Hello and welcome to Lockheed Martin Corporation's 2024 annual meeting of stockholders. Please note that today's meeting is being recorded. At the conclusion of the business of the meeting, we'll have a discussion period. If you access the meeting by entering the control number provided to you in your proxy materials, you may submit one question or comment at any time by clicking on the Q&A icon near the top right of your screen, typing in your question into the box that appears, and then clicking Send. Please also be advised that remarks made during today's meeting may include forward-looking statements covering future events, and that the company's actual results may differ materially from those projected in the statements.
Please refer to the SEC filings, including our 2023 Form 10-K and First Quarter 2024 Form 10-Q, for information on factors that could cause actual results to differ materially from those in the forward-looking statements. These filings are available on Lockheed Martin's website and on the SEC's website. It is now my pleasure to turn today's meeting over to Mr. Jim Taiclet, Chairman, President, and Chief Executive Officer of Lockheed Martin Corporation. Mr. Taiclet, the floor is yours.
Thank you, and good morning, everyone. I'm Jim Taiclet, Chairman, President, and CEO of Lockheed Martin Corporation. Welcome to Lockheed Martin's 2024 annual meeting of stockholders. Before I turn over to the official business of this meeting, I'd like to take a moment to thank our Lockheed Martin team, many of whom are stockholders, for their remarkable work and ingenuity that is enabling our enterprise-wide transformation and leadership in advancing our 21st-century security vision. I'd also like to thank the stockholders who have taken the time to join our meeting today, and we appreciate your continued investment in Lockheed Martin. Now, turning to the business of the meeting, this meeting is hereby called to order.
Joining us for today's meeting are Marianne Lavan, our Senior Vice President, General Counsel, and Corporate Secretary, who will act as the Secretary of the Meeting, and representatives of Computershare Trust Company, who have been appointed to serve as the inspectors of election at the meeting. Also joining us today are other members of our management team, including Frank St. John, our Chief Operating Officer; Jay Malave, our Chief Financial Officer; Greg Poling, our Chief Human Resources Officer; and Leo Mackay, our Senior Vice President of Ethics and Enterprise Assurance. We are also joined by members of the Board of Directors. Two of our directors, Jim Ellis and Dan Akerson, have reached our mandatory retirement age and are not standing for reelection.
I want to personally thank Jim, who has served as a director for 20 years, and Dan, who has served for 10 years, including as Independent Lead Director since 2019, for their many years of dedicated service and contributions to the board and our company. Lastly, representatives from Ernst & Young LLP, our independent auditors, are also present at the meeting. During the discussion period that follows the meeting, they will be available to answer your questions. Before proceeding to the official business of the meeting, I'd like to advise you that the agenda and the rules and procedures that we will be following today are posted on the virtual meeting site. If you access the meeting by entering the control number provided to you in your proxy materials, you may submit a question for consideration during the discussion period at the conclusion of the meeting.
Please limit yourself to one question so that we can answer as many pertinent stockholder questions as time permits. Stockholders who wish to vote during the meeting may do so throughout the meeting until I announce that the polls have been closed. If you have already voted in advance, there is no need to vote during the meeting unless you wish to change your vote. As a reminder to all Lockheed Martin Savings Plan participants, the deadline to vote your plan shares was April 29th, and in-meeting voting is therefore not available. Marianne Lavan has advised me that the notice of this meeting, the proxy statement, and the annual report were duly and properly distributed to all stockholders of record as of the close of business on February 26th, 2024, and the affidavits to that effect will be filed with the records of this meeting.
The inspectors of election have reported that a quorum of stockholders is present to conduct the meeting based on stockholder proxies received. With notice and quorum requirements of our bylaws satisfied, we may proceed with today's meeting. Now we'll turn to the official business of this meeting. Detailed information regarding each of the six proposals to be covered is set forth in the Proxy Statement. The seventh proposal listed in the Proxy Statement was withdrawn by the stockholder proponent and will not be presented or voted upon in this meeting. At this time, I introduce and present Proposals one through three. Proposal one is the election of 11 directors to serve on the board of directors. The board recommends for each nominee. Proposal two is the advisory vote to approve the compensation of our named executive officers. The board recommends for the proposal.
Proposal three is the ratification of the appointment of Ernst & Young LLP as our independent auditors for 2024. The board recommends for the proposal. Proposals four through six are stockholder proposals that will be introduced and presented by each proponent. The board recommends against each stockholder proposal. I now invite the stockholder who submitted Proposal four requesting a report on alignment of political activities with human rights policy to present the proposal. Operator, please activate the proponent's line.
Thank you. I apologize. The proponent has disconnected. Please stand by while we reconnect him. A stockholder proponent has informed us that they are having technical difficulties presenting the proposal.
Therefore, I will present the proposal. This is Chairman Taiclet. Proposal four, as reproduced in the Proxy Statement, is now presented. We will now move to the next proposal.
Good morning. My name is Abigail Paris, speaking on behalf of shareholder representative As You Sow. Thank you for the opportunity to present today. I move Proposal five requesting that Lockheed issue a report disclosing how it intends to fully reduce its full value chain emissions in alignment with the Paris Agreement's 1.5 degrees Celsius goal. By adopting a plan to reduce its value chain emissions, this proposal will help Lockheed cement its position as the leading edge of defense, contribute to national security, and protect its business from climate-related costs. Last year, 35% of shareholders supported a similar proposal, reflecting that over a third of investors desire more information about how Lockheed is planning to position itself for long-term success. Despite the widespread support from Lockheed's shareholders, the company has failed to respond to investor concerns and has yet to address the essential objective of the proposal.
We acknowledge that as a defense company, Lockheed faces unique challenges in addressing the emissions of its materials and products. However, Lockheed's primary customers, including the US DOD, the Department of Defense, recognize that climate change is a threat multiplier and that reducing dependence on fossil fuels is a critical military advantage. Lockheed's ability to develop lower carbon supply chains and military capabilities will drive the company's value and meeting customer needs. While Lockheed Martin has set an emissions reduction target for its operation, this goal covers only 2% of the company's total emissions. Investors lack insight into how the company will measure, manage, and reduce the risks associated with its vast supply chain, representing 98% of the company's overall emissions. Lockheed's current disclosures, including its sustainability management pack, lack clarity about how Lockheed is planning to meet transition challenges and create long-term value.
As a result, Lockheed remains exposed to competitive risk as peers and customers ambitious decarbonization targets, transition risk through increased carbon pricing mechanisms, and physical risk from supply chain disruptions. Meanwhile, fellow climate defense contractors and industrial peers, including Safran, Airbus, Honeywell, and Saab, are already committed to cutting emissions across all scopes and positioning themselves to maximize climate-related opportunities. By disclosing a report on how Lockheed Martin intends to reduce its full value chain emissions, the company will provide investors with critical information about how the company intends to mitigate transition costs associated with emerging regulation and demonstrate how it will compete in a low-carbon regulatory environment. Thank you for your time today. Please vote for item five.
Thank you. The line is now muted.
Thank you for presenting the proposal. It has been properly submitted. I now invite the stockholder who submitted Proposal six requesting a reduction in the threshold to call a special stockholder meeting to present the proposal. Operator, please activate the proponent's line.
Thank you. The line has been activated.
Hello. This is John Chevedden. Proposal six, special shareholder meeting improvement. Shareholders ask our board to take the steps necessary to give the owners of a combined 15% of our outstanding common stock the power to call a special shareholder meeting. It seems reasonable for a combined 15% of Lockheed Martin shares to call for a special shareholder meeting since a lone Lockheed Martin shareholder who owns 10% of Lockheed Martin shares can now call for a special shareholder meeting. Lockheed Martin shareholders gave 46% support to this proposal topic in 2022 when it called for the lower 10% of shares to have the right to call for a special shareholder meeting. This 46% support likely represented 51% support from the Lockheed Martin shares that have access to independent proxy voting advice and are not forced to rely upon the biased views of the board of directors.
It is important to remember that it took much more Lockheed Martin shareholder conviction to vote for the 2022 special shareholder meeting improvement proposal and thereby reject the recommendation of the board of directors than simply follow the board of directors' recommendation. The Lockheed Martin board of directors' comments on this proposal topic in 2022 failed to recognize that it now only theoretically takes 25% of Lockheed Martin shares to call for a special shareholder meeting. This theoretical 25% translates into 33% of Lockheed Martin shares that cast ballots at our annual meeting. It would be hopeless to expect that the shares that do not have the time to vote would have the time to go through the special procedural steps to call for a special shareholder meeting.
It is important to have a more reasonable stock ownership percentage to call for a special shareholder meeting to help make up for the fact that we do not have a shareholder right to act by written consent. Many companies provide for both a shareholder right to call for a special shareholder meeting and a shareholder right to act by written consent. Southwest Airlines and Target are companies that do not provide for shareholder written consent and yet somewhat make up for this by providing for 10% of shares to call for a special shareholder meeting. In 2021, Lockheed Martin shareholders gave 46% support to a shareholder proposal for a right to act by written consent in spite of board of directors' resistance propped up by misleading board of directors' statements.
When reading the board of directors' statements next to this proposal or any other shareholder proposal, it is important to remember that there's a formal process to root out any misleading shareholder text in a shareholder proposal, but there's no similar process to root out misleading board of directors' text next to a shareholder proposal. Thus, the board of directors can get a free ride in opposing a shareholder proposal with misleading arguments. Please vote yes to special shareholder meeting improvement Proposal six.
Thank you. The line is now muted.
Thank you for presenting the proposal. It has been properly submitted. Now I would like to go back to Proposal four and offer the proponent to present Proposal four.
Hello. Can you hear me?
Thank you. Your line has been activated.
Thank you. Good morning, members of the board and shareholders. My name is Tom McCaney, and I represent the Sisters of St. Francis of Philadelphia. I'm here today to move Shareholder Proposal Number four, which calls for an alignment report of Lockheed's political activities with its human rights policy. We encourage all shareholders to support the proposal. In a society struggling with excessive violence, nuclear threats, and climate crisis, we assert that there is a clear moral responsibility for Lockheed Martin and its investors to acknowledge the direct role that the defense industry plays in perpetuating human rights harms in war and conflict. Despite its commitments to uphold the highest standards of human rights, Lockheed and its defense industry peers spend significant amounts of money on direct and indirect lobbying, electioneering, and think tank donations. In 2024 alone, Lockheed spent over $14 million on federal lobbying.
Investors are concerned that these undisclosed lobbying activities may undermine its own human rights commitments. For example, Lockheed has contracts with or supplies weapons to multiple states engaged in conflict and who are connected to gross human rights violations, including Saudi Arabia, United Arab Emirates, and Israel. Independent reporting has shown that the company lobbies heavily to ensure it continues its contracts and weapons supplies to these states, despite the significant material risks associated with their poor human rights track records. Lockheed's current disclosure on political activities is limited to just a small subset, such as federal direct lobbying, and it is virtually impossible to interpret how money is used. When the details of such lobbying efforts are exposed, the reality is deeply concerning.
For example, Lockheed reportedly paid $155,000 to a lobbying firm in 2023 that also represents the Saudi Arabian government and lobbied against resolutions to end U.S. involvement in the Saudi-led war in Yemen. Lockheed supplies arms to the Saudi Arabia-UAE-led coalition and was notably linked to a widely condemned school bus attack in 2018 that resulted in the deaths of dozens of children. We are asking for more transparency on Lockheed's political activities because we want to be assured it is not trying to shape foreign policy that is at odds with its human rights commitments. The reputational damage that can arise from misalignment can affect the company's performance, and most importantly, political activities that promote war and conflict have irremediable consequences, such as the loss of human life, which we uphold as sacred.
This proposal is an invitation to deeply examine the business model in the context of Lockheed's human rights commitments and political activities and a call for the company to stop incentivizing war. We offer this proposal, supported by strong legal and financial risk assessments, to the company and its shareholders requesting an alignment report. We remain committed to our engagement with you and will continue to urge you to make progress on these important issues. Thank you.
Thank you. The line is now muted.
Thank you for presenting the proposal. It has been properly submitted. That concludes the presentation of the proposals. I will now pause for one minute before closing the polls to allow stockholders adequate time to consider the discussions and complete their online voting on all proposals as properly presented.
Time has now elapsed.
At this time, I'd like to announce the preliminary voting results for the proposals properly presented today. The preliminary results are based on all proxies returned as of this morning prior to the meeting. After the meeting, the inspectors will count any additional votes received through the closing of the polls. Official results will be announced by the filing of a Form 8-K within four business days. The preliminary results are: Proposal one, each of the 11 director nominees is elected to the board of directors. Proposal two, the compensation of our named executive officers is approved on an advisory basis. Proposal 3, the appointment of Ernst & Young LLP as our independent auditors for 2024 is ratified. Proposal four, the stockholder proposal requesting a report on alignment of political activities with human rights policy is not approved.
The stockholder proposal requesting a report on reducing full value chain GHG emissions is not approved. The stockholder proposal requesting a reduction in the threshold to call special stockholder meetings is not approved. Your board and management team take seriously the feedback that we receive from you, our stockholders. We want to thank you for that input and for your participation in the voting process today. The board will discuss today's voting outcomes at its next meeting. This concludes the official business of our meeting today, and the meeting is now adjourned. We will now open the meeting to questions from our stockholders. We will answer as many questions as we can during the meeting. I will now turn to Maria Riccardone, our Vice President, Treasurer and Investor Relations, to monitor the Q&A. Over to you, Maria.
Great. Thank you, Jim. As a reminder to our stockholders on the call, if you have not already submitted a question, you may do so by clicking the Q&A icon near the top right of your screen, typing your question into the box that appears, and then clicking Send. The first question is: When do you intend to launch a commitment aiming for net zero covering Scope one, two, and three emissions by 2050 or sooner?
As discussed extensively in our 2024 Proxy Statement, particularly in our response to stockholder Proposal five requesting a report on reducing full value chain GHG emissions, at this time, it's not feasible for Lockheed Martin to state a timeline for setting a Net Zero commitment covering Scope one, two, and three emissions. Our climate targets are integrated with our overall financial and strategic planning cycles, which are set over three to five years. We make some projections in 10-year cycles. Setting long-term climate targets detached from these planning cycles would increase risk and cost to our company because the targets would be wholly detached from our robust and sound business planning process.
Thank you. The next question is: Would you please provide an overall status update on Orion's readiness for the Artemis II Moon mission?
For Artemis II, the spacecraft that will carry astronauts beyond the Moon for the first time, the crew module and service module are at the Kennedy Space Center and are nearly complete, and they're going now through environmental testing. The heat shield is installed. Crew module and service module have been mated together and have been powered on, and the spacecraft has completed its first round of functional testing. Leading up to the Artemis II mission, Orion is building and installing new components not flown on Artemis I. These include life support systems, displays, and controls, a new battery design, and other crew systems. These components will undergo rigorous testing to qualify for flight, and it is normal as part of this first-time development to discover challenges with components during testing.
These challenges are worked in depth with the technical teams and will be resolved to ensure mission success and crew safety. We're very dedicated to both the safety of the Artemis II mission and also delivering the Orion vehicle on time for the new September 2025 launch date.
Thank you. The next question is: How many deliveries will there be in 2024 of the F-16, F-35, and C-130?
For the F-16, it should be approximately 20 aircraft deliveries in 2024. For the F-35, the deliveries will range between 75 and 110. For the C-130, the deliveries will be approximately 20 aircraft in 2024.
Great. Thank you. It appears that there are no additional questions today. I will turn it back to you, Jim.
Thank you all for your questions and comments. I also want to thank everyone who attended today's meeting. This concludes the 2024 annual stockholders' meeting.
Thank you. This concludes the meeting. You may now disconnect.