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Message from the Board of Directors | ![]() |
Lockheed Martin Virtual Annual Meeting | |||||
When: Thursday, April 21, 2022, 9:00 a.m. EDT | Live Webcast Access: Online audio webcast at: www.meetnow.global/LMT2022 (You may begin to log in at 8:30 a.m. EDT.) | ||||
Who Can Vote: Stockholders of record at the close of business on February 25, 2022 are entitled to vote. Whether or not you plan to attend the Annual Meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described below. See pages 80-84 for additional information regarding accessing the Annual Meeting and how to vote your shares. | |||||
Proposal 1 | Proposal 2 | Proposal 3 | |||||||||||||||||||||
Election of 13 Director Nominees | Ratification of the Appointment of Ernst & Young LLP as our Independent Auditors for 2022 | Advisory Vote to Approve the Compensation of our Named Executive Officers (Say-on-Pay) | |||||||||||||||||||||
![]() | See pages 7-15 for further information. | ![]() | See pages 33-34 for further information. | ![]() | See page 36 for further information. | ||||||||||||||||||
![]() | FOR each Director Nominee | ![]() | FOR | ![]() | FOR | ||||||||||||||||||
Proposal 4 | Proposal 5 | ||||||||||||||||||||||
Stockholder Proposal to Reduce Threshold for Calling Special Stockholder Meetings | Stockholder Proposal to Issue a Human Rights Impact Assessment Report | ||||||||||||||||||||||
![]() | See pages 74-75 for further information. | ![]() | See pages 76-78 for further information. | ||||||||||||||||||||
![]() | AGAINST | ![]() | AGAINST |
![]() | Via Internet: | ![]() | By Telephone: | ![]() | By Mail: | ||||||||||||||||||
At the website listed on the proxy card or voting instruction form you received. | Call 1-800-652-8683 in the U.S., Canada and Puerto Rico, 1-781-575-2300 for other locations, or the numbers provided on your voting instruction form. | Mark, date and sign your proxy card or voting instruction form and return it in the accompanying postage prepaid envelope. |
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be Held on April 21, 2022: The 2022 Proxy Statement and 2021 Annual Report are available at www.edocumentview.com/LMT. | ||
www.lockheedmartin.com | 2022 Proxy Statement | 5 |
Director Overboarding Policy and Oversight | |||||
STOCKHOLDER PROPOSALS 4-5 | |||||
Frequently Requested Information | |||||||||||
People | Footprint | |||||||
![]() | 114,000 Total Employees | 372 Facilities Globally ![]() | ||||||
![]() | 7,500+ International Employees | |||||||
![]() | Nearly 60,000 Engineers, Scientists and Technologists | |||||||
![]() | More than one in five employees is a veteran |
Lead | Innovate | Drive | Grow | |||||||||||||||||
our industry with our customers to deliver superior 21st Century Security capability | to rapidly deliver capability through technology development, commercial technology application and new business models | operational excellence throughout the Company and efficiency throughout the industry | organically through franchise program captures, international expansion and through capital and acquisition investments that support our strategic goals | |||||||||||||||||
KEY ENABLERS | ||||||||
![]() | DISCRIMINATING TECHNOLOGY | ![]() | DIGITAL TRANSFORMATION | ![]() | STRATEGIC PARTNERSHIPS | ![]() | FISCAL DISCIPLINE |
1 | ![]() |
![]() | ![]() | 62% Total Stockholder Return 2017-2021 | ||||||
![]() | 8% Increase to Annual Dividend | |||||||
![]() | $6.3B Net Earnings |
![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||
$26.7B AERONAUTICS | $16.8B ROTARY AND MISSION SYSTEMS | $11.7B MISSILES AND FIRE CONTROL | $11.8B SPACE |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||
ARTIFICIAL INTELLIGENCE AND AUTONOMY | HYPERSONICS | DIRECTED ENERGY | EDGE COMPUTING | SPECTRUM DOMINANCE | ||||||||||||||||||||||
Sustainability At Lockheed Martin, we foster innovation, integrity and security to protect the environment, strengthen communities and propel responsible growth. We integrate environmental, social and governance practices throughout our business and our employees actively strengthen the quality of life where we live and work. | ||||||||
![]() | 47% Reduction in Carbon Emissions per $ Gross Profit 2015 baseline | ![]() | 22% Of Electricity Use Matched with Renewable Energy |
www.lockheedmartin.com | 2022 Proxy Statement | 2 |
Name, Age, Independence, Position and Other Public Boards | Tenure | Committees | ![]() | |||||||||||||||||||||||
![]() | ![]() | James D. Taiclet, 61 Chairman, President & CEO, Lockheed Martin Corporation | 2018 | |||||||||||||||||||||||
![]() | ![]() | ![]() | Daniel F. Akerson, 73, Independent Lead Director Retired Chairman & CEO, General Motors Company | 2014 | N* | |||||||||||||||||||||
![]() | James O. Ellis, Jr., 74 Retired President & CEO, Institute of Nuclear Power Operations Director at Dominion Energy, Inc. (Finance & Risk Oversight; Audit Chair; Nominating & Governance) | 2004 | A C * | |||||||||||||||||||||||
![]() | Thomas J. Falk, 63 Retired Chairman & CEO, Kimberly-Clark Corporation | 2010 | A* M | |||||||||||||||||||||||
![]() | Ilene S. Gordon, 68 Retired Chairman & CEO, Ingredion Incorporated Director at International Paper Company (Presiding Director; Governance Chair; Executive; Management Development & Compensation); International Flavors & Fragrances, Inc. (Human Capital & Compensation) | 2016 | A M * | |||||||||||||||||||||||
![]() | David B. Burritt, 66 President & CEO, United States Steel Corporation (U.S. Steel) Director at U.S. Steel (Executive) | 2008 | A N | |||||||||||||||||||||||
![]() | Bruce A. Carlson, 72 Retired United States Air Force General | 2015 | C N | |||||||||||||||||||||||
![]() | ![]() | John M. Donovan, 61 Retired CEO, AT&T Communications, LLC Palo Alto Networks (Lead Independent Director; Nominating & Governance Chair; Compensation and People; Security) | 2021 | C | ||||||||||||||||||||||
![]() | Joseph F. Dunford, Jr., 66 Senior Managing Director & Partner of Liberty Strategic Capital; Retired United States Marine Corps General; Former Chairman of the Joint Chiefs of Staff Director at Satellogic Inc. | 2020 | C N | |||||||||||||||||||||||
![]() | Vicki A. Hollub, 62 President & CEO, Occidental Petroleum Corporation Director at Occidental | 2018 | M N | |||||||||||||||||||||||
![]() | Jeh C. Johnson, 64 Partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP; Former Secretary of Homeland Security Director at U.S. Steel (Compensation & Organization; Corporate Governance & Sustainability) | 2018 | C N | |||||||||||||||||||||||
![]() | Debra L. Reed-Klages, 65 Retired Chairman, President & CEO, Sempra Energy Director at Chevron Corporation (Audit Chair); Caterpillar Inc. (Compensation & Human Resources) | 2019 | A M | |||||||||||||||||||||||
![]() | ![]() | Patricia E. Yarrington, 65 Retired Chief Financial Officer, Chevron Corporation | 2021 | A M | ||||||||||||||||||||||
A | Audit | M | Management Development and Compensation | * | Chair | ||||||||||||
C | Classified Business and Security | N | Nominating and Corporate Governance |
3 | ![]() |
Practices contributing to board effectiveness ![]() ![]() ![]() ![]() ![]() | Skills enhanced in the past 5 Years: | ||||||||||
![]() | Innovation, information technology and cybersecurity | ||||||||||
![]() | Industry and customer experience | ||||||||||
![]() | Environment, safety and sustainability expertise | ||||||||||
![]() | Enterprise risk management | ||||||||||
Meaningful Refreshment The Board has added 7 new directors in the past 5 years. | |||||||||||
![]() | Global organization experience |
Boards are accountable to stockholders | Boards should be responsive to stockholders and be proactive in order to understand their perspectives | ||||
![]() ![]() ![]() ![]() ![]() ![]() | ![]() ![]() | ||||
Boards should adopt structures and practices that enhance their effectiveness | |||||
![]() ![]() ![]() ![]() ![]() | ![]() ![]() ![]() ![]() |
Boards should have strong, independent leadership | Stockholders should be entitled to voting rights in proportion to their economic interest | Boards should develop management incentive structures that are aligned with the long-term strategy of the company | ||||||
![]() ![]() ![]() | ![]() ![]() | ![]() | ||||||
Stockholder Outreach In seeking stockholder perspectives, our senior management team offered during 2021 to engage with a cross section of stockholders representing over a majority of our outstanding shares and engaged with stockholders representing over 47% of our outstanding shares. Our consistent, active and year-round dialogue with stockholders, proxy advisory firms and other stakeholders enables our Board to consider a broad range of viewpoints in boardroom discussions. Please see the summary above of principal governance-related engagement topics during 2021. | Engagement Highlights 60+ Engagements 30+ Stockholders 47+% Outstanding Stock (as of December 31, 2021) |
www.lockheedmartin.com | 2022 Proxy Statement | 4 |
2021 CEO Target Opportunity Mix | 2021 Annual Incentive | |||||||
![]() | Component Weightings and Achievements | |||||||
![]() | ||||||||
2019-2021 LONG-TERM INCENTIVES | ||||||||
Component Weightings and Achievements | ||||||||
![]() |
![]() | Best Practices in Our Programs | ![]() | Practices We Do Not Engage In or Allow | |||||||||||
• Pay aligns with performance • Market-based (50th percentile) approach for determining NEO target pay levels • Caps on annual and long-term incentives, including when Total Stockholder Return (TSR) is negative • Enhanced clawback policy on variable pay • Double-trigger provisions for change in control • Robust stock ownership requirements • Low equity burn rate and dilution • No payment of dividends or dividend equivalents on unvested equity awards •Diversity and inclusion measures included in the strategic and operational goals under our Annual Incentive Plan | • No employment agreements • No option backdating, cash-out of underwater options or repricing (no employee options granted since 2012) • No excise tax assistance (gross-ups) upon a change in control • No tax gross-ups on personal use of corporate aircraft • No individual change in control agreements • No automatic acceleration of unvested incentive awards in the event of termination • No enhanced retirement formula or inclusion of long-term incentives in pensions • No enhanced death benefits for executives • No hedging or pledging of Company stock |
5 | ![]() |
Sustainability Sustainability Mission Our sustainability mission is to foster innovation, integrity and security to protect the environment, strengthen communities and propel responsible growth. Sustainability Governance Structure We take an integrated approach to managing corporate culture, ethics and business integrity, governance, and sustainability issues through a risk management lens. Oversight of ESG matters follows our formal sustainability governance structure. This structure includes our Nominating and Corporate Governance Committee (Governance Committee), the Sustainability Leadership Council and the Sustainability Management Team, that guide and implement our Sustainability Management Plan (SMP). The Governance Committee is chartered by the Board of Directors to lead its oversight responsibilities relating to the Company’s ethical conduct, human rights, environmental stewardship, corporate culture, philanthropy, workforce diversity, health and safety. Relevant Issues and Strategic Priorities Throughout 2021, we focused on four key sustainability priorities, which are set forth below. These four priorities include ESG topics that represent stakeholder priorities and drivers of long-term value creation. The independent directors who serve on the Governance Committee review performance against the SMP, a set of targets that correspond to objectives associated with our four core sustainability priorities. The Governance Committee also approves the Company’s Code of Conduct and annual Sustainability Report, which are available on our website. In April 2022, we will publish our first progress update on our 2025 SMP, which was publicly released in our 2020 Sustainability Report. The 2025 SMP follows our 2020 SMP and is comprised of new goals and key performance indicators (KPIs) that reflect the stakeholder feedback we received, internal and external trends, and the continued evolution of our business to create value well into the future. These metrics help focus our efforts in the areas that provide value to our stakeholders and our business. Details of our 2025 SMP and highlights of our 2021 progress are provided on page 31. ![]() | Our Sustainability Governance Structure | |||||||||||||
![]() Board of Directors | Monitors the Company’s adherence to our Code of Ethics and Business Conduct and oversees performance in corporate sustainability, employee safety and health, ethical business practices and diversity and inclusion. | |||||||||||||
Chairman, President and CEO | Nominating and Corporate Governance Committee | |||||||||||||
![]() | ||||||||||||||
![]() Executive Leadership Team | Oversees the sustainability program and enables Business Areas and functions to pursue and implement opportunities and practices that support the sustainability policy. | |||||||||||||
Chief Operating Officer | Chief Financial Officer | |||||||||||||
SVP Business Functions | Executive VP Business Areas | |||||||||||||
![]() | ||||||||||||||
![]() Sustainability Leadership Council Chair: SVP Ethics and Enterprise Assurance | Guides Lockheed Martin sustainability efforts and provides input to SMP execution. | |||||||||||||
Vice President representatives of the Business Areas and Corporate Functions | ||||||||||||||
![]() | ||||||||||||||
![]() Sustainability Management Team Chair: Senior Manager, Corporate Sustainability | Reviews SMP progress, reviews opportunities for program enhancement and shares internal and external insights and best practices. | |||||||||||||
Directors and Senior Managers responsible for functions related to specific SMP Goals |
www.lockheedmartin.com | 2022 Proxy Statement | 6 |
PROPOSAL 1: ELECTION OF DIRECTORS | ![]() | The Board unanimously recommends a vote FOR each of the director nominees. | |||||||||
Commitment to Board Diversity At Lockheed Martin, we recognize diversity and inclusion as a business imperative and strategic asset to our investors. We believe that our business accomplishments are a result of the efforts of our employees around the world, and that a diverse employee population will result in a better understanding of our customers’ needs. Our success with a diverse workforce also informs our views about the value of a board of directors that has persons of diverse skills, experiences and backgrounds. Diversity in skills and backgrounds ensures that the widest range of options and viewpoints are expressed in the boardroom. To this end, the Board seeks to identify candidates with areas of knowledge or experience that will expand or complement the Board’s existing expertise in overseeing a technologically advanced global security and aerospace company. While the Company does not have a formal policy on Board diversity, our Corporate Governance Guidelines (Governance Guidelines) place an emphasis on diversity, and our Governance Committee actively considers diversity in the recruitment and nominations of director candidates. The current composition of our Board and recent refreshment reflects those efforts and the importance of diversity to our Board. We added seven new directors in the past five years, including three women and one African-American male. | ||
Our Director Tenure Guidelines | |||||
Our Board believes that a balance of director diversity and tenure is a strategic asset to our investors. The range of our Board’s tenure encompasses directors who have institutional knowledge of Lockheed Martin and the competitive environment, complemented by newer directors with varied backgrounds and skills and fresh perspectives. | |||||
Mandatory Retirement Age | A director must retire at the annual meeting following their 75th birthday. | ||||
Term Limits | We do not have term limits for directors as we believe implementing term limitations may prevent the Board from taking advantage of insight that longer tenure brings. | ||||
Employment Change | Directors should expect to resign upon any significant change in principal employment or responsibilities. | ||||
Failed Election | Directors must offer to resign as a result of a failed stockholder vote under majority voting policy. | ||||
In 2021, the Board met a total of ten times. Directors are expected to attend all Board meetings and meetings of the committees on which they serve. All directors on the Board during 2021 attended more than 75 percent of the total Board and committee meetings to which they were assigned and overall attendance was greater than 99 percent. Board members are also encouraged to attend the annual meeting of stockholders and all director nominees for the 2021 annual meeting attended the 2021 annual meeting. | 99% | ||||||||||
Average attendance of directors as a group at Board and committee meetings during 2021 | |||||||||||
7 | ![]() |
SKILLS AND EXPERIENCE | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||||
![]() | CEO LEADERSHIP EXPERIENCE CEO public company leadership that contributes to the understanding and oversight of large complex organizations | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||||||||
![]() | ENVIRONMENTAL, SAFETY & SUSTAINABILITY Strengthens the Board’s oversight of climate risks and our environmental, safety and sustainability initiatives | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||||||||||||
![]() | HUMAN CAPITAL MANAGEMENT Contributes to our strategy to attract, motivate and retain a highly qualified workforce, including executives | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||
![]() | FINANCIAL EXPERT Meets the Securities and Exchange Commission’s (SEC) criteria as an independent “audit committee financial expert” | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||||||
![]() | MANUFACTURING Contributes to the understanding of the challenges of complex manufacturing | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||||||||
![]() | GOVERNMENT / MILITARY EXPERIENCE Contributes to the understanding of our customers and the relevant policy issues | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||||||||||||
![]() | GLOBAL EXPERIENCE Contributes to the understanding of operations and business strategy abroad | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||
![]() | ENGINEERING, TECHNOLOGY & INNOVATION Contributes to the understanding of key technology imperatives | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||||||||||||
![]() | RISK MANAGEMENT Contributes to the identification, assessment and mitigation of risks facing the Company | |||||||||||||||||||||||||||||||||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||
![]() | CYBERSECURITY / INFORMATION TECHNOLOGY Contributes to the understanding and oversight of cybersecurity threats and digital transformation | |||||||||||||||||||||||||||||||||||||||||||
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OTHER BOARD DEMOGRAPHICS | ||||||||||||||||||||||||||||||||||||||||||||
Caucasian/White | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||
African American/Black | ![]() | |||||||||||||||||||||||||||||||||||||||||||
Veterans of the U.S. Armed Forces | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||||||||||||||||||||
Gender (Male/Female) | M | M | M | M | M | M | M | F | F | M | F | M | F | |||||||||||||||||||||||||||||||
Age | 73 | 66 | 72 | 61 | 66 | 74 | 63 | 68 | 62 | 64 | 65 | 61 | 65 | |||||||||||||||||||||||||||||||
Tenure (rounded years) | 8 | 14 | 7 | 0 | 2 | 17 | 12 | 6 | 4 | 4 | 2 | 4 | 1 |
www.lockheedmartin.com | 2022 Proxy Statement | 8 |
![]() | Biography Vice Chairman of The Carlyle Group from March 2014 to December 2015. Mr. Akerson was Chairman of the Board of Directors and Chief Executive Officer of General Motors Company from January 2011 until his retirement in January 2014. Prior to joining General Motors, he was a Managing Director of The Carlyle Group, serving as the Head of Global Buyout from July 2009 to August 2010 and as Co-Head of U.S. Buyout from June 2003 to June 2009. Mr. Akerson previously served as Chairman of the U.S. Naval Academy Foundation from 2015 until 2021 and served on the board of directors of KLDiscovery Inc. from December 2019 until January 2020 and CommScope Holding Company, Inc. from April 2019 until December 2020. Skills, Qualifications and Core Competencies •Core leadership skills and experience with the demands and challenges of the global marketplace •Extensive operating, marketing and senior management experience in a succession of major companies in challenging, highly competitive industries •Enterprise risk management, financial, investment and mergers and acquisitions expertise | ||||||||||||||||||||||||||||
Daniel F. Akerson Age 73 Director since 2014 Independent Lead Director Committees Nominating and Corporate Governance, Chair Other Current Boards None | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Human Capital Management | ![]() | Financial Expert | ||||||||||||||||||||||||
![]() | Manufacturing | ![]() | Government/Military Experience | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Risk Management | ||||||||||||||||||||||||||||
![]() | Biography President and Chief Executive Officer of United States Steel Corporation (U.S. Steel) since May 2017. Mr. Burritt also was named to U.S. Steel’s board of directors at that time. Mr. Burritt previously served as President and Chief Operating Officer of U.S. Steel from February 2017 to May 2017; Chief Financial Officer from September 2013 to May 2017; and Executive Vice President from September 2013 to February 2017. Prior to joining U.S. Steel, Mr. Burritt served as Chief Financial Officer of Caterpillar Inc. until his retirement in 2010, after more than 32 years with the company. Skills, Qualifications and Core Competencies •Expertise in public company accounting, risk management, disclosure, financial system management, manufacturing and commercial operations and business transformation from roles as CEO and CFO at U.S. Steel and CFO and Controller at Caterpillar Inc. •Over 40 years’ experience with the demands and challenges of the global marketplace from his positions at U.S. Steel and Caterpillar Inc. | ||||||||||||||||||||||||||||
David B. Burritt Age 66 Director since 2008 Independent Director Committees Audit; Nominating and Corporate Governance Other Current Boards* U.S. Steel | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Environmental, Safety & Sustainability | ![]() | Human Capital Management | ||||||||||||||||||||||||
![]() | Financial Expert | ![]() | Manufacturing | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Risk Management | ||||||||||||||||||||||||||||
9 | ![]() |
![]() | Biography Retired U.S. Air Force General, Mr. Carlson has been chairman of Utah State University’s Space Dynamics Laboratory Guidance Council since June 2013 and chairman of its board of directors since 2018. Previously, Mr. Carlson served as the 17th Director of the National Reconnaissance Office from 2009 until 2012. He retired from the U.S. Air Force in 2009 after more than 37 years of service, including service as Commander, Air Force Materiel Command at Wright-Patterson AFB, Ohio, Commander, Eighth Air Force at Barksdale AFB, Louisiana; and Director for Force Structure, Resources and Assessment (J-8) for the Joint Staff. Mr. Carlson previously served on the board of directors of Benchmark Electronics Inc. from July 2017 until October 2021. Skills, Qualifications and Core Competencies •Industry-specific expertise and knowledge of our core customer, including aircraft and satellite development and acquisition experience from his service in senior leadership positions with the military •Experience with the demands and challenges associated with managing large organizations from his service as a Commander and Joint Staff Director of the Joint Chiefs and the National Reconnaissance Office •Skilled in executive management, logistics and military procurement | ||||||||||||||||||||||||||||
Bruce A. Carlson Age 72 Director since 2015 Independent Director Committees Classified Business and Security; Nominating and Corporate Governance Other Current Boards None | |||||||||||||||||||||||||||||
![]() | Human Capital Management | ![]() | Manufacturing | ![]() | Government/Military Experience | ||||||||||||||||||||||||
![]() | Global Experience | ![]() | Risk Management | ||||||||||||||||||||||||||
![]() | Biography Retired Chief Executive Officer of AT&T Communications, LLC, a wholly-owned subsidiary of AT&T Inc. Mr. Donovan served as CEO from August 2017 until his retirement in October 2019. He was Chief Strategy Officer and Group President of AT&T Technology and Operations from January 2012 through August 2017, and Chief Technology Officer of AT&T Inc. from April 2008 through January 2012. He is chair of the President’s National Security Telecommunications Advisory Committee. Skills, Qualifications and Core Competencies •Expertise in technology and innovation, including the transition to 5G networks •Skilled in overseeing global information, software development, supply chain, network operations and big data organizations •Experience in cybersecurity, artificial intelligence and machine learning | ||||||||||||||||||||||||||||
John M. Donovan Age 61 Director since 2021 Independent Director Committees Classified Business and Security Other Current Boards* Palo Alto Networks | |||||||||||||||||||||||||||||
![]() | Human Capital Management | ![]() | Financial Expert | ![]() | Manufacturing | ||||||||||||||||||||||||
![]() | Global Experience | ![]() | Engineering, Technology & Innovation | ![]() | Risk Management | ||||||||||||||||||||||||
![]() | Cybersecurity/Information Technology | ||||||||||||||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 10 |
![]() | Biography Retired U.S. Marine Corps General, Mr. Dunford has served as a senior managing director and partner of Liberty Strategic Capital and as a member of the firm’s investment committee since February 2022. Previously, he served as the 19th Chairman of the Joint Chiefs of Staff from 2015 until his retirement in September 2019. His previous assignments include serving as the 36th Commandant of the Marine Corps and the Commander of all U.S. and NATO Forces in Afghanistan. He is a Senior Fellow at the Belfer Center, Harvard University, and Chairman of the Board of the Semper Fi and America’s Fund. Skills, Qualifications and Core Competencies •Industry-specific expertise and knowledge of our core customer from his service in senior leadership positions with the military •Experience with the demands and challenges associated with managing large organizations from his service as a Commander and Chairman of the Joint Chiefs of Staff •Skilled in executive management, logistics, military procurement and cybersecurity threats | ||||||||||||||||||||||||||||
Joseph F. Dunford, Jr. Age 66 Director since 2020 Independent Director Committees Classified Business and Security; Nominating and Corporate Governance Other Current Boards Satellogic Inc. | |||||||||||||||||||||||||||||
![]() | Human Capital Management | ![]() | Government/Military Experience | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Risk Management | ![]() | Cybersecurity/Information Technology | ||||||||||||||||||||||||||
![]() | Biography Retired U.S. Navy Admiral, Mr. Ellis has served as an Annenberg Distinguished Fellow at the Hoover Institution at Stanford University since 2014. Previously, he served as President and Chief Executive Officer of the Institute of Nuclear Power Operations from May 2005 until his retirement in May 2012. Mr. Ellis retired from active duty in July 2004 after serving as Admiral and Commander, United States Strategic Command, Offutt Air Force Base, Nebraska. He formerly served as a director of Level 3 Communications, Inc. from March 2005 to November 2017. Skills, Qualifications and Core Competencies •Industry-specific expertise and knowledge of our core customers from his service in senior leadership positions with the military and the private sector •Expertise in aeronautical and aerospace engineering, information technology and emerging energy issues •Skilled in enterprise risk management •Over 40 years’ experience in managing and leading large and complex technology-focused organizations, in large part as a result of serving for 35 years as an active-duty member of the United States Navy | ||||||||||||||||||||||||||||
James O. Ellis, Jr. Age 74 Director since 2004 Independent Director Committees Audit; Classified Business and Security, Chair Other Current Boards* Dominion Energy, Inc. | |||||||||||||||||||||||||||||
![]() | Human Capital Management | ![]() | Government/Military Experience | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Engineering, Technology & Innovation | ![]() | Risk Management | ![]() | Cybersecurity/Information Technology | ||||||||||||||||||||||||
11 | ![]() |
![]() | Biography Executive Chairman of Kimberly-Clark Corporation from January 2019 through December 2019. Having served 36 years at Kimberly-Clark Corporation, Mr. Falk was Chairman of the Board and Chief Executive Officer from 2003 until December 2018; Chief Executive Officer from 2002 and President and Chief Operating Officer from 1999 to 2002. Skills, Qualifications and Core Competencies •Experience with the demands and challenges associated with managing global organizations from his experience as Chairman and Chief Executive Officer of Kimberly-Clark Corporation •Knowledge of financial system management, public company accounting, disclosure requirements and financial markets •Manufacturing, human capital management, compensation, governance and public company board experience | ||||||||||||||||||||||||||||
Thomas J. Falk Age 63 Director since 2010 Independent Director Committees Audit, Chair; Management Development and Compensation Other Current Boards None | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Environmental, Safety & Sustainability | ![]() | Human Capital Management | ||||||||||||||||||||||||
![]() | Financial Expert | ![]() | Manufacturing | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Risk Management | ||||||||||||||||||||||||||||
![]() | Biography Executive Chairman of the Board of Ingredion Incorporated from January 2018 through July 2018. Previously, Ms. Gordon was Chairman of the Board, President and Chief Executive Officer of Ingredion Incorporated from May 2009 through December 2017. Ingredion Incorporated is a publicly traded corporation manufacturing food ingredients globally. Skills, Qualifications and Core Competencies •Experience with the demands and challenges associated with managing global organizations from her experience as Chairman, President and Chief Executive Officer of Ingredion Incorporated •Knowledge of financial system management, public company accounting, disclosure requirements and financial markets •Marketing, human capital management, compensation, governance and public company board experience | ||||||||||||||||||||||||||||
Ilene S. Gordon Age 68 Director since 2016 Independent Director Committees Audit; Management Development and Compensation, Chair Other Current Boards* International Paper Company; International Flavors & Fragrances, Inc. | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Environmental, Safety & Sustainability | ![]() | Human Capital Management | ||||||||||||||||||||||||
![]() | Financial Expert | ![]() | Manufacturing | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Engineering, Technology & Innovation | ![]() | Risk Management | ||||||||||||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 12 |
![]() | Biography President and Chief Executive Officer of Occidental Petroleum Corporation (Occidental), an international oil and gas exploration and production company, since April 2016. Having served more than 30 years at Occidental, Ms. Hollub served as President and Chief Operating Officer from 2015 to 2016; Senior Executive Vice President, Occidental and President, Oxy Oil and Gas - Americas from 2014 to 2015, and Executive Vice President, Occidental and Executive Vice President, U.S. Operations and Oxy Oil and Gas from 2013 to 2014. Skills, Qualifications and Core Competencies •Broad insight and experience with the demands and challenges associated with managing global organizations from her experience as President and Chief Executive Officer of Occidental and more than three decades in executive and operational roles •Expertise in the Middle East region and Latin America •Skilled in enterprise risk management, environmental, safety and sustainability | ||||||||||||||||||||||||||||
Vicki A. Hollub Age 62 Director since 2018 Independent Director Committees Management Development and Compensation; Nominating and Corporate Governance Other Current Boards Occidental | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Environmental, Safety & Sustainability | ![]() | Human Capital Management | ||||||||||||||||||||||||
![]() | Financial Expert | ![]() | Manufacturing | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Engineering, Technology & Innovation | ![]() | Risk Management | ||||||||||||||||||||||||||
![]() | Biography Partner at the international law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP since January 2017. Previously, Mr. Johnson served as U.S. Secretary of Homeland Security from December 2013 to January 2017; and as General Counsel of the U.S. Department of Defense and as General Counsel of the U.S. Department of the Air Force. Mr. Johnson is presently a director of the Council on Foreign Relations, and formerly served as a director of PG&E Corporation from May 2017 to March 2018. Skills, Qualifications and Core Competencies •Expertise in national security, leadership development and organizational preparedness from his service as U.S. Secretary of Homeland Security •Industry-specific expertise and insight into our core customers, including requirements for acquisition of products and services, from prior senior leadership positions with the military •Experience with large organization management and assessing human resources, equipment, cybersecurity, and financial requirements, as well as reputational risks | ||||||||||||||||||||||||||||
Jeh C. Johnson Age 64 Director since 2018 Independent Director Committees Classified Business and Security; Nominating and Corporate Governance Other Current Boards* U.S. Steel | |||||||||||||||||||||||||||||
![]() | Human Capital Management | ![]() | Government/Military Experience | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Risk Management | ![]() | Cybersecurity/Information Technology | ||||||||||||||||||||||||||
13 | ![]() |
![]() | Biography Retired in December 2018 as Executive Chairman of Sempra Energy. She served as Chairman, President and Chief Executive Officer of Sempra Energy from March 2017 to May 2018, Chairman and Chief Executive Officer of Sempra Energy from December 2012 to March 2017 and Chief Executive Officer of Sempra Energy from June 2011 to December 2012. Previously, Ms. Reed-Klages served as an Executive Vice President of Sempra Energy and as President and Chief Executive Officer of SDG&E and SoCalGas, Sempra Energy’s regulated California utilities. She was also previously President, Chief Operating Officer and CFO of SDG&E and SoCalGas. She previously served on the boards of directors of Halliburton Company from January 2001 to September 2018 and Oncor Electric Delivery Company LLC during 2018. Skills, Qualifications and Core Competencies •Experience with the demands and challenges associated with managing global organizations from her experience as Chairman, President and Chief Executive Officer of Sempra Energy •Skilled in enterprise risk management, environmental, safety and sustainability •Knowledge of financial system management, compensation, governance and public company board experience | ||||||||||||||||||||||||||||
Debra L. Reed-Klages Age 65 Director since 2019 Independent Director Committees Audit; Management Development and Compensation Other Current Boards* Chevron Corporation Caterpillar Inc. | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Environmental, Safety & Sustainability | ![]() | Human Capital Management | ||||||||||||||||||||||||
![]() | Financial Expert | ![]() | Manufacturing | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Engineering, Technology & Innovation | ![]() | Risk Management | ||||||||||||||||||||||||||
![]() | Biography Chairman since March 2021 and President and Chief Executive Officer of Lockheed Martin since June 2020. Previously, Mr. Taiclet served as Chairman, President and Chief Executive Officer of American Tower Corporation from February 2004 until March 2020 and Executive Chairman from March 2020 to May 2020. Previously, Mr. Taiclet served as President of Honeywell Aerospace Services, a unit of Honeywell International and Vice President, Engine Services at Pratt & Whitney, a unit of United Technologies Corporation. Skills, Qualifications and Core Competencies •Effective leadership and executive experience as Chairman, President and CEO of American Tower Corporation •Expertise in management at large-scale, multinational corporations, including regulatory compliance, corporate governance, capital markets and financing, strategic planning and investor relations •Industry-specific expertise from service as a U.S. Air Force officer and pilot and as an executive at Honeywell Aerospace Services and Pratt & Whitney | ||||||||||||||||||||||||||||
James D. Taiclet Age 61 Director since 2018 Chairman, President and CEO Committees None Other Current Boards None | |||||||||||||||||||||||||||||
![]() | CEO Leadership Experience | ![]() | Human Capital Management | ![]() | Financial Expert | ||||||||||||||||||||||||
![]() | Manufacturing | ![]() | Government/Military Experience | ![]() | Global Experience | ||||||||||||||||||||||||
![]() | Engineering, Technology & Innovation | ![]() | Risk Management | ![]() | Cybersecurity/Information Technology | ||||||||||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 14 |
![]() | Biography Retired Vice President and Chief Financial Officer of Chevron Corporation, one of the world’s leading integrated energy companies. Ms. Yarrington served as CFO of Chevron from January 2009 until her retirement in March 2019. During her 38 years at Chevron, she also served as Vice President and Treasurer from 2007 through 2008, Vice President of Policy, Government and Public Affairs from 2002 to 2007 and Vice President of Strategic Planning from 2000 to 2002. Previously, Ms. Yarrington served on the boards of directors of Chevron Phillips Chemical Company LLC (a 50-50 joint venture with Phillips 66) and the Federal Reserve Bank of San Francisco, serving as the Chairman of the Bank’s board from 2013 to 2014. Skills, Qualifications and Core Competencies •Expertise in public company accounting, risk management, disclosure, and financial system management from her role as CFO at Chevron •Over 38 years’ experience with the demands and challenges of the global marketplace from her positions at Chevron | ||||||||||||||||||||||||||||
Patricia E. Yarrington Age 65 Director since 2021 Independent Director Committees Audit; Management Development and Compensation Other Current Boards None | |||||||||||||||||||||||||||||
![]() | Environmental, Safety & Sustainability | ![]() | Human Capital Management | ![]() | Financial Expert | ||||||||||||||||||||||||
![]() | Manufacturing | ![]() | Global Experience | ![]() | Risk Management | ||||||||||||||||||||||||
15 | ![]() |
Governance Committee Review of Board Candidates The Board seeks a diverse group of candidates who, at a minimum, possess the background, skills, expertise, competencies and time to make a significant contribution to the Board. Our Governance Guidelines (available at www.lockheedmartin.com/corporate-governance) list criteria against which candidates may be judged. In addition, the Governance Committee considers, among other things: •input from the Board’s self-assessment process to prioritize areas of expertise that were identified; •investor feedback and perceptions; •alignment of the candidates’ skills and competencies to the Company’s future strategic challenges and opportunities; •the needs of the Board in light of expected Board retirements or resignations; and •a balance between public company and government customer-related experience. When identifying and selecting director nominees, the Governance Committee screens and recommends candidates for nomination by the full Board. The Governance Committee uses a variety of methods to help identify potential board candidates with the desired skills and background needed for the Company’s business, including informal networks, internal resources and other channels. The Governance Committee considers both the short- and long-term strategies of the Company to determine what current and future skills and experience are required of the Board in exercising its oversight function and in the context of our strategic priorities. Our internal executive search team compiles a list of prospective director candidates reflecting the Board’s criteria, qualifications and experience, keeping in mind its commitment to diversity. Candidates (including Ms. Yarrington and Mr. Donovan) are identified from this source pool by the Chairman and the Governance Committee and may be interviewed by the Chairman and independent Lead Director, who chairs the Governance Committee. | Board Refreshment | ||||||||||||||||
Since 2018: | |||||||||||||||||
7 new directors, including 3 women directors and 1 African-American director | l | 2018 | |||||||||||||||
3 new directors | |||||||||||||||||
l | 2019 | ||||||||||||||||
1 new director | |||||||||||||||||
l | 2020 | ||||||||||||||||
1 new director | |||||||||||||||||
l | 2021 | ||||||||||||||||
2 new directors | |||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 16 |
Annual Performance Assessment The Board conducts a self-assessment of its performance and effectiveness as well as that of its committees on an annual basis. The self-assessment helps the Governance Committee to track progress in certain areas targeted for improvement from year-to-year and to identify ways to enhance the Board’s and its committees’ effectiveness. The evaluation process includes the following steps: | |||||||||||||||||
1 | Annual Written Questionnaire | Open-ended questions to solicit candid feedback. Topics covered include: •Board meeting content and virtual format; •Board culture; •Board leadership structure; •Board composition, selection and diversity; •Potential skills gaps for identifying board candidates; •Committee effectiveness; •Evaluation of risks, including COVID-19 response; and •Peer assessment to elicit feedback on the performance of individual directors. | |||||||||||||||
2 | One-on-One Discussions with Independent Lead Director | The independent Lead Director conducts separate, one-on-one discussions with each director to discuss any additional feedback or perspectives. | |||||||||||||||
3 | Committee/Board Private Sessions | The Governance Committee and each other committee and the full Board review the results of the evaluations in private session. The Board discussion is led by the independent Lead Director. Apart from the annual discussion, an executive session is scheduled at each meeting and any feedback from the independent directors is communicated to the Chairman by the Lead Director. | |||||||||||||||
4 | Feedback Incorporated | •Prioritization of Board discussion time with continued use of executive sessions •Incorporate virtual meeting opportunities into the future Board schedule •Added additional classified program reviews •Added additional directors with financial and capital allocation, environmental and sustainability, risk management, cybersecurity, technology and innovation experience | |||||||||||||||
Onboarding and Continuing Education New directors are provided a comprehensive orientation about the Company, including our business operations, strategy and governance. New directors have one-on-one sessions with the CEO, other directors and other members of senior management. Members of our senior management regularly review with the Board the operating plan of each of our business segments and the Company as a whole. The Board also conducts periodic site visits to our facilities as part of its regularly scheduled Board meetings and directors are encouraged to visit sites on an ad hoc basis and meet one-on-one with members of senior management and other employees. Directors are encouraged to attend outside director continuing education programs sponsored by educational and other institutions to assist them in staying abreast of developments in corporate governance and critical issues relating to the operation of public company boards. | |||||||||||||||||
17 | ![]() |
Board Leadership Structure | |||||||||||||||||||||||
The Board believes that the independent Board members should have the flexibility to respond to changing circumstances and choose the board leadership structure that best fits the then-current situation. As a result, the roles of the Chairman and the CEO have been split from time to time to facilitate leadership transitions, while at other times the roles have been combined. The independent directors elected Mr. Taiclet as Chairman in March 2021. Prior to that, the roles were separated while Ms. Hewson served as Executive Chairman to assist in the transition. As it does annually, in January 2022, the Board of Directors reviewed the Company’s leadership structure, including benchmarking data of the leadership structure of other large companies and industry peers and stockholder proposal trends for separating the roles. At present, the Board believes that the combination of the roles, along with the robust authority given to the experienced independent Lead Director, effectively maintains independent oversight of management. The Board consists entirely of independent directors, other than Mr. Taiclet, and exercises a strong, independent oversight function through frequent executive sessions, independent Board committees and having a strong independent Lead Director with clearly delineated and comprehensive duties. The Board believes there is value in presenting a single face to our customers through the combined Chairman and CEO role and that this structure of having the Board and management operate under the unified leadership of the highly experienced Mr. Taiclet best positions the Company to successfully implement its strategy. The independent directors will continue to review the leadership structure on an ongoing basis, at least annually, to provide effective risk management and to ensure that it continues to meet the needs of the Company and supports the generation of stockholder value over the long-term. Independent Lead Director’s Role The Board has structured the role of the independent Lead Director to further enhance the functioning of the Board and with sufficient authority to serve as a counterbalance to management, as specified in the Bylaws to include: • Leadership of independent directors — preside as chair at Board meetings while in executive sessions of the non-management directors or executive sessions of the independent directors or if the Chairman is not present; determine the frequency and timing of executive sessions of non-management directors; • Board meeting agendas and schedules — consult with the Chairman and committee chairs regarding the topics for and schedules of the meetings of the Board and committees and approve the topics for and schedules of Board meetings; review and approve all Board and committee agendas (in addition to each committee chair) and provide input to management on the scope and quality of information sent to the Board; • Board refreshment — assist with recruitment of director candidates and, along with the Chairman, extend invitations to potential directors to join the Board; • Board committees — act as liaison between the Board and management and among the directors and the committees of the Board; serve as an ex-officio member of each committee if not otherwise a member of the committee; • Stockholder communication — serve as the point of contact for stockholders and others to communicate with the Board; • Board consultants — recommend to the Board and committees the retention of advisors and consultants who report directly to the Board; and • Board special meetings — call a special meeting of the Board or of the independent directors at any time, at any place and for any purpose. | |||||||||||||||||||||||
![]() | |||||||||||||||||||||||
CHAIRMAN, PRESIDENT AND CEO James D. Taiclet | |||||||||||||||||||||||
![]() LEAD DIRECTOR AND GOVERNANCE COMMITTEE CHAIR Daniel F. Akerson Elected by independent directors. | |||||||||||||||||||||||
![]() ![]() ![]() | |||||||||||||||||||||||
OTHER COMMITTEE CHAIRS Thomas J. Falk (Audit) James O. Ellis, Jr. (CBS) Ilene S. Gordon (Compensation) All committees are independent | |||||||||||||||||||||||
CONSIDERATIONS IN SELECTING CURRENT LEAD DIRECTOR | |||||||||||||||||||||||
Mr. Akerson has served as the independent Lead Director since April 2019. The Board believes that having a strong, independent Lead Director role is important to sound corporate governance. In accordance with our Bylaws and Governance Guidelines, the independent members of the Board annually elect one of the independent directors to serve as the Lead Director by the affirmative vote of a majority of the directors who have been determined to be “independent” for purposes of the New York Stock Exchange (NYSE) listing standards. Stockholders and other interested parties may communicate with the Lead Director at Lead.Director@lmco.com | |||||||||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 18 |
![]() Thomas J. Falk, Chair David B. Burritt James O. Ellis, Jr. Ilene S. Gordon Debra L. Reed-Klages Patricia E. Yarrington 1 All Audit Committee members are independent within the meaning of the NYSE listing standards, applicable SEC regulations and our Governance Guidelines. Each has accounting and related financial management expertise sufficient to be considered financially literate within the meaning of the NYSE listing standards. The Board has determined that all Committee members except Mr. Ellis meet the SEC’s criteria as audit committee financial experts. | 2021 Focus Areas | Meetings in 2021: 6 | |||||||||||||||
•Oversight of Capital Allocation and Dividend Policy •Enterprise Risk Management and 2021 Audit Plan •Critical Audit Matters Related to Revenue Recognition and Pension Estimates; Pension De-Risking Strategy | |||||||||||||||||
Roles and Responsibilities of the Committee The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the financial condition of the Company, the integrity of the financial statements and compliance with legal and regulatory requirements. The Audit Committee has oversight of the Company’s internal audit plan and reviews risks and opportunities to management's long-term strategy as identified by the Company's enterprise risk management processes. It is directly responsible for the appointment, compensation, retention, oversight and termination of the Company's independent auditors, Ernst & Young LLP (Ernst & Young). The Audit Committee also reviews the allocation of resources, the Company’s financial condition and capital structure and policies regarding derivatives. The Audit Committee meets privately with management, internal audit, and Ernst & Young. The functions of the Audit Committee are further described in the “Audit Committee Report” on page 35. | |||||||||||||||||
1 Ms. Yarrington joined in June 2021. |
19 | ![]() |
![]() James O. Ellis, Jr., Chair Bruce A. Carlson John M. Donovan 1 Joseph F. Dunford, Jr. Jeh C. Johnson All members of the CBS Committee are independent within the meaning of the NYSE listing standards and our Governance Guidelines and hold high-level security clearances. | 2021 Focus Areas | Meetings in 2021: 3 | |||||||||||||||
•Classified Program Risk Oversight and Alignment with Company’s Strategy •Support to Supply Chain Risk Management •Security of Personnel, Facilities and Data (including classified cybersecurity matters) | |||||||||||||||||
Roles and Responsibilities of the Committee The CBS Committee assists the Board in fulfilling its oversight responsibilities relating to the Company’s classified business activities and the security of personnel, facilities and data (including classified cybersecurity matters). The CBS Committee consists of directors who possess the appropriate security clearance credentials, at least one of whom must be a member of the Audit Committee, none of whom are officers or employees of the Company and all of whom are free from any relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment as a member of the CBS Committee. | |||||||||||||||||
1 Mr. Donovan joined in October 2021. |
![]() Ilene S. Gordon, Chair Thomas J. Falk Vicki A. Hollub Debra L. Reed-Klages Patricia E. Yarrington 1 All members of the Compensation Committee are independent within the meaning of the NYSE listing standards, applicable SEC regulations and our Governance Guidelines. | 2021 Focus Areas | Meetings in 2021: 3 | |||||||||||||||
•Chairman Transition and Other Leadership Changes •Talent Management and Succession Planning •Human Capital Governance and Workforce Diversity | |||||||||||||||||
Roles and Responsibilities of the Committee The Compensation Committee reviews and approves the corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluates the performance of the CEO and, either as a committee or together with the other independent members of the Board, determines and approves the compensation philosophy and levels for the CEO and other executive officers. The Compensation Committee does not delegate its responsibilities with respect to compensation that is specific to the executive officers. For other employees and for broad-based compensation plans, the Compensation Committee may delegate authority to the CEO or the Senior Vice President and Chief Human Resources Officer, subject to certain annual limits. Additional information regarding the role of the Compensation Committee and our compensation practices and procedures is provided under the captions “Compensation Committee Report” on page 36, “Compensation Discussion and Analysis (CD&A)” beginning on page 37 and “Other Compensation Matters” on page 51. | |||||||||||||||||
1 Ms. Yarrington joined in June 2021. |
www.lockheedmartin.com | 2022 Proxy Statement | 20 |
![]() Daniel F. Akerson, Chair David B. Burritt Bruce A. Carlson Joseph F. Dunford, Jr. Vicki A. Hollub Jeh C. Johnson All members of the Governance Committee are independent within the meaning of the NYSE listing standards, applicable SEC regulations and our Governance Guidelines. | 2021 Focus Areas | Meetings in 2021: 4 | |||||||||||||||
•Board Recruitment and Refreshment •2025 Sustainability Management Plan Goals and Progress, Including Climate Goals •Continued COVID-19 Business Continuity and Employee Safety and Health Efforts •Published Inaugural Human Rights Report | |||||||||||||||||
Roles and Responsibilities of the Committee The Governance Committee develops and implements policies and practices relating to corporate governance, including our Governance Guidelines. The Governance Committee assists the Board by selecting candidates to be nominated to the Board, making recommendations concerning the composition of Board committees and overseeing the annual evaluation of the Board and its committees. The Governance Committee reviews and recommends to the Board the compensation of directors. Our executive officers do not play a role in determining director pay. The Governance Committee assists the Board in fulfilling its oversight efforts in corporate responsibility, corporate culture, human rights, environmental stewardship, political contributions, ethical business practices, community outreach, philanthropy, diversity, inclusion and equal opportunity, sustainability, and safety programs. The Governance Committee monitors compliance and recommends changes to our Code of Conduct. The Governance Committee also has oversight over the Company’s policies and processes for the safety of the Company’s products and services. | |||||||||||||||||
21 | ![]() |
Risk Governance |
Board Committee | Risk Mitigation Role | ||||
AUDIT | Financial and compliance risks and risk identification process; risks related to business strategy and identified enterprise risk | ||||
CLASSIFIED BUSINESS AND SECURITY | Classified programs and security of personnel, facilities and data-related risks including classified cybersecurity, security of suppliers and the global supply chain within the classified business | ||||
NOMINATING AND CORPORATE GOVERNANCE | Board composition, corporate governance, safety, ethical conduct, human rights, political activities, corporate culture, human capital, and climate and other environmental risks | ||||
MANAGEMENT DEVELOPMENT AND COMPENSATION | Talent, workforce and incentive compensation risks |
www.lockheedmartin.com | 2022 Proxy Statement | 22 |
23 | ![]() |
Board Oversight of People Strategy | ||
The Board of Directors is actively engaged in the oversight of human capital management and strategy. Our human capital management strategy, which we refer to as our people strategy, is tightly aligned with our business needs and technology strategy. In order to ensure that we achieve our human capital objectives, we regularly conduct an employee engagement survey to gauge employee satisfaction and to understand the effectiveness of our employee and compensation programs. The Board reviews these survey results. The Senior Vice President and Chief Human Resources Officer updates the Board on the Company’s people strategy on an annual basis. Board members also are active partners in the development of our workforce, engaging and spending time with our high-potential leaders at Board meetings and other events. Annually, the Board meets to review our succession strategy and leadership pipeline for key roles, including the CEO, taking into account the Company’s long-term corporate strategy. More broadly, the Board is regularly informed of key talent indicators for the overall workforce, including performance against diversity metrics with respect to representation, hiring, promotions and leadership. Talent management and workforce diversity and inclusion metrics and goals are included in the strategic and operational performance measures in management’s annual incentive program. | ||
Our People Strategy Human capital is a critical business asset at Lockheed Martin. Due to the specialized nature of our business, our performance depends on identifying, attracting, developing, motivating, and retaining a highly skilled workforce in multiple areas, including: engineering, science, manufacturing, information technology, cybersecurity, business development and strategy and management. During 2021, our human capital efforts were focused on continuing to accelerate the transformation of our technology for workforce management through investments in upgraded systems and processes, and continuing to increase our agility to meet the quickly changing needs of the business, all while maintaining a respectful, challenging, supportive and inclusive working environment. We use a variety of human capital measures in managing our business, including: workforce demographics; hiring metrics; talent management metrics, including retention rates of top talent; and diversity metrics with respect to representation, attrition, hiring, promotions and leadership. Our people strategy focuses on three key priorities: Maximize Talent; Advance Technology; and Optimize Culture. In 2022 and beyond, we will continue to execute on the Lockheed Martin people strategy and its three strategic imperatives to accelerate transformation. | ||
![]() | MAXIMIZE TALENT | ![]() | ADVANCE TECHNOLOGY | ![]() | OPTIMIZE CULTURE | |||||||||||||||||||||||||||
•Acquire and Retain Top Diverse Talent at All Levels •Elevate Technical Talent to Match Strategy and the Digital Future of Work •Increase Executive Successor Pipeline and Leader Readiness •Deliver Agile Employee Development and Competitive Total Rewards Solutions | •Modernize Systems to Enable Human Resource Process Transformation •Transform Hiring with Artificial Intelligence and the New Employee Experience Process •Enable People Analytics and Data Driven Solutions •Advance the Secured Collaboration Tools and Facilities for Classified Programs | •Strengthen Inclusive Engagement, Diversity and Belonging •LMForward the Workplace (a multi-faceted initiative for long-term work solutions for the future) •Drive Process Cost Efficiency to Meet Business Needs •Utilize multi-media employee communications to reinforce mission, culture and retention | ||||||||||||||||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 24 |
Women(a) | People of Color(a) | Veterans(a) | People with Disabilities(a) | |||||||||||||||||||||||
Overall | 23% | 29% | 21% | 10% | ||||||||||||||||||||||
Executives(b) | 23% | 15% | 20% | 11% | ||||||||||||||||||||||
![]() | RECRUITING TOP TALENT: | ![]() | FOSTERING AN INCLUSIVE WORKPLACE: | ![]() | SUPPORTING STEM EDUCATION: | |||||||||||||||||||||||||||
• Improved the diversity of the workforce, specifically in the representation of women and People of Color, more actively expanding Minority Serving Institution (MSI) recruiting to areas beyond STEM, such as Finance • Selected #1 among Top Supporters of Historically Black College & University (HBCU) Engineering Institutions for 7th consecutive year | • Embracing digital platforms for D&I initiatives led to record attendance for BRG Leadership Forums and opened new levels of accessibility for employees with disabilities • Recognized as a Best Place to Work for LGBT Equality on the Human Rights Campaign’s Corporate Equality Index for 12th consecutive year • Ranked #1 Top 50 Employers in Women Engineer Magazine • Selected Top 10 Military Friendly Company | • Invested $17.38 million into nonprofit programs focused on STEM career readiness and access, particularly for those groups historically underrepresented in STEM • $1.99 million contributed to MSIs in 2021 to support programs enhancing student retention and success, such as mentoring, curriculum development and summer bridge programs | ||||||||||||||||||||||||||||||
25 | ![]() |
Stockholder Engagement Cycle |
Topic Highlights •Climate/Environmental Stewardship •Board diversity and refreshment •Workforce diversity and inclusion •Human rights risks •Executive compensation •Lobbying and political spending •Stockholder Proposals Key Participants •Independent Lead Director •Executive Leadership •Senior Management •Subject Matter Experts (sustainability, executive compensation, diversity & inclusion) Methods of Engagement •Telephone/video conferences •Written correspondence & surveys •Annual meeting of stockholders •Investor meetings and conferences •2021 Virtual “Investor Day” •Quarterly earnings calls | ||||||||||||||
•Solicit feedback on governance best practices and trends, executive compensation, human capital management, ESG matters and other topics of interest to stockholders •Discuss stockholder proposals with proponents •Respond to investor inquiries and requests for information or engagement | •Publish Annual Report, Proxy Statement and Sustainability Report •Specific engagements with stockholders about the voting matters to be addressed at the annual meeting in April •Receive and publish voting results for management and stockholder proposals | |||||||||||||
![]() | ||||||||||||||
•Board responds, as appropriate, with continued discussions with stockholders and enhancements to policies, practices and disclosures •Board uses stockholder feedback to enhance our disclosures, governance practices, environmental and social policies and compensation programs | •Discuss and evaluate voting results from annual meeting of stockholders •Stockholder input informs our Board’s ongoing process of continually enhancing governance and other practices | |||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 26 |
• The role of the Board and director responsibilities; • The role and responsibilities of the independent Lead Director; • Application of our Code of Ethics and Business Conduct (the Code of Conduct) to the Board; • Director nomination procedures and qualifications; • Director independence standards; • Director overboarding limits; • Policies for the review, approval and ratification of related person transactions; • Director orientation and continuing education; • Review by the Governance Committee of any change in job responsibilities of directors; | • Procedures for annual performance evaluations of the Board and its committees; • Director stock ownership guidelines; • Clawback policy for executive incentive compensation; • Policy prohibiting hedging and pledging of Company stock; • Majority voting for the election of directors and resignation procedures for directors who fail to receive a majority vote; • Process for director compensation review, specifically use of competitive data and input from independent compensation consultant; and • Stockholder engagement program; our independent Lead Director will consider requests to speak to investors and will designate (in consultation with the Corporate Secretary) a director to engage with the requesting investors, if appropriate. | ||||
DIRECTORS A director may not serve on the boards of more than 4 public companies (including Lockheed Martin) | PUBLIC COMPANY CEO Active CEOs or equivalent may not serve on the boards of more than 2 public companies (including Lockheed Martin) | AUDIT COMMITTEE Audit Committee members may not serve on more than 3 public company audit committees (including Lockheed Martin) |
27 | ![]() |
The Board has determined that all of our directors are independent under applicable NYSE listing standards, except Mr. Taiclet. Under the NYSE listing standards and our Governance Guidelines, a director is not independent if the director has a direct or indirect material relationship with the Company. The Governance Committee annually reviews the independence of all directors and reports its findings to the full Board. The Board has adopted director independence guidelines that are included in our Governance Guidelines, which are available on the Company’s website at www.lockheedmartin.com/corporate-governance. These guidelines set forth certain relationships between the Company and directors and their immediate family members or affiliated entities, which the Board, in its judgment, has deemed to be material or immaterial for purposes of assessing a director’s independence. If a director has a relationship with the Company that is not addressed in the independence guidelines, the independent members of the Board determine whether the relationship is material. The Board has determined that the following directors are independent: Daniel F. Akerson, David B. Burritt, Bruce A. Carlson, John M. Donovan, Joseph F. Dunford, Jr., James O. Ellis, Jr., Thomas J. Falk, Ilene S. Gordon, Vicki A. Hollub, Jeh C. Johnson, Debra L. Reed-Klages, and Patricia E. Yarrington. James D. Taiclet as an employee of the Company is not independent under the NYSE listing standards or our Governance Guidelines. Marillyn A. Hewson was also determined by the Board not to be independent while she served as Executive Chairman of the Board in 2021. In determining that each of the non-management directors is independent, the Board considered the relationships described under “Certain Relationships and Related Person Transactions of Directors, Executive Officers and 5 Percent Stockholders,” on page 29, each of which were determined to be immaterial to each individual’s independence. The Governance Committee and Board considered that the Company, in the ordinary course of business, purchases products and services from, or sells products and services to, companies or subsidiaries or parents of companies at which some of our directors (or their immediate family members) are or have been directors or officers and to other institutions with which some of these individuals have or have had relationships. These relationships included: Mr. Akerson (Northrop Grumman Corporation (family member’s employer)); Mr. Burritt (National Safety Council); Mr. Carlson (Benchmark Electronics Inc. and the Charles Stark Draper Laboratory); Mr. Donovan (AT&T Inc. (family member's employer)); Mr. Dunford (K&L Gates LLP (family member’s employer)); Mr. Ellis (Blue Origin, LLC (family member’s employer), Dominion Energy Inc. and the Economist Group (family member’s employer)); Ms. Gordon (The Conference Board and International Paper Company); Mr. Johnson (Center for a New American Security) and Ms. Reed-Klages (The Boeing Company (family member’s employer), Caterpillar Inc. and the University of Southern California). In determining that these relationships did not affect the independence of those directors, the Board considered that none of the directors had any direct or indirect material interest in, or received any special compensation in connection with, the Company’s business relationships with those entities. In addition to their consideration of these ordinary course of business transactions, the Governance Committee and the Board relied upon the director independence guidelines included in our Governance Guidelines to conclude that contributions to a tax-exempt organization by the Company did not create any direct or indirect material interest for the purpose of assessing director independence. The Governance Committee also concluded that all members of each of the Audit, Compensation and Governance Committees are independent within the meaning of our Governance Guidelines and NYSE listing standards, including the additional independence requirements applicable to members of the Audit Committee and Compensation Committee. | |||||||||||
DIRECTOR INDEPENDENCE | |||||||||||
92% | |||||||||||
Independent | |||||||||||
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www.lockheedmartin.com | 2022 Proxy Statement | 28 |
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www.lockheedmartin.com | 2022 Proxy Statement | 30 |
![]() | ADVANCING RESOURCE STEWARDSHIP •Counterfeit Parts Prevention •Energy Management •Total Cost of Ownership •Hazardous Chemicals and Materials •Resource and Substance Supply Vulnerability | ![]() | ELEVATING DIGITAL RESPONSIBILITY •Data Privacy and Protection •Artificial Intelligence •Intellectual Property Rights | |||||||||||
![]() | FOSTERING WORKPLACE RESILIENCY •Workplace Safety •Inclusion and Equity •Harassment Free Workplace | ![]() | MODELING BUSINESS INTEGRITY •Anti-Bribery and Corruption •Ethical Business Practices | |||||||||||
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Climate & Environmental Stewardship |
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REDUCE CARBON EMISSIONS PER $ GROSS PROFIT BY | REDUCE ENERGY PER OCCUPANT BY | REDUCE WASTE PER OCCUPANT BY | ||||||||||||||||||||||||
70% 2015 baseline | ![]() | 14% 2016 baseline | ![]() | 11% 2016 baseline | ![]() | |||||||||||||||||||||
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2021 PERFORMANCE | 47% | 7% | 5% | |||||||||||||||||||||||
Supplier Engagement |
20.2 percent or $5.6 billion of supplier spend was awarded to 7,715 small businesses including: | Received an “Exceptional” rating from the Defense Contract Management Agency (DCMA) for the Company’s GFY 2021 small business performance on Department of Defense contracts | ![]() | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
$1.05B awarded to woman-owned businesses (both large and small) | $631.2M awarded to veteran-owned businesses (both large and small) | $128M awarded to Alaskan Native and Tribally Owned Corporations | $351.7M awarded to 248 service-disabled veteran-owned small businesses | |||||||||||||||||||||||||||||||||||||||||||||||||||||
www.lockheedmartin.com | 2022 Proxy Statement | 32 |
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS | ![]() | The Board unanimously recommends that you vote FOR the ratification of the appointment of Ernst & Young as independent auditors for 2022. | |||||||||
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2020 | 2021 | |||||||
($) | ($) | |||||||
Audit Fees(a) | 23,500,000 | 23,500,000 | ||||||
Audit-Related Fees(b) | 310,000 | 1,142,000 | ||||||
Tax Fees(c) | 2,600,000 | 2,100,000 | ||||||
All Other Fees | — | — |
www.lockheedmartin.com | 2022 Proxy Statement | 34 |
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Thomas J. Falk Chairman | David B. Burritt | James O. Ellis, Jr. | Ilene S. Gordon | Debra L. Reed-Klages | Patricia E. Yarrington |
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PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NEOs (SAY-ON-PAY) | ![]() | The Board unanimously recommends that you vote FOR the advisory vote to approve the compensation of our named executive officers. | |||||||||
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Ilene S. Gordon Chairman | Thomas J. Falk | Vicki A. Hollub | Debra L. Reed-Klages | Patricia E. Yarrington |
www.lockheedmartin.com | 2022 Proxy Statement | 36 |
NEO | Title | Years of Service At End of 2021 (rounded) | ||||||
James D. Taiclet | Chairman, President and Chief Executive Officer | 2 years | ||||||
John W. Mollard | Vice President and Treasurer; Former Acting Chief Financial Officer | 39 years | ||||||
Kenneth R. Possenriede | Former Chief Financial Officer | - | ||||||
Frank A. St. John | Chief Operating Officer | 35 years | ||||||
Richard F. Ambrose | Former Executive Vice President, Space | 21 years | ||||||
Stephanie C. Hill | Executive Vice President, Rotary & Mission Systems | 35 years | ||||||
Marillyn A. Hewson | Former Executive Chairman; Former President and CEO | 39 years |
To assist stockholders in finding important information in the CD&A, sections are highlighted as follows: | Page(s) | |||||||||||||
38 | Our 2021 Performance | |||||||||||||
39 | 2021 CEO Compensation | |||||||||||||
41 | 2021 Comparator Group Companies | |||||||||||||
43 | 2021 Compensation Elements | |||||||||||||
44-46 | 2021 Annual Incentive | |||||||||||||
47-50 | 2021 Long-Term Incentive Compensation | |||||||||||||
50 | 2019-2021 LTIP and PSU Awards | |||||||||||||
50-51 | 2022 Incentive Opportunities | |||||||||||||
51-53 | Other Compensation Matters | |||||||||||||
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At our 2021 annual meeting, more than 92% of the votes cast by our stockholders approved our Say-on-Pay proposal. We meet with our key investors throughout the year to understand the topics that matter most to them as they relate to executive compensation. In these meetings, we seek the views of our stockholders with respect to our existing policies and practices. (Please see “Our Stockholder Engagement Program” on page 26 for more specific details). Investors we engaged with during 2021 reacted positively to our pay governance and executive compensation programs. These investors overall indicated that they appreciate our current compensation structure, including our pay mix, and transparency as manifested in our Proxy disclosures. We consider the input of our stockholders, along with emerging best practices, to ensure alignment with our executive pay programs. We welcome feedback regarding our executive compensation programs and will continue to engage with our stockholders in 2022. | 3-Year Say-on-Pay | |||||||||||||||||||
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In 2021, Lockheed Martin built on our vision to transform the future of the defense enterprise. We continued to demonstrate agility and resilience despite the ongoing challenges presented by the effects of COVID-19. Financially, we delivered strong results across our key financial metrics, including sales of $67.0 billion, segment operating profit* of $7.4 billion and record cash from operations of $9.2 billion. While supply chain disruptions adversely affected our 2021 revenues, we took swift actions to address these challenges, and continued to accelerate payments to our suppliers, prioritizing small- and medium-sized businesses as well as large business that have been negatively affected by the pandemic. Orders and backlog in 2021 were also impacted by some delays in international orders; however, we ended 2021 with a year-end backlog of $135.4 billion. From a strategic and operational perspective, thanks to our team members’ dedication and resolve, we continued to produce world-class products and services across all business areas. Lockheed Martin’s largest program, the F-35 Lightning II, continued to mature and expand around the globe with the delivery of 142 aircraft. The F-35 program also celebrated several international milestones with Switzerland and Finland joining the program and several other nations expressing interest in joining as well. We also had strategic and operational accomplishments across our other business areas in 2021. In March, we were awarded a $3.7 billion contract to develop the Next Generation Interceptor (NGI) – America’s most advanced missile defense system. Also in March, the Army renewed their commitment to the Guided Multiple Launch Rocket System (GMLRS) program by awarding us a $1.12 billion contract. The CH-53K King Stallion heavy-lift helicopter continues to impress customers and in June, U.S. Naval Air Systems Command awarded us a contract for $878.7 million. Throughout the year we showed the power and potential of One Lockheed Martin, drawing upon the breadth and depth of our industry-leading portfolio to enable customers’ Joint All-Domain Operations. We also delivered more customer capabilities through our integration of emerging technologies such as autonomy, artificial intelligence, and directed energy. | 2021 Financial Performance | |||||||||||||||||||
Sales of $67.0B |