Form 4: Huntington Ingalls Executive Acquires Additional Equity Through Dividend Equivalents

Nicolas G. Schuck, Corporate Vice President, Controller & Chief Accounting Officer of Huntington Ingalls Industries, Inc., acquired 6.42 Restricted Stock Rights through dividend equivalent rights.

Summary

• Nicolas G. Schuck, the Corporate Vice President, Controller & Chief Accounting Officer of Huntington Ingalls Industries, Inc. (HII), acquired 6.42 Restricted Stock Rights (RSRs) on June 13, 2025.
• These RSRs were acquired as dividend equivalent rights, which are credited following the payment of the Company's quarterly cash dividend.
• The number of dividend equivalent rights is calculated by dividing the aggregate dividend amount paid on the total RSRs held by the reporting person by the closing price of Company common stock on the dividend payment date.
• The RSRs represent a contingent right to receive an equivalent number of shares of Company common stock, or, at the Company's Compensation Committee's discretion, cash or a combination.
• 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, Mr. Schuck beneficially owns 1,113.161 Restricted Stock Rights directly.

Sentiment

Score: 6

Explanation: Slightly positive, as it represents a routine increase in an executive's equity stake through a standard compensation mechanism, aligning interests with shareholders. It is not a direct purchase, but an accrual based on existing holdings.

Positives

• The acquisition of Restricted Stock Rights by a key executive, even through dividend equivalents, aligns the executive's interests with those of shareholders.
• The existence of a long-term incentive plan (2022 LTISP) demonstrates a structured approach to executive compensation and retention.

Future Outlook

The acquired Restricted Stock Rights, along with existing ones, will vest ratably in three equal installments upon each of the first, second, and third anniversaries of their respective grant dates, providing a future equity stake for the executive.

Management Comments

• "Each Restricted Stock Right ('RSR') represents a contingent right to receive an equivalent number of shares of Company common stock, or, at the discretion of the Company's Compensation Committee, cash or a combination of cash and Company common stock."
• "The RSRs were granted under the 2022 Long-Term Incentive Stock Plan ('LTISP') and vest ratably in three equal installments upon each of the first, second and third anniversaries of the grant date."
• "The amount acquired represents dividend equivalent rights on the RSRs, which are credited following payment of the Company's quarterly cash dividend."
• "Pursuant to the LTISP, the number of dividend equivalent rights acquired is calculated by dividing the aggregate amount of the dividend paid on the total number of RSRs held by the reporting person by the closing price of a share of Company common stock on the dividend payment date."

Industry Context

This Form 4 filing details a routine insider transaction related to executive compensation. It reflects the standard practice of granting equity-based incentives, including dividend equivalents, to align executive interests with shareholder value, a common practice across various industries, particularly in large publicly traded companies.

Comparison to Industry Standards

• The use of Restricted Stock Rights (RSRs) and dividend equivalent rights is a common component of long-term incentive plans for executives in large industrial and defense companies, similar to practices at peers like Lockheed Martin, Northrop Grumman, or General Dynamics.
• The vesting schedule of three equal annual installments is a standard approach to encourage long-term retention and performance, consistent with industry benchmarks for executive equity awards.

Corporate Governance

Related Party Transactions

• This filing reports an insider transaction, specifically the acquisition of equity by a corporate officer, which is a common form of related party dealing within the scope of executive compensation.

Stakeholder Impact

• Shareholders: The acquisition of additional equity by a key executive, even through dividend equivalents, can be viewed positively as it further aligns management's financial interests with shareholder value creation.
• Employees: No direct impact on general employees is indicated by this specific filing.

Next Steps

• The acquired Restricted Stock Rights will vest in three equal annual installments from their grant date.

Key Dates

Keywords

SEC Form 4, Huntington Ingalls Industries, HII, Restricted Stock Rights, RSRs, Dividend Equivalents, Executive Compensation, Insider Transaction, Equity Acquisition, Long-Term Incentive Plan