LOCKHEED MARTIN CORP

Pay Versus Performance

The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee views the link between the Company’s performance and its NEOs’ pay. For a discussion of how the Company views its executive compensation structure, including alignment with Company performance, see “Compensation Discussion and Analysis” beginning on page 29.

The use of the term “compensation actually paid” (CAP) is required by SEC rules. Neither CAP nor the total amount reported in the Summary Compensation Table reflect the amount of compensation actually paid, earned, or received during the applicable year. Per SEC rules, CAP was calculated by adjusting the Summary Compensation Table Total values for the applicable year as described in the footnotes to the following table.

(1)The individuals comprising the Non-PEO NEOs are for 2025: Mr. Scott, Mr. St. John, Mr. Cahill, Mr. O’Connor, and Mr. Malave; for 2024: Mr. Malave, Mr. St. John, Ms. Hill and Mr. Lightfoot; for 2023: Mr. Malave, Mr. St. John, Mr. Cahill and Mr. Ulmer; for 2022: Mr. Malave, Mr. John W. Mollard, Mr. St. John, Mr. Scott T. Greene, Ms. Maryanne R. Lavan and Mr. Ulmer; and for 2021: Mr. Mollard, Mr. Kenneth P. Possenriede, Mr. St. John, Mr. Richard F. Ambrose, Ms. Hill and Ms. Marillyn A. Hewson.

(2)CAP reflects the total compensation reported in the Summary Compensation Table for the applicable year adjusted to include or exclude the amounts shown in the tables below for the NEOs. Amounts in the “Exclusion of Change in Pension Value” column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table. Amounts in the “Exclusion of Stock Awards” column are the totals from the “Stock Awards” column set forth in the Summary Compensation Table. The “Inclusion of Pension Service Cost” column would report amounts based on the pension service cost for services rendered during the listed year and any prior service cost or credit attributable to a plan amendment for services rendered prior to the amendment. There are no amounts listed in this column because the Company’s pension plan was frozen effective January 1, 2020 and there have not been any plan amendments triggering additional costs or credits in the years covered. Equity values are calculated in accordance with FASB ASC Topic 718.

• The amounts in the “Inclusion of Equity Values” column in the table above are derived from the amounts set forth in the following table, which reflects the forfeiture and clawback of Mr. Malave’s equity awards as described in the CD&A:

(3)Reflects S&P Aerospace & Defense Index.

(4)“Net income” is equivalent to “Net earnings” as reported in the Company’s financial statements.

(5)SEC rules require us to designate a “company-selected measure” that in our assessment represents the most important financial performance measure (that is not total stockholder return or net income) used by the Company to link the CAP of our NEOs, for the most recently completed fiscal year, to our performance. We selected Free Cash Flow as this measure for 2022, 2023, 2024 and 2025 as reflected in column (i) in the first table above. Free Cash Flow is a non-GAAP measure and is defined as cash from operations less capital expenditures. See Appendix A for more information on Free Cash Flow and how it is calculated. This performance measure may not have been the most important financial performance measure for 2021 and we may determine a different financial performance measure to be the most important financial performance measure in future years.

Relationship Between CAP and Cumulative TSR, Net Income and Free Cash Flow

The following chart sets forth the relationship between CAP for our PEO, the CAP average for our other NEOs, and our cumulative total stockholder returns during thefive most recently completed years. As illustrated, CAP generally correlates with our total stockholder returns as the majority of executive compensation is delivered through long-term incentives, the value of which is largely dependent on total stockholder return, including changes to our stock price and our forecasted performance factor for the unvested PSUs granted over the last three years.

The stockholder return performance indicated on the graph below is not a guarantee of future performance.

Net Income and Free Cash Flow are also important components of our executive compensation incentive plans. Free Cash Flow is incorporated in both our annual and long-term incentive plans, while Net Income is part of the formula for our ROIC calculation in our long-term incentive program. While Net Income and Free Cash Flow are key financial measures that can also affect our TSRs, they do not have as strong of a relation to CAP given that the methodology in determining CAP is primarily based on changes to equity-based award values tied to our annual stock price performance.

As shown in the Pay Versus Performance table on page 58 above, CAP increased from 2021 to 2022, decreased from 2022 to 2023, increased from 2023 to 2024 and decreased from 2024 to 2025, while Net Income decreased from 2021 to 2022, increased from 2022 to 2023, decreased from 2023 to 2024 and 2024 to 2025, while Free Cash Flow decreased from 2021 to 2022, increased from 2022 to 2023, decreased from 2023 to 2024 and increased from 2024 to 2025. See “2025 Compensation Elements” in the CD&A for more information on the impact of these measures to 2025 incentive awards.

Stockholder Returns Versus Peer Group

For purposes of the Pay Versus Performance disclosure, we measure our TSR performance against the industry-focused index disclosed in the stock performance graph of our Annual Report on Form 10-K. The comparison assumes $100 was invested in the Company and in the S&P Aerospace & Defense Index for the period starting December 31, 2020 and was held through the end of each year listed in the first table set forth above. All dollar values assume reinvestment of dividends paid by companies in the index. Historical stock performance is not necessarily indicative of future stock performance. This table does not reflect how the Compensation Committee considers TSR in setting executive pay or linking executive pay to Company performance.

Other Most Important Performance Measures