The Compensation & Governance Committees of the Board of Northrop Grumman is conducting a survey as to better understand and serve shareholder interests. Results will also be taken into consideration during the development of future executive compensation plans.

The Compensation Discussion & Analysis from the proxy can be found at https://appserv.northropgrumman.com/RFIFormsWeb/wrapers/CORP%20Forms/shareholder25.jsp

If you would like to view the Northrup Grumman �say on pay� online survey follow this link: https://appserv.northropgrumman.com/RFIFormsWeb/getForm.do?formId=21

Earlier this month, the U.S. Treasury delivered draft legislation to Congress regarding the independence of compensation committees and the compensation consultants they hire. Broadly speaking, the legislation addresses three areas of concern:

� Members of the compensation committee must meet new standards for independence � similar to the rules under Sarbanes-Oxley regarding members of audit committees.
� Any compensation consultants or legal counsel hired must be independent of management.
� Compensation committees must be provided the authority and funding to hire independent consultants to ensure that the committee bargains for pay packages that are in the best interests of shareholders. Further, if the committee decides not to use its own compensation consultant, it must explain that decision to shareholders.

At Compensation Resources, Inc. (CRI), we remain a truly independent compensation consultant. We offer no other services (insurance, healthcare, benefits, etc.) that could give rise to questions of conflict regarding our advice and counsel to the compensation committee. For more information regarding our Executive and Board of Director Compensation Consulting services, please call us at 201-934-0505 or email us at info@compensationresources.com

The atmosphere in today�s boardrooms is certainly not the �country club� setting that the old stereotype once suggested, and indeed, for many boards it never has been. However, the public scrutiny from shareholders, the government, and the media today is severe, to say the least. �Enterprise Risk Management� (ERM) and the position of �Chief Risk Officer� are just two examples of this emerging field in corporate governance.

Choosing to manage risks and actually doing it in an effective and meaningful way are two very different things. Anyone can create a Risk Assessment Committee of the Board, but how they translate their good intentions into actionable and quantifiable results is where much of the initial momentum is lost. An ERM plan is only as good as the behaviors it enforces. A plan with no real incentives (either positive or negative) for compliance will result in behaviors that either superficially go through the motions to give the impression of compliance, or ignore the plan altogether.

What do you think about Enterprise Risk Management? Is it another passing fad in response to the now transparent risky behaviors of banks dabbling in mortgage-backed securities? Or is this a process that will continue to gain traction in corporate America?

At Compensation Resources, Inc. (CRI), our professional consultants can provide Board Members with a customized approach to compensation that motivates the executive team to achieve the desired results and behaviors of the organization. We have years of experience in the design and development of compensation programs across a wide range of industries for both public and private companies. Please do not hesitate to call us at 201-934-0505 with any questions you may have.

On Wednesday, April 29 2009, more than fifty percent (50.34%) of Bank of America�s shareholders voted to remove CEO Kenneth D. Lewis as Chairman of the Board of Directors of the company. See related article in today�s New York Times at
http://www.nytimes.com/2009/04/30/business/30bank.html?ref=todayspaper
According to reporters, shareholders were quite vocal in their support of, or derision for Mr. Lewis and, as we now can see, they were rather evenly split. Though he was supported by the rest of the Board, the shareholders stood up and were counted � and the results are history.

Will this shareholder action spur on other activists to �get out the vote� or will this fervor subside and historical shareholder acquiescence to the Board return? Earlier this week, New York Senator Charles Schumer said he intends to introduce legislation that would require all publicly held companies to include a shareholder �say on pay� provision. In addition, the bill would require Boards to end the practice of staggering elections and hole annual votes for all Board members. Proponents of this move say that it will help shareholders vote off directors that they don�t like, rather than be able to remove the few that are up for election each year. Another component of the bill would require the Boards to set up a committee to perform a risk assessment as to whether or not the current compensation programs encourage/reward undue risk-taking.

Clearly these are dynamic times for Boards� governance and compensation committee members. At Compensation Resources, Inc., (CRI) we have dedicated professionals to assist your organization in addressing these pressing and ever-changing issues. Please do not hesitate to contact any one of our consultants should you have a question or concern.

Compensation Resources, Inc.
310 Rt. 17 North
Upper Saddle River, NJ 07458
tel. 201-934-0505
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