SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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☐ | Preliminary Proxy Statement |
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☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to Section 240.14a-12 |
Schnitzer Steel Industries, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Dear Shareholder:
On behalf of our Board of Directors, we are pleased to invite you to attend Schnitzer Steel’s
Our fiscal
Fiscal 2021 was the safest year recorded in our Company’s 116-year history. This is the third consecutive year that we achieved a historical best recordable incident rate. It is a testament to our team’s commitment to safety training, hazard awareness, and continuous improvement that 93% of our facilities did not experience a lost time injury. While we still have work to do, our team’s commitment to Safety is evident in these results. |
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As one of North America’s largest metals recyclers, sustainability is at the core of what we do and how we operate. The material we recover and recycle represents increasingly critical feedstock for industries and infrastructure that need high quality low-carbon metal solutions to fuel the transition to a sustainable future. Our Oregon steel mill is one of very few whose primary energy source comes from hydroelectricity and, combined with the use of recycled metal as its primary raw material, the steel made in our electric arc furnace (EAF) has an exceptionally low carbon impact compared to the industry average. We Schnitzer was recently recognized as a Great Place to Work-Certified™ company. We believe employee engagement, including initiatives focused on employees. For the |
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Fiscal
◾First, to keep our people safe, while continuing to improve safety
◾Second, to
◾Third, for the first time in our Company’s history, to ◾ Fourth, to increase our ferrous and nonferrous sales volumes through commercial initiatives and the continued diversification of our customer
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As one of North America’s largest metals recyclers, sustainability is at the core of whatDecarbonization trends are driving a structural increase in demand for recycled metals. The strategic investments we do and how we operate. We recently released our fiscal 2020 Sustainability Report, which included a progress update towards meeting or exceeding our set of multi-year goals, and highlightshave underway leverage the positive impactlong-term trends for our products and services. In fiscal 2021, we made in our operations, our workplace, and our communities. These impacts occur not only through the inherent sustainabilityramped up production on two of our business, but also through our industry-leading environmental practices and investments, strategic operational improvements, key investments in our workforce, and effective engagement with our communities.
Investments innew advanced metal recovery processing technologies, volume growth,systems enabling us to improve the efficiency of our processes by increasing our throughput and extracting more materials from our shredding process, and to produce additional furnace-ready materials that can be marketed globally. During the expansion of productsyear, we also made significant progress on our objective to increase our ferrous and services underpin the strategic actions we have underway to leverage positive long-term trends and better manage market volatility. In early fiscal 2021, we finalized our multi-phase strategy to develop a leaner and more efficient organization,nonferrous sales volumes with the transitionacquisition of eight metals recycling facilities from Columbus Recycling in the southeastern United States, a multi-divisional organizational structureregion expected to see a functionally-based, integrated operating model.significant increase in EAF steelmaking capacity in the coming years. Moving forward, our track record of delivering strong operating cash flow through the cycle and our strong balance sheet should provide us with flexibility and financial strength to take advantage of evolving market opportunities, continue our investments in advanced processing technologies and provide environmental stewardship.improvement projects, and return capital to our shareholders.
On behalf of the entire Board of Directors and our over 3,0003,500 employees, I want to thank you for your continued support and investment in our business.Company. Our commitment to strong corporate governance reflects our belief that a solid framework which links operational, financial, and governance goals creates long-term value for all our stakeholders. We value the ongoing dialogue we have with our shareholders, and we encourage you to continue to share your suggestions by writing to our Board of Directors at the address below:
Board of Directors
Schnitzer Steel Industries, Inc.
299 SW Clay Street, Suite 350
Portland, OR 97201
We have posted our proxy materials at www.proxydocs.com/SCHN. We believe this allows us to provide our shareholders with the information they need while lowering the costs and reducing the environmental impact of delivering printed copies of our proxy materials. If you would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting the materials included in the notice you received by mail, or as listed on our website.
Sincerely,
Tamara L. Lundgren
Chairman, President and Chief Executive Officer
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Notice of Annual Meeting of Shareholders of
Schnitzer Steel Industries, Inc.
Date: Tuesday, January
Time: 8:00 A.M. Pacific
Place: Online via audio webcast at www.virtualshareholdermeeting.com/
Record Date: November
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AGENDA:
◾ ELECT two directors named herein
◾ APPROVE, by non-binding vote, executive compensation
◾ RATIFY our independent registered public accounting firm for fiscal
◾ CONDUCT any other business that properly comes before the meeting or any adjournment or postponement thereof | |||
Only shareholders of record at the close of business on the Record Date are entitled to receive notice of and to vote at the Annual Meeting or any adjournments thereof.
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Important information if you plan to attend the virtual Annual Meeting:
Due to the public health concerns relating to the coronavirus (COVID-19) pandemic and to support the health and safety of our shareholders and employees, the Annual Meeting will be a virtual meeting as authorized by our Board of Directors, conducted exclusively via live audio webcast at www.virtualshareholdermeeting.com//SCHN2021.SCHN2022. There will not be a physical location for the Annual Meeting, and you will not be able to attend the meeting in person.
To attend the Annual Meeting at www.virtualshareholdermeeting.com/SCHN2021,SCHN2022, you must enter the control number on your proxy card, voting instruction form or Notice Regarding the Availability of Proxy Materials. Whether or not you plan to attend the virtual Annual Meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described below. During the meeting, you may ask questions and vote. To vote at the meeting, visit www.virtualshareholdermeeting.com/SCHN2021.SCHN2022. For more information about the virtual-only meeting format, please see page 20.21.
Notice Regarding the Availability of Proxy Materials
This notice of Annual Meeting of Shareholders and related proxy materials are being distributed or made available to shareholders beginning on or about December 16, 2020.15, 2021. This notice includes instructions on how to access these materials (including our proxy statement and 20202021 annual report to shareholders) online.
Please vote your shares
We encourage shareholders to vote promptly, as this will save the expense of additional proxy solicitation. Voting can be completed in one of four ways:
| Return the proxy card by mail | Telephone 1-800-690-6903 | ||||||||||||||||||||
| Internet www.proxyvote.com |
| By voting online at the virtual meeting www.virtualshareholdermeeting.com/ | |||||||||||||||||||
Even if you plan to attend the virtual Annual Meeting, we encourage you to vote by Internet, telephone, or mail in advance of the meeting so your vote will be counted if you later decide not to or cannot attend the virtual Annual Meeting.
By Order of the Board of Directors
Peter B. Saba
Secretary
SCHNITZER STEEL INDUSTRIES, INC.
299 SW Clay Street, Suite 350
Portland, Oregon 97201
December 16, 202015, 2021
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| Proposal 3 – Ratification of Selection of Independent Registered Public Accounting Firm
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Notice of Annual Meeting of Shareholders and | 2 |
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In this section, we present an overview of the information that you will find in this proxy statement. As this is only a summary, we encourage you to read the entire proxy statement for more information about these topics prior to voting. For more complete information regarding our fiscal 20202021 operating performance, please also review our Annual Report on Form 10-K.
Proposal | Board
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Election of Directors | ☑ | FOR each nominee | The Board and Nominating and Corporate Governance Committee believe the two director candidates possess the skills, experience, and diversity to effectively monitor performance, provide oversight, and advise management on the Company’s long-term strategy.
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Advisory Vote on Executive Compensation |
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FOR |
Our executive compensation programs demonstrate the continuing evolution of our pay-for-performance philosophy, and reflect the input of shareholders from our extensive outreach efforts.
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Ratification of Selection of Independent Registered Public Accounting Firm | ☑ | FOR | Based on the Audit Committee’s assessment of PricewaterhouseCoopers’ qualifications and performance, the Board believes the retention of PricewaterhouseCoopers for fiscal year |
Response to COVID-19
We have operated continuously throughout the COVID-19 pandemic, as part of the critical infrastructure sector and related supply chain as defined by the U.S. Department of Homeland Security. This reflects our Company’s important role in supplying raw materials and finished steel products for the construction of critical infrastructure. Our operating facilities are identified as essential businesses by state and local authorities in the U.S., Puerto Rico, and Canada. This reflects our role in supporting the health and safety of our communities by recycling materials that would otherwise be diverted to landfills or be disposed of in a less environmentally sustainable manner.
During the global COVID-19 pandemic, we remain firmly committed to safeguarding the health and safety of our employees and all who visit our sites, as well as meeting the ongoing needs of our communities and customers around the world. Based on guidance from the U.S. Centers for Disease Control and Prevention and state and local health departments, we deployed health, safety and wellness protocols, rolled out training, and engaged in steady communications across our platform to ensure the safety of our people, our customers, our suppliers, and all who visit our sites. These actions include pre-entry temperature checks, issuing effective protective gear and wearing face coverings, social distancing, frequently cleaning of work sites and washing hands, and remote working arrangements where applicable. We also redesigned our sales process to limit exposure to customers. While implementing these new work protocols and practices, team members did not lose focus on operational safety and were able to decrease the recordable incident rate in fiscal 2020 to the lowest rate in our Company’s history.
In addition to the mitigating actions to facilitate business continuity and safeguard employees, customers, suppliers, and all other visitors, we have undertaken a number of actions to support our employees during this difficult period, including:
for those employees who tested positive for COVID-19 we have continued their pay and benefits for the duration of their recovery;
used furloughs and flex hours as an alternate to layoffs related to COVID-19, allowing employees to retain health benefitsand PTO accrual throughout that period;
increased PTO rollover by 50%; and
paid special bonuses to our frontline employees.
At Schnitzer, we operate at the intersection of metals recovery, reuse, recycling, and manufacturing. Galvanized by a commitment to take actions that sustain future generations, our people work responsibly to provide products and services that our customers and communities trust - as we have since 1906.
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What We Do:
✓ | Acquire, process, and recycle millions of tons of |
✓ | Sell our processed recycled |
✓ | Manufacture finished steel products, such as reinforcing bar, merchant bar, and wire rod, at our electric arc furnace |
✓ | Sell millions of serviceable used parts from end-of-life vehicles at our 50 retail self-service auto parts stores, providing affordable parts to customers while saving resources that would otherwise be consumed in producing new parts. |
Building Long-Term Value Through Serving Stakeholders
By adhering to our core values of Safety, Sustainability,Safety, Sustainability, and Integrity,Integrity, we are able to build long-term value for all our stakeholders. Safety and Integrity form the foundation upon which our commitment to Sustainability can thrive. As one of North America’s largest metals recyclers, sustainability is at the core of what we do and how we operate. Advancing safe, ethical, and sustainable business practices and further integrating sustainability throughout our operations have been, and will continue to be, foundational elements of our success.
Notice of Annual Meeting of Shareholders and 2021 Proxy Statement | | 3 |
Proxy Summary |
Our Sustainability Strategic Framework: People, Planet and Profit
At Schnitzer, Sustainability is at the core of what we do.do. By recycling scrap metal,ferrous and nonferrous metals, we are diverting and reusing millions of tons of materials each year that might otherwise be destined for landfills. At our metals recycling facilities, the ferrous and non-ferrous scrap metal we process reduces the need for intensive mining of virgin material for use in steel manufacturing. Our auto recycling facilities, which operate under the Pick-n-Pull facilities extractbrand, optimize the maximum use fromvalue and reduce the environmental impact of end-of-life vehicles by providingselling affordable, used auto parts to consumers as well as auto bodies for recycling.and then recycling the cars once the valuable and reusable parts are sold. At our steel mill, which operates under the brand, Cascade Steel MillRolling Mills (“Cascade”), we use scraprecycled ferrous metal to produce new steel products that are used among other things, to build new houses, bridges, and commercial buildings –primarily in infrastructure projects that help improve the quality of life for people in our communities and beyond.nonresidential construction.
Sustainability is also at the core of how we operate. As a resultoperate. For the first time in our Company’s history, 100% of our investment in aelectricity is net carbon-free across all our facilities. With our state-of-the-art water recycling system at Cascade, we recycle about 80%over 90% of the water used at the mill. Across all ofin our facilities, 90% of our electricity is carbon-free. Also insteel manufacturing activities. In our metals recycling business,facilities, we are investing in sustainable advanced materialsmetal recovery innovations that willtechnology systems to increase our metal extraction yields and decrease landfill waste. Moreover, at our metal shredder facilities, weWe are also investing in enclosure and emission control technologies and enclosures to reduce our greenhouse gas and particulate matter emissions from thosethese operations.
PEOPLE: Through our commitment We are committed to providing a healthy and safe work environment. Fiscal 2021 was the safest year recorded in our Company’s 116-year history. We are equally committed to fostering an environment andthat attracts a diverse workforce and inclusivepromotes a culture of inclusiveness. This environment can only exist if we strive to create an injury-free workplace foundedare a place where characteristics such as race, gender, religion, and sexual orientation do not define talent and where our organization is distinguished by its diversity in all demographics and at all levels. Founded over one hundred years ago, we are a company built on a culture and by a workforce that has always been broad-based, and we understand that excellence defined by innovation, employee engagement, and productivity are not sustainable without a culture based on respect, fairness, and an equal opportunity for all our employeesopportunity. Based on responses to reach their full career potential.a Company-wide anonymous employee engagement survey, this year we were recognized as a Great Place to Work-Certified™ company. We are also committed to positively impacting our communities through among other things, community engagement and establishedsupport a paid Volunteer Time Off program so thatfor employees canto pursue volunteer activities during their regular work hours.in the communities in which we operate.
PLANET:: We effectively manageare committed to environmental stewardship in the pursuit of minimizing the impact of our operations to minimize our impact on the environment. We are continuously investing in state-of-the-art water and air emissions controls and, in operating our facilities, we seek to efficiently use energy and materials, reduce the amountuse of materials otherwise destinednon-renewable natural resources, and minimize waste. Reflecting our performance in these areas, CDP (Carbon Disclosure Project) has recognized us in corporate sustainability with a place on its “A List” for landfills through recycling ferrous and non-ferrous scrap metal, providing extended life to used auto parts, and manufacturing new steel products from recycled metal. Our facilities are powered by over 90% carbon-free electricitytackling water security, MSCI has awarded us an “AA” ESG rating, and we recapturewere named by S&P Global as a 2021 Sustainability Yearbook Member and reuse approximately 80% of the water used inrecognized as an Industry Mover based on our steel manufacturing operation.strong Environmental, Social, and Governance (“ESG”) performance.
PROFIT:: Sustainability is also about ensuring the long-term profitability of our Company so we can continue to make a positive impact on our people and our planet for many years to come. We are committed to embedding sustainability-based initiatives into our business to improve productivity, increase metal extraction yields, and product qualityprovide the range of products and services that contribute to increased profit margins.our customers value. Our fiscal 2021 results represent our Company’s best operating performance in a decade.
Notice of Annual Meeting of Shareholders and | 4 |
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Proxy Summary |
Our sustainability goals directly align with the issues that matter most to our stakeholders, as defined through the results of our fiscal 2021 materiality assessment. First established in fiscal 2019, these goals are embedded in our long-term business strategy. In fiscal 2021, we achieved industry-leading milestones and have set new goals that will continue to positively impact our employees, the customers we serve, and the communities in which we operate.
PEOPLE
Our FY20 Recycled ProductsSAFETY
Goal • Achieve a 1.00 total case incident rate (TCIR) by end of fiscal 2025. | Fiscal 2021 Highlight • Total Case Incident Rate of 1.71, a 10% improvement over the prior year, making fiscal 2021 the safest year in our Company’s 116-year history. |
VOLUNTEERISM AND COMMUNITY ENGAGEMENT
Goal • Donate at least 10,000 hours of paid volunteer time off (VTO) by end of fiscal 2025. | Fiscal 2021 Highlight • Our employees logged and donated 913 volunteer hours in fiscal 2021. (1,011 hours cumulative since January 2020 when VTO benefits became active). |
WELLNESS
Goal • Achieve a 25% employee participation rate in our physical and mental wellness programs by the end of fiscal 2025 • Achieve a 70% employee participation rate in our retirement benefits program by end of fiscal 2028 to promote the financial wellness of our workforce. | Fiscal 2021 Highlight • Launched a new digital wellness initiative to better support work-life balance. • Achieved 45% employee participation in our retirement benefits program, a 29% improvement over our fiscal 2019 base year. |
PLANET
OPERATIONS, PRODUCTS & SERVICES
Goal • Maintain 100% net carbon-free electricity use every year. • Achieve net zero GHG emissions for all operations by end of fiscal 2050. | Fiscal 2021 Highlight • Achieved 100% net carbon-free electricity use for the first time in our Company’s history. • Achieved a 19% reduction in Scope 1 and 2 GHG emissions over our fiscal 2019 base year. |
ENVIRONMENTAL MANAGEMENT SYSTEM
Goal • Deploy an enterprise-wide ISO 14001 certified Environmental Management System (EMS) by fiscal 2022. • Incorporated 100% of Company facilities within our ISO 14001 certified EMS by fiscal 2025. | Fiscal 2021 Highlight • Implemented an EMS in advance of ISO 14001:2015 certification. |
PROFIT
Goal • Achieve a profitability improvement target of $15/ton over our fiscal 2019 base year, using sustainability-based initiatives by fiscal 2023. | Fiscal 2021 Highlight • Best financial performance in a decade driven by positive market conditions resulting from strong global demand for recycled metals supported by long-term decarbonization trends, progress on our multi-year strategic volume growth goals, and higher productivity. |
Notice of Annual Meeting of Shareholders and | 5 |
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Proxy Summary |
Steel our largest traded material, is the world’s most recycled product. As compared to using newly extracted ore in steel manufacturing, the use of recycled metal in the steel manufacturing process:
Saves 74% in energy input;
Reduces water use by approximately 40%;
ShrinksReduces virgin material use by 90%; and
Minimizes mining waste generation by 97%.
Notice of Annual Meeting of Shareholders and | 6 |
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Proxy Summary |