Friday, October 4, 2019

Cleveland, Ohio-Based Iron Ore Mining Company Cleveland-Cliffs Inc's Top-Tier Executives Average Annual Pay and Employee Benefits Increase Was a Blistering 19.4% Per Year During the Past Ten Years

The third Democratic 2020 Presidential candidate debate was held in Houston, Texas on September 12, 2019.  The stickout strong performers in this debate were Amy Klobuchar, Pete Buttigieg, Beto O'Rourke and Cory Booker.  The only one of the Top Four candidates in the polls performing OK in this debate was Elizabeth Warren, with the other Top Three in the polls slipping in performance in this debate, especially two of them Kamala Harris and Bernie Sanders.

The most insightful recent move by the Democratic Presidential candidates is Pete Buttigieg's Bus, which is being driven now all over Iowa.  With this acquisition, Pete is showing his confidence in very effectively dealing with the media on a constant basis.  This move should eventually propel him into 3rd place in Iowa behind Elizabeth Warren and Joe Biden and give Pete a decent shot of eventually reaching the coveted 15% of Iowa's caucus vote.

The fourth Democratic 2020 Presidential candidate debate will be held on October 15, 2020 at Otterbein University in Westerville, Ohio, a Columbus suburb.  It's good to see that the New York Times will be one of the hosts.  The quality and relevance of the questions should improve substantially from what they were in the first three debates where the key economic issues played such a minor role.

The key issue to Ohio citizens should be the huge and continuing Income Inequality Expansion which is at the core of many critical problems the US faces.

While increasing the US federal minimum wage will help here, there is a much broader and critical problem that needs to be solved.  The annual percentage increase in the pay and employee benefits of Company non-executive employees are minuscule in relation to that of Company executive employees and this has been going on for decades.  When Corporate CEOs and CFOs primarily view non-executive employees as Costs rather than as People, this is what happens. And neither political party has had the courage to take on US Corporations here.

Thus I will be doing research and making posts on the average annual pay and employee benefits increase per year that the Top-Tier Executives of large Ohio Companies were rewarded with in the past ten years.

The 39th Ohio Company I am addressing here is Cleveland-Cliffs Inc.

From annual compensation information contained in Company Proxy Statement and 10-K/A filings with the US SEC, the chart at the bottom below shows Cleveland-Cliffs Inc's Top-Tier Executives Annual Total Compensation for each of the two consecutive full years of employment for the past ten years.
  
Cleveland-Cliffs Inc's Top-Tier Executives Average Annual Pay and Employee Benefits Increase was a blistering 19.4% per year during the past ten years, which is the 15th highest of the 39 large Ohio-related Companies I have addressed so far.

  1. TransDigm Group +243.1% per year for the past ten years
  2. Worldpay +49.0% per year for the past seven years
  3. General Motors +29.5% per year for the past ten years
  4. Wendy's +24.2% per year for the past ten years
  5. Welltower +24.0% per year for the past ten years
  6. Cardinal Health +23.3% per year for the past ten years
  7. Timken Company +23.3% per year for the past ten years
  8. Cedar Fair L.P. +22.5% per year for the past ten years
  9. MPLX LP +22.4% per year for the past five years
  10. RPM International +21.8% per year for the past ten years
  11. Scotts Miracle-Gro +21.5% per year for the past ten years
  12. Cintas Corp +20.7% per year for the past ten years
  13. Andeavor Logistics LP +20.6% per year for the past seven years
  14. Teradata +20.2% per year for nine years
  15. Cleveland-Cliffs +19.4% per year for the past ten years
  16. Marathon Petroleum Corp +18.7% per year for the past ten years
  17. Huntington Bancshares +18.4% per year for the past ten years
  18. Fifth Third Bancorp +18.0% per year for the past ten years
  19. STERIS plc +15.7% per year for the past ten years
  20. Nordson Corp +15.3% per year for the past ten years
  21. GrafTech International +14.9% per year for the past ten years
  22. American Electric Power +14.5% per year for the past ten years
  23. Forest City Realty Trust +13.2% per year for seven years
  24. Eaton Corp plc +12.7% per year for the past ten years
  25. Cincinnati Financial +12.3% per year for the past ten years
  26. Progressive Corp +12.1% per year for the past ten years
  27. Sherwin-Williams +12.0% per year for the past ten years
  28. Parker-Hannifin +12.0% per year for the past ten years
  29. The Kroger Company +11.2% per year for the past ten years
  30. FirstEnergy +10.2% per year for the past ten years
  31. KeyCorp +9.8% per year for the past ten years
  32. Chemed Corp +9.7% per year for the past ten years
  33. J. M. Smucker +8.8% per year for the past ten years
  34. Lancaster Colony +8.0% per year for the pat ten years
  35. Lincoln Electric Holdings +7.6% per year for the past ten years
  36. American Financial Group +7.6% per year for the next ten years
  37. Procter & Gamble +7.4% per year for the past ten years
  38. Macy's +6.6% per year for the past ten years
  39. L Brands +2.0% per year for the past ten years

There have been many US Government laws enacted in the past two decades that have substantially increased income inequality expansion including the year after year after year of annual furtive tax extenders of predominately special interests additional tax loopholes, which both the Democratic and Republican Establishments voted for, but none more income inequality expanding than the Trump Tax Cuts Act.

On the other hand, the only highly effective US Government law enacted by either party in the past two decades that has substantially reduced income inequality expansion is Obamacare.

My objective is to get a better handle on just why the US and particularly here Ohio has such massive continuing Income Inequality Expansion ..... it appears to be predominantly about the relative long-term annual pay and employee benefits percentage increases for the executives of a Company vs the many non-executive employees of a Company, coupled with the stock price appreciation subsequent to the time the company executives were rewarded in their pay with stock equity compensation.

To fix Income Inequality driven mainly by Company and its Board of Director choices on Percentage Annual Pay and Employee Benefits Raises, the US Government should step in and pass wisely-designed, simple but effective Fair Pay Raise Income Inequality Narrowing Company tax incentives for Companies which reward non-executive employees with fair pay increases ..... the carrot ..... and Company tax disincentives for Companies which reward executive employees with clearly excessively high pay and employee benefits increases ..... the stick.  I am certain ..... it is simple math ..... that this tax proposal would be very effective in substantially reducing the huge income inequality expansion that has occurred for decades in annual percentage pay raises between company executives and the rest of the company employees.

The above Fair Pay Raise Tax proposal could also be applied to US Non-Profit Organizations like Hospitals and other Health Care Organizations, which are known for their huge and continuing income inequality expansion due to their discriminating policies on annual pay and employee benefit increases.  

And the continuing annual net tax revenues raised by the US Government here should be set up in a separate fund to be used only for wise additional income inequality narrowing initiatives.  This fund should be run by an outside group made up entirely of minorities harmed the most by Income Inequality Expansion of the past decades  .....all women, all blacks, all Latinos, all other non-white people, all past and present union members, all LGBTQ, all non-employee contract workers and all middle and lower income people of all ages, including those retired.

Also, the US Government should require all US Corporate Boards to include at least one worker representative and to exclude any Company Executive.

Further, the US Government should ban Golden Parachutes.

FYE
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Dec
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Dec
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Cleveland-Cliffs
2018
2017
2017
2016
2016
2015
2015
2014
2014
2013
Top-Tier
Total
Total
Total
Total
Total
Total
Total
Total
Total
Total
Executive
Comp
Comp
Comp
Comp
Comp
Comp
Comp
Comp
Comp
Comp
$ 000s
$ 000s
$ 000s
$ 000s
$ 000s
$ 000s
$ 000s
$ 000s
$ 000s
$ 000s
Goncalves CEO        15,444        23,562        23,562           9,536           9,536        11,114  N/A   N/A     
Flanagan CFO           2,096           2,194
Fedor EVP US Iron Ore           2,406           2,628           2,628           1,621           1,621           1,888    
Harapiak Chief Admin Officer           2,412           2,390           2,390           1,476           1,476           1,841
Smith EVP Business Development           2,392           2,659           2,659           1,666           1,666           1,892           1,892           2,944    
Tompkins Former COO           4,316           2,174           2,174           2,542           2,542           2,252           2,252           1,985
Paradie Former CFO  N/A   N/A            2,668           1,157
Webb Former EVP Global Coal  N/A   N/A 
Halverson Former CEO  N/A   N/A 
 Totals      24,750     33,433     35,555     16,473     16,473     19,277       4,434       5,196       4,920       3,142
Annual % Change vs Prior Year -26.0% 115.8% -14.5% -14.7% 56.6%
5 Year Average Per Year % Change 23.4%
FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE
Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
Cleveland-Cliffs 2013 2012 2012 2011 2011 2010 2010 2009 2009 2008
Top-Tier Total Total Total Total Total Total Total Total Total Total
Executive Comp Comp Comp Comp Comp Comp Comp Comp Comp Comp
$ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s
Tompkins Former COO           1,985           1,633           1,633           1,828    
Paradie Former CFO           1,157               896    
Halverson Former CEO  N/A   N/A 
Gallagher Frmr Pres GlobalCommercial           3,881           1,998           1,998           2,413           2,413           2,071           2,071           1,396           1,396           2,110
Carrabba Former CEO  N/A   N/A            6,168           6,437           6,437           5,596           5,596           5,351           5,351           4,473
Brias Former Pres Global Operations  N/A   N/A            2,187           2,300           2,300           1,879           1,879           1,207           1,207           1,610
Price Former Pres Global Operations  N/A   N/A 
Brake Former EVP Global Metallics  N/A   N/A            1,624           1,775           1,775           1,179           1,179           1,330
Calfee Former EVP Commercial Projects  N/A   N/A            1,566           1,021           1,021           1,556
Mehan Former CEO Asia Pacific  N/A   N/A 
Hawk Former General Counsel  N/A   N/A                702           1,055
 Totals        7,023       4,527     11,986     12,978     12,774     11,321     12,887     10,154     10,856     12,134
Annual % Change vs Prior Year 55.1% -7.6% 12.8% 26.9% -10.5%
5 Year Average Per Year % Change 15.3%
10 Year Average Per Year % Change 19.4%



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