Textron 2021 Proxy Statement

30 TEXTRON 2021 PROXY STATEMENT How did the Committee Make 2020 Target Pay Decisions? Prior to making decisions on compensation, the Committee reviewed the following items: • Compensation data for each NEO • A detailed compensation benchmarking study comparing each NEO’s current target compensation by component and in total to the market median of the talent peer group • A retention analysis that examines the value of compensation an executive would forfeit upon termination • Potential share-derived wealth and share ownership information for each NEO Additionally, the CEO provided input to the Committee regarding compensation decisions for NEOs other than himself, including his assessment of each individual’s responsibilities and performance, the complexity of their position against market benchmarks, their experience and future potential. In approving 2020 target pay the Committee considered the CEO’s input and made its own assessment of competitive pay and performance. The Committee’s philosophy has been to provide target total direct compensation for our CEO at levels generally competitive with market median, taking into consideration Mr. Donnelly’s longer tenure and leadership contributions. In addition, the Committee has placed greater emphasis on increases in long-term incentive compensation, which is tied to the Company’s stock price performance and, with respect to PSUs, is heavily performance-based, in order to align Mr. Donnelly’s interests with our shareholders’ interests. This approach has resulted in a pay mix that is in close alignment with talent peer company practices which also emphasize incentive pay. After considering the Company’s 2019 financial results and stock price performance, as well as the benchmarking study, the Committee determined not to increase 2020 compensation for Messrs. Donnelly, Connor or Lupone. With respect to Ms. Duffy, the Committee increased her base salary, with the corresponding increases in target annual and target long-term incentive compensation, by approximately 9% in order to move Ms. Duffy’s compensation closer to market median of the talent peer group companies. What is the Target Pay and Pay Mix for Our Executives? The following table shows 2020 target total pay, along with the target for each component of target total pay, for Textron’s NEOs that was established at the Committee’s January 2020 meeting. Target direct compensation was maintained at 2019 levels for our CEO and all other NEOs, except that Ms. Duffy’s target was increased consistent with the competitive range of the talent peer group companies. At-Risk Compensation Name Position Base Salary Target Annual Incentive Target Long-Term Incentive Target Total Pay % Increase Over 2019 Scott C. Donnelly CEO $1,236,000 $1,854,000 (150% of salary) $11,022,000 (892% of salary) $14,112,000 0% Frank T. Connor CFO 1,000,000 1,000,000 (100% of salary) 3,250,000 (325% of salary) 5,250,000 0% E. Robert Lupone General Counsel 800,000 600,000 (75% of salary) 1,400,000 (175% of salary) 2,800,000 0% Julie G. Duffy EVP, HR 600,000 450,000 (75% of salary) 1,050,000 (175% of salary) 2,100,000 9%