Contrarian Corpus
activist full deck proxy fight
2025-02-19 · 29 pages

United States Steel Corporation X

U.S. Steel has lagged peers by 227 points under Burritt; with the Nippon deal dead, Ancora's slate would install Stelco-turnaround CEO Kestenbaum to fix the company as a standalone public co.

N 4 Narrative
V 4 Visual
C 4 Craft
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Thesis

U.S. Steel's CEO David Burritt and incumbent board have led the company down a dead end: shares have returned just 13.5% during his tenure versus a 241.2% peer median, the Big River expansion is $600M over budget, and management has missed its own 2024 proxy projections by wide margins (revenue -11.6%, EBITDA -51.2%, CapEx +52.2%). With President Trump now opposing the Nippon Steel deal, the transaction is unsalvageable — yet management refuses to take the $565M breakup fee and is pursuing costly litigation while threatening to shutter Mon Valley. Ancora is running a proxy contest to install a slate of director nominees and replace Burritt with Alan Kestenbaum, the steel-industry veteran whose Stelco turnaround delivered a 498% cumulative return and consistently outperformed U.S. Steel on EBITDA margins.

SCQA

Situation

U.S. Steel is a 124-year-old American steel icon trading at $39 with a $14B Nippon Steel takeover offer that has been blocked by both the Biden and Trump administrations.

Complication

CEO David Burritt has lagged peers by 227 percentage points on TSR, missed every operational projection, mismanaged the $600M-over-budget Big River expansion, and is now burning cash on doomed litigation instead of collecting the $565M breakup fee.

Resolution

Elect Ancora's slate of director nominees at the 2025 annual meeting, terminate the Nippon deal, and install steel-industry veteran Alan Kestenbaum as CEO to run U.S. Steel as a standalone public company.

Reward

Replicate the Stelco playbook — under Kestenbaum, Stelco delivered 498% cumulative TSR and consistently outperformed U.S. Steel's EBITDA margins (e.g., 50% vs 28% in 2021, 21% vs 9% in 1H 2024) — closing U.S. Steel's 43% premium-to-peer overvaluation gap by fixing the underlying operations.

The three reasons

  1. 1

    U.S. Steel TSR under Burritt is 13.5% vs. 241.2% peer median — a 227-point gap

  2. 2

    Nippon deal is dead under Trump; board is burning cash on litigation instead of taking $565M breakup fee

  3. 3

    Alan Kestenbaum delivered 498% return at Stelco — proven blueprint for U.S. Steel turnaround

Primary demands

  • Replace CEO David Burritt with Alan Kestenbaum (Stelco turnaround architect)
  • Elect Ancora's slate of highly qualified director nominees at the 2025 annual meeting
  • Abandon the dead Nippon Steel deal, collect the $565 million breakup fee, and end costly litigation
  • Run U.S. Steel as a standalone public company under upgraded leadership
  • Upgrade blast furnaces at Gary Works and the Mon Valley Works hot-strip mill
  • Reduce top-heavy SG&A and repair union relations with the United Steelworkers

KPIs cited

TSR under Burritt's tenure
U.S. Steel 13.5% vs. peer median 241.2% — relative underperformance of -227.7%
Revenue growth Q1 2021 – Q4 2024
U.S. Steel -32.4% relative to peers
Adjusted EBITDA growth Q1 2021 – Q4 2024
U.S. Steel -53.5% relative to peers
CapEx growth Q1 2021 – Q4 2024
U.S. Steel +205.3% relative to peers
Free cash flow growth Q1 2021 – Q4 2024
U.S. Steel -201.6% relative to peers
2024 revenue vs. Dec. 2023 proxy forecast
$15.6B actual vs. $17.7B forecast (-11.6%)
2024 Adjusted EBITDA vs. forecast
$1.2B actual vs. $2.4B forecast (-51.2%)
2024 EBITDA margin vs. forecast
7.4% actual vs. 13.4% forecast (-6.0 pts)
2024 CapEx vs. forecast
$2.3B actual vs. $1.5B forecast (+52.2%)
Big River Steel expansion cost overrun
Upwards of $600 million
Nippon Steel breakup fee available
$565 million if board terminates deal
Current EV/EBITDA premium to peers
U.S. Steel at 11.2x 2025 EBITDA vs. 7.8x peer median — 43% premium
Historical EV/EBITDA discount to peers
Average 43% discount pre-deal
Stelco cumulative return since IPO
498% vs. U.S. Steel 124% (53% pre-Nippon offer)
Stelco vs. U.S. Steel EBITDA margins 2021
50% (Stelco) vs. 28% (X total) / 26% (X flat-rolled)
Stelco vs. U.S. Steel EBITDA margins 1H 2024
21% (Stelco) vs. 9% (X total and flat-rolled)

Pattern membership

Where this document fits across the library's 12 rhetorical / structural patterns.

Precedents cited

  • Stelco turnaround under Alan Kestenbaum (498% cumulative TSR since 2017 IPO)
  • Globe Specialty Metals (Kestenbaum's prior union-relations track record)

Notable slides (6)

Notes

DFAN14A proxy filing from Ancora Catalyst Institutional and affiliates. Three-item filing: (1) the investor presentation 'A U.S. Solution for U.S. Steel' (pp. 1–22), (2) X.com social post (pp. 23–25), (3) email blast to MakeUSSteelGreatAgain.com subscribers (pp. 26–29). Strong campaign branding ('Make U.S. Steel Great Again' wordmark echoing MAGA on a politicized deal). Stake percentage not disclosed in the deck itself though specific share counts for Ancora vehicles appear on the disclaimer. CEO replacement candidate Alan Kestenbaum is named on the cover of the playbook (Stelco). No sum-of-parts; valuation argument is single-multiple peer comparison. Closing ask is implicit (proxy vote) rather than on a dedicated final slide — Q&A page closes the substantive deck.