Christopher E. Kubasik
L3HARRIS TECHNOLOGIES, INC. /DE/About Christopher E. Kubasik
Christopher E. Kubasik, age 63, is Chair and CEO of L3Harris Technologies (combined role since June 2022; previously Vice Chair and CEO 2021–2022; Vice Chair, President & COO 2019–2021; Chairman/CEO/President of L3 Technologies 2018–2019; prior senior roles at Lockheed Martin and Partner at Ernst & Young). He has served on the L3Harris Board since 2019 (2018 including L3 service) and was elected Chair in 2022; he currently also serves as Chair of the Aerospace Industries Association (since Nov. 2024) . Under his leadership, FY2024 delivered revenue of $21.325B, adjusted EBIT of $3.551B, non-GAAP EPS of $13.10, adjusted free cash flow of $2.319B, and record backlog of $34B, with LHX NeXt savings reaching $800M; 1/3/5-year TSR to FY2024 was 2%/5%/17% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| L3Harris Technologies | Chair & CEO | 2022–present | Portfolio shaping, record backlog, LHX NeXt transformation |
| L3Harris Technologies | Vice Chair & CEO | 2021–2022 | CEO transition, integration leadership |
| L3Harris Technologies | Vice Chair, President & COO | 2019–2021 | Post-merger operations and integration |
| L3 Technologies | Chairman, CEO & President | 2018–2019 | Led company into merger with Harris |
| L3 Technologies | President & COO | 2015–2017 | Operational leadership |
| Lockheed Martin | Vice Chairman, President & COO (among senior roles) | ~13 years | Senior operating, finance, and program leadership in A&D |
| Ernst & Young | Partner | 1996; 17-year career | Audit and advisory foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Aerospace Industries Association | Chair | 2024–present | Industry leadership and policy engagement |
Fixed Compensation
| Component (FY2024) | Amount | Notes |
|---|---|---|
| Base Salary | $1,582,788 | Includes 53 weeks in fiscal 2024 |
| Target Annual Cash Incentive | $3,100,000 | Target value unchanged vs FY2023 |
| Actual Annual Incentive Paid | $4,185,000 | 135% of target, based on FY2024 results |
| “All Other Compensation” | $1,242,144 | RSP $15,846; ERSP credits $301,284; equity dividends $360,788; life insurance $4,875; perqs (incl. aircraft, security/vehicle, planning, exams, match) $559,351 |
Key practices and pay mix:
- CEO FY2024 target pay mix: ~92% at-risk (AIP, PSUs, options, RSUs) .
- Clawback policy adopted Oct 2, 2023 (NYSE 303A.14); broader recoupment rights exist in plans .
- Hedging/pledging prohibited; 10b5-1 plans required for officers/directors .
Performance Compensation
Annual Incentive Plan (FY2024 structure and outcomes)
| Metric | Weight | Target | Actual/Result | Payout % | Notes |
|---|---|---|---|---|---|
| Adjusted Free Cash Flow | 50% | $2,232M | $2,319M | 126% | Company-level metric |
| Adjusted EBIT | 20% | $3,457M | $3,551M | 118% | Company-level metric |
| Revenue | 10% | $21,217M | $21,325M | 105% | Company-level metric |
| Adjusted Segment Operating Margin | 10% | 15.0% | 15.4% | 180% | Company-level metric |
| LHX NeXt Cost Savings | 10% | $400M | $800M | 200% | Company-level metric |
| Weighted payout (L3Harris) | — | — | — | 135% | Applied 100% for CEO |
Long-Term Incentives (FY2024 grants; annual mix: 50% PSUs, 25% options, 25% RSUs)
| Grant Type | Grant Date | Target/Units | Terms | Valuation/Strike |
|---|---|---|---|---|
| Performance Share Units (2024–2026 cycle) | 2/23/2024 | 31,476 target (62,952 max) | Metrics: 33% 3-yr cumulative EPS; 33% 3-yr avg ROIC; 33% Relative TSR (50% S&P 500, 50% A&D peer group); ±25% modifier on 2026 adj. segment op margin; cap 200%; no dividends during performance | |
| Stock Options | 2/23/2024 | 65,841 | 10-yr term; vest 1/3 each on 1st/2nd/3rd anniversaries; no repricing without shareholder approval | $214.45 exercise price |
| Restricted Stock Units | 2/23/2024 | 15,738 | 3-year cliff vesting; dividends accrue/pay on vest |
Prior PSU cycle outcome:
- 2022–2024 PSU cycle paid at 107.1% of target based on ROIC and cumulative EPS with S&P 500 TSR modifier .
Equity Ownership & Alignment
| Ownership/Equity (as of Feb 28, 2025 unless noted) | Amount |
|---|---|
| Shares owned outright | 183,390 |
| Exercisable options (within 60 days) | 629,828 |
| Total beneficial ownership | 813,218 (<1% of outstanding) |
| Unvested RSUs (market value) | 44,111 ($9.252M) as of 1/3/2025 |
| Unearned PSUs (at max; market value) | 127,192 ($26.679M) as of 1/3/2025 |
| Options outstanding (exercisable / unexercisable) | 569,614 / 124,634 |
| 2024 option exercises / value realized | 143,799 / $18,131,387 |
| 2024 stock vested (shares / value) | 41,492 / $8,733,032 |
| Pledging/Hedging | Prohibited; none pledged in FY2024; 10b5-1 plans required |
| Officer ownership guidelines | In place; CEO met guidelines as of Feb 28, 2025 |
Upcoming vesting schedule (selected):
- Options: 2/23/2025 21,947; 2/23/2026 21,947; 2/23/2027 21,947; plus other tranches per 2022/2023 awards .
- RSUs: 2/23/2027 (2024 grant); 2/24/2026 (2023 grant); 2/25/2025 (2022 grant vested) .
Deferred Compensation
- ERSP (non-qualified): 2024 executive contributions $452,695; company credits $301,284; earnings $527,975; aggregate balance $3,698,174 .
Employment Terms
- CEO Letter Agreement (2/23/2024; through 3/31/2028): If terminated without cause or resigns for good reason (outside change in control), cash severance equals 2x base salary + 2x target bonus; pro-rata AIP based on actual results; 2 years of medical/dental/vision; pro-rata vesting of time-based equity granted on/after 2/23/2024; pro-rata PSUs vest post-period based on actual results (subject to release/409A timing). CEO relocation benefits extended—reimburse up to $1,250,000 (with gross-up) up to six years post-merger .
- Change-in-Control (double-trigger CIC plan): CEO receives 3x base + target bonus, pro-rata target bonus, and benefits continuation for 3 years upon qualifying termination within 2 years post-CIC; no excise tax gross-up; “best net” approach applies .
- Illustrative potential payments (as of 1/3/2025):
- Involuntary without cause: $22.107M total (severance $9.300M; RSU acceleration $5.766M; PSU pro-rata $6.975M; benefits/other) .
- CIC qualifying termination: $37.451M total (severance $13.950M; RSU $9.642M; PSU $13.781M; benefits/other) .
- Clawback: NYSE-compliant clawback adopted Oct 2, 2023; additional recovery provisions in plans .
Board Governance
- Roles: Combined Chair & CEO (Kubasik); robust Lead Independent Director (Robert B. Millard) with defined authorities; all committees are 100% independent; executive sessions at every regularly scheduled Board and committee meeting .
- Committee memberships: Kubasik (employee director) serves on no committees .
- Independence: All directors are independent except the CEO .
- Attendance: 2024 Board meeting attendance 100%; committee meetings 99% .
- Director pay (context): Non-employee directors receive $150,000 cash + $190,000 equity retainer; chair/committee retainers as disclosed; employee directors do not receive director fees .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay support ≥92% at 2024 AGM and each year since the merger; in 2024 LTI design added Relative TSR as a core PSU metric and segment operating margin to AIP, reflecting investor input .
- Engagement: 375+ shareholder engagements; 110+ with CEO/CFO; multi-functional participation (IR, Legal/GC, Sustainability, HR/Rewards) .
Compensation Peer Group (Benchmarking)
- Peer set used for FY2024/2025 includes Eaton, Emerson, General Dynamics, Honeywell, Illinois Tool Works, Jacobs, Leidos, Lockheed Martin, Northrop Grumman, Parker Hannifin, RTX, Rockwell Automation, Motorola Solutions, Textron; target total direct compensation generally set near median .
Risk Indicators & Red Flags
- Dual role (Chair & CEO) mitigated by empowered Lead Independent Director and independent committees .
- No option repricing/backdating; minimum 12-month vesting; mandatory 10b5‑1 usage; hedging and pledging prohibited .
- Clawback in place; no excise tax gross-ups; “best net” approach under CIC plan .
- Personal aircraft use permitted for security/productivity (below limits in FY2024); relocation gross‑up allowances extended (potential optics risk) .
Performance & Track Record
| Metric | FY2023 | FY2024 |
|---|---|---|
| Revenue ($M) | 19,419 | 21,325 |
| Net Income ($M) | 1,198 | 1,512 |
| Adjusted EBIT ($M) | 3,260 | 3,551 |
| Operating Margin (%) | 7.3% | 9.0% |
| Adjusted Segment Op Margin (%) | 14.8% | 15.4% |
| GAAP EPS ($) | 6.44 | 7.87 |
| Non‑GAAP EPS ($) | 12.36 | 13.10 |
| Cash from Ops ($M) | 2,096 | 2,559 |
| Adjusted FCF ($M) | 2,029 | 2,319 |
| TSR (1Y/3Y/5Y cumulative) | — | 2% / 5% / 17% |
Strategic actions: 13 divestitures ($2B non-core revenue), two acquisitions ($2.7B revenue), 40+ minority tech investments; LHX NeXt delivered $800M FY2024 cost savings toward 2026 framework .
Board Service History & Dual‑Role Implications
- Board service: Director since 2019 (2018 including L3); currently Chair & CEO .
- Committee roles: None (employee director) .
- Independence: Not independent by virtue of executive role; Lead Independent Director provides counterbalance with defined responsibilities (agenda approval, executive sessions, CEO evaluation, succession oversight, shareholder communications) .
- Attendance: Board 100% in 2024; executive sessions each meeting .
- Director pay: Employee directors receive no separate director compensation .
Investment Implications
- Strong pay‑for‑performance alignment: FY2024 AIP keyed 50% to adjusted FCF and 30% to profitability (EBIT + segment margins) with 10% strategic savings and 10% revenue—delivering a 135% payout on broad‑based over‑achievement; LTI embeds multi‑year EPS, ROIC and Relative TSR with a margin modifier, capping windfalls at 200% .
- Alignment and retention: CEO owns 813K+ shares (including in‑the‑money/exercisable options) with meaningful unvested RSUs and PSUs; hedging/pledging banned; ownership guidelines met—supportive of long‑term alignment while near‑term selling pressure could arise around scheduled 2025–2027 vesting/option events .
- Downside protection and optics: Severance is moderate outside CIC (2x salary+target bonus) and market‑standard inside CIC (3x) with double trigger and no excise gross‑up; the relocation gross‑up extension and personal aircraft/security perqs are manageable optics risks given defense‑contractor security posture .
- Governance: Combined Chair/CEO role is mitigated by a strong Lead Independent Director structure; sustained >92% Say‑on‑Pay support and active investor engagement signal shareholder alignment on governance and compensation design .