DEFR14A: Lockheed Martin Amends Proxy Statement to Correct Errors in Stockholder Proposals

Lockheed Martin files an amendment to its 2024 proxy statement to correct typographical errors and omissions in stockholder proposals regarding human rights, emissions, and special meetings.

Summary

• Lockheed Martin has amended its definitive proxy statement originally filed on March 15, 2024.
• The amendment corrects typographical errors and omissions in stockholder proposals 4, 5, and 6, which relate to human rights, emissions, and special meetings respectively.
• The Board of Directors' recommendations against these proposals remain unchanged.
• The company's annual meeting of stockholders will be held on May 2, 2024.
• The original proxy statement remains unchanged except for the specified corrections and is as of March 15, 2024.

Sentiment

Score: 7

Explanation: The document is factual and corrective in nature, addressing specific errors in the proxy statement. While it acknowledges stockholder concerns, the board maintains its recommendations against the proposals, indicating a neutral to slightly positive sentiment.

Positives

• Lockheed Martin is committed to transparency with respect to our climate change initiatives and has taken significant steps to increase our disclosure.
• The company has a strong cross-functional working group, led by our Sustainability team, that supports the SMP and all sustainability-related disclosure and reporting.
• The company engages directly with its stockholders throughout the year to seek their views on an array of issues, including corporate governance matters, and reports to the Board on those engagements.

Negatives

• The stockholder proposal regarding GHG emissions reduction does not take into account the unique challenges the Company faces in reporting Scope 3 greenhouse gas (GHG) emissions.
• The proposal introduces potential risks to our Company that are not in the best interests of stockholders and is unnecessarily prescriptive and premature.
• The Board believes that the requested change to call special meetings is unnecessary and is not in the best interests of the stockholders.

Risks

• Engaging in political activities that are misaligned with its Human Rights Policy presents material legal, reputational, regulatory, and litigation risks to Lockheed and its investors.
• The company faces scrutiny for its role manufacturing F-35 jets for the Joint Strike Fighter Program, which costs taxpayers over $1 trillion.
• A low threshold for calling special meetings could allow a small group of stockholders to advance their own narrow interests, without regard to the broader interests of stockholders.

Future Outlook

The company will continue to engage with stockholders and address their concerns regarding corporate governance and sustainability.

Management Comments

• The Board recommends that stockholders vote AGAINST this proposal because it is unnecessary and not in the best interests of stockholders.
• The Board believes that the requested change is unnecessary and is not in the best interests of the stockholders.

Industry Context

The document reflects the increasing pressure on companies, particularly in the defense sector, to address environmental and social concerns raised by investors.

Comparison to Industry Standards

• The document mentions that Airbus, BAE Systems, Cisco Systems, Deere & Company, Honeywell, and Safran have established targets through the Science Based Targets initiative across all scopes of emissions.
• The document states that the company's 25% aggregate ownership threshold to call a special meeting is the most common standard among our compensation comparator group and S&P 500 companies and is consistent with the default provision under Maryland law.
• The document states that the company is unaware of any U.S.-based prime defense contractors that have set Net Zero Scope 3 reduction targets.

Stakeholder Impact

• Shareholders are impacted by the corrections to the proposals and should review them before voting.
• The outcome of the votes on the proposals will impact the company's policies and practices related to human rights, emissions, and corporate governance.

Next Steps

• Stockholders should review the amended proxy statement before voting.
• The company will hold its annual meeting of stockholders on May 2, 2024.

Key Dates

Keywords

proxy statement, stockholder proposals, human rights, GHG emissions, special meetings, political activities, Lockheed Martin