Form 4: Huntington Ingalls Industries Executive Acquires Restricted Stock Rights

Paul C. Harris, an executive at Huntington Ingalls Industries, acquired 3,323 restricted stock rights as part of a long-term incentive plan.

Summary

• Paul C. Harris, an Ex VP & Chief Sustainability Officer at Huntington Ingalls Industries, acquired 3,323 restricted stock rights on December 13, 2024.
• These restricted stock rights were granted under the 2022 Long-Term Incentive Stock Plan on February 26, 2024.
• The rights vest ratably in three equal installments on the first, second, and third anniversaries of the grant date.
• The acquisition also includes dividend equivalent rights, which are credited following the payment of the company's quarterly cash dividend.
• The number of dividend equivalent rights is calculated based on the dividend paid on the total number of RSRs held, divided by the closing price of a share of company common stock on the dividend payment date.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating a positive alignment of interests between management and shareholders. There are no negative implications.

Positives

• The acquisition of restricted stock rights aligns the executive's interests with the long-term performance of the company.
• The vesting schedule encourages long-term commitment from the executive.
• Dividend equivalent rights provide additional value to the executive based on company performance.

Future Outlook

The restricted stock rights will vest over the next three years, aligning the executive's compensation with the company's long-term performance.

Industry Context

This type of equity-based compensation is common in the defense and shipbuilding industry to incentivize and retain key executives.

Comparison to Industry Standards

• Many companies in the defense industry, such as Lockheed Martin (LMT) and General Dynamics (GD), use similar long-term incentive plans including restricted stock units and performance-based equity awards to align executive compensation with shareholder value.
• The vesting schedule of three years is also a common practice in the industry to encourage long-term commitment from executives.
• The inclusion of dividend equivalent rights is a standard feature in many equity compensation plans, ensuring that executives benefit from the company's dividend payouts.

Stakeholder Impact

• Shareholders may view this as a positive sign of management's commitment to the company's long-term success.
• Employees may see this as a standard practice for executive compensation.

Next Steps

• The restricted stock rights will vest over the next three years.
• The executive will receive dividend equivalent rights following each quarterly cash dividend payment.

Key Dates

Keywords

Restricted Stock Rights, Long-Term Incentive Plan, Executive Compensation, Dividend Equivalent Rights, Stock Vesting, HII, Huntington Ingalls Industries