Lockheed CEO's pay jumps as stock falls

Shares down 11% in 2003, but Coffman received 23% more, to $13.8 million

March 16, 2004|By BLOOMBERG NEWS

Lockheed Martin Corp., the largest U.S. defense company, increased Chief Executive Officer Vance Coffman's pay by 23 percent last year, even as the company's shares fell the most among major U.S. defense contractors.

Coffman, 59, received $13.8 million last year, up from $11.2 million in 2002, the Bethesda-based company said in a filing yesterday with the Securities and Exchange Commission.

Coffman, who will retire as chief executive in August and remain chairman until April 2005, was paid a salary of $1.68 million, a $3.3 million bonus, $8.51 million in long-term incentive payments and $268,225 in other compensation. He also got 375,000 stock options last year with a value of $6.67 million when they were granted.

Lockheed's shares fell 11 percent last year, the largest decline among the nine members of the Standard and Poor's 500 aerospace and defense index, which rose 21 percent. The drop was also larger than all but 10 members of the Standard and Poor's 500 index.

Lockheed's share performance "was disappointing" and "did not reflect a level of performance that exceeded expectations," the board's compensation committee said in the filing. Over the longer term, total stockholder returns "remained positive," growing 16 percent annually on average over the prior three-year period, the committee said.

"Performance shortcomings" last year included an accident in which a satellite under construction was dropped, and software problems with the F/A-22 fighter being developed for the U.S. Air Force, the filing said.

The committee said it rewarded Coffman, chief executive since August 1997, for "the successful implementation of strategic initiatives involving deployment of cash and disciplined growth in the federal information technology area."

In November, Lockheed completed a $658 million swap of business units with Affiliated Computer Services Inc., which expanded Lockheed's role as the biggest supplier of computers and network services for the U.S. government.

Lockheed President and Chief Operating Officer Robert Stevens, who is to succeed Coffman as chief executive, received a 70 percent increase in pay to $6.47 million last year, from $3.82 million the previous year, the filing said.

Stevens, 52, was paid a salary of $901,154, a bonus of $1.74 million, long-term incentive payments of $3.7 million and other compensation of $129,885. He also got 175,000 stock options with a value of $3.11 million when they were granted.

Shares of Lockheed eased 14 cents to $44.34 on the New York Stock Exchange yesterday.

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