A sweet retirement at Northrop Grumman …

July 30, 2010

Ronald W. Sugar stepped down last month as chairman and chief executive of Northrop Grumman (NOC) after 29 years at the company, under a plan announced last year. He may still do a little work for them here and there, though — starting at $5,560 a day.

Granted, the work isn’t full-time. It comes under a new year-long consulting agreement that Sugar and the company entered into, effective July 1 and attached to the quarterly report that Northrop Grumman filed yesterday. In the document, Sugar

“agrees to make himself available to perform services for the Company for up to three (3) days per month … The Company shall pay Consultant a fixed fee of $16,680 per full or partial month for consulting services performed…”

By our measure that means his pay starts at $5,560 a day — or about $695 an hour, if he works full eight-hour days (and much more if he works less). Should the defense contractor just need a an hour or two of work from Sugar in a given month? It’s still the same $16,680. (He also gets expenses reimbursed, and any travel is first class.)

It’s not like Sugar needs the work after his long run at Northrop. His total compensation over the last three years alone worked out to $56 million, according to the company’s latest proxy filing, including $157,719 in personal travel on company aircraft for last year alone. His company pensions — he benefits under nine of them — had a value of $51.7 million as of Dec. 31. Plus, he had accumulated another $11.3 million in IOUs from the company under its various deferred compensation plans. (Just for perspective: Combine all that pay and retirement compensation and it works out to more than this 2009 Pentagon shipbuilding contract won by Northrop Grumman Ship Systems.)

From that perspective, another $200,000 or so — should he do a little work for the company every month of the next year — isn’t all that much. But as taxpayers, we sure hope that the terms of Northrop Grumman’s contracts with the government aren’t quite as loose as Sugar’s little sinecure.

Image source: Northrop Grumman website

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