Form 4: HII Executive Acquires Dividend Equivalent Stock Rights

Huntington Ingalls Industries' Corporate VP, Controller & CAO, Nicolas G. Schuck, acquired 4.722 Restricted Stock Rights as dividend equivalents.

Summary

• Nicolas G. Schuck, Corporate VP, Controller & CAO of Huntington Ingalls Industries, Inc. (HII), reported an acquisition of derivative securities.
• The transaction involved 4.722 Restricted Stock Rights (RSRs) on December 12, 2025.
• These RSRs represent dividend equivalent rights, credited following the payment of the Company's quarterly cash dividend.
• The number of dividend equivalent rights is calculated by dividing the aggregate dividend paid on the total RSRs held by the reporting person by the closing stock price on the dividend payment date.
• Each RSR is a contingent right to receive an equivalent number of shares of Company common stock, cash, or a combination, at the discretion of the Company's Compensation Committee.
• The RSRs were granted under the 2022 Long-Term Incentive Stock Plan (LTISP) and vest ratably in three equal installments on the first, second, and third anniversaries of the grant date.
• Following this transaction, Nicolas G. Schuck beneficially owns 1,123.353 derivative securities (RSRs).

Sentiment

Score: 6

Explanation: The filing indicates a routine, expected insider transaction related to executive compensation (dividend equivalent rights). While not a direct purchase, it increases the executive's stake, which is generally a neutral to slightly positive signal for alignment of interests.

Positives

• The acquisition of dividend equivalent rights increases the beneficial ownership of a key executive, aligning their interests further with shareholders.
• The existence of a Long-Term Incentive Stock Plan (LTISP) indicates a structured approach to executive compensation and retention.

Future Outlook

The acquired Restricted Stock Rights (RSRs) are part of a long-term incentive plan and will vest ratably in three equal installments on the first, second, and third anniversaries of their grant date. The RSRs represent a future contingent right to receive common stock, cash, or a combination.

Industry Context

This filing reflects a routine insider transaction related to executive compensation within the defense and shipbuilding industry. Such transactions are common for publicly traded companies that utilize equity-based incentive plans to align management interests with shareholder value.

Comparison to Industry Standards

• The use of Restricted Stock Rights (RSRs) as part of a Long-Term Incentive Stock Plan (LTISP) is a standard practice in executive compensation across various industries, including defense contractors like Huntington Ingalls Industries.
• Dividend equivalent rights on unvested equity awards are also a common feature in such plans, ensuring that executives benefit from dividends as if they held the underlying shares, further aligning their interests with common shareholders.

Stakeholder Impact

• Shareholders: Increased alignment of executive interests with shareholder value through equity-based compensation and dividend equivalents.
• Employees (executives): The transaction reflects the ongoing benefits and structure of the company's long-term incentive plan for key personnel.

Next Steps

• The acquired Restricted Stock Rights will vest ratably in three equal installments on the first, second, and third anniversaries of the grant date.
• The Company's Compensation Committee retains discretion to settle the RSRs in common stock, cash, or a combination upon vesting.

Key Dates

Keywords

Huntington Ingalls Industries, HII, Form 4, Insider Transaction, Restricted Stock Rights, Dividend Equivalents, Executive Compensation, Beneficial Ownership