Lockheed Martin is Over the Target

The defense giant defends its business against anti-Isreal activists, scraps quotas and is reviewing its lack of faith-based employee groups.

We recently told you about the engagement we’re doing at companies like Johnson & Johnson, where the process of submitting shareholder proposals and discussing them with management representatives opens the door to a more collegial relationship that allows us to discuss issues without always having to go through the proposal filing process. In many ways, it’s the gold standard — being very clear about having the company’s success at the front of your mind not only builds tremendous goodwill, but also often sets you apart from the vast majority of activists submitting proposals. Several days ago, we added another company to that list of gold standard players.

The Missile Makers vs. the Missile Takers

The anti-fiduciary activist crowd has a handful of industries they’re truly hardwired to dislike: there’s zero pretense of being fiduciary in their engagements, just loud demands to “shrink because we say so.” One of those industries is the defense sector, and Lockheed Martin probably takes the most flack from ESG-aligned groups when it comes to problematic areas like… being a defense company. What does a quick glance at the company’s shareholder agenda from both 2024 and 2025 show you? Activist demands to terminate Lockheed’s contracts and longstanding business relationship with the state of Israel in the name of “human rights” commitments (and no, that’s never defined).

There’s no genuine fiduciary argument to be made for these sorts of arguments. Indeed, it’d be fairly difficult to argue for terminating contracts worth billions of dollars (read: making shareholders billions of dollars) in the name of shareholder interest. Last year when we engaged with Lockheed, they mentioned their appreciation for us swatting down these sorts of activist demands from groups like the “Sisters of St. Francis.” And why shouldn’t we? Lockheed genuinely listened to our concerns, while the Sisters called us enemies of human rights for suggesting that it is, in fact, good for a missile-building company to build missiles. It was the beginning of rapport-building that, we’re hoping, is going to continue in the years to come.

Why Rapport Matters

And we have good reason for thinking so. This year we filed a resolution at Lockheed Martin on behalf of a shareholder (who’s been racking up shareholder wins this year in quite impressive fashion) about its use of diversity pipelines that get dangerously close to quotas. The company was also a founding member of Catalyst, a group aimed at increasing the gendered/racial diversity of executive boards and not via particularly organic or meritocratic methods.

And our engagement carried the same rapport that last year’s did. As President Trump’s executive orders on divisive DEI programs takes effect, federal contractors like Lockheed are already well on the path to compliance, including looking at the areas of concern we’ve raised. With these guarantees that our concerns are being addressed (not only is the team at Lockheed generally honest, but the company is not jeopardizing its new $4B missile contract to keep diversity programs alive), we successfully withdrew the proposal. Remember: withdrawals can sometimes be a better sign than a proposal actually making its way to a vote: they achieve a policy concession without actually having to achieve majority shareholder support. That shareholder’s willingness to put his shares to work on behalf of his values is bearing fruit — again.

Moving Forward

The reality is, like many companies, Lockheed’s leftward drift was partially caused by the excesses of the Biden administration but also driven by only hearing from the left-wing activist side of the corporate aisle. In this new world, with a federal government that wants Lockheed in the business of missiles and not mandated pronouns, and a growing pro-shareholder advocacy wing that wants the same, Lockheed is on a steady move back to neutrality. And now that ESG & DEI pushing activists aren’t the only ones in the shareholder arena, there’s a solid chance that the company will commit to neutrality in additional ways in the future. For example, the company reps told us that they are putting a pause on their Business Resource Groups and also reviewing the issue of the lack of faith-based BRGs in light of issues such as anti-Christian bias. Thanks to all of you for letting us represent your influence, your values, and your voice in this arena.

Jerry Bowyer is President of Bowyer Research. Isaac Willour is a Corporate Relations Analyst at Bowyer Research.