Lockheed Martin Corp. bestowed a 25 percent pay raise on Chairman and Chief Executive Officer Norman R. Augustine last year, bringing his salary and bonus to more than $2.7 million.
Augustine also earned stock options worth about $1.4 million at yesterday's closing price, according to a proxy statement the company filed with the Securities and Exchange Commission.
The next four highest-paid executives at the Bethesda-based defense giant earned combined salaries and bonuses of more than $5.5 million.
Augustine's base salary of $1.14 million was up from $983,846 in 1995. He won two raises during the year: a 10 percent boost when he became CEO last January and another 13.6 percent merit raise later.
The proxy statement said Augustine's compensation is mid-range for CEOs of similarly sized companies. It is significantly higher, though, than some others in the defense industry.
Boeing Co. President and CEO Philip M. Condit, for instance, received a little more than $1.3 million in salary and bonus last year. McDonnell Douglas Corp. President and Chief Executive Officer Harry C. Stonecipher received almost $1.8 million in salary and bonus.
Augustine's package "seems a little high," said defense industry analyst Ken Herbert of Frost & Sullivan in San Francisco. "But CEO pay overall has been going up substantially as the stock market has been going up."
The proxy statement said directors rewarded Augustine for "successfully guiding the corporation in this turbulent period for the defense industry." Lockheed Martin bought most of Loral Corp. last year and completed an extensive reorganization effort, shedding several business units and laying off hundreds of employees.
At the same time, the company's stock outperformed both industry peers and the Standard & Poor's 500, the proxy said.
The company won an almost unprecedented string of big government contracts, including awards for a network of missile defense satellites called the Space Based Infrared System, the next-generation Space Shuttle and the final competition to build the Joint Strike Fighter warplane.
"All told, I think [Augustine] is doing a very good job," Herbert said. "He certainly does more than a lot of other CEOs in the defense industry to sort of promote the industry."
On the other hand, Herbert said, a 25 percent pay raise is "probably a good bit higher than the pay raise of the average Lockheed Martin employee. It may be difficult to reconcile from that perspective."
Pub Date: 3/26/97