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Table of Con en COMPENSATION DISCUSSION AND ANALYSIS SUMMARY COMPENSATION TABLE 2011 Summary Compensation Table
Change in Pension Value and NonQualified Deferred Compensation Earnings (5) ($) 5,276,169 699,987 1,702,285 1,190,384 994,044 520,661 1,146,473 483,435 286,428 2,354,970 1,793,114 0 2,434,630 1,551,922

Name & Principal Position Wesley G. Bush Chairman, Chief Executive Officer and President James F. Palmer Corporate Vice President and Chief Financial Officer Gary W. Ervin Corporate Vice President and President, Aerospace Systems James F. Pitts (7) Corporate Vice President and President, Electronic Systems Linda A. Mills (8) Corporate Vice President and President, Information Systems

Year 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010

Salary (1) ($) 1,471,251 1,334,615 950,000 845,258 820,194 800,001 845,257 781,731 598,077 845,258 781,731 600,001 770,233 721,154

Bonus (2) ($) 0 0 0 250,000 0 233,333 0 0 0 0 0 0 0 0

Stock Aw ards (3) ($) 9,400,723 8,349,848 4,121,084 2,350,181 4,907,860 2,015,552 3,628,648 2,406,340 1,576,450 2,350,181 2,406,340 1,576,450 2,115,147 2,208,350

Option Aw ards (3) ($) 3,576,969 7,155,165 2,382,560 894,246 4,477,369 1,165,941 894,246 1,524,405 912,554 894,246 1,524,405 912,554 804,818 1,400,034

Non-Equity Incentiv e Plan Compensation (4) ($) 4,027,500 3,037,500 1,068,750 1,250,000 1,000,000 820,000 1,250,000 1,000,000 600,000 1,200,000 1,000,000 600,000 1,150,000 900,000

All Other Compensation (6) ($) 2,489,832 2,272,297 157,401 918,134 151,137 133,373 202,873 195,386 97,280 164,830 122,898 76,107 230,588 265,335

Total ($) 26,242,444 22,849,412 10,382,080 7,698,203 12,350,604 5,688,861 7,967,497 6,391,297 4,070,789 7,809,485 7,628,488 3,765,112 7,505,416 7,046,795

(1) This column includes amounts that were deferred under the savings and nonqualified deferred compensation plans. (2) Pursuant to his March 12, 2007 offer letter, Mr. Palmer received a signing bonus of $700,000 in three installments ($233,333) each in 2007, 2008 and 2009. Mr. Palmer also received a recognition bonus for the spin-off of our former shipbuilding business in 2011. (3) The dollar value shown in these columns is equal to the total grant date fair value of RPSRs, RSRs, and options granted during 2011. For information on each grant, see the 2011 Grants of Plan-Based Awards table. For a discussion on valuation assumptions, see the discussion in Note 17 of the Company s 2011 Form 10-K for the fiscal year ended December 31, 2011, adjusted to exclude forfeitures. The maximum grant date value of 2011 RPSRs for each NEO, which assumes a 200% maximum payout, is listed below: Wesley G. Bush James F. Palmer Gary W. Ervin James F. Pitts Linda A. Mills $8,523,026 $2,130,757 $2,130,757 $2,130,757 $1,917,667

(4) These amounts were paid pursuant to the Company s annual cash bonus program. This column includes amounts that were deferred under the savings and nonqualified deferred compensation plans. (5) The amounts in this column relate solely to the increased present value of the executive s pension plan benefits (see the description of these plans under the Pension Benefits table). There were no above-market earnings in the nonqualified deferred compensation plans (see the description of these plans under the Nonqualified Deferred Compensation table). The amount accrued in each year differs from the amount accrued in other years due to an increase in the number of years of service and any increases or decreases in pay (salary and bonus). The amount reflected is also sensitive to changes in the interest rate used to determine the present value of the payments to be made over the life of the executive. Of the $5,276,169 change in pension value in 2011 for Mr. Bush, approximately $1,500,000 was due to the lower discount rate used in 2011, $3,000,000 was due to the increase in his pay, and $700,000 was due to an additional year of age and service. (6) The 2011 amount listed in this column for Mr. Bush includes medical, dental, life and disability premiums ($51,616), Company contributions to Northrop Grumman defined contribution plans ($180,350), financial planning/income tax preparation ($22,850) and other perquisites including personal liability insurance and executive physicals for years 2009 through 2011 ($7,000). In addition, the Company incurred $2,228,016 in costs related to security protection for Mr. Bush. These costs included $250,882 attributable to personal travel, including travel expenses for family members accompany Mr. Bush while on travel, on Company aircraft consistent with the Company s security program. 46
l NORTHROP GRUMMAN CORPORATION 2012 ANNUAL MEETING OF SHAREHOLDERS

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Table of Con en COMPENSATION DISCUSSION AND ANALYSIS SUMMARY COMPENSATION TABLE (con in ed) The 2011 amount listed in this column for Mr. Palmer includes medical, dental, life and disability premiums ($39,500), Company contributions to Northrop Grumman defined contribution plans ($73,810), security costs and personal travel on Company aircraft, including travel expenses for family members accompanying Mr. Palmer while on travel ($33,229), relocation expenses ($750,000) and other perquisites including financial planning/income tax preparation, personal liability insurance and executive physicals for years 2009 through 2011 ($21,595). The 2011 amount listed in this column for Mr. Ervin includes medical, dental, life and disability premiums ($39,500), Company contributions to Northrop Grumman defined contribution plans ($73,810), security costs and personal travel on Company aircraft, including travel expenses for family members accompanying Mr. Ervin while on travel ($69,379) and other perquisites including financial planning/income tax preparation, personal liability insurance and executive physicals for years 2009 through 2011 ($20,184). The 2011 amount listed in this column for Mr. Pitts includes medical, dental, life and disability premiums ($50,606), Company contributions to Northrop Grumman defined contribution plans ($72,585), security costs and personal travel on Company aircraft, including travel expenses for family members accompanying Mr. Pitts while on travel ($36,796) and other perquisites including personal liability insurance and executive physicals for years 2009 through 2011 ($4,843). The 2011 amount listed in this column for Ms. Mills includes medical, dental, life and disability premiums ($39,686), Company contributions to Northrop Grumman defined contribution plans ($66,809), security costs and personal travel on Company aircraft, including travel expenses for family members accompanying Ms. Mills while on travel ($103,158) and other perquisites including personal liability insurance, financial planning/income tax preparation and executive physicals for years 2010 and 2011 ($20,935). Method for Calculating Personal Use of Company Aircraft Value The following method was used to calculate the value of personal use of Company aircraft described in the paragraphs above. The Company calculates the incremental cost of each element, which includes trip-related crew hotels and meals, in-flight food and beverages, landing and ground handling fees, hourly maintenance contract costs, hangar or aircraft parking costs, fuel costs based on the average annual cost of fuel per mile flown, and other smaller variable costs. Fixed costs that would be incurred in any event to operate Company aircraft (e.g., aircraft purchase costs, maintenance not related to personal trips, and flight crew salaries) are not included. The amount related to the loss of tax deduction to the Company due to the personal use of corporate aircraft under the Internal Revenue Code is not included. Method for Calculating Personal Security Costs As discussed above under Security Arrangements, the Company provides certain NEOs with residential and personal security protection due to the nature of our business, which dictates certain security and personal safety requirements. The amounts reflected in the All Other Compensation column include expenses for residential and personal security that are treated as perquisites under relevant SEC guidance, even though the need for such expenses arises from the risks attendant with their positions with the Company. The Company calculates the cost of travel security coverage based on the hourly rates and overhead fees charged directly to the Company by the firms providing security personnel. If Company security personnel are used, their hourly rates are used to calculate the cost of coverage for each trip. (7) Due to the technical interaction of two pension plans, when calculated pursuant to SEC reporting rules, Mr. Pitts net accrual for 2009 was negative, which is reported as zero in the column entitled Change in Pension Value and Non-Qualified Deferred Compensation Earnings. (8) Ms. Mills was not a named executive officer in 2009; therefore, data for 2009 are not applicable.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND 2012 PROXY STATEMENT l

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