Form 4: Northrop Grumman Executive's Equity Awards & Tax Sales

Robert J. Fleming, CVP and President of Space Systems at Northrop Grumman, reported new equity awards and common stock transactions for tax withholding.

Summary

• Robert J. Fleming, CVP and President of Space Systems, reported transactions on February 11, 2026.
• Acquired 913.16 shares of common stock at a price of $0, resulting from the conversion of previously held Restricted Performance Stock Rights (RPSRs).
• Disposed of 300 shares of common stock at a price of $678.83 per share to cover tax withholding obligations related to the settlement of awards.
• Received a new grant of 3,982.16 Restricted Performance Stock Rights (RPSRs) at a price of $0. These RPSRs include 296.16 vested from a 2023 grant (settled at 148% of target) and 3,686 unvested from a 2024 Long-Term Incentive Stock Plan (LTISP) with a measurement period ending December 31, 2027.
• Received a new grant of 1,701 Restricted Stock Rights (RSRs) at a price of $0, granted under the 2024 LTISP, which will vest on February 12, 2029.
• Following these transactions, Fleming beneficially owns 2,440.03 shares of common stock directly.
• Beneficial ownership of derivative securities includes 14,174 RPSRs and 6,777 RSRs.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive filing. While routine, the vesting of performance awards at 148% of target is a strong indicator of past performance, and new grants align executive incentives for future growth.

Positives

• Acquisition of 913.16 shares of common stock at $0, indicating the successful vesting and settlement of previously granted performance awards.
• New grants of 3,982.16 Restricted Performance Stock Rights and 1,701 Restricted Stock Rights, demonstrating continued long-term incentive alignment with company performance.
• The settlement of 2023 RPSRs resulted in 148% of the target award, indicating strong performance against metrics for that period.

Negatives

• Disposition of 300 shares of common stock for tax withholding purposes, which reduces direct share ownership.

Future Outlook

The filing indicates future vesting dates for various equity awards, with Restricted Stock Rights vesting on February 12, 2029, and Restricted Performance Stock Rights having measurement periods extending to December 31, 2028, aligning executive incentives with long-term company performance.

Industry Context

StockSavvy.ai notes that the granting of Restricted Performance Stock Rights and Restricted Stock Rights is a standard practice in the defense and aerospace industry for executive compensation, aiming to align management's interests with long-term shareholder value creation. The settlement of performance-based awards at 148% of target suggests strong operational execution against specific metrics, which is a positive indicator within the competitive defense sector.

Stakeholder Impact

• Shareholders: The vesting and new grants of equity awards align executive interests with shareholder value. The disposition of shares for tax purposes is a routine event and not indicative of a lack of confidence.
• Employees: The long-term incentive plans (2011 LTISP, 2024 LTISP) mentioned suggest a structured approach to executive compensation, which can influence broader employee incentive programs.

Next Steps

• Future vesting of 264 RSRs on February 16, 2026.
• Future vesting of 2,356 RSRs on February 16, 2027.
• Future vesting of 2,456 RSRs on February 18, 2028.
• Future vesting of 1,701 RSRs on February 12, 2029.
• Measurement period for 5,133 RPSRs ends December 31, 2026.
• Measurement period for 5,355 RPSRs ends December 31, 2027.
• Measurement period for 3,686 RPSRs ends December 31, 2028.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation events, including the vesting of performance-based awards and new equity grants, along with a standard tax-related share disposition. While the 148% settlement of past performance awards is positive, these are not events that typically drive significant short-term share price movements. The filing provides transparency into executive incentives but does not present new information warranting a change in investment thesis for Northrop Grumman.

Keywords

Northrop Grumman, NOC, SEC Form 4, Insider Trading, Equity Awards, Restricted Stock Rights, Restricted Performance Stock Rights, Executive Compensation, Stock Vesting, Tax Withholding