GENERAL DYNAMICS CORP, DEF 14A filed on 3/22/2024
Proxy Statement (definitive)
v3.24.1
Cover
12 Months Ended
Dec. 31, 2023
Cover [Abstract]  
Document Type DEF 14A
Entity Registrant Name GENERAL DYNAMICS CORPORATION
Entity Central Index Key 0000040533
Amendment Flag false
v3.24.1
Pay vs Performance Disclosure
12 Months Ended
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Pay vs Performance Disclosure [Table]        
Pay vs Performance [Table Text Block]

Pay Versus Performance

 

The “Compensation Actually Paid” values shown below do not reflect the compensation actually paid to the CEO or the NEOs. As such, the Compensation Committee did not consider the information provided in the table in structuring or determining compensation for our NEOs. For a complete discussion of the company’s executive compensation program and the Committee’s philosophy and approach, please refer to the CD&A section of this Proxy Statement (beginning on page  45).

 

The table intends to compare “Pay Versus Performance” and prescribes a method to calculate “Compensation Actually Paid” (CAP). While the table shows SCT compensation and CAP values side by side, they are not comparable. 

 

Together with the salary and annual incentive, the SCT values include the accounting fair value of equity awards granted in the year shown (at the time the grant was made), whereas CAP values include a revaluation of the current grant at year-end, plus the year-over-year change in the fair value of multiple years of historical equity grants. Because CAP includes multiple years of grants, the calculation of CAP each year is heavily impacted by the change in the stock price and therefore, may be higher or lower than the SCT compensation values.

 

The actual value of an equity award realized by an executive depends on several factors measured over multiple years, including the stock price, the financial performance of the company, the rTSR performance of the company as compared to a peer group, timing of stock option exercises and other factors.

 

Year Summary
Compensation
Table Total
for PEO
($)(a)
Compensation
Actually Paid
to PEO
($)(a)(b)(c)
Average
Summary
Compensation
Table Total for
Non-PEO NEOs

($)(a)
Average
Compensation
Actually Paid
to Non-PEO
NEOs
($)(a)(b)(c)
Value of Initial Fixed $100
Investment Based on
Net
Earnings
($M)
Annual
ROIC(e)
GD Total
Shareholder
Return
($)
S&P Total
Aerospace &
Defense
Shareholder

Return
($)(d)
2023 22,582,776 31,647,903 7,204,864 9,619,890 163 119 3,315 12.3%
2022 21,478,167 48,651,910 6,221,750 12,842,568 152 112 3,390 12.6%
2021 23,553,861 42,557,364 6,501,277 11,102,219 125 95 3,257 11.9%
2020 19,328,499 9,128,233 5,293,847 2,978,395 87 84 3,167 11.8%

(a)For each year represented, Ms. Phebe N. Novakovic was our principal executive officer (PEO), and our non-PEO NEOs were Messrs. Jason W. Aiken, Mark L. Burns, Robert E. Smith and Mark C. Roualet.

(b)Amounts shown for CAP are computed in accordance with Item 402(v) of Regulation S-K under the Exchange Act and do not reflect the actual amount of compensation earned by or paid to the NEOs during the applicable year. These amounts reflect total compensation as reported in the SCT with certain adjustments as required by Item 402(v) of Regulation S-K and described in footnote (c) below.
(c)CAP reflects the exclusions and inclusions of equity awards for the PEO and the other NEOs as set forth below and calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The valuation methodologies and assumptions, with certain modifications pursuant to SEC guidance, used to calculate CAP are based on our grant date fair value of these awards as disclosed in the company’s consolidated audited financial statements filed with the SEC on Form 10-K for the years reflected in the table below. The amounts shown for 2022 for the PEOs’ CAP and the non-PEO NEOs’ CAP have been corrected to subtract $25,760 and $17,982, respectively. The amounts shown for 2021 for the PEOs’ CAP and the non-PEO NEOs’ CAP have been corrected to subtract $39,619 and $110,670, respectively. The amounts shown for 2020 for non-PEO NEOs’ CAP have been corrected to add $93,710.
 

SCT Total to Compensation Actually Paid Reconciliation for the PEO and non-PEOs:

 

   Calculation for PEO   Calculation for Average of Non-PEOs
Calculation(1) of Compensation 
Actually Paid
  Year 2020
($)
   Year 2021
($)
   Year 2022
($)
   Year 2023
($)
   Year 2020
($)
   Year 2021
($)
   Year 2022
($)
   Year 2023
($)
 
Summary Compensation Table Total   19,328,499    23,553,861    21,478,167    22,582,776    5,293,847    6,501,277    6,221,750    7,204,864 
Less aggregate change in actuarial present value of pension benefits   (381,567)                (242,276)            (78,205) 
Less grant date fair value of stock and option awards   (14,210,301)    (15,395,836)    (15,091,731)    (15,895,993)    (3,338,770)    (3,795,780)    (3,973,993)    (4,666,270) 
Add year-end fair value of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year   10,733,219    20,972,489    19,885,285    20,091,360    2,521,801    5,170,727    5,236,173    5,897,817 
Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied at fiscal year-end or during the fiscal year   (1,703,747)    1,725,480    4,975,264    (2,942,513)    (289,494)    371,980    1,146,440    (703,510) 
Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards granted in prior fiscal years   (4,843,424)    11,475,277    17,170,099    7,580,277    (1,008,977)    2,802,051    4,154,201    1,904,573 
Add dividends paid on unvested equity awards during the fiscal year   205,554    226,093    234,826    231,996    42,264    51,964    57,997    60,621 
Compensation Actually Paid   9,128,233    42,557,364    48,651,910    31,647,903    2,978,395    11,102,219    12,842,568    9,619,890 

  (1)     For the PEO and other NEOs, for each covered year, service cost and prior service cost of pension benefits equals $0, fair value of awards that are granted and vest in the same covered fiscal year equals $0, and fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year equals $0.

 

(d)TSR shown in this table utilizes the S&P 500 Aerospace & Defense (A&D) Index, which we use in our stock performance graph required by Item 201(e) of Regulation S-K included in the company’s consolidated audited financial statements filed with the SEC on Form 10-K for the years reflected in the table above. The comparison assumes $100 was invested for the period starting December 31, 2019, through December 31 of the applicable fiscal year in each of the company’s Common Stock and the S&P A&D Index. All dollar values assume reinvestment of the pre-tax value of dividends paid by companies included in the S&P A&D Index. The historical stock price performance of our Common Stock shown is not necessarily indicative of future stock price performance. 

 

In our 2022 Pay Versus Performance disclosure, we referenced the S&P 500 Index (rather than the S&P A&D Index) but have changed that for the table above because of subsequently issued clarifying SEC guidance. For comparison purposes, the table below provides TSR for the company’s Common Stock, the S&P A&D Index currently presented, and the S&P 500 Index previously presented.

 

    Value of Initial Fixed $100
Investment Based on
Year  

GD Total
Shareholder Return
($)

S&P Total Aerospace &
 Defense Shareholder Return
($)
S&P 500 Total
Shareholder Return
($)
2023 163 119 158
2022 152 112 125
2021 125 95 152
2020 87 84 118
(e)Pursuant to Item 402(v) of Regulation S-K, we determined annual ROIC to be the most important financial performance measure used to link company performance to CAP to our PEO and other NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2022, 2021, and 2020 ,and we may determine a different financial performance measure to be the most important such measure in future years. See Appendix A for a discussion of this non-GAAP measure.+
     
Company Selected Measure Name annual ROIC      
Named Executive Officers, Footnote [Text Block]

(a)For each year represented, Ms. Phebe N. Novakovic was our principal executive officer (PEO), and our non-PEO NEOs were Messrs. Jason W. Aiken, Mark L. Burns, Robert E. Smith and Mark C. Roualet.
     
Peer Group Issuers, Footnote [Text Block]

(d)TSR shown in this table utilizes the S&P 500 Aerospace & Defense (A&D) Index, which we use in our stock performance graph required by Item 201(e) of Regulation S-K included in the company’s consolidated audited financial statements filed with the SEC on Form 10-K for the years reflected in the table above. The comparison assumes $100 was invested for the period starting December 31, 2019, through December 31 of the applicable fiscal year in each of the company’s Common Stock and the S&P A&D Index. All dollar values assume reinvestment of the pre-tax value of dividends paid by companies included in the S&P A&D Index. The historical stock price performance of our Common Stock shown is not necessarily indicative of future stock price performance. 
     
PEO Total Compensation Amount [1],[2] $ 22,582,776 $ 21,478,167 $ 23,553,861 $ 19,328,499
PEO Actually Paid Compensation Amount [1],[2],[3],[4] $ 31,647,903 48,651,910 42,557,364 9,128,233
Adjustment To PEO Compensation, Footnote [Text Block]

SCT Total to Compensation Actually Paid Reconciliation for the PEO and non-PEOs:

 

   Calculation for PEO   Calculation for Average of Non-PEOs
Calculation(1) of Compensation 
Actually Paid
  Year 2020
($)
   Year 2021
($)
   Year 2022
($)
   Year 2023
($)
   Year 2020
($)
   Year 2021
($)
   Year 2022
($)
   Year 2023
($)
 
Summary Compensation Table Total   19,328,499    23,553,861    21,478,167    22,582,776    5,293,847    6,501,277    6,221,750    7,204,864 
Less aggregate change in actuarial present value of pension benefits   (381,567)                (242,276)            (78,205) 
Less grant date fair value of stock and option awards   (14,210,301)    (15,395,836)    (15,091,731)    (15,895,993)    (3,338,770)    (3,795,780)    (3,973,993)    (4,666,270) 
Add year-end fair value of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year   10,733,219    20,972,489    19,885,285    20,091,360    2,521,801    5,170,727    5,236,173    5,897,817 
Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied at fiscal year-end or during the fiscal year   (1,703,747)    1,725,480    4,975,264    (2,942,513)    (289,494)    371,980    1,146,440    (703,510) 
Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards granted in prior fiscal years   (4,843,424)    11,475,277    17,170,099    7,580,277    (1,008,977)    2,802,051    4,154,201    1,904,573 
Add dividends paid on unvested equity awards during the fiscal year   205,554    226,093    234,826    231,996    42,264    51,964    57,997    60,621 
Compensation Actually Paid   9,128,233    42,557,364    48,651,910    31,647,903    2,978,395    11,102,219    12,842,568    9,619,890 

  (1)     For the PEO and other NEOs, for each covered year, service cost and prior service cost of pension benefits equals $0, fair value of awards that are granted and vest in the same covered fiscal year equals $0, and fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year equals $0.

 

     
Non-PEO NEO Average Total Compensation Amount [1],[2] $ 7,204,864 6,221,750 6,501,277 5,293,847
Non-PEO NEO Average Compensation Actually Paid Amount [1],[2],[3],[4] $ 9,619,890 12,842,568 11,102,219 2,978,395
Adjustment to Non-PEO NEO Compensation Footnote [Text Block]

SCT Total to Compensation Actually Paid Reconciliation for the PEO and non-PEOs:

 

   Calculation for PEO   Calculation for Average of Non-PEOs
Calculation(1) of Compensation 
Actually Paid
  Year 2020
($)
   Year 2021
($)
   Year 2022
($)
   Year 2023
($)
   Year 2020
($)
   Year 2021
($)
   Year 2022
($)
   Year 2023
($)
 
Summary Compensation Table Total   19,328,499    23,553,861    21,478,167    22,582,776    5,293,847    6,501,277    6,221,750    7,204,864 
Less aggregate change in actuarial present value of pension benefits   (381,567)                (242,276)            (78,205) 
Less grant date fair value of stock and option awards   (14,210,301)    (15,395,836)    (15,091,731)    (15,895,993)    (3,338,770)    (3,795,780)    (3,973,993)    (4,666,270) 
Add year-end fair value of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year   10,733,219    20,972,489    19,885,285    20,091,360    2,521,801    5,170,727    5,236,173    5,897,817 
Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied at fiscal year-end or during the fiscal year   (1,703,747)    1,725,480    4,975,264    (2,942,513)    (289,494)    371,980    1,146,440    (703,510) 
Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards granted in prior fiscal years   (4,843,424)    11,475,277    17,170,099    7,580,277    (1,008,977)    2,802,051    4,154,201    1,904,573 
Add dividends paid on unvested equity awards during the fiscal year   205,554    226,093    234,826    231,996    42,264    51,964    57,997    60,621 
Compensation Actually Paid   9,128,233    42,557,364    48,651,910    31,647,903    2,978,395    11,102,219    12,842,568    9,619,890 

  (1)     For the PEO and other NEOs, for each covered year, service cost and prior service cost of pension benefits equals $0, fair value of awards that are granted and vest in the same covered fiscal year equals $0, and fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year equals $0.
     
Compensation Actually Paid vs. Total Shareholder Return [Text Block]

 

The following charts set forth the relationship between CAP to our PEO, the average of CAP to our other NEOs, and the company’s cumulative TSR, S&P A&D Index TSR, net earnings, and ROIC over the four-year period from 2020 through 2023, each as set forth in the table above.

 

     
Compensation Actually Paid vs. Net Income [Text Block]

 

The following charts set forth the relationship between CAP to our PEO, the average of CAP to our other NEOs, and the company’s cumulative TSR, S&P A&D Index TSR, net earnings, and ROIC over the four-year period from 2020 through 2023, each as set forth in the table above.

 

     
Compensation Actually Paid vs. Company Selected Measure [Text Block]

The following charts set forth the relationship between CAP to our PEO, the average of CAP to our other NEOs, and the company’s cumulative TSR, S&P A&D Index TSR, net earnings, and ROIC over the four-year period from 2020 through 2023, each as set forth in the table above.

 

     
Total Shareholder Return Vs Peer Group [Text Block]

The following charts set forth the relationship between CAP to our PEO, the average of CAP to our other NEOs, and the company’s cumulative TSR, S&P A&D Index TSR, net earnings, and ROIC over the four-year period from 2020 through 2023, each as set forth in the table above.

 

     
Tabular List [Table Text Block]

2023 Tabular List of Most Important Financial and Non-Financial Performance Measures

 

The following table presents the financial and non-financial performance measures that the company considers to have been the most important in linking CAP to our PEO and other NEOs in 2023 as set forth in the table above to company performance. The measures in this table are not ranked.

 

Most Important Performance Measures
Diluted EPS
Free Cash Flow
Operating Margin
Return on Invested Capital
Total Shareholder Return
 
     
Total Shareholder Return Amount $ 163 152 125 87
Peer Group Total Shareholder Return Amount [5] 119 112 95 84
Net Income (Loss) Attributable to Parent $ 3,315,000,000 $ 3,390,000,000 $ 3,257,000,000 $ 3,167,000,000
Company Selected Measure Amount [6] 0.123 0.126 0.119 0.118
PEO Name Ms. Phebe N. Novakovic Ms. Phebe N. Novakovic Ms. Phebe N. Novakovic Ms. Phebe N. Novakovic
Measure [Axis]: 1        
Pay vs Performance Disclosure [Table]        
Measure Name Diluted EPS      
Measure [Axis]: 2        
Pay vs Performance Disclosure [Table]        
Measure Name Free Cash Flow      
Measure [Axis]: 3        
Pay vs Performance Disclosure [Table]        
Measure Name Operating Margin      
Measure [Axis]: 4        
Pay vs Performance Disclosure [Table]        
Measure Name Return on Invested Capital      
Measure [Axis]: 5        
Pay vs Performance Disclosure [Table]        
Measure Name Total Shareholder Return      
PEO [Member] | Less aggregate change in actuarial present value of pension benefits        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] $ (381,567)
PEO [Member] | Less grant date fair value of stock and option awards        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] (15,895,993) (15,091,731) (15,395,836) (14,210,301)
PEO [Member] | Add year-end fair value of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] 20,091,360 19,885,285 20,972,489 10,733,219
PEO [Member] | Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied at fiscal year-end or during the fiscal year        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] (2,942,513) 4,975,264 1,725,480 (1,703,747)
PEO [Member] | Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards granted in prior fiscal years        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] 7,580,277 17,170,099 11,475,277 (4,843,424)
PEO [Member] | Add dividends paid on unvested equity awards during the fiscal year        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] 231,996 234,826 226,093 205,554
Non-PEO NEO [Member] | Less aggregate change in actuarial present value of pension benefits        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] (78,205) (242,276)
Non-PEO NEO [Member] | Less grant date fair value of stock and option awards        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] (4,666,270) (3,973,993) (3,795,780) (3,338,770)
Non-PEO NEO [Member] | Add year-end fair value of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] 5,897,817 5,236,173 5,170,727 2,521,801
Non-PEO NEO [Member] | Add change in fair value (whether positive or negative) as of vesting date of awards granted in prior fiscal years for which all applicable vesting conditions were satisfied at fiscal year-end or during the fiscal year        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] (703,510) 1,146,440 371,980 (289,494)
Non-PEO NEO [Member] | Add change in fair value (whether positive or negative) as of fiscal year-end for unvested and outstanding awards granted in prior fiscal years        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] 1,904,573 4,154,201 2,802,051 (1,008,977)
Non-PEO NEO [Member] | Add dividends paid on unvested equity awards during the fiscal year        
Pay vs Performance Disclosure [Table]        
Adjustment to Compensation Amount [2] $ 60,621 $ 57,997 $ 51,964 $ 42,264
[1] For each year represented, Ms. Phebe N. Novakovic was our principal executive officer (PEO), and our non-PEO NEOs were Messrs. Jason W. Aiken, Mark L. Burns, Robert E. Smith and Mark C. Roualet.
[2] For the PEO and other NEOs, for each covered year, service cost and prior service cost of pension benefits equals $0, fair value of awards that are granted and vest in the same covered fiscal year equals $0, and fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year equals $0.
[3] Amounts shown for CAP are computed in accordance with Item 402(v) of Regulation S-K under the Exchange Act and do not reflect the actual amount of compensation earned by or paid to the NEOs during the applicable year. These amounts reflect total compensation as reported in the SCT with certain adjustments as required by Item 402(v) of Regulation S-K and described in footnote (c) below.
[4] CAP reflects the exclusions and inclusions of equity awards for the PEO and the other NEOs as set forth below and calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The valuation methodologies and assumptions, with certain modifications pursuant to SEC guidance, used to calculate CAP are based on our grant date fair value of these awards as disclosed in the company’s consolidated audited financial statements filed with the SEC on Form 10-K for the years reflected in the table below. The amounts shown for 2022 for the PEOs’ CAP and the non-PEO NEOs’ CAP have been corrected to subtract $25,760 and $17,982, respectively. The amounts shown for 2021 for the PEOs’ CAP and the non-PEO NEOs’ CAP have been corrected to subtract $39,619 and $110,670, respectively. The amounts shown for 2020 for non-PEO NEOs’ CAP have been corrected to add $93,710.
[5] TSR shown in this table utilizes the S&P 500 Aerospace & Defense (A&D) Index, which we use in our stock performance graph required by Item 201(e) of Regulation S-K included in the company’s consolidated audited financial statements filed with the SEC on Form 10-K for the years reflected in the table above. The comparison assumes $100 was invested for the period starting December 31, 2019, through December 31 of the applicable fiscal year in each of the company’s Common Stock and the S&P A&D Index. All dollar values assume reinvestment of the pre-tax value of dividends paid by companies included in the S&P A&D Index. The historical stock price performance of our Common Stock shown is not necessarily indicative of future stock price performance. 
[6] Pursuant to Item 402(v) of Regulation S-K, we determined annual ROIC to be the most important financial performance measure used to link company performance to CAP to our PEO and other NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2022, 2021, and 2020 ,and we may determine a different financial performance measure to be the most important such measure in future years. See Appendix A for a discussion of this non-GAAP measure.