ArcelorMittal's remuneration policy for its non-executive directors is based on a fixed amount; for senior managers it blends long-term and short-term incentives.
ArcelorMittal’s board of directors receive a fixed remuneration approved every year by the annual general meeting of shareholders.
Our senior managers remuneration policy aims to achieve a financially responsible balance between attractive fixed salaries, equity-based incentives and performance-related bonuses.
Our remuneration policy for senior managers aims to:
- provide total compensation at a level that is competitive with other industrial companies of a similar size and scope or specific peer group;
- promote internal equity and total direct compensation (base pay + bonus + long-term incentives) levels for our executives at the 75th percentile of all industrial companies of a similar size and scope or a specific peer group;
- motivate managers towards the achievement of group-wide and personal goals, including efficiency and growth and;
- retain those individuals who consistently perform at or above expected levels and contribute to the success of our business.
The appointments, remuneration and corporate governance committee considers detailed remuneration proposals for senior managers, which are approved by the board of directors. Compensation to be paid to the board of directors is approved by our shareholders every year. The board of directors approves the remuneration of the individual members of our Group Management Board (GMB) and management committee. Such proposals comprise fixed annual salaries, performance-related bonuses and equity-based long-term incentives such as restricted share units (RSUs), performance share units (PSUs), and other benefits. These annual proposals apply to:
- the chief executive officer (CEO) and the other members of the GMB;
- the members of the management committee.
Decisions on short-term and long-term incentive plans may apply to a larger group of employees. The appointments, remuneration and corporate governance committee receives updates about the application of these plans on a regular basis.
Fixed annual salary
For new entrants in the position, the size of the fixed annual salary is targeted to the median salary level of ArcelorMittal’s peer group of companies, i.e. industrial companies of a similar size and scope. Base salary levels are reviewed annually to ensure that ArcelorMittal remains competitive. They are moved progressively towards 75th percentile depending on merit.
ArcelorMittal has a discretionary bonus plan. The performance of the group as a whole, the performance of the relevant business units, the achievement of specific objectives and the individual’s overall performance and potential determine the outcome of the bonus calculation. The bonus is calculated as a percentage of the individual’s base salary. Different percentage ranges are used depending on the hierarchical level of the individual. Performance-related bonuses are paid only if certain minimum performance thresholds are exceeded by ArcelorMittal as a whole and/or the relevant business segment. This global performance bonus plan is applicable to more than 2,000 executives worldwide.
The CEO and the other GMB members, management committee members and vice presidents benefit from the global performance share units plan. A broader group of senior managers benefits from the global restricted share units plan.
The overall cap on RSUs and PSUs available for grants during a given year is approved annually by the shareholders at the annual general meeting. See equity incentive plans.
In addition to the main compensation elements described above, other benefits may be provided to executives, such as company cars, contributions to pension plans or insurance policies.
The remuneration of individual members of the board of directors and the CEO is published in the company’s statutory annual report and its US annual report on Form 20-F. Remuneration of the other members of the GMB and the management committee is disclosed on an aggregated basis.