Textron 2020 Proxy Statement

34 TEXTRON 2020 PROXY STATEMENT (1) Ms. Duffy’s 2017-2019 PSU award is not reflected in the preceding chart because it was granted while she served in her previous role and, consistent with the terms of grants made to other non-executive officers, was not subject to the TSR modifier. The amount paid is reflected in the Option Exercises and Stock Vested in Fiscal 2019 table on page 42. As shown in the chart above, the payout value of the 2017–2019 awards was significantly lower than the grant date value of the award despite the Company’s three-year average performance against operating metrics of 105.8%. Because the Company’s TSR performance was at the bottom of the 2018 performance peer group, after adjusting for operating performance, the Committee exercised its negative discretion and applied the TSR modifier to reduce the units earned by 40%. The final cash payout was then further reduced as a result of the decrease in Textron’s stock price from 2017 to 2019, resulting in the payout values set forth above. The chart below shows our CEO’s 2017–2019 cycle PSU award from grant date value, as adjusted by the Company’s performance against the goals set by the Committee and as adjusted for the TSR modifier, to realized value (final payout value), reflecting the change in Textron’s stock price during the performance period. 2017–2019 Performance Share Unit Payouts 2017–2019 Units Name (1) Position Units Granted Units Paid Grant Date Value Payout Value Scott C. Donnelly CEO 100,583 63,850 $ 4,986,905 $2,879,635 Frank T. Connor CFO 28,666 18,197 $1,421,260 $ 820,685 E. Robert Lupone General Counsel 12,849 8,157 $ 637,053 $ 367,881 2017–2019 Value Restricted Stock Units and Stock Options In addition to PSUs, the Company’s long-term incentive compensation program consists of RSUs and stock options. The ultimate value of these awards to the executives, upon the vesting of RSUs or the exercise of stock options, is directly based upon Textron’s stock price. For the value realized by the executives upon the vesting or exercise of these awards, see Option Exercises and Stock Vested in Fiscal 2019 on page 42. CEO’s 2017–2019 PSU Award Value Reflects performance adjustment, TSR modifier and stock price decrease of 9% 100.0% Grant Date Award Value 63.5% Value After TSR Modifier Realized Value 105.8% Value After Performance Adjustment $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 57.7%