Northrop Chairman Sugar Receives 11% Raise

Northrop Grumman Corp. increased top executive Ronald Sugar’s compensation 11% to $5.87 million last year as rising defense spending and acquisitions boosted sales and profit.

Sugar, 55, received a salary of $1.04 million, a $2.65-million bonus, a $2.09-million incentive payment and $82,292 in other compensation pay, Century City-based Northrop said in a regulatory filing.

He also was awarded 150,000 stock options, valued at $22.5 million if the share price rises 10% annually until 2013.

Sugar, Northrop’s chairman, chief executive and president, succeeded Kent Kresa, who more than quadrupled sales and staff through $26 billion of acquisitions over 10 years. During Sugar’s first year at the helm of the aerospace and shipbuilding company, Northrop integrated TRW Inc. into the company, sold TRW’s auto unit, won a $4.5-billion missile defense program and delivered the aircraft carrier Ronald Reagan to the Navy, the company’s compensation committee said in its report.

The purchase of satellite sensor maker TRW in December 2002 helped Northrop, the third-largest U.S. defense contractor, increase sales 52% last year to $26.2 billion. Net income rose to $866 million from $64 million.

Sugar, who was president and chief operating officer before becoming CEO in April 2003 and chairman in October, was paid $5.28 million in 2002. That included a salary of $790,410, a bonus of $1.65 million, a long-term incentive payout of $2.73 million and $110,836 in other compensation. He also received options on 55,000 shares.

Separately, Northrop won a contract of $350 million to develop a communications system for the Department of Homeland Security.

The Homeland Secure Data Network will allow department personnel to exchange classified information and help consolidate the networks that the department uses, said Wood Parker, president of the Northrop unit that will work on the project.

Shares of Northrop rose 25 cents to $100.84 on the New York Stock Exchange.