STEEL DYNAMICS INC
For the period ended Apr 25, 2025. Filed Mar 13, 2025.
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Apr 25, 2025 · Filed Mar 13, 2025
Contents
What Drives our Program
Compensation Philosophy and Objectives
Our executive compensation program reflects a continuation of the team-oriented entrepreneurial culture upon which the Company was founded and that has contributed to our success. While the type of executive we seek to attract and retain might have the opportunity to work elsewhere at a higher base salary, we believe that he or she will want to work for us because of the opportunity to earn a higher multiple of that base salary in years in which his or her efforts have contributed to a substantially more profitable year for the Company, our team members and our shareholders. Fundamental to this philosophy is the recognition of the central role that teamwork, collaboration, and transparency play in the achievement of superior financial and operational performance, under all market conditions, both at the executive and operating levels. This philosophy is reflected at every level of the Company, from our colleagues on the plant floor to corporate and operational senior leaders.
Both our annual and long-term incentive compensation award opportunities have a common objective and intentional “pay-for-performance” design. Each program rewards one or more elements important to the interests of the Company, our teams, and our shareholders. Our executive compensation program contains a significant majority of compensation “at risk” and aligns with shareholder interests with clear, objective return metrics that over the long-term drive value creation.
Compensation Design Principles and Elements of Pay
Our philosophy drives the following compensation design principles:
| ■ | base salary is fixed, payable in cash, and generally set at or below the competitive market, yet, when combined with the potential from our highly-levered annual incentive compensation plan, aspires to be sufficiently competitive to attract and retain the type of entrepreneurial executives we seek; |
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| ■ | annual incentive compensation should be awarded only after earnings first exceed certain threshold levels established by the Compensation Committee and designed to initially provide a minimum return to shareholders, with annual incentive compensation awards dependent upon additional earnings beyond such threshold levels, capped, however, at pre-established multiples of base salary; |
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| ■ | long-term incentive compensation should be predominantly performance-based, including awards linked to shareholder returns and with awards measured by how our executives have performed relative to our steel sector competitors over a multi-year period, based on pre-established key financial and operational measures; |
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| ■ | our executive compensation program should appropriately balance the use of both absolute and relative performance measures for incentive compensation; |
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| ■ | rewards for exemplary individual effort and performance over time should generally be expressed through annual increases in the level of base salary; and |
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| ■ | total direct compensation across all market conditions should be market competitive when Company performance so merits, but below market norms when that performance lags. |
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When compared to our steel competitors (as we do in our LTIP), we continue to achieve best-in-class operating and financial performance. Our CEO’s total target compensation remains below the 25 th percentile of the chief executive officers of the companies included in our compensation peer group.
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| 48 | Health and Safety | Entrepreneurial Culture | Customer Commitment | Strategic Sustainable Growth | Innovation | Financial Strength |
Pay Mix
The following charts illustrate the 2024 target total direct compensation mix of our Chief Executive Officer and the average for our other NEOs as approved by the Compensation Committee:
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