TEXTRON 2026 PROXY STATEMENT / 27 COMPENSATION DISCUSSION AND ANALYSIS 2025 Long-Term Incentive Compensation: • The Committee again awarded a mix of long-term incentive awards comprised of 50% performance share units, 25% stock options, and 25% restricted stock units. • The Committee approved payouts for the 2023-2025 performance share units at 93.3% of target, based on the Company’s performance. Executive Compensation Highlights The following summarizes key aspects of our executive compensation program for the NEOs: Practices we employ • Pay for performance philosophy aligns with a substantial portion of executives’ compensation tied to Company performance against pre-established metrics set by the Committee • Fifty percent (50%) of long-term incentive awards are subject to performance-based metrics to closely align with longterm Company performance • Pay is aligned with shareholder interests as a substantial portion of executives’ target compensation, including more than 75% of CEO’s target compensation, is in the form of equity-based long-term incentives • Annual incentive compensation and performance share unit payout percentages are capped • Double-triggers are required in change in control provisions for equity awards and severance arrangements • Committee annually conducts a pay-for-performance analysis based on operating metrics used in our annual incentive program • Committee annually reviews the composition of a talent peer group which is referenced for benchmarking our executives’ compensation and makes changes as appropriate • Committee annually reviews compensation data against the talent peer group in order to understand the competitiveness of our compensation program and pay levels • Committee annually reviews a compensation-related risk assessment with assistance from its independent compensation consultant • Committee and the Board review and evaluate plans for executive development and succession • Executives are subject to robust share ownership requirements Practices we prohibit • No single-trigger vesting of long-term incentive awards upon a change in control of the Company • No tax gross-ups for officers hired after 2008 • No employment contracts guaranteeing fixed-term employment or bonuses to executives • No excessive executive perquisites • No hedging or pledging Textron securities • No repricing or exchanging stock options without shareholder approval Compensation Philosophy Textron’s compensation philosophy establishes target total direct compensation with reference to a talent peer group median and ties a substantial portion of our executives’ compensation to performance against objective business metrics and stock price performance. This approach helps us to recruit and retain talented executives, incentivizes our executives to achieve desired business goals and aligns their interests with the interests of our shareholders.
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