30 TEXTRON 2022 PROXY STATEMENT How did the Committee Make 2021 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 • Potential share-derived wealth and share 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 2021 target pay, the Committee considered the CEO’s input and made its own assessment of competitive pay and performance. The Committee’s philosophy has been to provide target total direct compensation for our CEO at levels generally competitive with market median, taking into consideration Mr. Donnelly’s longer tenure and leadership contributions. In addition, the Committee has placed greater emphasis on increases in long-term incentive compensation, which is tied to the Company’s stock price performance and, with respect to PSUs, is heavily performance-based, in order to align Mr. Donnelly’s interests with our shareholders’ interests. This approach has resulted in a pay mix that is in close alignment with talent peer company practices which also emphasize incentive pay. After considering the Company’s 2020 financial results and the benchmarking study, the Committee determined not to increase 2021 compensation for Messrs. Donnelly or Connor and to provide base salary increases of $25,000 for each of Mr. Lupone and Ms. Duffy. Annual and long-term incentives as a percentage of base salary were not increased for any of the named executive officers, so target incentive dollar amounts for Mr. Lupone and Ms. Duffy increased only as a result of their base salary increases. What is the Target Pay and Pay Mix for Our Executives? The following table shows 2021 target total pay, along with the target for each component of target total pay, for Textron’s NEOs as established by the Committee at its January 2021 meeting. Target direct compensation for our CEO and CFO was not increased for the second year in a row, remaining at 2019 levels. Mr. Lupone and Ms. Duffy’s target compensation was increased by 3% and 4%, respectively. consistent with the competitive range of the talent peer group companies and with Textron’s merit increase levels for the broader employee population. At-Risk Compensation Name Position Base Salary Target Annual Incentive Target Long-Term Incentive Target Total Pay % Increase Over 2020 Scott C. Donnelly CEO $1,236,000 $1,854,000 (150% of salary) $11,022,000 (892% of salary) $14,112,000 0% Frank T. Connor CFO 1,000,000 1,000,000 (100% of salary) 3,250,000 (325% of salary) 5,250,000 0% E. Robert Lupone General Counsel 825,000 619,000 (75% of salary) 1,444,000 (175% of salary) 2,888,000 3% Julie G. Duffy EVP, HR 625,000 469,000 (75% of salary) 1,094,000 (175% of salary) 2,188,000 4%
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