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BAE Systems CEO made almost £1m extra in share sale after hike in price since Gaza war

A chief executive of Britain’s leading arms manufacturer has seen his share price sell-off boosted by almost £1 million following an increase in his company’s share value since the start of the Gaza-Israel war.

On 9 March, BAE Systems CEO, Charles Woodburn, sold 331,716 personal shares of stock in the company, netting him £4,163,035. The sale was to pay income tax and National Insurance contribution liabilities from the 704,014 performance shares Woodburn received under the BAE Systems Long Term Incentive Plan.

An equivalent sale of shares before Hamas’ attack on Israel on 7 October would have earned Woodburn £3,252,807, when BAE Systems’ average stock price was £9.81 compared to £12.55 when he offloaded his holdings. That difference netted Woodburn about £910,228.

The total value of Woodburn’s 704,014 bonus shares on 8 March stood at just over £8.83 million. BAE’s share price has risen some 39% since 6 October 2023. At the time of writing, the price stands at £13.63.

The company, valued at almost £38 billion, recently issued its 2023 report noting underlying profits before interest and tax of £2.7 billion, arising from record sales of £25.3 billion. Woodburncited “rising instability across Europe, the Middle East and other parts of the world” for global increases in defence spending.

Between 2013 and 2022, BAE Systems PLC saw more than £194 billion in sales, with a cumulative operating profit of £17 billion. 

Woodburn has benefited enormously from the company’s profits. He was awarded £13.45 million in 2023, a rise of 112% from his total pay of £6.34 million in 2021. 

Part of this increase on the part of Woodburn’s bonus is linked to share price rises following the invasion of Ukraine and the recent tragedies in Gaza and Israel.

At least 32,142 Palestinians have been killed and 74,412 wounded since Israel’s bombardment and siege of the Gaza Strip began, according to the Gazan Health Ministry. The recent and unprecedented escalation in violence followed Hamas’ assault on Israel on the 7th October. Up to 1200 Israelis were killed and 253 hostages were seized, according to Israeli authorities.

BAE Systems supplies the Israeli Air Force with weapons systems for their fleet of F-15, F-16 and F-35 fighter jets, which have in the past been used to carry out “waves of airstrikes across the Gaza strip”. BAE Systems was awarded a $20.4 million contract in 2018 to supply transmitters for Israel’s F-35s and belongs to a collaborative effort with Lockheed Martin and Northrop Grumman to develop the tail of F-35 fighter jet.

In February, the Court of Appeal in the Hague asserted that there is “a clear risk that Israel’s F-35 fighter jets might be used in the commission of serious violations of international humanitarian law.” The court ordered the Netherlands government to block the export of all F-35 fighter jet parts to Israel over the “undeniable” risk.

 The Canadian government has also stated it will halt all arms shipments to Israel, noting it cannot be fully assured that Israel is complying with Canada’s export regime.

The UK arms industry has come under repeated scrutiny in recent years, including legal challenges to the UK government presented by Oxfam and Campaign Against the Arms Trade(CAAT) to the High Court demanding a cease of arms sales to Saudi Arabia, which had amounted to £25 billion since the conflict began in 2015.

Responding to Woodburn’s share bonuses, Emily Appe, CAAT’s Media Coordinator said : “Woodburn is directly profiting from the horrendous war crimes Israel is committing against Palestinian people. These obscene profits show exactly what is wrong with the arms trade. War, death and destruction are all good business for arms dealers. They have no interest in peaceful solutions because it is instability and conflict that drive up share prices and allow them to make even more money selling yet more weapons to fuel conflict around the world.”

A BAE Systems spokesperson said: “Mr Woodburn recently exercised a long-term incentive award that vested at the end of last year.  He only sold the number of shares required to fund his tax and insurance liability on exercise.”

There is no accusation by AOAV that BAE Systems or Mr Woodburn has done anything illegal in this sale trade.

The UK government has previously refused to export components in 2011 and 2012 to Israel due to concerns over the country’s “respect for human rights and international humanitarian law.” It is not yet known whether Foreign Secretary, David Cameron, will follow through on his warning to Israel that the UK will cease arms sales if detained Palestinian suspects are denied access to the Red Cross.

Dr Iain Overton of Action on Armed Violence said of Mr Woodburn’s profits: “‘The financial benefits accruing to individuals as a direct result of military conflicts highlight a grave and discomforting paradox in global defense economics. The stark contrast between the economic gains of a few and the loss and suffering of many underscores a disconcerting alignment of market success with geopolitical instability. While the legality of such transactions is not in question, the ethical implications warrant serious contemplation and discourse. This situation is a call to action for the international community to reassess the mechanisms of the global arms trade and its implications for peace and human security.”