Lockheed CEO got $24.1M in 2007

Published: Saturday, March 1, 2008 at 5:54 p.m.
Last Modified: Saturday, March 1, 2008 at 5:54 p.m.

CHEVY CHASE, Md. - The chief executive of defense contractor Lockheed Martin Corp. received compensation last year valued at $24.1 million, almost unchanged from 2006, as he was awarded fewer stock options but saw his pay and perks rise amid record defense spending.

Robert Stevens' compensation compared with the $24.4 million he took home in 2006, according to an analysis of Lockheed's preliminary proxy statement filed Friday.

Lockheed earned $3 billion, or $7.10 per share, in 2007, up 22 percent from 2006 on an earnings per share basis. The Bethesda-based company, the world's largest defense contractor, has benefited along with the rest of the industry from heavy Pentagon spending on the wars in Iraq and Afghanistan and for new weapons programs.

Stevens, 56, who has led Lockheed since 2004, saw most of his compensation grow in 2007. He made $1.6 million in base pay, received a $3.9 million bonus, and had $8.5 million in incentive pay, more than double his 2006 figure. His $1.5 million in perks included nearly $160,000 for home security and $1 million from a discontinued retirement death benefit plan.

But the value of his 2007 stock option awards was $8.5 million, lower than the $14.3 million worth of options he received in 2006. The difference came from 92,000 stock options Stevens was granted in 2006 to encourage him to stay with Lockheed until age 60.

Lockheed's good year meant Stevens' pay was at the high end of what he was eligible to receive, according to company spokesman Tom Jurkowsky.

The compensation "is consistent with what our comparable companies pay their CEOs, taking into account the size and complexity of our company, our performance and his experience," Jurkowsky said.

The Associated Press' calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

Stevens also realized big gains last year by the vesting and exercising of stock options he held. In all, he made nearly $21 million on those transactions. The AP does not include these results in total compensation because they represent personal financial decisions made by executives, not awards from the company.

Lockheed is perhaps best known for its military plane business, which includes the F-16 and F-22 fighters, along with the C-130 line of transport planes. But the company also has a growing information technology division, and makes equipment that includes missiles and rockets.

Despite its recent string of record earnings, the company has warned that its results may soften in the next few years as its aeronautics division switches from making the F-16 to the new F-35 fighter.

The company's shares fell $1.96 to close at $103.20 Friday.

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