Lockheed Retains E&Y

April 23, 2004 (PLANSPONSOR.com) - Shareholders of Lockheed Martin Corp voted to retain auditors Ernst & Young LLP.

Shareholders at the company’s annual meeting held in Fort Worth, Texas overwhelmingly approved the accounting firm.   Ernst & Young was reappointed with 94% of the company’s shareholders voting yes, according to a Bloomberg News report.

Additionally, some shareholders of the Bethesda, Maryland-based defense contractor had publicly questioned some non-audit functions performed by Ernst & Young.   Last year, Lockheed paid the accounting firm $16.8 million, 43% of which was for non-audit work.

Lockheed investors such as the California Public Employees’ Retirement System (CalPERS), the nation’s largest public  pension fund, and the United Association S&P 500 Index Fund said such work could cast doubt on the quality of its audits.  “We didn’t want the same thing to happen to Lockheed that happened to Enron Corp.; that’s why we wanted an independent audit,” said United Association spokesman Joe Hall. “All their eggs are in one basket, the same as with Arthur Andersen and Enron.”

The vast majority of Lockheed shareholders disagreed. Eighty-eight percent of the company’s shareholders rejected a proposal to limit Ernst & Young’s role to audit only functions.