2018 Proxy Statement

31 TEXTRON 2018 PROXY STATEMENT RISKS RELATED TO COMPENSATION The Committee strives to set compensation policies for senior executives which do not encourage excessive risk-taking that could endanger the Company. For 2017, the Committee completed a full review of managing risk within the executive compensation programs. This annual review helps the Committee to structure executive compensation programs that are designed to avoid exposing the Company to unwarranted risk. OTHER COMPENSATION PROGRAMS $V PHQWLRQHG DERYH 7H[WURQ SURYLGHV FHUWDLQ RWKHU FRPSHQVDWLRQ SURJUDPV VXFK DV UHWLUHPHQW GHDWK EHQH¿WV WKDW DUH GHVLJQHG WR SURYLGH WR 1(2V WKH VDPH OHYHO RI EHQH¿WV SURYLGHG WR QRQ H[HFXWLYH RI¿FHUV DQG LQ PRVW FDVHV DOO VDODULHG HPSOR\HHV &HUWDLQ RI WKHVH SURJUDPV SURYLGH EHQH¿WV RYHU DQ\ FDSV PDQGDWHG E\ JRYHUQPHQW UHJXODWLRQV LQFOXGLQJ • Textron Spillover Pension Plan: 1RQ TXDOL¿HG EHQH¿W SODQ WR PDNH XS IRU ,56 OLPLWV WR TXDOL¿HG SHQVLRQ SODQV DQG LQ WKH FDVH RI 0U 'RQQHOO\ WR SURYLGH D ³ZUDS DURXQG´ SHQVLRQ EHQH¿W ZKLFK WDNHV LQWR DFFRXQW KLV ¿QDO DYHUDJH FRPSHQVDWLRQ ZLWK 7H[WURQ DQG KLV FRPELQHG VHUYLFH ZLWK 7H[WURQ DQG *( DQG UHGXFHV WKLV EHQH¿W E\ WKH DPRXQW RI DQ\ RWKHU SHQVLRQ EHQH¿WV which he is eligible to receive under Textron and GE pension plans. • Textron Spillover Savings Plan: 1RQ TXDOL¿HG EHQH¿W SODQ WR PDNH XS IRU ,56 OLPLWV WR TXDOL¿HG VDYLQJV SODQV 7H[WURQ SURYLGHV D SURJUDP WR H[HFXWLYHV ZKLFK EHQHILWV WKHP E\ DOORZLQJ IRU WD[ SODQQLQJ DQG DOVR EHQHILWV WKH &RPSDQ\ LQ that cash payments by the Company are delayed • Deferred Income Plan for Textron Executives: 1RQ TXDOL¿HG SODQ WKDW DOORZV SDUWLFLSDQWV WR GHIHU FRPSHQVDWLRQ ROLE OF INDEPENDENT COMPENSATION CONSULTANT Under its charter, the Committee has the authority to retain outside consultants or advisors as it deems necessary to provide GHVLUHG H[SHUWLVH DQG FRXQVHO ,Q WKH &RPPLWWHH HQJDJHG WKH VHUYLFHV RI 3D\ *RYHUQDQFH //& DV LWV FRPSHQVDWLRQ FRQVXOWDQW 3D\ *RYHUQDQFH //& UHSRUWV GLUHFWO\ DQG H[FOXVLYHO\ WR WKH &RPPLWWHH DQG SURYLGHV DGYLFH UHJDUGLQJ FXUUHQW DQG HPHUJLQJ EHVW SUDFWLFHV ZLWK UHJDUG WR H[HFXWLYH FRPSHQVDWLRQ $ UHSUHVHQWDWLYH IURP 3D\ *RYHUQDQFH //& DWWHQGHG HDFK RI WKH &RPPLWWHH¶V VL[ PHHWLQJV LQ 3D\ *RYHUQDQFH //& GRHV QRW SURYLGH DQ\ RWKHU VHUYLFHV WR WKH &RPPLWWHH RU WKH &RPSDQ\ 7KH &RPPLWWHH KDV GHWHUPLQHG WKDW 3D\ *RYHUQDQFH //& LV LQGHSHQGHQW DQG WKDW WKH ZRUN RI 3D\ *RYHUQDQFH //& ZLWK WKH &RPPLWWHH IRU KDV QRW UDLVHG DQ\ FRQÀLFW RI LQWHUHVW STOCK OWNERSHIP REQUIREMENTS 2QH REMHFWLYH RI RXU H[HFXWLYH FRPSHQVDWLRQ SURJUDP LV WR DOLJQ WKH ¿QDQFLDO LQWHUHVWV RI RXU 1(2V ZLWK WKH LQWHUHVWV RI RXU shareholders. As a result, we require that senior executives accumulate and maintain a minimum level of stock ownership in the Company which may be achieved through direct ownership of shares, Textron Savings Plan shares, unvested RSUs, and vested/ XQYHVWHG VKDUH HTXLYDOHQWV LQ 7H[WURQ FRPSHQVDWLRQ DQG EHQH¿W SODQV 0LQLPXP RZQHUVKLS OHYHOV DUH H[SUHVVHG DV D PXOWLSOH RI EDVH VDODU\ DV IROORZV ¿YH WLPHV IRU WKH &(2 DQG WKUHH WLPHV IRU RWKHU 1(2V 1HZ H[HFXWLYH RI¿FHUV DUH JLYHQ ¿YH \HDUV WR reach their required ownership level. All NEOs currently meet their respective stock ownership requirements or are within their LQLWLDO ¿YH \HDU SHULRG