2018 Proxy Statement

21 TEXTRON 2018 PROXY STATEMENT EXECUTIVE COMPENSATION HIGHLIGHTS Executive compensation decisions at Textron are made by our Board’s Organization and Compensation Committee. The Committee strives to keep pace with evolving best practices in executive compensation. The following summarizes key aspects of our executive compensation program: Best practices adopted by the Committee Practices eliminated by the Committee in recent years • 1R VLQJOH WULJJHU YHVWLQJ XSRQ FKDQJH LQ FRQWURO RI ORQJ WHUP LQFHQWLYH DZDUGV granted after 2013 • 1R WD[ JURVV XSV IRU RI¿FHUV KLUHG DIWHU • 1R HPSOR\PHQW FRQWUDFWV JXDUDQWHHLQJ ¿[HG WHUP HPSOR\PHQW RU ERQXVHV WR executives and no individual termination protection since 2008 • Limited executive perquisites Textron Stock • Robust stock ownership requirements • No hedging or pledging Textron securities • No repricing or exchanging stock options without shareholder approval 2017 SAY-ON-PAY ADVISORY VOTE ON EXECUTIVE COMPENSATION $W RXU DQQXDO PHHWLQJ VKDUHKROGHUV H[SUHVVHG VXEVWDQWLDO VXSSRUW IRU WKH FRPSHQVDWLRQ RI RXU QDPHG H[HFXWLYH RI¿FHUV ³1(2V´ RU ³H[HFXWLYHV´ ZLWK DSSUR[LPDWHO\ RI WKH YRWHV FDVW IRU DSSURYDO RI WKH VD\ RQ SD\ DGYLVRU\ YRWH RQ H[HFXWLYH compensation. The Committee evaluated the results of the 2017 advisory vote at its July meeting and made no changes to our executive compensation program and policies as a result of the vote. COMPENSATION PHILOSOPHY Textron’s compensation philosophy is to establish target total pay with reference to a talent peer group and to tie a substantial portion of our executives’ compensation to performance against objective business goals and stock price performance. This approach helps us to recruit and retain talented executives, incentivizes our executives to achieve desired business goals and aligns their interests with the interests of our shareholders. • Pay for performance—substantial portion of executives’ compensation tied to Company performance against goals set by the Committee • Pay aligned with shareholder interests—over 75% of CEO’s target compensation LV LQ WKH IRUP RI HTXLW\ EDVHG ORQJ WHUP LQFHQWLYHV • &ODZEDFN SROLF\ DSSOLHV WR DOO DQQXDO DQG ORQJ WHUP LQFHQWLYH FRPSHQVDWLRQ • Committee annually conducts performance analysis against performance peer group using operating metrics and total shareholder return