Good morning, everyone.
Good morning.
I'm Kathy Warden, Chair, CEO and President of Northrop Grumman. I wanna thank you all for joining us today. It's great to be back in person with you in an in-person shareholder meeting. I'd now like to call the meeting to order. Before turning to the business before us today, I wanna comment briefly on recent events and provide you a short update on the company. The invasion of Ukraine has created a profound humanitarian crisis, and our thoughts are with the people of Ukraine as they defend their freedom and protect their way of life. Recent world events have reminded us of the importance of the defense systems that we build for our nation, for our allies, and how they help to protect human rights, avoid conflicts, and deter aggression.
Our company is proud of our long history of supporting this noble mission. Before beginning the formal business today, I also want to touch on our strategy. In our recent earnings call, I reminded you that we have four areas of focus that our company has been enabling for the last four years. First, we're maintaining technology leadership and delivering innovative and affordable solutions. Next, we're sustainably and profitably growing our business in our customers' highest priority missions while maintaining our contracting discipline. We're keeping laser-focused on performing and driving cost efficiencies. Finally, we are focused on deploying our capital in value-creating ways for our customers and our shareholders. We believe that this strategy has created strong alignment of our portfolio with our customers' most important work, as well as strengthened our position in our industry.
We continue to demonstrate the ability to deliver these compelling solutions in this environment, and that's created value for our shareholders, which resulted in 29% shareholder return in 2021. I also wanna highlight that none of this can be done without a strong culture and our people. That's one of the reasons we have focused on having industry-leading ESG practices. We encourage you to take a look at our sustainability report, which we recently published, and to look at the progressive governance structure, culture, commitment to engagement, equity, diversity, and inclusion, as well as environmental sustainability. Let me now turn to the conduct of our meeting. We've set an agenda and established rules of conduct to help ensure a fair and orderly proceeding that's inclusive and affords our shareholders the opportunity to comment on the matters that are before us today.
In particular, we've taken steps to ensure that our shareholders have an opportunity to present shareholder proposals, comment, and ask any questions on those proposals as outlined in the proxy. Both the agenda and the meeting procedures are also available on our investor relations meeting website if you would like to refer to them, and I do intend to conduct the meeting in accordance with both. I'd like to now introduce Don Felsinger, the company's Lead Independent Director. Don, if you will stand. As well as the other nominees of the Board of Directors who are all here with us in person today. I will read your names and then ask all of you to stand when I conclude.
David Abney, Marianne Brown, Anne Fudge, Bill Hernandez, Maddie Kleiner, Karl Krapek, Graham Robinson, Gary Roughead, Tom Shuey, Jim Turley, and Mark Welsh. Thank you, ladies and gentlemen. All of our nominees are currently members of the Board of Directors. They have agreed to serve if elected, and their names and short bios appear in the proxy statement for this meeting. Our Board of Directors fixed March 22, 2022 as the record date for determining the shareholders of record who were entitled to and received notice of the ability to vote at this meeting. Computershare Trust Company has been appointed the Inspector of Elections for this meeting. Jennifer C. McGarey is our Corporate Vice President and Secretary, and she will be acting as the Secretary for the meeting. Jennifer, if you'd please give the Secretary's report.
Each shareholder of record as of the record date has been given proper notice of this meeting and has been furnished with a written copy of or was provided electronic access to the proxy statement dated April 1, 2022, a proxy card, and the 2021 annual report. Affidavits related to the mailing and electronic availability of the notice and report and proxy statement will be filed with the records of this meeting. The holders of common stock have one vote per share. On the record date, there were 155,703,868 common shares outstanding. I'm able to report that the shares represented at this meeting represent a majority of the shares entitled to vote and that a quorum is present.
Thank you, Jennifer. If there's any shareholder present who has not already voted or holds a proxy card that he or she would like to vote for another shareholder, and you'd like to do so at this time, please raise your hand. If you wish to vote by ballot after the proposed items of business are presented and need an official ballot, please raise your hand. Very good. We'll now review the matters to be voted on, and I'd like to ask Jennifer to please proceed with the transaction of business.
Before we proceed, there are a few ground rules I'd like to mention. First, according to the company's bylaws, any matters which were to be put to the vote of the shareholders have already been submitted according to the notice requirements and were set forth in the proxy statement. No other matters may be put to vote at this meeting. It is May eighteenth, 8:06 A.M., and the polls are currently open. I'll now turn it over to Kathy to introduce the items of business.
We'll now present, entertain comments and questions, and vote on the items of business set forth in the proxy statement. Then we will receive the report of the Inspector of Elections on the vote and adjourn. Please note that we intend to solicit and address shareholder questions when the relevant item is brought before the meeting. The first order of business is the election of the 13 directors of the company, each of whom will hold office until the 2023 annual meeting of shareholders, or until his or her earlier resignation or removal. The nominees and their bios were listed in the proxy statement. Are there any questions or comments on this first management proposal? Thank you. We'll move on to the next item of business.
The second item on the agenda is the proposal to approve, on an advisory basis, the compensation of the named executive officers. Are there any comments or questions on this second management proposal? Thank you. The third item on the agenda is the proposal to ratify the appointment of Deloitte & Touche as the independent auditor for the company for the year ending December thirty-first, two thousand and twenty-two. We do have in attendance in the meeting, representatives of Deloitte & Touche. Steve, if you'll please stand. Are there any comments or questions on this management proposal? Thank you, Steve. The fourth item on the agenda is the shareholder proposal that the ownership threshold for shareholders to call a special meeting be reduced from 25% to 10%. We've been told that John Chevedden will be presenting this proposal.
Welcome, Mr. Chevedden. We're glad you could join us. Operator, if you would please open the line for Mr. Chevedden to present his proposal.
Your line is open, Mr. Chevedden. John Chevedden. Can you hear me okay?
Yes, Mr. Chevedden, we can hear you.
Proposal four, special shareholder meeting improvement. Shareholders ask our board to take the steps necessary to amend the governing documents to give the owners of the combined 10% outstanding common stock the power to call a special shareholder meeting. It is important for a more reasonable 10% of shares to have the right to call for a special shareholder meeting to help make up for our totally useless right to act by written consent. It's worse to have no right at all than to find out that a right that is technically on the books at Northrop Grumman is totally useless.
No group of shareholders who own 25% of Northrop Grumman would find it attractive to do so little as to obtain a date on the calendar for management that then forces these same shareholders to scramble with money out of their own pockets to meet a written consent deadline when these same owners of 25% of our company could compel management to do the scrambling and hold a special shareholder meeting. To initiate written consent at Northrop Grumman, 25% of shares must now petition management for the baby step of a record date. Once a record date is obtained, then shareholders are on a tight deadline to obtain the consent of 51% of shares outstanding, which is equal to 60% of the shares that vote at the annual meeting. This turns into giving Northrop Grumman shareholders a classic catch-22 dilemma.
In order to get a record date, 25% of shares must give their contact information to management. Thus, it is easier than shooting fish in a barrel for Northrop management, with free access to the corporate war chest and professional proxy solicitors, to pester the 25% of shares with messages and telephone calls to change their mind and revoke their support for acting by written consent. Thus, while the base of 25% of shares in favor of acting by written consent is easily vulnerable to management attack with deep pockets company money, these shareholders have the formidable task of doubling their numbers to 51% of shares in a limited period of time with money out of their own pockets.
This is all the worse at Northrop because Northrop shareholders gave an impressive 54% support for a genuine right to act by written consent, and Northrop management disingenuously gave shareholders in return a useless right to act by written consent that does nothing more than clutter up the bylaws of Northrop Grumman. We need a right for 10% of the shares to call for a special shareholder meeting to help make up for our useless right to act by written consent. Please vote yes. Proposal four, special shareholder meeting improvement.
Thank you, Mr. Chevedden. As always, we appreciate your input. Operator, if you will please close that line. Are there any other additional comments or questions regarding this shareholder proposal? I would like to acknowledge that we have long been committed to ensuring that our shareholders have meaningful rights to provide input and influence the direction of the company and to do so in a way that respects not only the interest of single shareholders, but all shareholders. That also helps the company to create long-term value. We appreciate the engagement that this proposal has led to with our shareholders, and we'll continue to discuss it in the year ahead. This does complete the formal business that was scheduled to come before the meeting, except of course for the voting.
Jennifer has voted the shares represented by the proxies that have been given to management before the meeting, and these votes have been tallied by the Inspector of Elections. Any votes that were submitted at this meeting will be included in the final tally once the Inspector of Elections has had an opportunity to verify the shares. If anyone has ballots they wish to submit, please pass your ballots in the aisle. I don't see any. Thank you. I see no additional ballots. The time is 8:12 A.M., so I declare that the polls are now closed. We've received the preliminary results of the meeting from the Inspector of Elections. Are there results of the election available at this time? If you'll please bring them forward. Thank you. Jennifer, if you'll share the results.
Based on the preliminary report of the Inspector of Elections, each of the thirteen nominees for director received at least 118,334,949 votes, has been elected director of the company until the 2023 annual meeting of shareholders, or until his or her earlier resignation or removal. The proposal to approve on advisory basis the compensation of our named executive officers received 122,047,000 votes and has passed. Proposal to ratify the appointment of Deloitte & Touche as the company's auditor for 2022 received 134,598,218 votes and has passed.
Based on the preliminary results, the shareholder proposal to move to a 10% ownership threshold for shareholders to call a special meeting received 63,526,028 votes, which is just over 50% of the votes cast. This concludes my report.
Thank you, Jennifer. The board of directors very much appreciate, and we will carefully consider all of our input from shareholders, including the results of the vote on the shareholder proposal to change the threshold to call a special meeting. We thank you all for your attendance and your continued interest in the company.