U.S. Steel CEO's 2008 pay package rises to $11.1 mil

PITTSBURGH -- United States Steel Corp.'s chief executive, John P. Surma, received compensation valued at $11.1 million in 2008, up 25 percent from the previous year, according to an Associated Press calculation of figures disclosed in a regulatory filing Friday. Some of that amount, however, included stock and stock options that have fallen in value.

Like other steel companies, U.S. Steel saw its fortunes fall sharply in the last three months of 2008 as the world economy slowed and credit markets froze, all but halting demand for the metal used in everything from office buildings to appliances. By the end of the year, steel companies had severely cut production.

But the industry thrived through much of the year, with steel prices hitting record levels in July.

Surma received $1.2 million in base salary last year, according to a proxy statement filed with the Security and Exchange Commission. He received a performance-related bonus of $3.3 million.

More than half of Surma's compensation came as stock and stock options, which were valued by U.S. Steel at $6.4 million when they were granted in May 2008. But at that time, U.S. Steel's shares were trading at $172.23 -- before they began a precipitous drop. The company's stock closed Friday at $18.18.

Among the perks included in Surma's pay package were $104,083 for personal aircraft use and $41,375 for life insurance premiums.

The Associated Press' compensation formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.

The Pittsburgh-based firm, the largest U.S.-based steel maker, reported 2008 earnings of $2.13 billion, more than twice the $879 million the company posted for the previous year.

In 2008, the company's shares shed 67 percent of their value.