32 TEXTRON 2022 PROXY STATEMENT 2021 Annual Incentive Compensation Calculation ($ in millions) Financial Metric Threshold Performance Target Performance Maximum Performance Actual Performance Component Weighting Component Payout Enterprise NOP $611 $895 $1,136 $1,134 60% 119.45% Manufacturing Cashflow $183 $403 $ 623 $1,149 35% 70% Hiring Diversity Performance 33.4% 43.4% 53.4% 47.1% 5% 6.85% Total Earned 196.3% (1) “Enterprise NOP” means our total “Segment profit” as reported in our annual report on Form 10-K. For 2021, segment profit for the manufacturing segments excludes interest expense, certain corporate expenses, gains/losses on major business dispositions and special charges. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. (2) “Manufacturing Cash Flow” means “Manufacturing cash flow before pension contributions” (a non-GAAP measure) as reported in our quarterly earnings releases. For 2021, net cash provided by operating activities of continuing operations (the GAAP measure) has been adjusted for capital expenditures, contributions to our pension plans and proceeds from the sale of property, plant and equipment. (3) “Hiring Diversity Performance” represents the percentage of full-time U.S. salaried newly-hired employees who identify as female or diverse based on race or ethnicity. Annual incentive compensation targets and payouts for 2019, 2020 and 2021 for each NEO are shown below: Annual Incentive Compensation Targets and Payouts 2019 2020 2021 Name Position Target Payout Target Payout Target Payout Scott C. Donnelly CEO $1,854,000 $1,737,000 $1,854,000 $ 744,000 $1,854,000 $3,639,000 Frank T. Connor CFO $1,000,000 $ 937,000 $1,000,000 $ 652,000 $1,000,000 $1,963,000 E. Robert Lupone General Counsel $ 600,000 $ 562,000 $ 600,000 $ 391,000 $ 619,000 $1,215,000 Julie G. Duffy EVP, HR $ 412,500 $ 387,000 $ 450,000 $ 293,000 $ 469,000 $ 920,000 Prior Year Performance Analysis As it does each year, the Committee conducted a comparative analysis of the annual incentive compensation paid to Textron’s CEO in 2021, with respect to 2020, compared to Textron’s year-over-year operating performance for that year, relative to the annual incentive compensation paid to the talent peer companies’ CEOs compared to the year-over-year operating performance of the peer group companies. While exactly comparable data was not available for all peer companies, indicative comparisons were made using publicly-reported GAAP operating cash flows and pre-tax earnings from continuing operations. The Committee’s comparative analysis confirmed the strong correlation between Textron’s annual incentive compensation payouts and its performance relative to the talent peer companies.
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