John Kaloski, executive vice president and operating officer
Base salary: $565,000
Roger Newport, vice president of finance and chief financial officer
Base salary: $360,000
Keith Howell, vice president of operations
Base salary: $320,000
Albert Ferrara Jr., retired senior vice president of corporate strategy and investor relations
Base salary: $357,500
Gary Barlow, former vice president of sales and customer service
Base salary: $188,846
SOURCE: AK Steel Holding Corp. proxy statement filed April 21, 2014
Executive officers of AK Steel Holding Corp. have not received merit raises since January 2010 mainly due to the company’s financial performance, according to the steelmaker’s proxy statement filed Monday.
Some top executives have received raises since 2010 because of promotions, but no merit raises have been awarded. In the filing with the U.S. Securities and Exchange Commission, AK Steel’s management development and compensation committee said base salary, once set, is not directly linked to the company’s performance. But performance is “strongly” considered when setting salaries each year.
AK Steel is Middletown’s largest employer, and Butler County’s third-largest employer overall of approximately 2,400 full-time employees. AK Steel is headquartered in West Chester Twp. and operates seven steel plants, including Middletown Works.
“Due to the continued impact on the company’s financial performance of the extremely challenging economic and business conditions of the last several years, the base salary of the company’s CEO remained at the same level in 2013 as it was in 2010,” reads the 98-page proxy statement.
The compensation committee consists of four independent directors on AK Steel’s 12-person board of directors.
The publicly-traded company files every year a proxy statement to invite stockholders to the upcoming annual meeting (May 29) and present information about items stockholders will vote on.
James Wainscott’s cash salary remains unchanged at $1,150,000 a year. He is chairman, president and chief executive officer of AK Steel. He became president and CEO in 2003, and was later named chairman.
Other top officer salaries in 2013 were: David Horn, executive vice president, general counsel and secretary, who received $637,500; John Kaloski, executive vice president and operating officer, received $565,000; Roger Newport, vice president of finance and chief financial officer, received $360,000; Keith Howell, vice president of operations, received $320,000; Albert Ferrara Jr., retired senior vice president of corporate strategy and investor relations, received $357,500; and Gary Barlow, former vice president of sales and customer service, received $188,846, according to the document.
AK Steel’s total compensation program also includes stock awards and options, incentive payouts and benefits.
The recent economic crisis was the worst recession since the Great Depression, the compensation committee wrote in the proxy statement. The effects of the crisis on the domestic steel industry lingered in 2013.
AK Steel in 2013 recorded a net loss of approximately $46.8 million, the fifth consecutive annual loss. The net loss in 2012 was approximately $1 billion.
As a result of missing financial targets from 2011-2013, the company did not pay long-term incentive payouts last year. Long-term incentives are based on meeting thresholds for earnings before interest, taxes, depreciation and amortization, total stockholder return during the three-year time period relative to a stock index, and stock price growth.
Executives received some short-term annual incentives for meeting safety targets. Annual incentives are based on net income, as well as safety and quality.
Wainscott’s total compensation for which he was potentially eligible in 2013 was $3,303,514, down more than 62 percent from compensation of $8,687,258 the year before. Wainscott did not actually take home $3.3 million in 2013; rather that amount includes the estimated value of stock and other benefits at a point in time.
The value of stock awards dropped year-over-year in tune with stock prices, and changing interest rates used to calculate Wainscott’s pension investment lowered its value.
The compensation committee in 2013 “decided to keep the number of restricted shares, options and performance shares granted to each executive officer the same as in 2012, which had the effect of reducing the value of the equities granted to the executive officers because of the decrease in share price compared to the prior year,” the proxy reads.