Danny Deep
GENERAL DYNAMICSAbout Danny Deep
Danny Deep is Executive Vice President, Global Operations at General Dynamics (promoted June 4, 2025), after serving as Executive Vice President, Combat Systems from April 15, 2024; he previously led General Dynamics Land Systems . Under his leadership, the Combat Systems segment in 2024 delivered orders of $11.9B (book-to-bill 1.3x), revenue of $9.0B (+8.8% YoY), operating earnings of $1.28B (+11.2% YoY), operating margin of 14.2% (+30 bps YoY), and earned a 195% strategic/operational score, reflecting strong execution and capacity expansion in artillery production . Company pay program received 95.7% say‑on‑pay support in 2024, and core performance metrics remain unchanged, emphasizing EPS, FCF, operating margin, ROIC and rTSR .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| General Dynamics | EVP, Global Operations | Jun 2025 – present | Promoted with new compensation framework (base $1.2M; 130% target AIP), signaling expanded operating remit . |
| General Dynamics | EVP, Combat Systems | Apr 2024 – Jun 2025 | Orders $11.9B (1.3x B/B), revenue $9.0B (+8.8%), operating earnings $1.28B (+11.2%), margin 14.2% (+30 bps); artillery capacity ramp to 36k rounds/month; 195% strategic/operational score . |
| General Dynamics Land Systems | President | Through Apr 2024 (successor named) | “Capable, tested leader” with deep operations and land forces program background; succeeded by David Paddock effective Apr 1, 2024 . |
Fixed Compensation
| Year | Role | Base salary ($) | Target AIP (% of base) | Notes |
|---|---|---|---|---|
| 2025 | EVP, Global Operations | 1,200,000 | 130% | New compensation terms set upon promotion (June 4, 2025) . |
| 2024 | EVP, Combat Systems | 830,000 | 110% | Appointed April 2024 with $830k salary; AIP structure and weights unchanged vs prior year . |
Performance Compensation
Annual Incentive Plan (AIP)
| Metric | Weighting | Target setting approach | 2024 outcome for Deep |
|---|---|---|---|
| Diluted EPS | 25% | Target ranges used to balance payout vs volatility; 2024 EPS target set 18% higher vs 2023 . | Overall achievement 109.1% of target; payout $996,000 on $913,000 target . |
| Free Cash Flow | 25% | FCF target consistent with 2023 . | Included in overall 109.1% result . |
| Operating Margin | 20% | Operating margin target set 7% higher vs 2023 . | Included in overall 109.1% result . |
| Strategic & Operational | 30% | Committee assessment of segment execution, leadership, capital allocation, human capital, ESG, etc. . | Strategic/operational score 195% of target for Deep . |
| 2024 AIP details | Base ($) | Target % | Target ($) | Overall achievement | Payout ($) |
|---|---|---|---|---|---|
| Danny Deep | 830,000 | 110% | 913,000 | 109.1% | 996,000 |
Long‑Term Incentive (LTI) Structure and 2024 Grants
| Instrument | 2024 LTI allocation | Grant mechanics | Vesting | 2024 grant specifics (Deep) |
|---|---|---|---|---|
| Performance Stock Units (PSUs) | 50% | Target units set off grant‑date avg price; metric = 3‑yr avg ROIC with rTSR modifier . | 3‑year cliff; payout 0–200% based on ROIC ± rTSR . | Target 6,740 PSUs (2024‑2026 cycle) . |
| Stock Options | 30% | Exercise price = $274.51 (avg high/low at grant) . | 50% vests at 2 years; 50% at 3 years; 10‑yr term . | 18,370 options @ $274.51 granted Mar 6, 2024 . |
| Restricted Stock | 20% | Shares valued at grant‑date avg price . | 3‑year cliff vesting . | 2,695 restricted shares (grant 3/6/2024; vest 3/6/2027) . |
| 2024 LTI grant value ($) | PSU grant‑date fair value ($) | Option grant‑date fair value ($) |
|---|---|---|
| 3,700,000 (committee‑set LTI award) | 2,811,411 (PSUs + restricted) | 1,109,732 |
PSU performance framework: 2024–2026 ROIC target set at 13.2% (60 bps above prior cycle), with rTSR vs S&P 500 adjusting payout by ±33%; 2022–2024 PSUs paid at 136% (ROIC 102% of target; rTSR at 81st percentile) .
Equity Ownership & Alignment
Beneficial Ownership (as of March 12, 2025)
| Shares owned | Options exercisable within 60 days | Total common stock | % of class |
|---|---|---|---|
| 30,166 | 113,445 | 143,611 | <1% |
Outstanding and Recently Granted Equity
| Category | Detail |
|---|---|
| 2024 option grant | 18,370 options @ $274.51; 50% vests 3/6/2026; 50% vests 3/6/2027; exp. 3/5/2034 . |
| 2024 restricted stock | 2,695 shares; cliff‑vest on 3/6/2027 . |
| Unvested/unearthed awards at 12/31/2024 | 7,360 restricted shares; 11,724 PSUs unearned; multiple option tranches outstanding (see table) . |
| 2024 realizations | Exercised 8,360 options ($1,136,876 value realized); 6,175 shares vested ($1,693,246) . |
Ownership Policies and Alignment
- Stock ownership guidelines: CEO 15x salary; other officers 8x–10x salary; officers cannot sell shares until guidelines are met; net shares from vesting/exercise must be retained until in compliance .
- Anti‑hedging and anti‑pledging: Hedging and pledging of company securities are prohibited for directors and executive officers .
- Clawback: NYSE/SEC‑compliant recoupment policy for restatements; Committee did not implement clawback in 2024 .
Employment Terms
Current Role and AIP Terms
| Effective date | Role | Base salary ($) | Target AIP |
|---|---|---|---|
| June 4, 2025 | EVP, Global Operations | 1,200,000 | 130% of base |
Potential Payments Upon Termination/Change‑in‑Control (as disclosed)
| Scenario | Annual incentive ($) | Severance ($) | Benefits/other ($) | Equity acceleration ($) | Total ($) |
|---|---|---|---|---|---|
| Termination without cause or retirement | — | — | — | Options: 1,278,323; RS: 1,939,286; PSUs: 1,078,728 | 4,296,337 |
| Death | — | — | Life insurance: 1,660,000 | — | 1,660,000 |
| Change in control with qualifying termination (double‑trigger) | 810,000 | 4,903,600 | Benefits: 48,266; Outplacement: 10,000; Financial counseling: 30,000; Supplemental retirement: 90,479 | PSUs: 1,440,500 | 7,332,845 |
Additional terms and governance:
- Double‑trigger equity and severance vesting upon CIC and qualifying termination; no tax gross‑up; CIC agreements reviewed against peer practice .
- Historical formula: for NEOs other than Gulfstream President, severance equals 2.99x salary plus annual incentive under CIC agreements (illustrative prior‑year footnote) .
- 2024 policy: Shareholder approval required for any new/modified executive cash severance arrangements >2.99x salary + annual incentive .
Retirement and Pension
- Participates in Canadian Salaried Plan (defined benefit) with earnings/service frozen as of Jan 10, 2022; participates in CSERP and Excess Plan (nonqualified), both frozen as of Jan 10, 2022 .
Perquisites (2024)
| Perquisite | Amount ($) | Notes |
|---|---|---|
| Security | 178,981 | Related to new EVP Combat Systems role . |
| Relocation | 109,860 | Related to new role . |
| Retirement plan contributions | 33,800 | 401(k)/Supplemental Savings Plan allocations . |
| Term life insurance | 5,769 | |
| Tax reimbursement (HQ dining program) | 1,579 | . |
Compensation Structure Analysis (2024 snapshot)
| Component | Amount ($) | Mix notes |
|---|---|---|
| Salary | 786,250 | Partial‑year in role . |
| Stock awards (PSUs/RS) | 2,811,411 | LTI weighted to PSUs (50%) with ROIC+rTSR . |
| Option awards | 1,109,732 | Options 30% of LTI; 2‑/3‑year vest; 10‑yr term . |
| AIP | 996,000 | 109.1% of target . |
| All other comp | 354,641 | Security/relocation etc. . |
| Total | 6,058,033 | High at‑risk equity exposure . |
Program stability and rigor:
- No changes to AIP/LTI metrics or weightings for 2024; targets were at or above 2023 actuals (EPS +18%, OM +7%, FCF flat) .
- PSU ROIC target for 2024–2026 raised to 13.2%; rTSR vs S&P 500 governs 0–200% payouts; 2022–2024 PSU paid at 136% (81st percentile TSR) .
Investment Implications
- Alignment and retention: High equity weighting (PSUs/options/RS) and stringent ownership rules (8x–10x salary) create strong long‑term alignment and reduce near‑term selling flexibility; anti‑hedging/pledging mitigates misalignment risk .
- Execution track record: Combat Systems outperformance on orders, revenue, and operating earnings, coupled with capacity expansion in munitions, indicates effective operational leadership; 195% strategic/operational score supports AIP outcome .
- Upcoming vesting/supply: 2024 RS (2,695 sh) cliff‑vests 3/6/2027; 2024 options (18,370) become exercisable in 2026/2027; multiple prior‑year tranches outstanding provide flexibility but are subject to holding requirements until guideline compliance .
- Change‑in‑control economics: Double‑trigger framework with severance and equity acceleration yields ~$7.33M total value for Mr. Deep based on tabled assumptions; historical 2.99x cap and 2024 policy requiring shareholder approval curb excessive severance risk .
- Role expansion: June 2025 promotion (base $1.2M; 130% target AIP) elevates influence across operations; compensation leverage increases with broader remit, potentially tying outcomes more tightly to enterprise performance .