Form 4: Director Kelly Acquires HII Stock Units via Dividend Reinvestment

Huntington Ingalls Industries Director Anastasi D. Kelly acquired 74.602 common stock units through dividend equivalents under the company's long-term incentive plans.

Summary

• Director Anastasi D. Kelly of Huntington Ingalls Industries, Inc. acquired 74.602 shares of common stock, specifically Director Stock Units (SUA).
• The transaction date for this acquisition was December 12, 2025, and the Form 4 was filed on December 15, 2025.
• These shares were acquired as dividend equivalents under the company's 2012 and 2022 Long-Term Incentive Stock Plans (LTISPs).
• Each SUA represents a right to receive one share of Company common stock, which typically becomes payable within 30 days after a non-employee director ceases board services.
• The number of dividend equivalents acquired is calculated by dividing the aggregate dividend paid on total SUAs held by the director by the closing price of common stock on the dividend payment date.
• Following this transaction, Director Kelly directly beneficially owns 17,747.706 shares of common stock.
• The transaction was made pursuant to a Rule 10b5-1(c) plan, indicating a pre-arranged, non-discretionary transaction.

Sentiment

Score: 6

Explanation: Neutral to slightly positive. This is a routine, non-discretionary transaction reflecting standard director compensation and dividend policy. The director's increased ownership is a minor positive for alignment.

Positives

• Director Kelly's increased beneficial ownership aligns her interests with those of shareholders.
• The acquisition through dividend equivalents demonstrates the company's ongoing dividend policy and commitment to shareholder returns.
• The use of a Rule 10b5-1(c) plan indicates a pre-planned, non-discretionary transaction, enhancing transparency and reducing concerns about opportunistic insider trading.

Future Outlook

The acquired Director Stock Units (SUA) will generally become payable within 30 days following the date a non-employee director ceases to provide services as a member of the board of directors, reflecting a standard payout mechanism for director compensation.

Industry Context

This is a routine insider transaction for a director receiving dividend equivalents on their stock units. This practice is a common component of non-employee director compensation across publicly traded companies, including those in the defense and shipbuilding industry where Huntington Ingalls operates, aiming to align director interests with shareholders.

Comparison to Industry Standards

• The practice of granting stock units and dividend equivalents to non-employee directors is a common compensation structure across many industries, including defense contractors like Lockheed Martin, Northrop Grumman, and General Dynamics, to align director interests with shareholders.
• The use of a Rule 10b5-1(c) plan for such transactions is also standard practice for insiders to avoid accusations of trading on material non-public information.

Corporate Governance

Related Party Transactions

• Acquisition of 74.602 common stock units by Director Anastasi D. Kelly as dividend equivalents under the company's Long-Term Incentive Stock Plans.

Stakeholder Impact

• Shareholders: The director's increased ownership aligns her interests with shareholders, and the dividend equivalent mechanism reflects the company's ongoing dividend policy.
• Employees: No direct impact on employees is mentioned in this filing.

Next Steps

• The acquired stock units will generally become payable within 30 days following the date the non-employee director ceases to provide services as a member of the board of directors.

Key Dates

Recommendation

This Form 4 filing details a routine, non-discretionary acquisition of common stock units by a director through dividend reinvestment, a standard component of director compensation. While it slightly increases insider ownership, it does not provide new material information regarding the company's operational performance, financial health, or strategic direction that would warrant a change in investment recommendation. The transaction is expected and reflects existing compensation plans and dividend policy.

Keywords

Huntington Ingalls Industries, HII, Insider Transaction, Form 4, Director Stock Units, Dividend Equivalents, Long-Term Incentive Plan, Corporate Governance, Stock Ownership