In 1998, Nucor was a Fortune 500 company with 6,900 employees and had sales of $4.3 billion in steel and steel-related products. Its chairman, F. Kenneth Iverson, had headed the company for more than 30 years. During his tenure, the steel industry faced a number of problems, including foreign competition, strained labor relations, and slowed demand for steel (related in part to the substitution of alternative materials). Despite these industry challenges, Nucor’s sales during Iverson’s tenure grew at an annual compound rate of about 17 percent per annum. Selected comparative financial data are shown in Exhibit 1. In different years, both Iverson and Nucor CEO John Correnti were named Steelmaker of the Year by New Steel magazine.
In January 1999, in a boardroom coup, Ken Iverson, chairman of Nucor, was forced into retirement. In June 1999, his successor, John Correnti, was voted out of power. The board appointed 68-year-old David Aycock chairman, chief executive, and president of Nucor. Aycock joined Nucor in 1954, became a director in 1971 and president in 1984; he retired in 1991. He stayed on Nucor’s board after 1991 as the second largest individual shareholder.
The main bone of contention was the long-term strategic direction of the company. The board wanted a fundamental shift in Nucor’s strategy which Iverson and Correnti resisted.