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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

       
þ   Filed by the Registrant o   Filed by a Party other than the Registrant

 

Check the appropriate box:
o Preliminary Proxy Statement
o CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12

  

TEXTRON INC.

(Name of Registrant as Specified In Its Charter)

 

 
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

   
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee paid previously with preliminary materials.
o Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
 

 

 

 
 

 

TEXTRON AVIATION

Textron Aviation is home to the Beechcraft® and Cessna® aircraft brands and is a leader in general aviation through two principal product lines: aircraft and aftermarket parts and services. Aircraft includes sales of business jets, turboprop and military trainer and defense aircraft and piston engine aircraft. Aftermarket parts and services includes commercial parts sales and maintenance, inspection and repair service.

BELL

Bell is a leading supplier of helicopters, tiltrotor aircraft and related spare parts and services. Bell supplies military helicopters and tiltrotors to the U.S. Government and non-U.S. military customers and supplies commercially certified helicopters to corporate, private, law enforcement, utility, public safety, emergency medical and other helicopter operators. Bell provides support and service for an installed base of approximately 13,000 helicopters.

INDUSTRIAL

Our Industrial segment designs and manufactures a variety of products within the Kautex and Specialized Vehicles product lines. Kautex is a leader in designing and manufacturing plastic fuel systems for automobiles and light trucks, along with other automotive systems and components. Specialized Vehicles includes golf cars, recreational and utility vehicles, aviation ground support equipment and professional mowers, manufactured by Textron Specialized Vehicles businesses.

 

TEXTRON SYSTEMS

Textron Systems’ businesses develop, manufacture and integrate products and services for U.S. and non-U.S. military, government and commercial customers to support defense, homeland security, aerospace and other missions. Product and service offerings include electronic systems and solutions, advanced marine craft, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, unmanned aircraft systems, and both manned and unmanned armored and specialty vehicles.

TEXTRON eAVIATION

Textron eAviation includes Pipistrel, a manufacturer of light aircraft, along with other research and development initiatives related to sustainable aviation solutions. Pipistrel offers a family of light aircraft and gliders with both electric and combustion engines. Pipistrel’s Velis Electro is the world’s first, and currently only, electric aircraft to receive full type certification from the European Union Aviation Safety Agency and from the UK Civil Aviation Authority.

FINANCE

Our Finance segment, operated by Textron Financial Corporation (TFC), is a commercial finance business that provides financing solutions for purchasers of Textron products, primarily Textron Aviation aircraft and Bell helicopters. For more than five decades, TFC has played a key role for Textron customers around the globe.

 

 

II      TEXTRON 2024 PROXY STATEMENT

 
 

NOTiCE OF ANNUAL MEETiNG

To the Shareholders of Textron Inc.:

The 2024 Annual Meeting of Shareholders of Textron Inc. will be held on Wednesday, April 24, 2024 at 11 a.m., Eastern time. This year’s meeting will be held virtually via a live audio webcast at www.virtualshareholdermeeting.com/TXT2024. Shareholders will not be able to attend the meeting in person. At the meeting, our shareholders will be asked to do the following:

     
To elect the ten director nominees named in the proxy statement to hold office until the next annual shareholders’ meeting; Wednesday, April 24, 2024
       
To approve the proposed Textron Inc. 2024 Long-Term Incentive Plan; 11:00 a.m. Eastern Daylight Time
        
To approve Textron’s executive compensation on an advisory basis; Virtual Meeting Site:
    www.virtualshareholdermeeting.com/TXT2024
To ratify the appointment by the Audit Committee of Ernst & Young LLP as Textron’s independent registered public accounting firm for 2024;    
       
If properly presented at the meeting, to consider and act upon a shareholder proposal, set forth beginning on page 68 in the accompanying proxy statement, which is opposed by the Board of Directors; and    
       
To transact any other business as may properly come before the meeting or any adjournment or postponement of the meeting.    

 

To be admitted to the Annual Meeting virtually, you will need to log in to www.virtualshareholdermeeting.com/TXT2024. Instructions on how to participate in the Annual Meeting via live audio webcast are described in the accompanying proxy statement and posted at www.virtualshareholdermeeting.com/TXT2024.

On March 7, 2024, we mailed to many of our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access and review our proxy materials, including our Proxy Statement and the Annual Report to Shareholders, and vote online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials unless you request one. If you would prefer to receive printed proxy materials, please follow the instructions included in the Notice. Shareholders who requested paper copies of the proxy materials or previously elected to receive our proxy materials electronically did not receive the Notice and will receive the proxy materials in the format requested.

Whether or not you plan to attend the virtual meeting, we urge you to cast your vote as soon as possible so that your shares may be represented at the meeting. You may vote your shares via the internet or by telephone by following the instructions included on the Notice. Alternatively, if you received paper copies of the proxy materials by mail, you can also vote by mail by following the instructions on the proxy card.

You are entitled to vote all shares of common stock registered in your name at the close of business on February 26, 2024.

By order of the Board of Directors,

E. Robert Lupone

Executive Vice President, General Counsel and Secretary

Providence, Rhode Island
March 7, 2024

 
 
 
 
 
YOUR VOTE IS IMPORTANT
 
Brokers are not permitted to vote on the election of directors or on certain other proposals, and may elect not to vote on any matters, unless they receive voting instructions from the beneficial owner. Therefore, if your shares are held in the name of your broker or bank, it is important that you vote. We encourage you to vote promptly, even if you intend to attend the Annual Meeting.
 
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 24, 2024:
 
The Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders, the Annual Report to Shareholders for the fiscal year ended December 30, 2023 and the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023 are available at http://investor.textron.com/investors/investor-resources. The Company will provide by mail or email, without charge, a copy of its Annual Report on Form 10-K, at the request of shareholders. Please direct all inquiries to the Company at (401) 457-2288 or by submitting a written request to the Secretary at Textron inc., 40 Westminster Street, Providence, Rhode island 02903 or by email to irdepartment@textron.com.
 
 
 

 

 
REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
     
BY TELEPHONE
Call the telephone number on your proxy card or voting instruction form.
  BY MAIL
If you received your materials by mail, you can vote
by mail by marking, dating and signing your proxy
card or voting instruction form and returning it in the
postage-paid envelope.
 
  BY INTERNET
You can vote your shares online at www.proxyvote.com or on the website address set forth on your proxy card or voting instruction form.
  BY ATTENDING THE VIRTUAL MEETING
Attend the virtual meeting and vote
your shares during the meeting at
www.virtualshareholdermeeting.com/TXT2024

 

IV      TEXTRON 2024 PROXY STATEMENT

 
 

TABLE OF CONTENTS

Textron inc. 2024 Annual Meeting of Shareholders 1
         
Attending the Meeting 1      
Shareholders Who May Vote 1      
Voting Recommendation 1      
         
Item 1 Election of Directors 2
         
Board Membership Qualifications 2   Nominees for Director 2
         
Corporate Governance 8
         
Governance Highlights 8   Corporate Responsibility and Sustainability 14
Director Independence 9   Shareholder Outreach 15
Leadership Structure 9   Shareholder Communications to the Board 15
Board and Committee Evaluations 10   Director Nominations 15
Meeting Attendance 10   Compensation of Directors 16
Other Directorships 10   Director Stock Ownership Requirements 17
Board Committees 11   Anti-Hedging and Pledging Policy 17
Executive Committee 13   Corporate Governance Guidelines and Policies 17
Risk Oversight 13   Code of Ethics 18
Committee and Board Oversight of Environmental,
Social and Governance Matters
13  
         
Security Ownership 19
         
Audit Committee Report 21
         
Compensation Committee Report 22
         
Compensation Discussion and Analysis 23
         
Executive Summary 23   Role of Independent Compensation Consultant 36
Overview and Objectives of Executive
Compensation Program
26   Share Ownership Requirements 36
Target Direct Compensation 27   Anti-Hedging and Pledging Policy 36
2023 Incentive Compensation Targets, Payouts
and Performance Analysis
31   Clawback Policy 36
Risks Related to Compensation 35   Compensation Arrangements Relating to
Termination of Employment
37
Other Compensation Programs 35   Tax Considerations 37

 

TEXTRON 2024 PROXY STATEMENT     V

 
 
Executive Compensation 38
         
Summary Compensation Table 38   Potential Payments Upon Termination or Change in Control 46
Grants of Plan-Based Awards in Fiscal 2023 40   Pay Ratio 50
Outstanding Equity Awards at 2023 Fiscal Year-End 41   Pay versus Performance 51
Option Exercises and Stock Vested in Fiscal 2023 42   Evaluation of Risk in Compensation Plans 55
Pension Benefits in Fiscal 2023 43   Transactions with Related Persons 55
Nonqualified Deferred Compensation 45   Equity Compensation Plan Information 56
         
item 2 Approval of the Textron inc. 2024 Long-Term incentive Plan 57
         
item 3 Advisory Vote to Approve Textron’s Executive Compensation 63
         
Item 4 Ratification of Appointment of Independent Registered Public Accounting Firm 64
         
Fees to Independent Auditors 64      
         
General information about the Annual Meeting 65
         
Internet Availability of Proxy Materials 65  

Required Vote

65
Voting 65  

Costs of Proxy Solicitation

66
Savings Plan Participants 65  

Confidential Voting Policy

66
Changing or Revoking a Proxy 65   Attending the Meeting 66
         
Item 5 Shareholder Proposal Regarding Independent Board Chairman 68
         
Other Matters to Come Before the Meeting 71
         
Shareholder Proposals and Other Matters for 2025 Annual Meeting 71
         
Delivery of Documents to Shareholders Sharing an Address 72
         
Appendix A: Textron inc. 2024 Long-Term Incentive Plan A-1
         
Certain statements in this document are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our 2023 Annual Report on Form 10-K. In addition, our environmental, social and governance goals are aspirational and may change. Statements regarding our goals are not guarantees or promises that they will be met.

 

VI      TEXTRON 2024 PROXY STATEMENT

 
 
 
 
 
TEXTRON INC. 2024 ANNUAL MEETiNG OF SHAREHOLDERS
 

 

ATTENDING THE MEETING

This proxy statement, which is first being made available to shareholders on or about March 7, 2024, is furnished in connection with the solicitation by the Board of Directors of Textron Inc. of proxies to be voted at the annual meeting of shareholders to be held on April 24, 2024, at 11:00 a.m. Eastern Time virtually via a live audio webcast and at any adjournments or postponements thereof. Shareholders will be able to attend the Annual Meeting, vote their shares and submit questions during the meeting at www.virtualshareholdermeeting.com/TXT2024.

The live audio webcast of the Annual Meeting will begin promptly at 11:00 a.m. Online access to the audio webcast will open 15 minutes prior to the start of the Annual Meeting to allow time for you to log-in and test your device’s audio system. We encourage you to access the meeting in advance of the designated start time.

To be admitted to the Annual Meeting virtually, you will need to log in to www.virtualshareholdermeeting.com/TXT2024 using the 16-digit control number found on the proxy card, voting instruction form, Notice of Internet Availability of Proxy Materials or email, as applicable, sent or made available to shareholders entitled to vote at the Annual Meeting. Shareholders whose shares are held in street name and whose voting instruction form or Notice of Internet Availability does not indicate that their shares may be voted through the www.proxyvote.com website should contact their bank, broker or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the Annual Meeting.

SHAREHOLDERS WHO MAY VOTE

All shareholders of record at the close of business on February 26, 2024 will be entitled to vote. As of February 26, 2024, Textron had outstanding 192,386,946 shares of common stock, each of which is entitled to one vote with respect to each matter to be voted upon at the meeting. Proxies are solicited to give all shareholders who are entitled to vote on the matters that come before the meeting the opportunity to do so whether or not they attend the meeting.

VOTING RECOMMENDATION

The Board of Directors recommends that shareholders vote as follows:

 

    Voting Recommendation
Item 1 To elect the ten director nominees named in the proxy statement to hold office until the next annual shareholders’ meeting; “FOR” each of the
director nominees
Item 2 To approve the proposed Textron Inc. 2024 Long-Term Incentive Plan; “FOR”
Item 3 To approve Textron’s executive compensation on an advisory basis; “FOR”
Item 4 To ratify the appointment by the Audit Committee of Ernst & Young LLP as Textron’s independent registered public accounting firm for 2024; “FOR”
Item 5 Shareholder Proposal regarding Independent Board Chairman. “AGAINST”

 

TEXTRON 2024 PROXY STATEMENT     1

 
 
 
 
 
ELECTION OF DIRECTORS
 

 

BOARD MEMBERSHIP QUALIFICATIONS

The Board of Directors believes that the Board, as a whole, should possess a combination of skills, professional experience and diversity of backgrounds necessary to oversee the Company’s business. Accordingly, the Board and the Nominating and Corporate Governance Committee consider the qualifications of directors and director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. In addition, the Board believes that there are certain attributes that every director should possess, as reflected in the Board’s membership criteria which are developed and recommended to the Board by the Nominating and Corporate Governance Committee. All of our current Board members share certain qualifications and attributes consistent with these criteria, which are set forth in the Company’s Corporate Governance Guidelines and Policies and are summarized below:

Board Membership Criteria

         
         
Exemplary personal ethics and
integrity
 

Core business competencies of
high achievement and a record
of success

  Financial literacy and a history of
making good business decisions
and exposure to best practices
         
         
         
Enthusiasm for Textron and
sufficient time to be fully
engaged
  Strong communications skills
and confidence to ask tough
questions
  Interpersonal skills that
maximize group dynamics,
including respect for others
         
         
         
Specific skills and experience aligned with Textron’s strategic direction and
operating challenges and that complement the overall composition of the Board
         

 

NOMINEES FOR DIRECTOR

At the 2024 annual meeting, ten directors are to be elected to hold office until the 2025 annual meeting and until their successors have been elected and qualified. All ten nominees are currently Textron directors. Mr. Garrett was appointed as a director by the Board following the 2023 Annual Meeting of Shareholders, effective July 1, 2023. Mr. Garrett was recommended by a third-party search firm and then evaluated and interviewed by members of the Nominating and Corporate Governance Committee, as well as most other members of the Board, prior to his appointment. The search firm assisted the Company in identifying and evaluating director candidates for a fee paid by the Company. It is the intention of the persons named as proxies for the Annual Meeting, unless otherwise instructed, to vote “for” each of the directors who have been nominated for election. If any director nominee is unable or unwilling to serve as a nominee at the time of the Annual Meeting, the persons named as proxies will vote for the balance of the nominees and may vote for a substitute nominee.

Our Nominating and Corporate Governance Committee and our Board have determined that each of our nominees has the experience, attributes and skills needed to collectively comprise an effective and well-functioning Board. Textron’s directors have experience with businesses that operate in industries in which Textron operates or that involve skills that are integral to Textron’s operations.

 

2      TEXTRON 2024 PROXY STATEMENT

 
 

Our director nominees offer an effective mix of relevant experience and skills, as illustrate below (by percentage of board members):

Director Experience and Skills

 

 

Although the Nominating and Corporate Governance Committee does not have a formal policy for considering diversity in identifying nominees for director, it seeks a variety of occupational and personal backgrounds on the Board in order to obtain a range of viewpoints and perspectives. Increasing the diversity of the Board, including with respect to gender and racial/ethnic diversity, is a significant focus in developing the pool from which we identify qualified director candidates, and the Committee has advised its third-party search firm that it prioritizes enhancing the Board’s diversity. The Board assesses its effectiveness in this regard as part of its refreshment process.

Our Board nominees provide diverse and independent oversight, with director tenure that balances institutional knowledge with fresh perspectives, as illustrated below:

     
Independence of
Directors
Diversity of
Directors
Average Tenure of
Directors
     

 

TEXTRON 2024 PROXY STATEMENT     3

 
 

Biographical information about each nominee, as well as highlights of the specific experience, qualifications, attributes and skills of our individual Board members, are included below:

          
   


Scott C. Donnelly
Director Since 2009   

Chairman

 

 

Experience, Qualifications, Attributes and Skills

•  Significant experience in the aerospace and defense sector

•  Deep operational experience in innovation, manufacturing, sales and marketing, portfolio management, talent development and business processes

•  First-hand, real-time experience in, and understanding of, Textron operations

 

   
  Mr. Donnelly, 62, is Chairman, President and Chief Executive Officer of Textron. Mr. Donnelly joined Textron in June 2008 as Executive Vice President and Chief Operating Officer and was promoted to President and Chief Operating Officer in January 2009. He was appointed to the Board of Directors in October 2009, became Chief Executive Officer of Textron in December 2009 and Chairman of the Board in September 2010. Previously, Mr. Donnelly was the President and CEO of General Electric (GE) Company’s Aviation business unit, a position he had held since July 2005. GE’s Aviation business unit is a leading maker of commercial and military jet engines and components as well as integrated digital, electric power and mechanical systems for aircraft. Prior to July 2005, Mr. Donnelly served as Senior Vice President of GE Global Research, one of the world’s largest and most diversified industrial research organizations with facilities in the U.S., India, China and Germany and held various other management positions since joining GE in 1989. In 2013, Mr. Donnelly joined the board of directors of Medtronic plc.
       
 

Richard F. Ambrose
Director Since 2022
   

Audit Committee 

O&C Committee 

 

 

Experience, Qualifications, Attributes and Skills

•  Extensive operating and leadership experience in aerospace and defense industry

•  Deep understanding of working with the Department of Defense

•  Demonstrated expertise in management of U.S. government defense programs

•  Significant experience in research and development of advanced technology

•  Audit Committee Financial Expert

 

   
  Mr. Ambrose, 65, recently retired as the Executive Vice President – Space of Lockheed Martin Corporation, a global security and aerospace company, where he led Lockheed Martin’s $12 billion Space business which employs approximately 20,000 people and provides advanced technology systems for national security, civil and commercial customers. Prior to this role, which he assumed in 2013, he served as President, Lockheed Martin Information Systems & Global Solutions-National from 2011 through 2012 and as Vice President & General Manager, Lockheed Martin Surveillance & Navigation Systems line of business within Space from 2006 through 2010. He joined Lockheed in 2000 as Vice President & General Manager, Lockheed Martin Ground Systems and served as President, Lockheed Martin Maritime Systems & Sensors Tactical Systems from 2004 to 2006. Prior to joining Lockheed Martin, Mr. Ambrose served as President and General Manager of the Space Systems Division at Hughes Information Systems (which merged with Raytheon C3I Systems in 1997).
       
   

Kathleen M. Bader
Director Since 2004   

Audit Committee

N&CG Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Comprehensive experience in strategic planning and change management

•  Expertise in managing strategic business process implementation within global industrial business environments

•  Extensive experience in advancing customer loyalty and employee satisfaction

•  Expertise in expansion of international business

 

   
  Ms. Bader, 73, was President and Chief Executive Officer of NatureWorks LLC, which makes proprietary plastic resins and was formerly known as Cargill Dow LLC, until her retirement in January 2006. Formerly, she was a Business President of a $4.2 billion plastics portfolio at the Dow Chemical Company, a diversified chemical company. She joined Dow in 1973 and held various management positions in Dow’s global and North American operations, before becoming Chairman, President and Chief Executive Officer of Cargill Dow LLC, at the time an equal joint venture between Dow and Cargill Incorporated, in February 2004. She assumed the position of President and Chief Executive Officer of NatureWorks in February 2005 following Cargill’s acquisition of Dow’s interest in Cargill Dow. Ms. Bader also served for seven years on President Bush’s Homeland Security Advisory Council.

 

4      TEXTRON 2024 PROXY STATEMENT

 
 
 
    

R. Kerry Clark
Director Since 2003
       

Audit Committee

N&CG Committee 

 

 

Experience, Qualifications, Attributes and Skills

•  Extensive expertise in establishing brand equity worldwide and extending strategic initiatives globally

•  Leadership skills in enhancing customer service and advancing customer relationships

•  Significant experience in corporate governance, talent development, change management, marketing and business development

•  Audit Committee Financial Expert

   
  Mr. Clark, 71, is the retired Chairman and Chief Executive Officer of Cardinal Health, Inc., a leading provider of services supporting the health care industry. He joined Cardinal Health in April 2006 as President and Chief Executive Officer, became Chairman in November 2007 and retired in September 2009. Prior to joining Cardinal Health he was Vice Chairman of the Board, P & G Family Health, and a director of The Procter and Gamble Company, which markets consumer products in over 140 countries, from 2002–2006. He joined Procter and Gamble in 1974 and served in various key executive positions before becoming Vice Chairman of the Board in 2002 and held that position until leaving the company in April 2006. Mr. Clark became a director of General Mills, Inc. in 2009 and a director of Elevance Health, Inc. (formerly Anthem, Inc.) in 2014. He served as a director of Avnet, Inc. from 2012 through 2019.
       
   

Michael X. Garrett
Director Since 2023

Audit Committee

N&CG Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Experience managing complex operational and strategic issues

•  Deep understanding of the U.S. military

•  Broad knowledge of the defense industry and international security issues

•  Demonstrated leadership and management skills

   
  Mr. Garrett, 62, is a retired United States Army four-star general with nearly 40 years of service, most recently serving as Commanding General, United States Army Forces Command (FORSCOM), the largest command in the U.S. Army, from March 2019 until his retirement in July 2022. As FORSCOM Commander, he led 750,000 combat and support personnel through the COVID-19 pandemic and a shifting global security landscape. His earlier command tours included U.S. Army Central Command for almost four years, during which he was responsible for all Army activity in the Central Command area. Previously, he spent six years leading Army activity in the Middle East, first as Chief of Staff, U.S. Central Command and later as commanding general. Mr. Garrett joined the Board of Nano Dimension Ltd. in October, 2023.
  
   

 


Deborah Lee James
Director Since 2017
    

 

Chair, O&C Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Deep expertise in national security

•  Significant experience in U.S. government procurement and logistics

•  Demonstrated leadership and management skills

•  Extensive experience in the cybersecurity field

   
  Ms. James, 65, is the retired 23rd Secretary of the United States Air Force, a position she held from December 2013 to January 2017. Prior to her role as Secretary of the Air Force, Ms. James held various executive positions during a 12-year tenure at Science Applications International Corporation (SAIC), a provider of services and solutions in the areas of defense, health, energy, infrastructure, intelligence, surveillance, reconnaissance and cybersecurity to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, foreign governments and other customers, most recently serving as Sector President, Technical and Engineering of the Government Solutions Group. Earlier in her career, Ms. James served as Professional Staff Member for the House Armed Services Committee and as the DoD Assistant Secretary of Defense for Reserve Affairs. Ms. James has served on the board of directors of Unisys Corporation since 2017, and she served on the Board of Aerojet Rocketdyne Holdings, Inc. from June 2022 to July 2023.

 

TEXTRON 2024 PROXY STATEMENT     5

 
 
   


Thomas A. Kennedy
Director Since 2023
   

Audit Committee

O&C Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Extensive leadership experience in aerospace and defense industry

•  Deep understanding of working with the Department of Defense

•  Significant operational and strategic expertise

•  Audit Committee Financial Expert

 

   
  Mr. Kennedy, 68, is the retired Executive Chairman of the Board of Directors of Raytheon Technologies, an aerospace and defense company that provides advanced systems and services for commercial, military and government customers globally, a position he held from April 7, 2020 until his retirement in June 2021. Prior to his role as Executive Chairman, Kennedy had been the Chairman and Chief Executive Officer of the Raytheon Company, a technology and innovation leader specializing in defense, civil government and cybersecurity solutions, from 2014 to 2020. In April 2020, the Raytheon Company merged with United Technologies Corporation, creating Raytheon Technologies. He previously held the position of Executive Vice President and Chief Operating Officer of Raytheon Company from 2013 to 2014. Since joining Raytheon in 1983, Mr. Kennedy held various leadership roles at the company, including senior executive management positions within Raytheon’s Unmanned and Reconnaissance Systems, Space and Airborne Systems, and Integrated Defense Systems business units. Prior to joining Raytheon, Kennedy was a captain in the U.S. Air Force.

 

   


Lionel L. Nowell III
Director Since 2020   

Chair,
Audit Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Deep expertise in treasury functions, including debt, investments, capital markets strategies, foreign exchange and insurance

•  Significant experience in financial reporting and accounting of large international businesses

•  Extensive global perspective in risk management and strategic planning

•  Audit Committee Financial Expert

   
  Mr. Nowell, 69, is the retired Senior Vice President and Treasurer of PepsiCo, Inc., a worldwide food and beverage company, where he managed a global staff with responsibility for the company’s worldwide Treasury function. He joined PepsiCo in 1999 as Senior Vice President and Corporate Controller, and from 2000-2001 served as the Executive Vice President and Chief Financial Officer of Pepsi Bottling Group, Inc. before being named Senior Vice President and Treasurer of PepsiCo in 2001, a role he held until his retirement in 2009. Prior to PepsiCo, Mr. Nowell served as Senior Vice President, Strategy and Business Development at RJR Nabisco from 1998 to 1999 and from 1991 to 1998, he held various senior financial roles at the Pillsbury division of Diageo plc, including Chief Financial Officer of its Pillsbury North America, Pillsbury Foodservice and Häagen-Dazs businesses. Earlier in his career, he held finance roles at Pizza Hut, which at the time was a division of PepsiCo, and Owens Corning. Mr. Nowell served as a director of American Electric Power Company from 2004 to 2020. He has served as a director of Bank of America Corporation since 2013, as its Lead Director since 2021, and as a director of Ecolab Inc. since 2018.

 

   

James L. Ziemer
Director Since 2007   

Audit Committee

O&C Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Extensive expertise in establishing brand equity worldwide

•  Leadership experience in fostering outstanding customer satisfaction and loyalty

•  Significant experience with the captive finance business model

•  Audit Committee Financial Expert

 

   
  Mr. Ziemer, 74, was the President and Chief Executive Officer and a director of Harley-Davidson, Inc. until his retirement in April 2009. Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company which design, manufacture and sell motorcycles and related parts and accessories, and Harley-Davidson Financial Services, which provides related financing and insurance. Mr. Ziemer had been a director of Harley-Davidson, Inc. since December 2004 and was named President and Chief Executive Officer in April 2005. He previously served as Vice President and Chief Financial Officer of Harley- Davidson from December 1990 to April 2005 and President of the Harley-Davidson Foundation, Inc. from 1993 to 2006. Mr. Ziemer also served as a director of Thor Industries, Inc. from 2010 to 2022.

 

6      TEXTRON 2024 PROXY STATEMENT

 
 
   


Maria T. Zuber
Director Since 2016
   

Chair, N&CG Committee

 

    

Experience, Qualifications, Attributes and Skills

•  Extensive expertise in scientific research

•  Considerable leadership experience, including in relationships with the federal government

•  Deep understanding of emerging technologies

•  Expertise in climate change and climate action strategy

 

   
  Ms. Zuber, 66, is the Vice President for Research and the E.A. Griswold Professor of Geophysics at the Massachusetts Institute of Technology where she has been a member of the faculty in the Department of Earth, Atmospheric and Planetary Sciences since 1995. In her role as Vice President for Research, to which she was appointed in 2013, she has overall responsibility for research administration and policy at MIT, overseeing MIT Lincoln Laboratory and more than a dozen interdisciplinary research laboratories and centers, and plays a central role in research relationships with the federal government. She also leads MIT’s Climate Action Plan. Since 1990, she has held leadership roles associated with scientific experiments or instrumentation on ten NASA missions. Ms. Zuber served on the National Science Board from 2013 to 2021, including as Board Chair from 2016 to 2018. She serves as co-chair of the President’s Council of Advisors on Science and Technology, a position she has held since 2021. Ms. Zuber has served as a director of Bank of America Corporation since 2017.

 

The Board of Directors recommends a vote “FOR” each of the
director nominees (Items 1a through 1j on the proxy card).

 

TEXTRON 2024 PROXY STATEMENT     7

 
 
 
 
 
CORPORATE GOVERNANCE
 

 

GOVERNANCE HiGHLiGHTS

Textron is committed to sound corporate governance practices, including the following:

Director
Independence
 

9 of our 10 director nominees are independent, with our CEO being the only management director.

Our three principal Board committees, the Audit, Nominating and Corporate Governance, and Organization and Compensation Committees, are each comprised of entirely independent directors.

The independent directors meet regularly in executive session without management present.

     
Independent
Lead Director
 

Our independent directors elect a director from among themselves to serve as Lead Director, generally for a three-year term, with annual ratification.

The Lead Director is assigned clearly defined and expansive duties.

The Lead Director presides at executive sessions of the independent directors without management present at each regularly scheduled Board meeting.

     
Board
Accountability
and Practices
 

All directors must stand for election annually and be elected by a majority of votes cast in uncontested elections.

During 2023, each director attended at least 75% of the total number of Board and applicable committee meetings, and all of the directors then standing for re-election attended the Annual Meeting of Shareholders.

The Board and each of its three principal committees perform annual self-evaluations, and the evaluation process elicits feedback from each independent director if they have any concerns with respect to the performance of any other independent director.

Directors may not stand for reelection after their 75th birthday.

     
Shareholder
Rights
 

Shareholders holding 25% of our outstanding shares may call a special meeting of shareholders.

Our By-Laws provide a majority vote standard for the election of directors in uncontested elections, and we maintain a resignation policy under which any director who fails to receive a majority vote is required to tender their resignation for consideration by the Nominating and Corporate Governance Committee and the Board.

Our By-Laws provide for proxy access to allow eligible shareholders to include their own director nominees in the Company’s proxy materials.

Our Board and management regularly engage with large shareholders on corporate governance matters, our executive compensation program and ESG matters.

     
Textron Stock  

We have robust stock ownership requirements for both our directors and our senior executives, all of whom currently meet their respective requirements.

Our executives and our directors are prohibited from hedging or pledging Textron securities.

 

8      TEXTRON 2024 PROXY STATEMENT

 
 

DIRECTOR INDEPENDENCE

The Board of Directors has determined that Mses. Bader, James and Zuber and Messrs. Ambrose, Clark, Garrett, Kennedy, Nowell and Ziemer, are independent, and that former Board members, James T. Conway and Ralph D. Heath, who served as directors until April 26, 2023, were independent during the time each served as a director, as defined under the listing standards of the New York Stock Exchange, based on the criteria set forth in the Textron Corporate Governance Guidelines and Policies which are posted on Textron’s website as described below. In making its determination, the Board examined relationships between directors or their affiliates with Textron and its affiliates and determined that each such relationship did not impair the director’s independence. Specifically, the Board considered the fact that, in 2023, the Textron Charitable Trust made a $15,000 donation to the Semper Fi Wounded Warrior Fund, an organization for which Mr. Garrett serves as a Director and Mr. Conway’s wife serves as Board Vice President, a $2,500 donation to The Christ Hospital Foundation, an organization for which Mr. Clark serves as a director, and a $7,500 donation to the Pentagon Federal Credit Union (PenFed) Foundation, an organization for which Ms. James serves as a Director. In addition, the Board considered that, in 2023, the Textron Charitable Trust made a $50,000 donation to The Atlantic Council, an organization for which Ms. James serves as a director. Textron has supported The Atlantic Council since 2002, with the amount of its contribution being $50,000 annually since 2011. The Board determined that these donations have not compromised any of the director’s independence as a Textron director.

LEADERSHIP STRUCTURE

Historically, as reflected in Textron’s Corporate Governance Guidelines and Policies, the Board has determined that the practice of combining the positions of Chairman of the Board and Chief Executive Officer serves the best interests of Textron and its shareholders. This is because the Board believes that the CEO, with his extensive knowledge of the Company’s businesses and full-time focus on the business affairs of the Company, makes a more effective Chairman than an independent director, especially given the size and multi-industry nature of the Company’s business. As required by the Corporate Governance Guidelines and Policies, the Board, at least once every two years, reviews whether having the positions of Chairman and CEO combined best serves the interests of Textron and its shareholders. The Board welcomes and takes under consideration any input received from our shareholders regarding the Board’s leadership structure and will inform shareholders of any change in the Board’s leadership structure in a press release or through amended Corporate Governance Guidelines and Policies published on our website and highlighted in our annual proxy statements.

Our independent directors elect a Lead Director from among them for what is expected to be a three-year term with the appointment ratified annually. Currently, Mr. Clark serves as Lead Director. The Lead Director is assigned clearly defined and expansive duties under our Corporate Governance Guidelines and Policies, including:

 

Presiding at all meetings of the Board at which the Chairman is not present, including all executive sessions of the Board;
Serving, when needed, as liaison between the CEO and the independent directors;
Identifying, together with the CEO, key strategic direction and operational issues upon which the Board’s annual core agenda is based;
Discussing agenda items and time allocated for agenda items with the CEO prior to each Board meeting, including the authority to make changes and approve the agenda for the meeting;
Determining the type of information to be provided to the directors for each scheduled Board meeting;
Convening additional executive sessions of the Board;
Being available for consultation and direct communication with Textron shareholders; and
Such other functions as the Board may direct.

 

Textron’s Corporate Governance Guidelines and Policies also require that the Board meet in executive session for independent directors without management present at each regularly scheduled Board meeting. Textron’s Lead Director presides at these sessions and at any additional executive sessions convened at the request of a director. During 2023, the independent directors met in executive session without management present during each of the Board’s six regularly scheduled meetings.

 

TEXTRON 2024 PROXY STATEMENT     9

 
 

The functions of the Board are carried out by the full Board, and, when delegated, by the Board committees, with each director being a full and equal participant. The Board is committed to high standards of corporate governance and its Corporate Governance Guidelines and Policies were designed, in part, to ensure the independence of the Board and include a formal process for the evaluation of CEO performance by all non-management Board members. The evaluation is used by the Organization and Compensation Committee as a basis to recommend the compensation of the CEO. In addition, the Audit Committee, the Nominating and Corporate Governance Committee and the Organization and Compensation Committee are composed entirely of independent directors. Each of these committees’ charters provides that the committee may seek the counsel of independent advisors and each routinely meets in executive session without management present.

BOARD AND COMMITTEE EVALUATIONS

The Board and each of its three principal committees perform a comprehensive self-evaluation on an annual basis with oversight from the Nominating and Corporate Governance Committee. Each director completes a detailed questionnaire soliciting feedback on a number of matters designed to assess Board and committee performance and effectiveness, including oversight, risk management, Board composition, materials and processes, culture, and accountability, among other topics. The questionnaire also includes a question designed to elicit feedback from each independent director with respect to any concerns with any other independent director meeting the qualifications and attributes required of Textron Board members as established by the Nominating and Corporate Governance Committee, including the Board Membership Criteria described on page 2. Any such concerns will be discussed with the Chair of the Nominating and Corporate Governance Committee, the Lead Director or the Chairman, as appropriate. The questionnaires also enable directors to provide written comments designed to allow for more detailed feedback, and written feedback is required for any question for which the director provides a rating below the mid-point of the response range. Results of the evaluations are compiled by the Nominating and Corporate Governance Committee and shared with the full Board and each committee. Each committee discusses its respective evaluation results in executive session and determines if any follow-up actions are appropriate. Additionally, a discussion of the evaluations is held in executive session with the full Board to discuss the results and any other perspectives, feedback, or suggestions that the directors may want to raise.

MEETING ATTENDANCE

During 2023, the Board of Directors held six regular meetings. Directors are expected to regularly attend Board meetings and meetings of committees on which they serve, as well as the annual meeting of shareholders. Each director attended at least 75% of the total number of Board and applicable committee meetings. All directors standing for re-election attended the 2023 annual meeting of shareholders.

OTHER DIRECTORSHIPS

Textron’s Corporate Governance Guidelines and Policies provide that non-management directors may serve on four other public company boards, provided that, in the case of a director who is a chief executive officer of a public company, the limit is two other such boards.

 

10      TEXTRON 2024 PROXY STATEMENT

 
 

BOARD COMMITTEES

The Board of Directors has established the following three standing committees to assist in executing its duties: Audit, Nominating and Corporate Governance, and Organization and Compensation. Key responsibilities of each of the committees are described below, together with the current membership and number of meetings held in 2023. In addition, the Board of Directors and these committees are actively engaged in oversight of our enterprise risk management process and of our environmental, social and governance initiatives, as separately discussed below. Each of these committees is composed entirely of independent, non-management directors. Each of these committees has a written charter. Copies of these charters are posted on Textron’s website, www.textron.com, under “Investors—Corporate Governance—Committee Charters,” and are also available in print upon request to Textron’s Secretary.

 

Member Name   AUDIT
COMMITTEE
  NOMINATING AND
CORPORATE
GOVERNANCE
COMMITTEE
  ORGANIZATION AND
COMPENSATION
COMMITTEE
             
Richard F. Ambrose          
Kathleen M. Bader             
R. Kerry Clark*        
Michael X. Garrett             
Deborah Lee James          
Thomas A. Kennedy            
Lionel L. Nowell III        
James L. Ziemer          
Maria T. Zuber        

 

  Member Chair Audit Committee Financial Expert

 

* Lead Director

AUDIT COMMITTEE Meetings in 2023: 7   
   

Lionel L. Nowell III (Chair)

Richard F. Ambrose

Kathleen M. Bader

R. Kerry Clark

Michael X. Garrett

Thomas A. Kennedy

James L. Ziemer

Primary Responsibilities:

•  Assists the Board with its oversight of (i) the integrity of Textron’s financial statements, (ii) Textron’s compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, (iv) the performance of Textron’s internal audit function and independent auditor, and (v) risk management

•  Directly responsible for the appointment, compensation, retention and oversight of Textron’s independent auditors

 

The Board has determined that each member of the Audit Committee is independent as defined under the listing standards of the New York Stock Exchange applicable to audit committee members. No member of the committee simultaneously serves on the audit committees of more than three public companies. The Board of Directors has determined that Mr. Ambrose, Mr. Clark, Mr. Kennedy, Mr. Nowell and Mr. Ziemer each are “audit committee financial experts” under the criteria adopted by the Securities and Exchange Commission.

 

TEXTRON 2024 PROXY STATEMENT     11

 
 
     
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE Meetings in 2023: 3   
   

Maria T. Zuber (Chair)

Kathleen M. Bader

R. Kerry Clark

Michael X. Garrett

 

Primary Responsibilities:

•  Identifies individuals to become Board members and recommends that the Board select the director nominees for the next annual meeting of shareholders, considering suggestions regarding possible candidates from a variety of sources, including shareholders

•  Develops and recommends to the Board a set of corporate governance principles applicable to Textron

•  Oversees the evaluation of the Board and its committees

•  Annually reviews the Board’s committee structure, charters and membership

•  Makes recommendations on compensation of the Board after conducting an annual review of director compensation and benefits program, consulting with independent board compensation advisors, as appropriate

•  Annually reviews the Board’s composition, appropriate size of the Board, results of the review of the Board’s overall performance and the strategy of the Company to determine future requirements for Board members

•  Assists the Board of Directors in fulfilling its oversight responsibilities relating to the Company’s policies and practices regarding environmental, social and governance matters that are significant to the Company

 

The Board has determined that each member of the Nominating and Corporate Governance Committee is independent as defined under the New York Stock Exchange listing standards.

     
ORGANIZATION AND COMPENSATION COMMITTEE Meetings in 2023: 5   
   

Deborah Lee James (Chair)

Richard F. Ambrose

Thomas A. Kennedy

James L. Ziemer

 

Primary Responsibilities:

•  Approves compensation arrangements, including merit salary increases and any annual and long-term incentive compensation, with respect to the Chief Executive Officer and other executive officers of the Company

•  Oversees and, where appropriate, takes actions with respect to compensation arrangements applicable to other corporate officers

•  Amends any executive compensation plan or nonqualified deferred compensation plan of the Company and its subsidiaries to the same extent that the plan may be amended by the Board

•  Administers the executive compensation plans and nonqualified deferred compensation plans of the Company and its subsidiaries

•  Approves the Chief Executive Officer’s and other executive officers’ responsibilities and performance against pre-established performance goals

•  Plans for the succession of the Company’s management, including with respect to the development and diversity of Company management

•  As appropriate and as may be requested by the Board, makes recommendations on the Company’s human capital management practices 

 

12      TEXTRON 2024 PROXY STATEMENT

 
 

See the Compensation Discussion and Analysis (CD&A) beginning on page 23 for more information on the Organization and Compensation Committee’s processes and the role of management and the Committee’s consultant in determining the form and amount of executive compensation. The Board of Directors has determined that each member of the committee is independent as defined under the New York Stock Exchange listing standards applicable to compensation committee members.

EXECUTIVE COMMITTEE

Textron’s Board also maintains an Executive Committee which has the power, between meetings of the Board of Directors, to exercise all of the powers of the full Board, except as specifically limited by Textron’s By-Laws and Delaware law. Currently, Mr. Donnelly, Mr. Clark, Ms. James, Mr. Nowell and Ms. Zuber comprise the Executive Committee, which did not meet during 2023.

RISK OVERSIGHT

The Board oversees the Company’s enterprise risk management (“ERM”) process which is designed to identify risks throughout the Company. On a quarterly basis, each business unit and functional area throughout the Company conducts assessments of identified significant business risks under their purview in the categories of financial, information technology, operational, strategic and compliance risks. The assessment results are depicted using a heat map to highlight the potential severity of each risk and likelihood of occurrence, along with mitigation actions, and the identified risks are prioritized and, depending on the probability and severity of the risk, escalated to a cross-functional enterprise risk committee and senior management. Management reviews the results of the quarterly risk assessment, including any new material risks or significant changes in material risks, with the Audit Committee each quarter. Our full Board oversees our ERM process through discussions at our Board of Directors Annual Strategic Business and Risk Review and at an annual dedicated ERM review. In addition, the Board retains direct oversight responsibility with respect to certain risks. For example, oversight of information security matters is conducted by our full Board of Directors. The Board annually receives a comprehensive presentation on information security and controls from our Chief Information Officer (CIO) and, as may be necessary for specific topics, follow up occurs at additional meetings during the course of the year.

Although the full Board is responsible for the ERM and certain other risk oversight functions, the Organization and Compensation Committee, the Nominating and Corporate Governance Committee and the Audit Committee assist the Board in discharging its oversight duties. During the past year, each of the committees held a number of meetings to oversee and assess risks related to the matters for which it is responsible as identified in their respective charters. Among other topics, the Organization and Compensation Committee received reports on and discussed risks related to the Company’s compensation programs, organizational development and talent diversity and assessed whether risks arising from the Company’s compensation policies and practices for senior executives are reasonably likely to have a material adverse effect on the Company. The Nominating and Corporate Governance Committee, among other things, reviewed risks associated with certain environmental, social and governance matters. Similarly, the Audit Committee held a number of sessions with management and the independent auditor, as appropriate, to review and provide feedback on management’s policies and processes for risk assessment and risk management and management’s evaluation of the Company’s major risks and the steps management has taken or proposes to take to monitor and mitigate such risks.

Accordingly, while each of the three committees contributes to the risk management oversight function by assisting the Board in the manner outlined above, the Board itself remains ultimately responsible for the oversight of risk, and receives report- outs from each of the committees, as well as periodic reports from management addressing the various risks, including those related to financial and other performance, cybersecurity and human capital matters.

COMMITTEE AND BOARD OVERSIGHT OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

The charter of the Nominating and Corporate Governance Committee specifically includes as one of its responsibilities assisting the Board in fulfilling its oversight responsibilities relating to the Company’s policies and practices regarding environmental, social and governance (“ESG”) matters that are significant to the Company. The agenda for each Nominating and Corporate Governance Committee meeting includes updates to ESG matters, as appropriate. Our other Board Committees also have oversight responsibility for ESG topics under their purview. The Executive Vice President, General Counsel and Chief Compliance Officer of the Company reports to the Audit Committee on legal, ethics and compliance matters as well as environmental, health and safety matters at each Audit Committee meeting. The Organization and Compensation Committee has oversight of management succession, talent development and diversity, equity and inclusion efforts, and may

 

TEXTRON 2024 PROXY STATEMENT     13

 
 

make recommendations on other human capital management practices. The Audit Committee and the full Board are also directly engaged with ESG risk areas through our ERM program described above. Sustainability risks, including physical risks related to climate change and risks related to transitioning to a lower carbon economy, are assessed through the ERM program and reviewed with the Audit Committee and the Board, in accordance with the ERM process outlined above.

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Textron is committed to being a responsible corporate citizen. Our corporate responsibility efforts include the following focus areas:

Working to decrease the environmental impact of our business activities throughout our operations through a carefully developed five-year plan: Achieve 2025

Under this plan, for the period from 2020-2025, we will focus on achieving the following goals with respect to our operations:
  Reduce greenhouse gas emission intensity of our operations by 20%;
  Reduce energy use intensity by 10%;
  Reduce water use intensity by 10%; and
  Reduce waste generation intensity by 10%.

Enhancing workplace safety and the health and well-being of our employees

  Our Global Environmental Health and Safety (EHS) Policies and Standards establish a management system framework, guided by an enterprise-wide EHS council, that includes goal setting, risk reduction, compliance auditing, and performance reporting throughout the enterprise.
  Our Achieve 2025 plan includes a five-year goal to reduce injury rates by 20%.
  Performance on the injury rate reduction goal is reported to senior leadership and the Audit Committee of the Board.
Offering our employees opportunities to grow and develop their careers
  Our talent development programs are designed to prepare our employees at all levels to take on new career and growth opportunities at Textron.
  Leadership, professional and functional training courses are tailored for employees at each stage of their careers and include a mix of enterprise-wide and business unit-specific programs.
  The current and future talent needs of each of our businesses are assessed annually through a formal talent review process which enables us to develop leadership succession plans and provide our employees with potential new career opportunities.
  Leaders from functional areas within each business belong to enterprise-wide councils which review talent to enable us to match employees who are ready to assume significant leadership roles with opportunities that best fit their career paths, which may be in other businesses within the enterprise.
Working to increase the diversity of our workforce and supporting inclusive workplaces
  Textron is committed to having a diverse workforce and inclusive workplaces throughout our global operations. We believe by employing highly talented employees, who feel valued, respected and are able to contribute fully, we will improve performance, innovation and collaboration and drive talent retention, all of which contribute to stronger business results and reinforce our reputation as leaders in our industries and communities.
  For over a decade, Textron has allocated 5% of annual incentive compensation for management level employees toward achievement of diversity goals. Beginning in 2024, 5% of annual incentive compensation will be earned based upon a qualitative assessment that may incorporate quantitative and qualitative data with respect to our progress and achievement of environmental, social, and governance goals, including diversity and inclusion.
  Textron annually posts its EEO-1 employee diversity data on Textron.com.

Each year we publish a Corporate Responsibility Report which highlights the actions we have taken during the past year in these and other environmental, social and governance focus areas and provides disclosure in alignment with the Task Force on Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board reporting frameworks.

 

14      TEXTRON 2024 PROXY STATEMENT

 
 

Our Corporate Responsibility Report is available on our website at Textron.com/CorpResponsibility/corporate-responsibility- report. Information in the Corporate Responsibility Report and on our website is not incorporated by reference into this Proxy Statement or considered to be part of this document.

 

SHAREHOLDER OUTREACH

Textron is committed to robust shareholder engagement, and we conduct a regular shareholder outreach program each fall dedicated to corporate governance, executive compensation and corporate responsibility topics. In each of the past several years, we have contacted shareholders representing approximately 66% of our outstanding shares to hear their views and held an engagement call with each shareholder that accepted our invitation. Our core shareholder engagement team comprises senior members of our investor relations, corporate governance and executive compensation teams, supplemented by a member of our Board, as appropriate. These efforts are in addition to normal course outreach conducted by our investor relations team and members of senior management with shareholders, portfolio managers and analysts. We also meet with shareholders at investor conferences held throughout the year.

Over the past year, as described in detail on page 35, we had robust discussions with shareholders around various ESG topics, including actions we are taking to reduce our carbon emissions and energy use, our efforts in connection with various human capital management areas, as well as various governance matters. In response to feedback and questions from a number of investors, Textron annually provides disclosure in our Corporate Responsibility Report in alignment with the Task Force on Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board reporting frameworks. In addition, as requested by a number of our shareholders, we post Textron’s EEO-1 employee diversity data on Textron.com each year.

 

SHAREHOLDER COMMUNICATIONS TO THE BOARD

Shareholders or other interested parties wishing to communicate with the Board of Directors, the Lead Director, the non- management directors as a group or with any individual director may do so by calling (866) 698-6655 (toll-free) or (401) 457-2601, writing to Board of Directors at Textron Inc., 40 Westminster Street, Providence, Rhode Island 02903, or by e-mail to textrondirectors@textron.com. The telephone numbers and addresses are also listed on the Textron website. All communications received via the above methods will be sent to the Board of Directors, the Lead Director, the non- management directors or the specified director.

 

DIRECTOR NOMINATIONS

Director candidates suggested by shareholders will be communicated to the Nominating and Corporate Governance Committee for consideration in the committee’s selection process. Shareholder-recommended candidates are evaluated using the same criteria used for other candidates. The committee also periodically retains a third-party search firm to assist in the identification and evaluation of candidates.

Textron’s By-Laws contain a provision which imposes certain requirements upon nominations for directors made by shareholders, including proxy access nominees, at the annual meeting of shareholders or a special meeting of shareholders at which directors are to be elected. Shareholders wishing to nominate an individual for director at the annual meeting must submit timely notice of nomination within the time limits described below, under the heading “Shareholder Proposals and Other Matters for 2025 Annual Meeting” on page 71, to the committee, c/o Textron’s Secretary, along with the information described in our By-Laws.

All candidates are evaluated against the Board’s needs and the criteria for membership to the Board set forth above on page 2. The committee must also take into account our By-Laws which provide, without provision for exemption, condition or waiver, that no person shall be elected a director who has attained the age of 75. In addition, the Corporate Governance Guidelines and Policies provide that a substantial majority of the Company’s directors must be independent under the standards of the New York Stock Exchange. All recommendations of nominees to the Board by the committee are made solely on the basis of merit.

 

TEXTRON 2024 PROXY STATEMENT     15

 
 

COMPENSATION OF DIRECTORS

During 2023, for their service on the Board, non-employee directors were paid an annual cash retainer of $130,000 and, on the date of the 2023 Annual Meeting, were issued stock-settled restricted stock units (“RSUs”), valued at $165,000. The RSUs vest in one year unless the director elects to defer settlement of the RSUs until the director’s separation from service on the Board. The annual cash retainer and the RSUs are prorated for directors who serve on the Board for a portion of the year.

Each member of the Audit Committee (including the chair) received an additional cash retainer of $15,000, and the chairs of the Audit Committee, the Nominating and Corporate Governance Committee and the Organization and Compensation Committee received, respectively, an additional $15,000, $20,000, and $25,000 and the Lead Director received an additional $45,000.

Textron maintains a Deferred Income Plan for Non-Employee Directors (the “Directors’ Deferred Income Plan”) under which they can defer all or part of their cash compensation until retirement from the Board. Deferrals are made either into an interest bearing account or into an account consisting of Textron stock units, which are equivalent in value to Textron common stock and receive dividend equivalents. The interest-bearing account earns interest at a monthly rate that is one-twelfth of the greater of 8% or the average for the month of the Moody’s Corporate Bond Yield Index, but in either case, not to exceed a monthly rate equal to 120% of the Applicable Federal Rate.

Textron sponsors a Directors Charitable Award Program that was closed to new participants in 2004. Under the program, Textron contributes up to $1,000,000 to the Textron Charitable Trust on behalf of each participating director upon his or her death, and the Trust donates 50% of that amount in accordance with the director’s recommendation among up to five charitable organizations. Textron currently maintains life insurance policies on the lives of the participating directors, the proceeds of which may be used to fund these contributions. The premiums on the policies insuring our current directors who participate in this program have been fully paid so there are no longer expenditures associated with these policies. Ms. Bader and Mr. Clark, the only current directors who participate, do not receive any direct financial benefit from this program as the insurance proceeds and charitable deductions accrue solely to Textron. Non-employee directors also are eligible to participate in the Textron Matching Gift Program under which Textron will match contributions of directors and full-time employees to eligible charitable organizations at a 1:1 ratio up to a maximum of $7,500 per year.

Non-employee directors are eligible to receive awards granted under the Textron Inc. 2015 Long-Term Incentive Plan. In addition to the RSUs described above, prior to 2022, directors received a one-time grant of 2,000 shares of restricted stock (the “Restricted Shares”) upon joining the Board. The Restricted Shares do not vest until the director has completed at least five years of Board service and all successive terms of Board service to which he or she is nominated and elected or in the event of death or disability or a change in control of Textron. At its December 2021 meeting, the Board eliminated this one-time stock grant for new directors joining the Board after 2021. This change was recommended by the Nominating and Corporate Governance Committee after its annual review of director compensation, in light of the annual grant of RSUs now made to our independent directors and to better align with current practice at similar companies.

None of our directors receive compensation for serving on the Board from any shareholder or other third party. Employee directors do not receive fees or other compensation for their service on the Board or its committees.

 

16     TEXTRON 2024 PROXY STATEMENT

 
 

Director Compensation Table

The following table provides 2023 compensation information for our directors other than Mr. Donnelly, whose compensation is reported in the Summary Compensation Table on page 38.

 

    Fees Earned or   Stock   All Other      
Name   Paid in Cash ($)   Awards ($)(1)   Compensation ($)(2)   Total ($) 
                         
Richard F. Ambrose   145,000     165,000           310,000  
Kathleen M. Bader   145,000     165,000           310,000  
R. Kerry Clark   190,000     165,000     10,000     365,000  
James T. Conway(3)   48,215                 48,215  
Michael X. Garrett(4)   73,096     134,344           207,440  
Ralph D. Heath(3)   46,607                 46,607  
Deborah Lee James   143,154     165,000     7,500     315,654  
Thomas A. Kennedy   145,000     165,000           310,000  
Lionel L. Nowell III   160,000     165,000           325,000  
James L. Ziemer   151,667     165,000     7,500     324,167  
Maria T. Zuber   143,571     165,000           308,571  

 

 

(1)The amounts in this column represent the grant date fair value of the RSUs issued to each of the directors serving on the date of the 2023 Annual Meeting, and for Mr. Garrett, the grant date fair value of the RSUs issued to him upon his appointment to the Board effective July 1, 2023.
(2)The amounts in this column represent matching charitable contributions made by the Company on behalf of participating directors pursuant to the Textron Matching Gift Program. The amount for Mr. Clark includes a contribution paid by Textron in 2023 to match a contribution made in 2022.
(3)Mr. Conway and Mr. Heath retired from the Board as of the 2023 Annual Meeting.
(4)Mr. Garrett was appointed to the Board effective July 1, 2023.

 

DIRECTOR STOCK OWNERSHIP REQUIREMENTS

In order to align the financial interests of our directors with the interests of our shareholders, we require that our directors maintain a specified level of stock ownership equal to eight times the portion of their annual cash retainer. All directors currently meet the stock ownership requirement, which allows them to achieve the required level of ownership over time in the case of directors who have more recently joined the Board. We also have a stock retention policy restricting non-employee directors from transferring the Restricted Shares or the stock units credited under the Directors’ Deferred Income Plan while they serve on the Board. To the extent that directors do not defer settlement of their RSUs, they may not sell shares of common stock received upon vesting of RSUs unless the stock ownership requirement has been met.

 

ANTI-HEDGING AND PLEDGING POLICY

Our directors are prohibited from (i) pledging Textron securities as collateral for any loan or holding Textron securities in a margin account or (ii) engaging in short sales of Textron securities or transactions in publicly traded options or derivative securities based on Textron’s securities.

 

CORPORATE GOVERNANCE GUIDELINES AND POLICIES

Textron’s Corporate Governance Guidelines and Policies, originally adopted in 1996 and most recently revised in February 2024, meet or exceed the listing standards adopted by the New York Stock Exchange and are posted on Textron’s website, www.textron.com, under “Investors—Corporate Governance—Corporate Governance Guidelines and Policies,” and are also available in print upon request to Textron’s Secretary.

 

TEXTRON 2024 PROXY STATEMENT     17

 
 

CODE OF ETHICS

Textron’s Business Conduct Guidelines, originally adopted in 1979 and most recently revised effective July 2023, are applicable to all employees of Textron, including the principal executive officer, the principal financial officer and the principal accounting officer. The Business Conduct Guidelines are also applicable to directors with respect to their responsibilities as members of the Board of Directors. The Business Conduct Guidelines are posted on Textron’s website, www.textron.com, under “Corporate Responsibility—Ethics and Compliance—Textron’s Business Conduct Guidelines,” and are also available in print upon request to Textron’s Secretary. We intend to post on our website, at the address specified above, any amendments to the Business Conduct Guidelines or the grant of a waiver from a provision of the Business Conduct Guidelines requiring disclosure under applicable Securities and Exchange Commission rules within four business days following the date of the amendment or waiver.

 

18     TEXTRON 2024 PROXY STATEMENT

 
 
 
 
 
SECURITY OWNERSHIP
 

 

The following table sets forth information regarding the beneficial ownership of our common stock as of January 2, 2024, unless otherwise noted, by:

Each person or group known by us to own beneficially more than 5% of our common stock;
Each of our directors;
Each of our named executive officers, as defined under Securities and Exchange Commission rules (“NEOs”); and
All of our current directors and executive officers as a group.

 

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes any shares over which a person exercises sole or shared voting or investment power. Shares of common stock subject to options that are exercisable, or restricted stock units that will vest, within 60 days of January 2, 2024, and shares held for the executive officers by the trustee under the Textron Savings Plan, are considered outstanding and beneficially owned by the person holding the option or unit or participating in the Plan but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

Each shareholder listed below has sole voting and investment power with respect to the shares beneficially owned, except in those cases in which the voting or investment power is shared with the trustee or as otherwise noted.

 

Directors and Executive Officers   Number of Shares of
Common Stock
  Percent of Class  
               
Richard F. Ambrose   2,174 (1)        
Kathleen M. Bader   11,353 (1)   *    
R. Kerry Clark   11,353 (1)   *    
Frank T. Connor   619,081 (2)(3)   *    
Scott C. Donnelly   2,352,411 (2)(3)   1.2 %  
Julie G. Duffy   148,132 (2)(3)   *    
Michael X. Garrett   (1)   *    
Deborah Lee James   11,372 (1)   *    
Thomas A. Kennedy   734 (1)        
E. Robert Lupone   308,168 (2)(3)   *    
Lionel L. Nowell III   11,361 (1)   *    
James L. Ziemer   11,518 (1)   *    
Maria T. Zuber   11,374 (1)   *    
All current directors and executive officers as a group (13 persons)   3,499,031     1.8 %  
Beneficial Holders of More than 5%              
BlackRock, Inc.(4)   16,727,725     8.7 %  
T. Rowe Price Investment Management, Inc.(5)   13,548,397     7.0 %  
The Vanguard Group, Inc.(6)   22,512,608     11.7 %  

 

 

* Less than 1% of the outstanding shares of common stock.

(1)Excludes (i) stock units held by our non-employee directors under the Directors Deferred Income Plan that are paid in cash following termination of service as a director, based upon the value of Textron common stock, as follows: Mr. Ambrose, 172 shares; Ms. Bader, 65,207 shares; Mr. Clark, 84,070 shares; Ms. James, 7,445 shares; Mr. Nowell, 5,179 shares; Mr. Ziemer, 83,071 shares; and Ms. Zuber, 12,894 shares and (ii) for each director, 2,517 unvested RSUs payable in stock, not obtainable within 60 days of January 1, 2024, except that Mr. Garrett received a prorated award of 1,987 RSUs because he joined our Board effective July 1, 2023.
(2)Includes shares obtainable within 60 days of January 2, 2024, as follows: (i) upon the exercise of stock options: Mr. Connor, 486,560 shares; Mr. Donnelly, 1,668,737 shares; Ms. Duffy, 110,274 shares; Mr. Lupone, 215,158 shares; (ii) upon the vesting of RSUs: Mr. Connor, 23,694 shares; Mr. Donnelly, 80,357 shares; Ms. Duffy, 7,693 shares; Mr. Lupone, 10,432 shares; (iii) upon settlement of PSUs paid in stock to Mr. Donnelly, 32,547 shares; and (iv) all directors and executive officers as a group, 2,635,452 shares.

 

TEXTRON 2024 PROXY STATEMENT     19

 
 
(3)Excludes (i) stock units held under non-qualified deferred compensation plans that are paid in cash, based upon the value of Textron common stock, as follows: Mr. Connor, 11,163 shares; Mr. Donnelly, 17,585 shares; Ms. Duffy, 2,068 shares; and Mr. Lupone, 6,201 shares; (ii) unvested RSUs payable in stock, not obtainable within 60 days of January 1, 2024, as follows: Mr. Connor, 24,844 shares; Mr. Donnelly, 84,999 shares; Ms. Duffy, 8,089 shares; and Mr. Lupone, 10,584 shares; and (iii) unvested PSUs payable in cash when earned based upon the value of Textron common stock, as follows:
Mr. Connor, 49,687 shares; Mr. Donnelly, shares; Ms. Duffy, 16,177 shares; and Mr. Lupone, 21,167 shares.

(4)Based on information disclosed in Amendment No. 9 to Schedule 13G filed by BlackRock, Inc. on January 25, 2024. According to this filing, as of December 31, 2023, BlackRock, Inc., through its various entities, beneficially owns these shares and has sole power to dispose of or direct the disposition of all of these shares and sole power to vote or direct the voting of 16,727,725 of these shares. The address for BlackRock, Inc. is 50 Hudson Yards, New York, NY. During 2023, BlackRock acted as an investment manager for certain assets within Textron’s pension plans and employee savings plans. BlackRock received approximately $1.1 million in fees for these services.
(5)Based on information disclosed in Amendment No. 2 to Schedule 13G filed by T. Rowe Price Investment Management, Inc. on February 14, 2024. According to this filing, as of December 31, 2023, T. Rowe Price Investment Management, Inc., in its capacity as investment adviser for various individual and institutional clients, is deemed to beneficially own these shares as to which it has sole dispositive power and, with respect to 5,550,599 of these shares, sole voting power. T. Rowe Price Investment Management, Inc. expressly disclaims beneficial ownership. The address for T. Rowe Price Investment Management, Inc. is 100 E. Pratt Street, Baltimore, MD 21201.
(6)Based on information disclosed in Amendment No. 13 to Schedule 13G filed by The Vanguard Group, Inc. on February 13, 2024. According to this filing, as of December 29, 2023, The Vanguard Group, Inc. beneficially owns these shares and has sole power to dispose of or direct the disposition of 21,722,123 of these shares, shared power to dispose of or direct the disposition of 790,485 of these shares, sole power to vote or direct the voting of none of these shares and shared power to vote or direct the voting of 227,046 of these shares. The address for The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355. During 2022, Vanguard acted as an investment manager for certain assets within Textron’s pension plans and employee savings plans. Vanguard received approximately $1.2 million in fees for these services.

 

20     TEXTRON 2024 PROXY STATEMENT

 
 
 
 
 
AUDIT COMMITTEE REPORT
 

 

The Audit Committee of the Board of Directors has furnished the following report on its activities:

The committee reviewed and discussed the audited consolidated financial statements and the related schedule in the Annual Report referred to below with management. The committee also reviewed with management and the independent registered public accounting firm (the “independent auditors”) the reasonableness of significant judgments, including critical audit matters, and the clarity of disclosures in the financial statements, the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the committee by applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. In addition, the committee discussed with the independent auditors the auditors’ independence from management and the Company. This discussion included the matters in the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communication with the audit committee concerning independence and considered the possible effect of non-audit services on the auditors’ independence.

The committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits and met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, including internal controls over financial reporting, and the overall quality of the Company’s financial reporting. The committee also reviewed the Company’s compliance program. Seven committee meetings were held during the year.

 

In reliance on the reviews and discussions referred to above, the committee recommended to the Board of Directors that the audited consolidated financial statements and the related schedule be included in the Annual Report on Form 10-K for the fiscal year ended December 30, 2023, to be filed with the Securities and Exchange Commission. The committee also reported to the Board that it had selected Ernst & Young LLP as the Company’s independent auditors for 2024 and recommended that this selection be submitted to the shareholders for ratification. In determining whether to reappoint Ernst & Young LLP as the Company’s independent auditor, the committee took into consideration a number of factors, including the quality of the committee’s ongoing discussions with Ernst & Young LLP and an assessment of the professional qualifications and past performance of the lead audit partner and Ernst & Young LLP.

 

  LIONEL L. NOWELL III, CHAIR
  RICHARD F. AMBROSE
  KATHLEEN M. BADER
  R. KERRY CLARK
  MICHAEL X. GARRETT
  THOMAS A. KENNEDY
  JAMES L. ZIEMER

 

TEXTRON 2024 PROXY STATEMENT     21

 
 
 
 
 
COMPENSATION COMMITTEE REPORT
 

The Organization and Compensation Committee of the Board of Directors has furnished the following report:

The Committee reviewed the Compensation Discussion and Analysis to be included in Textron’s 2024 Proxy Statement and discussed that Analysis with management.

Based on its review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Textron’s 2024 Proxy Statement and Textron’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

This report is submitted by the Organization and Compensation Committee.

 

  DEBORAH LEE JAMES, CHAIR
  RICHARD F. AMBROSE
  THOMAS A. KENNEDY
  JAMES L. ZIEMER

 

22     TEXTRON 2024 PROXY STATEMENT

 
 
 
 
 
COMPENSATION DISCUSSION AND ANALYSIS
 

 

EXECUTIVE SUMMARY

Key 2023 Performance Highlights

In 2023, Textron’s revenues increased 6% and segment profit increased 17%, compared with 2022. Our backlog increased 5% in 2023, to $13.9 billion, which included a $782 million increase at the Textron Aviation segment. During 2023, we continued to manage through the impacts of ongoing global supply chain shortages/delays and labor shortages to deliver products to our customers.

Financial highlights for 2023 also include:

Generated $1.3 billion of net cash from operating activities from our manufacturing businesses
Invested $570 million in research and development projects and $402 million in capital expenditures
Returned $1.2 billion to our shareholders through the repurchase of 16.2 million shares of our common stock

Beginning in 2023, we changed how we measure our segment profit for the manufacturing segments, as discussed below under 2023 Annual Incentive Compensation Performance Metrics on page 31. As a result of this change, the prior periods have been recast to conform to this presentation.

 

 

 

Business highlights for 2023 include:

Textron Aviation announced development of the Citation Ascend which is designed to bring the latest technology and innovations in cockpit avionics, engine performance and luxurious cabin features to the midsize business jet market. As part of a new fleet agreement with NetJets, Textron Aviation named NetJets as the fleet launch customer for the Ascend.

Bell began work on development of the next generation tiltrotor aircraft for the U.S. Army’s Future Long Range Assault Aircraft (FLRAA) program under a contract awarded to Bell in December 2022. Bell ramped up activity with additional engineering resources, contracting with key suppliers, ordering long-lead materials and breaking ground on a new FLRAA Drive Systems Test Lab as it continues work on a new tiltrotor aircraft to meet U.S. Army weapon system requirements.

Textron Systems grew its Intelligence, Surveillance and Reconnaissance (ISR) support to the U.S. Navy, expanding our Aerosonde® uncrewed aircraft systems (UAS) from four to seven vessels over the course of 2023. Also, Textron Systems was selected for Option 2 for the Future Tactical Uncrewed Aircraft System (FTUAS) program and its RIPSAW® M3 was downselected to participate in the Army’s Robotic Combat Vehicle Phase 1: Platform Prototype program.

Textron Specialized Vehicles unveiled its new Jacobsen SLF1 ELiTE lithium mower. The newest Jacobsen offering was the centerpiece of an all-electric display of Jacobsen and Cushman products at the 2023 Golf Course Superintendents Association of America Conference and Trade Show. In addition, Textron Ground Support Equipment launched its new TUG 660 Li belt loader, powered by lithium battery technology. This zero-emission, fully electric operation allows airlines, air freight companies and ground handlers to help achieve their sustainability goals with lower operational costs.

 

TEXTRON 2024 PROXY STATEMENT     23

 
 
After receiving its first order from an automotive OEM for a thermoplastic composite underbody battery protection system, Kautex ramped up in preparation for successful production of this innovative product. The underbody protection product is part of Kautex’s customizable Pentatonic battery system, which also includes battery enclosures and thermal management systems for use in electric vehicles, from hybrid to full battery electric vehicles.

Pipistrel, within our Textron eAviation segment, has expanded its distributor and customer reach by adding three new distributors in the U.S. that collectively represent 29 states, as well as distributors in both Canada and Africa.

 

Overview of 2023 Executive Compensation Decisions and Results

 

Key compensation decisions and results for 2023 include the following:

2023 Base Salaries: The Organization and Compensation Committee (the “Committee”) increased base salaries for each of the named executive officers (“NEOs”). Mr. Donnelly received an increase of 5.0% while Mr. Connor, Mr. Lupone, and Ms. Duffy received increases of 4.5%, 4.6% and 6.1% respectively.

2023 Target Incentive Compensation: Target annual and long-term incentive compensation for each of the named executive officers increased only as a result of their base salary increases, except that the Committee increased Mr. Donnelly’s target annual incentive compensation by 10% of his base salary and his target long-term incentive compensation increased 8% from $12 million to $13 million.

2023 Long-Term Incentive Awards: Maintained the target value allocation first instituted in 2020 of 50% PSUs, 25% stock options, and 25% RSUs.
2023 Short-Term Incentive Results: The calculated payout for 2023 was 112.9% of target, which reflects above target performance on our profitability and cash flow metrics, and performance just below target on our hiring diversity metric.
2021-2023 Long-Term Incentive Results: The calculated payout for the 2021-2023 PSU award was 200% as performance on our return on invested capital, cumulative cash flow and relative total shareholder return metrics exceeded maximum performance.

 

Executive Compensation Highlights

The following summarizes key aspects of our executive compensation program for the NEOs:

 

 

Practices we employ Pay for performance—substantial portion of executives’ compensation tied to Company performance against pre-established metrics set by the Committee
     
  Fifty percent (50%) of long-term incentive awards subject to performance-based metrics to closely align with long-term Company performance
     
  Pay aligned with shareholder interests-substantial portion of executives’ target compensation, including more than 75% of CEO’s target compensation, is in the form of equity-based long-term incentives
     
  Annual incentive compensation for 2023 included hiring diversity performance metric; beginning in 2024, this metric will be broadened to encompass additional environmental, social, and governance objectives.
     
  Caps on annual incentive compensation and performance share unit payouts
     
  Double-trigger change in control provisions for equity awards and severance arrangements
     
  Committee annually conducts a pay-for-performance analysis based on operating and stock performance metrics used in our annual and long-term incentive awards
     
  Committee annually reviews the composition of a talent peer group which is referenced for benchmarking our executives’ compensation and makes changes as appropriate

 

24     TEXTRON 2024 PROXY STATEMENT

 
 
  Committee annually reviews compensation data against the talent peer group in order to understand the competitiveness of our compensation program and pay levels
     
  Committee annually reviews a compensation-related risk assessment with assistance from its independent compensation consultant
     
  Committee and the Board review and evaluate plans for executive development, succession and diversity
     
  Annual shareholder engagement program includes discussion of executive compensation with Board involvement as requested by shareholders
     
  Robust share ownership requirements
 

Practices we prohibitNo single-trigger vesting of long-term incentive awards upon a change in control of the Company
No tax gross-ups for officers hired after 2008
No employment contracts guaranteeing fixed-term employment or bonuses to executives and no individually negotiated termination protection since 2008
No excessive executive perquisites
No hedging or pledging Textron securities
 No repricing or exchanging stock options without shareholder approval

 

 

Compensation Philosophy

Textron’s compensation philosophy is to establish target total direct compensation with reference to a talent peer group median and to tie a substantial portion of our executives’ compensation to performance against objective business metrics and stock price performance. This approach helps us to recruit and retain talented executives, incentivizes our executives to achieve desired business goals and aligns their interests with the interests of our shareholders.

 

2023 Compensation Program Components

Total direct compensation for Textron’s executives, including the NEOs, consists of base salary, annual incentive compensation and long-term incentive compensation. Our annual incentive compensation program is designed to reward performance against annual business metrics established by the Committee at the beginning of each year and is payable in cash.

Our long-term incentive compensation program is directly linked to stock price through three award types: performance share units (“PSUs”), restricted stock units (“RSUs”) and stock options. PSUs represent 50% of long-term incentives awarded to our NEOs and are earned based on performance against financial metrics set by the Committee measured over a three-year performance period. The three-year financial metrics currently used for our PSUs are Average Return on Invested Capital (weighted at 50%), Cumulative Manufacturing Cash Flow (weighted at 30%), and relative Total Shareholder Return (“TSR”) compared to the S&P 500 (weighted at 20%). PSUs are typically settled in cash based upon our stock price at the end of the three-year performance cycle, but, in the Committee’s discretion, can be settled in shares of common stock, cash, or a combination of both.

 

TEXTRON 2024 PROXY STATEMENT     25

 
 

 

Our annual and long-term incentive compensation programs for 2023 are summarized in the following table:

 

 

 

OVERVIEW AND OBJECTIVES OF EXECUTIVE COMPENSATION PROGRAM

The objectives of Textron’s compensation program for executive officers are:

Encouraging world class performance
Focusing executives on delivering balanced performance by providing (i) both cash and equity incentives and (ii) both annual and long-term incentives
Aligning executive compensation with shareholder value
Attracting and retaining high-performing talent

 

26     TEXTRON 2024 PROXY STATEMENT

 
 

 

To achieve these objectives, the Committee uses the following five guidelines for designing and implementing executive compensation programs at Textron:

 

 Target total direct compensation should be set in reference to the median target total direct compensation of a talent peer group
Incentive compensation payout should be higher than target compensation when Textron performs well and lower if Textron underperforms
 Performance metrics should align interests of executives with long-term interests of shareholders
 Compensation programs should not incentivize executives to conduct business in ways which could put the Company at undue risk
 Indirect compensation should provide the same level of benefits given to other salaried employees

 

TARGET DIRECT COMPENSATION

How Does the Committee Establish Target Direct Compensation?

Target total direct compensation consists of three components: (i) base salary, (ii) target annual incentive compensation and (iii) target long-term incentive compensation. In establishing target pay, the Committee addresses each component with reference to a talent peer group median and makes its determinations based on individual responsibilities, complexity of position versus that of the market benchmarks, performance, experience, and future potential. The target incentive compensation components generally are established as a percentage of base salary, varying for each NEO. The objectives of the three components are as follows:

 

 

 

How Does the Committee Select the Talent Peer Group?

 

The Committee references a “talent” peer group of companies, recommended by its independent compensation consultant, and reviewed and approved by the Committee annually, as part of its process in establishing target direct compensation for each NEO. For its 2022 review of the talent peer group, the compensation consultant evaluated current and potential peer companies using the following factors: size appropriateness, based upon both revenue and market capitalization, industry and business fit, global reach, and whether the company uses Textron as a peer company for compensation purposes. The Committee also considers changes that may occur at peer companies due to mergers and acquisitions and/or spin-off activities. After this review, the compensation consultant recommended, and the Committee concluded, that no changes to the 2022 talent peer group were warranted.

 

TEXTRON 2024 PROXY STATEMENT     27

 
 

 

The table below lists the 2022 talent peer group companies and Textron showing fiscal 2021 revenues. The 2022 talent peer group was referenced in setting target direct compensation for 2023.

 

2022 Talent Peer Group

 

       
Company Name   Industry 2021 Revenue
($ in billions)
       
General Dynamics Corporation   Aerospace and Defense $38.5
Northrop Grumman Corporation   Aerospace and Defense $35.7
Honeywell International Inc.   Industrial Conglomerate $34.4
Eaton Corporation Plc   Electrical Equipment $19.6
Lear Corporation   Auto Components $19.3
Emerson Electric Co.   Electrical Equipment $18.2
L3Harris Technologies, Inc.   Aerospace and Defense $17.8
The Goodyear Tire & Rubber Company   Auto Components $17.5
BorgWarner Inc.   Auto Components $14.8
Illinois Tool Works Inc.   Machinery $14.5
Parker-Hannifin Corporation   Machinery $14.3
Oshkosh Corporation   Machinery   $7.7
KBR, Inc.   Technology/Engineering   $7.3
Rockwell Automation Inc.   Electrical Equipment   $7.0
Spirit AeroSystems Holdings, Inc.   Aerospace and Defense   $4.0
Terex Corporation   Machinery   $3.9

 

Textron Inc.

 

  Aerospace and Defense $12.4 

  

         
    ($ in billions)    
         
$19.4   $16.2   $7.6
75th Percentile   Median   25th Percentile
         

 

28     TEXTRON 2024 PROXY STATEMENT

 
 

Changes to the Talent Peer Group

Consistent with the evaluation approach taken in 2022, the compensation consultant’s 2023 review and discussions with management resulted in recommended changes to the 2023 talent peer group, referenced in setting target direct compensation for 2024. The Committee approved the recommendation to add Howmet Aerospace Inc., Huntington Ingalls Industries Inc., and TransDigm Group to the 2023 talent peer group and to remove The Goodyear Tire & Rubber Company, KBR, Inc., and Terex Corporation. These changes to the talent peer group increased the number of aerospace and defense companies in the peer group, while decreasing the companies in other industries, to better align the talent peer group with Textron’s current and expected future business focus.

 

How did the Committee Make 2023 Target Direct Compensation 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 direct compensation by component and in total to the market median of the talent peer group
Supplemental benchmarking data for the CEO and CFO using longer-tenured executives from the talent peer group
Supplemental analysis for the CEO and CFO of projected 2022 realized pay, including salary, annual and long-term incentive plan payouts, and market value at vesting of RSUs and stock options vesting in 2022, compared to CEOs and CFOs from the talent peer group

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 2023 target direct compensation, the Committee considered the CEO’s input, as well as the benchmarking data, and made its own assessment of competitive pay and performance.

The Committee’s philosophy with respect to the CEO has been to provide target total direct compensation for Mr. Donnelly at levels generally competitive with market median, taking into consideration his longer tenure and leadership contributions. In addition, the Committee has placed greater emphasis on increases in Mr. Donnelly’s 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 his interests with our shareholders’ interests. This approach has resulted in a pay mix that is in close alignment with talent peer group practices which also emphasizes long-term incentive pay.

After a review of Mr. Donnelly’s performance, the benchmarking study and the supplemental benchmarking data and analysis described above, the market data, the Company’s 2022 above-plan financial results despite a challenging business environment, and relative TSR performance, the compensation consultant recommended, and the Committee determined, to increase his target total direct compensation by approximately 8%. The increase consisted of a 5% market adjustment in his base salary, an increase in his target short-term incentive compensation from 160% to 170% of his base salary, and an 8% increase in target long-term incentive compensation from $12 million to $13 million. With the additional emphasis on performance-based pay, these increases resulted in 2023 target total direct compensation for Mr. Donnelly of approximately 3% above the market median of the talent peer group, based upon the benchmarking study.

In addition, after considering the factors described above, the Committee determined to increase 2023 base salaries for each of the other named executive officers. Mr. Connor’s base salary was increased by 4.5%, and Mr. Lupone and Ms. Duffy’s base salaries were increased by 4.6% and 6.1%, respectively. The Committee did not increase annual and long-term incentives as a percentage of base salary for Mr. Connor, Mr. Lupone, or Ms. Duffy, so each of their target incentive dollar amounts increased only as a result of their base salary increases.

 

TEXTRON 2024 PROXY STATEMENT     29

 
 

What is the Target Direct Compensation for Our Executives?

The following table shows 2023 target total direct compensation, along with the target for each component of target total direct compensation, for Textron’s NEOs as established by the Committee at its January 2023 meeting:

 

2023 Target Total Direct Compensation

 

                     
            At-Risk Compensation    
                     
Name   Position   Base Salary   Target Annual
Incentive
  Target Long-Term
Incentive
  Target
Total Direct
Compensation
                     
Scott C. Donnelly   CEO   $1,365,000   $2,320,500
(170% of salary)
  $13,000,000  
(952% of salary)
  $16,685,500
                     
Frank T. Connor   CFO      1,150,000   1,150,000
(100% of salary)
  3,737,500
(325% of salary)
       6,037,500
                     
E. Robert Lupone   General
Counsel
      910,000   682,500
(75% of salary)
  1,592,500
(175% of salary)
      3,185,000
                     
Julie G. Duffy   EVP, CHRO       700,000   525,000
(75% of salary)
  1,225,000
(175% of salary)
       2,450,000
                     
                     

 

2023 Target Pay Mix

 

        CEO Target Pay Mix NEO Target Pay Mix
(Excluding CEO)
  Approximately 92% of
our CEO’s pay mix and
on average approximately

76%
of our other NEOs’
pay mix is tied to Company
performance, including stock
price performance (“at-risk”).
       
       

 

30     TEXTRON 2024 PROXY STATEMENT

 
 

2023 INCENTIVE COMPENSATION TARGETS, PAYOUTS AND PERFORMANCE ANALYSIS

Setting Targets for 2023 Performance Metrics

The Committee relies on Textron’s Annual Operating Plan (“AOP”) in setting financial performance targets for short and long-term incentive compensation. The AOP, which is prepared toward the end of each fiscal year for the following three fiscal years, includes financial plans and targets and key assumptions for each segment. At its December meeting, the Board of Directors reviews and approves the AOP, subject to adjustment for certain year-end items. The Committee approves targets for the performance metrics included in Textron’s incentive compensation programs in January based upon the finalized AOP.

 

2023 Annual Incentive Compensation Performance Metrics

 

Consistent with the prior year, the performance metrics for the 2023 annual incentive compensation program focused on profitability, measured by enterprise net operating profit (weighted at 60%), manufacturing cash flow (weighted at 35%), and hiring diversity (weighted at 5%).

The net operating profit metric focused executives on improving execution in order to increase profit margin consistent with our expectations of our end markets. The 2023 net operating profit target was approximately 12% higher than both the 2022 target and actual performance.

The manufacturing cash flow metric focused executives on improving operational efficiency and sustaining the strength of the balance sheet. The cash flow target established by the Committee for 2023 was approximately 18% higher than the previous year’s target. However, the target was set approximately 29% below last year’s actual performance, largely due to expected higher working capital associated with increased revenue volume, a lower period-over-period increase in customer deposits and a higher level of investment to support new development programs and the higher volume.

 

  In 2023, Textron changed the segment profit measure for its manufacturing segments to exclude the non-service components of pension and post- retirement income, net; LIFO inventory provision; and intangible asset amortization. The Company believes the revised measure provides a more consistent method of measuring and evaluating business performance across its segments, while also aligning its reporting results more consistently with other companies within its industry. This change impacts the enterprise net operating profit metric included in our annual incentive compensation program because this metric is based on segment profit. For comparison purposes only, the net operating profit target and actual performance figures for 2022 that are included in this discussion of 2023 metrics have been adjusted to conform to the revised measure.
   

The hiring diversity performance metric focused executives on increasing hiring of diverse employees (defined as employees who identify as female or diverse based on race or ethnicity). Annually, our executives review hiring plans for the coming year along with publicly available data on talent availability as a guide for setting diverse hiring targets.

 

Change to the Annual Incentive Compensation Metric for 2024

Beginning in 2024, our annual incentive compensation program will use an environmental, social and governance (ESG) metric in place of the hiring diversity metric. Five percent (5%) of annual incentive compensation will be earned based upon a qualitative assessment that may incorporate quantitative and qualitative data with respect to our progress and achievement of environmental, social and governance goals, including diversity and inclusion.

 

2023-2025 PSU Cycle Performance Metrics

Performance metrics for the 2023-2025 PSU cycle are unchanged from the prior year and consist of average Return on Invested Capital (ROIC) (weighted at 50%), Cumulative Manufacturing Cash Flow (weighted at 30%), and relative total shareholder return compared to the S&P 500 (weighted at 20%), all measured over the three-year performance period. The ROIC and cumulative manufacturing cash flow performance metrics were chosen by the Committee to align with key value drivers of our business and, together, are designed to incentivize our executives to make disciplined capital allocation decisions and to manage working capital, inventory and investments to generate returns and create value for our shareholders over the long term. The relative Total Shareholder Return metric maintains focus on stock performance as an important relative measure of Company performance.

 

TEXTRON 2024 PROXY STATEMENT     31

 
 

Annual Incentive Compensation Payouts and Performance Analysis

As described in Key 2023 Performance Highlights on page 23, Textron’s 2023 performance exceeded target for both the profitability and cash flow metrics. Performance on the hiring diversity metric was slightly below target. The formula for determining 2023 annual incentive compensation payouts for executive officers and the resulting percentage earned are detailed below:

 

2023 Annual Incentive Compensation Calculation
($ in millions)

 

Financial Metric   Threshold Performance   Target Performance   Maximum Performance   Actual Performance   Component Weighting   Component Payout
                         
Enterprise NOP(1)    $913   $1,284   $1,664   $1,327   60%      66.79%
Manufacturing Cash Flow(2)    $391   $   846   $1,301   $  931   35%     41.54%
Hiring Diversity Performance(3)      37.3%          47.3%          57.3%        46.5%     5%       4.60%
Total Earned                        112.93%
 
(1)“Enterprise NOP” means our total “Segment profit” as reported in our annual report on Form 10-K. Segment profit for the manufacturing segments excludes certain corporate expenses; interest expense, net for the Manufacturing group; LIFO inventory provision; intangible asset amortization; non- service components of pension and postretirement income, net; 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” as reported in our quarterly earnings releases. This measure adjusts net cash from operating activities (GAAP) as follows: deducts capital expenditures; includes proceeds from insurance recoveries and the sale of property, plant and equipment; excludes dividends received from Textron Financial Corporation (TFC) and capital contributions to TFC provided under the Support Agreement and debt agreements; and adds back pension contributions.
(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 2021, 2022 and 2023 for each NEO are shown below:

 

Annual Incentive Compensation Targets and Payouts

 

              2021       2022       2023  
                                             
Name     Position       Target   Payout       Target   Payout       Target   Payout  
                                             
Scott C. Donnelly     CEO       $1,854,000   $3,639,000       $2,080,000   $2,704,000       $2,320,500   $2,621,000  
Frank T. Connor     CFO       $1,000,000   $1,963,000       $1,100,000   $1,430,000       $1,150,000   $1,299,000  
E. Robert Lupone     General Counsel       $   619,000   $1,215,000       $   652,500   $   848,000       $   682,500   $   771,000  
Julie G. Duffy     EVP,
CHRO
      $   469,000   $   920,000       $   495,000   $   644,000       $   525,000   $   593,000  
                                             

 

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 2023, with respect to 2022. The Committee compared Textron’s year-over-year operating performance for 2022, relative to the annual incentive compensation paid to the talent peer group 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.

 

32      TEXTRON 2024 PROXY STATEMENT

 
 

Long-Term Incentive Compensation Payouts and Performance Analysis

2021-2023 Performance Share Units

Payouts for the 2021-2023 PSU cycle were based upon performance for the three-year period against metrics established by the Committee at the time the PSUs were granted. Performance metrics for the 2021-2023 PSU cycle consisted of average Return on Invested Capital (ROIC), Cumulative Manufacturing Cash Flow, and relative Total Shareholder Return compared to the S&P 500, all measured over the three-year performance period.

As described above, the ROIC and Cumulative Manufacturing Cash Flow performance metrics were chosen by the Committee to align with key value drivers of our business and, together, are designed to incentivize our executives to make disciplined capital allocation decisions and to manage working capital, inventory and investments to generate returns and create value for our shareholders over the long term. The three-year targets established by the Committee for the 2021-2023 PSU cycle for each of these financial metrics were based upon the AOP approved in December 2020 during uncertain global economic and market conditions. At that time, we anticipated a gradual end to COVID-19 shutdowns and moderate economic recovery over the next three-year period with the pandemic continuing to have a significant impact on our businesses and financial results over the three-year performance period. Actual performance reflects the Company’s successful management of ongoing global supply chain and labor challenges to deliver products and services to our customers.

The Company’s actual performance achieved against the threshold, target and maximum levels set for the metrics included in the 2021-2023 PSU cycle, and the resulting percentage of PSUs earned by the NEOs, are detailed below:

 

2021–2023 Performance Share Unit Calculation
($ in millions)

 

Financial Metric     Threshold
Performance
      Target
Performance
  Maximum
Performance
      Actual
Performance
  Component
Weighting
      Earned
Percentage
 
                                         
Average Return on Invested Capital(1)          4.5%                8.5%          11.5%               12.5%(4)   50%       100%  
Cumulative Manufacturing Cash Flow(2)     $539       $1,342   $2,145       $3,326(4)   30%         60%  
Relative Total Shareholder Return(3)           25%                 50%             75%            82.1%   20%          40%  
Total Earned                                   200%  
 
(1)“Average Return on Invested Capital” is measured by dividing “ROIC income” by “average invested capital”. “ROIC income” includes income from continuing operations and adds back after-tax amounts for interest expense for the Manufacturing group. “Invested capital” represents total shareholders’ equity and Manufacturing group debt, less Manufacturing group cash and equivalents and any outstanding amounts loaned to the Finance group. Invested capital is averaged over the three-year period using the balance at the beginning of the performance period and at the end of each year in the performance period.
(2)“Cumulative Manufacturing Cash Flow” is the amount of “Manufacturing cash flow before pension contributions” (as reported in our quarterly earnings releases and as described above) generated over the three-year performance period.
(3)“Relative Total Shareholder Return” is the percentile rank of our Total Shareholder Return (“TSR”) compared with the companies in the S&P 500 (as of the grant date) over the three-year performance period. “TSR” is a measure of stock price appreciation, including reinvested dividends.
(4)As approved by the Committee when the metrics were established, performance for both Average Return on Invested Capital and Cumulative Manufacturing Cash Flow may be adjusted to reflect items not contemplated when performance targets were set. Accordingly, performance has been adjusted for, as applicable, the impact of acquisitions and dispositions, special charges and the impact of foreign exchange fluctuations and changes associated with pension plans.

 

The calculated payout above for the 2021-2023 PSU award is 200% of target. The average ROIC, the Cumulative Manufacturing Cash Flow and relative TSR metrics were earned at the maximum of 200% of their weighting as performance on all three metrics exceeded maximum performance. Textron’s stock price increased by 52.5% over the three-year performance period.

Two factors impact the value of PSU payouts: (i) the number of units earned is based on Textron’s performance against operating metrics and (ii) the value of each unit earned is based on Textron’s stock price at the end of the performance cycle. The table below shows the PSU awards granted in 2021 and the payout earned by each NEO.

 

TEXTRON 2024 PROXY STATEMENT     33

 
 

2021–2023 Performance Share Unit Payouts

 

                                   
        2021–2023 Units   2021–2023 Value
                 
Name   Position   Units Granted   % Earned   Grant Date Target Value   Payout Value
                 
Scott C. Donnelly   CEO   113,722     200%     $ 5,863,506   $ 17,886,196
Frank T. Connor   CFO     33,532     200%     $ 1,728,910   $   5,273,913
E. Robert Lupone   General
Counsel
    14,896     200%     $   768,038   $   2,342,843
Julie G. Duffy   EVP,
CHRO
    11,285     200%     $    581,855   $   1,774,905

 

As shown in the table above and illustrated in the graph below, the payout values of the 2021–2023 awards were well above the grant date values of the awards due to the actual performance achieved on the metrics and a 52.5% increase in Textron’s stock price over the three-year period (3/1/2021 price of $51.56 and 2024 ten-day average of $78.64). As a result, the value of the PSUs at settlement was 305% of their grant date target value.

 

 

The Textron Inc. 2015 Long Term Incentive Plan (the “Plan”) under which our long-term incentive compensation awards were granted, provides that the maximum amount that may be paid to any individual Plan participant in any calendar year with respect to awards settled in cash is $15 million. Because the payout value for Mr. Donnelly’s PSUs exceeded the Plan’s cash payment limitation, and, in consideration of the Company’s performance over the 2021-2023 period through a challenging business environment under Mr. Donnelly’s leadership, the Committee determined to settle the balance of Mr. Donnelly’s PSU award payout exceeding the cash limit by issuing shares of common stock with a value equal to such balance.

 

34      TEXTRON 2024 PROXY STATEMENT

 
 

Restricted Stock Units and Stock Options

In addition to PSUs, the Company’s long-term incentive compensation program consists of RSUs and stock options. Our RSUs vest in full on the third anniversary of the grant date, and, upon vesting, the holder is entitled to one share of our common stock for each RSU. Our stock options vest ratably over three years on each anniversary of the grant date.

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 at the time of vesting or exercise. For the value realized by the executives upon the vesting or exercise of these awards, see Option Exercises and Stock Vested in Fiscal 2023 on page 42.

 

2023 Say-on-Pay Advisory Vote on Executive Compensation and 2023 Shareholder Outreach

Executive compensation decisions at Textron are made by the Committee. One of the guiding objectives of Textron’s compensation program, as established by the Committee, is to align executive compensation with shareholder value creation. Therefore, the Board and the Committee carefully consider the full range of shareholder feedback and vote outcomes from our Annual Meeting each year. At our 2023 Annual Meeting, approximately 94.3% of our shareholders approved our advisory say-on-pay vote on 2022 executive compensation.

As we have done during the last several years, during 2023, we made significant efforts to engage with our institutional shareholders to discuss various environmental, social and governance (“ESG”) matters, including compensation matters. Our outreach team included our Executive Vice President and General Counsel, our Executive Vice President and Chief Human Resources Officer, our Vice President of Investor Relations, our Executive Director, Environmental, Health & Safety and Sustainability, our Senior Executive Counsel, our Director of Compensation and Executive Rewards and our Director of Sustainability. Board member participation in the calls was available upon request.

During 2023, we reached out to our 25 largest institutional shareholders representing approximately 66% of our outstanding shares to offer an engagement call with our team, and representatives of institutional shareholders, representing approximately 27% of our outstanding shares, participated in engagement calls with us. Institutional shareholders representing approximately 18% of our outstanding shares advised that they had no need for a call.

We received valuable feedback during our engagement calls on governance, sustainability, human capital management and other matters, all of which was communicated to the Committee and to our full Board on a regular basis throughout the process. Based upon these discussions and with the strong majority of shareholders being supportive of our compensation program, the Committee did not make any changes for the 2023 executive compensation program. We intend to continue to regularly engage with our investors to hear their views on our executive compensation program as well as on other matters.

 

RISKS RELATED TO COMPENSATION

The Committee strives to set compensation policies for senior executives which do not encourage excessive risk-taking that could endanger the Company. For 2023, the Committee completed a full review of managing risk within our executive compensation program. This review was informed by a risk analysis of our executive compensation program conducted by the Committee’s independent compensation consultant. The consultant’s risk analysis concluded that our executive compensation program has no elements that are likely to cause a material adverse outcome for the Company. This annual review helps the Committee to structure executive compensation programs that are designed to avoid exposing the Company to unwarranted risk.

 

OTHER COMPENSATION PROGRAMS

Textron provides certain other compensation programs (such as retirement benefits) that are designed to provide NEOs the same level of benefits provided to non-executive officers. Certain of these programs provide benefits over any caps mandated by government regulations, including:

Textron Spillover Pension Plan: Non-qualified benefit plan to make up for IRS limits to qualified pension plans.
Textron Spillover Savings Plan: Non-qualified benefit plan to make up for IRS limits to qualified savings plans.

 

TEXTRON 2024 PROXY STATEMENT     35

 
 

Textron provides a program to executives which benefits them by allowing for tax planning and also benefits the Company, in that cash payments by the Company are delayed:

Deferred Income Plan for Textron Executives: Non-qualified plan that allows participants to defer compensation.

 

ROLE OF INDEPENDENT COMPENSATION CONSULTANT

Under its charter, the Committee has the authority to retain outside consultants or advisors as it deems necessary to provide desired expertise and counsel. In 2023, the Committee engaged the services of Pearl Meyer as its independent compensation consultant.

Pearl Meyer reports directly and exclusively to the Committee and was retained to provide advice regarding current and emerging best practices with regard to executive compensation. In addition, as described above, Pearl Meyer annually conducts a risk review of our executive compensation program. Representatives from Pearl Meyer attended each of the Committee’s meetings in 2023. Pearl Meyer does not provide any other services to the Committee or the Company. The Committee has determined that Pearl Meyer is independent and that the work of Pearl Meyer with the Committee for 2023 has not raised any conflict of interest.

 

SHARE OWNERSHIP REQUIREMENTS

One objective of our executive compensation program is to align the financial interests of our NEOs with the interests of our shareholders. As a result, we require that senior executives accumulate and maintain a minimum level of share ownership in the Company which may be achieved through direct ownership of shares, Textron Savings Plan shares, unvested RSUs and vested/ unvested share equivalents in Textron compensation and benefit plans. Stock options and unvested/unearned PSUs are not included for purposes of calculating share ownership. Minimum ownership levels are expressed as a multiple of base salary as follows: five times for the CEO and three times for other NEOs. New executive officers are given five years to reach their required ownership level. All NEOs currently meet their respective share ownership requirements.

 

ANTI-HEDGING AND PLEDGING POLICY

Our executives, including our NEOs, and their designees are prohibited from engaging in short sales of Textron securities and from engaging in transactions in publicly traded options, such as puts, calls and other derivative securities based on Textron’s securities including any hedging, monetization or similar transactions designed to decrease the risks associated with holding Textron securities, and financial instruments such as equity swaps, collars, exchange funds and forward sales contracts (the “anti-hedging policy”). The anti-hedging policy does not apply to employees generally but applies to officers at the Company and its subsidiaries who are subject to the Company’s insider trading policy. In addition, our NEOs are prohibited from pledging Textron securities as collateral for any loan or holding Textron securities in a margin account.

 

CLAWBACK POLICY

Our 2015 Long-Term Incentive Plan, as well as our Short-Term Incentive Plan which governs our annual incentive compensation program, include a clawback provision which we amended, effective July 25, 2023, to conform to the newly adopted New York Stock Exchange listing standard, which effects the recovery policy (“Recovery Policy”) required by the Dodd-Frank Act and implemented by the SEC.

The new Recovery Policy requires the “clawback” of certain incentive-based compensation paid to current and former NEOs and the Controller if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws and such executives would have received less incentive-based compensation under the restated numbers than they actually received. The new policy applies a “no fault” standard and does not require any misconduct on the part of the recipient of the incentive-based compensation. “Incentive-based compensation” includes any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure. A copy of the Recovery Policy is included as Exhibit 97 to our Annual Report on Form 10-K for the fiscal year ended December 30, 2023.

 

36      TEXTRON 2024 PROXY STATEMENT

 
 

In addition, the Company’s long-term incentive award agreements provide that an executive who violates the noncompetition provisions of the award during employment, or within two years after termination of employment with the Company, forfeits future rights under the award and must repay to the Company value received during the period beginning 180 days prior to the earlier of termination or the date the violation occurred.

The Company also is subject to the “clawback” provision of Section 304 of the Sarbanes-Oxley Act of 2002 which generally requires public company chief executive officers and chief financial officers to disgorge bonuses, other incentive- or equity- based compensation, and profits on sales of company stock that they receive within the 12-month period following the public release of financial information if there is a restatement because of material noncompliance, due to misconduct, with financial reporting requirements under the federal securities laws.

 

COMPENSATION ARRANGEMENTS RELATING TO TERMINATION OF EMPLOYMENT

Since hiring Mr. Donnelly, the Committee no longer agrees to formal employment contracts which provide for individual termination protection. Mr. Donnelly’s letter agreement with Textron provides for payment of varying benefits to him upon events such as death, disability, retirement and termination under voluntary, involuntary (for cause), involuntary (not for cause or for good reason) or change in control circumstances. Mr. Donnelly’s termination benefits are consistent with the terms of our previous CEO’s agreement and were approved by the Committee upon Mr. Donnelly’s initial hiring in 2008. Mr. Connor, Mr. Lupone, and Ms. Duffy are each eligible for termination benefits that are available to all corporate officers as provided by the Severance Plan for Textron Key Executives.

In order for Textron to attract Mr. Donnelly to join the Company after his 19-year career at GE, his pension benefits were designed to take into account his years of service at GE so that he would not be disadvantaged by joining Textron. This benefit has been effected through the adoption of an amendment to the Textron Spillover Pension Plan adding an appendix which provides a “wrap- around pension benefit” to Mr. Donnelly in order to compensate for pension benefits at GE that would otherwise not keep pace with his increasing compensation over the course of his career upon joining Textron. The benefit takes into account his service with both GE and Textron and uses the definition of pensionable compensation and final average compensation in the Textron Spillover Pension Plan. This nonqualified pension benefit became 100% vested upon his completion of ten years of service with Textron and will be reduced by the combined value of any other benefit which he is eligible to receive under (i) a tax-qualified defined benefit plan maintained by GE, (ii) a tax-qualified defined benefit plan maintained by Textron and (iii) the Textron Spillover Pension Plan.

Mr. Connor’s letter agreement, which was negotiated at the time of his hiring in 2009, provides for an enhanced pension benefit which will give him an additional three years of credited service under the Textron Spillover Pension Plan, subject to the vesting terms of that Plan. Neither Mr. Lupone nor Ms. Duffy has been provided any supplemental or enhanced pension benefits.

 

TAX CONSIDERATIONS

The Committee considers tax and accounting implications in determining all elements of our compensation plans, programs and arrangements, although they are not the only factors considered. In some cases, other important considerations may outweigh tax or accounting considerations, and the Committee maintains the flexibility to compensate its officers in accordance with the Company’s compensation philosophy. Under current tax law, we expect that compensation paid to our named executive officers, including performance-based compensation, in excess of $1 million generally will not be tax-deductible.

 

TEXTRON 2024 PROXY STATEMENT     37

 
 
 
 
 
EXECUTIVE COMPENSATION
 

 

The following Summary Compensation Table sets forth information concerning compensation of our principal executive officer, principal financial officer and each other individual who was serving as an executive officer at the end of Textron’s 2023 fiscal year (each, an “NEO” and collectively, the “NEOs”).

 

SUMMARY COMPENSATION TABLE

                                   
Name and Principal Position   Year   Salary
($)(1)
Stock
Awards
($)(2)
Option
Awards
($)(3)
Non-Equity
Incentive Plan
Compensation
($)(4)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
All Other
Compensation
($)(6)
Total ($)
                                   
Scott C. Donnelly   2023   1,352,500   10,100,586   3,477,679   2,621,000   2,682,449   157,548   20,391,762  
Chairman, President and   2022   1,282,769   8,314,479   2,905,358   2,704,000                 0   160,672   15,367,279  
Chief Executive Officer   2021   1,236,000   10,500,442   3,011,625   3,639,000       95,972    92,975   18,576,014  
                                   
Frank T. Connor   2023   1,140,385   2,903,960 999,835   1,299,000   1,190,453     86,572     7,620,205  
Executive Vice President and   2022   1,080,769   2,477,074   865,551   1,430,000                 0     94,807     5,948,201  
Chief Financial Officer   2021   1,000,000   3,096,153   888,025   1,963,000     250,381     74,912     7,272,471  
                                   
E. Robert Lupone   2023   902,308   1,237,423   426,033     771,000                 0   115,128     3,451,892  
Executive Vice President,   2022   861,346   1,054,963   368,616    848,000                 0   126,121     3,259,047  
General Counsel and Secretary   2021   820,192   1,368,645   394,476   1,215,000                 0     89,457     3,887,770  
                                   
Julie G. Duffy   2023   692,308   951,836   327,710
    593,000   1,087,406     41,215     3,693,475  
Executive Vice President and   2022   653,269   800,319   279,639      644,000                0     61,284     2,438,511  
Chief Human Resources Officer   2021   620,192   1,021,663   298,848      920,000     400,571     36,810      3,298,084  

 

 
(1)Base salary increases, if any, are implemented in the first pay period in March of each year; therefore, amounts shown in this column may not exactly match the base salaries disclosed in the CD&A.
(2)The numbers shown in this column represent the grant date fair values of equity awards granted during the fiscal year, whether settled in stock or cash, including PSUs and RSUs, which are described in the CD&A. The grant date fair values are determined based on the closing price of our common stock on the date of grant, and the PSU values assume performance at target on the metrics. Assuming maximum performance is achieved, the grant date fair value of the PSUs granted in 2023 for the three-year performance period would be: Mr. Donnelly, $13,467,399, Mr. Connor, $3,871,897, Mr. Lupone,$1,649,849 and Ms. Duffy, $1,269,115.
(3)The amounts that appear in this column represent the grant date fair value of stock options granted during the fiscal year. The grant date fair values have been determined based on the assumptions and methodologies set forth in Note 14 Share-Based Compensation in Textron’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023. The number of shares underlying the stock options granted to each NEO during 2023 is detailed in the Grants of Plan- Based Awards in Fiscal 2023 table on page 40.
(4)The amounts in this column reflect annual incentive compensation earned under Textron’s annual incentive compensation program.
(5)The amounts in this column reflect the year-over-year change in actuarial present value of accumulated pension benefits under all defined benefit plans in which the NEOs participate. Mr. Lupone does not participate in any of our defined benefit pension plans as he joined the Company after the plans were closed to new employees. For Ms. Duffy, this column also includes $119 in above-market non-qualified deferred compensation earnings that were posted to her interest-bearing account under the Deferred Income Plan for Textron Executives. Earnings are considered “above-market” if they were higher than 120% of the long-term applicable federal rate with compounding.

 

38      TEXTRON 2024 PROXY STATEMENT

 
 
(6)The amounts in this column include the value of other benefits and the incremental cost to Textron in 2023 of providing various perquisites in 2023, as detailed below:

 

  Benefit Type   Mr. Donnelly Mr. Connor Mr. Lupone Ms. Duffy  
               
  Spillover Savings Plan Contribution(a)     51,125 40,519    85,428 18,115  
  Contributions to Textron Savings Plan     16,500 16,500   29,700 16,500  
  Contributions to Retirement Plans       6,600   6,600 0   6,600  
  Perquisites(b)     83,323 22,953 0          0  
  Total   157,548 86,572 115,128 41,215  

 

 
(a)These amounts represent the value of cash-settled Textron stock units credited to the NEO’s Spillover Savings Plan(“SSP”) account during the year. For Mr. Lupone, who is not eligible for a defined benefit pension plan, the Company credits an interest-bearing Moody’s account within the SSP with an amount equal to 4% of eligible compensation, reduced by the contribution that was made by the Company under the Textron Savings Plan.
(b)This amount includes the following: (i) $3,000 for parking for each of Mr. Donnelly and Mr. Connor, (ii) $5,937 for an annual physical exam for Mr. Donnelly, (iii) $74,386 for Mr. Donnelly’s personal travel on corporate aircraft, which includes $35,469 for Mr. Donnelly’s usage of corporate aircraft to attend a meeting of an outside board of directors on which he serves at the request of the Company’s board, deemed to be personal travel under SEC rules, (iv) $3,706 for the incremental cost to the Company of corporate aircraft dropping off or picking up Mr. Connor at an alternative airport for his personal convenience, (v) $16,247 for Mr. Connor, representing the Company paid portion of the costs for hangar space utilized by his personal aircraft. In addition, family members and invited guests of Mr. Donnelly occasionally fly as additional passengers on business flights. In those cases, the aggregate incremental cost to the Company is a de minimis amount and, as a result, no amount is reflected in the Summary Compensation Table. Textron values the personal use of corporate aircraft by using an incremental cost method that multiplies the hours flown on a personal flight by an hourly direct operating cost rate for the aircraft flown. The rate per flight hour is derived from the aircraft’s variable operating costs which include landing fees, fuel, hangar fees, maintenance, catering, security fees, crew expenses, de-icing costs and other direct operating expenses. The incremental cost of locating aircraft to the origin of a trip or returning aircraft from the completion of a trip are also included in the amount reported.

 

TEXTRON 2024 PROXY STATEMENT     39

 
 

GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023

The following table sets forth information on plan-based compensation awards granted to the NEOs during Textron’s 2023 fiscal year. Annual equity awards were approved on January 27, 2023 for grant on March 1, 2023.

                     
              All Other
Stock
Awards:
Number of
Shares
of Stock
or Stock
Units (#)(3)
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)(4)
Exercise
or Base
Price
of Option
Awards
($/sh)(5)
Grant
Date Fair
Value
of Stock
and
Option
Awards(6)
             
        Estimated Possible
Payouts Under
Non-Equity Incentive
Plan Awards(1)
  Estimated Future
Payouts Under
Equity Incentive
Plan Awards(2)
Name Grant
Date
Approval
Date
Grant
Type
Target
($)
Maximum
($)
  Threshold
(#)
Target
(#)
Maximum
(#)
                           
Scott C. Donnelly     Annual IC 2,320,500 4,641,000                
  3/1/2023 1/27/2023 PSUs       23,001 92,003 184,006       6,733,700
  3/1/2023 1/27/2023 RSUs             46,002     3,366,886
  3/1/2023 1/27/2023 Stock Options               145,937 73.19 3,477,679
Frank T. Connor     Annual IC 1,150,000 2,300,000                
  3/1/2023 1/27/2023 PSUs         6,613 26,451   52,902       1,935,949
  3/1/2023 1/27/2023 RSUs             13,226     968,011
  3/1/2023 1/27/2023 Stock Options                 41,957 73.19 999,835
E. Robert Lupone     Annual IC 682,500 1,365,000                
  3/1/2023 1/27/2023 PSUs         2,818 11,271   22,542       824,924
  3/1/2023 1/27/2023 RSUs               5,636     412,499
  3/1/2023 1/27/2023 Stock Options                 17,878 73.19 426,033
Julie G. Duffy     Annual IC 525,000 1,050,000                
  3/1/2023 1/27/2023 PSUs         2,168   8,670   17,340       634,557
  3/1/2023 1/27/2023 RSUs               4,335     317,279
  3/1/2023 1/27/2023 Stock Options                 13,752 73.19 327,710
 
(1)These amounts refer to awards of annual incentive compensation made under our Short-Term Incentive Plan. The performance metrics and methodology for calculating payments are described in the CD&A.
(2)These amounts refer to the number of PSUs granted under the Textron Inc. 2015 Long-Term Incentive Plan. PSUs are performance share units which are earned based upon performance against pre-established metrics over a three-year performance period as described in the CD&A. PSUs are typically payable in cash based on the average closing price of our common stock for the first ten trading days of the fiscal year following vesting, but, in the Committee’s discretion, can be settled in shares of common stock, cash, or a combination of both. Grants of PSUs in 2023 vest at the end of fiscal 2025. The “target” amount to be paid assumes 100% of PSUs granted are earned, and the “maximum” that can be paid per the plan design is 200% of the PSUs granted.
(3)These amounts represent the number of RSUs granted in 2023 pursuant to the Textron Inc. 2015 Long-Term Incentive Plan. RSUs earn dividend equivalents until vested and vest in full on the third anniversary of the grant date.
(4)These amounts represent the number of stock options granted in 2023 pursuant to the Textron Inc. 2015 Long-Term Incentive Plan. Stock options vest ratably over three years, beginning on March 1, 2024, and annually thereafter.
(5)Reflects the exercise price for the stock options granted on March 1, 2023 which is equal to the closing price of our common stock on the grant date.
(6)Represents the grant date fair value of each equity award listed in the table as determined in accordance with generally accepted accounting principles.

 

40      TEXTRON 2024 PROXY STATEMENT

 
 

OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END

The following table sets forth information with respect to the NEOs concerning unexercised options and stock awards and other equity incentive plan awards that have not yet vested as of the end of our 2023 fiscal year.

 

Outstanding Equity Awards at 2023 Fiscal Year-End
   

Option Awards

 

Stock Awards

 

 

 

 

 

 

 

 

 

 

 

Name

 

 

 

 

 

 

 

 

 

 

 

Grant
Date(1)

 

 

 

 

 

 

 

Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable

 

 

 

 

 

 

 

Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable

 

 

 

 

 

 

 

 

Option
Exercise
Price
($)(2)

 

 

 

 

 

 

 

 

 

Option
Expiration
Date

 

 

 

 

 

 

 

 

 

 

Type of
Stock
Award(3)

 

 

 

 

 

 

 

 

 

 

Grant
Year

 

 

 

 

 

Number of
Shares or
Units of
Stock
That Have
Not
Vested
(#)

 

 

 

Market
Value
of Shares
or
Units of
Stock
That Have
Not
Vested
($)(4)

 

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units, or
Other
Rights That
Have Not
Vested
(#)(5)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested
($)(5)

                           
Scott C. Donnelly  

3/1/2023

         0

145,937

73.19

3/1/2033  

PSU

2023

   

184,006

14,797,763

    3/1/2022   48,544   97,088 71.07 3/1/2032   RSU 2023 46,002 3,699,481    
    3/1/2021 133,406   66,702 51.56 3/1/2031   PSU 2022     155,986 12,544,394
    3/1/2020 233,913          0 40.60 3/1/2030   RSU 2022 38,997 3,136,139    
    3/1/2019 242,419          0 54.43 3/1/2029   RSU 2021 56,861 4,572,762    
    3/1/2018 193,820          0 58.24 3/1/2028   RSU 2019 23,496 1,889,548    
    3/1/2017 219,619          0 49.58 3/1/2027              
    3/1/2016 238,578          0 34.50 3/1/2026              
    3/1/2015 194,546          0 44.31 3/1/2025              
Frank T. Connor   3/1/2023          0   41,957 73.19 3/1/2033   PSU 2023       52,902  4,254,379
    3/1/2022   14,462   28,924 71.07 3/1/2032   RSU 2023 13,226 1,063,635    
    3/1/2021   39,337   19,668 51.56 3/1/2031   PSU 2022       46,472  3,737,278
    3/1/2020   68,972          0 40.60 3/1/2030   RSU 2022 11,618 934,320    
    3/1/2019   71,480          0 54.43 3/1/2029   RSU 2021 16,766 1,348,322    
    3/1/2018   56,179          0 58.24 3/1/2028   RSU 2019   6,928 557,150    
    3/1/2017   62,591          0 49.58 3/1/2027              
    3/1/2016   68,718          0 34.50 3/1/2026              
    3/1/2015   56,705          0 44.31 3/1/2025              
E. Robert Lupone   3/1/2023          0   17,878 73.19 3/1/2033   PSU 2023       22,542  1,812,828
    3/1/2022    6,159   12,318 71.07 3/1/2032   RSU 2023 5,636 453,247    
    3/1/2021   17,474    8,737 51.56 3/1/2031   PSU 2022       19,792  1,591,673
    3/1/2020   29,711          0 40.60 3/1/2030   RSU 2022 4,948 397,918    
    3/1/2019   30,791          0 54.43 3/1/2029   RSU 2021 7,448 598,968    
    3/1/2018   24,906          0 58.24 3/1/2028   RSU 2019 2,984 239,973    
    3/1/2017   28,056          0 49.58 3/1/2027              
    3/1/2016   31,091          0 34.50 3/1/2026              
    3/1/2015 26,114          0 41.31 3/1/2025              
Julie G. Duffy   3/1/2023          0   13,752 73.19 3/1/2033    PSU  2023       17,340  1,394,483
    3/1/2022    4,673   9,344 71.07 3/1/2032   RSU 2023 4,335 348,621    
    3/1/2021   13,238    6,619 51.56 3/1/2031   PSU 2022       15,014   1,207,426
    3/1/2020   22,283          0 40.60 3/1/2030   RSU 2022 3,754 301,897       
    3/1/2019   21,169          0 54.43 3/1/2029   RSU 2021 5,642 453,730    
    3/1/2018   14,044          0 58.24 3/1/2028   RSU 2019 2,051 164,941    
    3/1/2017    6,260          0 49.58 3/1/2027              
    3/1/2016    7,009          0 34.50 3/1/2026              
    3/1/2015    5,727          0 41.31 3/1/2025              

 

 
(1)Stock option awards associated with each annual grant vest ratably over three years on each anniversary of the grant date.
(2)The exercise price of stock options is equal to the closing price of our common stock on the date of grant.
(3)The following types of stock awards are shown in this table:
(a)“PSU” refers to performance share units. These units reward achievement of long-term goals over a three-year performance period, vesting at the end of the third fiscal year. They are typically settled in cash at a value based on the average closing price of our common stock for the first ten trading days of the fiscal year following vesting, but, in the Committee’s discretion, can be settled in shares of common stock, cash, or a combination of both. Further information about these awards can be found in the CD&A.
(b)“RSU” refers to restricted stock units. RSUs granted prior to 2020 vest over five years, in three equal annual installments, beginning on the third anniversary of the grant date. Beginning with 2020 grants, RSUs vest in full on the third anniversary of the grant date. Upon vesting, common stock will be issued to the executive. RSUs are granted with the right to receive dividend equivalents.

 

TEXTRON 2024 PROXY STATEMENT     41

 
 
(4)The market value of RSUs that have not vested as of December 30, 2023 was calculated using the fiscal year-end closing share price of $80.42 multiplied by the number of unvested units.
(5)PSUs granted in 2022 and 2023 vest, to the extent earned, on December 28, 2024 and January 3, 2026, respectively. The numbers of PSUs and the related values as of December 30, 2023 represent the units earned and payout value at maximum for both the 2022-2024 and 2023-2025 three-year performance periods, rather than the units earned and payout value at target, in accordance with SEC rules requiring reporting of these amounts in this manner because our performance exceeded target during the previous fiscal year. The payout values shown were determined by multiplying the 2023 fiscal year end closing price of our common stock of $80.42 by the maximum number of unearned and unvested PSUs.

 

OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023

The following table provides information concerning option exercises and the vesting of stock, including PSUs and RSUs, during Textron’s 2023 fiscal year for each NEO.

 

Option Exercises and Stock Vested in Fiscal 2023

 
    Option Awards   Stock Awards  
Name  

Number of
Shares
Acquired on
Exercise (#)

Value
Realized on
Exercise ($)

 

Type of
Equity
Award(1)

Number of
Shares or Units
Acquired
on Vesting
(#)

 

Value
Realized on
Vesting
($)(2)

                 
Scott C. Donnelly   222,319 7,481,168   PSU 227,444(3)   18,291,046  
          RSU 102,309       7,487,996  
                25,779,042  

Frank T. Connor

 

    63,361

2,132,332

 

PSU

67,064 

 

5,393,287

 
          RSU 30,078     2,201,409  
                7,594,696  
E. Robert Lupone                0                0   PSU 29,792     2,395,873  
          RSU 13,020    952,934  
                3,348,807  

Julie G. Duffy