By Doug Cameron
Lockheed Martin Corp. said Friday that it had more than doubled
the total compensation awarded to Chief Executive Marillyn Hewson
last year to $25.2 million, as she completed her first 12 months in
charge of the world's largest defense contractor by revenue.
Boeing Co., meanwhile, said CEO Jim McNerney's total
compensation fell 10% from a year earlier to $23.3 million, though
exercised options and stock awards saw his take-home pay almost
double to $39.2 million.
The world's two largest defense contractors surpassed internal
financial targets used to determine incentive pay for executives,
and their stock performance has surprised many analysts as cost
cuts buoyed margins and diluted the impact of U.S. budget cuts and
the government shutdown.
Boeing shares rose 81% last year, lifted by its bulging
commercial aircraft backlog and deliveries, while Lockheed climbed
61%, in line with other large prime military contractors.
Ms. Hewson's total compensation climbed to $25.2 million from
$11.4 million in 2012, when she was elevated to chief operating
officer before her surprise promotion to CEO following the
resignation of the planned successor to then-CEO and chairman
Robert Stevens. Ms. Hewson added the chairmanship at the start of
2014.
Almost $7.5 million in additional stock awards, together with
higher pension and incentive payments, drove Ms. Hewson's
compensation higher, the company said in its annual proxy filing.
Her base salary rose to $1.37 million from almost $740,000 a year
earlier, and is set to rise another 10.6% in 2014.
Mr. McNerney's total compensation fell to $23.3 million from
$27.5 million, excluding stock option exercises, as a $6.4 million
decline in pension value outweighed a $2.1 million rise in a
long-term performance award. His basic pay remained $1.93 million,
while stock and option awards were also in line with 2012
levels.
In its latest proxy filing, Boeing said Mr. McNerney's "actual
compensation realized," or take-home pay, for 2013 was $39.2
million, up from $20.1 million a year earlier. This figure includes
exercised options and vested stock awards, but excludes changes in
pension value and perks.
Defense contractor shares have continued to outperform the
broader market this year following the agreement on a fiscal 2014
budget and the outline 2015 request, which companies have said
eased uncertainty over medium-term spending.
Lockheed shares are up 9.2% so far this year, with General
Dynamics Corp. and Raytheon Co. boasting double-digit gains. Boeing
shares are down almost 10%, reflecting concerns among some analysts
about cash flow and shareholder returns as it looks to boost
aircraft production
Write to Doug Cameron at doug.cameron@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires