Gary Roughead
NORTHROP GRUMMAN CORP /DE/About Gary Roughead
Admiral Gary Roughead (U.S. Navy, Ret.) is an independent director of Northrop Grumman, age 73, serving on the Board since February 2012. He is the former 29th Chief of Naval Operations (CNO), where he led ship and aircraft procurement acceleration, expanded ballistic missile defense and unmanned systems capabilities, and restructured Navy cyber operations; he is also the Robert and Marion Oster Distinguished Military Fellow at the Hoover Institution . He serves on Northrop Grumman’s Compensation & Human Capital Committee and chairs the Policy Committee .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| United States Navy | 29th Chief of Naval Operations (senior military position in the Navy) | Four years ending Sept 2011 | Stabilized/accelerated ship and aircraft procurement; built BMD/unmanned capacity; restructured for cyber operations |
| United States Navy | Multiple operational commands including commanding both Atlantic and Pacific Fleets | N/A | Senior operational leadership across major fleets |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Maersk Line, Limited | Director | N/A | Maritime logistics; private company board |
| Dodge & Cox Funds | Trustee | N/A | Mutual fund complex trustee |
| Johns Hopkins University | Trustee | N/A | University trustee |
| Johns Hopkins University Applied Physics Laboratory | Board of Managers | N/A | Defense R&D non-profit lab governance |
| Fincantieri Marinette Marine Corporation | Former Chairman | N/A | Former chair; U.S. Navy shipbuilder affiliate |
Board Governance
- Independence: The Board affirmed all directors other than the CEO are independent; this includes Admiral Roughead .
- Committees: Policy Committee (Chair; 4 meetings in 2024) and Compensation & Human Capital Committee (member; 7 meetings in 2024) .
- Attendance: In 2024, the Board met 9 times; each director attended ≥75% of Board/committee meetings; average attendance exceeded 97% .
- Lead independent director: Madeleine A. Kleiner; robust LID responsibilities, including executive session leadership and agenda-setting authority .
- Security clearance requirement: Directors must obtain a Top Secret clearance within 12 months of election and tender resignation if they fail to obtain/maintain clearance .
- Overboarding policy: Independent directors limited to three other public company boards absent consent; Board annually reviews outside commitments .
- Governance controls: Strong committee charters; enterprise risk oversight framework assigns cybersecurity to Audit & Risk, human capital and pay risk to Compensation & HC, and geopolitical/sustainability/political contributions oversight to Policy (chaired by Roughead) .
Fixed Compensation (Director)
| Component (2024) | Amount | Detail/Timing |
|---|---|---|
| Cash fees (retainer + committee/Chair retainers) | $168,138 | Fees earned/paid in cash |
| Equity (Deferred Stock Units – DSUs) | $182,500 | Annual grant (Automatic Stock Units) under the 2024 LTIP; 2024 grant on July 31, 2024 vests May 15, 2025 |
| All other compensation | $21,176 | Includes dividend equivalent DSUs and $10,000 matching gift under education program |
| Total (2024) | $371,814 | Sum of cash, equity grant-date value, other |
Fee structure shift in 2024 (Board-approved May 15, 2024): annual cash retainer increased from $140,000 to $145,000; annual equity grant from $175,000 to $182,500; Chair/committee retainers unchanged; Anti-hedging/pledging policy applies to directors .
Performance Compensation
- Director pay at Northrop Grumman is not formulaically tied to financial or ESG performance metrics; equity is delivered as DSUs with time-based vesting to align with shareholders .
Other Directorships & Interlocks
- Current public company directorships disclosed: none for Roughead; external roles are primarily private company, fund trustee, academic/non-profit boards .
- Compensation Committee interlocks: The company reports no interlocks or related person transactions involving Compensation & Human Capital Committee members in 2024 (Roughead served on the committee) .
Expertise & Qualifications
- National security, information warfare, cyber operations, and global security expertise; senior leadership across Pacific, Europe, Middle East; talent development/management experience .
- Board skill matrix highlights senior leadership, corporate governance, risk oversight, international experience, and cybersecurity/technology among overall Board competencies .
Equity Ownership
| As of March 21, 2025 | Shares Beneficially Owned | Share Equivalents (DSUs) | Total | Pledged? |
|---|---|---|---|---|
| Gary Roughead | — | 11,286 | 11,286 | None (pledging prohibited) |
| Notes | None exceed 1% ownership; directors subject to 5x retainer ownership guideline; DSUs count toward guideline | DSU total includes Automatic and Elective Stock Units; Roughead held 11,237 Automatic Stock Units at 12/31/2024 | — | Company prohibits hedging and pledging for directors; none of directors’ shares are pledged |
Citations: Beneficial ownership and DSUs: . Ownership guideline and anti-hedge/pledge policy: .
Compensation Structure Analysis (Signals)
- Mix and alignment: Cash vs equity split (~45% cash / ~55% equity by grant-date value) supports alignment via DSUs and mandatory ownership guidelines .
- 2024 changes: Moderate upward adjustments to cash retainer (+$5,000) and equity grant (+$7,500) align to ~50th percentile of target industry peer group for directors, per annual benchmarking; no use of stock options .
- No risk enhancers observed: No discretionary bonuses for directors; anti-hedging/pledging; no tax gross-ups specific to directors beyond standard matching gifts program; equity vests time-based .
Related-Party & Conflicts Review
- Independence review noted Roughead served on boards/trusteeships of organizations to which Northrop Grumman made routine contributions; amounts were below NYSE and company thresholds; Board affirmed independence .
- Related person transaction policy requires review/approval for transactions >$120,000 with directors/officers; 2024 disclosure identified employment of an executive spouse and relationships with 5% holders (State Street, BlackRock) in fiduciary capacities, not involving directors; no Roughead-related transactions disclosed .
- Policy oversight breadth as Policy Committee Chair includes sustainability, human rights, health & safety, political contributions, and geopolitical risk—areas with elevated stakeholder scrutiny—providing direct governance touchpoints but no disclosed conflicts .
Say‑on‑Pay & Shareholder Feedback (Context for Board Oversight)
- High support: 3‑year average say‑on‑pay support of 96% and 94% approval at 2024 Annual Meeting indicate strong investor alignment with compensation frameworks overseen by the Board .
- Shareholder engagement: Semiannual governance outreach with largest holders; 2023 adoption of lower special meeting threshold (25%→15%) received ~99% support .
Governance Assessment
- Strengths for investor confidence: Long-tenured national security expert; independent director; Policy Committee Chair with direct oversight of geopolitical/sustainability/political activity risks; strong attendance; robust anti-hedging/pledging and ownership alignment; no interlocks or related‑party concerns disclosed; top-secret clearance requirement enforces defense-grade governance standards .
- Watch items: Approaching mandatory retirement age (75) within policy window; underscores importance of succession planning for Policy Committee leadership and defense/military expertise continuity .
- Net view: Roughead’s profile and roles strengthen Board oversight of mission-critical risk domains; compensation and ownership policies further align interests, with no material red flags identified in 2024–2025 disclosures .