52 TEXTRON 2025 PROXY STATEMENT Financial Performance Measures The following list of financial performance measures represents, in the Company’s assessment, the most important financial performance measures used by the Company to link Compensation Actually Paid (“CAP”) to the NEOs to company performance for the 2024 fiscal year. Please see the Compensation Discussion and Analysis beginning on page 22 for additional discussion of how these factors affected our NEOs’ compensation. Descriptions of Relationships Manufacturing Cash Flow before Pension Contributions Average Return on Investment Capital Cumulative Manufacturing Cash Flow Enterprise Net Operating Profit Relative TSR compared to the S&P 500 Set forth below are descriptions of the relationship between CAP and each of the financial performance metrics set forth in the Pay versus Performance table above, as well as a description of the relationship of the Company’s Total Shareholder Return (“TSR”) compared to our Peer Groups’ TSR. CAP versus TSR As shown in the chart below, the calculated CAP for both the PEO and the Non-PEO NEOs is correlated with the Company’s TSR for each of the years set forth in the table above. This is due primarily to the Company’s use of equity incentive awards in the long-term incentive compensation plan, which results in the alignment of the value of our executives’ outstanding and unvested awards with shareholders’ interests. As described in detail in the Compensation Discussion and Analysis beginning on page 22, awards issued under our long-term incentive compensation program are directly linked to stock price and represent a substantial portion of our NEOs’ compensation which serves to align our executives’ interests with our shareholders’ interests. Textron’s common stock price increased 59.7%, from $48.33 at the end of the 2020 fiscal year to $77.20 at the end of the 2021 fiscal year, resulting in a substantially greater fair value of outstanding and unvested equity awards and a substantial increase in year-over-year CAP. From the end of the 2021 fiscal year to the end of the 2022 fiscal year, Textron’s common stock price decreased 8.3% from $77.20 to $70.80 which is reflected in the lower CAP for 2022. Textron’s common stock price then increased 13.6%, from $70.80 at the end of 2022 to $80.42 at the end of fiscal year 2023, resulting again in an increase in year- over-year CAP for 2023. Textron’s common stock price decreased 4.0% from $80.42 to $77.21 from the end of fiscal year 2023 to the end of fiscal year 2024, which is reflected in the lower CAP for 2024. The impact of equity incentive compensation is greater for the PEO’s CAP calculation because the portion of his compensation that is delivered in the form of equity incentives is greater than that portion for the Non-PEO NEOs. - 5 10 - 20 40 60 80 100 120 140 160 180 200 15 20 25 30 35 40 45 50 2020 2021 2022 2023 2024 Compensation in Millions TSR in Dollars CAP Versus TSR CAP for PEO Avg CAP for Non-PEO NEO Textron TSR 108.6 173.7 159.5 181.4 174.3 15.8 3.8 45.8 9.4 18.7 4.5 28.0 6.0 15.8 3.8
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