General Dynamics looking for next CEO

FALLS CHURCH, Va. – Defense contractor General Dynamics Corp.’s board of directors met Wednesday to consider a successor to Chief Executive Nicholas Chabraja, who plans to retire next summer.

Chabraja, 65, told reporters after the company’s annual shareholder meeting Wednesday morning that he will step down at the end of June 2009. He said the board would discuss a replacement later in the day, but did not give specifics on when an announcement would be made.

“It’s been a great run,” Chabraja said of his nearly 11-year tenure as CEO. “The company has done spectacularly well. I’ve been privileged to lead it.”

During Chabraja’s time as a company executive, General Dynamics purchased ship maker Bath Iron Works, private jet maker Gulfstream Aerospace, General Motors’ defense unit, and the information technology company Anteon International.

In a conference call last month, Chabraja said a decision on his replacement already had been made and that a successor would be publicly named this month. But he told Wall Street analysts on the call that the board had to meet again to cement its choice.

Chabraja will not leave the executive office empty-handed. According to the company’s proxy statement filed in March with the Securities and Exchange Commission, Chabraja will receive a retirement package worth more than $67 million from the vesting of stock options, the value of his pension and other perks.

That amount likely will change by the time Chabraja retires, since much of the package’s value comes from stock options that are affected by changes in the company’s share price.

Some analysts have speculated that Chabraja’s successor will be an executive inside the company, but Chabraja would not comment.

Falls Church-based General Dynamics is one of the nation’s largest defense contractors, making everything from warships to bullets for the military. Its armored vehicle division, which builds tanks and armored vehicles, has benefited from heavy Pentagon spending on the wars in Iraq and Afghanistan.