KRATOS DEFENSE AND SECURITY SOLUTI (KTOS)
Sector: Industrials
2026 Annual Meeting Analysis
KRATOS DEFENSE AND SECURITY SOLUTI · Meeting: May 12, 2026
Directors FOR
9
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Anderson has served since 1997 and brings extensive financial and legal expertise; KTOS's 3-year return of +406.5% outperforms the peer group median by +287.4 percentage points, far exceeding the 65-point threshold needed to trigger a vote against, and he meets all other policy criteria with no attendance, overboarding, or independence concerns.
Boyd joined in November 2023 — fewer than 24 months before the meeting date — so he is exempt from the TSR underperformance trigger under the new-director exemption, and his military and AI/autonomy background is highly relevant to Kratos's defense technology mission.
DeMarco is the CEO and a director since 2003; KTOS's 3-year return of +406.5% outperforms the peer group median by +287.4 percentage points, well above the 65-point threshold required to trigger a vote against an executive director, and he passes all other policy criteria.
Doorenbos joined in March 2024 — fewer than 24 months before the meeting — so she is exempt from the TSR trigger under the new-director exemption, and her Air Force and unmanned systems operational background is directly relevant to Kratos's business.
Hoglund has served as Chairman since 2009 and brings deep financial and defense industry expertise; the strong TSR outperformance versus peers means no TSR trigger fires, and he meets all other policy criteria with no overboarding or attendance issues.
Jarvis has served since 1997 and contributes M&A and investment expertise; the 3-year TSR outperformance of +287.4 percentage points over the peer median is well above the 65-point threshold needed to trigger a vote against, and he meets all other policy criteria.
King joined in March 2026 — within the past 24 months — so he is exempt from the TSR trigger under the new-director exemption, and his four decades of aerospace and defense executive experience, including leading Dynetics to a $1.65 billion sale, is highly relevant to Kratos's strategy.
Lund is the CFO and a non-independent director serving on no board committees, so there is no independence-on-committee concern; KTOS's 3-year outperformance versus peers means no TSR trigger fires, and her CPA background and long tenure as CFO provide clear financial expertise.
Zegart has served since 2014 and brings national security, AI, and intelligence policy expertise directly relevant to Kratos; the strong TSR outperformance over the peer group clears the policy threshold by a wide margin, and she meets all other policy criteria.
All nine director nominees earn a FOR vote. KTOS's 3-year stock return of +406.5% outperforms the disclosed compensation peer group median by +287.4 percentage points, far exceeding the 65-point threshold that would be needed to trigger votes against incumbent directors. Three directors who joined within the past 24 months (Boyd, Doorenbos, King) are exempt from the TSR trigger under the new-director exemption. No director has overboarding, attendance, independence-on-committee, or familial-relationship concerns.
Say on Pay
✓ FORCEO
Eric DeMarco
Total Comp
$10,832,739
Prior Support
91.74%%
CEO Eric DeMarco received total compensation of $10,832,739 for fiscal 2025, which is within a reasonable range for a CEO of a $12.6 billion defense technology company that delivered record revenues and Adjusted EBITDA. The pay program is well-structured: roughly 76% of DeMarco's 2025 pay is variable (equity awards plus performance-based cash bonus), comfortably exceeding the 50-60% variable pay threshold, and approximately 50% of equity grants are performance-based restricted stock awards tied to multi-year Adjusted EBITDA growth targets. The company's 3-year stock return of +406.5% dramatically outperforms the peer group median of +119.1%, confirming strong pay-for-performance alignment, and shareholders gave the program 91.74% support at the 2025 meeting, reflecting broad endorsement of the compensation structure. The company also maintains a meaningful clawback policy updated in 2023 to comply with SEC Rule 10D-1, and no excise tax gross-up provisions are being added to new agreements.
Auditor Ratification
✓ FORAuditor
Deloitte & Touche LLP
Tenure
13 yrs
Audit Fees
$2,608,650
Non-Audit Fees
$598,795
Non-audit fees (audit-related fees of $257,007 plus tax fees of $339,893 plus other fees of $1,895, totaling $598,795) represent approximately 23% of audit fees ($2,608,650), well below the 50% threshold that would raise independence concerns. Deloitte was first appointed in June 2013, giving it roughly 13 years of tenure — below the 25-year threshold that would trigger a negative vote. Deloitte is a Big 4 firm fully appropriate for a company of Kratos's $12.6 billion market cap, and no material restatements were identified.
Overall Assessment
The 2026 Kratos annual meeting is a clean ballot with no significant governance concerns: all nine directors earn a FOR vote on the strength of exceptional 3-year stock outperformance versus peers, the Say on Pay program earns a FOR given strong performance-based pay structure and near-record shareholder approval last year, and the auditor ratification clears all policy screens with low non-audit fees and reasonable tenure. The non-standard proposals — an authorized share increase, officer exculpation, and an equity plan top-up — are standard corporate housekeeping items, with the equity plan expansion left unevaluated under current policy scope.
Compensation Peer Group
8 companies disclosed in 2026 proxy filing