GENERAL DYNAMICS CORP — Remuneration Information 2019

Apr 4, 2019

DEFA14A 1 d709432ddefa14a.htm DEFA14A DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

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General Dynamics Corporation

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The following is additional information regarding the Annual Incentive Compensation for the Named Executive Officers (NEOs) of General Dynamics Corporation (the Company).

Disclosure of Threshold and Maximum Goals Under Our Annual Incentive Plan

The NEO annual incentive compensation payments are based on performance against specific, measurable goals established at the beginning of each year and approved by the Compensation Committee (the Committee) as well as the Committee’s assessment of each NEO’s individual performance during the year. To further enhance the transparency related to the goals shown on page 38 of our Proxy Statement, we have included the threshold and maximum levels of performance for each of the 2018 annual incentive plan metrics.

2018 Annual Incentive

P ERFORMANCE M ETRIC	T HRESHOLD	T ARGET	M AXIMUM	2018 A CTUAL
Earnings from Continuing Operations	$2,866 million	$3,184 million	$3,502 million	$3,358 million
Free Cash Flow from Continuing Operations	$2,264 million	$2,830 million	$3,396 million	$2,458 million

Annual Incentive Plan Payout Determination

To elaborate upon the disclosure contained on pages 37-39 of the proxy statement and further clarify the process the Committee undertook to determine annual incentive payments ranging from 125% to 175% of target for our NEOs, we are sharing the following additional information about key individual achievements of each NEO. These additional elements represented notable achievements that contributed to the financial success of the Company in 2018, with all-time highs for revenue, earnings from continuing operations and diluted earnings per share from continuing operations. The following results and individual contributions were taken into consideration by the Committee when arriving at the annual incentive plan payouts, which varied by NEO as evidenced below.

NEO	F INANCIAL	O PERATIONAL /S TRATEGIC	P AYOUT F ACTOR
Phebe N. Novakovic	•   Drove organic revenue
growth in each of our five segments. •   Achieved double-digit year-over-year growth
in diluted earnings per share, up 17.4% over 2017. •   Achieved a book-to-bill ratio of 1:1 on a consolidated basis. •   Ended the year with total backlog of $67.9 billion, up 7.4% over 2017. •   Defense businesses demonstrated strong operating performance while continuing to book
significant new business, with backlog in the defense segments increasing by 11.4% over 2017. •   Oversaw the return of 115% of our free cash flow from operations to
shareholders.	•   Aerospace segment
successfully managed through a new model transition while achieving good order intake, industry-leading operating margins and increased deliveries of large cabin aircraft. •   Resolved a significant supplier challenge at Gulfstream, which will support improved
quality and lower costs. •   Commencement of a multi-year capital investment plan to
support the substantial growth anticipated in our Marine Systems segment driven. •   Successful combination of General Dynamics Information Technology (GDIT) and CSRA the
largest acquisition in the company’s history, to create a premier provider of technology solutions and mission services.	175%

NEO	F INANCIAL	O PERATIONAL /S TRATEGIC	P AYOUT F ACTOR
Jason W. Aiken	•   Drove outperformance of
operating cash flow at the business units to partially offset cash shortfall in other areas. •   Achieved double-digit year-over-year growth in diluted earnings per share, up 17.4%
over 2017. •   Successfully managed the effective tax rate in line with
projections. •   Repaid approximately $1.7 billion of the roughly
$10 billion of debt issued to finance the acquisition of CSRA. •   Oversaw the
return of 115% of our free cash flow from operations to shareholders.	•   Demonstrated leadership in
the consummation of, as well as the issuance and optimization of new debt to finance, the acquisition of CSRA. Maintained our strong credit rating. •   Facilitated integration of the CSRA acquisition. •   Led several investor meetings. •   Conducted significant succession planning efforts within the Finance
organization.	150%
John P. Casey	•   Strong Marine Systems
segment performance: 6.2% revenue growth, 11.1% operating earnings growth and 9% operating margin rate.	•   Provided experienced
leadership and oversight of the Marine Systems segment. •   Thorough and accurate
assessment of the performance of our shipyards. •   Worked closely on improving
performance and the application of capital expenditures throughout the Marine Systems segment.	168%
Mark C. Roualet	•   Solid Combat Systems
segment performance: 4.9% revenue growth, 2.7% operating earnings growth and 15.4% operating margin rate.	•   Provided experienced
leadership and oversight of the Combat Systems segment. •   Oversaw continued growth
development and improvement in operations throughout the Combat Systems segment. •   Significant involvement in succession planning and leadership development throughout
the Combat Systems segment.	161%
S. Daniel Johnson	•   Significant revenue and
operating earnings growth in the Information Technology segment due to the CSRA acquisition. •   Mission Systems segment performance: 5.5% revenue growth, 3.3% operating earnings
growth and 13.9% operating margin rate.	•   Played a critical
leadership role in the CSRA acquisition, including a key role in external communications with regard to the acquisition. •   Continued to provide valuable and experienced guidance to the GDIT and Mission
Systems segments.	125%