). Mr. Frias also received an increase in his performance based restricted stock units in order to increase his total compensation at target to near the median. Mr. Darsey’sFrias’ base salary adjustment was intended to bring him closer to other Executive Vice Presidents. Thealso reflected his base salary adjustments for Messrs.being materially below the median of the aged benchmark data. Mr. Darsey, Mr. Hall and Mr. Stratman wereall received a 2% base salary increase consistent with the range of base salary adjustments for other Nucor executives.
28 2018 Proxy Statement
Annual IncentivesCOMPENSATION DISCUSSIONAND ANALYSIS
Annual Incentives
The Annual Incentive Plan (“AIP”)AIP provides Executive Officers an opportunity to receive annual cash incentive awards based on Nucor’s annual performance. The incentive opportunity, expressed as a percentage of base salary, is the same for all Executive Officers.
An Executive Officer may earn an incentive award under the AIP for each fiscal year of up to a maximum of 300% of the Executive Officer’s base salary, as follows:
Seventy-five percent (75%) of the maximum incentive award or 225% of base salary (75% of 300% = 225%) is earned based on Nucor’s ROE. For 2015,2017, the Committee set the threshold at 3% ROE and the maximum at 20% ROE. The threshold and maximum performance requirements arelevel of ROE is set by the same as 2014.Committee on an annual basis. If Nucor achieves the threshold ROE, the Executive Officer will earn an incentive award equal to 20% of his base salary. If Nucor’s ROE for the fiscal year is 20% or higher, the Executive Officer will earn an incentive award equal to the maximum 225% of his base salary. A prorated incentive award is earned for ROE between 3% and 20%.
The remaining 25% of the maximum annual award available under the AIP or up to 75% of the Executive Officer’s base salary (25% of 300% = 75%) is earned based on the change in Nucor’s net salesannual ROAIC compared to the change in net salesannual ROAIC of members of the Steel Industry Comparator Group (identified above) as follows:
Steel Comparator Group Rank (1) | Percentage of Performance Award Opportunity | Performance Award Payment (% of Base Salary) | ||
1 | 100% | 75% | ||
2 | 80% | 60% | ||
3 | 60% | 45% | ||
4 | 40% | 30% | ||
5 | 20% | 15% | ||
6 | 0% | 0% |
Steel Comparator Group Rank (1) | Percentage of Performance Award Opportunity | Performance Award Payment (% of Base Salary) | ||
1 | 100% | 75% | ||
2 | 80% | 60% | ||
3 | 60% | 45% | ||
4 | 40% | 30% | ||
5 | 20% | 15% | ||
6 | 0% | 0% |
(1) | The table represents potential AIP awards for |
For 2017, the Committee changed the second performance metric to ROAIC from revenue growth. After careful consideration, the Committee determined that ROAIC was more aligned with Nucor’s strategy and five drivers to profitable growth including vertical integration, which is not reflected in revenue growth.
Executive Officers may elect to defer up toone-half of their AIP award into Nucor common stock units. The AIP provides an incentive for Executive Officers to defer their AIP awards by providing a grant of additional Nucor common stock units equal to 25% of the number of common stock units deferred. An Executive Officer is always vested in the common stock units attributable to the deferred award. The deferral incentive units become vested upon the Executive Officer’s attainment of age 55, death or disability while employed by Nucor. The vested common stock units are distributed to the Executive Officer in the form of Nucor common stock following the Executive Officer’s retirement or other termination of employment. Dividend equivalents are paid on deferred incentive units in cash within 30 days of when stockholders are paid.
TwoThree Executive Officers, Mr. Frias, Mr. Hall and Mr. Hall,Stratman, participate in this deferral program.
2018 Proxy Statement 29
2015 PerformanceCOMPENSATION DISCUSSIONAND ANALYSIS
2017 Performance Results and AIP Payout
Based on Nucor’s ROE of 4.7%15.78% and being ranked fifthfirst within the Steel Comparator Group based on ROAIC for the change in net sales for 2015,2017, Executive Officers earned an award of 39.97%174.11% of base salary for the ROE performance measure and an award of 15%75% of base salary for the change in net salesROAIC performance measure formeasure. As a result, the total incentive compensation under the AIP award earned was equal to 54.97%249.11% of base salary.
2017 Base Salary | AIP Award Payout | |||||||||||||||
Executive Officer | Deferred (1) | Paid in Cash | Total | |||||||||||||
John J. Ferriola | $ | 1,365,000 | — | $ | 3,400,352 | $ | 3,400,352 | |||||||||
James D. Frias | $ | 519,600 | $ | 388,313 | $ | 906,063 | $ | 1,294,376 | ||||||||
James R. Darsey | $ | 472,350 | — | $ | 1,176,671 | $ | 1,176,671 | |||||||||
Ladd R. Hall | $ | 472,350 | $ | 588,335 | $ | 588,336 | $ | 1,176,671 | ||||||||
R. Joseph Stratman | $ | 498,600 | $ | 621,031 | $ | 621,031 | $ | 1,242,062 |
(1) | As discussed above, Mr. Frias, Mr. Hall and Mr. Stratman elected to defer a portion of their AIP payout and received additional stock units having a value equal to 25% of their deferred amount. |
Long-Term Incentives
Long-term incentives are used to balance the short-term focus of the AIP by rewarding performance over multi-year periods and growth in long-term stockholder value. Executive Officers receive long-term incentives in the following forms:
Cash and restricted stock through athe three-year performance-based Long-Term Incentive Plan (the “LTIP”);
Restricted Stock Units (“RSUs”)RSUs that vest over time;
Performance RSUs that may be granted only if certain levels of ROE are achieved; and
Stock options.
The Committee believes that halfone-half of the three-year LTIP awards should be earned relative to performance as compared to the Steel Comparator Group and the other half earned relative to performance as compared to the General Industry Comparator Group. The Committee believes that this plan design provides an incentive to perform better than steel industry competitors, as well as other capital intensivecapital-intensive companies. The Committee also believes it is appropriate to provide a level of retention through time vestingtime-vesting RSUs, alignment with stockholders through stock options, and an opportunity to earn more RSUs, based on performance, that become vested at retirement.
The Long-Term Incentive Plan
Executive Officers earn incentive compensation under the LTIP based on Nucor’s performance during the LTIP’s performance periods. The performance periods commence every January 1 and last for three years.
30 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
The target award under the LTIP for each performance period is a number of shares of Nucor common stock. The target number of shares is determined by dividing 85% of each Executive Officer’s annual base salary rate as of the beginning of the performance period by the closing price of Nucor common stock on the last trading day immediately preceding the first day of the performance period. The targets for the performance period beginning January 1, 2015 and ended December 31, 20152017 were as follows:
Executive Officer | Base Salary Rate at the Beginning of the Performance Period | 85% of Base Salary | Nucor Stock Price 12/31/12 | Target Award Number of Shares | ||||||||||||
John J. Ferriola | $ | 900,000 | $ | 765,000 | $ | 43.16 | 17,724 | |||||||||
James D. Frias | 410,100 | 348,585 | 43.16 | 8,076 | ||||||||||||
James R. Darsey | 385,000 | 327,250 | 43.16 | 7,582 | ||||||||||||
Ladd R. Hall | 434,250 | 369,113 | 43.16 | 8,552 | ||||||||||||
R. Joseph Stratman | 434,250 | 369,113 | 43.16 | 8,552 |
Executive Officer | Base Salary Rate at the Beginning of the Performance Period | 85% of Base Salary | Nucor Stock | Target Award Number of Shares | ||||||||||||
John J. Ferriola | $ | 1,200,000 | $ | 1,020,000 | $ | 49.05 | 20,795 | |||||||||
James D. Frias | $ | 467,000 | $ | 396,950 | $ | 49.05 | 8,092 | |||||||||
James R. Darsey | $ | 432,400 | $ | 367,540 | $ | 49.05 | 7,493 | |||||||||
Ladd R. Hall | $ | 454,000 | $ | 385,900 | $ | 49.05 | 7,867 | |||||||||
R. Joseph Stratman | $ | 454,000 | $ | 385,900 | $ | 49.05 | 7,867 |
The maximum award that an Executive Officer may earn under the LTIP is equal to 200% of the target number of shares.
Fifty percent (50%) of the LTIP award is based on Nucor’s ROAIC for the performance period relative to the Steel Comparator Group based on the table below. The remaining 50% of the award is based on Nucor’s ROAIC for the performance period relative to the General Industry Comparator Group based on the table below.
A maximum award of 200% may be earned if Nucor ranks first relative to the Steel Comparator Group (which earns 100% of target) and ranks first or second relative to the General Industry Comparator Group (which earns an additional 100% of target).
Steel Comparator Group (1) | General Industry Comparator Group (1) | |||||
Rank | Award as a % of Target | Rank | Award as a % of Target | |||
1 | 100% | 1 or 2 | 100% | |||
2 | 80% | 3 or 4 | 80% | |||
3 | 60% | 5 or 6 | 60% | |||
4 | 40% | 7 or 8 | 40% | |||
5 | 20% | 9 | 20% | |||
6 | 0% | 10 or 11 | 0% |
(1) | These tables represent the potential awards based on the LTIP performance period that began January 1, |
One-half of each LTIP award is paid in cash and the remainderother half is paid in restricted stock. Restricted stock vestsone-third on each of the first three anniversaries of the award date, or upon the Executive Officer’s attainment of age 55, death or disability while employed by Nucor.
An Executive Officer may defer delivery of the restricted stock portion of an LTIP award until the Executive Officer’s retirement or other termination of employment. Nucor does not provide an incentive for the deferral of LTIP restricted stock awards. Dividend equivalents are paid in cash on deferred restricted stock awards within 30 days of when stockholders are paid.
2017 Performance Results and LTIP Payout
2015 Performance
Nucor’s ROAIC of 13.20%20.25% for the LTIP performance period that began January 1, 20132015 and ended December 31, 20152017 was ranked second relative to members of the Steel Comparator Group (2nd(second out of 6)six) and ranked tenthseventh relative to the General Industry Comparator Group (10th(seventh out of 11).
2018 Proxy Statement 31
COMPENSATION DISCUSSIONAND ANALYSIS
These rankings resulted in the following performance award as a percentage of targets:
Performance Measure | Percentage Calculated | Ranking | Performance Award as a % of Target Number of Shares | |||||||||
ROAIC - Steel Comparator Group | 13.20 | % | 2 | 80% | ||||||||
ROAIC - General Industry Comparator Group | 13.20 | % | 10 | 0% | ||||||||
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Performance Measure | ROAIC | Ranking | Performance Award as a % of Target Number of Shares | |||||||||
ROAIC — Steel Comparator Group | 20.25 | % | 2 | 80 | % | |||||||
ROAIC — General Industry Comparator Group | 20.25 | % | 7 | 40 | % | |||||||
Total | 120 | % |
The resulting payouts were as follows:
Executive Officer | Target Award Number of Shares | Performance Award as a % of Target | Shares Earned | |||||||||
John J. Ferriola | 17,724 | 80 | % | 14,179 | ||||||||
James D. Frias | 8,076 | 80 | % | 6,461 | ||||||||
James R. Darsey | 7,582 | 80 | % | 6,065 | ||||||||
Ladd R. Hall | 8,552 | 80 | % | 6,841 | ||||||||
R. Joseph Stratman | 8,552 | 80 | % | 6,841 |
Executive Officer | Target Award Number of Shares | Performance Award as a % of Target | Shares Earned | |||||||||
John J. Ferriola | 20,795 | 120 | % | 24,954 | ||||||||
James D. Frias | 8,092 | 120 | % | 9,710 | ||||||||
James R. Darsey | 7,493 | 120 | % | 8,991 | ||||||||
Ladd R. Hall | 7,867 | 120 | % | 9,440 | ||||||||
R. Joseph Stratman | 7,867 | 120 | % | 9,440 |
Nucor paidone-half of the LTIP award in cash and the other half in the form of restricted shares of Nucor’s common stock in March 2016.2018.
Restricted Stock Units
The Committee believes that RSUs align Executive Officers’ interests with those of stockholders and provide significant retentive characteristics. Each June 1, a base amount of RSUs is granted to each Executive Officer.One-third of the base amount of RSUs becomebecomes vested on each of the first three anniversaries of the June 1 award date, upon the Executive Officer’s retirement (defined below), or upon the Executive Officer’s death or disability while employed by Nucor.
AdditionalPerformance RSUs (“Performance RSUs”) are granted contingent on Nucor’s ROE for the prior fiscal year. Performance RSUs vest upon the Executive Officer’s retirement, death or disability while employed by Nucor. Performance RSUs must be held as long as the participant is employed by Nucor. Performance RSUs are forfeited if the Executive Officer leaves employment other than due to retirement, death or disability. The threshold ROE required for a grant of Performanceperformance RSUs is 5%3%. The maximum number of Performanceperformance RSUs is granted for ROE of 20% or more.
The total number of RSUs granted is determined for each Executive Officer position by dividing the dollar amount shown below (prorated for ROE between any of the levels shown below) by the closing price of Nucor’s common stock on the annual June 1 grant date.
The size of base grants is determined based on the Executive Officer’s position on the grant date. The size of Performanceperformance RSU grants is determined based on the Executive Officer’s position as of May 31 of the performance year (2014(2016 in the present case). In 2017, a new grant level was added when Nucor created the position of Chief Digital Officer and Executive Vice President. The following schedule was effective for grants on June 1, 2015:2017:
Position | Base Amount of RSUs Granted Market Value | Performance RSUs Market Value (Based on Prior Fiscal Year ROE) | ||||||||||||||||||||||||||||||||||||||||||||||
Base RSUs Market Value | Performance RSUs Market Value (Based on Prior Fiscal Year ROE) | |||||||||||||||||||||||||||||||||||||||||||||||
Position | Base Amount of RSUs Granted Market Value | 5% ROE | 10% ROE | 12.5% ROE | 15% ROE | 20% ROE | 3% ROE | 10% ROE | 12.5% ROE | 15% ROE | 20% ROE | |||||||||||||||||||||||||||||||||||||
$ | 750,000 | $ | 1,100,000 | $ | 1,500,000 | $ | 2,250,000 | $ | 4,600,000 | $ | 1,000,000 | $ | 750,000 | $ | 1,100,000 | $ | 1,500,000 | $ | 2,250,000 | $ | 4,600,000 | |||||||||||||||||||||||||||
Chief Financial Officer | 300,000 | 450,000 | 625,000 | 750,000 | 1,530,000 | 2,220,000 | $ | 300,000 | $ | 450,000 | $ | 625,000 | $ | 750,000 | $ | 1,530,000 | $ | 2,220,000 | ||||||||||||||||||||||||||||||
Chief Digital Officer | $ | 300,000 | $ | 387,500 | $ | 537,500 | $ | 645,000 | $ | 1,315,000 | $ | 1,910,000 | ||||||||||||||||||||||||||||||||||||
Executive Vice Presidents | 300,000 | 325,000 | 450,000 | 540,000 | 1,100,000 | 1,600,000 | $ | 300,000 | $ | 325,000 | $ | 450,000 | $ | 540,000 | $ | 1,100,000 | $ | 1,600,000 |
Prior to 2015, the CFO’s schedule was the same as Executive Vice Presidents. In 2015, the CFO’s Performance RSU opportunity was increased to bring the CFO’s total target compensation closer to the market median across all levels of performance. After the increase to the above schedule and the larger increase in salary previously discussed, the CFO’s compensation opportunity across all levels of performance are closer to, but below, the market median.32 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Retirement for purposes of the RSUs is defined as Committee-approved retirement upon termination of employment and completion of the following age and service requirements:
Age | 65 | 64 | 63 | 62 | 61 | 60 | 59 | 58 | 57 | 56 | 55 | 65 | 64 | 63 | 62 | 61 | 60 | 59 | 58 | 57 | 56 | 55 | ||||||||||||||||||||||
Years of Service | -0- | 2 | 4 | 6 | 8 | 10 | 12 | 14 | 16 | 18 | 20 | -0- | 2 | 4 | 6 | 8 | 10 | 12 | 14 | 16 | 18 | 20 |
20152017 Performance Results and RSU Awards
On June 1, 2015,2017, as a result of 20142016 ROE of 9.3%10.4%, the Executive Officers received base and performance RSUs with the following value of base and Performance RSUs:values:
Market Value of RSUs Granted | ||||||||||||
Executive Officer | Base RSUs | Performance RSUs | Total (1) | |||||||||
John J. Ferriola | $ | 999,961 | $ | 1,050,978 | $ | 2,050,939 | ||||||
James D. Frias | 299,960 | 600,490 | 900,450 | |||||||||
James R. Darsey | 299,960 | 432,498 | 732,458 | |||||||||
Ladd R. Hall | 299,960 | 432,498 | 732,458 | |||||||||
R. Joseph Stratman | 299,960 | 432,498 | 732,458 |
Grant Date Value | ||||||||||||
Executive Officer | Base RSUs | Performance RSUs | Total (1) | |||||||||
John J. Ferriola | $ | 999,996 | $ | 1,163,974 | $ | 2,163,970 | ||||||
James D. Frias | $ | 299,958 | $ | 644,985 | $ | 944,943 | ||||||
James R. Darsey | $ | 299,958 | $ | 464,349 | $ | 764,307 | ||||||
Ladd R. Hall | $ | 299,958 | $ | 464,349 | $ | 764,307 | ||||||
R. Joseph Stratman | $ | 299,958 | $ | 464,349 | $ | 764,307 |
(1) | The actual number of RSUs granted is rounded down to the nearest full |
Stock Options
On June 1, 2015,2017, the Committee granted options to each Executive Officer in the amounts shown in the table below with the following grant values:
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Position | Grant Date Value of Options (1) | |||
Chairman, Chief Executive Officer and President | $ | 4,000,000 | ||
Chief Financial Officer | $ | 600,000 | ||
Chief Digital Officer | $ | 600,000 | ||
Executive Vice Presidents | $ | 600,000 |
(1) | The actual number of stock options granted is rounded down to the nearest full option. |
The options vest on the third anniversary of theirthe grant date or upon the Executive Officer’s death, disability or retirement (same as RSUs above) and have a ten-year10-year term.
OTHER PRACTICES, POLICIES AND GUIDELINES
Stock Ownership Guidelines
Executive Officers have an opportunity to earn a significant number of Nucor shares and the Committee considers executive stock ownership a key element of the Nucor culture. Executive Officers are required to hold a significant number of shares as outlined below:
Chairman, Chief Executive Officer and President | At least 150,000 shares | |
Chief Financial Officer | At least 50,000 shares | |
Chief Digital Officer | At least 50,000 shares | |
Executive Vice Presidents | At least 50,000 shares |
The above guidelines are higher than the median guidelines for Nucor’s steel company peers and other industrial and materials companies of similar size.
2018 Proxy Statement 33
BenefitsCOMPENSATION DISCUSSIONAND ANALYSIS
All Executive Officers were in compliance with the stock ownership guidelines as of December 31, 2017. Executive Officers have five years to achieve ownership of the guideline number of shares. On an annual basis, the Committee monitors each Executive Officer’s compliance with the ownership guideline or, if applicable, the Executive Officer’s progress in achieving ownership of the guideline number of shares. If the Committee determines an Executive Officer is not in compliance or has not made sufficient progress toward achieving the ownership guideline, the Committee has the discretion to take action or adjust incentive award payments to concentrate payouts more heavily in Nucor common stock.
Executive Officers have significant exposure to Nucor’s stock price through direct stock ownership and their target LTIP awards. The Committee believes aligning the long-term interests of Executive Officers with the long-term interests of Nucor’s stockholders in a material way promotes superior long-term performance. It also means that if Nucor’s stock price declines, then Executive Officers’ Nucor stock, options, LTIP awards and RSUs all decline in value.
No Hedging or Short Selling
Nucor maintains policies that apply to all officers, certain designated employees and the members of the Board that prohibit hedging or short selling (profiting if the market price of the securities decreases) of Nucor securities.
Executive Officer Incentive Compensation Recoupment (“Clawback”) Policy
The Company has a written policy to address the recoupment of performance-based compensation awarded to or earned by an executive officer if there is a restatement of the Company’s financial results due to material noncompliance of the Company with any financial reporting requirement under the federal securities laws. In the event of such a restatement, the Committee shall review the performance-based compensation awarded to or earned by the executive officers for the three-year period prior to the restatement event and, if the Committee determines in its reasonable discretion that any such performance-based compensation would not have been awarded to or earned by an executive officer based on the restated financial results, the Committee shall within 12 months of the restatement event, to the extent practicable, seek to recover from such executive officer any portion of the performance-based compensation that is greater than that which would have been awarded or earned had it been calculated on the basis of the restated financial results.
Benefits
Executive Officer benefits are limited to benefits provided to all other full-time employees on the same basis and at the same cost as all other full-time employees. Nucor does not provide any tax gross ups. Certain benefits such as Nucor’s Profit Sharing, Scholarship Program, Employee Stock Purchase Plan, Extraordinary Bonus and Service Awards Program are not available to Nucor’s Executive Officers.
Changes Effective in 2018
During 2017, the Committee, with the help of management and Pearl Meyer, its independent compensation consultant, reviewed executive compensation levels, incentive plan metrics, sensitivity to performance (including relative pay at various levels of potential performance) and performance comparator groups. The purpose of this exercise was to ensure Nucor’s executive compensation plans continue to be aligned with the Company’s compensation philosophy.
The review provided the Committee insight into how Nucor’s incentive plans have performed relative to the steel and general industry comparator groups and the compensation benchmark companies. In general:
34 2018 Proxy Statement
Post Termination CompensationCOMPENSATION DISCUSSIONAND ANALYSIS
The Committee is reviewing the above work and considering changes for 2018.
Post-Termination Compensation Benefits
The Committee believes that Executive Officers should be provided a reasonable severance benefit in the event an executive is terminated. Severance benefits for Executive Officers reflect the fact that it may be difficult to find comparable employment within a reasonable period of time. The Committee periodically reviews total compensation, including these post termination compensation benefits, to ensure that such amounts remain reasonable.
Non-Compete andNon-Solicitation Agreements Agreements.
Nucor has entered into anon-compete andnon-solicitation agreement with each Executive Officer. Pursuant to these agreements, the Executive Officers have agreed not to compete with Nucor during the24-month period following their termination of employment with Nucor for any reason in exchange for monthly cash payments from Nucor during thenon-competition period. The agreements with the Executive Officers also restrict the disclosure of confidential information and prohibit the Executive Officers from encouraging Nucor customers to purchase steel or steel products from any Nucor
competitor or encouraging any Nucor employee to terminate his or her employment with Nucor. Each agreement further provides that any inventions, designs or other ideas conceived by the Executive Officers during their employment with Nucor will be assigned to Nucor. Since Nucor began entering into thenon-compete andnon-solicitation agreements with its executive officers in 1999, no executive officer has left Nucor other than to retire.
The amount of each monthly cash payment during the 24-month non-competition24-monthnon-competition period will be equal to the product of 3.36 times the Executive Officer’s highest annual base salary during the twelve12 months immediately preceding the termination of his employment, divided by twelve.12. If an Executive Officer who is receiving monthly installment payments dies within twelve12 months of his date of termination of employment, Nucor will continue to pay his estate the monthly payments only through the end of the first twelve12 months following termination of his employment. Nucor’s obligation to make the monthly installment payments to an Executive Officer terminates if the Executive Officer dies twelve12 or more months following termination of his employment.
Severance BenefitsBenefits.
Executive Officers are entitled to receive severance payments following termination of employment or their resignation, death or retirement under the Nucor Corporation Severance Plan for Senior Officers and General Managers. The amount of severance payments to be received by a particular Executive Officer or, in the case of his death while employed by Nucor, his estate, will depend upon his age at the time of his termination, resignation, retirement or death and his length of service with Nucor. If the Executive Officer is younger than age 55, then the Executive Officer, or his estate, will be entitled to receive a severance payment equal to the greater of (i) one month of his base salary for each year of service to Nucor with a minimum severance payment of six months’ base salary or (ii) the value of the total number of his unvested shares of Nucor common stock (including deferred shares) granted under the LTIP. If the Executive Officer is age 55 or older, then the Executive Officer, or his estate, will be entitled to receive a severance payment equal to one month of his base salary for each year of service to Nucor with a minimum severance payment of six months’ base salary.
Change in Control BenefitsBenefits.
Nucor provides Executive Officers the following benefits in the event of a change in control of Nucor. The benefits do not result in Executive Officers receiving severance benefits in excess of three times their annual compensation or provide an excise tax gross up for any payments that would be considered excess parachute payments under Section 280G of the Internal Revenue Code.
• | Severance – If terminated within 24 months of a change in control, Executive Officers participating in Nucor’s severance plan would receive a severance payment equal to a base amount multiplied by 3 in the case of the Chief Executive Officer, 2.5 in the case of the Chief Financial Officer, and 2 in the case of any other Executive Vice President. The base amount is the sum of the executive’s base salary plus the greater of target or the three-year average actual award under the AIP, plus the greater of target or the most recent award under the LTIP. The target awards under the AIP and the LTIP are equal to 50% of each plan’s maximum award payout. In addition, Executive Officers participating in Nucor’s severance plan would receive 36 months of medical, dental and life insurance continuation for the Chief Executive Officer, 30 months for the Chief Financial Officer and 24 months for all |
2018 Proxy Statement 35
COMPENSATION DISCUSSIONAND ANALYSIS
• | Annual Incentive Plan – For the year in which a change in control occurs, the AIP award will be no less than an award equal to the greater of actual performance through the change in control or target performance, in each case prorated through the date of the executive’s termination of employment. |
• | Long-Term Incentive Plan – The LTIP performance periods in progress on the date of the change in control will be terminated and awards will be paid based on a prorated basis through the date of the change in control in an amount equal to the greater of actual or target performance. |
• | Acceleration of Unvested Equity – All unvested equity awards under the AIP and the LTIP, including deferred shares, and all outstanding unvested options and RSUs, will vest upon a change in control. |
• | Restricted Stock Units – If terminated within 24 months of a change in control, Executive Officers would receive a payment equal to the sum of the value of the RSUs that would have been granted in the year of termination based on the prior year’s performance (if not granted prior to the date of termination) and the value of the RSUs that would normally be granted the following year for performance during the year of the Executive Officer’s termination. |
• | Excess Parachute Payments – If any payments or benefits would be considered excess parachute payments under Section 280G of the Internal Revenue Code, the payments or benefits would be reduced to the Section 280G safe harbor amount if the reduction results in a larger net benefit to the Executive Officer. Executive Officers are responsible for taxes on all payments. No tax gross ups are provided. |
36 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Post-Termination Payments Summary
The following is a summary of the severance andnon-compete payments that would have been payable to the Executive Officers if their employment had terminated on December 31, 2015.2017. All Executive Officers were retirement-eligible as of December 31, 2015.2017.
Name of Executive | Executive Benefits and | Voluntary Termination | Retirement | Involuntary Not for Cause Termination | For Cause Termination | Disability | Death | Change In Control | Executive Benefits and Payments Upon Termination | Voluntary ($) | Retirement ($) | Not for Cause ($) | For Cause ($) | Disability ($) | Death ($) | Change In ($) | ||||||||||||||||||||||||||||||||||||||||||||
John J. Ferriola | Non-compete – cash | $ | 8,064,000 | $ | 8,064,000 | $ | 8,064,000 | $ | 8,064,000 | $ | 8,064,000 | $ | — | $ | 8,064,000 | Non-compete–cash | 9,172,800 | 9,172,800 | 9,172,800 | 9,172,800 | 9,172,800 | — | 9,172,800 | |||||||||||||||||||||||||||||||||||||
Severance – cash | 2,486,944 | 2,486,944 | 2,486,944 | — | 2,486,944 | 2,486,944 | 12,060,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | — | 5,271,280 | — | — | 5,271,280 | 5,271,280 | 5,271,280 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of stock options | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units – cash | — | — | — | — | — | — | 1,000,000 | Severance–cash | 3,056,399 | 3,056,399 | 3,056,399 | — | 3,056,399 | 3,056,399 | 15,301,412 | |||||||||||||||||||||||||||||||||||||||||||||
Pro-rata LTIP | — | — | — | — | — | — | 274,309 | Vesting of restricted stock | — | 10,397,937 | — | — | 10,397,937 | 10,397,937 | 10,397,937 | |||||||||||||||||||||||||||||||||||||||||||||
Benefits and perquisites | — | — | — | — | — | — | 30,791 | Vesting of stock options | — | 13,375,049 | — | — | 13,375,049 | 13,375,049 | 13,375,049 | |||||||||||||||||||||||||||||||||||||||||||||
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| Restricted stock units–cash | — | — | — | — | — | — | 3,673,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 10,550,944 | $ | 15,822,224 | $ | 10,550,944 | $ | 8,064,000 | $ | 15,822,224 | $ | 7,758,224 | $ | 26,700,380 | Pro-rata LTIP | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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| Benefits and perquisites | — | — | — | — | — | — | 33,830 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | 12,229,199 | 36,002,185 | 12,229,199 | 9,172,800 | 36,002,185 | 26,829,385 | 51,954,028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
James D. Frias | Non-compete – cash | $ | 3,138,240 | $ | 3,138,240 | $ | 3,138,240 | $ | 3,138,240 | $ | 3,138,240 | $ | — | $ | 3,138,240 | Non-compete–cash | 3,491,712 | 3,491,712 | 3,491,712 | 3,491,712 | 3,491,712 | — | 3,491,712 | |||||||||||||||||||||||||||||||||||||
Severance – cash | 951,729 | 951,729 | 951,729 | — | 951,729 | 951,729 | 3,911,125 | Severance–cash | 1,145,526 | 1,145,526 | 1,145,526 | — | 1,145,526 | 1,145,526 | 4,885,379 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | — | 2,869,803 | — | — | 2,869,803 | 2,869,803 | 2,869,803 | Vesting of restricted stock | — | 5,785,716 | — | — | 5,785,716 | 5,785,716 | 5,785,716 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of stock options | — | — | — | — | — | — | — | Vesting of stock options | — | 2,006,247 | — | — | 2,006,247 | 2,006,247 | 2,006,247 | |||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units – cash | — | — | — | — | — | — | 300,000 | Restricted stock units–cash | — | — | — | — | — | — | 1,954,200 | |||||||||||||||||||||||||||||||||||||||||||||
Pro-rata LTIP | — | — | — | — | — | — | 116,480 | Pro-rata LTIP | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Benefits and perquisites | — | — | — | — | — | — | 36,708 | Benefits and perquisites | — | — | — | — | — | — | 35,384 | |||||||||||||||||||||||||||||||||||||||||||||
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| Total | 4,637,238 | 12,429,201 | 4,637,238 | 3,491,712 | 12,429,201 | 8,937,489 | 18,158,638 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,089,969 | $ | 6,959,772 | $ | 4,089,969 | $ | 3,138,240 | $ | 6,959,772 | $ | 3,821,532 | $ | 10,372,356 | ||||||||||||||||||||||||||||||||||||||||||||||
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James R. Darsey | Non-compete – cash | $ | 2,905,728 | $ | 2,905,728 | $ | 2,905,728 | $ | 2,905,728 | $ | 2,905,728 | $ | — | $ | 2,905,728 | Non-compete–cash | 3,174,192 | 3,174,192 | 3,174,192 | 3,174,192 | 3,174,192 | — | 3,174,192 | |||||||||||||||||||||||||||||||||||||
Severance – cash | 1,327,728 | 1,327,728 | 1,327,728 | — | 1,327,728 | 1,327,728 | 2,897,080 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | — | 2,727,544 | — | — | 2,727,544 | 2,727,544 | 2,727,544 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of stock options | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units – cash | — | — | — | — | — | — | 300,000 | Severance–cash | 1,529,124 | 1,529,124 | 1,529,124 | — | 1,529,124 | 1,529,124 | 3,597,809 | |||||||||||||||||||||||||||||||||||||||||||||
Pro-rata LTIP | — | — | — | — | — | — | 108,783 | Vesting of restricted stock | — | 5,188,128 | — | — | 5,188,128 | 5,188,128 | 5,188,128 | |||||||||||||||||||||||||||||||||||||||||||||
Benefits and perquisites | — | — | — | — | — | — | 20,527 | Vesting of stock options | — | 2,006,247 | — | — | 2,006,247 | 2,006,247 | 2,006,247 | |||||||||||||||||||||||||||||||||||||||||||||
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| Restricted stock units–cash | — | — | — | — | — | — | 1,490,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,233,456 | $ | 6,961,000 | $ | 4,233,456 | $ | 2,905,728 | $ | 6,961,000 | $ | 4,055,272 | $ | 8,959,662 | Pro-rata LTIP | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
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| Benefits and perquisites | — | — | — | — | — | — | 23,593 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | 4,703,316 | 11,897,691 | 4,703,316 | 3,174,192 | 11,897,691 | 8,723,499 | 15,479,969 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ladd R. Hall | Non-compete – cash | $ | 3,050,880 | $ | 3,050,880 | $ | 3,050,880 | $ | 3,050,880 | $ | 3,050,880 | $ | — | $ | 3,050,880 | Non-compete–cash | 3,174,192 | 3,174,192 | 3,174,192 | 3,174,192 | 3,174,192 | — | 3,174,192 | |||||||||||||||||||||||||||||||||||||
Severance – cash | 1,307,667 | 1,307,667 | 1,307,667 | — | 1,307,667 | 1,307,667 | 3,041,880 | Severance–cash | 1,439,246 | 1,439,246 | 1,439,246 | — | 1,439,246 | 1,439,246 | 3,662,842 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | — | 2,849,895 | — | — | 2,849,895 | 2,849,895 | 2,849,895 | Vesting of restricted stock | — | 5,381,157 | — | — | 5,381,157 | 5,381,157 | 5,381,157 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of stock options | — | — | — | — | — | — | — | Vesting of stock options | — | 2,006,247 | — | — | 2,006,247 | 2,006,247 | 2,006,247 | |||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units – cash | — | — | — | �� | — | — | — | 300,000 | Restricted stock units–cash | — | — | — | — | — | — | 1,490,000 | ||||||||||||||||||||||||||||||||||||||||||||
Pro-rata LTIP | — | — | — | — | — | — | 118,066 | Pro-rata LTIP | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Benefits and perquisites | — | — | — | — | — | — | 31,651 | Benefits and perquisites | — | — | — | — | — | — | 39,264 | |||||||||||||||||||||||||||||||||||||||||||||
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| Total | 4,613,438 | 12,000,842 | 4,613,438 | 3,174,192 | 12,000,842 | 8,826,650 | 15,753,702 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,358,547 | $ | 7,208,442 | $ | 4,358,547 | $ | 3,050,880 | $ | 7,208,442 | $ | 4,157,562 | $ | 9,392,372 | ||||||||||||||||||||||||||||||||||||||||||||||
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R. Joseph Stratman | Non-compete – cash | $ | 3,050,880 | $ | 3,050,880 | $ | 3,050,880 | $ | 3,050,880 | $ | 3,050,880 | $ | — | $ | 3,050,880 | Non-compete–cash | 3,350,592 | 3,350,592 | 3,350,592 | 3,350,592 | 3,350,592 | — | 3,350,592 | |||||||||||||||||||||||||||||||||||||
Severance – cash | 994,912 | 994,912 | 994,912 | — | 994,912 | 994,912 | 3,041,800 | Severance–cash | 1,175,750 | 1,175,750 | 1,175,750 | — | 1,175,750 | 1,175,750 | 3,772,171 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | — | 2,849,895 | — | — | 2,849,895 | 2,849,895 | 2,849,895 | Vesting of restricted stock | — | 5,381,157 | — | — | 5,381,157 | 5,381,157 | 5,381,157 | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of stock options | — | — | — | — | — | — | — | Vesting of stock options | — | 2,006,247 | — | — | 2,006,247 | 2,006,247 | 2,006,247 | |||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units – cash | — | — | — | — | — | — | 300,000 | Restricted stock units–cash | — | — | — | — | — | — | 1,722,100 | |||||||||||||||||||||||||||||||||||||||||||||
Pro-rata LTIP | — | — | — | — | — | — | 118,066 | Pro-rata LTIP | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Benefits and perquisites | — | — | — | — | — | — | 23,542 | Benefits and perquisites | — | — | — | — | — | — | 27,267 | |||||||||||||||||||||||||||||||||||||||||||||
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| Total | 4,526,342 | 11,913,746 | 4,526,342 | 3,350,592 | 11,913,746 | 8,563,154 | 16,259,534 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,045,792 | $ | 6,895,687 | $ | 4,045,792 | $ | 3,050,880 | $ | 6,895,687 | $ | 3,844,807 | $ | 9,384,183 | ||||||||||||||||||||||||||||||||||||||||||||||
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2018 Proxy Statement 37
COMPENSATION DISCUSSIONAND ANALYSIS
EXECUTIVE COMPENSATION TABLES
The table below describes the total compensation paid toof our Executive Officers in 2015.2017.
Name and Principal Positions | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (2) | Total ($) | ||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | ||||||||||||||||||||||||
John J. Ferriola | 2015 | 1,200,000 | — | 3,070,939 | 4,000,000 | 659,640 | 900 | 8,931,479 | ||||||||||||||||||||||||
Chairman, Chief Executive Officer and President | 2014 | 950,000 | — | 2,655,444 | 4,000,000 | 1,335,320 | 875 | 8,941,639 | ||||||||||||||||||||||||
2013 | 900,000 | — | 2,149,439 | 4,000,000 | 1,088,730 | 875 | 8,139,044 | |||||||||||||||||||||||||
James D. Frias | 2015 | 467,000 | — | 1,393,666 | 600,000 | 179,697 | 900 | 2,641,263 | ||||||||||||||||||||||||
Chief Financial Officer, Treasurer and Executive | 2014 | 426,500 | — | 1,397,167 | 600,000 | 299,744 | 875 | 2,724,286 | ||||||||||||||||||||||||
2013 | 410,100 | — | 1,140,078 | 600,000 | 396,878 | 875 | 2,547,931 | |||||||||||||||||||||||||
James R. Darsey | 2015 | 432,400 | — | 1,099,998 | 600,000 | 237,690 | 900 | 2,370,988 | ||||||||||||||||||||||||
Executive Vice President | 2014 | 400,400 | — | 1,000,302 | 600,000 | 562,802 | 875 | 2,564,379 | ||||||||||||||||||||||||
2013 | 385,000 | — | 994,722 | 600,000 | 465,735 | 875 | 2,446,332 | |||||||||||||||||||||||||
Ladd R. Hall | 2015 | 454,000 | — | 1,274,335 | 600,000 | 124,782 | 900 | 2,454,017 | ||||||||||||||||||||||||
Executive Vice President | 2014 | 442,900 | — | 1,425,515 | 600,000 | 311,270 | 875 | 2,780,560 | ||||||||||||||||||||||||
2013 | 434,250 | — | 1,036,584 | 600,000 | 525,312 | 875 | 2,597,021 | |||||||||||||||||||||||||
R. Joseph Stratman | 2015 | 454,000 | — | 1,118,358 | 600,000 | 249,564 | 900 | 2,422,822 | ||||||||||||||||||||||||
Executive Vice President | 2014 | 442,900 | — | 1,036,427 | 600,000 | 622,540 | 875 | 2,702,742 | ||||||||||||||||||||||||
2013 | 434,250 | — | 1,036,584 | 600,000 | 525,312 | 875 | 2,597,021 |
Name and Principal Positions | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (2) | Total ($) | ||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (i) | (j) | ||||||||||||||||||||||
John J. Ferriola | 2017 | 1,365,000 | — | 3,324,220 | 4,000,000 | 3,400,352 | 900 | 12,090,472 | ||||||||||||||||||||||
Chairman, Chief Executive Officer and President | 2016 | 1,300,000 | — | 2,939,929 | 4,000,000 | 2,386,670 | 900 | 10,627,499 | ||||||||||||||||||||||
2015 | 1,200,000 | — | 3,070,939 | 4,000,000 | 659,640 | 900 | 8,931,479 | |||||||||||||||||||||||
James D. Frias | 2017 | 519,600 | — | 1,871,994 | 600,000 | 906,063 | 900 | 3,898,557 | ||||||||||||||||||||||
Chief Financial Officer, Treasurer and Executive Vice President | 2016 | 490,350 | — | 1,546,849 | 600,000 | 630,163 | 900 | 3,268,262 | ||||||||||||||||||||||
2015 | 467,000 | — | 1,393,666 | 600,000 | 179,697 | 900 | 2,641,263 | |||||||||||||||||||||||
James R. Darsey | 2017 | 472,350 | — | 1,165,804 | 600,000 | 1,176,671 | 900 | 3,415,725 | ||||||||||||||||||||||
Executive Vice President | 2016 | 463,100 | — | 1,048,921 | 600,000 | 850,205 | 900 | 2,963,126 | ||||||||||||||||||||||
2015 | 432,400 | — | 1,099,998 | 600,000 | 237,690 | 900 | 2,370,988 | |||||||||||||||||||||||
Ladd R. Hall | 2017 | 472,350 | — | 1,901,224 | 600,000 | 588,336 | 900 | 3,562,810 | ||||||||||||||||||||||
Executive Vice President | 2016 | 463,100 | — | 1,580,299 | 600,000 | 425,103 | 900 | 3,069,402 | ||||||||||||||||||||||
2015 | 454,000 | — | 1,274,335 | 600,000 | 124,782 | 900 | 2,454,017 | |||||||||||||||||||||||
R. Joseph Stratman Chief Digital Officer and Executive Vice President | 2017 | 498,600 | — | 1,964,406 | 600,000 | 621,031 | 900 | 3,684,937 | ||||||||||||||||||||||
2016 | 473,914 | — | 1,048,921 | 600,000 | 870,058 | 900 | 2,993,793 | |||||||||||||||||||||||
2015 | 454,000 | — | 1,118,358 | 600,000 | 249,564 | 900 | 2,422,822 |
(1) | The amounts shown represent the grant date fair value of the shares or options awarded. The |
(2) | The amounts shown represent matching contributions to the Nucor 401(k) retirement savings |
38 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Grants of Plan-Based Awards Table
The table below presents the RSUs and stock options awarded June 1, 2015,2017, the possible payouts under Nucor’s AIP for 20152017 and LTIP for the performance periods beginning in 2015.2017.
Name | Grant Date | Committee Approval Date | Award Type |
Estimated Possible Payouts |
Estimated Possible Payouts | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||||||||||
John J. Ferriola | 6/1/15 | 5/13/15 | RSP | (1) | 43,096 | 2,050,939 | (5) | |||||||||||||||||||||||||||||||||||||||||||||
AIP | (2) | 180,000 | 1,800,000 | 3,600,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/2/14 | LTIP | (3) | 4,159 | 20,795 | 41,590 | 1,019,995 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
6/1/15 | 5/13/15 | OPT | (4) | 341,588 | $ | 47.59 | 4,000,000 | (7) | ||||||||||||||||||||||||||||||||||||||||||||
James D. Frias | 6/1/15 | 5/13/15 | RSP | (1) | 18,921 | 900,450 | (5) | |||||||||||||||||||||||||||||||||||||||||||||
AIP | (2) | 70,050 | 700,500 | 1,401,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
3/10/16 | 12/2/14 | AIP | (8) | 2,211 | 96,267 | (9) | ||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/2/14 | LTIP | (3) | 1,619 | 8,092 | 16,184 | 396,913 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
6/1/15 | 5/13/15 | OPT | (4) | 51,238 | $ | 47.59 | 600,000 | (7) | ||||||||||||||||||||||||||||||||||||||||||||
James R. Darsey | 6/1/15 | 5/13/15 | RSP | (1) | 15,391 | 732,458 | (5) | |||||||||||||||||||||||||||||||||||||||||||||
AIP | (2) | 64,860 | 648,600 | 1,297,200 | ||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/2/14 | LTIP | (3) | 1,499 | 7,493 | 14,986 | 367,532 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
6/1/15 | 5/13/15 | OPT | (4) | 51,238 | $ | 47.59 | 600,000 | (7) | ||||||||||||||||||||||||||||||||||||||||||||
Ladd R. Hall | 6/1/15 | 5/13/15 | RSP | (1) | 15,391 | 732,458 | (5) | |||||||||||||||||||||||||||||||||||||||||||||
AIP | (2) | 68,100 | 681,000 | 1,362,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
3/10/16 | 12/2/14 | AIP | (8) | 3,582 | 155,960 | (9) | ||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/2/14 | LTIP | (3) | 1,573 | 7,867 | 15,734 | 385,876 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
6/1/15 | 5/13/15 | OPT | (4) | 51,238 | $ | 47.59 | 600,000 | (7) | ||||||||||||||||||||||||||||||||||||||||||||
R. Joseph Stratman | 6/1/15 | 5/13/15 | RSP | (1) | 15,391 | 732,458 | (5) | |||||||||||||||||||||||||||||||||||||||||||||
AIP | (2) | 68,100 | 681,000 | 1,362,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
1/1/15 | 12/2/14 | LTIP | (3) | 1,573 | 7,867 | 15,734 | 385,876 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
6/1/15 | 5/13/15 | OPT | (4) | 51,238 | $ | 47.59 | 600,000 | (7) |
Name | Grant Date | Committee Approval Date | Award Type | Estimated Possible Payouts Incentive Plan Awards | Estimated Possible Payouts Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($) | Grant Date ($) | |||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||||||
John J. Ferriola | ||||||||||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | RSP(1) | 36,634 | 2,163,970 | (5) | |||||||||||||||||||||||||||||||||||||||||||
AIP(2) | 204,750 | 2,047,500 | 4,095,000 | |||||||||||||||||||||||||||||||||||||||||||||
1/1/17 | 11/30/16 | LTIP(3) | 3,899 | 19,493 | 38,986 | 1,160,223 | (6) | |||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | OPT(4) | 317,208 | $ | 59.07 | 4,000,000 | (7) | |||||||||||||||||||||||||||||||||||||||||
James D. Frias | ||||||||||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | RSP(1) | 15,997 | 944,943 | (5) | |||||||||||||||||||||||||||||||||||||||||||
AIP(2) | 77,940 | 779,400 | 1,558,800 | |||||||||||||||||||||||||||||||||||||||||||||
3/10/18 | 11/30/16 | AIP(8) | 7,227 | 485,365 | (9) | |||||||||||||||||||||||||||||||||||||||||||
1/1/17 | 11/30/16 | LTIP(3) | 1,484 | 7,420 | 14,840 | 441,638 | (6) | |||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | OPT(4) | 47,581 | $ | 59.07 | 600,000 | (7) | |||||||||||||||||||||||||||||||||||||||||
James R. Darsey | ||||||||||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | RSP(1) | 12,939 | 764,307 | (5) | |||||||||||||||||||||||||||||||||||||||||||
AIP(2) | 70,853 | 708,525 | 1,417,050 | |||||||||||||||||||||||||||||||||||||||||||||
1/1/17 | 11/30/16 | LTIP(3) | 1,349 | 6,746 | 13,492 | 401,522 | (6) | |||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | OPT(4) | 47,581 | $ | 59.07 | 600,000 | (7) | |||||||||||||||||||||||||||||||||||||||||
Ladd R. Hall | ||||||||||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | RSP(1) | 12,939 | 764,307 | (5) | |||||||||||||||||||||||||||||||||||||||||||
AIP(2) | 70,853 | 708,525 | 1,417,050 | |||||||||||||||||||||||||||||||||||||||||||||
3/10/18 | 11/30/16 | AIP(8) | 10,950 | 735,402 | (9) | |||||||||||||||||||||||||||||||||||||||||||
1/1/17 | 11/30/16 | LTIP(3) | 1,349 | 6,746 | 13,492 | 401,522 | (6) | |||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | OPT(4) | 47,581 | $ | 59.07 | 600,000 | (7) | |||||||||||||||||||||||||||||||||||||||||
R. Joseph Stratman | ||||||||||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | RSP(1) | 12,939 | 764,307 | (5) | |||||||||||||||||||||||||||||||||||||||||||
AIP(2) | 74,790 | 747,900 | 1,495,800 | |||||||||||||||||||||||||||||||||||||||||||||
3/10/18 | 11/30/16 | AIP(8) | 11,559 | 776,302 | (9) | |||||||||||||||||||||||||||||||||||||||||||
1/1/17 | 11/30/16 | LTIP(3) | 1,424 | 7,120 | 14,240 | 423,782 | (6) | |||||||||||||||||||||||||||||||||||||||||
6/1/17 | 5/10/17 | OPT(4) | 47,581 | $ | 59.07 | 600,000 | (7) |
(1) | Represents |
(2) | The Executive Officers were eligible to earn a range of performance-based payments under the AIP for the Company’s performance during |
(3) | Represents the range of performance-based awards that may be earned under the LTIP for the |
(4) | Represents stock options awarded June 1, |
(5) | The awards have been valued using the June 1, |
(6) | The target awards have been valued using the December 31, |
(7) | The awards have been valued using a Black-Scholes value of |
(8) | Represents common stock units deferred under the |
(9) | The awards have been valued using the March 9, |
Non-Equity Incentive Plan Awards
Under the AIP, Executive Officers may earn anon-equity incentive award for each fiscal year of up to a total of 300% of the Executive Officer’s base salary. For a description of the AIP, please refer to the “Components of“2017 Executive Compensation for 2015in Detail – Annual Incentives”Incentives” section of thethis CD&A beginning on page 25.29. While the AIP has no stated target, for planning purposes including compensation benchmarking, the Committee considers target to be 50% of the maximum.
2018 Proxy Statement 39
COMPENSATION DISCUSSIONAND ANALYSIS
Equity Incentive Plan Awards
Restricted Stock Units (“RSUs”)
Each year, on or about June 1, participants are granted a threshold or base amount of RSUs. An additional amount of RSUs may be granted based on Nucor’s ROE for the prior year. The base award vests annually over the three-year period following the date of grant or upon retirement. TheROE-based award vests at retirement. The RSUs were granted on June 1, 20152017 and are reported in column (i).
Stock Options
The Committee granted the Executive Officers options to purchase shares of Nucor common stock at an exercise price of $47.59.$59.07. The options become vested and exercisable on June 1, 2018.2020.
Long-Term Incentive Plan (“LTIP”)
The range of potential grants for the performance period January 1, 20152017 through December 31, 20172019 is reported in columns (f), (g) and (h). The Company paysone-half of the LTIP award in cash and the other half in the form of restricted shares of Nucor’s common stock. The number of shares is determined at the beginning of the performance period. For a description of the LTIP, please refer to the“Components of “2017 Executive Compensation for 2015in Detail – Long-Term Incentives” section of thethis CD&A beginning on page 25.
30.
Actual performance for the LTIP performance period ended December 31, 20142016 resulted in cash payments and awards of restricted shares on March 10, 20152017 as follows:
Shares Issued (#) | Cash Paid ($) | |||||||
John J. Ferriola | 3,653 | 179,224 | ||||||
James D. Frias | 2,352 | 115,373 | ||||||
James R. Darsey | 2,319 | 113,793 | ||||||
Ladd R. Hall | 2,577 | 126,437 | ||||||
R. Joseph Stratman | 2,577 | 126,437 |
Shares (#) | Cash ($) | |||||||
John J. Ferriola | 7,563 | 450,191 | ||||||
James D. Frias | 3,395 | 202,112 | ||||||
James R. Darsey | 3,187 | 189,744 | ||||||
Ladd R. Hall | 3,526 | 209,884 | ||||||
R. Joseph Stratman | 3,526 | 209,884 |
All of the Executive Officers were 55 or older as of March 10, 2015;2017; therefore, the restricted shares vested upon issuance. These shares were granted at the beginning of the performance period, January 1, 2012,2014, and are therefore not reported in the Grants of Plan-Based Awards Table.
40 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
Outstanding Equity Awards at FiscalYear-End Table
The following table below shows the outstanding equity awards for each Executive Officer on December 31, 2015.2017.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | ||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||
John J. Ferriola | 65,061 | 42.34 | 5/31/21 | 130,801 | (3) | 5,271,280 | 12,477 | (4) | 502,823 | |||||||||||||||||||||||
87,719 | 35.76 | 5/31/22 | 9,076 | (5) | 365,763 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
152,780 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
266,134 | (2) | 44.51 | 5/31/23 | |||||||||||||||||||||||||||||
228,832 | (6) | 50.63 | 5/31/24 | |||||||||||||||||||||||||||||
341,588 | (7) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
836,554 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
James D. Frias | 39,037 | 42.34 | 5/31/21 | 71,211 | (8) | 2,869,803 | 4,855 | (4) | 195,657 | |||||||||||||||||||||||
52,631 | 35.76 | 5/31/22 | 4,074 | (5) | 164,182 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
91,668 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
39,920 | (2) | 44.51 | 5/31/23 | |||||||||||||||||||||||||||||
34,324 | (6) | 50.63 | 5/31/24 | |||||||||||||||||||||||||||||
51,238 | (7) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
125,482 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
James R. Darsey | 39,037 | 42.34 | 5/31/21 | 67,681 | (9) | 2,727,544 | 4,495 | (4) | 181,149 | |||||||||||||||||||||||
52,631 | 35.76 | 5/31/22 | 3,825 | (5) | 154,148 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
91,668 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
39,920 | (2) | 44.51 | 5/31/23 | |||||||||||||||||||||||||||||
34,324 | (6) | 50.63 | 5/31/24 | |||||||||||||||||||||||||||||
51,238 | (7) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
125,482 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Ladd R. Hall | 39,037 | 42.34 | 5/31/21 | 70,717 | (10) | 2,849,895 | 4,720 | (4) | 190,216 | |||||||||||||||||||||||
52,631 | 35.76 | 5/31/22 | 4,231 | (5) | 170,509 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
91,668 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
39,920 | (2) | 44.51 | 5/31/23 | |||||||||||||||||||||||||||||
34,324 | (6) | 50.63 | 5/31/24 | |||||||||||||||||||||||||||||
51,238 | (7) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
125,482 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
R. Joseph Stratman | 39,037 | 42.34 | 5/31/21 | 70,717 | (11) | 2,849,895 | 4,720 | (4) | 190,216 | |||||||||||||||||||||||
52,631 | 35.76 | 5/31/22 | 4,231 | (5) | 170,509 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
91,668 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
39,920 | (2) | 44.51 | 5/31/23 | |||||||||||||||||||||||||||||
34,324 | (6) | 50.63 | 5/31/24 | |||||||||||||||||||||||||||||
51,238 | (7) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
125,482 | ||||||||||||||||||||||||||||||||
|
|
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity That Have | ||||||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||
John J. Ferriola | 65,061 | 42.34 | 5/31/21 | 163,541 | (3) | 10,397,937 | 27,290 | (4) | 1,735,098 | |||||||||||||||||||||||||||
87,719 | 35.76 | 5/31/22 | 32,903 | (5) | 2,091,973 | |||||||||||||||||||||||||||||||
266,134 | 44.51 | 5/31/23 | ||||||||||||||||||||||||||||||||||
228,832 | 50.63 | 5/31/24 | ||||||||||||||||||||||||||||||||||
341,588 | (2) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||||||
438,596 | (6) | 48.80 | 5/31/26 | |||||||||||||||||||||||||||||||||
317,208 | (7) | 59.07 | 5/31/27 | |||||||||||||||||||||||||||||||||
James D. Frias | 39,037 | 42.34 | 5/31/21 | 90,999 | (8) | 5,785,716 | 10,388 | (4) | 660,469 | |||||||||||||||||||||||||||
39,920 | 44.51 | 5/31/23 | 12,410 | (5) | 789,028 | |||||||||||||||||||||||||||||||
34,324 | 50.63 | 5/31/24 | ||||||||||||||||||||||||||||||||||
51,238 | (2) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||||||
65,789 | (6) | 48.80 | 5/31/26 | |||||||||||||||||||||||||||||||||
47,581 | (7) | 59.07 | 5/31/27 | |||||||||||||||||||||||||||||||||
James R. Darsey | 39,037 | 42.34 | 5/31/21 | 81,600 | (9) | 5,188,128 | 9,443 | (4) | 600,386 | |||||||||||||||||||||||||||
39,920 | 44.51 | 5/31/23 | 11,721 | (5) | 745,221 | |||||||||||||||||||||||||||||||
34,324 | 50.63 | 5/31/24 | ||||||||||||||||||||||||||||||||||
51,238 | (2) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||||||
65,789 | (6) | 48.80 | 5/31/26 | |||||||||||||||||||||||||||||||||
47,581 | (7) | 59.07 | 5/31/27 | |||||||||||||||||||||||||||||||||
Ladd R. Hall | 39,037 | 42.34 | 5/31/21 | 84,636 | (10) | 5,381,157 | 9,443 | (4) | 600,386 | |||||||||||||||||||||||||||
39,920 | 44.51 | 5/31/23 | 11,721 | (5) | 745,221 | |||||||||||||||||||||||||||||||
34,324 | 50.63 | 5/31/24 | ||||||||||||||||||||||||||||||||||
51,238 | (2) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||||||
65,789 | (6) | 48.80 | 5/31/26 | |||||||||||||||||||||||||||||||||
47,581 | (7) | 59.07 | 5/31/27 | |||||||||||||||||||||||||||||||||
R. Joseph Stratman | 39,920 | 44.51 | 5/31/23 | 84,636 | (11) | 5,381,157 | 9,968 | (4) | 633,765 | |||||||||||||||||||||||||||
34,324 | 50.63 | 5/31/24 | 11,721 | (5) | 745,221 | |||||||||||||||||||||||||||||||
51,238 | (2) | 47.59 | 5/31/25 | |||||||||||||||||||||||||||||||||
65,789 | (6) | 48.80 | 5/31/26 | |||||||||||||||||||||||||||||||||
47,581 | (7) | 59.07 | 5/31/27 |
(1) | The awards have been valued using the December 31, |
(2) | Represents stock options vesting on June 1, |
(3) | Represents RSUs vesting as follows: |
(4) | Represents the expected number of shares that will be earned under the LTIP for the |
(5) | Represents the expected number of shares that will be earned under the LTIP for the |
(6) | Represents stock options vesting on June 1, |
(7) | Represents stock options vesting on June 1, |
(8) | Represents RSUs vesting as follows: |
(9) | Represents RSUs vesting as follows: |
(10) | Represents RSUs vesting as follows: |
(11) | Represents RSUs vesting as follows: |
2018 Proxy Statement 41
COMPENSATION DISCUSSIONAND ANALYSIS
Options Exercised and Stock Vested Table
NoThe table below presents the stock options were exercised by each Executive OfficersOfficer in 2015.2017. Stock awards vested in 20152017 are comprised of restricted stock granted under the LTIP for the performance period ended December 31, 20142016 and RSUs issued in 2012, 20132014, 2015 and 2014.2016. Under the LTIP, awards vest over a three-year period unless the executive is age 55 or older, dies or becomes disabled. In 2015,2017, all of the Executive Officers were over the age of 55 and became fully vested upon grant in the restricted shares awarded for the three-year performance period ended December 31, 2014.2016.
Option Awards | Stock Awards | |||||||||||||||
Name of Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
John J. Ferriola | — | — | 21,454 | 1,013,934 | ||||||||||||
James D. Frias | — | — | 9,371 | 442,707 | ||||||||||||
James R. Darsey | — | — | 9,338 | 441,154 | ||||||||||||
Ladd R. Hall | — | — | 9,596 | 453,298 | ||||||||||||
R. Joseph Stratman | — | — | 9,596 | 453,298 |
Option Awards | Stock Awards | |||||||||||||||||||
Name of Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||||||
John J. Ferriola | — | — | 27,981 | 1,644,755 | ||||||||||||||||
James D. Frias | 52,631 | 1,411,037 | 9,520 | 561,667 | ||||||||||||||||
James R. Darsey | — | — | 9,312 | 549,058 | ||||||||||||||||
Ladd R. Hall | — | — | 9,651 | 569,609 | ||||||||||||||||
R. Joseph Stratman | 39,037 | 840,789 | 9,651 | 569,609 |
Nonqualified Deferred Compensation Table
The table below presents information about the amounts deferred by the Executive Officers under the AIP. Executive Officers may elect to defer up toone-half of their AIP award into Nucor common stock units. The AIP provides an incentive for Executive Officers to defer their AIP awards by providing a grant of additional Nucor common stock units equal to 25% of the number of common stock units deferred. An Executive Officer is always vested in the common stock units attributable to the deferred award. The deferral incentive units become vested upon the Executive Officer’s attainment of age 55, death or disability while employed by Nucor. The vested common stock units are distributed to the Executive Officer in the form of Nucor common stock following the Executive Officer’s retirement or other termination of employment. Dividend equivalents are paid on deferred incentive units in cash within 30 days of when stockholders are paid.
Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) (3) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
James D. Frias | 299,744 | (1) | 74,936 | (2) | (215,829 | ) | — | 1,062,065 | (4) | |||||||||||
Ladd R. Hall | 311,266 | (5) | 77,816 | (6) | (56,809 | ) | — | 332,273 | (7) |
Executive ($) Registrant ($) Aggregate Last FY ($) (3) Aggregate ($) James D. Frias Ladd R. Hall Name
Contributions in
Last FY
Contributions in
Last FY
Earnings in
Withdrawals /
Distributions Aggregate
Balance at
Last FYE
($) (a) (b) (c) (d) (e) (f) 270,070 (1) 67,518 (2) 132,926 — 2,170,700 (4) 425,103 (5) 106,275 (6) 74,703 — 1,310,056 (7)
(1) | Represents |
(2) | Represents |
(3) | Represents the |
(4) | Represents |
(5) | Represents |
(6) | Represents |
42 2018 Proxy Statement
COMPENSATION DISCUSSIONAND ANALYSIS
(7) | Represents |
Internal Revenue Code Section 162(m)
Internal Revenue Code Section 162(m) limits the amount of compensation paid to certain Executive Officers that may be deducted by Nucor for federal income tax purposes in any year to $1,000,000. “Performance-based” compensation that has been approved by Nucor’s stockholders is not subject to the $1,000,000 deduction limit. Nucor’s incentive plans have all been approved by Nucor’s stockholders, and awards under those plans, other than certain time-vesting RSUs, should constitute “performance-based” compensation that is not subject to the Section 162(m) deduction limit. The Committee has not adopted a formal policy that all compensation paid to Executive Officers must be deductible.
Effective for tax years beginning after December 31, 2017, U.S. tax law changes will expand the definition of covered employees under Section 162(m) to include, among others, the Chief Financial Officer, and eliminate the performance-based compensation exception beginning in 2018. At this time, it is not certain that our performance-based compensation for periods prior to 2018 will qualify for an exemption from the deduction limit under transition relief applicable to arrangements in place as of November 2, 2017.
The Committee views the tax deductibility of executive compensation as one factor to be considered in the context of its overall compensation philosophy, and will consider the tax law changes. The Committee reviews each material element of compensation on a continuing basis to determine whether deductibility can be accomplished without sacrificing flexibility and other important elements of the overall executive compensation program.
Pay Ratio Disclosure
SEC rules require that we provide a comparison of the annual total compensation of John J. Ferriola, our Chief Executive Officer in 2017, to the median of the annual total compensation of our employees other than Mr. Ferriola. For purposes of providing the comparison in accordance with SEC rules, we identified a “median employee” and compared Mr. Ferriola’s annual total compensation to that of the median employee. For 2017, our last completed fiscal year:
The methodology that we used to identify the median employee is described below. Annual total compensation is calculated in the same manner as the amount set forth in the “Total” column in the Summary Compensation Table. While, as explained below, the methodology involves several assumptions and adjustments, we believe the pay ratio information set forth above constitutes a reasonable estimate, calculated in a manner consistent with applicable SEC rules.
Because other companies may use different methodologies to identify their median employees, the pay ratio set forth above may not be comparable to the pay ratios reported by other companies.
Methodology
Date Used to Determine Employee Population. For purposes of identifying the median employee, we selected October 1, 2017 to be the date as of which we would determine our employee population.
Composition of Employee Population. We determined that, as of October 1, 2017, we had 25,322 employees globally. Of that amount, 22,672 were U.S. employees and 2,650 werenon-U.S. employees. In order to simplify the determination of the median employee and as permitted by SEC rules, we excluded 292
2018 Proxy Statement 43
COMPENSATION DISCUSSIONAND ANALYSIS
non-U.S. employees (approximately 1.2% of our employees) located in seven countries, comprising all of the employees in those countries, as set forth in the table below:
Country Excluded | Number of Employees Excluded | |
China | 4 | |
India | 215 | |
Mexico | 22 | |
Poland | 2 | |
Sri Lanka | 38 | |
Switzerland | 10 | |
United Arab Emirates | 1 |
After excluding the 292non-U.S. employees, we determined the identity of our median employee from a population of 25,030 employees, including 22,672 U.S. employees and 2,358non-U.S. employees.
Given availability of payroll data, the size, composition and global diversity of these 25,030 employees, we employed statistical sampling to assist in identification of the median employee. We stratified the employee population based on similarity of characteristics such as product line and geography into groups. We then took the natural log of compensation data for each employee within the group. From the lognormal data, we calculated median, standard deviation and variance of each group for the purposes of deriving sample sizes that fairly represented the grouping. Using this methodology, we generated a random sample of 4,464 employees. The group medians were then weighted by total group headcount relative to Nucor’s 25,030 employees to derive the median employee.
As permitted by SEC rules, the employee population data described above does not include approximately 122 employees of St. Louis Cold Drawn, Inc., an entity we acquired in September 2017.
Pay Data Used. To identify the median employee, we derived compensation information from our payroll records for fiscal 2017. We used a consistently applied compensation measure (CACM) which included total taxable income, or equivalent. We converted the amount of compensation paid tonon-U.S. employees to U.S. dollars using average foreign currency exchange rates for 2017. We annualized compensation for employees hired during 2017.
The employee whose CACM was at the median of the employee population, determined as described above, is the “median employee” for purposes of the comparison to Mr. Ferriola’s annual total compensation.
REPORT OF THE COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
The Compensation and Executive Development Committee has reviewed and discussed the Compensation Discussion and Analysis with management of the Company. Based on that review and discussion, the Compensation and Executive Development Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2015.2017.
THE COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE
Victoria F. Haynes, Chairman
Harvey B. GanttLloyd J. Austin III
Patrick J. Dempsey
Gregory J. Hayes
Bernard L. Kasriel
Christopher J. Kearney
Laurette T. Koellner
Raymond J. Milchovich
John H. Walker
44 2018 Proxy Statement
EQUITY COMPENSATION PLAN INFORMATION
The following table below sets forth information regarding shares of Nucor’s common stock that may be issued under Nucor’s equity compensation plans as of December 31, 2015.2017. There are no equity compensation plans that have not been approved by stockholders.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by stockholders (1) | 5,615,912 | (2) | 43.51 | (3) | 11,324,404 | (4) |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | |||||||||
Equity compensation plans approved by stockholders (1) | 6,848,746 | (2) | $ | 47.96 | (3) |
| 7,941,116 | (4) |
(1) | Includes the AIP, the LTIP, the 2005 |
(2) | Includes |
(3) | Weighted average exercise price of awarded and outstanding options; excludes deferred stock units and RSUs. |
(4) | Represents |
2018 Proxy Statement 45
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
APPROVAL OF THE AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO ADOPT A MAJORITY VOTE STANDARD, ELIMINATE CUMULATIVE VOTING AND REMOVE OBSOLETE PROVISIONS
The Board believes that it is in the best interests of Nucor and its stockholders to adopt a majority vote standard for the election of directors, which would require that nominees for director in an uncontested election receive a majority of the votes cast for or against such nominee’s election in order to be elected to the Board. The Board also believes that, to avoid a conflict with a majority vote standard, the right to cumulate votes in elections of directors should be eliminated. Accordingly, the Board has unanimously adopted, and recommends that Nucor’s stockholders adopt, an amendment to Article VII of our Restated Certificate of Incorporation providing for:
a majority vote standard for uncontested elections of directions
the elimination of cumulative voting in elections of directions
the removal of obsolete provisions related to the prior de-classification of the Board and the prohibition on removal of directors without cause.
A copy of Article VII of our Restated Certificate of Incorporation, as modified by the proposed amendment and reflecting such modifications, is attached as Appendix A to this Proxy Statement.
Majority and Cumulative Voting
Under our current plurality vote standard, director nominees receiving the highest number of votes cast are elected, subject to a corporate governance principle adopted by the Board. This corporate governance principle requires any director nominee in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election to promptly tender his or her resignation for consideration by the Governance and Nominating Committee.
The Board believes that the adoption of the proposed majority vote standard for uncontested elections is appropriate at this time. The Board has regularly considered adopting a majority vote standard for uncontested elections of directors in past years but did not primarily due to potential uncertainties, including potential technical and legal uncertainties, and because the cumulative voting rights in our Restated Certificate of Incorporation are incompatible with a majority vote standard. By amending the Restated Certificate of Incorporation to implement the majority vote standard, the vote standard for directors in uncontested elections could not be changed in the future without approval by Nucor’s stockholders while a corporate governance principle could be changed by the Board acting alone.
Our current Restated Certificate of Incorporation entitles stockholders to exercise cumulative voting rights when electing directors. This means that each holder of common stock is entitled to cast a number of votes equal to the number of his or her shares of stock multiplied by the number of directors to be elected. A stockholder may give one candidate all the votes such stockholder is entitled to cast or may distribute such votes among as many candidates as the stockholder chooses.
The Board believes that it is necessary and appropriate to eliminate cumulative voting rights in connection with the implementation of a majority vote standard because cumulative voting rights are incompatible with a majority vote standard. To this point, the American Bar Association Committee on Corporate Laws and commentators have concluded that majority voting should not apply to public companies that allow cumulative voting. In addition, Glass Lewis and Co. stated in its 2016 Proxy Season Guidelines that it would recommend against cumulative voting proposals where a company already has a true majority vote standard due to their incompatibility. If both majority voting and cumulative voting applied in the same election of directors, there would be a higher likelihood that one or more candidates may not receive a majority of votes, potentially causing the Board to have multiple vacancies.
Removal of Obsolete Provisions in our Restated Certificate of Incorporation.
The proposed amendment to our Restated Certificate of Incorporation removes two obsolete provisions in Article VII that are no longer applicable or relevant. First, the proposed amendment removes provisions in Article VII that were adopted in 2010 to eliminate the classified structure of the Board over a three year period, which was completed in 2013. Second, the proposed amendment removes a provision prohibiting the removal of a director without cause, which ceases to be applicable under the Delaware General Corporation Law (“DGCL”) when a board of directors is not classified or a corporation does not have cumulative voting. The Board believes the removal of these obsolete provisions is advisable and in the best interests of Nucor and its stockholders.
Director Resignation Policy and Bylaws Amendments.
As noted above, the Board had adopted a corporate governance principle requiring director resignation in conjunction with our current plurality vote standard. If the proposed amendment to our Restated Certificate of Incorporation is approved and adopted by our stockholders, the Board will revise the current director resignation requirement in our Corporate Governance Principles to conform to the amendment.
Upon amending our Restated Certificate of Incorporation to adopt the proposed amendment, several provisions in our Bylaws will become ineffective. The plurality vote provisions and references to cumulative voting in our Bylaws will become invalid because our Restated Certificate of Incorporation will provide for a majority vote standard in uncontested elections of directors and will not provide for cumulative voting in elections of directors. Accordingly, if the proposed amendment is approved and adopted by Nucor’s stockholders, the Board plans to amend the Bylaws to be consistent with the amendment to our Restated Certificate of Incorporation approved by our stockholders.
Vote Recommendation
For the foregoing reasons, Nucor’s Board of Directors recommends a vote FOR adoptionthe resolution.
As required by Section 14A of the amendment1934 Act, Nucor is requesting stockholder approval of the compensation of its Executive Officers in 2017, which is described in the “Compensation Discussion and Analysis” section, compensation tables and related narrative discussion of this Proxy Statement. This approval is not intended to Article VIIaddress any specific item or element of our Restated Certificatecompensation or the compensation of Incorporation.any particular Executive Officer, but rather the overall compensation of the Company’s Executive Officers and the philosophy, principles and policies used to determine compensation.
Stockholders were most recently asked to approve the compensation of Nucor’s Executive Officers at the Company’s 2017 annual meeting of stockholders, and stockholders approved the Company’s Executive Officer compensation with more than 95% of the votes cast in favor. At the 2017 annual meeting of stockholders, the Company’s stockholders were also asked to indicate whether future advisory stockholder votes on Executive Officer compensation should occur every one, two or three years. Based on the voting results, the Board adopted a policy that the Company will include an advisory stockholder vote on Executive Officer compensation in the Company’s proxy materials on an annual basis until the next required advisory vote on the frequency of advisory stockholder votes on Executive Officer compensation, which will occur no later than the Company’s annual meeting of stockholders in 2023.
As described in the “Compensation Discussion and Analysis” section, compensation for all employees at Nucor, including Executive Officers, is performance-based. Nucor pays for results. The executive compensation program is designed to pay above the market median when performance is outstanding and, conversely, to pay below the market median when performance is below Nucor’s peers. This is accomplished through a compensation program for Executive Officers that is balanced but highly leveraged — a significant portion of each Executive Officer’s potential compensation is variable and based on results achieved. Executive Officer compensation is earned under incentive plans that are based on Nucor’s performance and the value delivered to its stockholders. Stock ownership requirements and the design of the long-term incentives ensure that Executives Officers are significantly exposed to Nucor’s financial performance and changes in stock price, thereby aligning their interests with stockholders’ interests.
The Compensation and Executive Development Committee of the Board (“the Committee”) monitors and reviews the compensation program to ensure that it continues to support Nucor’s unique culture, including its ability to attract, retain and motivate its workforce. The Committee also regularly reviews the program to ensure that it is not reasonably likely to incentivize Executive Officers to take risks that could have a material adverse impact on Nucor. Stockholders are urged to read the “Compensation Discussion and Analysis” section, along with the compensation tables and the related narrative discussion, which more thoroughly discuss the Company’s compensation policies and procedures. The Committee and the Board believe that these policies and procedures are effective in implementing the Company’s overall compensation philosophy.
This vote is an advisory vote, which means that the stockholder vote on this proposal will not be binding on Nucor, the Committee or the Board, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on, Nucor, the Committee or the Board. However, the Committee values the opinions expressed by Nucor’s stockholders and will carefully consider the outcome of the vote when making future compensation decisions for Nucor’s Executive Officers.
Vote Recommendation
The Board of Directors recommends a vote FOR the below advisory resolution approving the compensation paid to Nucor’s Executive Officersin 2017.Unless otherwise specified, proxies will be votedFOR the resolution.
RESOLVED, that the compensation paid to Nucor’s Executive Officers, as disclosed in this proposal.Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the “Compensation Discussion and Analysis” section, compensation tables and related narrative discussion included in this Proxy Statement, is herebyAPPROVED.
46 2018 Proxy Statement
STOCKHOLDER PROPOSAL
We have been notified that Domini SocialImpact Equity Fund (the “Fund”), as lead proponent, intends to present the proposal set forth below for consideration at the annual meeting.Annual Meeting. The address and number of shares of the Company’s sharescommon stock held by the Fund and the co-proponents will be promptly provided upon oral or written request made to our Corporate Secretary. We are not responsible for the content of the stockholder proposal, which is printed below exactly as it was submitted.
Nucor’sThe Board of Directors recommends a vote AGAINST this stockholder proposal. Unless otherwise specified, proxies will be votedAGAINST the proposal.
Political Lobbying Report
Whereas, we believe in full disclosure of Nucor’s direct and indirect lobbying activities and expenditures to assess whether Nucor’s lobbying is consistent with its expressed goals and in the best interests of stockholders.
Resolved,the stockholders of Nucor shareholders request the preparation of a report, updated annually, disclosing:
1. | Company |
2. | Payments by Nucor used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. |
3. | Nucor’s membership in and payments to anytax-exempt organization that writes and endorses model legislation. |
4. | Description of management’s and the Board’s decision making process and oversight for making payments described in sections 2 and 3 above. |
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Nucor is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees of the board and posted on Nucor’s website.
Supporting Statement
Full disclosure of Nucor’s directAs stockholders, we encourage transparency and indirect lobbying activities and expenditures will allow shareholders to assess whether these activities are consistent with Nucor’s expressed goals andaccountability in the best interestsuse of stockholders.
Nucor spent $3.2 million in 2013 and 2014 on federal lobbying (www.opensecrets.org). These figures do not include lobbying expenditurescorporate funds to influence legislation in states, where disclosure is uneven or absent.and regulation. Nucor spent over $116,000$13,610,000 from 2010 — 2016 on federal lobbying. Data on state level spending is not consistently available. Nucor spent $555,606 on lobbying in North Carolina for 2013 and 2014 (http://www.secretary.state.nc.us/lobbyists/)from 2010 — 2016. Nucor’s lobbying over steel tariffs has attracted media attention (“Trump Still Determined to Enact Steel Tariffs, Says Nucor CEO,”Bloomberg, September 29, 2017).
Nucor’s mission includes a commitment to being “cultural and environmental stewards in our communities where we live and work.” Nucor’s indirect lobbying may be inconsistent with that commitment. Nucor belongs tosits on the board of the National Association of Manufacturers, which spent $20$25.44 million on lobbying in 20132015 and 20142016. Nucor also sits on boards of the American Iron and is a party to a lawsuit againstSteel Institute (“AISI”) and the Environmental Protection Agency, and to the Manufacturing Policy Alliance, which drew attention for lobbying against green energy standards (“Large Ohio Manufacturing Employers Form Lobbying Group,”Columbus Dispatch).World Steel Association. Nucor does not comprehensively disclose its membership in trade associations or its trade association memberships, nor payments and the portions used for lobbying.
And Nucor does not disclose its membership in or payments totax-exempt organizations that write and endorse model legislation, such as supporting the Heartland Institute orand the American Legislative Exchange Council (ALEC). In 2012,
We are concerned that Nucor’s supportlack of trade association and ALEC disclosure presents reputational risks. For example, AISI has drawn media scrutiny for lobbying the EPA (“Scott Pruitt’s EPA Is Letting Industry
2018 Proxy Statement 47
Lobbyists Roll Back Environmental Protections,”Newsweek, October 4, 2017), as has Nucor’s past funding of the Heartland Institute, was leaked towhich has drawn criticism for misleading the press. The Heartland Institute has raised controversy over its work to discreditpublic about climate change science (“Big Donors Ditch Rightwing Heartland Institute over Unabomber Billboard,The Steel Magnate Helping Trump Assail Pollution Regulations,”The GuardianInside Climate News), August 17, 2016). Nucor was a member of the Utah Host Committee for ALEC’s 2012 annual meeting. More thanOver 100 companies have publicly left ALEC, including 3M, John Deere, Emerson Electric and International Paper, over its controversial positions.Paper.
Board of Directors’ Statement in Opposition to the Proposal
Nucor’sThe Board of Directors recommends a voteAGAINST this proposal. Although the Board supports transparency and accountability in lobbying and corporate spending on political contributions, we believe that adopting the proposal is unnecessary and would not be in the best interests of Nucor.
Nucor and its stockholders.
We believe that the interests and well-being of Nucor, our stockholders, our employees and our nation requiremandate our active engagement in the public policy decision-making process. Because our business is subject to extensive regulation at all levels of government, we support legislative and regulatory actions that further Nucor’s long-term business strategies, and we oppose any unreasonable, unnecessary or overly burdensome actions that threaten Nucor’s strategic success. More fundamentally, however, we believe that only a restoration of our country’shealthy manufacturing industry can return our country’s economy to a sound footing. For that reason, we actively promote government policies that address the multitude of state, national and international issues that challenge the U.S. manufacturing industry, including trade practices in violation of global trade rules, currency manipulation, and tax and overly burdensome regulatory policies that sap the health and vitality of our manufacturing companies.
Nucor takes a multi-faceted approach to political engagement. First, we utilize our unique industry position to engage in direct outreach efforts to ensure that our country’s citizens and leaders understand the challenges facing our economy, our industry and our Company. Through advertisements, articles and other outreach methods, we provide information and thought leadership to promote an improved grassroots understanding of issues of critical importance to Nucor and our stockholders.importance. For example, we created a page on our website discussing the importance of our country’s manufacturing economy (located athttp://www.nucor.com/voice)voice), which facilitates our direct communication with the public at large regarding an issueissues that impactsimpact Nucor and our entire country. As appropriate, and prudent, Nucor also engages in lobbying activities that ensure Nucor’s interests are adequately considered by federal, state and local politicalgovernment leaders. Nucor’s lobbying activities are subject to comprehensive regulation at both the federal and state levels. Federal law requires the filing of regular, detailed reports with the U.S. Senate and the House of Representatives disclosing general and specific lobbying activities that are undertaken on our behalf. Such reports are available to the public on the websites of the U.S. Senate (located atwww.senate.gov/legislative/Public_Disclosure)lobbyingdisc.htm and the U.S. House of Representatives (located at http://lobbyingdisclosure.house.gov)lobbyingdisclosure.house.gov. State lobbying activities also are subject to detailed registration and disclosure requirements, and such reports are also publicly available through the applicable state authorities. Nucor is committed to complying with all laws applicable to its lobbying activities.
Second, Nucor contributes to, and maintains memberships in, various trade associations and other organizations that we believe share and will further the goals of Nucor and benefit its stockholders. Such associations and organizations provide both a useful forum for discussing issues of general industry significance and a powerful platform for advocating positions on issues of importance to the members. While associations and organizations in which Nucor is a member may from time to time take positions on issues that are not representative of Nucor’s position, (which is always the case in an organization composed of a variety of individual members), on the whole we believe that Nucor’s membership in such organizations and associations is in the long-term interestinterests of our Company and our stockholders.
The Board opposes the proposal because we believe that theexisting restrictions imposed, and reports required, by existing state and federal law together with Nucor’s existing internal compliance and decision-making processes strike the appropriate balance between disclosure of Nucor’s activities and protection of Nucor’s strategiesstrategic and confidential information. All of Nucor’s lobbying and advocacy activities are managed and overseen by its Public Affairs Department, which ensures not only that such activities comply with applicable law but also that all activities further the long-term interests of Nucor and our stockholders. The activities of trade associations and other organizations in which Nucor participates are also closely monitored to ensure that Nucor’s interests continue to be served by membership in such entities.
Our Company participates in the public policy decision-making process solely to promote and protect the economic future of Nucor for the benefit of our stockholders, our employees and our national economy. We believe that the additional disclosure requested by the Fund could put Nucor at a competitive disadvantage by revealing its long-term business strategies and objectives. Competitors, unions and other parties with interests adverse to Nucor also engage in the political process to further their own business or strategic priorities. Therefore,The Board believes that unilaterally imposing more stringent disclosure and reporting requirements on Nucor couldwould likely benefit thosethese third parties to the detriment of Nucor and its stockholders. The Board believes that any disclosures or reporting requirements over and above those currently mandated by law should be applicable to all participants in the political process and not just to Nucor.
Similarly, Nucor believes that the information and arguments disseminated by Nucor or others should be considered on their own merits. In today’s hyper-partisan political environment, the force of argument can be lost if the speaker, rather than the merit of a position, becomes the story. Special interest groups may also seize upon the information contained in the reports requested by the Fund to demand “equal time” or to otherwise hold Nucor hostage to their special interest without any regard for the long-term interests of Nucor and our stockholders. As such, transparency of the kind sought by the Fund risks handicapping Nucor’s ability to influence and inform public debate for the long-term benefit of Nucor and our stockholders.48 2018 Proxy Statement
Vote Recommendation
For the foregoing reasons, Nucor’sThe Board of Directors recommends a vote AGAINST this stockholder proposal.Unless otherwise specified, proxies will be voted AGAINSTthis proposal.
PROPOSAL 5
STOCKHOLDER PROPOSAL
We have been notified that Pax World Mutual Funds (“PWMF”) intends to present the proposal set forth below for consideration at the annual meeting. The address and number of the Company’s shares held by PWMF will be promptly provided upon oral or written request made to our Corporate Secretary. We are not responsible for the content of the stockholder proposal, which is printed below exactly as it was submitted.
Nucor’s Board of Directors recommends a vote AGAINST this stockholder proposal. Unless otherwise specified, proxies will be voted AGAINSTthe proposal.
RESOLVED:Shareholders request Nucor adopt time-bound, quantitative, company-wide goals to reduce greenhouse gas (GHG) emissions, taking into consideration the most recent Intergovernmental Panel on Climate Change (IPCC) guidance for reducing total GHG emissions, and issue a report by September 2016, at reasonable cost and omitting proprietary information, on its plans to achieve these goals. 2018 Proxy Statement 49
Supporting Statement
In order to mitigate the worst impacts of climate change, the IPCC estimates that a 55 percent reduction in GHG emissions globally is needed by 2050 (relative to 2010 levels) to stabilize global temperatures, entailing a US target reduction of 80 percent.
The costs of failing to address climate change are significant and estimated to have an average value at risk of $4.2 trillion globally—representing 6% current market capitalization of all the world’s stock markets(The Economist,Intelligence Unit, 2015).Risky Business: The Economic Risks of Climate Change in the United States (2014),an analysis of climate change impacts, found serious economic effects including property damage, shifting agricultural patterns, reduced labor productivity, and increased energy costs. These effects could substantially impact a company’s business operations, revenue, or expenditure.
Setting GHG emission targets is widespread among US companies and can have positive financial outcomes. Presently, 60 percent of Fortune 100 companies have GHG reduction commitments, renewable energy commitments, or both.
A report published by WWF, Carbon Disclosure Project (CDP), and McKinsey & Company,The3%Solution: Driving Profits Through Carbon Reduction (2013),found that companies with GHG targets achieved an average of 9% better return on investment than companies without targets. Additionally, the 79% of companies in the S&P 500 that report to CDP earned a higher return on their carbon reduction investments than on their overall corporate capital investments. Also, the 53 Fortune 100 companies reporting on climate and energy targets to CDP are saving $1.1 billion annually through their emission reductions and renewable energy initiatives. These goals enable companies to reduce costs, build resilient supply chains, and manage operational and reputational risk.
Investors with $95 trillion in assets have supported the CDP which seeks corporate reporting on climate change and received responses from 81% of companies in the Global 500 in 2013. While we recognize Nucor for pursuing less carbon intensive steel production methods relative to peers, such as electric arc furnace (EAF) steel production, Nucor does not currently report a quantifiable carbon reduction or energy efficiency target nor has Nucor responded to the CDP. We believe this may have negative consequences for Nucor and long-term shareholder value.
Board of Directors’ Statement in Opposition to the Proposal
Nucor’s Board of Directors recommends a voteAGAINST this proposal. Nucor is committed to serving our customers, communities, stockholders and teammates and recognizes that protecting the environment is critical to our operations and long-term success. We take pride in our leadership in corporate environmental sustainability as the largest recycler in North America. Nucor complies with the laws and regulations governing its various operations, including reporting its GHG emissions to the Environmental Protection Agency, and publishes information on emissions and other aspects of sustainability biannually in our sustainability report. We have one of the smallest GHG footprints of any steel producing company in the world and are committed to reducing not only GHG emissions but all emissions from our operations through the installation of technology that is economically viable.
Nucor believes that establishing non-regulatory, self-imposed GHG emission reductions and targets on environmentally responsible United States companies will result in a net export to and global increase of GHG and other emissions by steel producers that do not participate in these programs, principally foreign producers, and result in much greater harm to our global environment. Environmentally responsible steel producers like Nucor would then be forced either to (i) decrease their steel production to achieve emission targets and thereby create an incentive for less environmentally responsible steel producers to increase their production to meet consumer demand or (ii) increase the price of their steel products to cover the higher cost for an environmentally superior product that is substantially more expensive than but not functionally superior to other steel products with the probable effect of decreasing demand for their product and increasing demand for (and production of) the foreign product. This production displacement would result in an increase in GHG emissions released into the environment globally, which is the opposite outcome we believe is intended by the proposal. Globally, a far better scenario would be for caps to be placed on producers that have little or no environmental protection laws with which they must comply so that they either improve their performance or face having their markets shift to more responsible producers like Nucor. In the absence of comprehensive limitations imposed on global industrial sectors, we believe proposals to voluntarily limit emissions from responsible producers are counterproductive and detrimental to the global environmental condition.
Nucor believes that protecting our global environment is in the best interests of everyone. We believe that adopting GHG emission reductions and targets on environmentally responsible U.S. steel producers such as Nucor would result in the unintended and negative consequence of increasing global GHG emissions through production displacement from U.S. producers to foreign producers. Nucor believes its efforts and assets, as well as those of other concerned persons, should be on the development and installation of technologies to reduce GHG and other emissions and the imposition of emission limits such as those in the United States on steel producers in foreign markets.
Vote Recommendation
For the foregoing reasons, Nucor’s Board of Directors recommends a vote AGAINST this proposal.Unless otherwise specified, proxies will be votedAGAINST this proposal.
Discretionary Voting by Proxy Holders
Nucor’sThe Board of Directors does not intend to present any matters at the 2016 annual meeting of stockholdersAnnual Meeting other than as set forth above and knows of no other matter to be brought before the meeting. However, if any other matter comes before the meeting,Annual Meeting, or any adjournment or postponement thereof, the matter may be excluded by Nucor as untimely or the persons named in the enclosed proxy may vote such proxy on the matter according to their best judgment.
Stockholder Proposals for the 20172019 Annual Meeting of Stockholders
Any stockholder proposal intended to be included in Nucor’s proxy statement and form of proxy for its 20172019 annual meeting of stockholders must be received by Nucor not later than November 17, 2016. Such proposals23, 2018. Any such stockholder proposal must also comply with SEC regulations under Rule14a-8 regarding of the 1934 Act, which lists the requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. ProposalsStockholder proposals should be addressed to the attention of A. Rae Eagle, Corporate Secretary, at our principal executive offices, 1915 Rexford Road, Charlotte, North Carolina 28211, or faxed to her attention at(704) 943-7207.
Pursuant to the SEC rules, submitting a proposal will not guarantee that it will be included in the Company’s proxy materials.
In addition, any stockholder proposal intended to be presented at the 20172019 annual meeting of stockholders, but that will not be included in Nucor’s proxy statement and form of proxy relating to the 20172019 annual meeting, must be delivered in writing to our Corporate Secretary at the Company’s principal executive offices not lesslater than the close of business on the 120 days nor more than 150 daysth day before the first anniversary of the 2016 annual meetingAnnual Meeting nor earlier than the close of stockholders.business on the 150th day before the first anniversary of the Annual Meeting. As a result, any proposals submitted by a stockholder pursuant to the provisions of Nucor’s Bylaws (other than proposals submitted pursuant to Rule14a-8) must be received no earlier than December 14, 201611, 2018 and no later than January 13, 2017.
10, 2019.
Solicitation and Expenses
Nucor will bear the entire cost of thissoliciting proxies and will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses for sending proxy solicitation, including the preparation, printingmaterials to stockholders and mailing of the proxy statement, the proxy and any additional soliciting materials sent by Nucor to stockholders.obtaining their proxies. Nucor has retained the services of Georgeson Inc.Innisfree M&A Incorporated to assist in the solicitation ofsoliciting proxies from the Company’s stockholders for a fee of approximately $20,000,$15,000 plus expenses. Further, the Company may reimburse brokerage firms and other persons representing beneficial ownersreimbursement of shares for reasonable expenses incurred by them in forwarding proxy soliciting materials to such beneficial owners.expenses. In addition to solicitationssoliciting the proxies by mail and the Internet, certain of the Company’s directors, officers and regular employees, without additional remuneration,compensation, may solicit proxies personally or by telephone, facsimile and personal interviews. Solicitation by officers and employees of Nucor may also be made of some stockholders in person or by mail, telephone or facsimile following the original solicitation.
e-mail.
Delivery of Proxy Statements
As permitted by the 1934 Act, only one copy of this Proxy Statement and the proxy statement and annual report, or the notice regarding the availability of proxy materials on the Internet, as applicable, is being delivered to stockholders residing at the same address unless such stockholders have notified the Company of their desire to receive multiple copies of the proxy statement andstatements, annual report.
reports or notices.
The Company will promptly deliver, upon oral or written request, a separate copy of this Proxy Statement and the proxy statement and annual report, or the notice regarding the availability of proxy materials on the Internet, as applicable, to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies of this Proxy Statement, the annual report or the notice and/or requests for multiple copies of the proxy statement, andthe annual report or the notice in the future should be directed to Nucor’s Corporate Secretary at our principal executive offices, 1915 Rexford Road, Charlotte, North Carolina 28211 and(704) 366-7000.
Stockholders residing at the same address and currently receiving multiple copies of the proxy statement, andthe annual report or the notice regarding the availability of proxy materials on the Internet may contact Nucor’s Corporate Secretary at our principal executive offices to request that only a single copy of the proxy statement, andthe annual report or the notice be mailed in the future.
Miscellaneous
The information referred to in this proxy statementProxy Statement under the captions “Report of the Compensation and Executive Development Committee” and “Report of the Audit Committee” (to the extent permitted under the 1934
50 2018 Proxy Statement
OTHER MATTERS
Act) (i) shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or to the liabilities of Section 18 of the 1934 Act and (ii) notwithstanding anythingshall not be deemed to the contrary that may be contained inincorporated by reference into any filing by Nucor under the 1934 Act or the Securities Act of 1933, shall not be deemedexcept to be incorporatedthe extent that the Company specifically incorporates it by reference in any such filing.
reference.
By order of the Board of Directors,
John J. Ferriola
Chairman, Chief Executive Officer and President
March 17, 201623, 2018
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD OR VOTING
INSTRUCTON FORM IN THE ENCLOSED ENVELOPE, OR VOTE VIA TELEPHONE OR INTERNET.
ARTICLE VII OF
NUCOR CORPORATION’S RESTATED CERTIFICATE OF INCORPORATION
YOUR VOTE IS VERY IMPORTANT. TO ENSURE THAT YOU WILL BE REPRESENTED AT THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY AS MODIFIED BY PROPOSED AMENDMENTSOON AS POSSIBLE VIA THE INTERNET,
ARTICLE VII
DIRECTORSTELEPHONE OR MAIL.
A. The number of directors of the corporation shall be such as from time to time shall be fixed by, or in the manner provided in, the by-laws. Election of directors need not be by ballot unless the by-laws so provide. 2018 Proxy Statement 51
B. At all elections of directors of the corporation at which a stockholder is entitled to vote, eachsuch stockholderof record of Preferred Stockshall be entitled toas many votes as shall equal thesuchnumber of votes, if any, as may be fixed in this Restated Certificate of Incorporation or the applicable certificate of designation for each share of such stock registered in such stockholder’s name on the books of the corporation and each stockholder of record of Common Stock shall be entitled to one vote for each share of such stock registered in such stockholder’s name on the books of the corporation. which (except for this provision as to cumulative voting) he would be entitled to cast for the election of directors with respect to his shares of stock, multiplied by the number of directors to be elected, and he may cast all of such votes for a single director or may distribute them among the number to be voted for, as he may see fit. Each director nominee shall be elected by an affirmative vote of a majority of the votes cast with respect to such director nominee by the stockholders entitled to vote in the election at a meeting at which a quorum is present, unless the number of nominees exceeds the number of directors to be elected in which case each director nominee shall be elected by a plurality of the votes of the shares properly represented and entitled to vote in the election at such meeting. In the event that a nominee is already a director of the corporation and does not receive a majority of the votes cast with respect to such nominee in an election where the number of nominees equals the number of directors to be elected, such nominee shall promptly tender his or her resignation to the board of directors for consideration
C. Until the 2013 annual meeting of stockholders, the directors of the corporation shall continue to be classified and divided into three classes, each class to be as equal in number as possible. Each director who is serving as a director immediately following the 2010 annual meeting of stockholders, or is thereafter elected a director, shall hold office until the expiration of the term for which he or she has previously been elected, and until his or her successor shall be duly elected and qualified, or until death, resignation or removal. At the 2011 annual meeting of stockholders, the successors of the class of directors whose terms expire at that meeting shall be elected for a two-year term expiring at the 2013 annual meeting of stockholders. At the 2012 annual meeting of stockholders, the successors of the class of directors whose terms expire at that meeting shall be elected for a one-year term expiring at the 2013 annual meeting of stockholders. Atthe 2013 annual meeting of stockholders, and at each annual meeting of stockholders thereafter, all directors shall be elected for terms expiring at the next annual meeting of stockholders.
D. After the 2013 annual meeting of stockholders, subject to the rights of the holders of shares of any series of Preferred Stock, no special meeting of stockholders of the corporation may be called by or on behalf of the stockholders of the corporation for a purpose of voting to remove one or more directors without cause, and stockholders may not act by written consent in lieu of a meeting to remove one or more directors without cause.
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NUCOR CORPORATION C/O PROXY SERVICES P.O. BOX 9142 FARMINGDALE, NY 11735 | VOTE BY INTERNET -www.proxyvote.com | |||||
As an alternative to completing this form, you may enter your vote instruction by telephone at 1-800-PROXIES, or via the Internet at www.voteproxy.com and follow the simple instructions. Use the Company Number and Account Number shown on your proxy card.
This proxy is being solicited on behalf of the Board of Directors of Nucor Corporationfor the 2016 annual meeting of stockholders, to be held at 10:00 a.m. Eastern Time on Friday, May 13, 2016, at the Charlotte Marriott SouthPark, 2200 Rexford Road, Charlotte, North Carolina.
John J. Ferriola and James D. Frias, or either of them, with power of substitution, are appointed proxies to vote all shares of the undersigned at the 2016 annual meeting of stockholders, and any adjournment or postponement thereof, on the following proposals, as set forth in the proxy statement:
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This proxy, when properly executed, will be voted as specified by the undersigned. If no choice is specified, this proxy will be votedFOR the election of all nominees for director listed on the reverse side,FOR proposals 2 and 3,AGAINST proposals 4 and 5, and according to the discretion of the proxy holders on any other matters that may properly come before the meeting or any adjournment or postponement thereof. The proxy holders reserve the right to cumulate votes and cast such votes in favor of the election of some or all of the applicable director nominees in their sole discretion.
PLEASE SIGN AND DATE ON THE OTHER SIDE
ANNUAL MEETING OF STOCKHOLDERS OF
May 13, 2016
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ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by Nucor Corporation in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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i Please detach along perforated line and mail in the envelope providedIF you are not voting via telephone or the Internet. i
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E39595-P01635-Z71702 KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||||||||||||||||||||||||
Nucor’s Board of Directors recommends a voteFOR ALL NOMINEES.
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02) Patrick J. Dempsey
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06) Laurette T. Koellner
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To cumulate your vote for one or more of the listed nominees, mark the cumulative voting box below and write in your instructions on the | Nucor’s Board of Directors recommends a voteFOR proposals 2 and 3. | For | Against | Abstain | |||||||||||||||||||||||||||||||||||
2. Ratification of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for the year ending December 31, 2018 | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
3. Approval, on an advisory basis, of Nucor’s named executive officer compensation in 2017 | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
Nucor’s Board of Directors recommends a voteAGAINST proposal 4. | |||||||||||||||||||||||||||||||||||||||
4. Stockholder proposal regarding political lobbying report | ☐ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
If you wish to exercise cumulative voting, please mark the box to the right and write in your instructions on the reverse side. | ☐ | In their discretion, the proxy holders are authorized to vote on such other business as may properly come before the meeting or any adjournment or postponement
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
E39596-P01635-Z71702
NUCOR CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The stockholder(s) hereby appoint(s) John J. Ferriola and James D. Frias, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Nucor Corporation that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., Eastern Time on May 10, 2018, at the Charlotte Marriott SouthPark, 2200 Rexford Road, Charlotte, North Carolina, and any adjournment or postponement thereof.
This proxy, when properly executed, will be voted as directed by the stockholders(s). If no such directions are made, this proxy will be votedFOR the election of the nominees listed on the reverse side for the board of directors,FOR proposals 2 and 3,AGAINST proposal 4 and in the discretion of the proxies with respect to such other business as may properly come before the meeting or any adjournment or postponement thereof. The proxy holders reserve the right to cumulate votes and cast such votes in favor of the election of some or all of the applicable director nominees in their sole discretion.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
CUMULATE | ||||
(If you noted cumulative voting instructions above, please check the corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE