Northrop Chief’s Pay Drops

Northrop Grumman Corp. cut Chief Executive Ronald Sugar’s total pay by 20% to $8.6 million in 2005 as he and the company’s other top executives were denied stock options.

Sugar earned $1.41 million in salary and a bonus of $3.5 million last year, the Century City-based company said Friday in a filing with the Securities and Exchange Commission. He also received an incentive payout of $3.39 million and other compensation totaling $252,581.

The company “exceeded all of the performance measurement criteria set forth at the beginning of the period,” the filing said.

All categories of Sugar’s compensation rose last year, except that he received no options, compared with a 2004 grant of 250,000 options.

Northrop shares rose 11% last year, lagging behind the 14% gain in the Standard & Poor’s aerospace and defense index. Sales rose 2.9% to $30.7 billion, compared with a 12% increase the year before.

In 2004, Sugar earned total pay of $10.7 million, including $1.28 million in salary, a $3.1-million bonus, an incentive payment of $2.36 million, other compensation of $169,736, and the options grant.