Northrop Grumman Corporation | Separate Chair & CEO at Northrop Grumman Corporation

Status
Filed
Previous AGM date
Resolution details
Company ticker
NOC
Lead filer
John Chevedden
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
RESOLVED : Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary including the Corporate Governance Guidelines in order that 2 separate people hold the office of the Chairman and the office of the CEO as soon as possible.
Supporting statement
The Chairman of the Board shall be an Independent Director. An independent Lead Director shall not be a substitute for an independent Board Chairman. The Board shall have the discretion to select an interim Chairman of the Board, who is not an Independent Director, to serve while the Board is required to seek an Independent Chairman of the Board on an accelerated basis. This policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition although it is better to adopt it now to obtain the maximum benefit. An independent Board Chairman at all times improves corporate governance by bringing impartiality, objective oversight, and external expertise to board decisions, mitigating conflicts of interest, enhancing transparency, and boosting shareholder confidence. This detached perspective allows the chairman to focus on shareholder interests , strengthen management accountability, and provide critical checks and balances, ultimately contributing to long-term sustainability and credibility. An independent Board Chairman could help Northrop Grumman deal with a relative plateau in the stock price. The Northrop Grumman sock price was at $556 in 2022 and only at $561 in late 2025 despite a robust stock market. An independent Board Chairman could also help NOC deal with headwinds like those that emerged in 2025: A significant source of negative press was the news that NOC took a $477 million pre-tax loss on the B-21 Raider stealth bomber program due to higher-than-anticipated manufacturing and material costs. This led to a 49% drop in Q1 2025 net earnings and a sharp decline in NOC?s stock price in April 2025. NOC lowered its full-year 2025 revenue guidance on more than one occasion due to delayed program awards, timing of material receipts, and challenges within the space systems segment which faced a wind-down of 2 large programs. NOC lost the bid for the Next Generation Interceptor (NGI) anti-missile contract (an estimated $17 billion program) to Lockheed Martin, which was viewed as a competitive setback. Revenue shortfalls and conservative forecasts led to a cautious, and at times negative, market reaction and investor concern over NOC?s growth trajectory. The Aeronautics Systems and Space Systems segments experienced sales and operating income declines, offsetting growth in other areas.

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