Textron 2020 Proxy Statement

TEXTRON 2020 PROXY STATEMENT 33 Long-Term Incentive Compensation Payouts and Performance Analysis Performance Share Units Payouts for the 2017-2019 PSU cycle were based upon performance for each of the annual periods within the 2017-2019 cycle against performance goals set for three one-year performance periods, weighted equally, subject to a TSR modifier that can decrease, but not increase, the final payout up to 40%, based on the mathematical ranking of Textron’s three-year TSR performance compared to that of our 2017 performance peers and the Committee’s discretion. The performance achieved against the threshold, target and maximum payouts for the 2017-2019 PSU cycle, and the resulting percentage earned by the executive officers, are detailed below: 2017–2019 Performance Share Unit Calculation ($ in millions) 60% 60% 60% 59.7% 59.9% 53.9% 40% 40% 40% 51.1% 50.4% 42.6% 105.8% Threshold 50% Payout Target 100% Payout Actual: $1,267 $769 $827 $868 $1,459 $1,577 $1,692 $1,150 $955 $924 $449 $249 $277 Maximum 150% Payout Component Weighting Component Payout 110.8% Total Earned 110.3% 96.5% Enterprise NOP Enterprise NOP Enterprise NOP Manufacturing Cash Flow Manufacturing Cash Flow Manufacturing Cash Flow Actual: $1,270 Actual: $993 Actual: $784 Actual: $642 2017 2018 2019 $799 $1,269 $1,173 $598 $1,372 $600 Actual: $1,169 Units Earned as % of Original Award: (Three-year average) The performance metrics for 2019 are described in more detail in the 2019 Annual Incentive Compensation Calculation chart on page 31 and for previous years are described in the proxy statement for the applicable year. Payouts are made in cash and could range from 0% to 150% of target based on performance. Two measures impact the value of PSU cash payouts: (i) the number of units earned is based on Textron’s performance against operating metrics and may be adjusted downward (but not upward), based upon the mathematical ranking of the Company’s three-year TSR performance compared to the TSR performance of its performance peer companies and the Committee’s discretion and (ii) the value of each unit earned is based on Textron’s stock price. The tables below show the PSU awards granted in 2017 and associated cash payouts received by executive in terms of both units and value. To validate that the Company’s PSU awards link pay to performance, the Committee evaluated the PSU payouts on the basis of both relative performance (TSR performance vs. 2017 performance peer group companies) and absolute performance (change in stock price) and concluded that the payouts were appropriately linked to Textron’s overall performance. 105.8% Units Earned as % of Original Award -40% TSR Modifier applied by O&C Committee 63.5% Final Payout as % of Original Award