Lockheed Martin paid its chief executive Marillyn Hewson $25.2 million in 2013, more than double what she received the previous year, according to a recent regulatory filing by the Bethesda-based defense giant.
Falls Church-based General Dynamics chief executive Phebe N. Novakovic saw an even steeper spike in her pay, which almost tripled in 2013 to more than $19 million, according to the company’s regulatory filing.
The spikes in pay represent a vote of confidence in two new executives who took over during a turbulent time of a government shutdown and spending cuts. Both executives preserved profits by cutting jobs and adjusting strategies.
The raises likely make Hewson and Novakovic two of the top paid female executives in the country, according to Aaron Boyd, director of governance research at compensation bench-marking firm Equilar.
Hewson’s base salary as chief executive rose to about $1.3 million, up from $738,462 in 2012 when she served as the company’s chief operating officer. Her stock awards grew about 10 times to $8.1 million since 2012, when her entire compensation totaled about $11.4 million. Though she did not receive a bonus or option awards in 2013, she got incentive-based pay that reached almost $6 million, and the change in her pension plan was valued at about $9.4 million.
According to the company’s proxy statement, the compensation committee found that Hewson significantly exceeded most of her commitments, and “executed a seamless and effective transition of the executive team” and “strengthened customer relationships and restructured organizations to position for growth.” Her individual performance — as well as the company’s overall performance across business segments — contributed to the pay increase, the company said.
In November 2012, Hewson was asked to step in as chief executive, effective January 2013, after CEO-to-be Christopher Kubasik was asked to resign after the board discovered he had had a close personal relationship with a subordinate employee.
Robert Stevens, Lockheed’s executive chairman and strategic adviser to the chief executive, saw his pay package fall to $14.9 million from about $27.5 million in 2012. Stevens served as Lockheed’s chief executive between 2004 and 2012.
At General Dynamics, Novakovic’s base salary jumped to $1.5 million in 2013, up from about $944,166 in 2012. Her bonus doubled to $4 million, from $2 million the previous year; her stock awards and option awards roughly tripled to about $6.5 million each.
Novakovic’s compensation is tied to company performance, according to the company’s proxy statement.
Upon her appointment, Novakovic told shareholders she would focus on expanding margins, generating cash and securing a return on invested capital, according to the compensation committee. “With no acquisitions in 2013, a significant level of free cash flow was returned to shareholders in the form of dividends and share repurchases ... the company achieved all [three goals] with a direct, positive result on shareholder value,” the statement said.
Novakovic previously served as president and chief operating officer. She took over when former chairman and chief executive Jay Johnson retired. Her larger equity grants, salary, and bonus are likely tied to her speedy upward trajectory in the company over the past three years, Boyd said.
Lockheed chief executive Marillyn Hewson’s total pay in 2013, more than double the $11.4 million she received in 2012.
Hewson’s salary: $1.3M.
Non-equity incentive plan: $5.9M.
Stock awards: $8.1M.
Change in pension value: $9.4M.
All other compensation: $238,150.
General Dynamics chief executive Phebe Novakovic’s total pay in 2013,
almost triple the $6.8 million she received in 2012.
Stock awards: $6.5M.
Option awards: $6.5M.
Change in pension value: $263,963.
All other compensation: $309,146.