James Taiclet
LOCKHEED MARTINAbout James Taiclet
James D. Taiclet (age 64) is Chairman, President & CEO of Lockheed Martin; he became CEO in June 2020 and Chairman in March 2021, and has served as a director since 2018 . He previously served as Chairman/CEO of American Tower (2004–2020), President of Honeywell Aerospace Services, and Vice President at Pratt & Whitney; he is a former U.S. Air Force officer and pilot . Under his leadership, 2024 results included sales of $71.0B, segment operating profit of $6.1B, free cash flow of $5.3B, and a record $176.0B backlog; LMT returned $6.8B to shareholders (buybacks/dividends) . Over 2020–2024, a $100 investment in LMT grew to $142.73 vs. $136.24 for the S&P Aerospace & Defense Index; “compensation actually paid” to the CEO tracked TSR over time .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Lockheed Martin | Chairman; President & CEO | Chairman since Mar 2021; CEO since Jun 2020 | Leads 21st Century Security strategy; capital deployment and execution oversight . |
| American Tower | Chairman, President & CEO; Executive Chairman | 2004–2020 (Exec Chair Mar–May 2020) | Led global tower expansion and capital allocation at scale . |
| Honeywell Aerospace Services | President | Prior to 2004 | P&L leadership in aerospace services . |
| Pratt & Whitney (then-UTC) | Vice President, Engine Services | Prior to 2004 | Operational/aftermarket leadership in propulsion . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Tower Corporation | Director (and executive) | 2004–2020 | No current public company boards . |
Fixed Compensation
| Metric (CEO) | 2024 | Notes |
|---|---|---|
| Base salary ($) | 1,751,000 | Unchanged since 2021 |
| Target annual incentive (% of salary) | 190% | $3,326,900 target |
| Actual annual incentive payout ($) | 2,960,900 | 89% overall payout factor; see details below |
Multi-year summary compensation (CEO):
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 1,751,000 | 1,751,000 | 1,751,000 |
| Stock awards (RSUs+PSUs grant-date fair value) | 13,413,894 | 13,008,681 | 13,046,594 |
| Non-equity incentive plan comp (Annual + LTIP) | 7,989,200 | 6,655,900 | 6,566,900 |
| All other compensation | 1,656,451 | 1,398,194 | 2,389,420 |
| Total | 24,810,545 | 22,813,775 | 23,753,914 |
Performance Compensation
2024 Annual Incentive design and results:
- Structure: 70% financial (Sales 20%, Segment Operating Profit 40%, Free Cash Flow 40%); 30% strategic/operational. Payout range 0–200% of target; CEO plan capped by 0.3% of Cash from Operations .
- Results: Financial factor 67% (Sales above target; SOP below threshold → 0%; FCF ~96%); Strategic & Operational factor 140%; overall payout 89% .
| 2024 Annual Incentive Metric | Weight | Target | Actual | Payout | Weighted payout |
|---|---|---|---|---|---|
| Sales ($M) | 20% | 69,250 | 71,043 | 143% | 29% |
| Segment Operating Profit ($M) | 40% | 7,340 | 6,851 | 0% | 0% |
| Free Cash Flow ($M) | 40% | 6,300 | 6,253 | 96% | 38% |
| Strategic & Operational | 30% | — | — | 140% | 42% |
| Overall payout factor | — | — | — | — | 89% |
Long-term incentives (LTI) and 2022–2024 cycle outcomes:
- Mix: 50% PSUs (stock), 30% RSUs (stock), 20% LTIP (cash); PSUs/LTIP metrics: Relative TSR 50%, ROIC 25%, Free Cash Flow 25% with 0–200% payout; TSR capped at 100% if absolute TSR negative; RSUs cliff-vest at 3 years .
- 2022–2024 PSU/LTIP payout factor: 120.2% (TSR 164.3% payout; FCF 101.5%; ROIC 50.7%) .
- CEO distributions on 2022–2024: LTIP payout $3.606M; PSUs earned 23,182 shares on 19,286 target .
| 2022–2024 LTI Metric | Weight | Calculated payout | Weighted payout |
|---|---|---|---|
| Relative TSR | 50% | 164.3% | 82.1% |
| Free Cash Flow | 25% | 101.5% | 25.4% |
| ROIC | 25% | 50.7% | 12.7% |
| Overall payout factor | — | — | 120.2% |
Additional vesting detail (liquidity timing signal):
- Stock vested during 2024 (CEO): 30,321 shares; value realized $13,071,990 (Feb 25, 2024 vest at $431.12; also tax-withholding RSU accelerations for others) .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial ownership (CEO) | 68,070 common shares; 33,774 stock units; total 101,844; no shares pledged . |
| Ownership as % of outstanding | Each NEO/director owns <1% of shares outstanding . |
| Stock ownership guideline | CEO required at least 6x base salary; all NEOs exceeded requirements as of 12/31/2024 . |
| Hedging/pledging | Prohibited for all directors/officers/employees (anti-hedging/anti-pledging policy) . |
| Options | Company has not granted employee options since 2012; no option repricing/cash-out/backdating . |
Employment Terms
- Employment agreements: None for NEOs (including CEO) .
- Executive Severance Plan (ESP): Lump-sum basic severance plus supplemental payment of salary + one-year target bonus; CEO multiple is 2.99x (others 1.0x). Includes lump sum for one year of medical/dental/vision, outplacement, relocation; requires release and agreement with post-employment covenants .
- Change-in-control (CIC): Double-trigger for LTI acceleration; if successor does not assume awards, immediate vesting at target; acceleration of non-qualified pension/deferred comp payment schedules .
- Restrictive covenants: Two-year post-employment non-compete and non-solicitation to receive supplemental severance/favorable vesting on layoff .
- Clawbacks: Mandatory SEC/NYSE-compliant clawback for restatements; supplemental clawback for misconduct, severe reputational/financial harm, or misappropriation; applies to variable pay .
Potential payments (CEO; assuming event on 12/31/2024):
| Event | LTIP ($) | RSUs ($) | PSUs ($) | Executive Severance ($) | Total ($) |
|---|---|---|---|---|---|
| Change in Control (double-trigger) | 9,500,000 | 16,911,218 | 28,188,076 | — | 54,599,294 |
| Death/Disability | — | 16,911,218 | — | — | 16,911,218 |
| Layoff (no cause) | — | — | — | 15,273,756 | 15,273,756 |
| Divestiture | — | 10,542,693 | — | — | 10,542,693 |
Deferred compensation (CEO):
- 2024 contributions/earnings and aggregate balances: NQSSP exec contributions $397,240; company contributions (NQSSP+NCAP) $150,566; aggregate balance $2,498,433 .
Board Governance (Taiclet as Director)
- Role: Combined Chairman & CEO; Board annually reviews leadership structure and relies on strong Independent Lead Director model; all committees are fully independent .
- Independence: Taiclet is not independent; all other nominees are independent .
- Lead Independent Director: Thomas J. Falk—significant authority (agenda approval; executive sessions; succession oversight; investor engagement; ex officio on all committees) .
- Attendance: 100% Board and committee attendance in 2024; independent directors met in executive session at every board meeting in 2024 .
- Director compensation: Employee director (CEO) receives no separate board fees .
- Stockholder rights: Annual elections; majority voting; proxy access; right to call special meetings; no poison pill .
Committee landscape (oversight of CEO pay and risk):
- Management Development & Compensation Committee: Independent; sets CEO goals/compensation; administers clawback policy .
- Independent compensation consulting and benchmarking: Executive pay targets set around 50th percentile of comparator group; best-practice features (double-trigger CIC, robust ownership, no hedging/pledging) .
- Say-on-Pay support: Average >93% approval across last five annual meetings; 2020 IPAP equity plan approved ~96% .
Performance & Track Record
- 2024 performance highlights: Sales $71.0B; segment operating profit $6.1B; FCF $5.3B; record $176.0B backlog; dividend increased for 22 consecutive years .
- Annual incentive reflected mixed operating performance (SOP losses on certain programs drove 0% SOP payout), demonstrating downside sensitivity (overall 89% payout) .
- Long-term alignment: 2022–2024 LTI paid at 120.2% driven by strong relative TSR and FCF; ROIC underperformed target .
- Shareholder returns: $100 → $142.73 (company) vs $136.24 (index) over 2020–2024; CAP correlated with TSR as equity dominates CEO pay mix .
Compensation Structure Analysis
- Mix shifts/structure: CEO target LTI $16.5M in 2024 (50% PSUs/30% RSUs/20% LTIP); no options; equity-only LTI alongside cash LTIP reduces option-related risk; RSUs three-year cliff supports retention .
- Metric rigor and adjustments: Annual plan financial targets align to public outlook; permitted adjustments to SOP/FCF specified and disclosed; LTIs include guardrails (TSR cap if negative; value caps) .
- Risk controls: Mandatory and supplemental clawbacks; anti-hedging/pledging; double-trigger CIC; no gross-ups; capped incentives .
Multi-year Revenue and EBITDA context
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenues ($) | 65,398,000,000* | 67,044,000,000* | 65,984,000,000* | 67,571,000,000* | 71,043,000,000 |
| EBITDA ($) | 10,001,000,000* | 9,010,000,000* | 8,620,000,000* | 10,225,000,000* | 8,394,000,000* |
| Values marked with * retrieved from S&P Global. |
Say-on-Pay & Shareholder Feedback
- Program design: Market-based (50th percentile) targeting; high variable/equity orientation; multi-metric with caps; robust stock ownership .
- Investor sentiment: Average >93% say-on-pay support over last five years; ongoing governance outreach; strong support for equity plan in 2020 (~96%) .
Related Party Transactions and Red Flags
- Related party transactions: None noted for the CEO; the company transparently discloses related person transactions; Board determined only specified items met its policy thresholds (not involving CEO) .
- Red flags mitigated: No hedging/pledging; no option repricing; no CIC gross-ups; independent committees; mandatory/separate clawbacks; strong LID structure .
Board Service History, Committees, and Dual-role Implications
- Board service: Director since 2018; Chairman since 2021; no committee memberships (employee director) .
- Dual-role implications: Combined Chair/CEO offset by empowered independent Lead Director, fully independent committees, frequent executive sessions, and 100% attendance .
- Independence: Not independent; nine of ten nominees independent .
- Director compensation: No separate pay for employee directors .
Investment Implications
- Pay-for-performance alignment is credible: 2024 annual incentive paid below target at 89% after program-driven SOP shortfall, while 3-year LTI at 120.2% was driven by TSR/FCF, indicating balanced performance sensitivity across cycles .
- Retention risk appears low: Three-year RSU cliffs, PSU/LTIP structures, and CEO ownership above 6x-salary guideline support retention; hedging/pledging bans limit misalignment .
- Event risk manageable: ESP limits cash severance; CIC requires double-trigger for LTI; quantified CIC exposure (~$54.6M) is primarily equity-driven (alignment) rather than cash gross-ups .
- Governance comfort: Combined Chair/CEO mitigated by a strong LID and fully independent committees with robust oversight and engagement record; 100% attendance and consistent say-on-pay support (>93%) further reduce governance discount risk .
S&P Global disclaimer: Values marked with * in the Multi-year Revenue and EBITDA context table were retrieved from S&P Global.