WASHINGTON – Lockheed Martin’s tumultuous time last year was tough on more than just shareholders.
Vance Coffman, Lockheed's chief executive officer, also took a hit in the wallet.
The aerospace and defense giant’s board of directors withheld a 1999 bonus for Coffman at his request because Lockheed had a year of "serious program and financial performance issues," according to a company statement released Wednesday by the Securities and Exchange Commission.
The statement did not say how much Coffman would lose. His bonus for 1998 was $1.25 million, on top of his $1 million-plus salary.
In 1999, the world’s largest defense contractor had a number of setbacks in its space business, including several launch failures and the loss of a major spy satellite contract to rival Boeing.
Lockheed also took responsibility for the loss of NASA’s $250 million Mars Climate Orbiter in September and the $165 million Mars Polar Lander, which vanished in December as it began its descent to the Red Planet's surface.
While the Bethesda, Maryland-based company acknowledged an "unacceptably disappointing year," it also pointed to successful launches of the Atlas 5, Proton 5, Titan 3 and Athena 2 rockets.
But it was Lockheed's major misfires in its financial projections that eroded the company's stock value.
Lockheed stock has fallen steadily from a high of $55 a share in the first quarter of 1998. Thursday it closed at $17.06.
"It was a disastrous year, really, " said Paul Nisbet of JSA Research in Newport, Rhode Island. "They lost complete control of the financial picture."
The language of the company's statement made it clear that the board felt Lockheed’s performance under Coffman was lackluster. Still, he pocketed $1,257,981 in salary in 1999, up 15 percent from $1,093,750 in 1998.
The board extended kudos to Coffman and other corporate brass saying they extended sound leadership and hard work during the year.
Wall Street analysts have been putting pressure on the company to replace Coffman with a high-powered outsider, but the language in the proxy statement seemed to indicate no changes were planned.
"He probably will survive," Nisbet said. "Things seems to have turned around for the company in the past six to eight months because about $11 billion has been added to their backlog of work."
The board is to meet on April 27 at its annual meeting in Texas to vote on several issues, including the membership of next year's board.
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