Northrop CEO Got $3-Million Bonus

Northrop Grumman Corp. Chief Executive Kent Kresa received a $3-million bonus last year along with options that could be worth as much as $17.4 million as a reward for exceeding the company’s financial performance goals, according to a regulatory filing.

Kresa’s pay package, excluding the options, rose 11% to $4.76 million from $4.29 million. His base salary rose to $1.2 million from $1.02 million. He received a $462,070 long-term incentive payout along with $95,874 in other compensation.

Kresa got options to buy 216,230 shares with strike prices of $78.55 to $93.30, which could be worth as much as $17.4 million if the share price rises 10% or more annually over the life of the grant. An annual increase of 5% or more would value the options at as much as $7.2 million.

“Growth occurred throughout the organization with strong performance in all major programs,” the Los Angeles-based company said in the filing. “Overall customer satisfaction was outstanding.”

Northrop entered the shipbuilding business last year through its $5.2-billion acquisition of Litton Industries Inc., owner of shipyards in Louisiana and Mississippi. Northrop shares rose 21% last year, while its peers in the Standard & Poor’s 500 aerospace and defense index fell 19%.

The firm also won a key subcontracting role on Lockheed Martin Corp.’s $200-billion Joint Strike Fighter contract, and its Global Hawk aerial drone was deployed in Afghanistan.

Northrop has made an unsolicited offer to purchase TRW Inc., a leading subcontractor on the missile defense program, for $11.4 billion. Cleveland-based TRW has urged shareholders to reject the offer as too low.