U.S. Steel CEO Steps Down Two Weeks After Earnings MissBy
Shares plunged most since ’91 last month after earnings report
COO David Burritt will become president and CEO, company says
Mario Longhi stepped down as chief executive officer of U.S. Steel Corp. on Monday, less than two weeks after the company suffered its steepest stock decline since at least 1991 following disappointing earnings.
David Burritt, the 61-year-old chief operating officer, was elected to replace Longhi, 62, as CEO and join the board, the steelmaker said in a statement Wednesday. The Pittsburgh-based company’s shares lost as much as 27 percent on April 26 after first-quarter earnings fell short of analysts’ estimates. U.S. Steel said at the time that it was speeding up plant upgrades to resolve shortcomings that choked results even as metal prices surged.
“The issue is they should be making money now and they’re not,” said Gordon Johnson, an analyst at Axiom Capital Management who has a sell rating on the stock. The first-quarter report “came out of left field, and people were upset about it. And as a result we believe people were calling for new leadership.”
The statement was released after the close of regular trading in New York, where U.S. Steel rose 1.3 percent to $21.25 at 5:32 p.m.
Longhi has been a vocal supporter of policies to curb the flow of cheaper imports into the U.S. Last month, he stood with Donald Trump in the Oval Office as the president described the opening of an investigation into whether steel imports hinder national security as “a historic day for American steel and most importantly for American steel workers.”
Longhi’s “impact was felt across our company and the steel industry through his efforts in Washington, D.C., to combat unfair trade and create a level playing field,” Chairman David S. Sutherland said in the statement. The company declined to comment beyond the statement.
Longhi began his career at U.S. Steel in 2012 as executive vice president and chief operating officer. A Brazilian-American, he previously served as an executive at Brazilian steelmaker Gerdau SA.
"When I came to the company, I envisioned a five-year tenure, which I have completed," Longhi said in the statement. He will remain on the board and provide transitional support through June 30.
Longhi had been CEO and on the board since 2013, according to the company’s website. U.S. Steel traces its roots back to a company founded in 1901 by John Pierpont Morgan and others who combined Andrew Carnegie’s Carnegie Steel Co. with two other producers.
As of Wednesday’s close, Longhi is poised to vest in equity awards worth $5.65 million between now and June 30 if the company performs according to the board’s targets, regulatory filings show. When he leaves, he’ll also get benefits worth about $1.23 million and a pro-rated bonus of $1.13 million, assuming that he meets financial goals.
— With assistance by Anders Melin