Textron 2020 Proxy Statement

28 TEXTRON 2020 PROXY STATEMENT How did the Committee Make 2019 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 and in total to the market median of the talent peer group • A retention analysis that examines the value of compensation an executive would forfeit upon termination • Potential share-derived wealth and stock ownership information for each NEO 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, their experience and future potential. In approving 2019 target pay, the Committee considered the CEO’s input and made its own assessment of competitive pay and performance. In January 2019, the Committee considered Mr. Donnelly’s leadership performance as well as his extensive experience as CEO in its decision to increase his target total compensation by approximately 5%, all delivered through his target long-term incentive compensation. This approach is consistent with the Committee’s philosophy of providing compensation opportunities that are generally competitive with market median through increases in incentive compensation. The Committee considered Mr. Connor’s wide scope of responsibilities, including Information Technology, Investor Relations, Treasury, Internal Audit, Mergers and Acquisitions and Strategy in addition to the traditional finance function, and strong performance as well as his experience at Textron in increasing his target annual and target long-term incentive compensation by 15 percentage points and 25 percentage points, respectively (to 100% and 325% of his base salary) in order to increase his target total compensation through incentive compensation rather than through increases in base salary. With respect to Mr. Lupone and Ms. Duffy, the Committee increased the base salary, with the corresponding increases in target annual and target long-term incentive compensation, for Mr. Lupone, by approximately 5% and for Ms. Duffy, by approximately 10%. Additionally, in order to move closer to market median, the Committee increased Ms. Duffy’s target annual and target long-term incentive compensation by 15 percentage points and 25 percentage points, respectively (to 75% and 175% of her base salary). The increases in compensation for Mr. Lupone and Ms. Duffy 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. What is the Target Pay and Pay Mix for Our Executives? The following table shows 2019 target total pay, along with the target for each component of target total pay, for Textron’s NEOs as of the Committee’s January 2019 meeting: Position Base Salary Target Annual Incentive Target Long-Term Incentive Target Total Pay At-Risk Compensation Scott C. Donnelly CEO $1,236,000 $1,854,000 (150% of salary) $11,022,000 (892% of salary) $14,112,000 Frank T. Connor CFO 1,000,000 1,000,000 (100% of salary) 3,250,000 (325% of salary) 5,250,000 E. Robert Lupone General Counsel 800,000 600,000 (75% of salary) 1,400,000 (175% of salary) 2,800,000 Julie G. Duffy EVP, HR 550,000 412,500 (75% of salary) 962,500 (175% of salary) 1,925,000 Name