Lockheed Martin CEO pay falls 10 percent to $20.6 million during rocky year for defense giant

Lockheed CEO pay drops 10 pct to $20.6M in 2009

WASHINGTON — The pay of Lockheed Martin Corp. CEO Robert Stevens fell 10 percent in 2009 as the nation’s biggest defense contractor felt the effects of shifting Pentagon spending priorities.

Stevens received compensation valued at $20.6 million last year, according to an Associated Press analysis of a Lockheed filing Friday with the Securities and Exchange Commission. His salary edged up, but Stevens’ bonus and incentive pay both fell as the company fell short of some of its goals for the year.

Lockheed’s board of directors praised Stevens for building the company’s backlog of orders to $78 billion and taking steps such as freeing up cash and funding Lockheed’s pension plan. Lockheed also earned $3 billion despite the deep recession.

But the board also noted that the Pentagon canceled Lockheed contracts last year for a helicopter to carry the president and a communications satellite.

The Defense Department — the biggest buyer of Lockheed fighter jets, missile systems and other military hardware — has shifted its priorities to save money and focus on the new conflicts it faces. Defense Secretary Robert Gates decided to cap production of the pricey F-22 fighter jet last year, and the Pentagon is buying more unmanned drones better suited for wars in difficult terrain like Afghanistan.

Gates has also paid close attention to keeping programs on budget and on time. In February, he rebuked Lockheed for missing performance goals and cost overruns, saying the Pentagon would hold back $614 million in performance bonuses from the company.

Lockheed, which is based in Bethesda, Md., increased Stevens’ 2009 base pay slightly to $1.8 million. But his bonus was shaved 8 percent to $3.9 million and his incentive pay fell 39 percent to 5.2 million. The value of stock options awarded to Stevens rose 17 percent to $9.1 million.

The AP’s calculations of total pay includes salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations exclude changes in the present value of pension benefits, and they sometimes differ from totals companies list in the summary compensation table of proxy statements filed with the SEC. during the year.