Summary
Northrop Grumman Corporation (NOC) has filed an 8-K detailing compensation actions approved by its Compensation Committee and Board of Directors on February 12, 2020. The report outlines the key performance metrics for the 2020 Incentive Compensation Plan (ICP) and the metrics for Restricted Performance Stock Rights (RPSR) for the 2020-2022 performance period. These compensation structures are designed to align executive incentives with critical financial and operational performance drivers for the company.
Key Highlights
- 1The 2020 Incentive Compensation Plan (ICP) will be weighted towards cash flow from operations (35%), segment operating income growth (35%), net income growth (15%), and operating margin rate (15%).
- 2Restricted Performance Stock Rights (RPSR) for the 2020-2022 period will be measured by cumulative free cash flow (1/3), operating return on net assets (1/3), and relative total shareholder return (1/3).
- 3The company awarded 70% of its Restricted Stock Rights (RSR) as RPSRs and 30% as RSRs, a structure similar to prior years.
- 4Northrop Grumman's Compensation Committee opted not to award any stock options for the named executive officers.
- 5Special grants of 1,414 RSRs were awarded to Blake Larson (President, Space Systems) and Janis Pamiljans (President, Aeronautics Systems), vesting on December 31, 2021.
- 6Financial metrics for net income growth and operating margin rate under the ICP are adjusted for certain items including net pension, purchased intangible amortization, and merger-related costs.