Raytheon Company (RTN)
May 31, 2012 11:00 am ET
William H. Swanson - Chairman, Chief Executive Officer and Chairman of Executive Committee
Jay B. Stephens - Senior Vice President, Secretary and General Counsel
William H. Swanson
Previous Statements by RTN
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Good morning, everyone. Will the meeting please come to order? I want to welcome you to Raytheon's 83rd Annual Meeting. I am Bill Swanson, Chairman and CEO of Raytheon.
Each of you should find a program on your chair describing the flow of the meeting and the procedures we will follow. If you don't have a program, would you please raise your hand? Like we're all set there. If this is your first meeting, you might want to familiarize yourself with ground rules. We request only shareholders or shareholders' representatives address the meeting. We also ask that you limit your questions or comments to 2 minutes. This meeting will be webcast, and we welcome those listeners. I'm pleased to report that your company had a strong year in 2011. And based on our first quarter results announced last month, we're off to a good start this year. I'll discuss our progress in a few minutes.
Right now, there's some individuals I'd like for all of you to meet. First, our Board of Directors. I'd like to introduce each director and ask them to please stand, starting first with Linda Stuntz; Bill Spivey; Ron Skates; Mike Ruettgers, our Lead Director; Fred Poses; Steve Hadley; John Deutch, Vernon Clark; and our newest member, Jim Cartwright.
Ladies and gentlemen, in addition to myself, those are your directors standing for reelection today. We are fortunate to have such a qualified, independent and committed directors serving on our board. I look forward to continuing to work with them in the future. Also with us today is Raytheon's leadership team. I'd like to ask the leadership team, please, to stand and be recognized.
I'm very proud of this team and what it has accomplished for our customers and our shareholders and thank you, all, for what you do. Joining me on stage this morning is Jay Stephens. Jay is our Senior Vice President, General Counsel and Corporate Secretary. He will act as the Secretary of the meeting and take minutes. Jay, thank you for joining us. We're also pleased to have with us here today Andrea Smith, who will provide sign language interpretation. Welcome, Andrea. Good to see you again, and thank you for coming. The board has designated Peter Descovich of Broadridge Financial Solutions as Inspector of Election today. This is Peter's ninth year serving in this capacity. Welcome back again, Peter. Good to see you.
Now let's make sure we have a quorum present.
Jay B. Stephens
Chairman, we do have a quorum.
William H. Swanson
The Secretary advises me that a quorum is present in person or by proxy. It is 11:05, I declare the polls open. The polls will remain open until all business properly before the meeting has been acted upon. The proxy describes the items to be acted upon today. If you will look at the ballot -- if you need a ballot, would you please raise your hand? Okay, thank you. We will collect any that need to be voted upon at the conclusion.
The first 3 items on the ballot as proposed by the board and discussed in the proxy are as follows: the election of all directors, the advisory vote on executive compensation and the ratification of PricewaterhouseCoopers as the company's independent auditor. These items are now formally placed before the meeting. Are there any comments on the director nominees or the company proposals? Hearing none, now I'll move to the consideration of the shareholder proposals appearing in the proxy.
We will address the proxy in the order as they appear. As we consider these proposals, I'd like you to know that the Governance and Nominating Committee and the full board engage in a thorough review of the company's governance practices to ensure that they are sound and contemporary and that we remain focused on world-class governance practices. These practices are described in detail in our proxy and additional information is available on our website at www.raytheon.com.
Now to the consideration of the first shareholder proposal, executive stock retention. Does John Chevedden or his representative wish to introduce and discuss the proposal? If so, could you please go to the microphone and begin by stating your name?
Shareholder Proposal 4 on proxy, executives to retain significant stock. Resolved, shareholders urge that our executive pay committee adopt a policy requiring that senior executives retain a significant percentage of stock acquired through equity pay programs until 1 year following the termination of their employment and to report to shareholders regarding this policy before our next annual shareholder meeting.
Shareholders recommend that a percentage of at least 33% of net after-tax stock be required. This policy shall apply to future grants and awards of equity pay and should address the permissibility of transactions such as hedging transactions, which are not sales but reduce the risk of loss to executives. This proposal asks for a retention policy starting as soon as possible.
Requiring senior executives to hold a significant portion of stock obtained through executive pay plans after employment termination would focus our executives on our company's long-term success. A Conference Board Task Force report on executive pay stated that at least hold-to-retirement requirements give executives "an ever-growing incentive to focus on long-term stock price performance."