PEO Non-PEO NEOs (average) 2023 2022 2021 2020 2023 2022 2021 2020 Deduction for the grant date fair value of stock awards (PSUs and RSUs) awarded during the year, reported under the “Stock Awards” column in the SCT (10,100,586)(8,314,479)(10,500,442)(10,522,576) (1,697,740)(1,444,119)(1,828,820)(1,797,292) Deduction for the grant date fair value of options awarded during the year, reported under the “Option Awards” column in the SCT (3,477,679) (2,905,358) (3,011,625) (2,493,513) (584,526) (504,602) (527,116) (429,833) Increase for year-end fair value of awards granted during year that remain outstanding and unvested as of year-end(1) 14,676,737 12,650,262 22,165,513 13,307,527 2,466,901 2,190,502 3,879,540 2,293,943 Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end(1) 4,093,826 1,079,909 14,602,311 1,043,862 711,301 194,183 2,484,003 170,048 Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during the year 4,665,339 264,240 3,486,240 (977,153) 814,467 50,307 588,100 (155,581) Increase for value of dividend equivalents 14,355 18,180 19,617 19,985 2,469 3,112 3,286 3,237 Total Adjustments 7,602,871 3,369,203 27,245,696 (1,947,922) 1,083,005 651,974 4,547,040 (435,677) “Compensation Actually Paid” $27,994,633 $18,736,482 $45,821,710 $15,822,859 $6,004,863 $4,533,894 $9,366,481 $3,770,432 (1) We calculate the fair value of our PSUs, which are typically settled in cash, but, in the Committee’s discretion, can be settled in shares of common stock, cash, or a combination of both, in accordance with GAAP, based on the closing price of our common stock and the number of units, as adjusted based on estimates with respect to performance on the relevant metrics. On the grant date, we assume performance at target on the metrics. Following the grant date, we apply the actual relative TSR as of the valuation date, and, for the remaining performance periods, we utilize estimates of performance against the target for each operating metric. Financial Performance Measures The following list of financial performance measures represents, in the Company’s assessment, the most important financial performance measures used by the Company to link Compensation Actually Paid (“CAP”) to the NEOs to company performance for the 2023 fiscal year. Please see the Compensation Discussion and Analysis beginning on page 23 for additional discussion of how these factors affected our NEOs’ compensation. Descriptions of Relationships Manufacturing Cash Flow before Pension Contributions Average Return on Investment Capital Cumulative Manufacturing Cash Flow Enterprise Net Operating Profit Relative TSR compared to the S&P 500 Set forth below are descriptions of the relationship between CAP and each of the financial performance metrics set forth in the Pay versus Performance table above, as well as a description of the relationship of the Company’s Total Shareholder Return (“TSR”) compared to our Peer Groups’ TSR. 52 TEXTRON 2024 PROXY STATEMENT
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