Lourenco Goncalves
CLEVELAND-CLIFFSAbout Lourenco Goncalves
Chairman, President and CEO of Cleveland-Cliffs since August 2014, with 40+ years in metals/mining and prior CEO roles at Metals USA and California Steel Industries. Education: BS and MS in Metallurgical Engineering (Brazil); Distinguished Member/Fellow of AIST; 2021 Steelmaker of the Year (AIST) and S&P Global Platts CEO/Chairperson of the Year . Under his leadership, CLF executed strategic M&A (Stelco acquisition in 2024) and capital returns ($733M share repurchases in 2024), while decarbonization initiatives advanced (DOE-selected projects up to $575M; hydrogen trials) . Recent performance: 2024 Adjusted EBITDA $780M with net loss ($708M); 2023 Adjusted EBITDA $1.9B and net income $450M; TSR context provided in Pay-Versus-Performance disclosures .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Metals USA Holdings Corp. | Chairman, President & CEO | May 2006 – Apr 2013 | Led U.S. steel manufacturing/processing; CEO and board leadership |
| Metals USA Inc. | President, CEO & Director | Feb 2003 – Apr 2006 | Executive leadership; board experience |
| California Steel Industries, Inc. | President & CEO | Mar 1998 – Feb 2003 | Operated integrated steel producer; sector expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Iron and Steel Institute | Director | Since 2014 | Industry policy and advocacy; sector leadership |
| Ascometal SAS | Director (former) | 2011 – 2014 | International board experience in specialty steel |
| Metals USA Holdings Corp. | Director (former) | 2006 – 2013 | Public company governance in U.S. steel |
Fixed Compensation
Multi-year CEO compensation and cash incentives:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 2,035,000 | 2,116,000 | 2,201,000 |
| Target Annual Bonus (% of Salary) | 200% | 200% | 200% |
| Actual Annual Incentive Paid ($) | 6,924,868 | 7,994,248 | 880,400 |
| CEO Pay Ratio | 125:1 (FY 2024) — — | — — | 125:1 |
Notes:
- 2023 EMPI payout 188.9% of target; 2024 EMPI payout 20% of target .
- Salary merit increase applied annually, with CEO base raised 4% in 2024 .
Performance Compensation
Annual plan metrics (EMPI) and long-term incentives (LTI):
| Component | Metric | Weight | Target/Calibration | FY 2024 Actual | Payout |
|---|---|---|---|---|---|
| EMPI | Adjusted EBITDA ($B) | 50% | Threshold $1.4; Target $1.7; Max $2.0 | $0.78 | 0% |
| EMPI | Safety (TRIR improvement) | 10% | Target +5% YoY | +26.2% improvement | 200% on metric; weighted 20% total |
| EMPI | Strategic Initiatives | 40% | Board-set qualitative goals | Achieved; negative discretion applied | 0% (management recommended) |
| LTI | Relative TSR (vs SPDR S&P Metals & Mining peers) | 100% (for performance cash/shares) | Threshold 25th; Target 50th; Max 75th percentile | 2022–2024 cycle: 9.6th percentile | 0% (2022–2024 awards) |
| LTI | RSUs (time-based) | — | 3-year cliff (vest 12/31 cycle) | Granted Feb 2024 | Vest 12/31/2026 |
Key 2024 strategic initiatives (examples): capital returns ($733M buybacks), transformer plant in Weirton, hydrogen trials at Indiana Harbor #7, DOE awards up to $575M — ultimately zeroed by negative discretion given financial results .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 5,233,256 shares; 1.06% of outstanding (as of 3/17/2025); none pledged |
| Outstanding RSUs (FY-end 2024) | 229,851 (2024 grant, vests 12/31/2026); 229,320 (2023 grant, vests 12/31/2025) |
| Outstanding Performance Shares (FY-end 2024) | 114,926 (2024 cycle at threshold); 114,660 (2023 cycle at threshold) |
| 2015 Option Exercises (2024) | 187,136 shares; value realized $2,318,615 |
| Ownership Guidelines | CEO: 6x salary; Goncalves at ~41.3x salary via direct + RSUs; values reflect 1-year average price $15.79 |
| Hedging/Pledging | Prohibited for officers/directors (no hedging/pledging) |
Recent Form 4 activity (2025): RSU grant of 407,288 units on 2/19/2025 (vests 12/31/2027); continuing significant direct and trust holdings .
Employment Terms
- Role/Tenure: Chairman, President & CEO since Aug 2014 .
- Employment agreements: None for executive officers; compensation programs overseen by independent Compensation Committee .
- Change-in-control: Double-trigger; CEO entitled to 3x salary+target bonus, SERP continuation, benefits/perquisites; others at 2x; non-compete, confidentiality, non-solicit apply .
- Potential payments (illustrative at 12/31/2024): CEO total ~$49.2M for termination without cause after a change-in-control, including cash severance ($19.8M), incentive pay at target, equity, retirement, and other benefits .
- Clawback: NYSE-compliant clawback for incentive-based comp; supplemental misconduct clawback prior to Oct 2023 .
Board Governance
- Board leadership: Combined Chairman & CEO; Lead Director in place (Douglas C. Taylor) to offset dual-role; regular executive sessions at least quarterly .
- Independence: Goncalves not independent; other directors largely independent .
- Committees: Chairs Strategy & Sustainability Committee; member Strategy & Sustainability .
- Board meetings/attendance: 13 meetings in 2024; directors attended ≥98% of Board/committee meetings .
Dual-role implications: Combined CEO/Chair can raise independence concerns; mitigations include a robust Lead Director role (exec sessions, CEO evaluation lead, agenda-setting liaison) and independent committee chairs (except Strategy & Sustainability) .
Director Compensation (for employee-director CEO)
- Employee directors receive no additional cash compensation for Board service; nonemployee director compensation disclosed separately .
Compensation Peer Group (Benchmarking)
2024 compensation comparator group (representative large-cap industrials/metals): Alcoa, Cummins, DuPont, Freeport-McMoRan, Illinois Tool Works, International Paper, Johnson Controls, LyondellBasell, Nucor, PACCAR, Parker-Hannifin, PPG, Reliance, Stanley Black & Decker, Steel Dynamics, Trane Technologies, U.S. Steel, WestRock .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval: ~93% (2023); ~75% (2024) .
- 2024 response: Raised concerns on annual plan rigor; Committee set aggressive 2024 Adjusted EBITDA target ($1.7B) and used negative discretion to set strategic payout to 0%; safety paid at 200% reflecting performance; alignment emphasized .
Expertise & Qualifications
- Education: BS/MS Metallurgical Engineering (Brazil); AIST Distinguished Member/Fellow; industry awards in 2021 recognizing leadership and value creation .
Work History & Career Trajectory
- Metals USA (2003–2013: CEO roles), California Steel Industries (1998–2003: CEO), extensive public board experience; broad strategic/M&A execution .
Compensation Structure Analysis
- Cash vs equity mix: Significant at-risk equity (performance shares, performance cash) balanced with RSUs for retention .
- Shift dynamics: Long-term incentives calibrated to relative TSR with 3-year horizon; RSUs maintain retention; options largely legacy (2015 plan) and minimal in current design .
- Governance practices: Double-trigger on CIC; no excise tax gross-ups; clawbacks; no repricing; anti-hedging/pledging; robust ownership guidelines — all supportive of shareholder alignment .
Related Party Transactions and Red Flags
- Related party: CFO Celso L. Goncalves Jr. is CEO’s son; compensation arrangements reviewed/approved under RPT Policy; Audit Committee oversight .
- Hedging/pledging: Prohibited; none pledged among insiders .
- Executive sessions/independence: Regular independent director sessions; Lead Director in place to balance combined Chair/CEO .
- No option repricing; no CIC tax gross-ups; annual risk assessment found compensation programs at low risk for excessive risk taking (Compensation risk assessment summary indicates low risk) (see Committee risk discussion, refs 35–48 across CD&A).
Insider Transactions & Vesting Pressure
- 2025 RSU grant: 407,288 RSUs (vest 12/31/2027) to CEO; large direct and trust holdings maintained .
- 2024 vesting/exercise: 2022 RSUs vested; performance shares paid 0%; 2015 options exercised (187,136 shares) .
- Beneficial ownership remains >1% of shares; ownership guidelines exceeded by ~41x salary (alignment signal) .
Performance & Track Record
- Strategic actions (2024): Closed Stelco acquisition; $733M buybacks; Weirton transformer plant ($150M); DOE funding selections; hydrogen trials — positioning for demand upturn .
- Financials: Adjusted EBITDA $780M (2024) vs $1.9B (2023); net income swung from $450M to a net loss of $708M amid steel market headwinds; pay outcomes aligned with shareholder experience (EMPI 20%; zeroed LTI 2022–2024) .
Investment Implications
- Alignment: High personal ownership (>1% outstanding; 41x salary) and strict anti-hedging/pledging/clawbacks indicate strong skin-in-the-game and shareholder alignment .
- Pay-for-performance: 2024 EMPI payout reduced to 20% and 2022–2024 LTI paid 0% (relative TSR below threshold) — Compensation Committee applied rigor and negative discretion; near-term selling pressure from vesting appears limited as LTI payouts were zero and RSUs are cliff-vested .
- Retention/CIC risk: CEO CIC protections (3x cash, benefits, equity treatment) are market-standard double-trigger; Board and major shareholders emphasize CEO retention as critical to long-term strategy execution .
- Governance: Combined Chair/CEO mitigated by empowered Lead Director and independent committees; Strategy & Sustainability chaired by CEO raises independence optics but balanced by quarterly executive sessions and high director attendance .
- Execution risk: 2025 outlook leans on demand recovery, synergy delivery from Stelco, and operational cost reductions; compensation metrics (Adjusted EBITDA, relative TSR) will reflect whether strategy translates to value creation .
Citations: and Form 4 link: .