Cleveland-Cliffs Inc DEF 14A, filed Apr 3, 2024

Cleveland-Cliffs Inc. (CLF)

DEF 14A 2024-04-03 For: 2023-12-31

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Added on June 12, 2026

About this DEF 14A

Cleveland-Cliffs Inc filed this DEF 14A on April 3, 2024.

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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 2023			19
PROPOSAL 1 – ELECTION OF DIRECTORS			20
Information Concerning Director Nominees			22
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 2023 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
AUDIT COMMITTEE REPORT			67
PROPOSAL 3 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			68
INFORMATION ABOUT SHAREHOLDER PROPOSALS AND COMPANY DOCUMENTS			69
OTHER INFORMATION			69
ANNEX A			A-1


2024 ANNUAL MEETING OF SHAREHOLDERS		(PAGE 6)

DATE AND TIME:	Thursday, May 16, 2024, at 11:30 a.m. EDT
PLACE:	Online at www.virtualshareholdermeeting.com/CLF2024
RECORD DATE:	March 18, 2024
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 2024 Annual Meeting of Shareholders (the “2024 Annual Meeting”) at www.virtualshareholdermeeting.com/CLF2024 (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 2023 Annual Report will be made available on or about April 3, 2024 to shareholders of record as of March 18, 2024.


YOUR VOTE IS IMPORTANT. YOU MAY VOTE BY INTERNET, BY TELEPHONE, BY MAILING THE ENCLOSED PROXY CARD, OR BY VOTING ONLINE DURING THE 2024 ANNUAL MEETING.
The proxy statement and Cliffs’ 2023 Annual Report for the 2023 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 2024 ANNUAL MEETING

Our virtual 2024 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 2024 Annual Meeting by visiting www.virtualshareholdermeeting.com/CLF2024, beginning at 11:00 a.m. EDT on May 16, 2024. Shareholders will be able to vote their shares electronically during the 2024 Annual Meeting. To participate in the 2024 Annual Meeting, you will need the 16-digit control number included on your proxy card or your voting instruction form. The 2024 Annual Meeting will begin promptly at 11:30 a.m. EDT. We encourage you to access the 2024 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 2024 Annual Meeting by visiting www.virtualshareholdermeeting.com/CLF2024, but guests are not entitled to participate. The virtual 2024 Annual Meeting platform is fully supported across browsers (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 2024 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 2024 Annual Meeting. To ensure your shares are properly represented, please vote your proxy promptly even if you plan to join the 2024 Annual Meeting. QUESTIONS At the conclusion of the 2024 Annual Meeting, Lourenco Goncalves, our Chairman, President and Chief Executive Officer (“CEO”), will be available to answer questions submitted by shareholders. Shareholders may submit questions for the 2024 Annual Meeting after logging in, beginning at 11:00 a.m. EDT on May 16, 2024. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CLF2024, typing your question into the “Ask a Question” field, and clicking “Submit.” Please submit any questions before the start time of the 2024 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 2024 Annual Meeting, related rules of conduct and other materials for the 2024 Annual Meeting will be available at www.virtualshareholdermeeting.com/CLF2024. TECHNICAL DIFFICULTIES Technical support, including related technical support phone numbers, will be available on the virtual meeting platform at www.virtualshareholdermeeting.com/CLF2024 beginning at 11:00 a.m. EDT on May 16, 2024 through the conclusion of the 2024 Annual Meeting.


SHAREHOLDER ENGAGEMENT (summary)			(PAGE 33)

We maintain open and proactive communications with the investment community. During 2023 and early 2024, we reached out to our top 25 shareholders, representing approximately 44% of our outstanding common shares (approximately 55% of the votes cast at our 2023 Annual Meeting of Shareholders), 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 2023, were as follows: 1.Align short-term and long-term incentives with results delivered to shareholders; 2.Be transparent, helping to 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).


2023 EXECUTIVE COMPENSATION SUMMARY			(PAGE 52)

The numbers in the following table showing the 2023 compensation of our named executive officers (the “NEOs”) were determined in the same manner as the numbers in the corresponding columns in the 2023 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 12/31/2023)	SALARY ($)	BONUS ($)	STOCK AWARDS ($)	OPTION AWARDS ($)	NON-EQUITY INCENTIVE PLAN COMPENSATION ($)	TOTAL ($)
Lourenco Goncalves	Chairman, President and Chief Executive Officer	2,116,000	—	11,860,431	—	10,150,235	24,126,666
Celso L. Goncalves Jr.	Executive Vice President, Chief Financial Officer	750,000	—	3,152,903	—	1,555,254	5,458,157
Clifford T. Smith	Executive Vice President & President, Cleveland-Cliffs Steel	859,000	—	3,611,091	—	2,479,086	6,949,177
Keith A. Koci	Executive Vice President & President, Cleveland-Cliffs Services	710,000	—	2,984,710	—	1,921,479	5,616,189
James D. Graham	Executive Vice President, Human Resources, Chief Legal and Administrative Officer & Secretary	681,000	—	2,544,728	—	1,598,460	4,824,188


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			(PAGE 68)

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 2024.


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 uncertainties and factors relating to our operations and business environment that are difficult to predict and may be beyond our control. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These factors and uncertainties include, but are not limited to, the factors, 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, 2023, 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	2023 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; and ▪Periodically evaluates ethical and legal compliance.
CHAIR: John T. Baldwin	MEMBERS: Robert P. Fisher, Jr., William K. Gerber and Arlene M. Yocum


COMPENSATION AND ORGANIZATION COMMITTEE

MEMBERS: 3	INDEPENDENT: 3	2023 MEETINGS: 7
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’ business strategy 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; and ▪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			2023 ($)
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	190,000	139,986	—	329,986
R.P. Fisher, Jr.	160,000	139,986	—	299,986
W.K. Gerber	160,000	139,986	1,500	301,486
S.M. Green	160,000	139,986	—	299,986
R.S. Michael, III	175,000	139,986	1,500	316,486
J.L. Miller	160,000	139,986	—	299,986
G. Stoliar	160,000	139,986	—	299,986
D.C. Taylor	280,000	139,986	—	419,986
A.M. Yocum	160,000	139,986	—	299,986
(1)The amounts reported in this column reflect the aggregate cash dollar value of all earnings in 2023 for annual retainer fees and chair retainers. As noted above, during 2023, Ms. Miller and Messrs. Fisher, Stoliar and Taylor each elected to take certain portions of these cash amounts in Cliffs shares under our Retainer Share Election Program. (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 2023, 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 9,433 shares on April 26, 2023 was $14.84 per share (approximately $140,000). Messrs. Baldwin and Fisher elected to defer all of their 2023 restricted share awards in the form of deferred shares under the Directors' Plan. As of December 31, 2023, the aggregate number of restricted shares or deferred shares subject to forfeiture held by each nonemployee director was as follows: Mr. Baldwin - 9,433; Mr. Fisher - 9,433; Mr. Gerber - 9,433; Ms. Green - 9,433; Mr. Michael - 9,433; Ms. Miller - 9,433; Mr. Stoliar - 9,433; Mr. Taylor - 9,433; and Ms. Yocum - 9,433. As of December 31, 2023, the aggregate number of deferred share units allocated to the deferred share accounts of Messrs. Baldwin and Fisher under the Directors’ Plan were 59,650 and 9,433, respectively. (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 AND NOMINATING COMMITTEE

MEMBERS: 5	INDEPENDENT: 5	2023 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; and ▪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: Ron A. Bloom, Robert P. Fisher, Jr., Susan M. Green and Janet L. Miller


STRATEGY AND SUSTAINABILITY COMMITTEE

MEMBERS: 5	INDEPENDENT: 4	2023 MEETINGS: 5
RESPONSIBILITIES:
▪Oversees Cliffs’ strategic planning activities and long-term business 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’ business strategy, including operational, safety and ESG-related risks, as well as climate-related risks and decarbonization opportunities; ▪Provides advice and assistance with developing our current and future strategy; ▪Monitors the progress and implementation of Cliffs’ strategy and long-term business objectives, including by assessing the results of major projects and transactions; ▪Assesses developments in best practice frameworks and guidance as may be appropriate in the context of Cliffs’ then current industrial assets, geographic footprint, and overall business plans and objectives; ▪Considers the merits and risks of potential acquisitions, joint ventures, emerging growth opportunities and strategic alliances; and ▪Reviews and approves any sustainability reports that Cliffs may publish from time to time.
CHAIR: Lourenco Goncalves	MEMBERS: Ron A. Bloom, Gabriel Stoliar, Douglas C. Taylor and Arlene M. Yocum


NAME OF BENEFICIAL OWNER	AMOUNT AND NATURE OF “BENEFICIAL OWNERSHIP” (1)
	BENEFICIAL OWNERSHIP	INVESTMENT POWER		VOTING POWER		PERCENT OF CLASS (2)
		SOLE	SHARED	SOLE	SHARED
Directors
John T. Baldwin	113,727	113,727	—	113,727	—	—
Ron A. Bloom	27,221	27,221	—	27,221	—	—
Robert P. Fisher, Jr.	189,516	189,516	—	189,516	—	—
William K. Gerber	137,578	137,578	—	137,578	—	—
Susan M. Green	90,286	90,286	—	90,286	—	—
Ralph S. Michael, III	171,840	171,840	—	171,840	—	—
Janet L. Miller	93,675	93,675	—	93,675	—	—
Ben Oren	—	—	—	—	—	—
Gabriel Stoliar	250,687	250,687	—	250,687	—	—
Douglas C. Taylor	128,857	128,857	—	128,857	—	—
Arlene M. Yocum	94,887	94,887	—	94,887	—	—
Named Executive Officers
Lourenco Goncalves	5,046,430	5,046,430	—	5,046,430	—	1.06
Celso L. Goncalves Jr.	134,293	134,293	—	134,293	—	—
Clifford T. Smith	580,946	580,946	—	580,946	—	—
Keith A. Koci	285,461	285,461	—	285,461	—	—
James D. Graham	398,546	398,546	—	398,546	—	—
All Current Directors and Executive Officers as a group (18 Persons)	8,376,586	8,376,586	—	8,376,586	—	1.76
Other Persons
The Vanguard Group (3) 100 Vanguard Blvd. Malvern, PA 19355	50,366,031	49,685,523	680,508	—	336,385	10.59
BlackRock, Inc. (4) 50 Hudson Yards New York, NY 10001	49,982,602	49,982,602	—	47,791,227	—	10.51
(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, director nominees, and executive officers and filings made with the SEC or furnished to us by any shareholder. (2)Less than one percent, except as otherwise indicated. (3)The Vanguard Group reported its ownership on Amendment No. 15 to Schedule 13G filed with the SEC on March 11, 2024. (4)BlackRock, Inc. reported its ownership on Amendment No. 4 to Schedule 13G filed with the SEC on March 7, 2024.


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	8,123,009	(1)	$9.59	(2)	23,666,004	(3)
Equity Compensation Plans Not Approved by Security Holders	—		__		—
Total	8,123,009				23,666,004


OUR NEOs FOR 2023:
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


CD&A TABLE OF CONTENTS


Executive Summary			30
Executive Compensation Philosophy and Core Principles			35
Development and Oversight of Executive Compensation			39
Analysis of 2023 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 expressed gratitude that the Compensation Committee incorporated feedback provided through prior shareholder outreach efforts into designing and implementing the overall executive compensation program for 2023.	ü	The Compensation Committee designed our executive compensation program to align with shareholder interests and is pleased that shareholders agree that the compensation program aligns with their interests, as indicated by the 93% support for Say-on-Pay received in 2023. Given the strong support, the Compensation Committee did not make material changes to the overall executive compensation program. In accordance with prior feedback, the Compensation Committee did not make any special discretionary awards to executive officers as part of the 2023 compensation program. The Compensation Committee also used continued rigor when setting goals and evaluating strategic initiatives.
Shareholders asked about the use of one-time discretionary awards to executives in prior periods.	ü	There were no one-time discretionary awards paid out as part of the 2023 compensation program. The Compensation Committee acknowledges that special discretionary awards are tools that should be used only in extraordinary circumstances.
Shareholders reiterated the desire 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. We believe that his contributions to generating shareholder value that has outperformed the broader market are recognized in the stock performance charts shown for the one, three and five-year periods.


COMPENSATION TYPE		PAY ELEMENT	WHY WE PAY THIS ELEMENT
Fixed Pay	Cash Compensation	Base Salary	■Provide 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.
		Performance Cash	■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.
	Equity Compensation	Performance Shares
		Restricted Stock Units	■Align the interests of executives with long-term shareholder value. ■Retain executives.


WHAT WE DO...

ü			Set rigorous 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 a NYSE-compliant incentive compensation clawback policy
ü			Set robust share ownership guidelines for our NEOs
ü			Regularly engage with shareholders to discuss governance and executive compensation matters
ü			Conduct an annual Say-on-Pay advisory vote
ü			Conduct annual compensation-related risk reviews
ü			Maintain an insider trading policy that, among other things, prohibits any officer from engaging in speculative trading activities with respect to Company securities, such as shorting, hedging and pledging transactions
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 without shareholder approval
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
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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


	2022 ($)	INCREASE (%)	2023 ($)
Goncalves	2,035,000	4.0%	2,116,000
C. Goncalves	660,000	13.6%	750,000
Smith	826,000	4.0%	859,000
Koci	683,000	4.0%	710,000
Graham	655,000	4.0%	681,000


EMPI PLAN AWARD OPPORTUNITIES

	2023 BASE SALARY ($)	THRESHOLD (%)	TARGET (%)	MAXIMUM (%)
Goncalves	2,116,000	100	200	400
C. Goncalves	750,000	50	100	200
Smith	859,000	60	120	240
Koci	710,000	60	120	240
Graham	681,000	50	100	200


2023 EMPI Plan Strategic Initiatives

STRATEGIC INITIATIVE	IMPORTANCE OF INITIATIVE	ACHIEVEMENTS
Consolidate profitability within the North American Automotive manufacturing industry	We are the largest supplier of steel to the automotive industry in North America. The automotive industry is our largest end market, and profitability to this end market is an important driver to the success of our business.	We had record steel shipments in 2023 led by record automotive shipments. Additionally, our record automotive shipments led to this end market generating the largest annual revenue for us since becoming a steel company. Due to our recent investments in maintaining our automotive steelmaking capabilities, focus on quality and differentiated service offerings, we were able to achieve an increase in automotive pricing despite commodity steel pricing falling during the negotiation period.
Establish branding strategy for low carbon Advanced High-Strength Steels	It is important for us to offer our customers low carbon steel options while maintaining quality specifications as customers seek to reduce their overall emissions profile.	Successfully implemented CLIFFS-H™ surcharge for steel melted with our internally produced HBI product. We also developed the Cleveland-Cliffs Battery Enclosure, which is a sustainable and robust all-steel battery concept that meets stringent performance requirements with a design that enables a CO2 reduction of more than 70% as compared to a comparable all-aluminum design.
Leadership participation in Regional Hydrogen Hub (H2Hubs) development	The use of hydrogen within our footprint will be instrumental to us in continuing to reduce our emissions.	Throughout 2023, Cliffs was heavily involved in prospective hydrogen hubs as part of the DOE’s H2Hubs funding initiative. In October 2023, the DOE announced the intention to award funding under the Infrastructure and Jobs Act for seven H2Hubs, including the Midwest Alliance for Clean Hydrogen. This hub covering Illinois, Indiana and Michigan, was selected for $1 billion in funding and is near our two largest plants, Indiana Harbor and Burns Harbor. We believe our willingness and ability to offtake a significant portion of the entire production of the hub is a key driver to the selection and viability of this hub. During 2023, we initiated a project to construct a pipeline to bring hydrogen to our Indiana Harbor blast furnace. We also were the first company in North America to inject hydrogen into a blast furnace, successfully completed in May of 2023.
Develop next decade emission and waste targets	A key priority of our GHG reduction strategy is to evaluate and pursue new technologies and opportunities to identify realistic pathways to continue to reduce our emissions profile. We take our leadership role in the industry seriously and it is important for us to be a leader when developing and setting emission and waste targets.	In 2023, we internally developed a plan to announce interim and long-term GHG reduction goals with intention to announce new targets in connection with our annual sustainability report in April 2024. We also internally completed a high volume waste stream assessment across our steelmaking operations in preparation of setting a waste goal.
Take in-house certain third-party services at steel plants	We pride ourselves on the ability to operate and serve our business with internal resources and strive to limit the amount of external services we use in order to continue to reduce costs and limit reliance on third-party contractors.	We successfully moved proprietary services in-house, including certain lab work, slab and coil hauling, roll shops, plant services, fuel delivery, product loading, railroad and scrap handling.
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.	See below


2023 EMPI Plan

EMPI PLAN PERFORMANCE METRIC	THRESHOLD 50%	TARGET 100%	MAXIMUM 200%	WEIGHTING (%)	2023 ACTUAL	2023 FUNDING (%)
Adjusted EBITDA (USD $ in millions) (1)	$1,200	$1,600	$2,000	50.0	$1,911	88.9
Safety Scorecard	8.0%	10.0%	12.0%	10.0	25.4%	20.0
Strategic Initiatives:	—	—	—	40.0	—	80.0
▪Consolidate profitability within the North American Automotive manufacturing industry
▪Establish branding strategy for low carbon Advanced High-Strength Steels
▪Leadership participation in Regional Hydrogen Hub development
▪Develop next decade emission and waste targets
▪Take in-house certain third-party services at steel plants
▪Any Initiatives the Compensation Committee deems significant to advancing the Company

			Total	100.0		188.9
(1)See Annex A to this proxy statement for an explanation of our non-GAAP financial measure, Adjusted EBITDA.


	BASE SALARY ($)	TARGET AWARD LEVEL (%)	TARGET AWARD LEVEL ($)	2023 EMPI FUNDING (%)	EMPI PLAN PAYOUT ($)
Goncalves	2,116,000	200	4,232,000	188.9	7,994,248
C. Goncalves	750,000	100	750,000	188.9	1,416,750
Smith	859,000	120	1,030,800	188.9	1,947,181
Koci	710,000	120	852,000	188.9	1,609,428
Graham	681,000	100	681,000	188.9	1,286,409


	TARGET (%)	TOTAL GRANT VALUE ($)	TARGET PERFORMANCE CASH INCENTIVE AWARDS ($)	TARGET PERFORMANCE SHARE AWARDS (#)	RESTRICTED STOCK UNITS (#)
Goncalves	600	13,416,058	4,316,640	229,320	229,320
C. Goncalves	450	3,566,432	1,147,500	60,961	60,961
Smith	450	4,084,728	1,314,270	69,820	69,820
Koci	450	3,376,193	1,086,300	57,709	57,709
Graham	400	2,878,495	926,160	49,202	49,202


			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, 2023
	# OF SHARES OWNED DIRECTLY	# OF RESTRICTED STOCK UNITS	# OF TOTAL SHARES
Goncalves	$83,292,849	$10,102,036	$93,394,885	6x	12,696,000	44.1x
	4,873,777	591,108	5,464,885
C. Goncalves	$2,062,250	$2,000,504	$4,062,754	3x	2,250,000	5.4x
	120,670	117,057	237,727
Smith	$9,139,339	$2,747,081	$11,886,420	3x	2,577,000	13.8x
	534,777	160,742	695,519
Koci	$4,375,143	$2,176,446	$6,551,589	3x	2,130,000	9.2x
	256,006	127,352	383,358
Graham	$6,302,689	$1,876,294	$8,178,983	3x	2,043,000	12.0x
	368,794	109,789	478,583
(1)Value is calculated based on the one-year average closing price per share of our shares as of December 31, 2023, which was $17.09.


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	2023	2,116,000	—	11,860,431	—	10,150,235	1,944,607	112,655	26,183,928
	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
Celso L. Goncalves Jr. EVP, CFO	2023	750,000	—	3,152,903	—	1,555,254	210,100	72,357	5,740,614
	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
Clifford T. Smith EVP & President, Cleveland-Cliffs Steel	2023	859,000	—	3,611,091	—	2,479,086	808,200	50,930	7,808,307
	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
Keith A. Koci EVP & President, Cleveland-Cliffs Services	2023	710,000	—	2,984,710	—	1,921,479	239,500	41,700	5,897,389
	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
James D. Graham EVP, HR, Chief Legal and Administrative Officer & Secretary	2023	681,000	—	2,544,728	—	1,598,460	515,275	43,810	5,383,273
	2022	647,083	—	1,733,872	—	948,324	140	48,614	3,378,033
	2021	—	—	—	—	—	—	—	—
(1)2023 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 2023 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 2023:


	401(k) CONTRIBUTION ($)	CATCH-UP CONTRIBUTION ($)	TOTAL ($)
Goncalves	22,500	7,500	30,000
C. Goncalves	22,500	—	22,500
Smith	52,800	7,500	60,300
Koci	22,500	7,500	30,000
Graham	52,800	7,500	60,300