Textron 2021 Proxy Statement

TEXTRON 2021 PROXY STATEMENT 53 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 33,000 employees located throughout the world, with approximately 76% in the U.S., 11% 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 2020 fiscal year, we used “annual rate”, as reflected in our enterprise-wide human resources information system, as of October 1, 2020, 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 2020, we determined that the “median employee” was a full-time, hourly employee located in the U.S. Total compensation for the median employee in the 2020 fiscal year was in the amount of $106,481. “Annual total compensation” of the median employee includes regular and overtime earnings, an 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 2020 fiscal year was $17,793,202, which is a $22,421 increase over the amount reflected in the “Total” column in the Summary Compensation Table on page 41. 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 2020 the ratio of the annual total compensation of Mr. Donnelly to the annual total compensation of the median employee was 167 to 1.