COMPENSATION DISCUSSION AND ANALYSIS 34 / TEXTRON 2026 PROXY STATEMENT Annual Incentive Compensation Payouts and Performance Analysis Textron’s 2025 performance was substantially above target for the cash flow metric and slightly below target for the profitability metric. In determining a 10% payout for environmental, social and governance, the Committee evaluated the Company’s progress with respect to safety, sustainability, and an engaged, high-performing workforce. The Committee assessed the Company’s performance at 200% of target, noting that the Company delivered excellent, measurable progress across safety, environmental sustainability, and talent development efforts. The formula for determining 2025 annual incentive compensation payouts for executive officers and the resulting percentage of target earned are detailed below: 2025 Annual Incentive Compensation Calculation ($ in millions) Metric Threshold Performance Target Performance Maximum Performance Actual Performance Component Weighting Component Payout Enterprise NOP(1) $975 $1,366 $1,771 $1,345(4) 60% 56.8% Manufacturing Cash Flow(2) $257 $668 $1,080 $983(4) 35% 61.8% Environmental, Social and Governance(3) 0 100% 200% 200% 5% 10.0% Total Earned 128.6% (1) “Enterprise NOP” means our total “Segment profit” as reported in our annual report on Form 10-K. Segment profit excludes the non- service components of pension and postretirement income, net; LIFO inventory provision; intangible asset amortization, interest expense, net for the Manufacturing group; certain corporate expenses; and gains/losses on major business dispositions. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. (2) “Manufacturing Cash Flow" means “Manufacturing cash flow before pension contributions” as reported in our quarterly earnings releases. This measure adjusts net cash from operating activities under U.S Generally Accepted Accounting Principles (“GAAP”) for the following: deducts capital expenditures; includes proceeds from insurance recoveries and the sale of property, plant and equipment; excludes dividends received from Textron Financial Corporation (TFC) and capital contributions provided under the Support Agreement and debt agreements; and adds back pension contributions. (3) “Environmental, Social and Governance” means a qualitative assessment with respect to the Company’s progress on its environmental, social and governance efforts. (4) For Enterprise NOP and Manufacturing Cash Flow, actual performance has been adjusted to exclude the impact of the disposition of the powersports product line in our Industrial segment. Annual incentive compensation targets and payouts for 2025 for each NEO are shown below: Annual Incentive Compensation Targets and Payouts 2025 Name Position Target Payout Scott C. Donnelly CEO $2,524,500 $3,246,000 David M. Rosenberg CFO $850,000 $1,093,000 E. Robert Lupone General Counsel $750,000 $965,000 Julie G. Duffy CHRO $600,000 $772,000 Prior Year Performance Analysis As it does each year, the Committee conducted a comparative analysis of the annual incentive compensation paid to Textron’s CEO in 2025, with respect to 2024. The Committee compared Textron’s year-over-year operating performance for 2024, relative to the annual incentive compensation paid to the talent peer group companies’ CEOs compared to the year-over-year operating performance of the peer group companies. While exactly comparable data was not available for all peer companies, indicative comparisons were made using publicly reported GAAP operating cash flows and pre-tax earnings from continuing operations. The Committee’s comparative analysis confirmed the strong correlation between Textron’s annual incentive compensation payouts and its performance relative to the talent peer companies.
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