TEXTRON 2026 PROXY STATEMENT / 31 COMPENSATION DISCUSSION AND ANALYSIS How did the Committee Make 2025 Target Direct Compensation Decisions? Compensation for Newly-Appointed Executive Vice President and Chief Financial Officer As described above, in setting target direct compensation for Mr. Rosenberg upon his appointment as Chief Financial Officer, the Committee referred to market data from Textron’s talent peer group, including data on shorter-tenured chief financial officers. The Committee targeted the 25th percentile of the talent peer group benchmarks, with the intent to accelerate compensation increases toward the market median as Mr. Rosenberg gains experience and demonstrates sustained performance. Mr. Rosenberg’s base salary was set at $850,000 with target annual incentive compensation and long-term incentive compensation of 100% and 250% of his base salary respectively. Compensation for Retiring Executive Vice President and Chief Financial Officer As previously announced, Mr. Frank Connor retired effective February 28, 2025 after having served as our CFO for fifteen years. The Organization and Compensation Committee approved Mr. Connor’s 2025 compensation to be set at $1.0 million, which consisted of salary at his 2024 rate and a special cash bonus payable upon his retirement in lieu of receiving any annual or long-term incentive compensation for 2025, taking into account Mr. Connor’s expected duties through his retirement. As part of his 2025 duties, Mr. Connor oversaw the completion of the Company’s post year-end financial reporting and related activities and effected an orderly transition of the CFO role to Mr. Rosenberg and other succession planning within the finance organization. Compensation for Other NEOs Prior to making decisions on compensation with respect to the other NEOs, the Committee reviewed the following items: • Compensation data for each NEO • A detailed compensation benchmarking study comparing each NEO’s current target direct compensation by component and in total to the market median of the talent peer group • Supplemental benchmarking data for the CEO using longer-tenured executives from the talent peer group • Supplemental analysis for the CEO of projected 2024 realized pay, including salary, annual and long-term incentive plan payouts, and market value at vesting of RSUs and stock options vesting in 2024, compared to CEOs from the talent peer group 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, and their experience and future potential. In approving 2025 target total 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, with more recent pay levels in excess of market median in recognition of his long tenure as CEO of the Company and career accomplishments. 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 group practices which also emphasize 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 compensation consultant recommended, and the Committee determined, to increase his target total direct compensation by approximately 4.9%. The increase consisted of a 4.2% increase in his base salary and a 5.1% increase in target long-term incentive compensation from $13.7 million to $14.4 million. In addition, after considering the detailed compensation benchmarking study with respect to the other NEOs, the Committee determined to increase 2025 base salaries for each of the other NEOs. Mr. Lupone’s base salary was increased by 5.3% due to his long tenure with the Company and Ms. Duffy’s base salary was increased by 6.7%. The Committee increased Mr. Lupone’s target long-term incentive compensation from 175% to 200% of his base salary to align this element of compensation to the market median. The Committee did not increase annual and long-term incentives as a percentage of base salary for Ms. Duffy, so each of her target incentive dollar amounts increased only as a result of her base salary increase.
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