2018 Proxy Statement

25 TEXTRON 2018 PROXY STATEMENT HOW DID THE COMMITTEE MAKE 2017 TARGET PAY DECISIONS? Prior to making decisions on compensation, the Committee reviewed the following items: • Compensation data for each NEO • A detailed compensation benchmarking study comparing each NEO’s current target compensation by component to the market median of the talent peer group • An executive retention analysis • 3RWHQWLDO VKDUH GHULYHG ZHDOWK DQG VWRFN RZQHUVKLS LQIRUPDWLRQ IRU HDFK 1(2 Additionally, the CEO provided input to the O&C 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, their experience and future potential. In approving 2017 target pay, the Committee considered the CEO’s input and made its own assessment of competitive pay and performance. As a result, the Committee increased the target total pay of each NEO. The Committee increased Mr. Donnelly’s base salary by approximately 4%, his target annual incentive compensation E\ SHUFHQWDJH SRLQWV WR RI KLV EDVH VDODU\ DQG KLV WDUJHW ORQJ WHUP LQFHQWLYH FRPSHQVDWLRQ E\ DSSUR[LPDWHO\ These increases are consistent with the Committee’s philosophy for Mr. Donnelly’s compensation of achieving or ultimately VXUSDVVLQJ PDUNHW PHGLDQ PRUH WKURXJK DQQXDO LQFHQWLYH DQG ORQJ WHUP LQFHQWLYH LQFUHDVHV WKDQ WKURXJK EDVH VDODU\ LQFUHDVHV With respect to the other NEOs, the Committee increased the base salary, with the corresponding increases in target annual and WDUJHW ORQJ WHUP LQFHQWLYH FRPSHQVDWLRQ RI 0U &RQQRU WKH &RPSDQ\¶V &)2 E\ DSSUR[LPDWHO\ 0U /XSRQH WKH &RPSDQ\¶V *HQHUDO &RXQVHO E\ DSSUR[LPDWHO\ DQG 0V -RKQVRQ WKH &RPSDQ\¶V (93 +5 E\ DSSUR[LPDWHO\ 7KH LQFUHDVHV LQ compensation for Mr. Connor, Mr. Lupone and Ms. Johnson were determined based on scope of responsibility and years of experience and with consideration toward how their compensation compares against compensation for similar positions at the talent peer group companies. In July 2017, Ms. Johnson left the Company to pursue other opportunities and the Board appointed Julie G. Duffy, the Company’s Vice President, Deputy General Counsel—Litigation, to succeed Ms. Johnson as Executive Vice President, Human Resources. The Committee established Ms. Duffy’s compensation for her new role at the same level as Ms. Johnson’s 2017 target total pay. WHAT IS THE TARGET PAY AND PAY MIX FOR OUR EXECUTIVES? The following table shows 2017 target total pay, along with the target for each component of target total pay, for Textron’s NEOs: At-Risk Compensation Target Annual Target Long-Term Target Name Position Base Salary Incentive Incentive Total Pay Scott C. Donnelly CEO $1,200,000 $1,800,000 $10,000,000 $13,000,000 (150% of salary) (833% of salary) Frank T. Connor CFO 1,000,000 850,000 2,850,000 4,700,000 (85% of salary) (285% of salary) E. Robert Lupone General 730,000 547,500 1,277,500 2,555,000 Counsel (75% of salary) (175% of salary) Julie G. Duffy EVP, HR 475,000 285,000 712,500 1,472,500 (60% of salary) (150% of salary) Cheryl H. Johnson Former 475,000 285,000 712,500 1,472,500 EVP, HR (60% of salary) (150% of salary)