2022 Say-on-Pay Advisory Vote on Executive Compensation and 2022 Shareholder Outreach Executive compensation decisions at Textron are made by the Committee. One of the guiding objectives of Textron’s compensation program, as established by the Committee, is to align executive compensation with shareholder value creation. Therefore, the Board and the Committee carefully consider the full range of shareholder feedback and vote outcomes from our Annual Meeting each year. At our 2022 Annual Meeting, approximately 93.5% of our shareholders approved our advisory say-on-pay vote on 2021 executive compensation. As we have done during the last several years, during 2022, we made significant efforts to engage with our institutional shareholders to discuss various environmental, social and governance (“ESG”) matters, including compensation matters. Our outreach team included our Executive Vice President and General Counsel, our Executive Vice President and Chief Human Resources Officer, our Vice President of Investor Relations, our Executive Director, Environmental, Health & Safety and Sustainability, our Senior Executive Counsel and our Director of Sustainability. Shareholders were also offered Board member participation. During 2022, we reached out to our 25 largest institutional shareholders representing approximately 68% of our outstanding shares to offer an engagement call with our team, and representatives of institutional shareholders, representing approximately 33% of our outstanding shares, participated in engagement calls with us. Institutional shareholders representing approximately 21% of our outstanding shares advised that they had no need for a call. We received valuable feedback during our engagement calls on governance, sustainability, human capital management and other matters, all of which was communicated to the Committee and to our full Board on a regular basis throughout the process. Based upon these discussions and with the strong majority of shareholders being supportive of our recently redesigned long-term incentive compensation program, the Committee did not make any changes for the 2022 executive compensation program. We intend to continue to regularly engage with our investors to hear their views on our executive compensation program as well as on other matters. RISKS RELATED TO COMPENSATION The Committee strives to set compensation policies for senior executives which do not encourage excessive risk-taking that could endanger the Company. For 2022, the Committee completed a full review of managing risk within our executive compensation program. This review was informed by a risk analysis of our executive compensation program conducted by the Committee’s independent compensation consultant. The consultant’s risk analysis concluded that our executive compensation program has no elements that are likely to cause a material adverse outcome for the Company. This annual review helps the Committee to structure executive compensation programs that are designed to avoid exposing the Company to unwarranted risk. OTHER COMPENSATION PROGRAMS Textron provides certain other compensation programs (such as retirement benefits) that are designed to provide to NEOs the same level of benefits provided to non-executive officers. Certain of these programs provide benefits over any caps mandated by government regulations, including: ● Textron Spillover Pension Plan: Non-qualified benefit plan to make up for IRS limits to qualified pension plans. ● Textron Spillover Savings Plan: Non-qualified benefit plan to make up for IRS limits to qualified savings plans. Textron provides a program to executives which benefits them by allowing for tax planning and also benefits the Company, in that cash payments by the Company are delayed: ● Deferred Income Plan for Textron Executives: Non-qualified plan that allows participants to defer compensation. TEXTRON 2023 PROXY STATEMENT 35
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