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 2022 target direct compensation, the Committee considered the CEO’s input, as well as the benchmarking data and made its own assessment of competitive pay and performance. The Committee’s philosophy with respect to the CEO has been to provide target total direct compensation for Mr. Donnelly at levels generally competitive with market median, taking into consideration his longer tenure and leadership contributions. In addition, the Committee has placed greater emphasis on increases in Mr. Donnelly’s 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 his 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 emphasizes long-term incentive pay. After a review of Mr. Donnelly’s performance, the benchmarking study and the supplemental benchmarking data and analysis described above, the market data, the Company’s financial results and its stock price and relative TSR performance, the compensation consultant recommended, and the Committee determined to increase, his target total direct compensation by approximately 9%. The increase consisted of an increase in his target short-term incentive compensation from 150% to 160% of his base salary in order to improve alignment with talent peer group practices, an increase in target long-term incentive compensation of approximately 9%, and an approximately 5% increase in his base salary, which was his first base salary increase since 2018. These increases resulted in 2022 target total direct compensation for Mr. Donnelly of approximately 8% above the market median of the talent peer group, based upon the benchmarking study. In addition, after considering the Company’s 2021 financial results, the benchmarking study and the supplemental benchmarking data and analysis described above, the Committee determined to increase 2022 base salaries for each of the other named executive officers. Mr. Connor’s base salary, which had not been increased since 2017, was increased by 10%, while Mr. Lupone’s and Ms. Duffy’s base salaries were increased by 5.5% and 5.6%, respectively. The Committee did not increase annual and long-term incentives as a percentage of base salary for Mr. Connor, Mr. Lupone or Ms. Duffy, so each of their target incentive dollar amounts increased only as a result of their base salary increases. What is the Target Direct Compensation for Our Executives? The following table shows 2022 target total direct compensation, along with the target for each component of target total direct compensation, for Textron’s NEOs as established by the Committee at its January 2022 meeting. 2022 Target Total Direct Compensation At-Risk Compensation Name Position Base Salary Target Annual Incentive Target Long-Term Incentive Target Total Direct Compensation Scott C. Donnelly CEO $1,300,000 $2,080,000 (160% of salary) $12,000,000 (923% of salary) $15,380,000 Frank T. Connor CFO 1,100,000 1,100,000 (100% of salary) 3,575,000 (325% of salary) 5,775,000 E. Robert Lupone General Counsel 870,000 652,500 (75% of salary) 1,522,500 (175% of salary) 3,045,000 Julie G. Duffy EVP, CHRO 660,000 495,000 (75% of salary) 1,155,000 (175% of salary) 2,310,000 30 TEXTRON 2023 PROXY STATEMENT
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