Ancora Holdings Group LLC, a prominent Cleveland-based activist investment firm and growing shareholder of U.S. Steel, made a bold step on Monday to transform the manufacturing company’s future.
In a Jan. 27 letter sent to the U.S. Steel Board of Directors, Ancora criticized the company’s leadership for pursuing what it calls a “risky and ill-advised” sale to Nippon Steel Corp., a Japanese bidder, over domestic alternatives — despite national security concerns and political opposition from figures including former President Joe Biden and President Donald Trump.
In its letter to the board, Ancora revealed its nomination of a new slate of nine independent board members for U.S. Steel’s 2025 Annual Meeting of Stockholders. The slate includes industry heavyweight Alan Kestenbaum, former chairman and CEO of Stelco Holdings Inc., as a potential replacement for current CEO David Burritt.
“Ancora has a proven track record of correctly identifying companies that are held back by conflicted or unfit CEOs,” wrote Fredrick DiSanto, chairman and CEO at Ancora Holdings Group LLC, and James Chadwick, president at Ancora Alternatives LLC.
“Before we seek the removal of a CEO, we typically try to work with a board of directors to address and course correct the executive’s shortcomings,” they wrote. “In this case, however, we see no future with Mr. Burritt.”
Ancora accused Burritt of mismanagement, including unreliable forecasts and “outlandish rhetoric,” while highlighting underperformance compared to peers during his oversight. And they noted that since before the sale to Nippon was announced, Burritt also appeared to have diverted his focus from U.S. Steel’s operations.
“While Mr. Burritt may not care due to what seem to be his jet-setting ways, we believe the city of Pittsburgh and the Commonwealth of Pennsylvania have been put at economic risk by his sale aspirations and mismanagement of the company,” wrote DiSanto and Chadwick.
There are consequences associated with having “out-of-touch leadership with weak involvement in local communities,” they added, noting that, “absent a miracle, Ancora believes a substantial and urgent reconstitution of the company’s leadership is necessary.”
Ancora also lambasted U.S. Steel’s board for its handling of the blocked Nippon transaction, which was struck down by Biden’s Jan. 3 Presidential Executive Order. U.S. Steel and Nippon Steel have filed a lawsuit in response.
However, Ancora argues that continuing litigation over the sale lacks legal precedent and distracts from U.S. Steel’s operational challenges, including lagging financial performance, rising debt, and strained relations with labor unions.
“The board’s choice to double down on its extremely poor decision to pursue a sale to Nippon has also kept U.S. Steel in a corroded state,” the execs wrote. “Burritt, who stood to rake in more than $70 million himself if the sale had been consummated, has been allowed to misallocate capital, issue unreliable and overoptimistic forecasts, and repeatedly miss financial targets.”
Rather than finally acknowledge the U.S. Steel’s “perilous trajectory” and try to correct course, the board has remained committed to “an underperforming leader who apparently lacks the ability and vision to bring U.S. Steel back from a busted transaction,” they wrote.
In addition to replacing Burritt and revamping executive leadership, Ancora’s proposed plan includes pursuing the $565 million breakup fee that U.S. Steel needs, and not soliciting acquisition proposals from steel competitor Cleveland-Cliffs Inc. or any other partner — domestic or foreign.
Likewise, Ancora wants to immediately end the current board’s advisory spending; protect key facilities like Mon Valley Works from closure; restore relations with labor union members and leaders, community organizations, and elected officials; and introduce a transparent strategy for long-term growth, according to the letter.
In proposing Kestenbaum as a CEO candidate for U.S. Steel, the activist firm pointed to his turnaround success at Stelco, a company U.S. Steel put into bankruptcy. Kestenbaum ended up acquiring Stelco for roughly $53 million and later sold it for more than $2 billion, while U.S. Steel’s investors received virtually nothing for the asset, the letter says.
If Ancora’s slate campaign is successful, DiSanto and Chadwick wrote that Kestenbaum would bring to the role expertise in identifying and operating undervalued assets, and a commitment to delivering the best possible results.
“Considering the significant underperformance of U.S. Steel’s operations and Mr. Burritt’s underwhelming results as a leader,” they wrote, “Mr. Kestenbaum represents a massive upgrade on all fronts.”
Ancora’s candidates for U.S. Steel Board Directors are:
- Kestenbaum: Currently serves as founder and CEO of Bedrock Industries Group LLC, a privately funded holding company that owns and operates assets in the metals, mining, and natural resources sectors. Former chairman and CEO of Stelco Holdings Inc., a Canadian steel company.
- DiSanto: A shareholder and experienced public company director with expertise in capital allocation, corporate finance, and the debt and equity markets who currently serves as chairman and CEO at Ancora Holdings, the parent company of Ancora Alternatives, a U.S. Steel shareholder.
- Jamie Boychuk: An experienced public company executive with a background in logistics, operations, and supply chain management, as well as experience from his tenure at a major customer of U.S. Steel (Canadian National Railway Co.). Boychuck most recently served as executive vice president of operations at CSX Transportation.
- Robert Fisher, Jr.: An investment manager, investment banker, and public company director experienced in dealmaking and the metals and mining sector who currently serves as president and CEO of George F. Fisher Inc., a private investment company.
- James Hayes: Currently serves on the board of directors of Marine Electric Systems Inc., a privately held manufacturer of monitoring and control systems, and has experience as a senior executive and board member implementing growth initiatives.
- Roger Newport: With 35 years of experience in the steel industry, he has a background as a public company director and former steel company CEO. Previously served as CEO of AK Steel Holding Corp., an American steelmaking and manufacturing company,
- Shelley Simms: A regulatory, compliance, and public policy expert who has held leadership roles at several Pennsylvania-based corporations and formerly served as a top ethics official for the state. Currently serves as general counsel and chief compliance officer of Philadelphia-based Xponance Inc., a multi-strategy investment firm.
- Peter Thomas: A senior executive and public company director with decades of experience in manufacturing leadership roles at several public companies across the industrials sector. He currently serves on the board of directors of Berry Global Group Inc., a global manufacturer and marketer of plastic packaging products.
- David Urban: A legal, government affairs, and stakeholder relations expert who currently serves as managing director of BGR Group, a lobbying and public relations firm; as Of Counsel of Torridon Law PLLC; and as a senior advisor to Gothams LLC, a provider of emergency response services.
In response to Ancora’s list of board nominees, U.S. Steel earlier today issued a statement saying that Ancora’s interests are not aligned with all U.S. Steel stockholders. “Our stockholders will not be well served by turning over control of the company to Ancora,” the company said.
U.S. Steel said its board will present recommendations regarding director nominees in the company’s proxy statement and other materials that will be filed with the Securities and Exchange Commission and mailed to all stockholders eligible to vote at the 2025 Annual Meeting, which has not yet been scheduled and no stockholder action is required at this time.
Additionally, U.S. Steel stood behind its current “experienced and independent board,” which has performed “tireless efforts over the past year to complete the company’s value-maximizing transaction with Nippon Steel and deliver $55 per share for its stockholders.”
“Our board has taken every action to deliver value, including running a robust strategic alternatives process,” said U.S. Steel, which added that it remains confident its proposed partnership with Nippon Steel is the best deal because the company would remain an American company with its headquarters in Pittsburgh, and its products would remain mined, melted, and made in America.
“U.S. Steel’s partnership with Nippon Steel is the only path that enables the necessary know-how, technology, and investments to secure the future of U. S. Steel,” said the company. “The transaction has received overwhelming support from our stockholders, communities, and employees — including local union leadership.”
Nevertheless, Ancora said that substantial leadership changes are essential for U.S. Steel’s survival and success.
“Our goal here is straightforward: make U.S. Steel great again for the benefit of employees, customers, shareholders, and all other stakeholders who want a bright future for this American icon,” the letter concluded.