LONDON, March 19 BAE Systems Plc has
frozen the salaries of Chief Executive Ian King and two other
top executives, after group earnings were hit by U.S. budget
cuts and delays to a deal with Saudi Arabia.
In its annual report published on Tuesday, Europe's largest
defence contractor said it would freeze King's 2013 base pay at
the previous year's level of 963,050 pounds ($1.5 million) after
the company failed to hit its earnings per share (EPS) target.
Finance Director Peter Lynas and Linda Hudson, chief
executive of BAE's U.S. arm, would also have their salaries
frozen at their respective 2012 levels of 546,000 pounds and
$1.05 million, it said.
"Against the performance background ... There will be no
increase in base compensation and no increase in earnings
opportunity owing through the rest of their pay packages," said
Carl Symon, chairman of BAE's remuneration committee.
The salary freeze compares with 2012, when King's salary
rose 3 percent from the previous year, and Lynas and Hudson's
salary increased 5 percent and 3.5 percent respectively.
BAE has endured a difficult year, during which it failed to
resolve discussions with Saudi Arabia over the pricing of a
contract for Typhoon aircraft and contracts were delayed or
canceled as U.S. politicians fought over cuts to the country's
Its proposed $45 billion merger with European aerospace
group EADS, seen by some analysts as reflective of the
pressure the company is under to find growth, also collapsed in
October following German political opposition.
In February it said underlying EPS, the metric by which it
measures management performance, fell 2 percent to 38.9 pence
from the previous year, having warned in December that the delay
of the Saudi deal would hit 2012 earnings.
BAE has said it expects to see only modest growth in EPS
this year, as spending cuts hit the U.S. military budget in a
process known as "sequestration".