This summary highlights selected information contained in this proxy statement, but it
does not contain all the information you should consider. We urge you to read the
whole proxy statement before you vote. This proxy statement was first mailed to
shareholders on or about April 21, 2017.
WE WILL BE VOTING ON THE FOLLOWING MATTERS:
AGENDA ITEM
VOTING RECOMMENDATION
MORE INFORMATION
1. Election of ten directors nominated by Raytheon's Board
Current Committee Memberships:
Audit Committee (Chair)
Public Affairs Committee
Robert E. Beauchamp
57
2015
Current Committee Memberships:
Audit Committee
Management
Development and
Compensation
Committee
Vernon E. Clark (Lead Director)
72
2005
Current Committee Memberships:
Special Activities
Committee (Chair)
Stephen J. Hadley
70
2009
Current Committee Memberships:
Governance
and Nominating
Committee (Chair)
Management
Development and
Compensation
Committee
Special Activities
Committee
Letitia A. Long
58
2015
Current Committee Memberships:
Audit Committee
Public Affairs
Committee (Chair)
George R. Oliver
56
2013
Current Committee Memberships:
Audit Committee
Management
Development and
Compensation
Committee
Public Affairs
Committee
Dinesh C. Paliwal
59
2016
Current Committee Memberships:
Governance
and Nominating
Committee
Public Affairs
Committee
Michael C. Ruettgers*
74
2000
Current Committee Memberships:
Governance
and Nominating
Committee
Special Activities
Committee
William R. Spivey
70
1999
Current Committee Memberships:
Governance
and Nominating
Committee
Management
Development and
Compensation
Committee (Chair)
James A. Winnefeld, Jr.
61
2017
Current Committee Memberships:
Audit Committee
Special Activities
Committee
Inside Director
Thomas A. Kennedy
61
2014
Number of Meetings in 2016
Audit Committee: 9
Governance
and Nominating
Committee: 9
Management
Development and
Compensation
Committee: 6
Public Affairs
Committee: 6
Special Activities
Committee: 7
*Mr. Ruettgers will be retiring from the Board effective May 25, 2017.
COMPOSITION OF THE BOARD
*Mr. Ruettgers will be retiring from the Board effective May 25, 2017.
BOARD TENURE AND REFRESHMENT
Our Board represents a balance of long-term members
with in-depth knowledge of our business and new
members who bring valuable attributes, skills, and
experience. The Board has undergone significant
refreshment over the last five years.
DIVERSITY OF SKILLS AND EXPERIENCE
Our Board embodies a broad and diverse set of experiences, qualifications, attributes and skills.
Below are the skills and experience of our director nominees.
OUR 2016 PERFORMANCE
In 2016, Raytheon continued to execute our growth strategy and deliver strong program performance while also maintaining
strong operating margins. Our global team built upon Raytheon's return to growth in 2015, driven by increases in both
domestic and international sales. Highlights of our 2016 performance include:
RECORD BOOKINGS OF
$27.8 BILLION
FOR THE YEAR
FULL-YEAR
NET SALES OF
$24.1 BILLION,
UP 3.5% FOR THE YEAR
FULL-YEAR EPS FROM
CONTINUING OPERATIONS OF
$7.44
STRONG OPERATING CASH FLOW
FROM CONTINUING OPERATIONS OF
$2.9 BILLION
FOR THE YEAR
13TH
CONSECUTIVE YEAR OF
INTERNATIONAL SALES GROWTH
2016 TOTAL SHAREHOLDER
RETURN OF
16.9%
OUR EXECUTIVE COMPENSATION PROGRAM
Our Management Development and Compensation Committee (MDCC) designed our executive compensation program to
attract and retain highly-qualified executives, motivate our executives to achieve our overall business objectives, reward
individual performance, and align our executives' interests with those of our shareholders. Our program's primary direct
compensation elements are base salary, annual cash incentives, and long-term equity incentives. The MDCC focuses on the
appropriate mix between fixed and at-risk variable compensation, and short-term cash and long-term equity compensation to
provide total direct compensation opportunities that meet our objectives. Our base salaries are competitive and reflect an
executive's experience and scope of responsibilities. Our annual cash incentives and long-term equity incentives motivate and
reward Raytheon and individual performance. Our long-term equity incentives also align executives' interests with those of our
shareholders, and help retain highly-qualified executives.
Most of our executives' compensation is at risk and varies based on performance. Due to Raytheon's strong 2016 financial
performance, our annual cash incentive was funded and our long-term equity performance plan paid out above pre-determined
targets. Our Named Executive Officers also achieved strong results against their individual performance goals in 2016.
Consistent with our compensation objectives, our Named Executive Officers, or NEOs, received the following
compensation in 2016:
Thomas A. Kennedy
Chairman and Chief Executive Officer
$1,299,979
$2,938,400
$5,000,028
$3,899,980
$13,138,387
Anthony F. O'Brien
Vice President and Chief Financial Officer
$608,510
$734,400
$1,199,945
$1,100,001
$3,642,856
David C. Wajsgras
Vice President, and President of Intelligence, Information and Services (IIS)
$971,943
$1,052,500
$1,250,007
$1,300,035
$4,574,485
Richard R. Yuse
Vice President, and President of Space and Airborne Systems (SAS)
$792,506
$997,900
$1,250,007
$1,300,035
$4,340,448
Taylor W. Lawrence
Vice President, and President of Missile Systems (MS)
$728,151
$817,900
$1,250,007
$1,300,035
$4,096,093
(1) Reflects the NEO's restricted stock/unit award and 2016-2018 LTPP award (at target) granted in 2016 based on the number of shares/units multiplied by the
closing price of our common stock on the award determination date.
SHAREHOLDER ENGAGEMENT AND ADVISORY SAY-ON-PAY VOTE
We communicate annually with a significant percentage of
our shareholders (typically representing over 40% of our
shares) on governance and compensation matters. Since
2011, the first year we offered a shareholder advisory
say-on-pay vote, Raytheon's shareholders have consistently
voted overwhelmingly for our executive compensation
program, with an average of 95.0% voting in favor.
We view this support as an indication of broad shareholder
agreement with the philosophy and policies underpinning
our executive compensation program.
Votes Cast “FOR” Say-on-Pay Vote
GOVERNANCE HIGHLIGHTS
Major elements of our governance profile are summarized below. We discuss most of these matters in greater detail in this
proxy statement.
RECENT DEVELOPMENTS
Significant Board Refreshment.
Two new directors added in the last twelve months; a total of seven added and six departed in the last five years
Proactive Adoption of Proxy Access By-Law in March 2016.
3% ownership/3-year holding period/cap of 20% of Board (but not less than two directors)
Redesigned Proxy Statement in 2017.
Proxy statement revamped to be more readable and useful for shareholders
INDEPENDENCE
All non-employee directors are independent
Independent directors regularly meet in executive session
