Cleveland-Cliffs Inc DEF 14A, filed Apr 3, 2023

Cleveland-Cliffs Inc. (CLF)

DEF 14A 2023-04-03

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Added on June 12, 2026

About this DEF 14A

Cleveland-Cliffs Inc filed this DEF 14A on April 3, 2023.

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☐			Preliminary Proxy Statement
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PROXY STATEMENT SUMMARY			1
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING			4
MEETING INFORMATION			6
ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY			8
CORPORATE GOVERNANCE			12
Board Leadership Structure			12
Board’s Role in Risk Oversight			12
Board Meetings and Committees			13
Identification and Evaluation of Director Candidates			15
Communications With Directors			16
Code of Business Conduct and Ethics			16
Independence and Related Party Transactions			16
DIRECTOR COMPENSATION			18
Director Compensation for 2022			19
PROPOSAL 1 – ELECTION OF DIRECTORS			20
Information Concerning Director Nominees			22
DELINQUENT SECTION 16(a) REPORTS			26
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY			27
EQUITY COMPENSATION PLAN INFORMATION			28
COMPENSATION DISCUSSION AND ANALYSIS			29
Executive Summary			30
Executive Compensation Philosophy and Core Principles			35
Development and Oversight of Executive Compensation			39
Analysis of 2022 Compensation Decisions			42
Retirement and Deferred Compensation Benefits			48
Supplementary Compensation Policies			48



COMPENSATION COMMITTEE REPORT			51
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			51
COMPENSATION-RELATED RISK ASSESSMENT			51
EXECUTIVE COMPENSATION TABLES			52
Executive Compensation Tables and Narratives			52
Potential Payments Upon Termination or Change in Control			58
CEO Pay Ratio			62
Pay Versus Performance			63
PROPOSAL 2 – APPROVAL, ON AN ADVISORY BASIS, OF OUR NAMED EXECUTIVE OFFICERS' COMPENSATION			66
PROPOSAL 3 – APPROVAL, ON AN ADVISORY BASIS, OF THE FREQUENCY OF FUTURE SHAREHOLDER VOTES TO APPROVE OUR NAMED EXECUTIVE OFFICERS' COMPENSATION			67
AUDIT COMMITTEE REPORT			68
PROPOSAL 4 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			69
INFORMATION ABOUT SHAREHOLDER PROPOSALS AND COMPANY DOCUMENTS			70
OTHER INFORMATION			70
ANNEX A			A-1


2023 ANNUAL MEETING OF SHAREHOLDERS		(PAGE 6)

DATE AND TIME:	Wednesday, May 17, 2023, at 11:30 a.m. EDT
PLACE:	Online at www.virtualshareholdermeeting.com/CLF2023
RECORD DATE:	March 20, 2023
VOTING:	Shareholders of record are entitled to vote by Internet at www.proxyvote.com; by telephone at 1-800-690-6903; by completing and returning the enclosed proxy card by mail; or by voting online during the 2023 Annual Meeting of Shareholders (the "2023 Annual Meeting") at www.virtualshareholdermeeting.com/CLF2023 (beneficial holders must obtain a legal proxy from their broker, bank, nominee or other shareholder of record granting the right to vote).
PROXY MATERIALS:	This proxy statement, the accompanying proxy card and our 2022 Annual Report will be made available on or about April 3, 2023 to shareholders of record as of March 20, 2023.


YOUR VOTE IS IMPORTANT. YOU MAY VOTE BY INTERNET, BY TELEPHONE, BY MAILING THE ENCLOSED PROXY CARD, OR BY VOTING ONLINE DURING THE 2023 ANNUAL MEETING.
The proxy statement and Cliffs’ 2022 Annual Report for the 2022 fiscal year are available at www.proxyvote.com. These materials also are available on Cliffs’ website at www.clevelandcliffs.com under "Investors." If your shares are not registered in your own name, please follow the voting instructions from your bank, broker, nominee or other shareholder of record to vote your shares.


ATTENDANCE AND PARTICIPATION AT THE 2023 ANNUAL MEETING

Our virtual 2023 Annual Meeting will be conducted on the Internet via live audio webcast. Shareholders will be able to participate online and submit questions in advance of the 2023 Annual Meeting by visiting www.virtualshareholdermeeting.com/CLF2023, beginning at 11:00 a.m. EDT on May 17, 2023. Shareholders will be able to vote their shares electronically during the 2023 Annual Meeting. To participate in the 2023 Annual Meeting, you will need the 16-digit control number included on your proxy card or your voting instruction form. The 2023 Annual Meeting will begin promptly at 11:30 a.m. EDT. We encourage you to access the 2023 Annual Meeting prior to the start time. Online access will begin at 11:00 a.m. EDT. Guests may listen to a live audio webcast of the virtual 2023 Annual Meeting by visiting www.virtualshareholdermeeting.com/CLF2023, but guests are not entitled to participate. The virtual 2023 Annual Meeting platform is fully supported across browsers (Microsoft Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and smartphones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to participate in the 2023 Annual Meeting. Participants should also allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the 2023 Annual Meeting. To ensure your shares are properly represented, please vote your proxy promptly even if you plan to join the 2023 Annual Meeting. QUESTIONS Lourenco Goncalves, our Chairman, President and Chief Executive Officer ("CEO"), will be available to answer questions submitted by shareholders at the conclusion of the 2023 Annual Meeting. Shareholders may submit questions for the 2023 Annual Meeting after logging in, beginning at 11:00 a.m. EDT on May 17, 2023. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CLF2023, typing your question into the “Ask a Question” field, and clicking “Submit.” Please submit any questions before the start time of the 2023 Annual Meeting. We will answer as many shareholder-submitted questions as time permits. Additional information regarding the ability of shareholders to ask questions during the 2023 Annual Meeting, related rules of conduct and other materials for the 2023 Annual Meeting will be available at www.virtualshareholdermeeting.com/CLF2023. TECHNICAL DIFFICULTIES Technical support, including related technical support phone numbers, will be available on the virtual meeting platform at www.virtualshareholdermeeting.com/CLF2023 beginning at 11:00 a.m. EDT on May 17, 2023 through the conclusion of the 2023 Annual Meeting.


SHAREHOLDER ENGAGEMENT (summary)			(PAGE 33)

We maintain open and proactive communications with the investment community. During 2022 and early 2023, we reached out to our top 25 shareholders, representing approximately 43% of our outstanding common shares (approximately 58% of the votes cast at our 2022 annual meeting), as well as major proxy advisory firms, to solicit their perspectives on our compensation program, financial performance, corporate governance, sustainability and other topics. These discussions included our independent Lead Director when requested. The feedback received from our outreach efforts is shared with and considered by our Board of Directors (the "Board"), and our engagement activities have generated valuable input that helps inform our decisions and strategy, when appropriate. See the section entitled "Shareholder Engagement" in the Compensation Discussion and Analysis ("CD&A") section for more details as to what we heard from our recent engagement activities and how we responded to that feedback.


EXECUTIVE COMPENSATION PHILOSOPHY AND CORE PRINCIPLES			(PAGE 35)

Our guiding executive compensation principles, as established by the Compensation Committee for 2022, were as follows: 1.Align short-term and long-term incentives with results delivered to shareholders; 2.Be transparent, ensure that executives and shareholders understand our executive compensation programs, including the objectives, mechanics, compensation levels and opportunities provided; 3.Design an incentive plan that focuses on performance objectives tied to our business plan (including profitability-related and cost control objectives), relative performance objectives tied to market conditions (including relative total shareholder return, measured by share price appreciation plus dividends, if any) and performance against other key objectives tied to our business strategy (including safety); 4.Provide competitive fixed compensation elements over the short term (base salary) and long term (equity and retirement benefits) to encourage long-term retention of our key executives; and 5.Continue to structure programs to align with corporate governance best practices (such as not providing "gross-ups" related to change in control payments, using "double-trigger" vesting in connection with a change in control for equity awards, using Share Ownership Guidelines and maintaining a clawback policy related to incentive compensation for our executive officers).


2022 EXECUTIVE COMPENSATION SUMMARY			(PAGE 52)

The numbers in the following table showing the 2022 compensation of our named executive officers (the "NEOs") were determined in the same manner as the numbers in the corresponding columns in the 2022 Summary Compensation Table (the "SCT") (provided later in this proxy statement); however, they do not include information regarding changes in pension value and non-qualified deferred compensation earnings and information regarding all other compensation, each as required to be presented in the SCT under the rules of the U.S. Securities and Exchange Commission (the "SEC"). As such, this table should not be viewed as a substitute for the SCT.


NAME	PRINCIPAL POSITION (AS OF 12/31/2022)	SALARY ($)	BONUS ($)	STOCK AWARDS ($)	OPTION AWARDS ($)	NON-EQUITY INCENTIVE PLAN COMPENSATION ($)	TOTAL ($)
Lourenco Goncalves	Chairman, President and Chief Executive Officer	2,035,000	—	9,260,335	—	6,924,868	18,220,203
Celso L. Goncalves Jr.	Executive Vice President, Chief Financial Officer	660,000	—	2,167,293	—	714,669	3,541,962
Clifford T. Smith	Executive Vice President & President, Cleveland-Cliffs Steel	826,000	—	2,364,331	—	1,699,684	4,890,015
Keith A. Koci	Executive Vice President & President, Cleveland-Cliffs Services	683,000	—	2,167,293	—	1,103,769	3,954,062
James D. Graham	Executive Vice President, Human Resources, Chief Legal and Administrative Officer & Secretary	647,083	—	1,733,872	—	948,324	3,329,279
Maurice D. Harapiak	Former Executive Vice President, Human Resources & Chief Administration Officer	196,875	—	1,733,872	—	733,956	2,664,703


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			(PAGE 69)

As a matter of good corporate governance, we are asking our shareholders to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2023.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. As a general matter, forward-looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to risks and uncertainties relating to our operations and business environment that are difficult to predict and may be beyond our control. Such risks and uncertainties may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Part I., Item 1A., "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2022, and those described from time to time in our future reports filed with the SEC. Except to the extent required by law, we do not undertake to update the forward-looking statements included in this proxy statement to reflect the impact of circumstances or events that may arise after the date the forward-looking statements were made. Forward-looking and other statements in this proxy statement regarding our greenhouse gas ("GHG") reduction plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current and forward-looking GHG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future.


AUDIT COMMITTEE

MEMBERS: 4	INDEPENDENT: 4	2022 MEETINGS: 9
AUDIT COMMITTEE FINANCIAL EXPERTS: The Board has determined that each of John T. Baldwin, Robert P. Fisher, Jr., William K. Gerber and Arlene M. Yocum is an "audit committee financial expert" within the meaning of Item 407 of Regulation S-K under the federal securities laws.
RESPONSIBILITIES:
▪Reviews with our management, the internal auditors and the independent registered public accounting firm, the adequacy and effectiveness of our system of internal control over financial reporting ▪Reviews significant accounting matters ▪Reviews quarterly unaudited financial information prior to public release ▪Approves the audited financial statements prior to public distribution ▪Oversees and monitors risks related to accounting, financial reporting and information security ▪Approves our assertions related to internal controls prior to public distribution ▪Reviews any significant changes in our accounting principles or financial reporting practices ▪Evaluates our independent registered public accounting firm; discusses with the independent registered public accounting firm its independence; and considers the compatibility of non-audit services with such independence ▪Annually selects and retains our independent registered public accounting firm to examine our financial statements, and reviews and approves the services performed by our independent registered public accounting firm ▪Establishes and maintains, with the Governance Committee, procedures to review related party transactions ▪Approves management’s appointment, termination or replacement of the head of Internal Audit ▪Periodically evaluates ethical and legal compliance
CHAIR: John T. Baldwin	MEMBERS: Robert P. Fisher, Jr., William K. Gerber and Arlene M. Yocum


COMPENSATION COMMITTEE

MEMBERS: 3	INDEPENDENT: 3	2022 MEETINGS: 8
RESPONSIBILITIES:
▪Oversees development and implementation of Cliffs' compensation policies and programs for officers ▪Develops criteria for awards under incentive plans that appropriately relate to Cliffs' strategic plan and operating performance objectives, and approves equity-based awards ▪Reviews and evaluates CEO and other executive officer performance and approves compensation (with the CEO's compensation being subject to ratification by the independent members of the Board) ▪Recommends to the Board the election of officers ▪Assists with management development and succession planning ▪Reviews and approves employment and severance arrangements with officers and oversees regulatory compliance regarding compensation matters and related party transactions ▪Reviews and recommends the CD&A and the Compensation Committee report for inclusion in appropriate Cliffs securities filings ▪Obtains the advice of outside experts with regard to compensation matters ▪May, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee and may delegate certain equity award grant authority to certain officers of Cliffs, subject to applicable law For more information about the role of executives and outside advisers in our executive compensation process, see the CD&A section of this proxy statement.
CHAIR: Douglas C. Taylor	MEMBERS: John T. Baldwin and Ralph S. Michael, III


PROXY STATEMENT TABLE OF CONTENTS


BOARD FORM OF CASH COMPENSATION			2022 ($)
Annual Retainer			160,000
Lead Director Annual Retainer			100,000
Audit Committee Chair Annual Retainer			30,000
Compensation Committee Chair Annual Retainer			20,000
Governance Committee Chair Annual Retainer			15,000


NAME	FEES EARNED OR PAID IN CASH ($)(1)	STOCK AWARDS ($)(2)	ALL OTHER COMPENSATION ($)(3)	TOTAL ($)
J.T. Baldwin	183,500	139,998	—	323,498
R.P. Fisher, Jr.	155,000	139,998	—	294,998
W.K. Gerber	155,000	139,998	1,500	296,498
S.M. Green	155,000	139,998	—	294,998
R.S. Michael, III	169,250	139,998	1,500	310,748
J.L. Miller	155,000	139,998	—	294,998
G. Stoliar	155,000	139,998	—	294,998
D.C. Taylor	267,500	139,998	—	407,498
A.M. Yocum	155,000	139,998	—	294,998
(1)The amounts reported in this column reflect the aggregate cash dollar value of all earnings in 2022 for annual retainer fees and chair retainers. (2)The amounts reported in this column reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718 for the nonemployee directors’ restricted share awards granted during 2022, which awards are further described above, and whether or not deferred by the director. The grant date fair value of the nonemployee directors’ restricted share award of 5,271 shares on April 26, 2022 was $26.56 per share (approximately $140,000). Mr. Baldwin elected to defer all of his 2022 restricted share awards in the form of deferred shares under the Directors' Plan. As of December 31, 2022, the aggregate number of restricted shares or deferred shares subject to forfeiture held by each nonemployee director was as follows: Mr. Baldwin - 5,271; Mr. Fisher - 5,271; Mr. Gerber - 5,271; Ms. Green - 5,271; Mr. Michael - 5,271; Ms. Miller - 5,271; Mr. Stoliar - 5,271; Mr. Taylor - 5,271; and Ms. Yocum - 5,271. As of December 31, 2022, the aggregate number of deferred share units allocated to the deferred share account of Mr. Baldwin under the Directors' Plan was 50,217. (3)The amounts in this column reflect matching contributions made to charitable organizations from the Foundation on behalf of the Director.


þ			THE BOARD RECOMMENDS A VOTE FOR ALL OF THE NOMINEES LISTED ON THE FOLLOWING PAGES.


GOVERNANCE COMMITTEE

MEMBERS: 4	INDEPENDENT: 4	2022 MEETINGS: 5
RESPONSIBILITIES:
▪Oversees annual review of our Corporate Governance Guidelines and periodically reviews external developments in corporate governance matters generally ▪Periodically reviews and makes recommendations regarding our officers' authorized levels for corporate expenditures ▪Establishes and maintains, with the Audit Committee, procedures for review of related party transactions that relate to Board members ▪Reviews the qualifications of incumbent directors and proposed Board candidates, and recommends to the Board as director-nominees those candidates possessing the experience, skills and qualifications consistent with Board-approved criteria, our Corporate Governance Guidelines and other criteria deemed important by the Governance Committee ▪Monitors the Board governance process and provides guidance on Board governance and other matters ▪Recommends changes in membership and responsibility of Board committees and reviews and makes recommendations regarding any conditional resignations tendered by directors ▪Reviews and administers our director compensation plans and benefits, and makes recommendations to the Board with respect to compensation plans, equity-based plans and share ownership guidelines for directors ▪Other responsibilities include oversight of annual evaluation of the Board and CEO, as well as monitoring risks associated with Board organization, membership, structure and succession planning
CHAIR: Ralph S. Michael, III	MEMBERS: Robert P. Fisher, Jr., Susan M. Green and Janet L. Miller


STRATEGY AND SUSTAINABILITY COMMITTEE

MEMBERS: 4	INDEPENDENT: 3	2022 MEETINGS: 5
RESPONSIBILITIES:
▪Oversees Cliffs’ strategic plan and annual management objectives ▪Acts in an advisory capacity with respect to Cliffs' sustainability strategies, its commitment to environmental stewardship, its focus on health and safety of employees and other stakeholders, and its corporate social responsibility initiatives ▪Monitors risks and opportunities relevant to Cliffs' strategy, including operational, safety, environmental, social and governance risks, as well as climate-related risks and decarbonization opportunities ▪Provides advice and assistance with developing our current and future strategy ▪Provides follow-up oversight with respect to the comparison of actual results with estimates for major projects and post-acquisition integration efforts ▪Assesses Cliffs’ overall capital structure and its capital allocation priorities ▪Assists management in determining the resources necessary to implement Cliffs’ strategic and financial plans ▪Considers the merits and risks of potential acquisitions, joint ventures, emerging growth opportunities and strategic alliances ▪Reviews and approves any sustainability reports that Cliffs may publish from time to time
CHAIR: Lourenco Goncalves	MEMBERS: Gabriel Stoliar, Douglas C. Taylor and Arlene M. Yocum


NAME OF BENEFICIAL OWNER	AMOUNT AND NATURE OF "BENEFICIAL OWNERSHIP" (1)
	BENEFICIAL OWNERSHIP (2)	INVESTMENT POWER		VOTING POWER		PERCENT OF CLASS (3)
		SOLE	SHARED	SOLE	SHARED
Directors
John T. Baldwin	113,727	113,727	—	113,727	—	—
Robert P. Fisher, Jr.	187,243	187,243	—	187,243	—	—
William K. Gerber	128,145	128,145	—	128,145	—	—
Susan M. Green	87,353	87,353	—	87,353	—	—
Ralph S. Michael, III	152,407	152,407	—	152,407	—	—
Janet L. Miller	81,969	81,969	—	81,969	—	—
Gabriel Stoliar	238,074	238,074	—	238,074	—	—
Douglas C. Taylor	118,469	118,469	—	118,469	—	—
Arlene M. Yocum	81,954	81,954	—	81,954	—	—
Named Executive Officers
Lourenco Goncalves	4,960,913	4,960,913	—	4,960,913	—	—
Celso L. Goncalves Jr.	114,170	114,170	—	114,170	—	—
Clifford T. Smith	562,207	562,207	—	562,207	—	—
Keith A. Koci	248,706	248,706	—	248,706	—	—
James D. Graham	392,948	392,948	—	392,948	—	—
Maurice D. Harapiak (4)	360,875	360,875	—	360,875	—	—
All Current Directors and Executive Officers as a group (17 Persons)	8,071,463	8,071,463	—	8,071,463	—	1.57
Other Persons
BlackRock, Inc. (5) 55 East 52nd Street New York, NY 10055	54,411,677	54,411,677	—	52,006,492	—	10.56
The Vanguard Group (6) 100 Vanguard Blvd. Malvern, PA 19355	50,252,165	49,630,693	621,472	—	284,141	9.76
(1)Under SEC rules, “beneficial ownership” includes having or sharing with others the power to vote or direct the investment of securities. Accordingly, a person having or sharing the power to vote or direct the investment of securities is deemed to “beneficially own” the securities even if he or she has no right to receive any part of the dividends on or the proceeds from the sale of the securities. Also, because “beneficial ownership” extends to persons, such as co-trustees under a trust, who share power to vote or control the disposition of the securities, the very same securities may be deemed “beneficially owned” by two or more persons shown in the table. Information with respect to “beneficial ownership” shown in the table above is based upon information supplied by our directors and executive officers and filings made with the SEC or furnished to us by any shareholder. (2)Amounts reported in this column include shares subject to options that are currently exercisable or exercisable within 60 days of March 20, 2023, as follows: 187,136 shares for Mr. Goncalves; 27,430 shares for Mr. Smith; 24,154 shares for Mr. Graham; and 27,430 shares for all other executive officers as a group. (3)Less than one percent, except as otherwise indicated. (4)Mr. Harapiak, previously Executive Vice President, Human Resources & Chief Administration Officer, separated from Cliffs in April 2022. The information for Mr. Harapiak is based on his direct ownership as of April 22, 2022, which was the last date such information was available to Cliffs and may not reflect current beneficial ownership as of March 20, 2023. (5)BlackRock, Inc. reported its ownership on Amendment No. 2 to Schedule 13G filed with the SEC on January 26, 2023. (6)The Vanguard Group reported its ownership on Amendment No. 12 to Schedule 13G filed with the SEC on February 9, 2023.


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 (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) (c)
Equity Compensation Plans Approved by Security Holders	8,201,975	(1)	$10.39	(2)	26,057,523	(3)
Equity Compensation Plans Not Approved by Security Holders	—		__		—
Total	8,201,975				26,057,523


OUR NEOs FOR 2022:
Lourenco Goncalves			Chairman, President and CEO
Celso L. Goncalves Jr.			Executive Vice President, CFO
Clifford T. Smith			Executive Vice President & President, Cleveland-Cliffs Steel
Keith A. Koci			Executive Vice President & President, Cleveland-Cliffs Services
James D. Graham			Executive Vice President, Human Resources, Chief Legal and Administrative Officer & Secretary
Maurice D. Harapiak (1)			Former Executive Vice President, Human Resources & Chief Administration Officer
(1) Mr. Harapiak separated from Cliffs on April 22, 2022.


CD&A TABLE OF CONTENTS


Executive Summary			30
Executive Compensation Philosophy and Core Principles			35
Development and Oversight of Executive Compensation			39
Analysis of 2022 Compensation Decisions			42
Retirement and Deferred Compensation Benefits			48
Supplementary Compensation Policies			48
Executive Compensation Tables and Narratives			52


WHAT WE HEARD...	HOW WE RESPONDED...

Shareholders questioned the use of one-time discretionary awards to executives.	ü	There were no one-time discretionary awards paid out as part of the 2022 compensation program. The Compensation Committee acknowledges that special discretionary awards are tools that should be used only in extraordinary circumstances, and the Compensation Committee has made a commitment to not make special discretionary awards to executive officers except in extraordinary circumstances where the compensation objectives cannot be addressed through our annual compensation program.
Shareholders questioned the rigor in setting financial targets for the short-term plan.	ü	The Compensation Committee consistently sets rigorous financial targets based on the best information available. Accordingly, the Compensation Committee set an aggressive financial target for the 2022 short-term plan, increasing our Adjusted EBITDA target to $4.5 billion, nearly three times the 2021 target of $1.6 billion. We did not meet this rigorous financial target, and the financial metric portion of the short-term plan paid out significantly lower than target level.
Shareholders questioned the evaluation of the strategic initiatives portion of the short-term plan.	ü	The strategic initiatives portion of the short-term incentive plan reflects the cyclical nature of the steel business and prioritizes important Company objectives that are not fully captured in the financial targets. For 2022, following Compensation Committee evaluation, this metric paid out significantly lower than historical levels, even though we achieved all strategic initiatives as well as additional initiatives deemed significant by the Compensation Committee to advancing the Company.
Shareholders expressed the necessity to retain Chairman, President and CEO, Lourenco Goncalves.	ü	Our shareholders have consistently expressed their view that Mr. Goncalves is critical to the long-term success of the Company and that his retention needs to be a top priority of the Compensation Committee. The Board also views Mr. Goncalves as a uniquely talented CEO and recognizes the importance of retaining him for the long term. As such, the Compensation Committee has put together a compensation package that it believes will incentivize Mr. Goncalves to remain in his current role at Cleveland-Cliffs. Under the leadership of Mr. Goncalves, the Company has experienced a complete turnaround, going from of a regional iron ore mining company in financial distress to the largest flat-rolled steel producer in North America. Our share performance under his leadership has also dramatically outperformed our peer group over the long term.


COMPENSATION TYPE		PAY ELEMENT	WHY WE PAY THIS ELEMENT
Fixed Pay	Cash Compensation	Base Salary	■Provides stable income and compensation for day-to-day responsibilities.
At Risk		Annual Incentive	■Motivate and reward executives for performance on key strategic, operational and financial measures during the year.
	Equity Compensation	Performance Cash and Shares	■Motivate and reward executives for performance on a key long-term performance metric. ■Align the interests of executives with long-term shareholder value. ■Retain executives.
		Restricted Stock Units	■Align the interests of executives with long-term shareholder value. ■Retain executives.


WHAT WE DO...

ü			Set incentive award metrics that are objective and tie to Company performance
ü			Provide a considerable proportion of NEO compensation in the form of performance-based compensation
ü			Include caps on individual payouts in incentive plans
ü			Use double-trigger vesting in connection with a change in control with respect to our long-term equity awards
ü			Maintain an incentive compensation clawback policy
ü			Set significant share ownership guidelines for our NEOs
ü			Regularly engage with shareholders to discuss governance and executive compensation
ü			Conduct an annual Say-on-Pay advisory vote
ü			Conduct annual compensation-related risk reviews
ü			Maintain an insider trading policy that prohibits any officer from hedging or pledging Company securities
ü			Retain an independent executive compensation consultant to advise the Compensation Committee, which is composed entirely of independent directors
WHAT WE DON'T DO...

X			We don't allow highly leveraged incentive plans that encourage excessive risk taking
X			We don't offer employment agreements for executive officers
X			We don't permit repricing or backdating of stock options
X			We don't pay tax "gross-ups" on change in control payments related to excise taxes and cash paid in lieu of health and welfare benefits
X			We don't provide service credits for prior employment related to the Supplemental Executive Retirement Plan (the "SERP") benefit


PROCESS FOR DETERMINING COMPENSATION COMPARATOR GROUP

Industry: U.S publicly-traded companies on major exchange and in similar industry
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Similar Scale: Revenue approximately 0.50 to 2.5 times that of Cliffs and market capitalization
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Business Fit: Direct business and labor market competitors
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Compensation Comparator Group
Alcoa Corporation	Johnson Controls International	Reliance Steel & Aluminum Co.
Cummins Inc.	LyondellBasell Industries N.V.	Stanley Black & Decker, Inc.
DuPont de Nemours, Inc.	Nucor Corporation	Steel Dynamics, Inc.
Freeport-McMoRan Inc.	PACCAR Inc.	Trane Technologies
Illinois Tool Works Inc.	Parker-Hannifin Corporation	United States Steel Corporation
International Paper Company	PPG Industries, Inc.	WestRock Company


	2021 ($)	INCREASE (%)	2022 ($)
Goncalves	1,938,000	5.0%	2,035,000
C. Goncalves	550,000	20.0%	660,000
Smith	765,000	8.0%	826,000
Koci	650,000	5.1%	683,000
Graham (1)	561,000	16.8%	655,000
Harapiak (2)	561,000	12.3%	630,000
(1)Effective on April 26, 2022, Mr. Graham received a base salary increase from $630,000 to $655,000 in connection with his role expanding to include the responsibility of Human Resources. (2)Mr. Harapiak separated from Cliffs on April 22, 2022 and received base salary at this rate through such date.


EMPI PLAN AWARD OPPORTUNITIES

	2022 BASE SALARY ($)	THRESHOLD (%)	TARGET (%)	MAXIMUM (%)
Goncalves	2,035,000	100	200	400
C. Goncalves	660,000	50	100	200
Smith	826,000	60	120	240
Koci	683,000	60	120	240
Graham	655,000	50	100	200
Harapiak (1)	630,000	50	100	200
(1)Mr. Harapiak separated from Cliffs on April 22, 2022 and received a prorated EMPI award payment based on full-year actual results, as further described below.


2022 EMPI Plan Strategic Initiatives

STRATEGIC INITIATIVE	IMPORTANCE OF INITIATIVE	ACHIEVEMENTS
Establish Cliffs Services as primary scrap client for Automotive Industry	Access to additional scrap gives us flexibility to optimize use within our footprint and further bolsters our internally and domestically sourced raw material portfolio.	We continued to enhance our scrap business and have leveraged our relationships with our automotive customers to increase scrap offtake arrangements by approximately 400,000 tons annually.
Maximize utilization of scrap in our BOFs	The increased utilization of scrap within our BOFs allows us to stretch hot metal production, resulting in lower emissions for our steel on a per ton basis.	At certain facilities, we were able to stretch hot metal production by utilizing up to 30% scrap in our BOFs.
Maximize utilization of HBI in our blast furnaces	The increased utilization of HBI in our blast furnaces boosts productivity and results in less coke consumed in the blast furnace.	The optimization of HBI consumption in our blast furnaces resulted in nearly double the volume of internally-sourced HBI consumed year-over-year.
Emerging Technology Participation - Alternative Iron Making, Carbon Capture, and Other New Initiatives	A key priority of our GHG reduction strategy is to evaluate and pursue new technologies and opportunities to further reduce emissions.	We are continuing to work with external partners related to carbon capture and hydrogen usage. We have been encouraged by the DOE to move forward with an application for a hydrogen hub and have continued studying carbon capture within our footprint.
Develop Renewable Energy Portfolio	A key priority of our GHG reduction strategy is the efficient use of clean energy.	We signed a 15-year power purchase agreement for 180 megawatts of a 200 megawatt wind farm that is anticipated to be operational in 2025, representing almost 10% of our total power needs.
Develop Science Based Emissions Reductions	It is important for us to develop a path towards near zero GHG emissions in line with expected SBTi guidelines to be released in 2023.	We have continued to participate in an expert advisory group initiated by SBTi to develop a pathway toward near zero GHG emissions for the global steel sector.
Any Initiatives the Compensation Committee deems significant to advancing the Company	The Compensation Committee feels it is important for management to evaluate additional opportunities throughout the year to complement strategic initiatives outlined in the compensation program.	Throughout the year, we successfully negotiated new labor agreements covering 14,000 USW-represented employees, significantly improved commercial contracts, proactively negotiated lower healthcare premiums resulting in a reduction in retirement liabilities, and completed our major repair and maintenance cycle.


2022 EMPI Plan

EMPI PLAN PERFORMANCE METRIC	THRESHOLD 50%	TARGET 100%	MAXIMUM 200%	WEIGHTING (%)	2022 ACTUAL	2022 FUNDING (%)
Adjusted EBITDA (USD $ in millions) (1)	$3,000	$4,500	$6,000	50.0	$3,169	27.80
Safety Scorecard	8.0%	10.0%	12.0%	10.0	6.2%	—
Strategic Initiatives:	—	—	—	40.0	—	40.00
Establish Cliffs Services as primary scrap client for Automotive Industry
Maximize utilization of scrap in our BOFs
Maximize utilization of HBI in our blast furnaces
Emerging Technology Participation - Alternative Iron Making, Carbon Capture, and Other New Initiatives
Develop Renewable Energy Portfolio
Develop Science Based Emissions Reductions
Any Initiatives the Compensation Committee deems significant to advancing the Company
◦During 2022, Cliffs reached a successful new labor agreement with the United Steelworkers (USW). The contract covers approximately 14,000 USW-represented employees at 17 operating locations, including steelmaking, mining and pelletizing operations.
			Total	100.0		67.80
(1)See Annex A to this proxy statement for an explanation of our non-GAAP financial measure, Adjusted EBITDA.


	BASE SALARY ($)	TARGET AWARD LEVEL (%)	TARGET AWARD LEVEL ($)	2022 EMPI FUNDING (%)	EMPI PLAN PAYOUT ($)
Goncalves	2,035,000	200	4,070,000	67.8	2,759,460
C. Goncalves	660,000	100	660,000	67.8	447,480
Smith	826,000	120	991,200	67.8	672,034
Koci	683,000	120	819,600	67.8	555,689
Graham	655,000	100	655,000	67.8	444,090
Harapiak (1)	630,000	100	193,315	67.8	131,068
(1)Mr. Harapiak's EMPI award was prorated based on his separation date of April 22, 2022.


	TARGET (%)	TOTAL GRANT VALUE ($)	TARGET PERFORMANCE CASH INCENTIVE AWARDS ($)	TARGET PERFORMANCE SHARE AWARDS (#)	RESTRICTED STOCK UNITS (#)
Goncalves	600	11,502,334	3,995,000	193,488	193,488
C. Goncalves	450	2,692,019	935,000	45,284	45,284
Smith	450	2,936,759	1,020,000	49,401	49,401
Koci	450	2,692,019	935,000	45,284	45,284
Graham	400	2,153,646	748,000	36,228	36,228
Harapiak	400	2,153,646	748,000	36,228	36,228


			MULTIPLE OF BASE PAY
CEO			6x
Executive / Senior Vice President			3x
Vice President			1.5x


	VALUE OF SHARES OWNED DIRECTLY ($)	VALUE OF RESTRICTED STOCK UNITS ($)	TOTAL SHARE VALUE ($) (1)	REQUIRED MULTIPLE OF BASE SALARY	REQUIRED VALUE ($)	APPROXIMATE OWNERSHIP RELATIVE TO BASE SALARY AS OF DECEMBER 31, 2022
	# OF SHARES OWNED DIRECTLY	# OF RESTRICTED STOCK UNITS	# OF TOTAL SHARES
Goncalves	$83,429,963	$13,925,601	$97,355,564	6x	$12,210,000	47.8x
	4,263,156	711,579	4,974,735
C. Goncalves	$1,482,467	$1,536,891	$3,019,358	3x	$1,980,000	4.6x
	75,752	78,533	154,285
Smith	$8,000,255	$3,468,176	$11,468,431	3x	$2,478,000	13.9x
	408,802	177,219	586,021
Koci	$3,504,341	$2,263,623	$5,767,964	3x	$2,049,000	8.4x
	179,067	115,668	294,735
Graham	$5,951,257	$2,014,340	$7,965,597	3x	$1,965,000	12.2x
	304,101	102,930	407,031
(1)Value is calculated based on the one-year average closing price per share of our shares as of December 31, 2022, which was $19.57.


NAME AND PRINCIPAL POSITION (a)	YEAR (b)	SALARY ($) (1)(2) (c)	BONUS ($) (d)	STOCK AWARDS ($) (3) (e)	OPTION AWARDS ($)(f)	NON-EQUITY INCENTIVE PLAN COMPENSATION ($) (1)(4) (g)	CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($) (5) (h)	ALL OTHER COMPENSATION ($) (6) (i)	TOTAL ($) (j)
Lourenco Goncalves Chairman, President and CEO	2022	2,035,000	—	9,260,335	—	6,924,868	573	236,575	18,457,351
	2021	1,938,000	3,876,000	7,060,185	—	10,760,320	420,893	439,333	24,494,731
	2020	1,810,016	3,800,000	4,127,534	—	7,472,000	684,898	616,957	18,511,405
Celso L. Goncalves Jr. EVP, CFO	2022	660,000	—	2,167,293	—	714,669	—	71,197	3,613,159
	2021	404,667	550,000	453,563	—	862,493	42,900	46,229	2,359,852
	2020	—	—	—	—	—	—	—	—
Clifford T. Smith EVP & President, Cleveland-Cliffs Steel	2022	826,000	—	2,364,331	—	1,699,684	—	62,659	4,952,674
	2021	765,000	918,000	1,741,806	—	2,521,100	85,700	84,870	6,116,476
	2020	706,218	900,000	1,018,304	—	1,406,940	234,200	65,180	4,330,842
Keith A. Koci EVP & President, Cleveland-Cliffs Services	2022	683,000	—	2,167,293	—	1,103,769	—	49,839	4,003,901
	2021	590,667	780,000	1,021,860	—	1,645,636	119,700	34,976	4,192,839
	2020	489,006	500,000	543,095	—	500,000	165,500	28,110	2,225,711
James D. Graham EVP, HR, Chief Legal and Administrative Officer & Secretary	2022	647,083	—	1,733,872	—	948,324	140	48,614	3,378,033
	2021	—	—	—	—	—	—	—	—
	2020	—	—	—	—	—	—	—	—
Maurice D. Harapiak Former EVP, HR & Chief Administration Officer	2022	196,875	—	1,733,872	—	733,956	104	4,426,247	7,091,054
	2021	561,000	561,000	1,021,860	—	1,532,210	63,871	77,899	3,817,840
	2020	531,699	550,000	597,410	—	1,056,940	163,269	59,305	2,958,623
(1)2022 amounts in columns (c), (d) and (g) reflect the salary, bonus and non-equity incentive plan compensation for each NEO, respectively, before pre-tax reductions for contributions to the 401(k) Savings Plan, the 2012 NQDC Plan and certain other benefit plans.
(2)The 2022 salary for each of the NEOs includes his base salary before the employee's contributions to the 401(k) Savings Plan. The following table summarizes salary contributions for the 401(k) Savings Plan for NEOs in 2022:


	401(k) CONTRIBUTION ($)	CATCH-UP CONTRIBUTION ($)	TOTAL ($)
Goncalves	20,500	6,500	27,000
C. Goncalves	20,500	—	20,500
Smith	48,800	6,500	55,300
Koci	20,500	6,500	27,000
Graham	48,800	6,500	55,300
Harapiak	13,781	6,500	20,281