Capital Buzz: Lockheed Martin makes changes to its compensation plan
Staff writer Thomas Heath is away, but we still managed to find some bits of news to pass on.
Bethesda-based Lockheed Martin has amended its incentive compensation plan so that the company’s overall success or failure plays a larger role in how employees fare, the company said in a filing with the Securities and Exchange Commission last week.
Under the old plan, an eligible employee was judged by his or her performance — as well as the performance of his or her business segment, whether it be space systems or aeronautics.
The new plan uses a three-factor formula that covers the employee’s performance, the business unit’s performance and the performance of the entire corporation. The performance of Lockheed will be weighted “slightly more” than the other two factors, the filing said.
The plan was also amended to place more emphasis on financial metrics than on strategic and operational metrics.
Lockheed isn’t the only contractor rethinking how it pays employees. Last year, Falls Church-based Computer Sciences Corp. established a new management compensation program, meant to align compensation for top executives with company profitability results.
— Marjorie Censer
Changes at WRIT
In July, management at Washington Real Estate Investment Trust made an unwelcome announcement to shareholders: for the first time in 50 years — 202 consecutive quarters! — the company cut its dividend.
Based in Rockville, WRIT is the oldest publicly traded real estate investment trust in the country, and its focus on the Washington area has served it well. But last week, six months after the dividend cut, more changes are in the works, with chief executive Skip McKenzie announcing that WRIT was mulling the sale of its entire medical office division. The unit amounts to 17 properties, 1.3 million square feet and 15 percent of the firm’s operating income.
McKenzie said the company plans to use the proceeds to invest in high-end office buildings, but he may not be around to do it — McKenzie is retiring from WRIT at the end of the year.
— Jonathan O’Connell
Legal’s ‘new normal’
What keeps you up at night?
If you’re the top lawyer at a corporation, it’s probably ethics, new government regulations and privacy — in that order — at least according to the latest survey of 1,100 chief legal officers conducted by the Association of Corporate Counsel, the Washington-based trade group that represents in-house attorneys.
Nearly 90 percent of the 1,104 lawyers surveyed said making sure their company complies with ethics laws will be a big issue for businesses in the next 12 months; 82 percent said the same about new or changing regulations, and 75 percent said information privacy will be the top preoccupation in the coming year. Those concerns mirror those of C-suite executives, as in-house lawyers are being increasingly tapped to share their thoughts on corporate strategy, not just legal know-how.
“Fulfilling the dual role of business executive and legal advisor is the new normal for chief legal officers today,” ACC President Veta Richardson said in a statement. “In-house counsel are squarely positioned in the hot seat.”
— Catherine Ho
The more the merrier
New Atlantic Ventures and Kinetic Ventures are the latest local venture capital firms to receive money from Maryland to invest in the state’s start-ups.
The state raised $84 million last year as part of its InvestMaryland initiative, which seeks to shore up money for promising young ventures. A third of that money will be invested directly into start-ups by the state, while the balance will be funneled through private firms.
Reston-based New Atlantic Ventures will receive $8 million, which it will then invest in early-stage companies in mobile, e-commerce, security and health care. Kinetic Ventures will receive $5 million. The firm, which has offices in the District, invests in clean technology, information technology and communications.
The deals require New Atlantic Ventures and Kinetic Ventures to repay the principal amount and 80 percent of profits to the state’s general fund if their investments prove successful.
Vienna-based Grotech Ventures was the first firm to receive funds, adding $12 million to its coffers in December. The venture capital firms are chosen by an independent body — the Maryland Venture Fund Authority.
— Steven Overly