Textron 2021 Proxy Statement

TEXTRON 2021 PROXY STATEMENT 35 Excluding these idle facility costs from the Enterprise NOP and Manufacturing Cash Flow calculations results in a payout of 65.2% of target, rather than the calculated payout amount of 40.1% shown above, since it resulted in Enterprise NOP having a below-target, yet above-threshold impact on the calculated payout. The Committee concluded that this adjustment would appropriately reward the extraordinary performance of these executive officers with a moderate payout increase, representing a meaningful decline from the prior year’s payout of 93.7% of target, while aligning with the interests of the Company’s employees and shareholders in ensuring that executives share in the impact of a difficult year. The Committee therefore exercised its judgment and increased the payouts for Mr. Connor, Mr. Lupone and Ms. Duffy to 65.2% of target. At the CEO’s request as described above, the Committee did not exclude the COVID-19-related idle facility costs in calculating the CEO’s 2020 annual incentive payout, which was approved at 40.1% of target. Annual incentive compensation targets and payouts for 2018, 2019 and 2020 for each NEO are shown below: Name Position Target Payout Target Payout Target Payout Scott C. Donnelly CEO $1,854,000 $2,223,000 $1,854,000 $ 1,737,000 $ 1,854,000 $ 744,000 Frank T. Connor CFO $ 850,000 $1,019,000 $1,000,000 $ 937,000 $ 1,000,000 $ 652,000 E. Robert Lupone General Counsel $ 570,000 $ 683,000 $ 600,000 $ 562,000 $ 600,000 $ 391,000 Julie G. Duffy EVP, HR $ 300,000 $ 360,000 $ 412,500 $ 387,000 $ 450,000 $ 293,000 2018 2019 2020 Annual Incentive Compensation Targets and Payouts Prior Year Performance Analysis The Committee believes that a pay-for-performance analysis should compare Company performance vs. peer performance over the time period an incentive is earned and that operating metrics are the appropriate performance comparator for annual incentive awards. Therefore, to validate that Textron’s annual incentive compensation is appropriately linked to the executives’ performance, the Committee reviewed the annual incentive compensation paid to Textron’s CEO in 2020, with respect to 2019, compared to Textron’s year-over-year operating performance for that year, relative to the annual incentive compensation paid to the performance peer companies’ CEOs compared to the year-over-year operating performance of the performance peer group companies for the corresponding year. While exactly comparable data was not available for all peer companies, indicative comparisons were made using publicly-reported GAAP operating cash flows and pre-tax earnings from continuing operations. As was the case for previous years, the Committee’s comparative analysis conducted in 2020 for payouts related to the 2019 performance period confirmed the strong correlation between Textron’s annual incentive compensation payouts and its performance relative to its peers.