This proxy statement is provided in connection with a solicitation of proxies by the Board of Directors of United States Steel Corporation to be used at the Annual Meeting of Stockholders to be held on Tuesday, April 28, 2015 at 10:00 a.m., Eastern Time, and at any adjournment or postponement thereof. The Annual Meeting will be held at the U. S. Steel Tower, 600 Grant Street, thirty-third floor, Pittsburgh, PA 15219. This proxy statement is first being provided to our stockholders on or about March 13, 2015. Throughout this proxy statement, “U. S. Steel,” the “Corporation,” “we,” “our,” or “us” are intended to refer to the United States Steel Corporation and its consolidated subsidiaries, unless specifically indicated otherwise. You are invited to attend the Annual Meeting, and we request that you vote on the

proposals described in this proxy statement as recommended by the Board of Directors. You do not need to attend the meeting to vote your shares. If you have received a printed copy of these materials by mail, you may complete, sign and return your proxy card, or submit your proxy vote by telephone or over the Internet. If you did not receive a printed copy of these materials by mail and are accessing them via the Internet, you may follow the instructions under the heading, “Questions and Answers About the Annual Meeting and Voting” beginning on page 63 of this proxy statement to submit your proxy vote via the Internet or by telephone. Also, other information about voting is provided under the heading, “Questions and Answers About the Annual Meeting and Voting.”

This proxy summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement before voting. For more information

regarding the Corporation’s 2014 performance, please see the Compensation Discussion and Analysis section of this proxy statement and the Corporation’s Annual Report on Form 10-K for the year-ended December 31, 2014.

U. S. Steel’s classified board structure is currently being phased out over a three-year period, beginning with the 2015 Annual Meeting of Stockholders. At the Annual Meeting, four directors are up for election. Two of these directors were previously Class II directors and two joined the Board on January 1, 2015. Mr. Thomas W. LaSorda has informed the Board that he will not stand for re-election at the Annual Meeting due to personal reasons. Each nominee will be elected to serve until our next annual meeting of stockholders. All of the nominees are presently members of the Board of Directors. The Board is recommending that all four nominees be elected.

Except in the case of contested elections, each director is elected if a majority of the votes are cast for that director’s election. The term “a majority of the votes cast” means that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” the director’s election, with abstentions and broker non-votes not counted as votes cast either “for” or “against” the director’s election. A “contested election” is one in which the number of nominees exceeds the number of directors to be elected at the meeting.

If a nominee who is currently serving as a director is not re-elected, Delaware law provides that the director would continue to serve on the Board until the director’s successor is duly elected and qualified or until the director’s earlier resignation or removal. Under our by-laws, in order for any incumbent director to become a nominee for election by the stockholders as a director, that director must tender an irrevocable offer to resign from the Board of Directors,

contingent upon acceptance of such offer of resignation by the Board of Directors, if the director fails to receive a majority of the votes cast in an election that is not a contested election. If an incumbent director fails to receive a majority of the votes cast in an election that is not a contested election, the Corporate Governance & Public Policy Committee, or such other independent committee designated by the Board of Directors, must make a recommendation to the Board of Directors as to whether to accept or reject the offer of resignation of the incumbent director, or to take other action.

The Board of Directors must act on the offer of resignation, taking into account the committee’s recommendation, within 90 days following certification of the election results. Each of the Corporate Governance & Public Policy Committee, in making its recommendation, and the Board of Directors, in making its decision, may consider such factors and other information as it may consider appropriate and relevant to the circumstances.

A brief statement about the background and qualifications of each nominee and each continuing director is provided on the following pages. No director has a familial relationship to any other director, nominee for director or executive officer. The independence of Board members and other information related to the Board of Directors is described under the heading, “Corporate Governance” in this proxy statement.

If any nominee for whom you have voted becomes unable to serve, your proxy may be voted for another person designated by the Board.

The Board recommends a vote “FOR” the election of each nominee.

Corporate governance is a continuing focus at U. S. Steel, embraced by the Board of Directors, management, and all employees. The Corporation has a long and rich tradition relating to corporate governance and public company disclosure. For example, U. S. Steel was the first publicly

traded company in United States history to hold an annual meeting of stockholders and to publish an annual report.

In this section, we describe some of our key governance policies and practices.

U. S. Steel is committed to maintaining the highest standards of corporate governance, which we believe is essential for sustained success and long-term stockholder value. In light of this goal, the Board oversees, counsels and directs management in the long-term interests of the Corporation, its stockholders and its customers. The Board’s responsibilities include, but are not limited to:

The Board discharges its responsibilities through regularly scheduled meetings as well as through telephonic meetings, action by written consent and other communications with management as appropriate. U. S. Steel expects directors to attend all meetings of the Board and the Board committees upon which they serve, and all annual meetings of the Corporation’s stockholders. All of the then serving directors, except Ms. McNeal and Mr. Lee attended the 2014 Annual Meeting of Stockholders.

During the fiscal year ended December 31, 2014, the Board held seven meetings. The Board has three standing committees: 1) the Compensation & Organization Committee; 2) the Audit Committee; and 3) the Corporate Governance & Public Policy Committee. Each of these committees is

described in more detail later in this proxy statement. During 2014, the Audit Committee held five meetings; the Corporate Governance & Public Policy Committee held four meetings; and the Compensation & Organization Committee held nine meetings.

The Board also has an Executive Committee consisting of Messrs. Sutherland and Longhi. The role of the Executive Committee is to act on, and report to the Board on, significant matters that may arise between Board meetings. The Executive Committee took action periodically during 2014 and regularly reported its actions to the Board.

The Board has long adhered to governance principles designed to assure excellence in the execution of its duties and regularly reviews the Corporation’s governance policies and practices. These principles are outlined in our Corporate Governance Principles, which in conjunction with our certificate of incorporation, by-laws, Board committee charters and related policies, form the framework for the effective governance of the Corporation.

The full text of the Corporate Governance Principles, the charters for each of the Board committees, and the Corporation’s Code of Ethical Business Conduct are available on the Corporation’s website, www.ussteel.com, under “Corporate Governance.” These materials are also available in print to any person, without charge, upon written request to:

Corporate Secretary
United States Steel Corporation
600 Grant Street, Suite 1500
Pittsburgh, PA 15219

The Board regularly considers the appropriate leadership structure for the Corporation. It has concluded that the Corporation and its stockholders are best served by the Board retaining discretion to determine whether the same individual should serve as both Chief Executive Officer and Chairman of the Board, or whether the Chairman of the Board should be an independent director. The Board believes that it is important to retain the flexibility to make this determination at any given point in time based on what it believes will provide the best leadership structure for the Corporation, taking into account the needs of the Corporation at that time. Due to the high level of transition in the Corporation’s executive leadership and the dynamic business environment in 2013 and 2014, the Board chose to implement a non-executive, independent Chairman role in January 2014 to allow the Chief Executive Officer to strategically focus on the associated business challenges that year.

If the Chairman of the Board is not independent, the independent directors annually elect from among themselves a Lead Director. The duties of the Lead Director are as follows:

If the Chairman of the Board is independent, the Chairman’s duties also include the duties of the Lead Director.

Pursuant to its charter, the Audit Committee of the Board of Directors is responsible for reviewing and discussing the Corporation’s policies with respect to the assessment of risks and risk management, including the following:

The Corporation’s Internal Audit group provides regular reports to the Audit Committee on the results of various internal audit projects and provides recommendations for the enhancement of operational functions in order to reduce certain risks. Although the Audit Committee has primary responsibility for overseeing risk management, each of our other Board committees also considers the risks within their specific areas of responsibility. For example, the charter of the Compensation & Organization Committee gives it responsibility for assessing whether the Corporation’s compensation and organization policies and practices for executives and non-executives are reasonably likely to create a risk that could have a material adverse effect on the Corporation. Pursuant to its charter, the Corporate Governance & Public Policy Committee considers the risks associated with

legislative, regulatory and public policy issues affecting the Corporation’s businesses and operations. Each committee periodically reports to the full Board of Directors on their respective activities, including, when appropriate, those activities related to risk assessment and risk management oversight.

The Board, as a whole, also considers risk assessment and risk management. For example, the Board annually reviews the Corporation’s strategic plan which includes a review of risks related to: safety, environmental, operating and competitive matters; political and regulatory issues; employee and labor issues; and financial results and projections. Management regularly provides updates to the Board related to legal and compliance risks and cyber-security matters.

The Senior Vice President-Finance & Chief Risk Officer of the Corporation reports to the Executive Vice President and Chief Financial Officer and is responsible for the Corporation’s financial and business risk management, including the assessment, analysis and monitoring of business risk and opportunities and the identification of strategies for managing risk. The Chief Risk Officer provides regular reports to the Audit Committee and Board of Directors on these matters.

The Corporation believes that its leadership structure, as described above, supports the Board’s role in risk oversight.

The following non-employee directors are independent within the definitions of independence of both the New York Stock Exchange (“NYSE”) listing standards and the Securities and Exchange Commission (the “SEC”) standards for Audit Committee members: Patricia Diaz Dennis, Dan O. Dinges, John G. Drosdick, John J. Engel, Richard A. Gephardt, Murry S. Gerber, Thomas W. LaSorda, Charles R. Lee, Glenda G. McNeal, Seth E. Schofield, David S. Sutherland and Patricia A. Tracey. The Corporation has incorporated the NYSE and SEC independence standards into its own categorical standards for independence. Robert J. Stevens is not deemed to be independent under the rules of the NYSE because our current Executive Vice President and Chief Financial Officer was on the compensation committee of Lockheed Martin while Mr. Stevens was an executive officer there. Mr. Stevens will be deemed to be independent under these rules in 2017. The Board believes that Mr. Stevens has sufficient independence to perform his fiduciary responsibilities as a Board member and that his business acumen, strategic planning and risk oversight experience, in addition to his other skills and attributes, make him a valued member of the Board. Mr. Stevens does not sit on any of the committees of the Board, but is invited to attend all such committee meetings. The Board has affirmatively determined that none of the directors or nominees for director,

other than Mr. Longhi, has a material relationship with the Corporation. The Board made such determination based on all relevant facts and circumstances, including the categorical standards for independence adopted by the Board.

In making its determination of director independence, the Board of Directors considered the fact that U. S. Steel purchased certain goods and services from WESCO International, Inc. (WESCO) in 2014. Mr. Engel is the Chairman, President and Chief Executive Officer of WESCO. The Board determined that Mr. Engel did not have a direct or indirect material interest in these transactions and that the transactions were undertaken in the ordinary course of business. In addition, the value of materials purchased by U. S. Steel was less than 2% of WESCO’s annual gross revenues. As a result, the Board concluded that these transactions would not affect Mr. Engel’s independence.

The Board also determined that: (i) no member of the Compensation & Organization Committee has a relationship to the Corporation which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, and (ii) each member of the Compensation & Organization Committee therefore satisfies the independence requirements of NYSE listing standards.

Under our by-laws and the general corporation law of the State of Delaware, U. S. Steel’s state of incorporation, the business and affairs of U. S. Steel are managed under the direction of the Board of Directors. The non-employee directors hold regularly scheduled executive sessions without management. The directors spend considerable time preparing for Board and committee meetings. During 2014, all of the directors attended in excess of 75 percent of the meetings of the Board and the committees on which they served, except Ms. Glenda McNeal. In 2014, Ms. McNeal attended 50% of the total number of meetings of the Board and the committees on which she served.

The Board has three principal committees, each of which is comprised exclusively of independent directors: (i) the Audit

Committee; (ii) the Compensation & Organization Committee; and (iii) the Corporate Governance and Public Policy Committee.

Each of these committees has a written charter adopted by the Board, which are available on the Corporation’s website (www.ussteel.com). Each committee may hire outside advisers, including counsel, at the Corporation’s expense. The Board also has an Executive Committee consisting of Messrs. Sutherland and Longhi. The Executive Committee acts on, and reports to the Board on, significant matters that may arise between Board meetings.

The charter requires the Audit Committee to perform an annual self-evaluation, review its charter each year and meet at least five times each year.

The charter also requires that the Audit Committee be comprised of at least three directors, each of whom is independent and financially literate, and at least one of whom must have accounting or related financial management expertise. Under the charter, no director who serves on the audit committees of more than two other public companies may serve on the Audit Committee, unless the Board determines that such simultaneous service will not impair the ability of such director to effectively serve on the Audit Committee. The Board has determined that John J. Engel, the Committee’s chairman, Dan O. Dinges, Thomas W. LaSorda, and Charles R. Lee meet the SEC’s definition of Audit Committee financial expert.

Pursuant to its charter, the Compensation & Organization Committee’s duties and responsibilities include:

The Compensation & Organization Committee may, in its sole discretion, retain or obtain the advice of any compensation consultant, independent legal counsel, or other adviser to assist the committee in fulfilling its duties and responsibilities. The committee is directly responsible for the appointment, compensation (which shall be paid by the Corporation), and oversight of any such adviser. Before selecting an adviser, the committee must take into consideration all factors relevant to such adviser’s independence, including without limitation the factors set forth in the NYSE listing standards.

The Compensation & Organization Committee’s charter requires the committee to perform a self-evaluation and charter review annually. The charter also requires that the committee be comprised of at least three directors, each of whom is independent.

The committee’s processes for determining the amounts of compensation to pay the Corporation’s executives are as follows (additional detail regarding these processes can be found in the “Compensation Discussion and Analysis” section of this proxy statement):

For 2014, the committee considered reports and analysis that it had requested of management and its independent consultant concerning risks associated with the Corporation’s compensation and organization policies and practices. The committee concluded that the Corporation’s compensation policies and practices for executives and non-executives are not reasonably likely to create a risk that could have a material adverse effect on the Corporation.

The Corporate Governance & Public Policy Committee serves as the Corporation’s governance and nominating committee. Pursuant to its charter, the duties and responsibilities of this committee include:

The committee establishes criteria for selecting new directors, which include: (a) independence, as defined by applicable law, stock exchange listing standards and the categorical standards listed in the Corporation’s corporate governance principles; (b) business or professional experience; (c) integrity and judgment; (d) records of public service; (e) ability to devote sufficient time to the affairs of the Corporation; (f) the diversity of backgrounds and experience a candidate will bring to the Board; and (g) the needs of the Corporation from time to time. The committee’s charter provides that all directors should be individuals of substantial accomplishment with demonstrated leadership capabilities and that they should represent all stockholders and not any special interest group or constituency.

In evaluating diversity, the committee considers not only racial and gender diversity, but also the need for a Board that represents diverse experience at policy making levels in business, government and education and in industries that are relevant to the Corporation’s business operations. The director selection criteria described above, including diversity, are evaluated by the committee each time a new candidate is considered for Board membership. In addition, at the end of each year, the Board of Directors conducts a thorough self-evaluation. This evaluation includes an assessment

of whether the Board (i) has the appropriate mix of skills, experience and other characteristics, and (ii) is made up of a sufficiently diverse group of people (for example, in terms of background, experience, gender, race and veteran status).

The committee will evaluate candidates for the Board of Directors recommended by stockholders using the same criteria that are described above. Stockholders wishing to recommend a candidate may submit a recommendation to the Secretary of the Corporation. That submission should include (i) the candidate’s name, address, occupation and share ownership; (ii) any other biographical information that will enable the committee to evaluate the candidate in light of the foregoing criteria; and (iii) information concerning any relationship between the candidate and the stockholder making the recommendation.

The Corporation has an agreement with the United Steelworkers (the “USW”) that permits the USW to recommend two individuals for consideration for Board membership. The agreement recognizes that every director has a fiduciary duty to the Corporation and all of its stockholders, and that each individual recommended by the USW must meet the criteria described above.

The committee’s charter gives the committee the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm’s fees and other retention terms.

Under the charter, the committee must: (i) be comprised of at least three directors, each of whom is independent, (ii) perform a self-evaluation and charter review annually; and (iii) meet at least four times each year.

Our by-laws require any non-employee director to retire at the first annual meeting of stockholders after he or she reaches the age of 74, even if his or her term has not expired; however, the Board can grant exceptions to this policy on a case-by-case basis. The Board previously granted such exceptions for Mr. Lee and Mr. Schofield, both of whom are 75. Mr. Lee and Mr. Schofield will retire at the 2015 Annual Meeting of Stockholders. Because of the extensive changes that took place to the Corporation’s senior management during 2013 (including a new Chief Executive Officer, Chief Financial Officer, Chief Information Officer and Chief Procurement Officer), the Board concluded that

it was important to retain the services of these two experienced directors for one additional year.

Each employee director must retire from the Board when he or she ceases to be an executive officer of the Corporation, except that the Chief Executive Officer may remain on the Board after retirement as an employee, at the Board’s request, through the last day of the month in which he or she turns 70.

Our by-laws also provide that directors who undergo a significant change in their business or professional careers should volunteer to resign from the Board.

The Board has adopted stock ownership requirements for executive officers. These requirements are described under the caption “A Culture of Ownership” in the Compensation Discussion and Analysis section of this proxy statement.

Non-employee directors are required to hold equity interests in the Corporation in the form of stock-based deferred compensation. This requirement is a part of our Corporate Governance Principles. Each non-employee director is required to defer at least 50% of his or her annual retainer as stock-based compensation under the Deferred Compensation Program for Non-Employee Directors. Amounts deferred are credited to the director’s deferred stock account in the form of Common Stock Units. No amounts are paid to the director from the deferred stock account until the director leaves the Board, at which time he or she receives actual shares of common stock corresponding to the number of Common Stock Units in his

or her account. The Board and management believe that such deferral, by continually building each director’s equity interest in the Corporation, provides a meaningful continued interest in the Corporation that is tied to the stockholders’ interest because the stock issued upon a director’s departure from the Board reflects all changes in the market value of U. S. Steel common stock from the date of deferral. Each non-employee director is in compliance with the requirement described in this paragraph.

The following table sets forth the number of shares of U. S. Steel common stock beneficially owned as of February 27, 2015 by each director and director nominee, by each executive officer named in the Summary Compensation Table and by all directors and executive officers as a group. No director or executive officer beneficially owned, as of the applicable date, any equity securities of U. S. Steel other than those shown.

Stockholders and interested parties may send communications through the Secretary of the Corporation to the: (1) Board, (2) Committee Chairmen, (3) Chairman of the Board or the Lead Director, or (4) outside directors as a group. The Secretary will collect, organize and forward to the directors all communications that are appropriate for consideration by the directors. Examples of communications that would not

be considered appropriate for consideration by the directors include solicitations for products or services, employment matters, and matters not relevant to stockholders, to the functioning of the Board, or to the affairs of the Corporation. The Secretary of the Corporation may be contacted at: Corporate Secretary, United States Steel Corporation, 600 Grant Street, Suite 1500, Pittsburgh, PA 15219.

The Board of Directors of the Corporation has adopted a written policy that requires certain transactions with related persons to be approved or ratified by its Corporate Governance & Public Policy Committee. For purposes of this policy, related persons include: (i) any person who is, or at any time since the beginning of the Corporation’s last fiscal year was, a director or executive officer of the Corporation or a nominee to become a director of the Corporation; (ii) any person who is the beneficial owner of more than 5 percent of any class of the Corporation’s voting securities; and (iii) any immediate family member of any person described in (i) or (ii). The types of transactions that are subject to this policy are transactions, arrangements or relationships (or any series of similar transactions, arrangements or relationships) in which the Corporation, or any of its subsidiaries, was, is or will be a participant and in which any related person had, has or will have a direct or indirect material interest and the aggregate amount involved will or may be expected to exceed $120,000. The standards applied by the Corporate Governance & Public Policy Committee when reviewing transactions with related persons include: (a) the benefits to the Corporation of the transaction; (b) the terms and conditions of the transaction and whether such terms and conditions are comparable to the terms available to an unrelated third party or to employees generally; and (c) the potential for the transaction to affect the independence or judgment of a director or executive officer of the Corporation. Under the policy, certain transactions are deemed to be automatically pre-approved and do not need

to be brought to the Corporate Governance & Public Policy Committee for individual approval. The transactions which are automatically pre-approved include: (i) transactions involving compensation to directors and executive officers of the type that is required to be reported in the Corporation’s proxy statement; (ii) indebtedness for ordinary business travel and expense payments; (iii) transactions with another company at which a related person’s only relationship is as an employee (other than an executive officer), a director or beneficial owner of less than 10 percent of any class of equity securities of that company, provided that the amount involved does not exceed the greater of $1,000,000 or 2 percent of that company’s consolidated gross annual revenues; (iv) transactions where the interest of the related person arises solely from the ownership of a class of equity securities of the Corporation, and all holders of that class of equity securities receive the same benefit on a pro rata basis; (v) transactions where the rates or charges involved are determined by competitive bid; (vi) transactions involving the rendering of services as a common or contract carrier or public utility at rates or charges fixed in conformity with law or governmental regulation; and (vii) transactions involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture or similar services.

There were no transactions that required approval of the Corporate Governance & Public Policy Committee under this policy during 2014.

Under Section 16(a) of the Securities Exchange Act of 1934, our directors and executive officers and persons holding more than ten percent of any class of our equity securities, are required to file with the SEC initial reports of their ownership of our common stock and reports of changes in such ownership. To our

knowledge, based on information furnished to us, there were no late filings by any U. S. Steel directors, executive officers or other persons subject to Section 16(a) of the Securities Exchange Act of 1934 required to be disclosed in this proxy statement.

Our by-laws provide that each non-employee director shall be paid compensation as the Board may determine from time to time. Directors who are employees of U. S. Steel receive no compensation for their service on the Board.

The objective of U. S. Steel’s director compensation programs is to enable the Corporation to attract and retain as directors individuals of substantial accomplishment with demonstrated leadership capabilities. In order to align the interests of directors with the interests of stockholders, our non-employee directors participate in the Deferred Compensation Program for Non-Employee Directors and the Non-Employee Director Stock Program, each of which is described below.

Non-employee directors are paid an annual retainer fee of $200,000. Committee Chairs and the Chairman of the Board are paid an additional annual fee of $20,000 and $50,000, respectively.

No meeting fees or committee membership fees are paid.

Under our Deferred Compensation Program for Non-Employee Directors, each non-employee director is required to defer at least 50% of his or her retainer in the form of Common Stock Units and may elect to defer up to 100%. A Common Stock Unit

is what is sometimes referred to as “phantom stock” because initially no stock is actually issued. Instead, we keep a book entry account for each director that shows how many Common Stock Units he or she has. When a director leaves the Board, he or she receives actual shares of common stock corresponding to the number of Common Stock Units in his or her account. The ongoing value of each Common Stock Unit equals the market price of the common stock. When dividends are paid on the common stock, we credit each account with equivalent amounts in additional Common Stock Units. If U. S. Steel were to undergo a change in control resulting in the removal of a non-employee director from the Board, that director would receive a cash payment equal to the value of his or her deferred stock account.

Under our Non-Employee Director Stock Program, upon joining our Board, each non-employee director is eligible to receive a grant of up to 1,000 shares of common stock. In order to qualify, each director must first have purchased an equivalent number of shares in the open market during the 60 days following the first date of his or her service on the Board.

The following table sets forth certain information concerning the compensation of directors for 2014:

At the 2014 Annual Meeting of Stockholders, 78.5% of the votes cast were “For” our advisory vote on executive compensation, up from 64.7% in 2013. In anticipation of the vote, we again contacted our largest stockholders (16 of them representing over 50% of our outstanding shares) and had conversations with stockholders representing approximately 30% of our outstanding stock. All of the stockholders provided positive comments on the changes to our executive compensation program. The Compensation & Organization Committee considered this feedback when reviewing the incentive compensation programs for 2014 and 2015.

A substantial portion of the annual and long-term incentive payouts to our NEOs in 2014 required and were based on the achievement of specific performance goals. Notable performance accomplishments in 2014 that were considered in making executive compensation decisions included:

The primary components of our CEO’s compensation in 2014 include:

We believe that our CEO’s 2014 compensation, and that of our other NEOs, is well aligned with and supported by our outstanding performance in 2014.

In considering this advisory vote, we encourage you to read the Compensation Discussion and Analysis, the compensation tables and the narrative discussion set forth above in this proxy statement for additional details on our executive compensation programs and the 2014 compensation paid to our named executive officers.

In addition to the typical accounting, finance, tax, internal audit and risk management duties associated with a traditional chief financial officer role, the scope of Mr. Burritt’s duties and responsibilities also include executive leadership of: Strategy & Transformation; Business Intelligence; North American Flat-Rolled Commercial Entities; Procurement & Supply Chain; Information Technology; Investor Relations; Human Resources; and Corporate Communications and Community Affairs.

In addition to the typical legal, governance and risk oversight duties that are usually related to a traditional general counsel role, the scope of Ms. Folsom’s duties and responsibilities also include executive leadership of: Government Affairs; Regulatory & Compliance; Labor Relations; Environmental Affairs; Corporate Security & Fire Protection; Corporate Aircraft; and U. S. Steel’s Real Estate division.

2014 was the first full year of a multi-year transformational journey for U. S. Steel. The transformation is designed and is being implemented by a new leadership team led by Mr. Longhi, our President and Chief Executive Officer. We have titled the transformation “The Carnegie Way,” to draw inspiration from and build a strong link to the unique culture and history of U. S. Steel, the iconic American corporation.

Our vision to strengthen our stature as the “Iconic Corporation,” and a leading business in the United States consists of two phases. In Phase 1, we are focused on “earning the right to grow,” which means generating positive economic profit through the business cycle. In Phase 2, we will focus on driving profitable growth.

The Carnegie Way transformation is comprehensive and sweeping in its scope. We have defined and launched a new business strategy that focuses on creating greater customer intimacy, operational excellence (including safety, reliability, quality, lead times and cost) and increasing investment in research and development. We are working to benchmark and improve every core business process. The scope includes commercial, supply chain, manufacturing, procurement, innovation, and every aspect of functional support. To support our new strategy, we have realigned the Corporation’s operating structure to get closer to our customers, provide visibility into value creation, and enhance accountability. We are implementing a new measurement methodology that focuses on economic profit based measurements for all leaders. The management team has taken several tough actions necessary to return the

Corporation to profitability including idling facilities, resizing the organization and exiting parts of the business where it is not possible to earn economic profit.

The Carnegie Way transformation has a scope that is several times more expansive and aims to deliver more results faster than other transformations we have benchmarked. Our benchmarks suggest that most corporations typically drive transformation in one or more aspects of the business. For example, they may drive transformations of core functions (e.g., commercial and procurement) or under-performing business units. The Carnegie Way transformation is combining a shift in strategy, a transformation of every core business function (commercial, supply chain, manufacturing, procurement, innovation, and every aspect of functional support), courageous actions to repair underperforming businesses, creation of a new organizational design and a new performance management model, and deployment of a new Enterprise Resource Planning system. Everything will be examined as part of the transformation process. The complexity of architecting and executing the transformation is very high; however, we believe that the results we are seeing are greater than what typical transformations deliver.

All these improvements are being driven by The Carnegie Way Method that builds off of proven Lean Six Sigma leadership methodologies. We are investing in building capabilities at all levels of our organization. In 2014, we implemented several projects that involved thousands of employees at every level in the

Corporation. The pipeline of future projects is robust and designed to ensure value creation at all points of the business cycle.

The Carnegie Way is delivering results faster than expected.

2014 was a year of very strong financial performance for the Corporation as demonstrated by the following 2014 highlights:

In addition, our stock price reached a high in 2014 of $46.55 during the third quarter, an increase of approximately 58% from our year-end 2013 stock price of $29.50. However, by the end of 2014, our stock price had declined, despite no publicly released performance update, resulting in a negative total shareholder return (TSR) for 2014. We believe the decline in our stock price was primarily due to investor expectations shaped by a volatile global market, including lower oil prices, lower steel prices, the impact of the stronger U.S. dollar and the effect of global overcapacity on imports and our operations.

While our stock price was impacted by these external factors, we are creating a lower cost and more flexible business model that is intended to produce more consistent earnings across the business cycles. The stock has still shown positive returns over the past 18 months, despite spot hot-rolled coil prices being over $100/ton lower than they were in September 2013. These positive returns indicate the market continues to recognize some progress we have made to date.

As part of The Carnegie Way, the Corporation created a performance scorecard that establishes goals for four critical drivers of stockholder value creation. We believe the performance scorecard creates a clear “line of sight” with the Corporation’s business transformation priorities and creates

accountability at the corporate, business segment and individual levels, while reinforcing the need to operate as a highly principled corporation and upholding our values and code of ethical business conduct. The four value creation drivers are shown in the table below:

For 2014, the Committee revised the Annual Incentive Compensation Plan (AICP) to support management’s business transformation efforts. Cash flow was added as a performance measure to strengthen our balance sheet and improve our liquidity position. Income from operations was added to drive line of sight to our operating performance. The cash flow and income from operations measures directly link

our annual incentive program to the performance scorecard and the core value drivers defined in The Carnegie Way transformation. In addition, because the success of The Carnegie Way originates in the many individual objectives assigned to each executive, the Committee formally introduced individual performance as a modifier to hold executives accountable for achieving results.

Effective April 1, 2014, Mr. Longhi’s base salary as President and Chief Executive Officer increased from $1,100,000 to $1,215,000, which is the salary midpoint for his position as determined by the Committee’s consultant based on peer group information and other relevant market data. Under the Annual Incentive Compensation Plan (AICP), Mr. Longhi’s target percentage for 2014 was increased by five percentage points to the market median of 145%. Under the Long-Term Incentive Plan, Mr. Longhi’s grant value was increased from $3,992,000, which reflected his role as the Corporation’s Chief Operating Officer for eight months and President and Chief Executive Officer for four months, to $7,535,000, which is the market median of the CEOs of our peer group. The Committee based these decisions on the fact that Mr. Longhi had been a chief executive officer at his former employer and believed him to be fully proficient in his role of leading the Corporation and The Carnegie Way transformation efforts.

As indicated previously, our cash flow, income from operations and return on capital employed significantly improved in 2014. Under the 2014 AICP, the Corporation’s performance exceeded the maximum performance thresholds for cash flow and income from operations, resulting in a payout rate of 175% of the target award prior to any adjustment for individual performance. Based on a comprehensive performance appraisal and the individual performance highlights described later in this Compensation Discussion and Analysis section, the Compensation & Organization Committee determined that Mr. Longhi’s performance as President and Chief Executive Officer in 2014 far exceeded expectations and increased his award under the AICP by 30%. The Corporation did not achieve its safety goal and, therefore, the additional 5% modifier was not earned in 2014. Mr. Longhi’s actual cash AICP award for 2014 was $4,007,981.

The 2011 Performance Awards

The three year performance period for the 2011 performance awards ended in May 2014. None of the 2011 performance awards vested because the Corporation’s performance was below the threshold required to earn a payout.

2012 – 2014 Cash and Equity Incentives

The following table illustrates how our performance has affected the payout of our short-term incentives and how the performance of our common stock affects the value of the long-term incentives that would be received by our executives based on our closing stock price of $26.74 on December 31, 2014:

Since 2012, we have extended invitations to our major stockholders to discuss our executive compensation program and plan to continue this dialogue in the future.

In 2013, some stockholders indicated that they would like to see (i) a larger percentage of the equity grants in our long-term incentive plan be performance-based and (ii) the inclusion of two performance measures in the plan. In response, the Committee revised the plan for 2014 to increase the performance awards from 40% to 60% of the

total award and, for the performance awards, added ROCE as a second performance measure to the existing relative TSR measure. The performance awards were divided equally between: (1) awards dependent upon our TSR compared to the TSR of the companies in our peer group, and (2) awards dependent upon our weighted average ROCE over the three year performance period. The 2014 changes to the plan are shown in the tables below:

The Committee believes that these changes address the views expressed by our stockholders and support management’s efforts to transform the Corporation and return it to sustainable profitability.

Prior to our 2014 annual meeting, we contacted 18 of our largest stockholders representing over 40% of our outstanding shares and held telephonic meetings with stockholders representing ownership of approximately 26% of our outstanding stock to discuss our executive compensation program. All of the stockholders we spoke with provided positive feedback on the changes made for 2014. At our 2014 Annual Meeting, 78.5% of the votes cast were “For” our advisory vote on executive compensation, up from 64.7% in 2013.

Prior to the 2015 Annual Meeting, we contacted 16 of our largest stockholders representing over 50% of our outstanding shares and held telephonic meetings with stockholders representing ownership of approximately 30% of our outstanding stock. None of the stockholders suggested any specific changes to our executive compensation program for 2015. Despite the increase in stockholder support for our executive compensation program, the Committee elected to modify the compensation program for 2015 to further align pay with performance. Specifically, the 2015 AICP was revised to replace shipment tons with net sales as the measure used as the funding trigger threshold. This change is intended to focus the Corporation on value creation rather than volume of tons shipped. If we do not achieve the threshold, no payments will be made under the AICP for 2015.

The Committee has retained Pay Governance LLC, an independent consultant, to assist it in evaluating executive compensation and also obtains input from the CEO with regard to compensation for other executives. As part of its

annual process of determining executive compensation, the Committee’s consultant prepares competitive assessments by position for each element of compensation and for compensation in the aggregate.

The Committee uses the below peer group data as a frame of reference to guide NEO compensation decisions, but the

Committee does not set NEO compensation with respect to specific percentiles.

In determining the CEO’s compensation, the Committee considers, among other things, the CEO’s individual performance in delivering the value creation drivers described in the performance scorecard discussion on page 26. The

CEO’s individual performance objectives are reviewed by the Committee and approved by the Board. A similar evaluation is performed by the CEO with respect to all other executive officers using similar measures and objectives.

The Committee also considers relevant market pay practices in its decision making process. Specifically, a peer group of companies is used to:

As a secondary source of information, the Committee will from time to time consider broader survey data supplied by the consultant. The Committee annually reviews the composition of the peer group.

The following criteria were developed by the Committee’s consultant to aid in the selection of companies to include in the Corporation’s peer group:

The Committee desires to maintain a peer group of 25 to 30 companies where the Corporation resides at approximately the middle of the peer group. Over the past several years, the Committee has attempted to balance company size with market capitalization. Accordingly, it has replaced several of the larger companies in terms of revenue with companies that generally are smaller than the Corporation in terms of revenue and asset size but larger than the Corporation in terms of market capitalization.

The Committee reviewed the peer group for purposes of benchmarking executive compensation in 2014 and removed Timken Co., which was the smallest peer company, because

it had announced its intention to separate into two public companies and its steel business was projected to be significantly below the Corporation’s peer group selection criteria.

The Committee’s consultant annually performs a risk assessment of our executive compensation program and, based on its most recent review, the consultant has determined that our compensation program contains a variety of features that mitigate unnecessary risk taking, including the following:

For these reasons, the Committee concluded that our 2014 compensation programs discourage executives from taking excessive risks and encourage them to act in the best long-term interests of the Corporation’s stockholders.

We have a comprehensive stock ownership policy designed to align the interests of our executive officers with those of the Corporation’s stockholders. As shown in the table below, our

executives are required to accumulate and retain a minimum level of ownership in the Corporation’s common stock based upon the salary midpoint for their position and their salary grade:

Under our stock ownership policy, Mr. Longhi has a stock ownership requirement of six times his salary midpoint. Messrs. Babcoke, Burritt and Matthews and Ms. Folsom each have a stock ownership requirement of three times their salary midpoint.

In 2014, the Committee revised the stock ownership policy to provide that an executive must retain 100% of the after-tax value of stock acquired upon the vesting of restricted stock units and

performance awards and 100% (previously 25%) of the after-tax value of shares issued upon the exercise of stock options until the ownership requirement is satisfied. The requirement to retain additional shares after meeting the ownership requirement was eliminated. All of the NEOs are in compliance with the terms of the policy, even though Messrs. Longhi, Babcoke and Matthews and Ms. Folsom are still accumulating shares in order to satisfy the ownership threshold requirement.

The types of compensation provided to our executives include: base salary, short-term incentive compensation, long-term incentive compensation, retirement benefits, and other

compensation. Each type of compensation is discussed in detail below with the principal elements summarized in the following table:

The distribution of compensation among the various compensation elements is based on the Committee’s belief that in order to link pay to performance, most of an executive’s compensation should be paid in the form

of performance-based variable compensation with a greater emphasis on variable components for the most senior executives who have greater responsibility for the performance of the business.

All of the principal elements of our compensation program, except for base salary and restricted stock units (which constitute 20% of the long-term incentive awards), are considered variable compensation as amounts actually paid are based upon achievement of performance goals or the performance of our stock. In 2014, variable compensation accounted for approximately 74% of our CEO’s target

compensation and, on average, approximately 63% of the target compensation of our other NEOs. Fixed compensation, which consists of base salary and restricted stock units, accounted for approximately 26% of our CEO’s target compensation and, on average, approximately 37% of the target compensation of our other NEOs. Only the base salary and the short-term incentive were paid in cash.

The Committee reviews the salaries of our executives on an annual basis, as well as at the time of promotion or other change in responsibilities. Salary adjustments are based on an evaluation of an executive’s performance and level of pay compared with salary levels for comparable executives at the companies in our peer group. In its discretion, the Committee may choose not to approve any annual salary increases or may limit or defer increases in response to financial constraints. Effective April 1, 2014, the Committee increased Mr. Longhi’s base salary as President and Chief Executive Officer from

$1,100,000 to $1,215,000 which is the salary midpoint for his position as determined by the Committee’s consultant based on peer group information and other relevant market data. For the other NEOs, excluding Ms. Folsom who did not receive an increase at that time because she was hired during 2014, the average increase in base salary was approximately 3.67%. Effective November 1, 2014, the Committee approved an increase of 7.5% to Ms. Folsom’s base salary in recognition of the scope of her duties and responsibilities.

Our Annual Incentive Compensation Plan (AICP) is a short-term incentive program designed to provide performance-based compensation. Typically, the short-term incentive awards are paid in cash, but the Committee retains discretion to provide the award in cash, stock, or a combination of both. The plan’s objective is to align our executive officers’ compensation with the achievement of annual performance goals that support our business strategy.

The Committee sets performance goals for each performance period based on expected business results for

the upcoming year, which are intended to be challenging yet achievable.

The following table shows the maximum award payable under the AICP for 2014 and the actual amount awarded by the Committee after consideration of the executive’s individual performance. Because the safety performance goal was not met, the maximum award does not include the 5% increase for safety performance.

In 2014, cash flow and income from operations replaced ROCE and shipment tons as the two main performance measures in the AICP. The Committee determined that cash flow and income from operations were the appropriate measures to drive the transformation required to achieve our goal of sustainable profitability. However, shipment tons was used in the AICP as the performance measure for funding the award pool for Section162(m) purposes. No payments could have been made

under the AICP if the shipment tons goal was not achieved. Since the shipment tons goal was achieved, the award pool was funded and the maximum payment was determined based on achievement of the performance measures described in the table below. The Committee retains discretion to reduce, or eliminate payment of the awards under the AICP. The Committee has determined that in 2015, shipment tons will be replaced by net sales as the measure used as the funding trigger threshold.

As shown above, the award calculated based on cash flow and income from operations is modified by individual performance. If the Committee determines that an executive’s performance exceeds expectations, his or her award measures may be increased by a maximum of 30%. If the Committee determines that the executive’s performance is below expectations, the award may be reduced by as much as 50%. Safety does not modify the award, but provides an additional 5% of the target award if the safety performance goal is achieved. As a result, the maximum amount payable to an executive in 2014 was approximately 233% of the individual’s target award for maximum performance at the corporate and individual levels.

The performance measures for the 2014 AICP are described below:

Environmental emissions was removed as a performance measure for 2014 because we have achieved our environmental improvement goals in prior performance periods by reducing our noncompliant air and water emissions and are at a world-class level. Although it is no longer a performance measure, the Committee may consider environmental performance when

exercising its discretion in determining awards under the AICP. We will continue to maintain a comprehensive environmental policy and are committed to reducing our emissions as well as our carbon footprint. Environmental stewardship continues to be a core value of the Corporation.

2014 Individual and Corporate Performance Goals and Results

The target award under the AICP for each NEO is equal to the percentage of base salary assigned to such NEO.

In addition to determining individual targets, the Committee approved IFO goals for each NEO. For the CEO and CFO, the IFO goal is based on total income, which generally measures the operational results of all business segments. For executives assigned to a specific segment, the IFO goal is based on the income goal for that segment. For all other executives, the IFO goal is weighted among the business segments based on the amount of leadership and support provided to each segment. This segment allocation of the IFO goal is intended to create stronger corporate, business segment and individual accountability by tying an executive’s award to the performance of the segments for which he or she is directly responsible.

For 2014, the Committee also established the corporate performance goals for shipment tons, cash flow, IFO, and safety performance. In setting the goals, the Committee considered the Corporation’s performance over the past five years, the business plan for 2014, industry performance, and the Corporation’s business transformation efforts. In general, the maximum performance goals were set at an amount that would require the Corporation to achieve a substantial level of The Carnegie Way benefits and represent a significant improvement over our 2013 performance.

In 2014, our funding trigger for the AICP was 16 million shipment tons. We exceeded our goal with a total of 19.8 million shipment tons, which means the award pool was funded. The actual amount paid under the AICP was then determined in accordance with the underlying award formula, which includes cash flow and income from operations as the two primary performance measures. In 2014, cash flow was approximately 194% of target and exceeded the maximum threshold by $507 million. Total income from operations was approximately 169% of target and exceeded the maximum threshold by $300 million. Each segment (Flat-Rolled, Tubular and Europe) exceeded its maximum threshold for IFO. Accordingly, the performance of the Corporation resulted in a total payout rate of 175% of the target award as shown in the table above. The payout rate demonstrates the pay for performance design of our plan.

2014 Individual Performance

Historically, equity awards under the long-term incentive program (LTIP) have been allocated among performance awards, stock options, and restricted stock units. The Committee believes these three long-term incentive vehicles best accomplish its objectives of aligning pay with performance

and the retention of executives. In 2014, the Committee granted the equity awards set forth in the table below with performance awards granted in February and stock options and restricted stock units granted in May. Beginning in 2015, all grants will be made in February.

Performance Awards (60% of the Total Value of LTIP Award)

Performance awards provide an incentive for executives to earn full-value shares based on our performance over a three-year performance period. The performance awards do not pay dividends or carry voting privileges prior to vesting. For 2014, the three year performance period began on January 1,

2014 and will end on December 31, 2017. The value of the 2014 performance awards was divided equally between: (1) awards dependent upon our TSR compared to the TSR of the companies in our peer group, and (2) awards dependent upon our weighted average ROCE over the three year performance period.