General Dynamic

Annual Meeting: May 6, 2020

The Chairman and CEO of General Dynamics, Phebe N. Novakovic, received $18,313,204 in compensation in 2019. However, this figure does not represent Novakovic’s total take-home pay.

Novakovic exercised options 1,199,380 shares in 2019, realizing in value $114,004,768. Novakovic is no stranger to exercising options. From 2018 to 2020, Novakovic exercised 1,328,600 option shares valued at $131,394,408. Over the same time-period, 312,454 shares vested with a value of $58,264,066. Yet she holds 429,270 fewer shares of her company’s stock in 2020 than she did in 2018.

Novakovic also enjoys lavish perquisites, which totaled $309,642 last year. The benefits include use of the company aircraft, home security, and financial planning and tax preparation services. As we have noted before, CEOs are compensated enough to cover even the finest financial planning and tax preparation services.

The median employee at General Dynamics makes $116,510 per year, more than twice the median US worker pay of approximately $49,764. General Dynamics thus reported CEO pay ratio as 1:157. If, however, rather than using the grant date values of this year’s options one used the realized value of options exercised this year ($114,004,768 cited above), then the pay ratio would be 1:1,103.