SCHN 2017 Proxy Statement

Compensation Discussion and Analysis expand the qualitative assessment of potential compensation peers to focus on position in the value chain and exposure to international markets. For example, a company that manufactures or whose products are used to make high-value end-products would be less comparable to our business which buys, processes, and sells raw materials and produces intermediate-level products. As a result of our analysis, the Committee made significant changes to our compensation peer group for fiscal 2016 to include a broader array of companies from similar industries, including steel manufacturing, metals recycling, coal and consumable fuels, diversified metals and mining, and aluminum, while still maintaining similar size market cap and revenue demographics. In 2017, we removed two companies from the fiscal 2017 compensation peer group as result of bankruptcy filings and made one additional change to the compensation peer group as noted in footnote 2 in the table below. The Committee has established a separate performance peer group for purposes of the TSR metric in our fiscal 2017 three- year performance share awards. In developing the performance peer group, we used a quantitative and qualitative approach similar to that used for selecting the compensation peer group while adding companies viewed as traditional peers, who for reasons of size may not be appropriate for purposes of comparing compensation. There were no changes to the performance peer group in fiscal 2017 from fiscal 2016. The following table shows the companies in the compensation and performance peer groups used in fiscal 2017: Market Capitalization (in $ millions) (1) Annual Revenue (in $ millions) (1) Fiscal 2017 Compensation Peer Group Fiscal 2017 Performance Peer Group A.K. Steel Holding Corp. $ 1,763 $ 5,962 X X Allegheny Technologies Inc. 2,268 3,313 X X Century Aluminum Co. 1,704 1,428 X X Cliffs Natural Resources Inc. 2,479 2,338 X X Cloud Peak Energy Inc. 236 870 X Coeur Mining, Inc. 1,588 715 X X Commercial Metals Co. 2,187 4,816 X X Gerdau S.A. 20,332 34,943 X Ferroglobe PLC (2) 2,318 1,573 X Harsco Corporation 1,375 1,495 X X Hecla Mining Co. 2,107 620 X X Minerals Technologies Inc. 2,246 1,620 X X Nucor Corporation 17,604 18,237 X Sims Metal Management Ltd. 2,980 5,090 X X Steel Dynamics Inc. 8,264 8,771 X SunCoke Energy Inc. 599 1,252 X X United States Steel Corporation 4,648 11,205 X Westmoreland Coal Co. 44 1,426 X (1) Market capitalization data is as of August 31, 2017 and annual revenue data is as of last 12 months ended August 31, 2017. (2) Ferroglobe PLC was removed from the fiscal 2017 compensation peer group because comparable proxy compensation data would no longer be available for this company. Notice of Annual Meeting of Shareholders and 2017 Proxy Statement | 39