Let's see if we have the mics on. Okay? We're in good shape. Well, good morning, everyone. Good morning, John.
Come on. We can do better than that. This is a Nucor meeting. Good morning. Good morning.
There we go. I'm John Ferriola, Chairman, Chief Executive Officer and President of Nucor Corporation. And I'd like to welcome those of you who are here today as well as the Nucor teammates, stockholders and others who are listening to the live webcast of this meeting. Meeting. As Chairman of the Board, I will be chairing this meeting and would like to call the twenty nineteen Annual Meeting of the Stockholders of Nucor Corporation to order.
Ray Eagle, Nucor's General Manager and Corporate Secretary, will act as Secretary of this meeting. We have with us today several key members of Nucor's management team: Jim Frias, our our Chief Financial Officer, Treasurer and Executive Vice President Craig Feldman, Executive Vice President of Raw Materials Vlad Hall, Executive Vice President of Flat Rolled Products Ray Napolitan, executive vice president of Engineered Bar Products Dave Sumoski, executive vice president of Merchant and Weebar Products Leon Topalian, Executive Vice President of Beam and Plate Products Chad Udemarc, Executive Vice President of Fabricated Construction Products and Joe Stratman, our Chief Digital Officer and Executive Vice President. Joe recently announced that he is retiring next month after more than twenty nine years of dedicated service to Nucor. Joe has been an exceptional and a resourceful leader who has made outstanding contributions throughout his career to Nucor. Over the past three decades, he has held key roles in our steel, raw materials, steel product businesses, as well as our business development and digital initiatives.
So thank you for your leadership. As I've said to you personally and then on behalf of 26,000 of our teammates, you will be missed. And please remember that you and Jill will always be members of the Nucor family. Come and see us often. Let's give Joe another round of applause.
May 19, Mary Emily Slate will be promoted to Executive Vice President and will assume responsibility for the Tubular Products Group, logistics and certain joint ventures. Mary Emily is a dynamic leader with nineteen years of experience at Nucor. She will be a strong addition to our executive management team. Welcome, Mary Emily. We also have with us today the following current directors and nominees for election as directors, general Lloyd Austin.
General Austin is a retired four star general who served for forty one years in the US army. Lloyd has been a director since 02/2017. Thank you for your service to our country. Patrick Dempsey is president and chief executive officer of Barnes Group. Patrick has been a director since 02/2016.
Chris Carney, entire chairman and CEO of SPX FLOW. Chris Chris has been a Director since 02/2008. Loret Cola, retired President of Boeing International. Loret has been a Director since 02/2015. And finally, John Walker, Non Executive Chairman of Global Brass and Copper Holdings, Inc.
John has been a director since 2008 and has served as Nucor's lead director since 02/2017. Victoria Haines is not able to join us this morning. We also have with us several of Nucor's advisers. From the law firm of Moore and Van Allen, James Weich is with us today. James?
From the accounting firm of PricewaterhouseCoopers, we have Matt Kosmieski, the lead partner for the order engagement, Laurie and Matt, and Rich Rodolfo, senior manager. Hi, Rich. There are several other people in the audience that I'd like to recognize. We have several, three, to be exact, retirees. I have the list here, but I really don't need it.
K? So let me just get right into it. Dave Ackock. Dave was our chairman, CEO, and president, retired, but still a great friend and investor in our company. Thank you, Dave.
And his daughter, Daphne, who's always hesitant to stand up, but we're going ask you to please stand up. And of course, Dan D'Amico, our former Chairman, CEO and President and currently Chairman Emeritus. Good to see you, Dan. And finally, we have Betsy Lieberman with us today. Where are you, Betsy?
Betsy, I think I have the number right. Thirty five years of service with you, And that's amazing. Congratulations. Okay. Now on to some business.
The secretary will please report to stockholders present by proxy and import person.
Mister chairman of the
Thank you. A little technical issue here, but we're we're good. We're we're catching up. Okay. Here we go.
Since the holders of the majority of the shares entitled to vote are present by proxy and in person, a qualm is present for the transaction of all items of business. I will ask the secretary to file the process with Nucor's record. Miss Siegel, will you please report on the notice of meeting sent to the stockholders of record as of 03/11/2019? These are the holders entitled to vote at this meeting.
For the notice of Internet availability or
Mister Siegel, would you please annex your affidavit for the minutes of this meeting? Sid Rodry with Broadridge Financial Solutions has been appointed inspector of election as required by Delaware Delaware law. He has submitted his oath of office executed before a notary public, and I ask that his oath be attached to the minutes of this meeting. The next order of business is to consider the five proposals for this annual meeting as set forth in the proxy statement. Proposal number one is the election of the seven directors for one year.
The terms of Lloyd Austin, Patrick Dempsey, Victoria Hanes, Chris Carney, Brett Kola, John Walker, and myself will expire at this annual meeting. The board's governance and nominating committee has recommended and the board of directors has nominated these seven nominees for reelection for one year terms ending at the annual meeting in 2020. There are no other nominees. Proposal number two is the ratification of the appointment of PricewaterhouseCoopers as Nucor's independent registered public accounting firm. The audit committee of the board of directors has selected the firm of PricewaterhouseCoopers to serve as independent auditors of Nucor for the year ending 12/31/2019.
PricewaterhouseCoopers has acted in such capacity for Nucor since 1989. Nucor's board of directors unanimously recommend a vote for the resolution. Proposal number three is an advisory vote on the named executive officer compensation. Because board of directors unanimously recommend a vote for the resolution. The next two proposals were submitted by stockholders.
Under Nucor's rules of conduct for its annual meeting, a stockholder or stockholder group offering a proposal as printed in the proxy statement has allowed a total of three minutes to introduce and discuss the proposal. Proposal number four is a stockholder proposal about a lobbying report. Brady Quikarvin, a representative for the proponent, is here to present the proposal. Brady? Good
morning. Fellow stockholders and member of the board, my name is Brady Quirkgarvin, and I'm here representing Domini Impact Equity Fund. I move proposal four asking our company to provide a report on its state and federal lobbying expenditures, including indirect funding of lobbying through trade associations and support for groups like the American Legislative Exchange Council. This is the fourth straight year that stockholders have asked Nucor to improve its lobbying disclosure. Transparency and accountability in corporate spending to influence public policy are in the best interest of Nucor's stockholders.
With Trump's steel tariffs, Nucor's lobbying has been attracting media scrutiny this year. Steel producers spent more on lobbying in 2018 than any other year since at least 1998. The largest steel spender was Nucor, which spent more than $2,200,000 on lobbying. And Nucor has reportedly sought to influence the appointment of two high ranking trade officials. Since 2010, Nucor has spent $17,750,000 on federal lobbying activities, and there's incomplete disclosure about spending at the state level where our company also lobbies extensively.
For example, in New York State, Nucor has already spent more than $1,200,000 on lobbying since 2011. Nucor is required to report all this lobbying and already has this information, so it could easily be provided to stockholders in a report. Corporations contribute millions to trade associations that lobby on their behalf without specific disclosure or accountability. Nucor fails to disclose its trade member association membership and does not disclose its trade association payments nor the amounts used for lobbying. Our research shows that Nucor chairman and CEO, John Ferriola, sits on the board of the National Association of Manufacturers or NAM.
For 2017 '28, the National Association of Manufacturers spent more than $17,500,000 on federal lobbying, but stockholders currently have no way to know Nucor's trade association's contributions or how they're being used to lobby on its behalf. Investors are concerned that undisclosed lobbying poses reputational risks when the lobbying can to lead to regulatory capture. We believe Nucor's stockholders face this risk on the issue of tariffs, which Nucor has been lobbying for, but can lead to higher prices for consumers and charges of unfair competition. The proxy adviser, ISS, supports this proposal. Our request for disclosure is a call for transparency and accountability in the spending of our stockholder resources.
We urge support for this proposal. Thank you.
Thank you. Nucor's board of directors unanimously recommend a vote against the proposal for the reasons outlined in the proxy. Under Nucor's charter under Nucor's charter, shareholders, stockholders have cumulative voting rights not one page, think. Okay. Thank you.
There you go. Okay. Proposal five is a stockholder proposal for political spending report. Brady, you're also going to present this proposal?
Yes, sir. Thank you. Good morning again. My name is Phil Brady, and this time, I am representing the First Affirmative Financial Network. I'm here to move proposal number five.
It requests greater accountability and transparency with regard to Nucor's political spending. We have no doubt that the company, as it points out in its opposition statement, complies with current laws. However, compliance with law does not equate to adequate disclosure to investors. Our proposal requests that disclosure is considered material to many investors, necessary for investors to evaluate how Nucor's involvement in public policy is managed, of increasing interest to investors. This interest is demonstrated by increasing support of similar disclosure request at other companies and by a record number of comments to the SEC in favor of rulemaking that mandates political spending disclosure.
Many companies already provide the disclosure necessary to adequately evaluate risks, including contributions to state level political candidates and parties, contributions to support or oppose ballot measures, payments to trade associations that support election related activity, and payments to other nonprofit entities that engage in political activity. One area receiving particular investor scrutiny is political spending made with corporate funds via third parties. When a company contributes funds that are used by a trade association or other entity for political purposes, it delegates an important function to the third party, necessitating diligent management oversight and disclosure to investors. These third parties are not obligated to disclose their contributors, and this money is now aptly referred to as dark money. Our company states that membership in such organizations does not equate to an agreement of all its positions and therefore, presumably, its political spending and priorities.
This fact does not eliminate the potential business and reputational risks posed by contributing corporate dollars that fund political spending of these affiliations. We believe the company should be accountable for all political spending, not just the political spending that by law cannot be hidden. There's an effective solution to this lack of accountability, and that is disclosure. Supreme Court justice Anthony Kennedy supported this idea in his 2010 Citizens United opinion. Through disclosure, he said, quote, shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are in the pocket of so called moneyed interests.
Public attention and scrutiny of corporate political contributions have reached a new level of intensity, and contributions via third party present investors with a significant blind spot. Dark money organizations spent at least 182,000,000 in the twenty sixteen presidential cycle. In the twenty eighteen midterm, these organizations spent a staggering $302,000,000 either spent directly or funneled through super PACs. Nucor's board of directors has a fiduciary duty to ensure that the company's assets are being used to further the long term interest of the firm and to fully disclose the company's public policy priorities and spending to investors. We once again urge shareholders to vote in favor of this proposal.
Thank you.
Thank you. Nucor's Board of Directors unanimously recommends a vote against this proposal for the reasons outlined in the proxy statement. The polls are now open to vote on the five matters presented to stockholders. If any of you prefer to vote in person, please raise your hand for a ballot if you have not yet received one. Under Nucor's charter, stockholders have cumulative voting rights for the election of directors.
Cumulative voting means that you have the number of votes equal to the number of shares you own times the number of directors to be elected, which is seven. You may cast the total number of votes you have in favor of only one of these seven nominees for director, or you may spread your votes among them as you wish. With respect to the other proposals, you have one vote for each share that you own. After you have completed your ballot, please raise your hand so that we can collect it. If there are no further votes to be cast, I declare the polls closed and ask the inspector of elections to count the votes.
I now request that the inspector of election announce the results of the vote.
Mister chairman, the certificate of the inspector of election certifying to the vote. One, Lloyd Austin, Patrick Dempsey, John Ferriola, Victoria Haynes, Chris Carney, Barret Coler, and John Walker have been reelected as directors of the company. Proposal two, the selection of PricewaterhouseCoopers to serve as the registered independent accounting firm for the company for the fiscal year ending 12/31/2019 has been ratified by the stockholders. On proposal three, Nucor's named executive officer compensation on an advisory basis has been approved by the stockholders. On proposal four, the stockholder proposal regarding a lobbying report has been defeated by the stockholders.
And on proposal five, the stockholder proposal regarding a political spending report has been defeated by the stockholders.
Thank you, Sid. If there's no further business to come before this meeting, a motion to adjourn is in order. Thank you. Well well done. I know you've been practicing that, Greg.
A motion has been made and seconded. Without objection, I declare that this meeting is adjourned. We will now proceed with a discussion of Nucor business. Before I begin, let me remind you all that we are making some forward looking statements in this meeting. Now without further delay, some great news.
Your company has set new records for earnings per share, revenue and tons of steel shipped in 2018. Strong economic growth fueled our record year. Tax reform and ongoing efforts to streamline the federal regulatory system took a good economy at the end of 2017 and made it even better. On top of that, the section two thirty two steel tariffs provided another tailwind for the industry by preventing unfairly traded steel imports from entering The US market. Between these tariffs and the cumulative impact of trade cases our industry has won in recent years, unfairly traded imports declined significantly last year.
Increased demand levels and lower imports generated approximately 6,000,000 tons of added volume for The United States steel industry last year. The strong economy and progress on fair trade was certainly important to success in 02/2018, but equally important was being well positioned to benefit from that. And for that, we can thank the consistent efforts of our Nucor teammates year in and year out to steadily transform Nucor into the industry leader it is today. Our teammates have been executing Nucor's long term strategy of profitable growth, which is built on our traditional competitive strength and created new ones. Today, Nucore is diversified across numerous products and regional markets.
We are well regarded by our customers, and the company is strongly capitalized and well positioned to profitably grow in the years to come. For the next few minutes, I'd like to speak to you about Nucor's strengths and why they are so important, and then I'll spend a few minutes discussing a few of the things we are doing to position Nucor for the future. Without a doubt, Nucor's most significant strengths remain our culture and our people. We believe our teammates are the company's most valuable assets. And even more importantly, our teammates understand and believe this also.
This belief is critical. It is built on a foundation of trust that we have consistently seek to reinforce. We do this in a number of ways, but especially by emphasizing the following. Safety. Everyone understands it's the most important consideration every Nothing is more important than the safety of our teammates.
Absolutely nothing. Teamwork, encouraged and rewarded through the company, throughout the company, a no layoff practice. Do your job well today, and you'll have it tomorrow. Paying for performance. When Nucor succeeds, our teammates do well.
This alignment reinforces the behaviors we want to encourage and helps us to continuously get better at what we do. Finally, our teammates live where we do business, and so they take great care and pride in Nucor's environmental performance. Nucor's teammates regularly find ways for the company to support the communities where we live and work. Central to the way that we do business is the economy that our local management teams have to make and implement the decisions that they believe will produce the best possible results. Our teammates are empowered to find the best path to success at their divisions, and they do just that.
Today, Nucor is North America's most diversified steel and steel products company. Our business divisions complement each other, making the whole company stronger. For example, the tubular product capabilities that we have been developing are an important source of base load demand for our sheet mills. And working closely with our own pipe and tube mills has enabled our sheet mills to perform better for both internal and external pipe and tube mill customers. Our tubular mills have like likewise benefited from their strong partnerships with the sheet mills, enjoying higher quality, more reliable substrate supply, improving their conversion cost and the quality of their product.
Today's Nucor is a much stronger and more diversified company than the one I joined twenty eight years ago. We are vertically integrated and a vertically integrated industry leader with attractive businesses all across North America. We are the market share leader in the majority of the North American steel products, and we still see numerous opportunities for continued profitable growth. But more about that later. Another critically important factor behind our success over the years is our cost position.
Nucor's highly variable cost structure ensures that we earn a robust metal margin regardless of market conditions or the direction that steel price may be headed. In 02/2018, very strong pricing and demand environment, we were fortunate to enjoy a particularly strong metal margin. But even during the more difficult periods, such as 02/2015, when very weak oil prices and an influx of imports made for more challenging conditions, Nucor's metal margin per ton was still very healthy. Nucor is able to remain consistently cost competitive because of our flexible electric arc furnace based steelmaking technology, our access to abundant ferrous scrap metal, and the attractive power contracts we have secured. But the critical difference in Nucor is our highly skilled teammates who are committed and incentivized to constantly innovate to lower our conversion costs.
Nucor's teammates find ways to do more with less or just plain do more. These payment teammates turn Nucor's competitive advantages into leadership positions in the markets we serve. Every Nucor teammate understands that productivity and innovation are the keys to maintaining Nucor's competitive edge. So that brings me to our financial profile. At Nucor, we have always believed that financial strength is a competitive advantage.
We have consistently worked to convert our consistently strong cash flow position into a strong balance sheet. This means that we're always ready to deal with a crisis like the great recession of two thousand and nine or to seize opportunities like the rapid establishment of a leadership position in tubular products in 2016 and '17. Today's Nucor is well capitalized with the strongest credit rating in the steel sector and generates strong cash flow even during more challenging market environments such as we experienced in 2015. So with that, as I promised, let me spend just a few minutes on what we are doing to position Nucor for continued success. Many of you have seen our five drivers to profitable growth before.
These represent our thinking on what we should be focused on to bring Nucor forward to the next level of success. Some, such as being a low cost producer and achieving market leadership, represent what we have always done and what we must continue to do. Other drivers, such as moving up the value chain, expanding channels to market and achieving commercial excellence, represent more recent initiatives that we are also executing on today. We feel strongly that they too are key to Nucor's prospects in the months and the years to come. Let me turn now to some examples of how these drivers translate into work Nucor's teammates do every day.
This slide shows our recently updated mission statement, which we recently updated to better reflect how we will achieve our next level of success. It says, we will take care of our customers by delivering the highest value products, services, experiences, and relationships to ensure long term success. We rolled this out across the company during the first quarter. I view it as a great summary of the kind of company we need to be, and I expect that as each Nucor teammate internalizes it, our progress towards true commercial excellence, one of our five drivers, will accelerate. Let me provide a little bit more background here.
While we are happy with Nucor's position and what we have achieved together, we are not satisfied. We are never satisfied. We know that we can never be satisfied. We must be continuously looking for the next initiative that we can undertake to improve Nucor's competitive standard. Nucor earned its position as North America's largest and most profitable steel and steel products company primarily by focusing on internal factors like safety, quality, cost, productivity and profitability and environmental stewardship.
We are well aware, however, that such operational excellence alone is not enough to propel us forward for future success. We need to become commercially excellent as well. That is why our mission statement has evolved to reflect the importance of enduring, mutually beneficial customer relationships. We will execute this mission by focusing on many of the same things that got us here, safety, quality, cost, environmental responsibility. But we will expand our expectations to include partnerships, financial strength and customer engagement.
We have a number of initiatives underway to ensure that we live up to this evolved mission. For example, we have established enterprise account managers for some of our largest strategic customers. We have revised our commercial team's incentive compensation plan to better align their efforts with our commercial excellence objectives. We have undertaken an ongoing digitalization initiative, much of which is aimed at making it easier for our customers to do business with us. We are working as well to refine the Nucor brand.
Our vision for the Nucor brand is not only to represent who we are as a company, but also a projection of who we want to be, a company that builds powerful partnerships with our customers to deliver powerful results. With our evolved mission comes a new tagline. I'm sure you can figure it out by now. Powerful partnerships, powerful results. Years ago, Nucor was a little steel company that could, fighting to win by doing things differently and better.
Today, we are a market leader. We have proven who we are and what we are capable of. We have evolved as a company, and so it is appropriate that we shift the way we speak, communicate and present ourselves to our customers and to the marketplace. Finally, I'll take just a few more minutes to review some of the major capital investments we are making to position Nucor for the future. These are also guided by and very much reflect our five drivers of profitable growth.
We currently have 10 significant growth projects going on across the company that will begin operations between now We are particularly excited that several of these are coming online this year, 02/2019. Among our sheet products, our new cold mill in Hickman, Arkansas has started up already and has shipped prime products. This flexible cold reduction mill expands our capability to produce motor lamination, high strength, low alloy and advanced high strength steel products. Congratulations and thanks to the entire Nucor Steel Arkansas team on a very successful startup.
Another significant sheet product initiative is our hot band galv line at Nucor Steel Gallatin. We expect it to begin producing pickled and oiled coils in July and galvanized coils in August. Lastly, on the sheet product side of things this year, our joint venture galvanizing line with JFE Steel located in Mexico is in the midst of qualifying with customers. These projects as well as our other projects in sheet steel are squarely focused on moving Nucor up the value chain in terms of products and solutions that we deliver to our customers, the third of our five drivers. Among long products, we have our merchant Bar Mill X Expansion in Illinois and a new rebar micro mill in Missouri, both on track to start up later in 2019.
We have recently received our permits and commenced construction on our Frostproof, Florida rebar micro mill. We are targeting start up there in mid-twenty twenty. While they create several advantages and points of competitive differentiation for us, our long product investments are primarily motivated by the importance that we have always placed on being a low cost producer, the first of our five drivers for profitable growth. Once these investments are completed, we expect to enjoy important conversion costs as well as logistical advantages, both on inbound scrap and outbound customer shipments. Logistics are increasingly important competitive factor in Nucor's businesses.
I don't wanna close this morning without mentioning the most ambitious project we have announced. Our plans to build a new state of the art plate mill in Brandenburg, Kentucky. This is a strategic move to solidify Nucor's position as the leader in The U. S. Plate market, not just in terms of volume, but also quality, reliability, and cost.
Consistent with my comment a moment ago on logistics, our site on the Ohio River is located in the center of our country's largest plate consuming market, strengthening our ability to serve our customers with lower freight costs and superior on time delivery. Further, we will be in a region with abundant low cost scrap that is well covered by our David J. Joseph scrap business. We are very excited about this investment and our entire pipeline of value enhancing growth projects. Nucor has achieved success over the past five decades by building market leadership positions, and we have done this by providing our customers with unmatched performance in quality, cost, product range and on time delivery.
At Nucor, we build powerful partnerships that deliver powerful results. The more successful we can make our customers, the greater success we will have as Nucor's shareholders and teammates. At this time, I will open the floor for questions. If you have a question, please step up
Gary Burgess. Most of the world considers when you're on the board for ten ten years, you're no longer independent. Four out of our seven directors are by directors. What can we do about changing that?
Let me start by contesting that assumption. I know each member of the board very well. I can tell you that not only are they extremely qualified, extremely experienced, but they are acting in a very independent manner. If, if you attend any of the board meetings or if you have any of our private lunches or dinners or breakfast, you would learn that they are very independent. They challenge me.
They challenge our management team, and they challenge our company in many aspects. So I disagree with you. We do have a very qualified board of directors. They're extremely competent, and they are acting in a very independent manner.
John, if I if I could
add one comment. I think it's also not you started with a statement like it's a fact that the majority of accrual of the of the world agrees with this ten year standard. And I don't think that's a true statement either. Otherwise, we wouldn't have the strength of reelection results that we have and other companies have with board members with more than ten years of service. So I would just repeat that statement that most of the world thinks that ten years should be the limit.
Let me, just correct myself. I apologize if I'm wrong, but, there is a general understanding that after ten years, you're no longer independent. I may have that wrong, but I believe that. I think after you've been on the board ten years, you're no longer independent. But we think you're much appreciated.
If I look on page 86, our I know our stock is highly volatile and changes at the end of the year, but we're basically down 15%, and your salary is up. Why is that? Doesn't seem right to me.
Well, let me start by agreeing with your first comment. K? And our stock is highly volatile. We're in a very cyclical business, as as you know. Cycles change, and and with that, there's a in our stock price.
But I will say to you when I look at the as we just covered the 10 projects that we have going forward, not only do they increase our ability in the steel sector, they do a better job of balancing out and increasing the diversification of our company, which I believe will result in more consistent, less variable profits and a more consistent stock price.
You mentioned earlier if you could come to the board meeting. Could I come to the board meeting on the next pay?
We all know the answer to that. K? Unfortunately, you cannot. But you can read the reports. Okay?
I also would encourage you at any time to come and visit with me personally if you have questions about the board or the company's performance. I'm always welcome to speak to any of our shareholders about our performance or our company.
Very good. Well, thank you very much. I vote for the individual, but I'm finding it very, very But if they can extremely have high credentials, I will vote for them. But I think we're Republican affiliate affiliated. Dan was part of the Trump team.
Trump doesn't take a salary, so he donates back the 400,000 that he gets
to him. Unfortunately, I didn't have his experiences before the current job. Okay, or inherit the amount of money that he did. So the answer to that would be no.
I briefly read the rebuttals for proposals four and five, and it really didn't say anything to me. I mean, of course, I don't understand everything correctly. Could you, from the heart, respond to why we're not transparent? I think Dan did a good job of being transparent. I think I would like to see us speak.
Well, our policy has not changed in the last twenty years easily. So and and it's it's declined very well in the proxy. And we believe that we we comply with all federal regulations. We also have internal regulations and guidelines that we follow. So as I said, we're we're confident that our position is the right position based upon our comments in the
process. One last comment. You know, this complies with all laws, regulations, things like that. Hope I can say that a lot of people think this is corporate bullshit. I mean, we've ratcheted up the CEO pay, and I think we justify a lot of things.
Sorry if I stepped out of line. But I think the big thing is we have a divide in the country and, you know, very much republican pro capitalism, but somehow we need to do a better job.
Thank you for your comments and your questions. Francois,
welcome. Good morning, John, and good morning, fellow stockholders. Well, I believe you shouldn't be a stockholder of a company if you don't support the company that you own. It's your company. You own the company.
So if you don't support the company, voice your opinion, and if you cannot come to a conclusion, then sell your stock. So on that note, I would just like to know and I've been wondering about this for a long time. Every time we have the meeting, it's mentioned that PWC has been our auditors since 1989. Again, on independence, I want I would like to ask, and I believe that we have a good relationship with BWC. But thirty
years? Isn't that too long, Jim? Yeah.
Let let me begin by answering the question, John. If you wanna add something, you can. You know, as part of the way auditing firms and public companies work together, there's a rotation of the audit share every five years specifically to deal with that issue of independence. In fact, we have a new signing audit partner from PDBC that's here with us today, Matt Kismicki, who's just started his five year term for 02/2019. So that's that's that's part of the answer.
Additionally, there has been recommendations in the past about forcing a more frequent rotation of the actual public accounting firm. But part of the quality audit is the result of the the auditors knowing the company well. And because of the length of time that PDPC has been in our detailed business and seeing it grow and evolve, they're better able to do their work in a way that creates an effective audit. And so if you were to change firms, you would actually dilute the quality of the audit, in our opinion, for at least two or three years while a new firm figured things out that PDPC has ingrained deeply in their knowledge. So not having to start with the basic building blocks of what Nucor does, they can really dig in deep into subtle questions about things like revenue recognition or broad risk because of their in-depth knowledge of the company.
So the entire team is rotated every five years? No. The there is a fairly frequent rotation in the accounting status because of of the turnover that happens in public accounting. So that that probably is true that there's a rotation every five years, but it's required that only the signing audit partner is rotated. And the other folks come and go with their careers develop and advance, they become promoted or leave the firm for private sector work.
So only the the signing chair for the signing audit partner is required to rotate every five years.
I think I would add one thing to that. We, of course, review the quality of the work done by PWC and its stellar. And if that should change, frankly, then we would consider making a change to Yeah.
And the audit committee, of course, oversees that. Management has some voice, but the audit committee makes that decision on the board.
So the the decision by the board, how much how much is it influenced by management? You say they have an influence, but how much is it influenced?
I I say that's hard to monitor, but they're they're an independent board. And if they didn't agree with management, they would choose they would choose to change public accounting and go through a process.
I have a finance question. I I didn't pick up on it on the call, and I I haven't read the annual report thoroughly yet. What is our current debt to equity ratio at the moment?
It's in the neighborhood of 30% at the end of the first quarter. I think
it was 29. 29% debt to equity.
Mhmm. And that's been a historical level. You know, we've always been a very fiscally conservative company, and we're continuing that process process today.
Yes. And everyone who owns the stock appreciates the dividend, and I guess I I that's why most people from outside the company owns the stock. And I appreciate the the conservatism with the dividend. That said, the company does generate a lot of cash flow. Would the board consider an increase in the dividend?
You know, we always take a look
at what growth opportunities, profitable growth opportunities are ahead of us. And right now, we see a lot of them. As you've heard, we've invested quite a bit. We have about $3,200,000,000 in projects going on right now. If you look over the last ten years, we've invested about $9,000,000,000 of that cash that we've been generating back into the company in profitable growth.
But we always take a look at that, and we have a policy of returning about 40% back to our shareholders, and we do that through dividends or share repurchases. And we take a look at which makes the most sense financially at the time. And right now, we've got the split that you that you are enjoying.
And up on operations, I would like to ask specifically about Skyline Steel in in New Jersey. If if the department heads want wants to comment on that or if John wants to comment on that, can someone can you elaborate on operations at Skyline Steel?
Well, we have the headquarters are located in Rock Hill, South Carolina. We have operations throughout North America. It's both an engineering company and a production company. It specializes in piling and pipe. It's been very successful.
We worked with Skyline in a customer supplier relationship for, I'm gonna say, twenty to thirty years. More than that, forty years. Okay? And then we had an opportunity to bring them into the Nucor family a few years ago through a a unique chain of events, and we took advantage of that opportunity, and they've been a profitable part of our company since.
And then I have one last question. And now this would not be the fact that it happened is not Nucor's fault. And if you don't wanna comment on whether they're our customer or not, that's okay. But do we supply steel to the
I was gonna say aerospace and industry. But do we supply to Boeing? We we don't put much steel in airplanes. K? And we might supply some small components, but I don't believe we sell at all.
Oh, there's boom. There's Rick. Alright. We sell anything to Boeing at all. I don't okay.
We do not supply Boeing with anything.
Okay. Thank you very much. K.
Thank you.
If I can make a comment. Tom Izzo was highly critical of his openly chastising Henry, and verdict's not entirely out. But the big thing is Henry played better in the tournament. And what came about that is Tom Izzo loves his players. His chastising players made him better players, grew the relationship.
And so all I'm saying is just because you criticize someone doesn't mean you don't love them.
Well, you're saying you love us. I love you little reading into this paper. I love you a little bit
more when Dan was president. He was a little bit warmer, and he introduced the stockholders and things like that. And that overly impressed me. I thought Dan was very transparent. And so I'm just asking for transparency.
I'm, you know, trying to improve
the world. I can't be more transparent than to invite you into my office to discuss any topics that you'd like to talk about. Now if you have a
question somewhere, is there a
question in here?
No. I mean, I just just just wanted to say, hey. Just because you criticize someone doesn't mean you don't love them.
Okay. Thank you for that comment. Any other questions? Dan? Highly
unusual for former CEO and chairman to get up at an annual meeting and speak. But I would I can't help myself, if you know that, all too well. First off, I wanna commend John Ferriola and his team and the board of directors for doing a great job overseeing the growth and success of this company.
Thank you. The
idea that somehow John is less transparent than previous CEOs. I take strong exception to that. I do appreciate your compliments. Okay? But he's better he's better than I am.
That was my job to make sure we found somebody to replace me who was better. And I know that you love the company. We've had great conversations. But I'm telling you, this guy is better than me
and doing a great job. And I thank you for that, John. You
don't need to defend yourself. I've I've got the microphone. Microphone. The idea that somehow the stock price drives Nucor's compensation is a false one. Ken Iverson would have been the first one to tell you.
Alright? He ignores stock price. Okay? He looks for performance. And I'm telling you, 2018 was a great year performance wise.
And I know, as we always say, John, the best is yet to come.
That's the years that's still ahead of us. Yes.
Now his pay is considerably higher than mine when I was CEO. And I don't begrudge that because he's got a bigger company. He's done a better job, and this excellence program and and commercial excellence is just fantastic. It's taking Nucor to the next level. And I know John and his team are gonna continue to do that.
So his pay this that he got last was based on last year's performance. If this year's performance isn't as good, his pay won't be as good. In fact, if I'm wrong, correct me. But Nucor still has a policy. If if for some reason, we are not profitable, there are no payoffs.
That's correct.
He gets his base salary. K? And Nucor is one of the few companies out there whose compensation is based upon performance from top to bottom. And if we have a bad year, it's the people at the top of the company to get hurt first, not our teammates on the shop floor. We did not lay off one person in 02/2008, 2009 Great Recession.
Not one. That's why John's leadership has continued great tradition that we've had at Nucor. Now maybe I sound like I'm defending the current team. I don't need to. But I want people to understand, because there's a lot of new folks in this room here, that Nucor's system doesn't depend on the stock price.
The stock price depends upon our performance. Ken always believes, and we all, John and I, believe the same, and Dave believes the same, k, that if our performance is there, the stock price will be there. Now I'll guarantee you one thing. Nucor stock price should be closer to 90 than to 50. Okay?
But the stock market works in mysterious ways. Alright? Keep performing. The stock's gonna do great. Thank you, and god bless the entire team.
Thank you.
I agree with that, Dan. I wholeheartedly agree with that because the stock market cannot always, in the first place, predict what's going to happen, and the stock market does not always appreciate what's happening. The the stock market doesn't sit inside a boardroom. The stock market doesn't stand on a shop floor. The stock market is not in a quarry where the where the job is done.
So ever any anytime the stock price trades and it's trading below $60 right now, but anytime it it trades below $60, I believe it's a buy. The fact that it doesn't correlate with anything or it seems to not correlate with anything, that the market doesn't know what goes on inside a company. So if you believe that the stock price is cheap at the current level, how many shares do we have outstanding? 304,000,000? So if it's cheap, buy more.
Buy more. Thank you. I will. I will. I will
say this. At the end of the day, I think all analysts would agree, most financial people would agree that the long term performance of the stock reflects the long term performance of the company. And I am confident, as we said just a moment ago, the long term performance of Nucor will continue to be very strong. Our best years are still ahead of us. Thank you all for coming today.