Chief Executive Officer Mario Longhi and other U.S. Steel executives are cashing in on the steelmaker's surging stock price.
U.S. Steel's stock price has been surging since the election of Donald Trump, who often talked about restoring America's steel industry and imposing tariffs on imports while on the campaign trail. It shot up from about $21 a share on Nov. 8 to about $35 a share Monday afternoon.
Longhi sold about 277,000 shares for an average price of $32.25, or a total of $8.9 million, on Nov. 28, though he will take home only about a fourth of that in profit, according to a Securities and Exchange Commission filing.
Company spokesman Erin DiPietro said Longhi exercised stock options that were previously granted to him. CEOs and other top executives are sometimes given stock options as an incentive-based form of compensation.
The options give the executives the right to acquire company stock at a fixed price. When prices climb, as they are now, that fixed price can be significantly lower than the stock's current price on the market. In those cases, the options can be exercised and the stock then sold at a higher price, netting the executive a profit.
Longhi acquired the 277,000 shares of U.S. Steel stock at between $24.28 a share and $25 a share by exercising his stock option, according to the SEC filing. He profited about $2.08 million from the transaction.
The chief executive officer, who took over the company in late 2013, saw his pay cut 35 percent to $8.6 million last year because of U.S. Steel's poor financial performance during the global import crisis.
Executive Vice President and Chief Financial Officer David Burritt and Senior Vice President of Tubing David Rintoul also recently sold U.S. Steel stock, according to the SEC.