2019 Proxy Statement

48 TEXTRON 2019 PROXY STATEMENT PAY RATIO :e are required by the Dodd Frank :all Street Reform and Consumer Protection Act and Securities and Exchange Commission (“SEC”) rules to provide the ratio of the annual total compensation of Mr. Donnelly, our Chief Executive Of¿cer, to that of an employee whose annual compensation is at the median of all our employees. Textron and its consolidated subsidiaries together have approximately 5,000 employees located throughout the world, with approximately 75 in the U.S., 12 in Europe, 7 in Canada and Mexico combined, 5 in Asia and 1 elsewhere. To identify the employee with compensation at the median of all employees for our 2017 ¿scal year, we used “annual rate”, as reÀected in our enterprise wide human resources information system, as of October 1, 2017, for all of our employees, including part time, temporary and seasonal employees. The annual rate for salaried employees reÀects base salary paid on an annual basis. For hourly employees, the annual rate is arrived at using their hourly rate and standard work hours. :e did not make any cost of living adjustments despite the large variety of labor markets in which our employees work, nor did we make any adjustments to account for the variety of compensation arrangements used to pay employees in varying roles (e.g., we did not include overtime, commissions, bonuses or other types of non ¿xed compensation). Using this methodology for 2017, we determined that the “median employee” was a full time, hourly employee located in the U.S. As permitted by SEC rules, we utilized the same median employee for 201 because we believe there was no material change to our employee population or employee compensation arrangements during 201 that would signi¿cantly impact our pay ratio disclosure. Total compensation for the median employee in the 201 ¿scal year was in the amount of $97,5 0. “Annual total compensation” of the median employee includes regular and overtime earnings, any applicable annual bonus payment, Company contributions to a 01(k) plan on behalf of the employee, and the Company paid portion of health and welfare bene¿ts. “Annual total compensation” for Mr. Donnelly for the 201 ¿scal year was $1 ,96 ,652, which is a $19,7 5 increase over the amount reÀected in the “Total” column in the Summary Compensation Table on page 6. The increase reÀects the inclusion of Mr. Donnelly’s health and welfare bene¿ts which are excluded from the Summary Compensation Table amounts under SEC rules. Based upon this information, for 201 the ratio of the annual total compensation of Mr. Donnelly to the annual total compensation of the median employee was 1 to 1.