Textron 2020 Proxy Statement

50 TEXTRON 2020 PROXY STATEMENT PAY RATIO We are required by the Dodd-Frank Wall 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 Officer, to that of an employee whose annual compensation is at the median of all our employees. Textron and its consolidated subsidiaries together have approximately 35,000 employees located throughout the world, with approximately 75% in the U.S., 12% in Europe, 7% in Canada and Mexico combined, 5% in Asia and1% elsewhere. To identify the employee with compensation at the median of all employees for our 2017 fiscal year, we used “annual rate”, as reflected 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 reflects base salary paid on an annual basis. For hourly employees, the annual rate is arrived at using their hourly rate and standard work hours. We 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-fixed 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 2018 and 2019 because we believe there was no material change to our employee population or employee compensation arrangements during 2018 or 2019 that would significantly impact our pay ratio disclosure. Total compensation for the median employee in the 2019 fiscal year was in the amount of $99,196. “Annual total compensation” of the median employee includes regular and overtime earnings, any applicable annual bonus payment, Company contributions to a 401(k) plan on behalf of the employee, and the Company-paid portion of health and welfare benefits. “Annual total compensation” for Mr. Donnelly for the 2019 fiscal year was $18,942,936, which is a $21,338 increase over the amount reflected in the “Total” column in the Summary Compensation Table on page 38. The increase reflects the inclusion of Mr. Donnelly’s health and welfare benefits which are excluded from the Summary Compensation Table amounts under SEC rules. Based upon this information, for 2019 the ratio of the annual total compensation of Mr. Donnelly to the annual total compensation of the median employee was 191 to 1.