Warren, Brown Slam U.S. Steel Executives for Corporate Greed in Nippon Steel Deal
Steel executives could make over $156 million from the deal, while selling out American steelworkers.
“If these reports are accurate, they demonstrate a repulsive conflict of interest in which U.S. Steel executives can enrich themselves at the expense of U.S. Steel workers.”
Boston, MA – Today, U.S. Senators Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio), backed the United Steelworkers (USW) and called out the executives of the United States Steel Corporation for selling out American steelworkers in order to get a fat payout if acquired by Nippon Steel.
For the past year, U.S. Steel, a storied American steel manufacturing company, has been subject to an increasingly controversial potential acquisition by Nippon Steel, a Japanese steel producer that has agreed to acquire U.S. Steel in an all-cash bid valued at $14.1 billion. Since then, the United Steelworkers (USW) union, along with President Biden and other elected officials have voiced opposition to the deal, arguing that the company should remain American operated.
Recent reports indicate that U.S. Steel executives may be incentivized by personal profit – $72 million in additional cash and benefits – to complete the deal. Indeed, according to the Company’s March 12, 2024 proxy statement, U.S. Steel’s named executive officers would receive in connection with the merger, change in control payments totaling over $156 million – not including $40.8 million in payments to non-employee members of the Board of Directors for previously non-vested stock-based awards.
“If these reports are accurate, they demonstrate a repulsive conflict of interest in which U.S. Steel executives can enrich themselves at the expense of U.S. Steel workers,” wrote the senators.
“U.S. Steel was not in distress when it first received an unsolicited bid, and it is not in distress today,” wrote the senators. “But if a merger is desired, there is no need for you to sell the company to a foreign-owned entity, as U.S. Steel has also received an alternative offer from a domestic steelmaker.”
However, just this month, U.S. Steel threatened to move the company’s headquarters out of Pittsburgh and take thousands of jobs with it if the deal with Nippon fails.
“You claimed that these would be “unavoidable consequences” if the deal is not completed,” the senators continued. “Far from being ‘unavoidable’, your threats are unjustified and unfair to U.S. Steel’s workers who have strengthened the company’s performance and helped mark U.S. Steel’s ‘second-best financial performance in the (c)ompany’s history’ only two years ago.”
USW has raised concerns about the secretive nature of the transaction: U.S Steel did not consult USW about the deal, even though the union’s members and retirees would be the population most at risk from the uncertainties caused by the merger of the company with a foreign steelmaker. Additionally, USW has raised concerns that Nippon will not commit to supporting steelmaking in the United States over the long term.
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