Clifford Smith
CLEVELAND-CLIFFSAbout Clifford Smith
Clifford T. Smith is Executive Vice President and Chief Operating Officer of Cleveland-Cliffs (since April 2024), after serving as EVP & President, Cleveland-Cliffs Steel (September 2021–April 2024) and EVP, COO (January 2019–September 2021) . He joined Cliffs in 2003 and previously held mine management roles at Asarco and Southern Peru Copper; he holds a BSc in Mining Engineering from the South Dakota School of Mines & Technology . Company performance in 2024 was mixed: Adjusted EBITDA was $780 million and net income was a loss of $708 million, reflecting a downcycle; relative TSR for the 2022–2024 LTI cycle was below threshold (9.6th percentile), resulting in a 0% payout for performance awards . Safety execution was strong with a record-low TRIR of 0.9 in 2024, a 26% improvement, which drove the only funded component of the annual incentive .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cleveland-Cliffs Inc. | EVP, Chief Operating Officer | Jan 2019–Sep 2021; Apr 2024–present | Oversight of operations and commercial, driving integrated steelmaking execution |
| Cleveland-Cliffs Inc. | EVP & President, Cleveland-Cliffs Steel | Sep 2021–Apr 2024 | Led steel segment operations during post-acquisition integration and capacity optimization |
| Cleveland-Cliffs Inc. | EVP, Business Development | Apr 2015–Jan 2019 | Led critical initiatives supporting turnaround and growth, contributing to HBI strategy |
| Cleveland-Cliffs Inc. | EVP, Seaborne Iron Ore; EVP, Global Operations; VP Latin America; GM Business Development | Pre‑2015 | Oversaw international operations in Australia/Canada; global ops leadership |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Asarco; Southern Peru Copper Corp. | Mine Management | Pre‑2003 | Operational leadership in mining; foundational technical experience |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $826,000 | $859,000 | $893,000 |
| All Other Compensation ($) | $62,659 | $50,930 | $52,660 |
| Change in Pension Value ($) | — | $808,200 | $121,600 |
| Pension PV at FYE ($) | — | — | Pension Plan $733,700; SERP $1,546,900 |
| Perquisites detail (2024) | — | — | Paid parking $4,200; Financial services $12,740; 401(k) match $13,800; NQDC match $21,920 |
Performance Compensation
| Metric | Weighting | Target/Structure | 2024 Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Adjusted EBITDA (EMPI) | 50% | Threshold $1.4B; Target $1.7B; Max $2.0B | $780M | 0% | Annual cash; paid Feb 2025 |
| Strategic Initiatives (EMPI) | 40% | Committee-evaluated goals (M&A, decarb, projects) | Achieved, but reset to 0% via negative discretion | 0% | Annual cash |
| Safety Scorecard (TRIR improvement) | 10% | TRIR improvement vs 2023 (target 5%) | 26.2% improvement | 200% of metric (weighted 10% → total plan funding 20%) | Annual cash |
| Annual Incentive Target (Smith) | — | 120% of base salary | — | Total EMPI funding 20% → $214,320 | Paid Feb 2025 |
| LTI – Performance Cash | 34% of LTI | Relative TSR vs SPDR S&P Metals & Mining peers; 25th/50th/75th pct → 50%/100%/200% | 2022–2024 cycle at 9.6th pct | 0% payout (cycle ended Dec 31, 2024) | 3-year cliff; pays early 2025 |
| LTI – Performance Shares | 33% of LTI | Same TSR curve | 2022–2024 cycle 0% | 0% payout | 3-year cliff |
| LTI – RSUs (time-based) | 33% of LTI | Time-based retention | 2022 grant vested Dec 31, 2024 (49,401 shares; $464,369 value realized) | N/A (vesting, not performance) | Vests Dec 31 of year 3 |
2024 LTI Grants (Smith):
- Performance Cash target grant value: $1,366,290
- Performance Shares target: 69,942 shares; threshold 34,971; max 139,884
- RSUs: 69,942 units; grant date price $19.54; vest Dec 31, 2026
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 616,078 shares (sole voting/investment power) as of March 17, 2025; less than 1% of shares outstanding |
| Pledging/Hedging | No pledging of shares by directors/executives; hedging and pledging prohibited by policy |
| Stock Ownership Guidelines | EVP requirement: 3x base salary; 5 years to comply; hold at least 50% of net shares until met |
| Compliance Status (as of Dec 31, 2024) | Exceeds guideline at ~13.6x base salary; direct shares 580,946, RSUs 189,163; total value $12,160,021 (based on $15.79 one‑year average) |
| Vested vs Unvested (FYE 2024) | Unvested RSUs: 69,820 (2023 grant, vests Dec 31, 2025) and 69,942 (2024 grant, vests Dec 31, 2026) |
| Performance Shares (Unvested at threshold) | 34,910 (2023–2025) and 34,971 (2024–2026); actual payout depends on relative TSR |
| Options | Exercised 27,430 options in 2024, value realized $339,858; indicative of limited remaining legacy options |
Employment Terms
| Term | Smith (EVP, COO) |
|---|---|
| Employment Agreement | Company does not offer employment agreements for executive officers (at‑will) |
| Change-in-Control (CIC) Structure | Double-trigger for equity; CIC definitions per equity plan |
| CIC Severance Multiple | 2x base salary + target annual incentive (highest of specific reference years) upon termination without cause within 24 months post‑CIC |
| Benefits on CIC Termination | 24 months COBRA for health/life/disability; SERP benefit lump sum for 24 months; incentive pay at target for year of termination; outplacement up to $17,500; financial planning perqs for 24 months ($15,000/year) |
| Non-Compete/Non-Solicit | Required to receive CIC severance; confidentiality and release obligations apply |
| Clawbacks | NYSE‑compliant mandatory clawback for restatements; supplemental misconduct‑based clawback for pre‑Oct 2, 2023 or non‑covered awards |
| Tax Gross-Ups | Company does not provide excise tax gross-ups on CIC payments |
| Insider Trading Controls | Strict policy prohibiting speculative trading, hedging, pledging; blackout processes |
Multi-Year Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $826,000 | $859,000 | $893,000 |
| Stock Awards ($) | $2,364,331 | $3,611,091 | $3,490,106 |
| Non-Equity Incentive ($) | $1,699,684 | $2,479,086 | $214,320 |
| Change in Pension Value ($) | — | $808,200 | $121,600 |
| All Other Compensation ($) | $62,659 | $50,930 | $52,660 |
| Total ($) | $4,952,674 | $7,808,307 | $4,771,686 |
Compensation Structure Analysis
- Mix shifted toward equity in 2023–2024, but realized pay compressed in 2024 due to 0% performance award payouts (relative TSR below threshold) and EMPI paying only safety component (total funding 20%) .
- Annual financial target rigor increased: Adjusted EBITDA target set at $1.7B; actual $780M led to 0% financial payout; strategic initiatives were reset to 0% by negative discretion despite achievement, aligning with shareholder experience .
- Governance protections are strong: double-trigger CIC equity vesting; NYSE clawbacks; no excise tax gross‑ups; prohibition on hedging/pledging .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval was ~75% (down from 93% in 2023); committee emphasized rigor in financial targets and strategic initiative evaluation, and applied negative discretion for 2024 strategic payouts .
Investment Implications
- Alignment: Smith exceeds ownership guidelines (13.6x salary) with no pledging; upcoming RSU vestings (Dec 31, 2025 and Dec 31, 2026) create predictable supply but are subject to holding requirements and blackout policies, moderating near-term selling pressure .
- Pay-for-performance: 2024 EMPI paid only 20% due to safety outperformance; LTI cycles are tightly linked to relative TSR. If CLF’s TSR relative to metals/mining peers improves, future LTI realizations could rebound; conversely, prolonged underperformance keeps realized equity low .
- Retention risk: CIC protections (2x salary+target bonus, benefits, double-trigger equity) and strong ownership suggest low voluntary departure risk; absence of employment agreements means flexibility for the company .
- Execution signals: Record safety and strategic initiatives (Stelco acquisition, DOE-funded decarb projects, hydrogen trials) indicate operational execution under Smith’s leadership, but financial underperformance in 2024 curtailed incentive outcomes—investors should monitor EBITDA recovery, TSR vs peer set, and strategic project milestones for future payout leverage .