Table of Contents

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 Registrant x   Filed by a Party other than the Registrant ¨

 

Check the appropriate box:

 

¨

   Preliminary Proxy Statement

¨

   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x

   Definitive Proxy Statement

¨

   Definitive Additional Materials

¨

   Soliciting Material Pursuant to §240.14a-12

 

 

Nucor Corporation


(Name of Registrant as Specified In Its Charter)

 

      


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

x   No fee required.

 

¨   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1)   Title of each class of securities to which the transaction applies:

 

  

 

  (2)   Aggregate number of securities to which the transaction applies:

 

  

 

  (3)   Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

  

 

  (4)   Proposed maximum aggregate value of the transaction:

 

  

 

  (5)   Total fee paid:

 

  

 

 

¨   Fee paid previously with preliminary materials.

 

¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

  (1)   Amount Previously Paid:

 

  

 

  (2)   Form, Schedule or Registration Statement No.:

 

  

 

  (3)   Filing Party:

 

  

 

  (4)   Date Filed:

 

  

 


Table of Contents

LOGO

 

1915 Rexford Road       Charlotte, North Carolina 28211       Phone 704/366-7000       Fax 704/362-4208 

 

NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT

 

ANNUAL MEETING

 

The 2015 annual meeting of stockholders of Nucor Corporation will be held in The Morrison Ballroom of the Charlotte Marriott SouthPark, 2200 Rexford Road, Charlotte, North Carolina, at 10:00 a.m. Eastern Time on Thursday, May 14, 2015, for the following purposes:

 

   

To elect the eight 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, 2015;

 

   

To consider and vote on a stockholder proposal; and

 

   

To conduct such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

Stockholders of record at the close of business on March 16, 2015 are entitled to notice of and to vote at the meeting.

 

It is important that you vote. To ensure that you will be represented at the meeting, please vote by one of the following three methods: (1) via mail by completing, signing, dating and promptly returning 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) via the Internet by using the website information and instructions listed on the enclosed proxy card or voting instruction form. Your prompt attention is requested.

 

By order of the Board of Directors,

 

LOGO

A. Rae Eagle

General Manager and

Corporate Secretary

March 26, 2015

 

Important Notice Regarding the Availability of

Proxy Materials for the Annual Meeting of Stockholders

to be Held on May 14, 2015

 

The proxy statement and annual report to stockholders are available at https://materials.proxyvote.com/670346.

 

PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD OR VOTING

INSTRUCTION FORM IN THE ENCLOSED ENVELOPE, OR VOTE VIA THE TELEPHONE OR INTERNET.


Table of Contents

Table of Contents

 

General Information

    1   

Proposal 1: Election of Directors

    3   

Information Concerning Experience, Qualifications, Attributes and Skills of the Nominees

    4   

Security Ownership of Management and Certain Beneficial Owners

    6   

Section 16(a) Beneficial Ownership Reporting Compliance

    7   

Corporate Governance and Board of Directors

    8   

Director Compensation

    14   

Report of the Audit Committee

    16   

Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm

    17   

Executive Officer Compensation

    18   

Compensation Discussion and Analysis

    18   

Post-Termination Payments Summary

    29   

Summary Compensation Table

    30   

Grants of Plan-Based Awards Table

    31   

Outstanding Equity Awards at Fiscal Year-End Table

    33   

Options Exercised and Stock Vested Table

    34   

Nonqualified Deferred Compensation Table

    34   

Report of the Compensation and Executive Development Committee

    35   

Equity Compensation Plan Information

    35   

Proposal 3: Stockholder Proposal

    36   

Other Matters

    39   

 


Table of Contents

GENERAL INFORMATION

 

The enclosed proxy is being solicited by the Board of Directors (the “Board of Directors” or the “Board”) of Nucor Corporation (“Nucor” or the “Company”) for use at the 2015 annual meeting of stockholders to be held on Thursday, May 14, 2015, and any adjournment or postponement thereof. The proxy may be revoked by the stockholder by letter to Nucor’s Corporate Secretary at 1915 Rexford Road, Charlotte, North Carolina 28211 received before the meeting, or by attending and voting at the meeting.

 

Proxy Materials and Annual Report

 

The 2014 annual report of Nucor, including financial statements, is being mailed to all stockholders of record together with this proxy statement and form of proxy on or about March 26, 2015. The 2014 annual report and other information about the Company is available on our website at www.nucor.com/investor. The information on our website is not a part of this proxy statement.

 

Shares Entitled to Vote

 

The record date for the annual meeting is March 16, 2015. Only holders of record of Nucor’s common stock at the close of business on that date will be entitled to vote at the annual meeting. The presence in person or by proxy of the holders of a majority of the shares issued, outstanding and entitled to vote at the annual meeting is necessary to constitute a quorum. As of the record date for the annual meeting, 319,131,109 shares of Nucor common stock were outstanding.

 

Voting Rights and Procedures

 

Each share of 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 common stock is entitled to cumulative voting rights, which means that when voting for 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 nominees for director, all of the votes to which a share of 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 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. 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 Item

 

The following are the voting requirements for each proposal:

 

Proposal 1, Election of Directors.    For the election of directors, the eight nominees receiving the highest number of all votes cast for directors at the annual meeting will be elected as directors to serve until the next annual meeting of stockholders.

 

Proposal 2, Ratification of the Appointment of Independent Registered Public Accounting Firm.    Approval of the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for fiscal year 2015 requires the affirmative vote 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 at the annual meeting.

 

Proposal 3, Stockholder Proposal.    Approval of the proposal requires the affirmative vote 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 at the annual meeting.

 

Other Items.    For any other matters, the affirmative vote 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.

 

Withhold Votes, Abstentions and Broker Non-Votes

 

Abstentions and broker “non-votes” are counted as present or represented for purposes of determining the presence or absence of a quorum for the annual meeting. A “non-vote” occurs when a nominee holding shares for a beneficial owner

 

1


Table of Contents

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 instructions from the beneficial owner.

 

Under the New York Stock Exchange rules and regulations (the “NYSE rules”), the proposal to ratify the appointment of the independent registered public accounting firm is considered a “discretionary” matter, which means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions. However, the election of directors and the stockholder proposal are “non-discretionary” matters under the NYSE rules, which means 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, and withhold votes, broker non-votes and abstentions will have no effect on the outcome of the proposal. Nucor’s Board of Directors has adopted a Corporate Governance Principle intended to give further effect to withheld votes in uncontested elections for directors under certain circumstances. This Corporate Governance Principle is set forth on page 3 of this proxy statement under the heading “Proposal 1: Election of Directors” and requires any nominee for director who received 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.

 

With respect to proposals 2 and 3, the ratification of the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for fiscal 2015 and the stockholder proposal, 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 the proposals, and a broker “non-vote” will not be considered entitled to vote on these proposals and will therefore have no effect on their outcome.

 

Voting of Proxies

 

The 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. If you submit a proxy but do not indicate how you wish to vote, your shares will be voted:

 

   

FOR the election of the eight director nominees;

 

   

FOR the ratification of the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for the year ending December 31, 2015; and

 

   

AGAINST the approval of the stockholder proposal.

 

2


Table of Contents

PROPOSAL 1

 

ELECTION OF DIRECTORS

 

The number of directors is currently fixed at nine. Peter C. Browning, age 73, is not standing for re-election at the 2015 annual meeting due to his having reached the mandatory retirement age under the Company’s Corporate Governance Principles. Mr. Browning has been a Nucor director since 1999 and served as Non-Executive Chairman, Lead Director and Chairman of both the Governance and Nominating Committee and the Audit Committee over the past 15 years and has been an integral and invaluable member of the Nucor Board. As a result of Mr. Browning’s retirement, effective on the date of the 2015 annual meeting, the size of the Board will be reduced to eight members. On the recommendation of the Governance and Nominating Committee, the Board of Directors has nominated the eight persons named below for election as directors at the 2015 annual meeting. If elected, each nominee will serve until his or her term expires at the 2016 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 2014 annual meeting of the Company’s stockholders. Under the Company’s Corporate Governance Principles, Harvey Gantt, at age 72, would be subject to mandatory retirement as of this annual meeting of stockholders. The Board of Directors, however, recognizing the valuable service that Mr. Gantt has provided as a director over the past 15 years, and continues to provide to the Board and the Company, extended his retirement date for one year until the Company’s annual meeting of stockholders in 2016. Each nominee has agreed to be named in this proxy 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’s Board of Directors may designate.

 

Nucor’s Board of Directors has adopted the following Corporate Governance Principle entitled “Effect of Withheld Votes in Uncontested Elections for Director.”

 

Any nominee for director in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation 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 reject 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 act within 120 days following certification of the stockholder vote and disclose its decision and the reasons therefor in an 8-K filing with the Securities and Exchange Commission (the “SEC”). Any director who tenders his or her resignation pursuant to this principle shall not participate in any committee or Board consideration of it.

 

Vote Recommendation

 

Nucor’s Board of Directors recommends a vote FOR the election of each of the eight nominees listed below. Unless otherwise specified, proxies will be voted FOR each nominee.

 

3


Table of Contents

INFORMATION CONCERNING EXPERIENCE, QUALIFICATIONS, ATTRIBUTES AND SKILLS OF

THE NOMINEES

 

     
JOHN J. FERRIOLA       

 

Director Since: 2011

Age: 62

  

  

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 on the executive committee of the board of directors of the World Steel Association and the American Iron and Steel Institute and on the board of directors of the National Association of Manufacturers. Mr. Ferriola has been active in the Association for Iron and Steel Technology for over 30 years and has served on its board of directors. He has also served on the board of directors of the Steel Manufacturers Association. With a degree in electrical engineering, Mr. Ferriola worked in various operating and management roles in the steel industry before joining Nucor. His more than 40 years of industry experience, including 24 years at Nucor, give him a very comprehensive knowledge of the Company and the steel industry.

 

 

HARVEY B. GANTT       

 

Director Since: 1999

Age: 72

  

  

Mr. Gantt served as senior principal of Gantt Huberman Architects – A Division of Bergmann Associates, Inc. from December 2012 until his retirement in November 2014. Previously, Mr. Gantt was the principal partner of Gantt Huberman Architects, PLLC, an architectural, planning and interior design firm, from 1971 to 2012. Mr. Gantt also has extensive experience in construction, both nonresidential and residential, and broad knowledge of developing trends in selection and use of construction materials by owners and architects on major projects. He served as the Mayor of the City of Charlotte, North Carolina, from 1983 to 1987, gaining valuable experience in land use regulation, government relations, public policy development and consensus-building. In recognition of his experience in urban planning and design, the President of the United States appointed him to serve as a chair from 1994 to 1999 of the National Capital Planning Commission, a United States government agency that provides planning guidance for the District of Columbia and the region surrounding the nation’s capital. He brings more than 40 years of managerial and leadership experience to Nucor’s Board.

 

 

GREGORY J. HAYES       

 

Director Since: 2014

Age: 54

  

  

Mr. Hayes has served as President, Chief Executive Officer and director of United Technologies Corporation, a diversified company providing high-technology products and services to the global aerospace and building systems industries, since November 2014. Previously, he was Senior Vice President and Chief Financial Officer from 2008 to 2014 and Vice President, Accounting and Finance, of United Technologies from 2006 to 2008. Mr. Hayes joined United Technologies in 1999 through the merger with Sundstrand Corporation, where he had been employed since 1989, and has held a variety of leadership positions during his tenure with the company, including Vice President and Controller and Vice President, Financial Planning and Analysis for Hamilton Sundstrand. He is also a Certified Public Accountant. Mr. Hayes brings to Nucor’s Board extensive experience in a number of critical areas, including accounting and financial oversight, corporate strategy and development, and managerial leadership.

 

 

VICTORIA F. HAYNES, PH.D.       
 
Director Since: 1999
Age: 67
  
  

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 Axiall Corporation, PPG Industries, Inc. and Royal DSM N.V. Dr. Haynes served as a director of Archer Daniels Midland Company from 2007 through 2011 and The Lubrizol Corporation from 1995 through 2007. Dr. Haynes brings more than 35 years of experience in technology leadership, management and new business development to Nucor’s Board.

 

 

 

4


Table of Contents
     
BERNARD L. KASRIEL       
 
Director Since: 2007
Age: 68
  
  

Mr. Kasriel was a partner of LBO France, a private equity fund, from September 2006 until September 2011. In 2006, before joining LBO France, Mr. Kasriel served as Vice Chairman of Lafarge S.A., a leading global building materials provider of cement, concrete, roofing and gypsum products based in Paris, France. Prior to that, Mr. Kasriel held various other executive positions at Lafarge, including Chief Executive Officer from 2003 to 2006, Vice Chairman and Chief Operating Officer from 1995 to 2003, and Managing Director from 1989 to 1995. He currently serves on the boards of directors of L’Oreal and Arkema S.A., and previously was a director of Lafarge S.A. until 2010 and Sonoco Products Company until 2007. Mr. Kasriel brings more than 40 years of industry experience, including an in-depth knowledge of international manufacturing and cross-border joint ventures, to Nucor’s Board.

 

 

CHRISTOPHER J. KEARNEY       

 

Director Since: 2008

Age: 59

  

  

Mr. Kearney has served as Chairman of SPX Corporation, a global multi-industry manufacturer, since 2007, and as President and Chief Executive Officer of SPX since 2004. Prior to that, Mr. Kearney served as Vice President, Secretary and General Counsel of SPX from 1997 to 2004. He currently serves on the boards of directors of Polypore International, Inc. and SPX Corporation. In addition to his strong leadership skills developed as the CEO of a manufacturing company that employs over 14,000 people in more than 35 countries, Mr. Kearney brings valuable mergers and acquisitions experience as well as corporate legal experience to Nucor’s Board.

 

 

RAYMOND J. MILCHOVICH       
 
Director Since: 2012
Age: 65
  
  

Mr. Milchovich has served as Lead Director of Nucor since September 2013. Mr. Milchovich served as non-executive Chairman of the board of directors of, and a consultant to, Foster Wheeler AG, a company that engineers and constructs facilities for the oil and gas, liquid natural gas, refining, chemical, pharmaceutical and power industries, from 2010 until his retirement in 2011. Previously, Mr. Milchovich served as Chairman and Chief Executive Officer of Foster Wheeler from 2001 to 2010 and as President from 2001 to 2007. Prior to that, Mr. Milchovich served as Chairman, President and Chief Executive Officer of Kaiser Aluminum & Chemical Corporation, a producer and marketer of alumina, aluminum and aluminum fabricated products, from 1999 to 2001, and as President and Chief Operating Officer from 1997 to 1999. Mr. Milchovich began his career in the steel industry, holding a variety of operating management positions for Wisconsin Steel Corporation and Wheeling-Pittsburgh Steel Corporation. From 2002 to 2007, Mr. Milchovich served as a director of Nucor and voluntarily resigned from such position to devote more time to his position as Chief Executive Officer of Foster Wheeler. Mr. Milchovich currently serves on the board of directors of The Dow Chemical Company and previously served as a director of Delphi Corporation from 2005 through 2009. In serving as Chief Executive Officer of two different companies for more than ten years, Mr. Milchovich developed strong leadership and strategic management skills. Mr. Milchovich also brings to Nucor’s Board more than 40 years of experience in the metals industry.

 

 

JOHN H. WALKER       
 
Director Since: 2008
Age: 57
  
  

Mr. Walker has served as non-executive Chairman of Global Brass and Copper, Inc., a manufacturer and distributor of copper and copper-alloy sheet, strip, plate, foil, rod and fabricated components, since March 2014. Mr. Walker previously served as Executive Chairman of Global Brass and Copper from November 2013 to March 2014 and as Chief Executive officer from 2007 to March 2014. Prior to joining Global Brass and Copper, Mr. Walker was the President and Chief Executive Officer of The Boler Company, the parent company of Hendrickson International, a suspension manufacturer for heavy duty trucks and trailers, from 2003 to 2006. From 2001 to 2003, he served as Chief Executive Officer of Weirton Steel Corporation, a producer of flat rolled carbon steel, and from 2000 to 2001 as President and Chief Operating Officer. From 1997 to 2000, Mr. Walker was President of flat rolled products for Kaiser Aluminum Corporation, a producer of fabricated aluminum products. Mr. Walker currently serves on the board of United Continental Holdings, Inc. and was a director of Delphi Corporation until 2009. In serving as Chief Executive Officer for three different companies, Mr. Walker has developed strong executive leadership and strategic management skills. Mr. Walker also brings to Nucor’s board more than 30 years of experience in metal-related manufacturing and fabricating industries.

 

 

 

5


Table of Contents

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

 

The following tables give information concerning the beneficial ownership of Nucor’s common stock as of February 28, 2015 by all directors, 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 percent 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
             

Peter C. Browning

     5,735                        27,075         32,810         *   

James R. Darsey

     139,833                39,037         59,309         238,179         *   

John J. Ferriola

     191,800                65,061         105,506         362,367         *   

James D. Frias

     66,219 (3)              39,037         59,309         164,565         *   

Harvey B. Gantt

     13,368                        20,574         33,942         *   

Keith B. Grass

     9,324                20,000                 29,324         *   

Ladd R. Hall

     43,070        92,499         39,037         62,345         236,951         *   

Gregory J. Hayes

                            2,765         2,765         *   

Victoria F. Haynes

     9,174        250                 20,574         29,998         *   

Bernard L. Kasriel

     1,500                        19,435         20,935         *   

Christopher J. Kearney

     1,000                        16,619         17,619         *   

Raymond J. Milchovich

     21,667                        5,573         27,240         *   

R. Joseph Stratman

     11,848        125,656         39,037         62,345         238,886         *   

John H. Walker

     2,645                        17,955         20,600         *   

All 17 directors and executive officers as a group

     572,691        242,184         241,209         533,071         1,589,155         *   

 

*   Represents holdings of less than 1%.

 

(1)   The number of shares beneficially owned subject to options or underlying restricted stock units includes shares of common stock that such person or group had the right to acquire on or within 60 days after February 28, 2015 upon the exercise of stock options or the vesting of restricted stock units. Holders of restricted stock units have no voting rights until such units settle and shares of common stock are issued to the holder.

 

(2)   Based on 319,049,092 shares of Nucor common stock outstanding as of the close of business on February 28, 2015.

 

(3)   Includes 18,414 shares Mr. Frias elected to defer under the Annual Incentive Plan. The deferred shares have no voting power.

 

6


Table of Contents

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

     30,597,061 (2)      9.59

Capital World Investors

333 South Hope Street

Los Angeles, California 90071

     28,326,665 (3)      8.88

The Vanguard Group, Inc.

100 Vanguard Blvd.

Malvern, Pennsylvania 19355

     19,962,743 (4)      6.26

State Street Corporation

One Lincoln Street

Boston, Massachusetts 02111

     18,317,305 (5)      5.74

BlackRock, Inc.

55 East 52nd Street

New York, New York 10022

     18,107,912 (6)      5.68

 

(1)   Based on 319,049,092 shares of Nucor common stock outstanding as of the close of business on February 28, 2015.

 

(2)   Based on Schedule 13G filed with the SEC on February 4, 2015, reporting beneficial ownership as of December 31, 2014. That filing indicates that State Farm Mutual Automobile Insurance Company has sole voting and dispositive power as to 21,636,800 of the shares shown and shared voting and dispositive power as to 79,732 of the shares shown; State Farm Life Insurance Company has sole voting and dispositive power as to 532,400 of the shares shown and shared voting and dispositive power as to 18,173 of the shares shown; State Farm Fire and Casualty Company has sole voting and dispositive power as to 2,800,000 of the shares shown and shared voting and dispositive power as to 10,590 of the shares shown; State Farm Investment Management Corp. has sole voting and dispositive power as to 968,000 of the shares shown and shared voting and dispositive power as to 28,493 of the shares shown; State Farm Insurance Companies Employee Retirement Trust has sole voting and dispositive power as to 2,272,100 of the shares shown and shared voting and dispositive power as to 11,173 of the shares shown; and State Farm Insurance Companies Savings and Thrift Plan for U.S. Employees has sole voting and dispositive power as to 2,239,600 of the shares shown.

 

(3)   Based on Schedule 13G/A filed with the SEC on February 13, 2015, reporting beneficial ownership as of December 31, 2014. That filing indicates that Capital World Investors has sole voting and dispositive power of these shares. Capital World Investors is a division of Capital Research and Management Company.

 

(4)   Based on Schedule 13G filed with the SEC on February 10, 2015, reporting beneficial ownership as of December 31, 2014. That filing indicates that Vanguard Group Inc. has sole voting power as to 545,622 of the shares shown, sole dispositive power as to 19,446,193 of the shares shown and shared dispositive power as to 516,550 of the shares shown.

 

(5)   Based on Schedule 13G filed with the SEC on February 12, 2015, reporting beneficial ownership as of December 31, 2014. That filing indicates that State Street Corporation has shared voting and dispositive power of the shares shown.

 

(6)   Based on Schedule 13G/A filed with the SEC on February 9, 2015, reporting beneficial ownership as of December 31, 2014. That filing indicates that BlackRock, Inc. has sole voting power as to 15,203,393 of the shares shown and sole dispositive power as to 18,107,912 of the shares shown.

 

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 percent of the outstanding shares of Nucor’s common stock to file initial reports of their beneficial ownership and changes in their beneficial ownership of Nucor’s common stock with the SEC. SEC regulations require Nucor to identify anyone who failed to file a required report or filed a late report during fiscal 2014. Based solely on a review of all reports filed by its directors and executive officers and written

 

7


Table of Contents

representations made by them with respect to the completeness and timeliness of their filings, Nucor believes that all Section 16(a) filing requirements were met by its directors and executive officers during its fiscal year ended December 31, 2014, except that D. Chad Utermark inadvertently omitted 41 shares from his original Form 3 and one Form 4 filed after his original Form 3 was filed, for which an amended Form 3 was subsequently filed to correct the number of shares.

 

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS

 

Board of Directors.    Our business and affairs are managed under the direction of our Board of Directors. In exercising its fiduciary duties, the Board represents and acts on behalf of the Company’s stockholders. Our Bylaws provide that our Board of Directors consists of a number of directors to be fixed from time to time by a resolution of the Board. Our Board of Directors currently has nine members, eight of whom are independent. If the director nominees are elected at the annual meeting, the Board of Directors will have eight members, seven 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, the compensation of directors, and annual performance evaluations of the Board and our Chief Executive Officer.

 

Codes of Ethics.    Nucor 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 potential conflicts of interest, compliance with laws, and accurate financial reporting. In addition, Nucor has adopted Standards of Business Conduct and Ethics, which apply to all employees and directors of the Company. The Company intends to post any amendments or waivers to either of these codes (to the extent required to be disclosed pursuant to Form 8-K) on the Company’s website at www.nucor.com/governance.

 

Documents Available.    All of the Company’s corporate governance materials, including the charters for the Audit Committee, Compensation and Executive Development Committee and 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 published on the Company’s website at www.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 Board of Directors affirmatively determines that the director has no material relationship with Nucor (either directly or as a partner, stockholder or officer of an organization that has a relationship with Nucor). The NYSE rules require 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, the Board has adopted categorical standards, which incorporate the independence standards of the NYSE rules (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. These 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 or to the Company or its subsidiaries and involving a director, his or her immediate family members, or an organization of 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 and on substantially the same terms and conditions, including price, as would be available to similarly situated customers;

 

8


Table of Contents
   

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.

 

In February 2015, the Board of Directors, with the assistance of the Governance and Nominating Committee, conducted an evaluation of director independence based on the Categorical Standards. 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, who serves as Chairman, Chief Executive Officer and President of SPX Corporation, that Nucor in the ordinary course of business purchased goods and services from SPX in an amount less than 0.5% of the consolidated gross revenues of SPX, and (ii) with respect to Mr. Hayes, who serves as President, Chief Executive Officer and director of United Technologies Corporation, that Nucor in the ordinary course of business purchased from and sold to United Technologies goods in an amount less than 0.5% of the consolidated gross revenues of United Technologies. 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) all fall well below the thresholds in the Categorical Standards. Consequently, the Board of Directors determined that each of Messrs. Browning, Gantt, Hayes, Kasriel, Kearney, Milchovich and Walker and Dr. Haynes 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, Compensation and Executive Development and Governance and Nominating Committees (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 Rule 10A-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. John J. Ferriola, the Company’s Chairman, Chief Executive Officer and President, is not independent due to his employment by the Company.

 

9


Table of Contents

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 2014, the Board reappointed Raymond J. Milchovich 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 President and Chief Executive Officer 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) 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; (iv) sets the agenda for and leads executive sessions of the non-employee directors without the attendance of management; (v) serves as a liaison between the Chairman and the independent directors; (vi) approves meeting schedules to assure that there is sufficient time for discussion of all agenda items; (vii) meets with the Chairman between Board meetings as appropriate in order to facilitate Board meetings and discussions; (viii) has the authority to call meetings of the independent directors; and (ix) is available for consultation and direct communication with major stockholders.

Independent Directors

   Independent directors comprise more than 85% of the Board and 100% of the Audit Committee, Compensation and Executive Development Committee and 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 senior management.

 

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:

 

Director

  

Audit

Committee

   Compensation
and Executive
Development

Committee
   Governance and
Nominating

Committee

Peter C. Browning

   X    X    X

John J. Ferriola

        

Harvey B. Gantt

   X    X    X

Gregory J. Hayes

   Chair    X    X

Victoria F. Haynes

   X    Chair    X

Bernard L. Kasriel

   X    X    X

Christopher J. Kearney

   X    X    X

Raymond J. Milchovich

   X    X    Chair

John H. Walker

   X    X    X

 

10


Table of Contents

The following table provides information about the operation and key functions of these committees:

 

Committee

  

Key Functions and Additional Information

   Number of
Meetings in
Fiscal 2014
 

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, and (iii) the performance of the Company’s internal audit function

•    Appoints, compensates, retains and oversees the Company’s independent registered public accounting firm

•    Reviews and discusses with the independent registered public accounting firm the annual and quarterly financial statements and earnings releases

•    Considers and approves all auditing services, internal control-related services and permitted non-auditing services proposed to be provided by the 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

     6   

Compensation

and Executive

Development

Committee

  

•    Administers the compensation program for senior officers

•    Reviews 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   

Governance and

Nominating

Committee

  

•    Develops and recommends to the Board 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

•    Recommends to the Board the size and composition of the Board, the size and composition of each Board committee, and the responsibilities of each Board committee

•    Oversees and arranges the annual process of evaluating the performance of the Board and the Company’s management

•    Administers the Company’s policy and procedures for the review, approval or ratification of related party transactions

•    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 2014. 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 2014. Pursuant to the Corporate Governance Principles, the non-management 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, as Lead Director, presides over these executive sessions.

 

Annual Meetings of Nucor’s Stockholders.    Directors are expected to attend the annual meeting of stockholders. All nine 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

 

11


Table of Contents

of each director standing for reelection, each committee and the Board of Directors. 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 and committee.

 

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 compromised 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 and outside counsel to discuss the Company’s major financial 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 assessment and risk management policies. The Company’s Corporate Controller annually conducts a risk assessment 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 his in-depth knowledge and understanding of the Company’s operations, 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-executive Chairman of the Board or a non-director Chief Executive Officer.

 

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 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. A copy of the policy is available on our website at www.nucor.com/governance.

 

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, the Committee retained Pearl Meyer & Partners (“Pearl Meyer”) to act as its independent advisor and to provide it with advice and support on executive compensation issues. The 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 “Compensation Discussion and Analysis – Determination of 2014 Compensation” on page 21 of this proxy statement for a description of Nucor’s process for the consideration and determination of executive compensation and Pearl Meyer’s role in such process.

 

Related Person Transactions.    The Board has adopted 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 involving the Company and “related persons” (directors, director nominees, and executive officers or their

 

12


Table of Contents

immediate family members, or stockholders owning five percent (5%) or greater of the Company’s outstanding shares of common stock). The policy is administered by the Governance and Nominating Committee of the Board of Directors. The policy includes several categories of pre-approved transactions that are based upon exceptions to the SEC’s rules for disclosure of such transactions. For transactions that are not pre-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) whether the transaction was undertaken in the ordinary course of business of the Company, (ii) the approximate dollar value of the transaction, (iii) the purpose, and potential benefits to the Company, of the transaction and (iv) the related party’s interest in the transaction, including whether the related party 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 2014, Smoot Enterprises, Inc. was paid approximately $4.95 million by Nucor to transport products and materials for Nucor. Mike Smoot, who is the brother-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.

 

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 less than 120 days and not more than 150 days 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 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 tenth 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 the nominee and the stockholder submitting the nomination, including, (i) with respect to the nominee, the nominee’s name, age, business and residential address, principal occupation or employment, the number of shares or other securities of the Company which are owned of record or beneficially by the nominee and any derivative positions held of record or beneficially by the nominee 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 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 with respect to the Company’s shares or other securities and (ii) with respect to the stockholder submitting the nomination, 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 the number of shares or other securities of the Company which are owned of record or beneficially by that stockholder or by any Stockholder Associated Person and 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 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, that stockholder or any Stockholder Associated Person with respect to the Company’s shares or other securities. A stockholder who is interested in recommending a director candidate should request a copy of Nucor’s Bylaw provisions by writing to Nucor’s Corporate Secretary at Nucor’s executive offices, 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 Committee has a policy that potential nominees shall be evaluated no differently regardless of whether the nominee is recommended by a stockholder, a Board member or Nucor’s management. The Committee considers potential nominees from all these sources, develops information from many sources concerning the potential nominee, evaluates the potential nominee 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 nominees for director. Nucor may do so again in the future.

 

13


Table of Contents

The 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 Committee considers persons with a variety of perspectives, professional experience, education and skills that possess the following 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 them 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 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 and Non-Management Directors.    Stockholders and other interested parties can communicate directly with our Board of Directors by sending a written communication addressed to Mr. Ferriola, our Chairman, c/o Corporate Secretary to Nucor Corporation, 1915 Rexford Road, Charlotte, North Carolina 28211. Stockholders and other interested parties wishing to communicate with Mr. Milchovich, as Lead Director, or with the non-management directors as a group may do so by sending a written communication addressed to Mr. Milchovich 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 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.

 

DIRECTOR COMPENSATION

 

In 2014, the Compensation and Executive Development Committee engaged the compensation consultant, Pearl Meyer, to benchmark director compensation by comparing Nucor’s director compensation to a group of 29 materials and industrial companies of similar size. These 29 companies are the same companies used to benchmark executive compensation. Please see “Compensation Discussion and Analysis – Compensation Benchmarking” on page 21 of this proxy statement. Director compensation survey data was also reviewed. Changes to director compensation were last made in 2011.

 

Based upon a review of the 2014 benchmarking and the director compensation survey data, the Compensation and Executive Development Committee established the director compensation amounts below effective June 1, 2014.

 

Board/Committee Position

   2014
Annual Fee
($)
     2013
Annual Fee
($)
 

Lead Director

     127,000         105,000   

Board Member (non-employee directors)

     95,000         75,000   

Audit Committee Chairman

     25,000         20,000   

Compensation and Executive Development Committee Chairman

     17,000         12,000   

Governance and Nominating Committee Chairman

     14,000         6,000   

 

14


Table of Contents

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. Directors may elect to receive their shares in the form of deferred stock units. Effective June 1, 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 elected to receive their grant in the form of deferred stock units in 2014. 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.

 

The following table summarizes the compensation paid to each non-employee director for his or her Board and committee services during 2014.

 

Name

   Fees
Earned or
Paid in
Cash

($)
     Stock
Awards

($) (1) (2)
     Total
($)
 
(a)    (b)      (c)      (h)  

Peter C. Browning (3)

     97,541         139,992         237,533   

Harvey B. Gantt

     90,000         139,992         229,992   

Gregory J. Hayes (3)

     106,209         139,992         246,201   

Victoria F. Haynes

     105,750         139,992         245,742   

Bernard L. Kasriel

     90,000         139,992         229,992   

Christopher J. Kearney

     90,000         139,992         229,992   

Raymond J. Milchovich

     133,500         139,992         273,492   

John H. Walker

     90,000         139,992         229,992   

 

(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 17 of Item 15 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

 

(2)   The number of deferred stock units granted and fully vested on June 1, 2014 based on a closing price of Nucor common stock on May 30, 2014 of $50.63 was 2,765 units.

 

(3)   Effective May 8, 2014, Mr. Hayes succeeded Mr. Browning as Audit Committee Chairman.

 

The following table summarizes the total number of vested deferred stock units granted to non-employee directors under the Company’s 2014 Omnibus Incentive Compensation Plan and the 2010 and 2005 Stock Option and Award Plans.

 

Outstanding Equity Awards at Fiscal Year-End

 

Name

   Number of
Vested  Stock
Units

(#) (1)
     Market
Value of  Stock
Units
($) (2)
 

Peter C. Browning

     27,075         1,328,029   

Harvey B. Gantt

     20,574         1,009,155   

Gregory J. Hayes

     2,765         135,623   

Victoria F. Haynes

     20,574         1,009,155   

Bernard L. Kasriel

     19,435         953,287   

Christopher J. Kearney

     16,619         815,162   

Raymond J. Milchovich

     5,573         273,356   

John H. Walker

     17,955         880,693   

 

(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)   Fully vested deferred stock units at December 31, 2014 valued using the closing stock price of Nucor common stock of $49.05.

 

15


Table of Contents

REPORT OF THE AUDIT COMMITTEE

 

The Audit Committee’s report with respect to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2014 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. 16 (Communications with Audit Committees), as adopted by the Public Company Accounting Oversight Board.

 

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 Form 10-K for the fiscal year ended December 31, 2014, for filing with the SEC.

 

THE AUDIT COMMITTEE

Gregory J. Hayes, Chairman

Peter C. Browning

Harvey B. Gantt

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, 2014 and 2013 fees billed for services provided by PwC were as follows:

 

     2014      2013  

Audit Fees (1)

   $ 3,742,200       $ 3,662,900   

Audit-Related Fees

               

Tax Fees (2)

     3,400         3,200   

All Other Fees (3)

     5,400         3,800   

 

(1)   Audit fees consist of fees for professional services rendered in connection with the audit of Nucor’s consolidated annual financial statements, for the review of interim consolidated financial statements in Forms 10-Q and for services normally provided in connection with statutory and regulatory filings or engagements. Audit fees also include fees for professional services rendered for the audit of the effectiveness of internal control over financial reporting.

 

(2)   Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning.

 

(3)   All other fees consist of fees billed for financial reporting literature.

 

The Audit Committee’s policy is to pre-approve all audit and permissible non-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 2014 were pre-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 permissible non-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.

 

16


Table of Contents

PROPOSAL 2

 

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, 2015. PricewaterhouseCoopers LLP has acted in such capacity for Nucor since 1989. Representatives of PricewaterhouseCoopers LLP are expected to be present at the annual meeting, will have the opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions.

 

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. The Board is submitting the appointment of PricewaterhouseCoopers LLP to the stockholders for ratification and will reconsider whether to retain PricewaterhouseCoopers LLP if the stockholders fail to ratify the Audit Committee’s appointment. In addition, even if the stockholders ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee may in its discretion appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that a change is in the best interests of Nucor.

 

Vote Recommendation

 

Nucor’s 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, 2015. Unless otherwise specified, proxies will be voted FOR the proposal.

 

17


Table of Contents

EXECUTIVE OFFICER COMPENSATION

 

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion & Analysis (“CD&A”) outlines Nucor’s executive compensation philosophy, objectives and processes and explains how the Compensation and Executive Development Committee of the Board (the “Committee”) made executive compensation decisions in fiscal year 2014, 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 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, 2014.

 

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.

 

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 believes that our compensation program closely aligns the interests of the Company with our stockholders’ interests. The positive results of the advisory vote on executive compensation held at the 2014 annual meeting reinforces this belief. The Committee determined, therefore, that no changes to the compensation program were necessary.

 

In 2014, Nucor performed well when compared against other steel companies included in the Steel Comparator Group (as defined on page 22) in an environment of continuing challenging steel market conditions. Nucor’s executive compensation plans worked as designed in 2014. Executive Officers received an annual incentive reflecting Nucor’s return on equity performance and revenue performance compared to the Steel Comparator Group. The long-term incentive plan rewarded Executive Officers for Nucor’s three-year performance ended December 31, 2014 relative to the Steel Comparator Group, but resulted in no payout for the three-year performance ended December 31, 2014 relative to the General Industry Comparator Group (as defined on page 22). In 2014, performance-based restricted stock units were granted based on Nucor’s return on equity performance for the preceding year. Stock ownership requirements and the design 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:

 

  1.   Hire and retain highly talented and productive people.

 

  2.   Put them in a simple, streamlined organizational structure that allows them to innovate and make quick decisions that affect results.

 

  3.   Pay them for producing results.

 

Nucor’s compensation philosophy stresses that Executive Officers share the pain and share the gain. If Nucor performs poorly, Executive Officers will be paid below the market median. If, however, over the business cycle, Nucor’s performance is outstanding, Executive Officers will be paid above the market median. This is consistent with Nucor’s overall compensation philosophy where all of its employees have the opportunity to earn more than the workers of other steel industry companies.

 

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 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 believes that the compensation provided to Executive Officers should be commensurate and aligned with the performance of Nucor and creation of long-term stockholder value. The key principles guiding Executive Officer compensation are to (1) reward Executive Officers for superior performance, (2) provide team-based incentives that reward overall Company performance, and (3) pay guaranteed compensation (meaning those elements of pay, such as base salary and benefits, that are not dependent on performance) that is below the median for similar size industrial and materials companies.

 

18


Table of Contents

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 performance relative to two performance comparator groups: the Steel Comparator Group and 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 performance for incentive plan purposes. They are not used to benchmark compensation.

 

Base salaries are set below the median 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 stock-based awards until retirement has been successful in meeting Nucor’s objectives of retention and succession planning. All Executive Officers have been with Nucor or an acquired company 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 of ROE performance under 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 2014, the Committee reviewed the payouts and determined that the incentive plan payouts were appropriate and, therefore, did not reduce the incentive plan payouts.

 

19


Table of Contents

At the time Nucor’s stockholders approved the current and long-term incentive plans in 2003, the Committee determined that the mix of base salary and annual and long-term incentives, and the incentive opportunities at target and maximum were appropriate to accomplish the goal of paying near the 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 Committee periodically reviews nationally recognized compensation survey data and peer group data to ensure that total compensation remains reasonable.

 

The Committee engaged Pearl Meyer in 2011 to perform a benchmarking comparison of Nucor’s compensation to that of the 29 companies listed on page 21 and, as a result, implemented a number of changes that resulted in our current programs. The Committee reviewed how Nucor’s compensation compared to the compensation peer group at various levels of performance (threshold and below, target and maximum). See a discussion of this benchmarking in the “Compensation Benchmarking” section on page 21. Consistent with Nucor’s compensation philosophy, Executive Officers can earn an above median level of compensation when Nucor’s performance is outstanding. If Nucor’s performance is near target levels of performance (defined as 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 2014, performance measures were the same as in past years. No plan design changes were made in 2014.

 

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. 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. 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 occur no later than Nucor’s annual meeting of stockholders 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. The guideline number of shares ranges from 180,000 shares for the Chairman, Chief Executive Officer and President (“Chief Executive Officer”) to 90,000 shares for Nucor’s executive vice presidents. The Committee has compared these guidelines to those of Nucor’s steel company peers and 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. 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, or had made sufficient progress toward achieving the ownership guideline, as of December 31, 2014.

 

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.

 

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.

 

20


Table of Contents

Determination of 2014 Compensation

 

In making its determinations with respect to executive compensation for fiscal 2014, the Committee was supported by Donovan E. Marks, Nucor’s General Manager of Human Resources, and A. Rae Eagle, Nucor’s General Manager and Corporate Secretary. 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 reviewing and developing alternatives for the comparator groups, monitoring trends in executive and non-employee director compensation, 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 Corporate Secretary interacted with Pearl Meyer to provide compensation and performance data for Executive Officers and Nucor. In addition, Pearl Meyer, in its discretion, sought 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 needed 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.

 

The Committee has not had Pearl Meyer benchmark Executive Officers’ compensation since 2011 with the exception noted below with respect to the promotion of Mr. Ferriola to Chief Executive Officer. In 2011, the Committee completed an exercise to understand how the compensation of Executive Officers compared to compensation of the peer group at target and 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 29 companies listed below at different levels of potential performance (below threshold, target and maximum). The Committee found that Executive Officers were paid below the peer group at all levels of potential performance.

 

3M Company   Freeport-McMoRan Copper & Gold Inc.    Northrop Grumman Corporation
Air Products and Chemicals, Inc.   General Dynamics Corporation    Paccar Inc.
Alcoa Inc.   Honeywell International Inc.    Parker-Hannifin Corporation
Caterpillar Inc.   Huntsman Corporation    PPG Industries, Inc.
Cummins Inc.   Illinois Tool Works Inc.    Praxair, Inc.
Danaher Corporation   Ingersoll-Rand plc    Raytheon Company
Deere & Company   International Paper Company    Textron Corporation
E.I. du Pont de Nemours and Company   ITT Corporation    Tyco International Ltd.
Eaton Corporation   L-3 Communications    United States Steel Corporation
Emerson Electric Co.   Monsanto Company   

 

Some of the above 29 companies are included in the Steel Comparator Group or the General Industry Comparator Group used in the incentive plans as described on page 22. However, the 29 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 requirements 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

 

21


Table of Contents

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.

 

In 2012, the Committee had Pearl Meyer benchmark chief executive officer compensation in anticipation of the promotion of Mr. Ferriola to Chief Executive Officer effective January 1, 2013. In benchmarking chief executive officer compensation, 28 of the above 29 companies were used. ITT Corporation was eliminated due to its substantial decrease in revenues following the spin-off of two of its businesses.

 

In 2014, the Committee did not use survey information to benchmark executive compensation, although Pearl Meyer shared general compensation trends, some of which the Committee understands were based on its knowledge of survey information.

 

As discussed above, Nucor’s compensation levels were below the market median as compared to the benchmarking peer group across all levels of performance. The recent changes to Nucor’s compensation levels and programs have brought Executive Officer compensation more in line with Nucor’s compensation philosophy. The 2014 changes to the Executive Officer salaries should result in Executive Officer total compensation closer to the market median at threshold and target levels of performance. The compensation programs should deliver between median and 75th percentile levels of compensation when Nucor’s performance is outstanding.

 

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 2014 are comprised of the following companies:

 

Steel Comparator Group    General Industry Comparator Group     

AK Steel Holding Corporation

  

3M Company

  

Commercial Metals Company

  

Alcoa Inc.

  

Steel Dynamics, Inc.

  

Caterpillar Inc.

  

United States Steel Corporation

  

Cummins Inc.

  

Worthington Industries, Inc.

  

The Dow Chemical Company

  
  

General Dynamics Corporation

  
  

Illinois Tool Works Inc.

  
  

Johnson Controls, Inc.

  
  

Parker-Hannifin Corporation

  
  

United Technologies Corporation

  

 

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).

 

22


Table of Contents

The Committee does not use the performance comparator groups for purposes of benchmarking compensation.

 

Components of Compensation for 2014

 

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 based on the 2011 benchmark (with the exception of Mr. Ferriola, whose 2013 salary was benchmarked). The Committee sets base salaries below the median because of the Committee’s desire to orient the Executive Officers’ total pay significantly towards at-risk incentive compensation. Base salaries for 2014 were as follows:

 

Executive Officer

 

Principal Position

  2014
Salary
    2013
Salary
    Increase     Increase %  
John J. Ferriola   Chairman, Chief Executive Officer and President   $ 950,000      $ 900,000      $ 50,000        5.6
James D. Frias   Executive Vice President, Treasurer and Chief Financial Officer   $ 426,500      $ 410,100      $ 16,400        4.0
James R. Darsey   Executive Vice President   $ 400,400      $ 385,000      $ 15,400        4.0
Ladd R. Hall   Executive Vice President   $ 442,900      $ 434,250      $ 8,650        2.0
R. Joseph Stratman   Executive Vice President   $ 442,900      $ 434,250      $ 8,650        2.0
Keith B. Grass   Executive Vice President   $ 442,900      $ 434,250      $ 8,650        2.0

 

Mr. Ferriola’s salary adjustment reflected his salary being materially below the 25th percentile of the benchmark data. After adjustment, Mr. Ferriola’s 2014 base salary remained below the 25th percentile. The salary adjustments for Messrs. Frias, Darsey, Hall, Stratman and Grass were consistent with the range of salary adjustments for other Nucor executives.

 

Annual Incentives

 

The Annual Incentive Plan (“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 2014, the Committee set the threshold at 3% ROE and the maximum at 20% ROE. The threshold and maximum performance requirements are the same as 2013. 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%.

 

23


Table of Contents
   

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 sales compared to the change in net sales 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%

 

(1)   The table represents potential AIP awards for 2014 net sales performance. Net sales performance is defined as the change in net sales from one year to the next and may be zero or negative. This portion of the incentive is intended to reward performance against other steel companies, not absolute growth. The comparator group for future years may include more or less comparator companies. The potential awards are adjusted to reflect the number of comparator companies in the group.

 

Executive Officers may elect to defer up to one-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.

 

Two Executive Officers, Mr. Frias and Mr. Hall, participate in this deferral program.

 

2014 Performance

 

Based on Nucor’s ROE of 9.3% and being ranked third within the Steel Comparator Group for the change in net sales for 2014, Executive Officers earned an award of 95.56% of base salary for the ROE performance measure and an award of 45% of base salary for the change in net sales performance measure for total incentive compensation under the AIP equal to 140.56% of base salary.

 

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 a three-year performance-based Long-Term Incentive Plan (the “LTIP”);

 

   

Restricted Stock Units (“RSUs”) that vest over time;

 

   

RSUs that may be granted if certain levels of ROE are achieved; and

 

   

Stock options.

 

The Committee believes that half of the three-year LTIP awards should be earned relative to performance as compared to the Steel Comparator Group and 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 intensive companies. The Committee also believes it is appropriate to provide a level of retention through time vesting RSUs with an opportunity to earn more RSUs, based on performance, that become vested at retirement.

 

As discussed above, the level of LTIP grants was established in 2003 and reaffirmed in 2008 and 2013 when the plans were approved by stockholders. The Committee periodically benchmarks total compensation to ensure the grant sizes are still competitive and reasonable. As part of a process to bring Executive Officers’ compensation to market, the Committee added an annual grant of stock options beginning in 2010 for the Chief Executive Officer and in 2011 for the other Executive Officers.

 

24


Table of Contents

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.

 

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 day immediately preceding the first day of the performance period. The targets for the performance period ended December 31, 2014 were as follows:

 

Executive Officer

   Base Salary Rate at the
Beginning of the
Performance Period
     85% of
Base
Salary
     Nucor Stock
Price 12/31/11
     Target Award
Number of
Shares
     Adjusted
Target Award
Number of
Shares
 

John J. Ferriola

     $567,000         $481,950         $39.57         12,179      

James D. Frias

     365,000         310,250         39.57         7,840      

James R. Darsey

     360,000         306,000         39.57         7,733      

Ladd R. Hall

     400,000         340,000         39.57         8,592      

R. Joseph Stratman

     400,000         340,000         39.57         8,592      

Keith B. Grass (1)

     422,000         358,700         39.57         9,064         8,057   

 

(1)   Because Mr. Grass retired on September 12, 2014, his target performance award has been adjusted by multiplying the target performance award by a fraction, the numerator of which is the number of complete calendar months during the performance period that he was employed by Nucor and participating in the LTIP (32), and the denominator of which is the total number of calendar months in the performance period (36).

 

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, 2014. The comparator group for other performance periods may include more or less comparator companies. The potential awards are adjusted to reflect the number of comparator companies in the group.

 

One-half of each LTIP award is paid in cash and the remainder is paid in restricted stock. Restricted stock vests one-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.

 

25


Table of Contents

2014 Performance

 

Nucor’s ROAIC of 14.49% for the LTIP performance period that began January 1, 2012 and ended December 31, 2014 was ranked third relative to members of the Steel Comparator Group (3rd out of 6) and ranked tenth relative to the General Industry Comparator Group (10th out of 11).

 

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

     14.49     3         60%   

ROAIC - General Industry Comparator Group

     14.49     10         0%   
       

 

 

 
          60%   
       

 

 

 

 

The resulting payouts were as follows:

 

Executive Officer

   Target Award
Number of Shares
     Performance Award
as a % of Target
    Shares Earned  

John J. Ferriola

     12,179         60     7,307   

James D. Frias

     7,840         60     4,704   

James R. Darsey

     7,733         60     4,639   

Ladd R. Hall

     8,592         60     5,155   

R. Joseph Stratman

     8,592         60     5,155   

Keith B. Grass

     8,057         60     4,834   

 

Nucor paid one-half of the LTIP award in cash and the other half in the form of restricted shares of Nucor’s common stock in March 2015.

 

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 become vested on each of the first three anniversaries of the June 1 award date, upon the Executive Officer’s retirement (defined below), or upon death or disability while employed by Nucor.

 

Additional 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 Performance RSUs is 5%. The maximum number of Performance 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 Performance RSU grants is determined based on the Executive Officer’s position as of May 31 of the performance year (2013 in the present case). The following schedule was effective for grants on June 1, 2014:

 

Position

   Base Amount
of RSUs
Granted
Market Value
     Performance RSUs Market Value
(Based on Prior Fiscal Year ROE)
 
      5% ROE      10% ROE      12.5% ROE      15% ROE      20% ROE  

Chief Executive Officer and President

   $ 1,000,000       $ 750,000       $ 1,100,000       $ 1,500,000       $ 2,250,000       $ 4,600,000   

Chief Financial Officer and Executive Vice Presidents

     300,000         325,000         450,000         540,000         1,100,000         1,600,000   

 

26


Table of Contents

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
Years of Service    -0-    2    4    6    8    10    12    14    16    18    20

 

2014 Performance

 

On June 1, 2014, as a result of 2013 ROE of 6.4%, Executive Officers received the following value of base and Performance RSUs:

 

     Market Value of RSUs Granted  

Executive Officer

   Base RSUs      Performance
RSUs
     Total (1)  

John J. Ferriola

     $999,993         $847,951         $1,847,944   

James D. Frias

     299,983         359,979         659,962   

James R. Darsey

     299,983         359,979         659,962   

Ladd R. Hall

     299,983         359,979         659,962   

R. Joseph Stratman

     299,983         359,979         659,962   

Keith B. Grass

     299,983         359,979         659,962   

 

(1)   The actual number of RSUs granted is rounded down to the nearest full share.

 

Stock Options

 

On June 1, 2014, the Committee granted options to each Executive Officer in the amounts shown in the table below with the following grant values:

 

Position

   Grant Date Value
of Options
Granted (1)
 

Chairman, Chief Executive Officer and President

     $4,000,000   

Chief Financial Officer and 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 their grant or upon the Executive Officer’s death, disability or retirement (same as RSUs above) and have a ten-year term.

 

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.

 

Post Termination Compensation

 

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 and Non-Solicitation Agreements

 

Nucor has entered into a non-compete and non-solicitation agreement with each Executive Officer. Pursuant to these agreements, the Executive Officers have agreed not to compete with Nucor during the 24-month period following their termination of employment with Nucor for any reason in exchange for monthly cash payments from Nucor during the non-competition period. The agreements with the Executive Officers also restrict the disclosure of confidential information and

 

27


Table of Contents

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 the non-compete and non-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-competition period will be equal to the product of 3.36 times the Executive Officer’s highest annual base salary during the twelve months immediately preceding the termination of his employment, divided by twelve. If an Executive Officer who is receiving monthly installment payments dies within twelve 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 twelve 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 twelve or more months following termination of his employment.

 

Severance Benefits

 

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, 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, the Executive Officer, or his estate, will be entitled to receive a severance payment equal to one month of base salary for each year of service to Nucor with a minimum severance payment of six months’ base salary.

 

Change in Control Benefits

 

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 others.

 

   

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 gross ups are provided.

 

28


Table of Contents

Post-Termination Payments Summary

 

The following is a summary of the severance and non-compete payments that would have been payable to the Executive Officers (other than Mr. Grass who retired during 2014) if their employment had terminated on December 31, 2014. All Executive Officers were retirement-eligible as of December 31, 2014.

 

Name of Executive
Officer

 

Executive Benefits and
Payments Upon
Termination

  Voluntary
Termination
    Retirement     Involuntary
Not for
Cause
Termination
    For Cause
Termination
    Disability     Death     Change In
Control
 

John J. Ferriola

  Non-compete – cash   $ 6,384,000      $ 6,384,000      $ 6,384,000      $ 6,384,000      $ 6,384,000      $      $ 6,384,000   
  Severance – cash     1,889,664        1,889,664        1,889,664               1,889,664        1,889,664        9,547,500   
  Vesting of restricted stock            5,175,069                      5,175,069        5,175,069        5,175,069   
  Vesting of stock options            2,374,033                      2,374,033        2,374,033        2,374,033   
  Restricted stock units – cash                                               2,051,000   
  Pro-rata LTIP                                               165,397   
  Benefits and perquisites                                               28,961   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

  $ 8,273,664      $ 15,822,766      $ 8,273,664      $ 6,384,000      $ 15,822,766      $ 9,438,766      $ 25,725,960   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

James D. Frias

  Non-compete – cash   $ 2,866,080      $ 2,866,080      $ 2,866,080      $ 2,866,080      $ 2,866,080      $      $ 2,866,080   
  Severance – cash     833,650        833,650        833,650               833,650        833,650        3,571,938   
  Vesting of restricted stock            2,909,106                      2,909,106        2,909,106        2,909,106   
  Vesting of stock options            880,703                      880,703        880,703        880,703   
  Restricted stock units – cash                                               732,500   
  Pro-rata LTIP                                               75,014   
  Benefits and perquisites                                               37,004   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

  $ 3,699,730      $ 7,489,539      $ 3,699,730      $ 2,866,080      $ 7,489,539      $ 4,623,459      $ 11,072,345   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

James R. Darsey

  Non-compete – cash   $ 2,690,688      $ 2,690,688      $ 2,690,688      $ 2,690,688      $ 2,690,688      $      $ 2,690,688   
  Severance – cash     1,196,102        1,196,102        1,196,102               1,196,102        1,196,102        2,682,680   
  Vesting of restricted stock            2,909,106                      2,909,106        2,909,106        2,909,106   
  Vesting of stock options            880,703                      880,703        880,703        880,703   
  Restricted stock units – cash                                               732,500   
  Pro-rata LTIP                                               70,452   
  Benefits and perquisites                                               23,086   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

  $ 3,886,790      $ 7,676,599      $ 3,886,790      $ 2,690,688      $ 7,676,599      $ 4,985,911      $ 9,989,215   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ladd R. Hall

  Non-compete – cash   $ 2,976,288      $ 2,976,288      $ 2,976,288      $ 2,976,288      $ 2,976,288      $      $ 2,976,288   
  Severance – cash     1,238,787        1,238,787        1,238,787               1,238,787        1,238,787        2,967,430   
  Vesting of restricted stock            3,058,022                      3,058,022        3,058,022        3,058,022   
  Vesting of stock options            880,703                      880,703        880,703        880,703   
  Restricted stock units – cash                                               732,500   
  Pro-rata LTIP                                               79,003   
  Benefits and perquisites                                               34,422   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

  $ 4,215,075      $ 8,153,800      $ 4,215,075      $ 2,976,288      $ 8,153,800      $ 5,177,512      $ 10,728,368   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

R. Joseph Stratman

  Non-compete – cash   $ 2,976,288      $ 2,976,288      $ 2,976,288      $ 2,976,288      $ 2,976,288      $      $ 2,976,288   
  Severance – cash     933,678        933,678        933,678               933,678        933,678        2,967,430   
  Vesting of restricted stock            3,058,022                      3,058,022        3,058,022        3,058,022   
  Vesting of stock options            880,703                      880,703        880,703        880,703   
  Restricted stock units – cash                                               732,500   
  Pro-rata LTIP                                               79,003   
  Benefits and perquisites                                               22,046   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
 

Total

  $ 3,909,966      $ 7,848,691      $ 3,909,966      $ 2,976,288      $ 7,848,691      $ 4,872,403      $ 10,715,992   
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

29


Table of Contents

Summary Compensation Table

 

The table below describes the total compensation paid to our Executive Officers in 2014.

 

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

     2014         950,000            2,655,444        4,000,000         1,335,320         875         8,941,639   

Chairman, Chief Executive Officer and President

     2013         900,000            2,149,439        4,000,000         1,088,730         875         8,139,044   
     2012         567,000            1,451,904        1,000,000         446,569         850         3,466,323   

James D. Frias

     2014         426,500            1,397,167        600,000         299,744         875         2,724,286   

Chief Financial Officer, Treasurer and Executive Vice President

     2013         410,100            1,140,078        600,000         396,878         875         2,547,931   
     2012         365,000            1,085,420        600,000         287,474         850         2,338,744   

James R. Darsey

     2014         400,400            1,000,302        600,000         562,802         875         2,564,379   

Executive Vice President

     2013         385,000            994,722        600,000         465,735         875         2,446,332   
     2012         360,000            1,081,170        600,000         283,536         850         2,325,556   

Ladd R. Hall

     2014         442,900            1,425,515        600,000         311,270         875         2,780,560   

Executive Vice President

     2013         434,250            1,036,584        600,000         525,312         875         2,597,021   
     2012         400,000            1,115,170        600,000         315,040         850         2,431,060   

R. Joseph Stratman

     2014         442,900            1,036,427        600,000         622,540         875         2,702,742   

Executive Vice President

     2013         434,250            1,036,584        600,000         525,312         875         2,597,021   
     2012         400,000            1,115,170        600,000         315,040         850         2,431,060   

Keith B. Grass

     2014         309,423            1,036,427 (3)      600,000         434,925         1,718,425         4,099,200   

Former Executive Vice President

     2013         434,250            1,036,584 (3)      600,000         525,312         8,925         2,605,071   
     2012         422,000            1,133,870 (3)      600,000         332,367         8,750         2,496,987   

 

(1)   The amounts shown represent the grant date fair value of the shares or options awarded. The 2014 stock awards column includes the following grant date values of the performance-based awards that may be earned under the LTIP for target-level performance during the 2014 – 2016 performance period: Mr. Ferriola, $807,500; Mr. Frias, $362,525; Mr. Darsey, $340,340; Mr. Hall, $376,465; Mr. Stratman, $376,465; and Mr. Grass, $376,465. The grant date values of the performance-based awards assuming performance at the maximum level over the three-year performance period would have been: Mr. Ferriola, $1,615,000; Mr. Frias, $725,050; Mr. Darsey, $680,680; Mr. Hall, $752,930; Mr. Stratman, $752,930; and Mr. Grass, $752,930. Our policy and assumptions made in the valuation of share-based payments are contained in notes 2 and 17 of Item 15 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

 

(2)   For Executive Officers other than Mr. Grass, the amounts shown represent matching contributions to 401(k) retirement savings plans. For Mr. Grass, who retired on September 12, 2014, the amount shown in 2014 includes $9,100 of matching contributions to a 401(k) retirement savings plan, $1,337,289 of severance benefits pursuant to Nucor’s severance plan and $372,036 earned under his non-compete and non-solicitation agreement.

 

(3)  

Because Mr. Grass retired on September 12, 2014, his actual LTIP earned will be based on actual performance for the performance period prorated for the time employed. For the LTIPs beginning in 2014, 2013 and 2012, he will receive 8/36ths, 20/36ths and 32/36ths, respectively, of what he would have earned had he been employed for the entire three-year performance periods.

 

30


Table of Contents

Grants of Plan-Based Awards Table

 

The table below presents the RSUs and stock options awarded June 1, 2014, the possible payouts under Nucor’s AIP for 2014 and LTIP for the performance periods beginning in 2014.

 

Name

  Grant
Date
    Committee
Approval
Date
    Award
Type
    Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
    Estimated Possible Payouts
Under Equity 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
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

    6/1/14        5/7/14        RSP (1)                  36,499            1,847,944 (5) 
        AIP (2)      142,500        1,425,000        2,850,000                 
    1/1/14        12/4/13        LTIP (3)            3,025        15,127        30,254              807,500 (6) 
    6/1/14        5/7/14        OPT (4)                    228,832      $ 50.63        4,000,000 (7) 

James D. Frias

    6/1/14        5/7/14        RSP (1)                  13,035            659,962 (5) 
        AIP (2)      63,975        639,750        1,279,500                 
    3/10/15        12/4/13        AIP (8)                  7,940            374,689 (9) 
    1/1/14        12/4/13        LTIP (3)            1,358        6,791        13,582              362,525 (6) 
    6/1/14        5/7/14        OPT (4)                    34,324      $ 50.63        600,000 (7) 

James R. Darsey

    6/1/14        5/7/14        RSP (1)                  13,035            659,962 (5) 
        AIP (2)      60,060        600,600        1,201,200                 
    1/1/14        12/4/13        LTIP (3)            1,275        6,376        12,752              340,340 (6) 
    6/1/14        5/7/14        OPT (4)                    34,324      $ 50.63        600,000 (7) 

Ladd R. Hall

    6/1/14        5/7/14        RSP (1)                  13,035            659,962 (5) 
        AIP (2)      66,435        664,350        1,328,700                 
    3/10/15        12/4/13        AIP (8)                  8,245            389,082 (9) 
    1/1/14        12/4/13        LTIP (3)            1,411        7,053        14,106              376,465 (6) 
    6/1/14        5/7/14        OPT (4)                    34,324      $ 50.63        600,000 (7) 

R. Joseph Stratman

    6/1/14        5/7/14        RSP (1)                  13,035            659,962 (5) 
        AIP (2)      66,435        664,350        1,328,700                 
    1/1/14        12/4/13        LTIP (3)            1,411        7,053        14,106              376,465 (6) 
    6/1/14        5/7/14        OPT (4)                    34,324      $ 50.63        600,000 (7) 

Keith B. Grass

    6/1/14        5/7/14        RSP (1)                  13,035            659,962 (5) 
        AIP (2)      66,435        664,350        1,328,700                 
    1/1/14        12/4/13        LTIP (3)            1,411        7,053        14,106              376,465 (6) 
    6/1/14        5/7/14        OPT (4)                    34,324      $ 50.63        600,000 (7) 

 

(1)   Represents restricted stock units awarded June 1, 2014 under the Nucor Corporation 2014 Omnibus Incentive Compensation Plan.

 

(2)   The Executive Officers were eligible to earn a range of performance-based payments under the AIP for the Company’s performance during 2014. The threshold and maximum amounts shown are equal to 15% and 300%, respectively, of each Executive Officer’s base salary. While the AIP does not have a stated target amount, the Committee uses 150% as the target for its compensation decisions.

 

(3)   Represents the range of performance-based awards that may be earned under the LTIP for the 2014-2016 performance period. Earned awards, if any, will be made in March 2017. The grant date fair value is calculated by multiplying the fair market value of Nucor stock on the grant date by the target number of shares.

 

(4)   Represents stock options awarded June 1, 2014 under the Nucor Corporation 2014 Omnibus Incentive Compensation Plan.

 

(5)   The awards have been valued using the May 30, 2014 closing stock price of Nucor common stock of $50.63.

 

(6)   The target awards have been valued using the December 31, 2013 closing stock price of Nucor common stock of $53.38.

 

(7)   The awards have been valued using a Black-Scholes value of $17.48.

 

(8)   Represents common stock units deferred under the 2014 AIP. The awards were paid in March 2015.

 

(9)   The awards have been valued using the March 9, 2015 closing stock price of Nucor common stock of $47.19.

 

Non-Equity Incentive Plan Awards

 

Under the AIP, Executive Officers may earn a non-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 Compensation for 2014 - Annual Incentives” section of the CD&A beginning on page 23. While the AIP has no stated target, for planning purposes including compensation benchmarking, the Committee considers target to be 50% of the maximum.

 

31


Table of Contents

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. The ROE-based award vests at retirement. The RSUs were granted on June 1, 2014 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 $50.63. The options become vested and exercisable on June 1, 2017, with the exception of the options granted to Mr. Grass which vested and became exercisable upon his retirement.

 

Long-Term Incentive Plan (“LTIP”)

 

The range of potential grants for the performance period January 1, 2014 through December 31, 2016 is reported in columns (f), (g) and (h). The Company pays one-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 Compensation for 2014 - Long-Term Incentives” section of the CD&A beginning on page 24.

 

Actual performance for the LTIP performance period ended December 31, 2013 resulted in cash payments and awards of restricted shares on March 10, 2014 as follows:

 

     Shares
Issued
(#)
     Cash
Paid ($)
 

John J. Ferriola

     4,073         217,442   

James D. Frias

     2,676         142,891   

James R. Darsey

     2,599         138,749   

Ladd R. Hall

     2,948         157,387   

R. Joseph Stratman

     2,948         157,387   

Keith B. Grass

     3,113         166,209   

 

All of the Executive Officers were 55 or older as of March 10, 2014; therefore, the restricted shares vested upon issuance. These shares were granted at the beginning of the performance period, January 1, 2011, and are therefore not reported in the Grants of Plan-Based Awards Table.

 

32


Table of Contents

Outstanding Equity Awards at Fiscal Year-End Table

 

The following table shows the outstanding equity awards for each Executive Officer on December 31, 2014.

 

    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        105,506 (3)      5,175,069        12,101 (4)      593,554   
      87,719 (2)      35.76        5/31/22            14,179 (5)      695,480   
      266,134 (6)      44.51        5/31/23           
      228,832 (7)      50.63        5/31/24           
   

 

 

             
      582,685               
   

 

 

             

James D. Frias

    39,037          42.34        5/31/21        59,309 (8)      2,909,106        5,433 (4)      266,489   
      52,631 (2)      35.76        5/31/22            6,461 (5)      316,912   
      39,920 (6)      44.51        5/31/23           
      34,324 (7)      50.63        5/31/24           
   

 

 

             
      126,875               
   

 

 

             

James R. Darsey

    39,037          42.34        5/31/21        59,309 (9)      2,909,106        5,100 (4)      250,155   
      52,631 (2)      35.76        5/31/22            6,065 (5)      297,488   
      39,920 (6)      44.51        5/31/23           
      34,324 (7)      50.63        5/31/24           
   

 

 

             
      126,875               
   

 

 

             

Ladd R. Hall

    39,037          42.34        5/31/21        62,345 (10)      3,058,022        5,642 (4)      276,740   
      52,631 (2)      35.76        5/31/22            6,841 (5)      335,551   
      39,920 (6)      44.51        5/31/23           
      34,324 (7)      50.63        5/31/24           
   

 

 

             
      126,875               
   

 

 

             

R. Joseph Stratman

    39,037          42.34        5/31/21        62,345 (11)      3,058,022        5,642 (4)      276,740   
      52,631 (2)      35.76        5/31/22            6,841 (5)      335,551   
      39,920 (6)      44.51        5/31/23           
      34,324 (7)      50.63        5/31/24           
   

 

 

             
      126,875               
   

 

 

             

Keith B. Grass

    10,000          42.34        9/12/15            1,253 (4)      61,460   
    20,000          50.63        9/12/15            3,800 (5)      186,390   
 

 

 

               
    30,000                 
 

 

 

               

 

(1)   The awards have been valued using the December 31, 2014 closing stock price of Nucor common stock of $49.05.

 

(2)   Represents stock options vesting on June 1, 2015.

 

(3)   Represents RSUs vesting as follows: 17,801 units vesting on June 1, 2015; 14,073 units vesting on June 1, 2016; 6,584 units vesting on June 1, 2017; and 67,048 units vesting upon Mr. Ferriola’s retirement as defined in the CD&A with the prior approval of the Committee.

 

(4)   Represents the expected number of restricted shares that will be earned under the LTIP for the 2014-2016 performance period valued using the December 31, 2014 closing stock price of Nucor common stock of $49.05. The expected number of restricted shares that will be earned has been calculated based on performance through December 31, 2014.

 

(5)   Represents the expected number of restricted shares that will be earned under the LTIP for the 2013-2015 performance period valued using the December 31, 2014 closing stock price of Nucor common stock of $49.05. The expected number of restricted shares that will be earned has been calculated based on performance through December 31, 2014.

 

(6)   Represents stock options vesting on June 1, 2016.

 

(7)   Represents stock options vesting on June 1, 2017.

 

 

33


Table of Contents
(8)   Represents RSUs vesting as follows: 7,019 units vesting on June 1, 2015; 4,222 units vesting on June 1, 2016; 1,975 units vesting on June 1, 2017; and 46,093 units vesting upon Mr. Frias’s retirement as defined in the CD&A with the prior approval of the Committee.

 

(9)   Represents RSUs vesting as follows: 7,019 units vesting on June 1, 2015; 4,222 units vesting on June 1, 2016; 1,975 units vesting on June 1, 2017; and 46,093 units vesting upon Mr. Darsey’s retirement as defined in the CD&A with the prior approval of the Committee.

 

(10)   Represents RSUs vesting as follows: 7,019 units vesting on June 1, 2015; 4,222 units vesting on June 1, 2016; 1,975 units vesting on June 1, 2017; and 49,129 units vesting upon Mr. Hall’s retirement as defined in the CD&A with the prior approval of the Committee.

 

(11)   Represents RSUs vesting as follows: 7,019 units vesting on June 1, 2015; 4,222 units vesting on June 1, 2016; 1,975 units vesting on June 1, 2017; and 49,129 units vesting upon Mr. Stratman’s retirement as defined in the CD&A with the prior approval of the Committee.

 

Options Exercised and Stock Vested Table

 

Stock awards vested in 2014 are comprised of restricted stock granted under the LTIP for the performance period ended December 31, 2013 and RSUs issued in 2011, 2012 and 2013. Under the LTIP, awards vest over a three-year period unless the executive is age 55 or older, dies or becomes disabled. In 2014, 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, 2013. For Mr. Grass, stock awards vested in 2014 also include RSUs that vested upon his retirement.

 

     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

                     17,651         892,530   

James D. Frias

                     10,080         509,601   

James R. Darsey

                     9,216         465,878   

Ladd R. Hall

                     9,565         483,451   

R. Joseph Stratman

                     9,565         483,451   

Keith B. Grass

     135,912         2,020,789         63,647         3,466,359   

 

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 to one-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 ($) (1)
     Registrant
Contributions in
Last FY ($) (2)
     Aggregate
Earnings
in Last FY
($) (3)
    Aggregate
Withdrawals /
Distributions
($)
     Aggregate
Balance at
Last FYE
($) (4)
 
(a)    (b)      (c)      (d)     (e)      (f)  

James D. Frias

     99,220         24,805         (71,746             903,214   

 

(1)   Represents 1,978 common stock units deferred by Mr. Frias under the 2013 AIP valued using the closing stock price of Nucor common stock of $50.15 on March 7, 2014, the date the units were issued.

 

(2)   Represents 495 additional common stock units granted to Mr. Frias as a 25% match of the units deferred under the 2013 AIP. The units have been valued using the closing stock price of Nucor common stock of $50.15 on March 7, 2014, the date the units were issued.

 

(3)   Represents the decrease in the value of the units due to the change in Nucor’s common stock price from $53.38 at December 31, 2013 and $50.15 at March 7, 2014 to $49.05 at December 31, 2014.

 

 

34


Table of Contents
(4)   Represents 18,414 deferred units valued at the December 31, 2014 closing stock price of Nucor common stock of $49.05. Of the amount shown in this column, $326,112 was reported in the Summary Compensation Tables of Nucor proxy statements for previous years.

 

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 Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

 

THE COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE

 

Victoria F. Haynes, Chairman

Peter C. Browning

Harvey B. Gantt

Gregory J. Hayes

Bernard L. Kasriel

Christopher J. Kearney

Raymond J. Milchovich

John H. Walker

 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table sets forth information regarding shares of Nucor’s common stock that may be issued under Nucor’s equity compensation plans as of December 31, 2014. 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
(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)

     4,827,535 (2)    $ 42.39 (3)      12,962,466 (4) 

 

(1)   Includes the AIP, the LTIP, the 2005 Stock Option and Award Plan (the “2005 Plan”), the 2010 Stock Option and Award Plan (the “2010 Plan”) and the 2014 Omnibus Incentive Compensation Plan (the “2014 Plan”). The 2014 Plan was approved by Nucor’s stockholders at the 2014 annual meeting. The 2014 Plan, which replaced and superseded the 2010 Plan, provides that any awards made under the 2010 Plan prior to the 2014 annual meeting remain outstanding in accordance with their terms. The 2010 Plan, which replaced and superseded the 2005 Plan, provides that any awards made under the 2005 Plan remain outstanding in accordance with their terms.

 

(2)   Includes 122,424 deferred stock units awarded and outstanding under the AIP; 287,470 deferred stock units awarded and outstanding under the LTIP; 1,967,100 stock options awarded and outstanding under the 2010 Plan; 454,776 stock options awarded and outstanding under the 2014 Plan; 410,071 RSUs awarded and outstanding under the 2005 Plan; 953,037 RSUs awarded and outstanding under the 2010 Plan; and 632,657 RSUs awarded and outstanding under the 2014 Plan.

 

(3)   Weighted average exercise price of awarded and outstanding options; excludes deferred stock units and RSUs.

 

(4)   Represents 1,111,012 shares available under the AIP and LTIP, no shares available under the 2005 and 2010 Plans and 11,851,454 shares available under the 2014 Plan.

 

35


Table of Contents

PROPOSAL 3

 

STOCKHOLDER PROPOSAL

 

We have been notified that The City of Philadelphia Public Employees Retirement System (the “System”) 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 the System 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 AGAINST the proposal.

 

Resolved, that the shareholders of Nucor Corp. (“Nucor” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:

 

1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.

 

2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:

 

a. The identity of the recipient as well as the amount paid to each; and

 

b. The title(s) of the person(s) in the Company responsible for decision-making.

 

The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting.

 

Supporting Statement

 

As long-term shareholders of Nucor, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

 

Disclosure is in the best interest of the company and its shareholders. The Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

 

Publicly available records show that Nucor contributed at least $1.6 million in corporate funds since the 2004 election cycle. (CQ: http://moneyline.cq.com and National Institute on Money in State Politics: http://www.followthemoney.org) Meanwhile, The 2014 CPA-Zicklin Index of Corporate Political Disclosure and Accountability rated Nucor near the bottom among the largest 300 companies in the S&P 500, giving it just 4.3 points out of 100.

 

Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value. This may be especially true for Nucor, which the Political Economy Research Institute included among the Toxic 100 Air Polluters list in 2013.

 

Relying on publicly available data does not provide a complete picture of a company’s political spending. This proposal asks DTE Energy to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of its peers, including Freeport-McMoran Copper & Gold, CSX Corp., and Cummins Inc., that support political disclosure and accountability and present this information on their websites.

 

The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.

 

36


Table of Contents

Board of Directors’ Statement in Opposition to the Proposal

 

Nucor’s Board of Directors recommends a vote AGAINST 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.

 

We believe that the interests and well-being of Nucor, our stockholders, our employees and our nation require 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’s manufacturing industry can return our 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 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. For example, we created a page on our website discussing the importance of our country’s manufacturing economy (located at http://www.nucor.com/voice), which facilitates our direct communication with the public at large regarding an issue that impacts 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 political 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 at www.senate.gov/legislative/Public_Disclosure) and the U.S. House of Representatives (located at http://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 interest of our Company and our stockholders.

 

The Board opposes the proposal because we believe that the 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 strategies 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 System 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, unilaterally imposing more stringent disclosure and reporting requirements on Nucor could benefit those 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

 

37


Table of Contents

the merit of a position, becomes the story. Special interest groups may also seize upon the information contained in the reports requested by the System 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 System risks handicapping Nucor’s ability to influence and inform public debate for the long-term benefit of our stockholders.

 

Vote Recommendation

 

For the foregoing reasons, Nucor’s Board of Directors recommends a vote AGAINST this proposal. Unless otherwise specified, proxies will be voted AGAINST this proposal.

 

38


Table of Contents

OTHER MATTERS

 

Discretionary Voting by Proxy Holders

 

Nucor’s Board of Directors does not intend to present any matters at the 2015 annual meeting of stockholders 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, 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 2016 Annual Meeting

 

Any stockholder proposal intended to be included in Nucor’s proxy statement and form of proxy for its 2016 annual meeting of stockholders must be received by Nucor not later than November 27, 2015. Such proposals must also comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to the attention of A. Rae Eagle, Corporate Secretary, at our executive offices, 1915 Rexford Road, Charlotte, North Carolina 28211, or faxed to her attention at (704) 943-7207.

 

In addition, any stockholder proposal intended to be presented at the 2016 annual meeting of stockholders, but that will not be included in Nucor’s proxy statement and form of proxy relating to the 2016 annual meeting, must be delivered in writing to our Corporate Secretary not less than 120 days nor more than 150 days before the first anniversary of the 2015 annual meeting of stockholders. As a result, any proposals submitted by a stockholder pursuant to the provisions of Nucor’s Bylaws (other than proposals submitted pursuant to Rule 14a-8) must be received no earlier than December 16, 2015 and no later than January 15, 2016.

 

Solicitation and Expenses

 

Nucor will bear the entire cost of this proxy solicitation, including the preparation, printing and mailing of the proxy statement, the proxy and any additional soliciting materials sent by Nucor to stockholders. Nucor has retained the services of Georgeson Inc. to assist in the solicitation of proxies from the Company’s stockholders. The fees to be paid to Georgeson by the Company for these services are not expected to exceed $10,000, plus reasonable out-of-pocket expenses. Further, the Company may reimburse brokerage firms and other persons representing beneficial owners of shares for reasonable expenses incurred by them in forwarding proxy soliciting materials to such beneficial owners. In addition to solicitations by mail, certain of the Company’s directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, email, facsimile and personal interviews. Solicitation by officers and employees of Nucor may also be made of some stockholders in person or by mail, telephone, email or facsimile following the original solicitation.

 

Delivery of Proxy Statements

 

As permitted by the 1934 Act, only one copy of the proxy statement and annual report 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 and annual report.

 

The Company will promptly deliver, upon oral or written request, a separate copy of the proxy statement and annual report to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies and/or requests for multiple copies of the proxy statement and annual report in the future should be directed to Nucor’s Corporate Secretary at our 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 and annual report may contact Nucor’s Corporate Secretary at our executive offices to request that only a single copy of the proxy statement and annual report be mailed in the future.

 

39


Table of Contents

Miscellaneous

 

The information referred to in this proxy 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 Act) (i) shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or the liabilities of Section 18 of the 1934 Act, and (ii) notwithstanding anything to the contrary that may be contained in any filing by Nucor under the 1934 Act or the Securities Act of 1933, shall not be deemed to be incorporated by reference in any such filing.

 

By order of the Board of Directors,

 

LOGO

John J. Ferriola

Chairman, Chief Executive Officer and President

 

March 26, 2015

 

PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD OR VOTING

INSTRUCTON FORM IN THE ENCLOSED ENVELOPE, OR VOTE VIA THE TELEPHONE OR INTERNET.

 

 

40


Table of Contents

 

 

0                    ¢

 

LOGO
PROXY
1915 Rexford Road, Charlotte, North Carolina 28211
Phone (704) 366-7000    Fax (704) 362-4208

 

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 Corporation for the 2015 annual meeting of stockholders, to be held at 10:00 a.m. Eastern Time on Thursday, May 14, 2015, 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 2015 annual meeting of stockholders, and any adjournment or postponement thereof, on the following proposals, as set forth in the proxy statement:

 

1.     Election of the eight directors nominated by the Board of Directors

 

2.     Ratification of the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for the year ending December 31, 2015

 

3.     Stockholder proposal regarding Nucor’s lobbying and corporate spending on political contributions

 

4.     Other business as may properly come before the meeting and any adjournment or postponement thereof

 

This proxy will be voted as specified by the undersigned. If no choice is specified, this proxy will be voted FOR the election of all nominees for director listed on the reverse side, FOR proposal 2 and AGAINST proposal 3, and according to the discretion of the proxy holders on any other matters that may properly come before the meeting and 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

 

¢    1.1 14475  ¢


Table of Contents

ANNUAL MEETING OF STOCKHOLDERS OF

 

LOGO

May 14, 2015

 

     

 

PROXY VOTING INSTRUCTIONS

 

     

 

INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page.

 

TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call.

 

Vote online/phone until 11:59 PM EST on May 13, 2015.

 

MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible.

 

IN PERSON - You may vote your shares in person by attending the Annual Meeting.

 

GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.

    

LOGO

 

  
    

 

COMPANY NUMBER  

 

    
    

 

ACCOUNT NUMBER  

 

    
           
           

 

 

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:

The Notice of Annual Meeting and Proxy Statement and Annual Report are

available at https://materials.proxyvote.com/670346

 

i  Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet.  i

 

¢    20803030000000000000    4      051415   

 

 

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE  x

 

Nucor’s Board of Directors recommends a vote FOR ALL NOMINEES.

1.   Election of the eight nominees as directors

 

         

 

Nucor’s Board of Directors recommends a vote FOR proposal 2.

            FOR   AGAINST   ABSTAIN

 

¨  FOR ALL NOMINEES

 

¨  WITHHOLD AUTHORITY

      FOR ALL NOMINEES

 

¨  FOR ALL EXCEPT

  (See instructions below)

   

 

NOMINEES:

O  1. John J. Ferriola

O  2. Harvey B. Gantt

O  3. Gregory J. Hayes

O  4. Victoria F. Haynes, Ph.D.

O  5. Bernard L. Kasriel

O  6. Christopher J. Kearney

O  7. Raymond J. Milchovich

O  8. John H. Walker

 

 

                    

                    

                    

                    

                    

                    

                    

                    

       

 

2. Ratification of the appointment of PricewaterhouseCoopers LLP as Nucor’s independent registered public accounting firm for the year ending December 31, 2015

 

 

¨

 

 

¨

 

 

¨

              Nucor’s Board of Directors recommends a vote AGAINST proposal 3.  
           

 

3. Stockholder proposal regarding Nucor’s lobbying and corporate spending on political contributions

 

 

¨

 

 

¨

 

 

¨

 

INSTRUCTIONS:    To withhold authority to vote for any individual nominee(s), mark “FOR ALL             EXCEPT” and fill in the circle next to each nominee you wish to withhold,
            as shown here:  l

     

 

4. In their discretion, the holder of this proxy is authorized to vote on such other business as may properly come before the meeting and any adjournment or postponement thereof

To cumulate your vote for one or more of the listed nominees, write the manner in which such votes shall be cumulated by indicating number of votes in the space to the right of the nominee name(s). The cumulative number of votes you have is 8 times the number of shares of Common Stock you owned on March 16, 2015. All your votes may be cast for a single nominee or may be distributed among any number of nominees. If you are cumulating your vote, do not mark the circle to the left of the name(s) of the nominee(s) for whom you are voting.

 

     

This proxy will be voted FOR the election of all nominees for director unless authority is withheld. 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. This proxy will be voted FOR proposal 2 and AGAINST proposal 3 unless otherwise indicated.

       
               

    

    

                           

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

 

¨  

           

 

Signature of Stockholder            

 

Date:    

        Signature of Stockholder           Date:        

 

¢   Note:  

Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

   ¢