Northrop Grumman Grants Performance-Based Award to CEO Warden

What Happened

• Northrop Grumman Corporation filed an 8-K reporting that, on August 19, 2026, its independent board members approved a one-time performance-based equity award to Kathy J. Warden, Chair, CEO and President. The award targets 35,910 Market Stock Units (MSUs) and vests based on absolute stock price performance through a performance period ending December 31, 2031. The grant is subject to the terms of the applicable MSU Grant Agreement and generally requires Ms. Warden’s continued service through the performance period.

Key Details

• Award approval date: August 19, 2026; 8-K filed August 21, 2026.
• Target grant size: 35,910 Market Stock Units (MSUs).
• Payout range based on stock price performance: 0% to 150% of target.
  • 0% payout if stock declines more than 25% over the performance period.
  • Target (100%) payout requires at least a 10% absolute stock price appreciation.
  • Maximum (150%) payout if stock appreciates 50% or more by 12/31/2031.
• Award was approved by the independent members of the Board of Directors and is intended to align Ms. Warden’s interests with shareholders and customers.

Why It Matters

• This is a retention and performance incentive for the CEO tied directly to absolute stock price movement over a multi-year period. For investors, the structure means the CEO benefits only if Northrop Grumman’s share price rises (with increasing payout for greater appreciation) and receives nothing if the stock falls substantially. The filing does not detail settlement mechanics or the accounting/dilution impact; however, MSUs are equity-based awards that, if earned and settled in stock, could affect share-based compensation expense and outstanding shares in the future.