Table of Contents
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. )
| ☑ |
Filed by the Registrant |
☐ |
Filed by a party other
than the Registrant |
|
| CHECK THE APPROPRIATE BOX: |
| ☐ |
|
Preliminary Proxy Statement |
| ☐ |
| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)) |
| ☑ |
| Definitive Proxy Statement |
| ☐ |
|
Definitive Additional Materials |
| ☐ |
| Soliciting Material under §240.14a-12 |
RTX Corporation
(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 ALL BOXES THAT APPLY): |
| ☑ |
|
No fee required |
| ☐ |
| Fee paid previously with preliminary materials |
| ☐ |
| Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
| |
| |
Table of Contents
Table of Contents
Table of Contents
March 10, 2025
Notice of 2025 Annual
Meeting of Shareowners |
PLACE
Our 2025 Annual Meeting will be
held in a virtual-only format at:
www.virtualshareholdermeeting.com/RTX2025
DATE AND TIME
May 1, 2025
8:00 a.m. Eastern time
Your vote is very important. Please submit your proxy card or voting instruction
form as soon as possible. |
Who may vote
If you owned shares of RTX
Common Stock at the close of business on March 4, 2025, you are entitled to receive this Notice of the 2025 Annual Meeting and
to vote at the meeting, either during the virtual meeting or by proxy.
How to attend
To be admitted to the 2025
Annual Meeting via the website, enter the 16-digit voting control number found on your proxy card, voting instruction form, notice
of internet availability of proxy materials or email notification. You can find detailed instructions on pages 101-103 of this
Proxy Statement.
Please review this Proxy
Statement and vote in one of the four ways shown to the right under “Voting Methods Available to You.”
By Order of the Board of
Directors.
Edward G. Perrault
Corporate Vice President & Secretary
| AGENDA |
| |
|
| 1 |
Election of the Eleven Director Nominees Listed in this Proxy Statement |
| 2 |
Advisory Vote to Approve Executive Compensation |
| 3 |
Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2025 |
| 4 |
Shareowner Proposal Requesting a Lobbying Transparency Report |
| |
|
| VOTING
METHODS AVAILABLE TO YOU |
| |
|
 |
Internet
Visit the website shown in your proxy card, voting instruction form
or electronic communications. |
| |
|
 |
Telephone
Call the number shown in your proxy card, voting instruction form
or electronic communications. |
| |
|
 |
Mail
Sign, date and return your proxy card or voting instruction form in the
enclosed envelope. |
| |
|
 |
During the Meeting
Attend the 2025 Annual Meeting online. See pages 101-103
for instructions. |
RTX
2025 PROXY STATEMENT i
Table of Contents
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareowners to be held on May 1, 2025. This Notice of the 2025 Annual Meeting of
Shareowners and Proxy Statement, as well as RTX’s 2024 Annual Report, are available free of charge at www.proxyvote.com
or at www.rtx.com/proxy. References in either document to our website are for the
convenience of readers, and information available at or through our website is not a part of, nor is it incorporated
by reference in, the Proxy Statement or Annual Report.
The Board of Directors of RTX Corporation (“RTX”
or the “Company”) is soliciting proxies to be voted at our 2025 Annual Meeting of Shareowners on May 1, 2025, and
at any postponed or reconvened meeting. We expect that the proxy materials or a notice of internet availability will be mailed
and made available to shareowners beginning on or about March 10, 2025. At the meeting, votes will be taken on the matters listed
in the Notice of 2025 Annual Meeting of Shareowners.
ii RTX
2025 PROXY STATEMENT
Table of Contents
| |
| This section highlights selected information in this Proxy Statement.
Please review the entire Proxy Statement and our 2024 Annual Report before voting your shares. |
Annual Meeting Agenda
| |
|
Board recommendation |
|
Page numbers |
| Proposal 1: |
Election of Directors |
|
FOR each director nominee |
|
11-19 |
| Proposal 2: |
Advisory Vote to Approve Executive Compensation |
|
FOR |
|
38-39 |
| Proposal 3: |
Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2025 |
|
FOR |
|
96-97 |
| Proposal 4: |
Shareowner Proposal Requesting a Lobbying Transparency Report |
|
AGAINST |
|
98-100 |
2024 Performance Highlights
At RTX, we strive to solve our customers’
most challenging problems, deliver long-term value to our shareowners and lead our industry by providing smarter defense systems,
transformative aerospace technologies and sustainable, more connected flight.
In 2024, we delivered on these goals, leveraging the
breadth and scale of our three complementary business units and the strength of our world-class engineering teams to provide innovative
solutions for our customers. We achieved strong financial results, supported by our relentless focus on executing our customer
commitments and a healthy demand for our products and services. This resulted in more than $112 billion in new bookings in 2024,
increasing our year-over-year backlog by 11% to $218 billion.
| 2024 AT A GLANCE |
|
|
|
|
| |
|
|
|
|
|
|
| 1.39 |
|
6.8% increase |
|
$125 billion |
|
$93 billion |
| book-to-bill ratio |
|
in dividend per share(1) |
|
commercial aerospace
backlog at year-end |
|
defense backlog
at year-end |
| 41% |
|
$3.7
billion |
|
88th consecutive year |
| total shareowner return |
|
returned to investors through
dividends and share repurchases |
|
paying a dividend to our shareowners |
Bolstered by robust organic sales and double-digit adjusted operating
profit growth, we exceeded the adjusted net sales and adjusted earnings per share (“EPS”) goals we communicated to
investors for the year, despite lower than expected commercial aircraft production rates. Importantly, we saw adjusted segment
margin expansion from each of our business units—Collins Aerospace, Pratt & Whitney and Raytheon. We achieved $7.2 billion
in cash flow from operating activities (GAAP) and $4.5 billion in free cash flow (“FCF”) during the year.(2)
| (1) |
In the second quarter of 2024, we increased our quarterly dividend from $0.59 per share to $0.63 per
share. |
| (2) |
See Appendix A on pages 111-113 for more information regarding the non-GAAP financial measures shown on this page. GAAP
cash flow is cash flow from operating activities of continuing operations. Non-GAAP cash flow is free cash flow from continuing
operations, which is defined as cash flow from operating activities less capital expenditures. |
RTX
2025 PROXY STATEMENT 1
Table of Contents
PROXY SUMMARY
2024 PERFORMANCE HIGHLIGHTS
We continued to return value to our shareowners, completing the $10
billion accelerated share repurchase program we announced last year. The total capital we have returned to
shareowners through dividends and share buybacks since the Merger(1)—over $33 billion—far surpasses
our original goal of $20 billion by 2025 and positions us well to deliver toward the high end of our revised $36 to $37
billion goal. And we ended 2024 with a 41% total shareowner return (“TSR”)—ahead of both the S&P 500
Index and our Core Aerospace & Defense Peers (“Core A&D Peers”).(2)
Focus on the safety and quality of our products continues
to be our top priority and in 2024 we made notable progress towards our Geared Turbofan (“GTF”) engine powder metal
fleet management plan. With thousands of parts inspected, findings in line with expectations, and agreements reached with most
of our impacted customers, we are on track to achieve the financial and operational plans we announced last year with respect
to this matter and remain confident in the future health of the GTF fleet.
We believe our future growth is closely linked to our
ability to provide innovative solutions to our customers. This requires us to execute our technology roadmap, and to make the
investments needed to keep developing new capabilities to fill our product pipeline. During 2024, we continued to invest in future
innovation with $7.7 billion in Company- and customer-funded spend on research and development.
| As we look toward the future, with our strong backlog and growing end markets, we are confident in our ability to: |
| |
| ● |
Solve our customers’ most challenging problems |
| ● |
Innovate for future growth |
| ● |
Deliver long-term, sustainable returns for our shareowners |
2024 FINANCIAL PERFORMANCE
We leveraged the breadth of our business and the
strength of our people to deliver solid financial results in 2024.
DILUTED EARNINGS PER SHARE
($ per share) |
|
CASH FLOW(3)
(in billions) |
| |
|
|
 |
|
 |
| |
|
|
NET INCOME
(in billions) |
|
SALES
(in billions) |
| |
|
|
 |
|
 |
 |
GAAP |
 |
Non-GAAP(4) |
|
| (1) |
United Technologies Corporation (“UTC”) and Raytheon Company merged on April 3, 2020 (the
“Merger”). |
| (2) |
See page 53 for the companies within our Core A&D Peer group. Core A&D Peer composite returns are determined by
calculating the TSR for each peer company, then a weighted average is applied based on each company’s market capitalization
at the beginning of the measurement period. |
| (3) |
GAAP cash flow is cash flow provided by operating activities from continuing operations. Non-GAAP cash flow is free cash
flow from continuing operations, which is defined as cash flow from operating activities less capital expenditures. |
| (4) |
See Appendix A on pages 111-113 for more information regarding the non-GAAP financial measures shown on this page. |
2 RTX
2025 PROXY STATEMENT
Table of Contents
PROXY SUMMARY
2024 PERFORMANCE HIGHLIGHTS
PROGRESS ON OUR KEY STRATEGIC PRIORITIES
During 2024, we made notable progress towards our
key strategic priorities.
Executing on our customer commitments
Turning our $218 billion backlog into sustainable,
long-term shareowner value takes an unwavering dedication to fulfilling our customer commitments. To meet this growing demand,
over the past year we invested over $2.6 billion in capital expenditures, with a significant focus on expanding our manufacturing
capacity and gaining operational efficiency. Examples include:
| ● |
Pratt & Whitney’s GTF engine aftermarket
network expanded to 18 facilities worldwide in 2024. |
| ● |
Pratt & Whitney also opened a new state-of-the-art facility
in Oklahoma City, Oklahoma, that features automation and advanced manufacturing technologies to streamline our processes,
improve productivity and expand military engine sustainment capacity. |
| ● |
Collins Aerospace broke ground on a 70,000 square foot, $200 million
expansion of its Spokane, Washington, carbon brake production facility. |
| ● |
Raytheon announced a $115 million investment in its Redstone Raytheon
Missile Integration Facility in Huntsville, Alabama, which will increase the factory’s space for integrating and delivering
on critical defense programs by 50%. |
| ● |
Raytheon increased production capacity by 5x for the F-35 Electro-Optical Distributed Aperture System. |
| ● |
We expanded our connected manufacturing ecosystem with our proprietary
digital analytics technology, which is now incorporated by 40 factories representing 20 million manufacturing hours. |
| ● |
We saw continued momentum in the deployment of our CORE business
operating system, with more than 67,000 active employees certified as CORE Apprentices, approximately 15,800 people leaders
certified as CORE Champions, and over 10,000 CORE engagements completed in 2024. |
Leveraging our breadth and scale
We continue to find ways to leverage the breadth and
scale of our businesses and to optimize and improve our cost structure, productivity, collaboration and performance. In 2024,
to mitigate supply chain disruptions and inflationary challenges, we deployed our people to our suppliers, and entered into second-sourcing arrangements and long-term supplier agreements. By unifying our approach to contracting and sourcing, we enabled
over 36% of our product procurement spend to go to suppliers that support all three of our businesses. We also established
long-term supply chain agreements on common metals to help us, and our suppliers, secure capacity and achieve savings. We continue
to simplify our digital footprint by reducing the number of systems used across our business and increasing our use of Company-wide applications. Through these efforts and others, we exceeded our $2 billion gross cost synergy commitment one year ahead of schedule.
Innovating for future growth
At RTX, we aspire to design and build breakthrough, innovative
solutions that redefine the future of aerospace and defense, and deliver long-term value for our shareowners. To
accomplish this bold goal, we have made significant investments in our product pipeline, spending over $35.9 billion in
Company- and customer-funded research and development since 2020. In 2024, we made several substantive advancements in key
innovative products. Examples include:
| ● |
Completing a significant milestone in the development
of our hybrid-electric demonstrator by validating the integrated system functionality of the engine, electric motor, batteries
and high-voltage electric power distribution, to enable better fuel efficiency and reduced emissions. |
| ● |
Delivering the first TPY-2 radar that incorporates our proprietary
gallium nitride technology–– a key enabler in providing expanded surveillance range and support for additional
space and hypersonic defense missions. |
| ● |
Developing artificial intelligence (“AI”) prototypes across
key capability areas, including multi-ship search and rescue capability and collaborative autonomy flight test. |
| ● |
Adapting carbon-carbon composite brake technology to hypersonic
applications. |
RTX
2025 PROXY STATEMENT 3
Table of Contents
PROXY SUMMARY
EXECUTIVE COMPENSATION OVERVIEW
PROVEN LEADERSHIP FOR OUR BUSINESS
In May 2024, Christopher T. Calio succeeded Gregory J. Hayes as Chief Executive Officer and Mr. Hayes took on the role of Executive Chairman. On February 2, 2025, the Board elected Mr. Calio as its Chairman, effective on April 30, 2025, upon which Mr. Calio will succeed Mr. Hayes. Mr. Hayes is not standing for re-election to the Board. Mr. Calio will continue to serve in his current role as President & CEO. Fredric G. Reynolds will continue to serve as the Board’s independent Lead Director. The Board believes that this structure — which combines tested leadership and familiarity with the Company and our industry, with deep experience in risk management, financial oversight and governance — best serves RTX and its shareowners at this time, enhancing decision-making efficiency and ensuring that our independent directors can effectively oversee our business and hold senior leaders accountable.
|
| |
|
|
|
Christopher
T.
Calio
Chairman, President &
Chief Executive Officer |
 |
Fredric G.
Reynolds
Independent
Lead Director |
 |
Executive Compensation Overview
HOW WE ALIGN PAY WITH PERFORMANCE
Our executive compensation program is
structured to advance our fundamental objective: aligning our executives’ compensation with the long-term interests of our shareowners.
The primary goal of the Human Capital &
Compensation Committee (the “HCC Committee”) has been to design a program that rewards financial and operating performance
and motivates effective strategic leadership—key elements in building sustainable shareowner value. This pay-for-performance philosophy
is embedded into our Guiding Principles (see page 44), which underpin the HCC Committee’s approach to program design.
How does our executive compensation
program align pay with performance?
| ● |
Performance Metrics. We use
metrics that are designed to recognize and reward executive actions and decisions that drive long-term strategy, maximize performance
and deliver results for our shareowners and customers. |
| ● |
“At-Risk” Compensation. The largest
portion of compensation for our Named Executive Officers (“NEOs”) is “at-risk” compensation—annual
and long-term incentive (“LTI”) awards that are contingent upon Company performance in our key metrics (see page 5) and
our stock price performance. |
2024 Pay Decisions
In making annual pay decisions, the HCC
Committee focuses primarily on “total direct compensation,” which includes our three principal elements of executive compensation:
base salary, annual incentives and LTI. Total direct compensation is set each year to reflect the HCC Committee’s assessment of
Company, business unit and individual performance. 2024 total direct compensation for each NEO includes 2024 base salary, 2024 annual
incentives paid in the first quarter of 2025 and the LTI grant values approved by the HCC Committee in February 2025, which were based
on its assessment of 2024 performance and the competitive market pay for each NEO’s role. The February 2024 LTI award grant date
fair values (accounting values at the time of grant) shown in the Summary Compensation Table on page 69 reflect the HCC Committee’s
assessment of 2023 performance and the competitive market pay for each NEO’s role at the time of grant. 2024 LTI is, therefore,
excluded from 2024 total direct compensation. Total direct compensation, as presented below, also uses year-end salary levels and does
not reflect any salary changes that occurred during the year, as the Summary Compensation Table does. For more details on our principal
elements of compensation, see pages 48-54, and on total direct compensation, see page 56.
4 RTX
2025 PROXY STATEMENT
Table of Contents
PROXY SUMMARY
EXECUTIVE COMPENSATION OVERVIEW
The table below shows 2024 total direct
compensation for our NEOs, as described on the prior page.
2024 PAY DECISIONS AND
PAY MIX
| |
|
 Base
Salary |
 Annual
Incentive |
 LTI |
Base
Salary
($K) |
|
Annual
Incentive
($K) |
|
LTI
($K)(1) |
|
Total
($K) |
| Christopher T. Calio |
|
 |
$1,450 |
|
$2,760 |
|
$17,150 |
|
$21,360 |
| Neil G. Mitchill,
Jr. |
|
 |
$1,050 |
|
$1,500 |
|
$6,500 |
|
$9,050 |
| Gregory J. Hayes(2) |
|
 |
$1,100 |
|
$2,320 |
|
$0 |
|
$3,420 |
| Shane G. Eddy |
|
 |
$810 |
|
$900 |
|
$4,000 |
|
$5,710 |
| Philip J. Jasper |
|
|
$790 |
|
$950 |
|
$4,000 |
|
$5,740 |
| Troy D. Brunk |
|
 |
$750 |
|
$565 |
|
$3,500 |
|
$4,815 |
| Stephen J. Timm(3) |
|
 |
$900 |
|
$795 |
|
$0 |
|
$1,695 |
| |
|
“At-Risk”
|
|
|
|
|
|
|
|
| (1) |
Reflects values approved by the
HCC Committee for the LTI award granted on February 6, 2025. These values differ from those that will be reported in the Summary
Compensation Table in 2026, which will be calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) Topic 718, Compensation—Stock Compensation. |
| (2) |
As described on page 4, and as disclosed in the Form
8-K filed by the Company on February 3, 2025, Mr. Hayes decided to step down as Executive Chairman of the Board effective April 30,
2025. As disclosed in the Form 8-K, he was not eligible to receive a 2025 LTI award on February 6, 2025. |
| (3) |
Mr. Timm served as President, Collins Aerospace until
July 17, 2024, at which point he transitioned to the role of Special Advisor, Collins Aerospace until his retirement. Because of
his impending retirement in March 2025, Mr. Timm was not granted an LTI award on February 6, 2025. |
2024 Performance Metrics
The HCC Committee believes that the metrics
used for our annual and LTI plans are strong indicators of the long-term health of the Company and measure particularly important aspects
of Company performance, therefore serving the fundamental objective of our executive compensation program.
| Metrics for the Annual Incentive
Plan (“AIP”)(1) |
|
FINANCIAL METRICS
Earnings measure the immediate impact
of operating decisions on the Company’s annual performance. For our Corporate executives, we use adjusted net income as our RTX-wide earnings metric, and for our business units, we use adjusted segment operating income.
Free Cash Flow (“FCF”) measures
our ability to generate cash to fund our operations and key business investments—whether that means funding critical research and
development, strategic acquisitions, paying down debt or distributing earnings to our shareowners.
CORPORATE RESPONSIBILITY SCORECARD (“CRS”)
Sustainability measures our progress
toward our long-term environmental sustainability objectives through two annual metrics: greenhouse gas emissions and water usage.
People & Culture measures our
ability to attract and retain employees with a broad range of experiences, backgrounds and perspectives needed to drive the innovation
required to propel RTX and our industry forward. To measure this, we use two annual metrics: total representation and employee retention.
As described on page 6, metrics for
the 2025 AIP will be solely based on financial performance.
| Metrics for Performance Share Units
(“PSUs”)(1) |
|
Adjusted Earnings Per Share (“EPS”)
measures our ability to create long-term, sustainable earnings that will ultimately drive TSR.
Return on Invested Capital (“ROIC”)
measures the efficiency with which we allocate capital resources, considering not just the quantity of earnings but also the quality
of earnings and investments that drive sustainable growth.
Relative Total Shareowner
Return (“TSR”) measures our ability to return value to our shareowners compared to competing investment opportunities
like the S&P 500 Index and our Core A&D Peers(2) and reinforces our program’s pay-for-performance objectives.
| (1) |
See Appendix B on page 114 for definitions
of financial metrics used for AIP and PSU purposes. |
| (2) |
See page 53 for the companies within our Core A&D
Peer group. |
RTX
2025 PROXY STATEMENT 5
Table of Contents
PROXY SUMMARY
EXECUTIVE COMPENSATION OVERVIEW
How 2024 Performance
Affected Incentive Payouts
2024 Annual Incentives. The following
chart shows the RTX-wide goals established by the HCC Committee for AIP purposes, our 2024 performance relative to these goals and how
these results translated into the 2024 RTX performance factor.
| Metric(1) |
Weight |
|
Threshold |
|
Target |
|
Maximum |
|
Actual |
|
Performance
Factor |
| RTX Earnings—Adjusted
Net Income ($M) |
40% |
|
$6,135 |
|
$7,220 |
|
$8,445 |
|
$7,722 |
|
141% |
| RTX Free Cash Flow
($M) |
40% |
|
$4,700 |
|
$5,700 |
|
$7,300 |
|
$5,607 |
|
95% |
| RTX Employee Retention
(%)(2) |
5% |
|
93.3% |
|
95.1% |
|
96.9% |
|
96.0% |
|
150% |
| RTX Total Representation
(%)(2) |
5% |
|
42.9% |
|
43.3% |
|
44.3% |
|
43.1% |
|
75% |
| RTX Greenhouse Gas Emissions vs. 2019 Baseline (metric tons of CO2)(2) |
5% |
|
-18% |
|
-21% |
|
-30% |
|
-21.4% |
|
104% |
| RTX Water Usage vs. 2019 Baseline (gallons)(2) |
5% |
|
-9% |
|
-11% |
|
-20% |
|
-9.7% |
|
68% |
| 2024
RTX Performance Factor |
|
|
|
|
|
|
|
|
|
|
114% |
2022–2024 PSUs. The table
below shows RTX’s performance for each of the four metrics used for the PSUs granted in 2022, which resulted in a PSU vesting factor
of 110%.
| Metric(3) |
Weight |
|
Threshold |
|
Target |
|
Maximum |
|
Actual |
|
Performance
Factor |
| Adjusted EPS |
35% |
|
8.1% |
|
14.1% |
|
17.9% |
|
13.6% |
|
94% |
| Return on Invested
Capital |
35% |
|
6.1% |
|
7.1% |
|
7.8% |
|
6.9% |
|
82% |
| TSR vs. S&P 500
Index Companies |
15% |
|
25th percentile |
|
50th percentile |
|
75th percentile |
|
74.6th percentile |
|
198% |
| TSR vs. Core A&D
Peers(4) |
15% |
|
25th
percentile |
|
50th
percentile |
|
75th
percentile |
|
55.5th
percentile |
|
122% |
| Final
PSU Vesting Factor |
|
|
|
|
|
|
|
|
|
|
110% |
| (1) |
AIP financial
results for our business units differ from the above table (see page 51 for details). Adjusted net income and free cash flow are
financial metrics used solely for AIP purposes and are defined in Appendix B on page 114. These metrics differ from other non-GAAP
metrics used and described in Appendix A on pages 111-113. |
| (2) |
As described below, metrics
for the 2025 AIP will be solely based on financial performance. |
| (3) |
See Appendix B on page 114
for a definition of PSU metrics. Adjusted EPS and ROIC metrics are used solely for PSU purposes and differ from other non-GAAP metrics
used and described in Appendix A on pages 111-113. |
| (4) |
See page 53 for the companies
within our Core A&D Peer group. |
The HCC Committee believes that these final
performance factors—114% for Corporate AIP and 110% for the 2022-2024 PSUs—demonstrate that our program is driving strong
financial performance and achieving its fundamental objective of aligning executive pay with the interests of our shareowners.
WHAT
IS CHANGING FOR 2025?
As we look to 2025, we are laser focused
on achieving the financial commitments we have made to our investors for 2025. As a result, the HCC Committee determined that the
funding formula for the 2025 AIP will be solely based on the financial performance of the Company and our business units. Performance
for our Corporate executives will be measured 50% on earnings and 50% on free cash flow. For our business unit executives, earnings
and free cash flow will be measured at both the RTX- and business unit-level—each weighted at 25%. |
6 RTX
2025 PROXY STATEMENT
Table of Contents
PROXY SUMMARY
GOVERNANCE AND BOARD OVERVIEW
Governance and Board Overview
BOARD NOMINEES
| |
|
|
Skills and Expertise |
| |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Tracy
A. Atkinson
Retired Executive Vice President
& Chief
Administrative Officer, State Street Corporation |
2020 |
2 |
■ |
|
■ |
|
■ |
■ |
■ |
|
|
Christopher
T. Calio
President & Chief Executive
Officer,
RTX Corporation |
2023 |
0 |
■ |
|
■ |
■ |
■ |
■ |
■ |
|
■ |
Leanne
G. Caret
Retired Executive Vice President,
The Boeing Company
and Former CEO, Boeing Defense, Space & Security |
2023 |
1 |
■ |
|
|
■ |
■ |
■ |
■ |
|
■ |
Bernard
A. Harris, Jr.
Chief Executive Officer and Managing
Partner,
Vesalius Ventures, Inc. |
2021 |
2 |
|
■ |
|
■ |
■ |
■ |
■ |
■ |
|
George
R. Oliver
Chairman & Chief Executive Officer,
Johnson Controls International plc |
2020 |
1 |
■ |
|
■ |
■ |
■ |
■ |
■ |
■ |
■ |
Ellen
M. Pawlikowski
General, U.S. Air Force (Retired)
and
Former Commander, Air Force Materiel Command |
2020 |
1 |
|
■ |
■ |
■ |
■ |
■ |
■ |
■ |
■ |
Denise
L. Ramos
Retired Chief Executive Officer
& President,
ITT Inc. |
2018 |
2 |
■ |
|
■ |
■ |
■ |
■ |
■ |
|
■ |
Fredric
G. Reynolds
Retired Executive Vice President
&
Chief Financial Officer, CBS Corporation |
2016 |
1 |
■ |
|
■ |
|
■ |
■ |
■ |
|
|
Brian
C. Rogers
Retired Chairman,
T. Rowe Price Group, Inc. |
2016 |
1 |
■ |
|
|
|
■ |
■ |
■ |
|
|
James
A. Winnefeld, Jr.
Admiral, U.S. Navy (Retired) and
Former Vice Chairman of the Joint Chiefs of Staff |
2020 |
1 |
|
■ |
■ |
■ |
■ |
■ |
■ |
■ |
|
Robert
O. Work
Retired Deputy Secretary of Defense,
U.S. Department of Defense |
2020 |
0 |
|
■ |
■ |
■ |
■ |
■ |
■ |
■ |
|
RTX
2025 PROXY STATEMENT 7
Table of Contents
PROXY SUMMARY
GOVERNANCE AND BOARD OVERVIEW
NOMINEE HIGHLIGHTS
The nominees for election at the Annual
Meeting have a broad range of skills, expertise, attributes and experiences. This enables them to bring a diversity of perspectives to
the boardroom, to make substantial contributions to Board deliberations and to provide effective oversight of the Company’s strategy
and business plans.
Current or Former CEOs
STEM Degrees
Other Public Company Board Experience
| Experience |
| |
|
 |
Senior
Leadership |
 |
| |
|
 |
Experience
in Industry |
 |
| |
|
 |
Financial |
 |
| |
|
 |
Risk
Management/Oversight |
 |
| |
|
 |
International |
 |
| |
|
 |
Technology/Cybersecurity |
 |
| |
|
 |
Government |
 |
| |
|
 |
Environmental,
Social and Governance (ESG) |
|
| |
|
 |
Manufacturing,
Operations and Supply Chain |
 |
8 RTX
2025 PROXY STATEMENT
Table of Contents
PROXY SUMMARY
GOVERNANCE AND BOARD OVERVIEW
| |
|
|
| TENURE
ON RTX BOARD |
|
AGE
OF NOMINEES |
| |
|
|
 |
|
 |
| |
|
|
BOARD ENGAGEMENT IN 2024
Our Board worked closely with management
in 2024 to provide strong oversight of key financial priorities, strategic investments, program execution risks and opportunities, supply
chain management, and initiatives to simplify, harmonize and leverage Company-wide systems.
| 96% |
|
5 |
| overall attendance by directors at the ten Board
meetings held during 2024 |
|
number of special Board and Committee meetings during
2024 |
| |
|
|
| 98% |
|
100% |
| overall attendance by directors at Board and Committee
meetings in 2024 |
|
overall attendance by directors at the 2024 Annual
Meeting of Shareowners |
| Board oversight priorities and actions |
|
| ● |
Execution of our key business and
financial priorities, including our initiatives to drive operational excellence and continuous improvement across our businesses |
| ● |
Risk management, including strengthening our risk management
systems to address risks and opportunities associated with program execution, compliance and our supply chain |
| ● |
Strategic capital deployment, including investments
in technology and innovation, and returning capital to shareowners |
| ● |
Enhancing our safety and quality systems, including
through promotion of safety as a core value, a Company-wide approach to safety and quality, and frequent reviews of our business
units’ safety and quality programs throughout the year |
| ● |
Our response to evolving geopolitical and other external
conditions, including inflation and the ongoing conflicts in Ukraine and the Middle East |
| ● |
Ongoing engagement with the Pratt & Whitney powder
metal matter |
| ● |
Evaluating Committee leadership and composition as well
as senior management succession planning |
RTX
2025 PROXY STATEMENT 9
Table of Contents
PROXY SUMMARY
GOVERNANCE AND BOARD OVERVIEW
STRENGTHENING DIRECTOR OVERSIGHT
Essential to each director’s ability
to provide robust and effective oversight is a deep understanding of our businesses, our strategic focus and significant risks we may
encounter, as well as an ongoing awareness of new developments and emerging risks that may arise during their Board service.
Below are some of the ways in which our
directors are able to gain such understanding and awareness.
Continuing
Education
Directors participate in individualized
sessions to continue learning the roles and responsibilities of the Board and the Committees on which they will serve. They continue
to learn about the Company’s strategy, our businesses, our technologies, our compliance programs, our corporate affairs and
community relations, our financial statements and any significant financial, accounting and risk management matters. Outside continuing
education programs are made available to directors at the Company’s expense. |
|
Employee
Engagement and Site Visits
As part of their continuing education,
our directors participate in employee engagement events and the Board visits at least one of our businesses each year. For example,
in 2024 the Board visited Pratt & Whitney’s facilities in Columbus, Georgia, which play an important role in the manufacture
of GTF engine parts and the performance of GTF and legacy engine overhauls that are critical to supporting the needs of our growing
installed base. Site visits and other employee engagement events give directors a firsthand understanding of the operations of the
business and the opportunity to interact with employees and key executives. |
| |
|
|
Strategy
and Business Plan Reviews
The Board regularly holds meetings
with senior management to review the strategy and long-range plans for each of our businesses and to discuss other topics, such as
key areas of focus and significant and emerging risks. We also regularly engage in a rigorous portfolio review process to identify
opportunities to optimize the portfolio, as reflected in 2024 by the divestiture of Raytheon’s Cybersecurity, Intelligence
& Services business and Collins Aerospace’s Hoist & Winch business. |
|
Direct
Interaction with Management
Our CEO and other members of senior
management communicate with directors outside of regularly scheduled Board and Committee meetings. These communications occur on
a regular basis, including through periodic written updates, special meetings and informal communications. In some circumstances
these written communications and meetings occur more frequently, such as for the recent settlements entered into by RTX regarding
certain legacy legal matters primarily associated with the Raytheon Company and Rockwell Collins businesses. |
| |
|
|
Outside
Perspectives
The Board is periodically briefed by
outside advisors and counsel on strategic, financial, legal, compliance and other matters. This gives them additional perspectives
on the Company’s business environment, strategic focus areas, performance, and significant and emerging risks. The Lead Director
and other directors also directly engage with investors to address their feedback from time to time. |
|
Lead
Director Role
Our independent Lead Director plays
a crucial role in facilitating the Board’s independent oversight. The Lead Director regularly communicates with other directors,
both in executive sessions and outside of Board meetings, to solicit feedback on Board matters, succession planning and management
development, among other topics. The Lead Director also regularly collaborates with the CEO on meeting agendas and communicates with
the CEO and other directors on developments in the Company’s business, emerging risks and issues, and Board operational and
governance matters. |
10 RTX
2025 PROXY STATEMENT
Table of Contents
Proposal
1:
Election
of Directors
What
am I
voting on? |
We are seeking your support for the election of the eleven individuals nominated to
serve on the Board of Directors until the 2026 Annual Meeting of Shareowners. We
believe these nominees have the right experiences and perspectives to guide the Company
and provide effective oversight of our strategy and our business plans. Each is well qualified
to serve as a director of a large aerospace and defense company that competes in
government and commercial markets worldwide. |
Criteria
for Board Membership
The Board and the Committee on
Governance and Public Policy (the “Governance Committee”) believe that there are general attributes all directors
must exhibit, in addition to key skills and expertise that should be represented on the Board as a whole, but not necessarily
by each director.
THESE GENERAL ATTRIBUTES ARE
ESSENTIAL FOR ALL DIRECTORS
| ● | Objectivity and independence in making informed business decisions |
| ● | Extensive knowledge, experience and judgment |
| ● | Highest integrity |
| ● | Diversity of perspective |
| ● | Willingness to devote the extensive time necessary to fulfill a director’s duties |
| ● | Appreciation for the role of a corporation in society |
| ● | Loyalty to the interests of RTX and its shareowners |
The Governance Committee regularly
considers whether the Board has all of the key skills and expertise needed for effective oversight of our businesses and strategy.
Further, the Governance Committee
continues to recognize the value of selecting directors with diverse experiences to ensure that the Board as a whole has a wealth
of perspectives to inform its decisions. We believe diversity in lived experiences, skills and capabilities makes our business
stronger and more innovative and is critical to the Company’s long-term success.
RTX
2025 PROXY STATEMENT 11
Table of Contents
PROPOSAL 1: ELECTION OF DIRECTORS
CRITERIA FOR BOARD MEMBERSHIP
The charts below show the
percentage of directors with skills and expertise in each key area. In the nominee biographies on pages 14-19, we highlight for
each individual the three key skills and areas of expertise upon which the Board particularly relies.
KEY SKILLS AND EXPERTISE
 |
 |
|
 |
 |
| Senior Leadership |
Technology/Cybersecurity |
| Directors who have extensive leadership experience with a complex, large enterprise offer
practical perspectives on and oversight of organizational and strategic planning, including in the areas of talent development,
succession planning and driving change and long-term growth. |
Directors with a background or experience in research and development, engineering, science,
information technology/software, cybersecurity or technology offer valuable perspectives on the development of advanced technologies
and innovative solutions (including on potential capabilities and implications of AI), and also serve a critical role in the
Board’s oversight of cybersecurity risks. |
| |
|
|
|
|
 |
 |
|
 |
 |
| Experience in Industry |
Government |
| Directors with experience in the aerospace and defense markets, whether through leadership
of a business engaged in those markets or as a government or military customer, provide valuable insights on industry developments
and strong oversight of RTX’s strategic priorities and business performance. |
Directors who have served in senior government or military roles provide constructive insights
about significant government policies and regulations, as well as public policy issues, and their impact on the Company. |
| |
|
|
|
|
 |
 |
|
 |
|
| Financial |
Environmental, Social and Governance (ESG) |
| Directors with proficiency in complex financial management, financial reporting processes,
capital allocation, capital markets and mergers and acquisitions provide strong oversight of the Company’s financial
reporting, financial controls, capital deployment and strategic investments. |
Directors with experience in environmental (including climate-related) issues, sustainability,
social responsibility, product safety, ethics and compliance and public company governance (including service on a public
company board) strengthen the Board’s oversight of key ESG initiatives, reporting and risks. |
| |
|
|
|
|
 |
|
|
 |
|
| Risk Management/Oversight |
Manufacturing, Operations and Supply Chain |
| Directors with knowledge and experience in managing major risk exposure for complex, large
organizations—including significant financial, operational, compliance, reputational, strategic, international, political
and cybersecurity risks—are critical to the Board’s important risk oversight role. |
Directors who have led organizations with or otherwise managed manufacturing capabilities,
operations and supply chains provide valuable insights on these aspects of our business, which are key to our focus on execution,
operational efficiencies and structural cost reductions.
|
| |
|
|
|
|
 |
|
|
|
|
| International |
|
|
| Directors who have conducted business or operations outside of the United States or worked
on international policy and related issues provide perspectives and insights on international business, politics and culture
that are invaluable to a global company with operations and sales around the world. |
|
|
12 RTX
2025 PROXY STATEMENT
Table of Contents
PROPOSAL 1:
ELECTION OF DIRECTORS
BOARD COMPOSITION AND REFRESHMENT
Board Composition and Refreshment
The Board strives to maintain
an appropriate balance of tenure, viewpoints and experiences.
The Board’s
composition has changed significantly in recent years. As of the 2025 Annual Meeting on May 1, 2025,seven directors will
have left the Board in the past five years. Three directors (Bernard A. Harris, Jr., Leanne G. Caret and Christopher T.
Calio) have joined in the last three years. These new directors bring important skills to the Board, including expertise in
cybersecurity and supply chain issues.
The Board believes that it benefits from a mix of both
new directors, who bring fresh perspectives, and longer-serving directors, who bring valuable experience, continuity and a
deep understanding of the Company. It also believes that the Board as a whole has the appropriate attributes, experiences and
perspectives to guide the Company and provide effective oversight of our strategy and business plans.
| TENURE
OF RTX BOARD NOMINEES |
| |
 |
| |
For more information about the
skills and experience of our directors, see “Nominee Highlights” on page 8.
The Board has a policy that prohibits
further nomination of a director after they have served a 15-year term limit or reached age 75. The Board recognizes that director
refreshment is important to shareowners and critical for strong Board oversight. It will continue to promote refreshment by:
| ● | Regularly reviewing the key skills and expertise that are most important in selecting candidates
to serve as directors, taking into account the evolution of our business, as well as the mix
of capabilities and experience already represented on the Board. |
| ● | Regularly considering individual director tenure and succession. |
| ● | Using its self-evaluation process, including individual director evaluations, to inform
its decisions about nominations and refreshment (see page 23 for more details on the annual
self-evaluation process). |
How Candidates Are Identified
In furtherance of its focus on
director refreshment and Board composition, the Board strives to regularly identify potential director candidates who can bring
unique perspectives, add new insights and expertise, and enhance the performance and effectiveness of the Board. The Governance
Committee is responsible for identifying and evaluating director candidates to recommend to the Board. Potential directors can
be brought to the Governance Committee’s attention in different ways, as shown below. The Governance Committee screens and
evaluates all candidates, regardless of who recommends them, using the criteria described under “Criteria for Board Membership”
on page 11.
| To ensure there is a large pool of potential directors with diverse experiences, the Governance Committee
may engage search firms to assist it in finding qualified and interested candidates and verifying their credentials. |
|
Any shareowner may recommend a director candidate by writing to the RTX Corporate Secretary (see page
106 for contact information). |
|
Current Board members who become aware of suitable candidates may recommend them to the Governance
Committee from time to time. |
RTX
2025 PROXY STATEMENT 13
Table of Contents
PROPOSAL 1: ELECTION OF DIRECTORS
NOMINEES
Nominees
The Board, upon the recommendation
of the Governance Committee, has nominated for election the eleven individuals listed in this Proxy Statement. All are current
directors of RTX.
 |
The Board of Directors unanimously recommends a vote FOR each
of the following nominees: |
Tracy A. Atkinson
| INDEPENDENT DIRECTOR |
|
AGE 60 |
| Retired Executive Vice President & Chief Administrative
Officer, State Street Corporation |
|
DIRECTOR SINCE 2020 |
| |
BOARD COMMITTEES |
| |
Human Capital & Compensation (Chair), Finance |
| Key Skills and Expertise |
|
|
 |
FINANCIAL |
 |
SENIOR LEADERSHIP |
 |
RISK MANAGEMENT/OVERSIGHT |
Qualifications
Ms. Atkinson
provides the Board with significant experience in finance, risk management and compliance matters, as well as executive leadership
experience developed through her senior finance and compliance leadership roles at State Street and MFS Investment Management.
She also brings valuable accounting expertise derived from her experience as a Certified Public Accountant and a partner at PricewaterhouseCoopers
LLP.
Experience
| ● | Chief Administrative Officer,
State Street Corporation (financial services firm), 2019–2020 |
| ● | Executive Vice President
& Chief Compliance Officer, State Street Corporation, 2017–2019 |
| ● | Executive Vice President,
Finance, State Street Corporation, 2010–2017 |
| ● | Treasurer, State Street
Corporation, 2016–2017 |
| ● | Executive Vice President,
Chief Compliance Officer, State Street Corporation, 2009–2010 |
| ● | Executive Vice President,
Chief Compliance Officer, State Street Global Advisors, 2008–2009 |
| ● | Senior positions with MFS
Investment Management and PricewaterhouseCoopers LLP, 1999–2008 |
Other Current
Directorships
| ● | Citizens Financial Group,
Inc., since 2024 |
| ● | United States Steel Corporation,
since 2020 |
Former Public
Company Directorships
| ● | Affiliated Managers Group,
2020–2024 |
| ● | Raytheon Company, 2014–2020 |
Other Leadership
Experience and Service
| ● | Director and Past President,
The Arc of Massachusetts |
14 RTX
2025 PROXY STATEMENT
Table of Contents
PROPOSAL
1: ELECTION OF DIRECTORS
NOMINEES
Christopher T. Calio
| President, Chief Executive Officer and Director,
RTX Corporation |
|
AGE 51
DIRECTOR SINCE 2023 |
| |
BOARD COMMITTEES |
| |
Finance, Special Activities |
| Key Skills and Expertise |
|
|
 |
EXPERIENCE IN INDUSTRY |
|
RISK MANAGEMENT/OVERSIGHT |
|
SENIOR LEADERSHIP |
Qualifications
Mr. Calio has
substantial experience in the aerospace and defense industry and executive leadership experience gained through his President,
CEO and COO roles at RTX and other senior leadership roles at RTX and Pratt & Whitney. Through these roles and his legal roles
at RTX-affiliated companies, he also brings risk management experience, as well as a significant background in manufacturing,
operations and supply chain.
Experience
| ● | President, Chief Executive
Officer and Director, RTX Corporation, since May 2024 |
| ● | President, Chief Operating
Officer and Director, RTX Corporation, December 2023–May 2024 |
| ● | President & Chief Operating
Officer, RTX Corporation (formerly Raytheon Technologies Corporation), March 2023–December
2023 |
| ● | Chief Operating Officer,
Raytheon Technologies Corporation, March 2022–February 2023 |
| ● | President, Pratt & Whitney,
Raytheon Technologies Corporation (formerly United Technologies Corporation (“UTC”)),
January 2020–February 2022 |
| ● | President, Commercial Engines,
Pratt & Whitney, UTC, February 2017–December 2019 |
| ● | Chief of Staff to the Chairman
and Chief Executive Officer, UTC, February 2015–January 2017 |
| ● | Various senior positions
since joining UTC in 2005, including Vice President and General Counsel of UTC Aerospace
Systems, and Vice President and Counsel, Commercial Engines, Pratt & Whitney |
Other Leadership
Experience and Service
| ● | Board of Directors, US-India
Strategic Partnership Forum |
Effective on
April 30, 2025, Mr. Calio will succeed Mr. Hayes as Chairman of RTX
Leanne G. Caret
| INDEPENDENT DIRECTOR |
|
AGE 58 |
| Retired Executive Vice President, The Boeing Company
and Former CEO, Boeing Defense, Space and Security |
|
DIRECTOR SINCE 2023 |
| |
BOARD COMMITTEES |
| |
Audit (Chair), Special Activities |
| Key Skills and Expertise |
|
|
|
FINANCIAL |
|
EXPERIENCE IN INDUSTRY |
 |
MANUFACTURING, OPERATIONS & SUPPLY CHAIN |
Qualifications
Ms. Caret provides
the Board with significant experience in the aerospace and defense industry and finance experience gained through her CEO and
CFO roles with Boeing Defense, Space & Security and other senior leadership roles at The Boeing Company. Through these roles
she also brings executive leadership experience, as well as a significant background in oversight of risk management and of manufacturing,
operations and supply chain.
Experience
| ● | Executive Vice President
and Senior Advisor, The Boeing Company (aerospace and defense systems & services),
April 2022–December 2022 |
| ● | President & CEO, Defense,
Space & Security, The Boeing Company, 2016–2022 |
| ● | President, Global Services
& Support, The Boeing Company, 2015–2016 |
| ● | Chief Financial Officer,
Defense, Space & Security, The Boeing Company, 2014–2015 |
| ● | Vice President & General
Manager, Vertical Lift, The Boeing Company, 2013–2014 |
| ● | Vice President, H-47 Programs, The Boeing Company, 2009–2013 |
| ● | General Manager, Global
Transport & Executive Systems, The Boeing Company, 1998–2009 |
Other Current
Directorships
| ● | Deere & Company, since
2021 |
Other Leadership
Experience and Service
| ● | Associate Fellow, American
Institute of Aeronautics and Astronautics |
| ● | Fellow, Royal Aeronautical
Society |
RTX
2025 PROXY STATEMENT 15
Table of Contents
PROPOSAL
1: ELECTION OF DIRECTORS
NOMINEES
Bernard A. Harris, Jr.
| INDEPENDENT DIRECTOR |
|
AGE 68 |
| Chief Executive Officer and Managing Partner,
Vesalius Ventures, Inc. |
|
DIRECTOR SINCE 2021 |
| |
BOARD COMMITTEES |
| |
Audit, Special Activities |
| Key Skills and Expertise |
|
|
|
EXPERIENCE IN INDUSTRY |
 |
ESG |
 |
TECHNOLOGY/CYBERSECURITY |
Qualifications
Dr. Harris has
significant aerospace industry knowledge, a deep understanding of science and technology, and executive leadership experience
gained through his CEO and other senior leadership roles at Vesalius Ventures and the National Math and Science Initiative, his
service as Chief Medical Officer of SPACEHAB, and his years as an astronaut and flight surgeon at NASA. He has significant experience
in technology innovation and strategic planning. He also brings valuable expertise in guiding organizations to leverage their
resources in support of business operations, investment, community development and philanthropic endeavors.
Experience
| ● | Chief Executive Officer
and Managing Partner, Vesalius Ventures (venture capital), since 1998 |
| ● | Executive Director, National
Math and Science Initiative Inc. (education nonprofit), August 2022–March 2023 |
| ● | Chief Executive Officer,
National Math and Science Initiative Inc., 2018–2022 |
| ● | Vice President, Business
Development, Space Media Inc., 1999–2001 |
| ● | Vice President, Chief Medical
Officer and Scientist, SPACEHAB Inc., 1996–2001 |
| ● | Astronaut, NASA, 1991–1996
|
| ● | Clinical Scientist &
Flight Surgeon, Johnson Space Center, NASA, 1987–1990 |
Other Current
Directorships
| ● | U.S. Physical Therapy, since
2005 |
| ● | Solventum Corporation, since
2024 |
| ● | MassMutual (non-public) |
Former Public
Company Directorships
| ● | Sterling Bancshares Inc.,
2006–2011 |
Other Leadership
Experience and Service
| ● | Board of Directors, Astronaut
Scholarship Foundation |
| ● | Board of Directors, Texas
Medical Center |
| ● | The Harris Foundation (founder) |
George R. Oliver
| INDEPENDENT DIRECTOR |
|
AGE 64 |
| Chairman & Chief Executive Officer,
Johnson Controls International plc |
|
DIRECTOR SINCE 2020 |
| |
BOARD COMMITTEES |
| |
Human Capital & Compensation, Finance |
| Key Skills and Expertise |
|
|
 |
INTERNATIONAL |
|
SENIOR LEADERSHIP |
|
MANUFACTURING, OPERATIONS & SUPPLY CHAIN |
Qualifications
Mr. Oliver provides
the Board with substantial executive leadership experience and global operational and management expertise, gained through his
CEO and other leadership roles at the global industrial and technology companies Johnson Controls, Tyco International and General
Electric. He also has significant experience in strategic planning, mergers and acquisitions, finance, risk management and technology.
Experience
| ● | Chairman of the Board &
Chief Executive Officer, Johnson Controls International plc (diversified technology and
multi-industrial company), since 2017 |
| ● | President & Chief Operating
Officer, Johnson Controls International plc, 2016–2017 |
| ● | Chief Executive Officer,
Tyco International Ltd., 2012–2016 |
| ● | President, Tyco International
Ltd., 2011–2012 |
| ● | President, Tyco Electrical
and Metal Products, 2007–2010 |
| ● | President, Tyco Safety Products,
2006–2010 |
| ● | Various leadership roles
of increasing responsibility at several General Electric divisions, culminating as President
of GE Water and Process Technologies, until 2006 |
Other Current
Directorships
| ● | Johnson Controls International
plc, since 2016 |
Former Public
Company Directorships
| ● | Raytheon Company, 2013–2020
|
| ● | Tyco International Ltd.,
2012–2016 |
Other Leadership
Experience and Service
| ● | Board of Trustees, Worcester
Polytechnic Institute |
| ● | Board of Directors, United
Way of Greater Milwaukee & Waukesha Counties |
| ● | Board of Directors, Greater
Milwaukee Committee |
| ● | Board
of Directors, Metropolitan Milwaukee Association of Commerce |
16 RTX
2025 PROXY STATEMENT
Table of Contents
PROPOSAL
1: ELECTION OF DIRECTORS
NOMINEES
Ellen M. Pawlikowski
| INDEPENDENT DIRECTOR |
|
AGE 68 |
| General, U.S. Air Force (Retired) and Former
Commander, Air Force Materiel Command |
|
DIRECTOR SINCE 2020 |
| |
BOARD COMMITTEES |
| |
Human Capital & Compensation,
Special Activities |
| Key Skills and Expertise |
|
|
 |
GOVERNMENT |
|
SENIOR LEADERSHIP |
|
EXPERIENCE IN INDUSTRY |
Qualifications
General Pawlikowski
delivers deep defense industry-specific expertise, senior leadership experience and understanding of leading-edge science and
technology through her extensive military service, including as Commander, U.S. Air Force Materiel Command. She provides the Board
with important insights regarding military critical mission needs, advanced weapons systems management and acquisition and national
security policy.
Experience
| ● | Commander, Air Force Materiel
Command (military leadership), 2015–2018 |
| ● | Various positions of increasing
responsibility during a 36-year career in the U.S. Air Force, including Military Deputy
for the Assistant Secretary for Acquisition; Commander/Program Executive Officer, Space
and Missile Systems Center; Commander, Air Force Research Laboratory; and Deputy Director
and Chief Operating Officer, National Reconnaissance Office |
Other Current
Directorships
| ● | RPM International Inc.,
since 2022 |
| ● | Applied Research Associates
(non-public) |
| ● | SRI International (non-public)
|
| ● | CEM Defense Materials (non-public) |
Former Public
Company Directorships
| ● | Velo3D, Inc., March 2022–July
2023 |
| ● | Intelsat S.A., 2019–February
2022 |
| ● | Raytheon Company, 2018–2020 |
Other Leadership
Experience and Service
| ● | Chair, Honorary Fellows
Committee, American Institute of Aeronautics and Astronautics |
| ● | Member, National Academy
of Engineering |
| ● | Member, Air Force Studies
Board |
| ● | Advisor, Defense Science
Board |
Denise L. Ramos
| INDEPENDENT DIRECTOR |
|
AGE 68 |
| Retired Chief Executive Officer & President, ITT Inc. |
|
DIRECTOR SINCE 2018 |
| |
BOARD COMMITTEES |
| |
Audit, Governance and Public Policy |
| Key Skills and Expertise |
|
|
|
MANUFACTURING, OPERATIONS & SUPPLY CHAIN |
|
SENIOR LEADERSHIP |
|
FINANCIAL |
Qualifications
Ms. Ramos provides
the Board with executive leadership and substantial global operational and management experience gained through her CEO and other
leadership roles at ITT Inc. She has extensive financial expertise and experience in strategic planning and mergers and acquisitions,
having served as the Chief Financial Officer at ITT and other large global companies. She also brings experience and insights
from her current and past service on boards of other public companies in a range of industries.
Experience
| ● | Chief Executive Officer
& President, ITT Inc. (formerly ITT Corporation—diversified manufacturer),
2011–2019 |
| ● | Senior Vice President &
Chief Financial Officer, ITT Corporation, 2007–2011 |
| ● | Chief Financial Officer,
Furniture Brands International (home furnishings), 2005–2007 |
| ● | Senior Vice President &
Corporate Treasurer, Yum! Brands, Inc., and Chief Financial Officer, KFC Corporation
(U.S. Division), 2000–2005 |
| ● | Various finance positions
of increasing responsibility during more than 20 years at Atlantic Richfield Company |
Other Current Directorships
| ● | Bank of America Corp., since
2019 |
Former Public Company Directorships
| ● | ITT Inc., 2011–2019
|
| ● | Praxair, Inc., 2014–2016
|
| ● | Phillips 66 Company, 2016–2025 |
RTX
2025 PROXY STATEMENT 17
Table of Contents
PROPOSAL
1: ELECTION OF DIRECTORS
NOMINEES
Fredric G. Reynolds
| INDEPENDENT LEAD
DIRECTOR |
|
AGE 74 |
| Retired Executive Vice President & Chief
Financial Officer, CBS Corporation |
|
DIRECTOR SINCE 2016 |
| |
BOARD COMMITTEES |
| |
Governance and Public Policy, Human Capital & Compensation |
| Key Skills and Expertise |
|
|
|
FINANCIAL |
|
RISK MANAGEMENT/OVERSIGHT |
|
SENIOR LEADERSHIP |
Qualifications
Mr. Reynolds
brings to the Board substantial financial and risk management expertise, as well as executive leadership and strategic planning
experience gained through his Chief Financial Officer and other leadership roles at large global companies CBS, Viacom and PepsiCo.
He also brings his experience and insights from his current and past service on boards of other public companies in a range of
industries.
Experience
| ● | Executive Vice President
& Chief Financial Officer, CBS Corporation (media), 2005–2009 |
| ● | President & Chief Executive
Officer, Viacom Television Stations Group (CBS predecessor), 2001–2005 |
| ● | Executive Vice President
& Chief Financial Officer, Viacom, Inc., 2000–2001 |
| ● | Executive Vice President
& Chief Financial Officer, Westinghouse Electric Corporation, 1994–2000 |
| ● | Various positions at PepsiCo,
Inc., 1982–1994 |
Other Current
Directorships
| ● | Pinterest, Inc., since 2017 |
Former Public
Company Directorships
| ● | Mondelez International,
Inc., 2007–May 2022 |
| ● | AOL, Inc., 2009–2015
|
| ● | Hess Corporation, 2013–2019 |
Brian C. Rogers
| INDEPENDENT DIRECTOR |
|
AGE 69 |
Retired Chairman,
T. Rowe Price Group, Inc. |
|
DIRECTOR SINCE 2016 |
| |
BOARD COMMITTEES |
| |
Finance (Chair), Human Capital & Compensation |
| Key Skills and Expertise |
|
|
|
FINANCIAL |
|
RISK MANAGEMENT/OVERSIGHT |
|
SENIOR LEADERSHIP |
Qualifications
Mr. Rogers provides
the Board with extensive financial and investment expertise and risk management experience through his Chief Investment Officer
and other investment management roles at T. Rowe Price, as well as significant executive leadership and governance experience
gained through his service as the Chairman of the Board of T. Rowe Price. Mr. Rogers also provides the Board with important insights
into the perspectives of institutional investors.
Experience
| ● | Chairman of the Board of
Directors, T. Rowe Price Group, Inc. (investment management), 2007–2017 |
| ● | Chief Investment Officer,
T. Rowe Price Group, Inc., 2004–2017 |
| ● | Various other senior leadership
roles since joining T. Rowe Price Group, Inc., in 1982 |
Other Current
Directorships
| ● | Lowe’s Companies,
Inc., since 2018 |
Former Public
Company Directorships
| ● | Chairman of the Board (non-executive), T. Rowe Price Group, Inc., 2017–2019 |
Other Leadership
Experience and Service
| ● | Trustee, Brookings Institution |
| ● | Board of Directors, Harvard
Management Company |
| ● | Trustee, Johns Hopkins Medicine |
18 RTX
2025 PROXY STATEMENT
Table of Contents
PROPOSAL
1: ELECTION OF DIRECTORS
NOMINEES
James A. Winnefeld, Jr.
| INDEPENDENT DIRECTOR |
|
AGE 68 |
| Admiral, U.S. Navy (Retired) and Former
Vice Chairman of the Joint Chiefs of Staff |
|
DIRECTOR SINCE 2020 |
| |
BOARD COMMITTEES |
| |
Special Activities (Chair),
Governance and Public Policy |
| Key Skills and Expertise |
|
|
|
GOVERNMENT |
|
EXPERIENCE IN INDUSTRY |
|
RISK MANAGEMENT/OVERSIGHT |
Qualifications
Admiral Winnefeld
brings extensive senior leadership, strategic planning and management experience developed through his various roles of increasing
responsibility in the U.S. military, culminating in his service as the Ninth Vice Chairman of the Joint Chiefs of Staff. He provides
the Board with deep defense industry-specific domain knowledge and expertise with respect to the global security environment and
our core defense customers.
Experience
| ● | Vice Chairman of the Joint
Chiefs of Staff (military leadership), 2011–2015 |
| ● | Various positions of increasing
responsibility during a 37-year career in the U.S. Navy, including Commander, U.S. Northern
Command (USNORTHCOM); Commander, North American Aerospace Defense Command (NORAD); Commander,
U.S. Sixth Fleet; and Commander, Allied Joint Command Lisbon |
Other
Current Directorships
| ● | Molson Coors Beverage Company,
since 2020 |
| ● | Alliance Laundry Systems
LLC (non-public) |
| ● | CEM Defense Materials (non-public) |
| ● | Enterprise Holdings, Inc.
(non-public) |
| ● | Hawkeye 360 (non-public) |
Former Public
Company Directorships
| ● | Raytheon Company, 2017–2020 |
Other Leadership Experience and Service
| ● | Co-founder and Co-chair,
SAFE Project |
| ● | Trustee, Georgia Tech Foundation |
| ● | Former Chairman of the President’s
Intelligence Advisory Board |
Robert O. Work
| INDEPENDENT DIRECTOR |
|
AGE 72 |
| Retired Deputy Secretary of Defense,
U.S. Department of Defense |
|
DIRECTOR SINCE 2020 |
| |
BOARD COMMITTEES |
| |
Governance and Public Policy (Chair),
Audit, Special Activities |
| Key Skills and Expertise |
|
|
|
GOVERNMENT |
|
EXPERIENCE IN INDUSTRY |
|
ESG |
Qualifications
Mr. Work provides
the Board with significant insight into customer needs acquired through his command, leadership and management positions, including
as a U.S. Marine Corps officer, Undersecretary of the Navy and Deputy Secretary of Defense. He has broad expertise in global security
matters, including in the areas of defense strategy, advanced technologies, international studies and acquisition reform. He also
brings experience with corporate governance and oversight of ESG risks from current and past board service, including his leadership
of the Governance Committee.
Experience
| ● | U.S. Deputy Secretary of
Defense (executive department leadership), 2014–2017 |
| ● | Chief Executive Officer,
Center for a New American Security, 2013–2014 |
| ● | Undersecretary of the Navy,
U.S. Department of the Navy, 2009–2013 |
| ● | Positions with the Center
for Strategic and Budgetary Assessments, serving in positions of increasing responsibility
from 2002 to 2009, culminating in service as Vice President for Strategic Studies |
| ● | Various positions of increasing
responsibility during a 27-year career in the U.S. Marine Corps, including artillery
battery commander; battalion commander; Base Commander, Camp Fuji, Japan; and Senior
Aide to the Secretary of the Navy |
Other Current
Directorships
| ● | System High (non-public)
|
| ● | Govini, Chairman (non-public)
|
| ● | Black Sea (non-public) |
Former Public
Company Directorships
| ● | Raytheon Company, 2017–2020 |
Other Leadership
Experience and Service
| ● | Senior Counselor for Defense,
Distinguished Senior Fellow for Defense and National Security, Center for a New American
Security |
| ● | Senior Fellow, Johns Hopkins
Applied Physics Laboratory |
| ● | Member, Council on Foreign
Relations |
| ● | Member, International Institute
for Strategic Studies |
RTX
2025 PROXY STATEMENT 19
Table of Contents
Our Continuing Commitment to Sound Corporate
Governance
RTX is committed to strong oversight and governance
practices that are grounded in a culture of integrity, accountability, transparency and the highest ethical standards. The Board
believes this commitment enhances shareowner value.
GOVERNANCE BEST PRACTICES
Our Board has adopted robust governance practices,
as set forth in our Corporate Governance Guidelines, our Committee charters and other RTX documents and policies. The Governance
Committee regularly monitors and considers current developments in corporate governance, as well as the views of our shareowners,
to determine when to recommend governance changes to the Board.
| Effective
Board oversight |
|
Board
independence |
● Highly qualified Board with diverse
mix of perspectives, experience and tenures
● Regular Board review of strategic
plans and priorities
● Regular Board and Committee review
of significant risks, including product safety and cybersecurity risks
● Annual Board evaluation of CEO performance
● Regular CEO and senior management
succession planning
|
|
● 10 out of 11 director nominees are
independent
● Robust Lead Director role, an independent
position of authority with clearly defined responsibilities
● Independent directors meet regularly
without management
● Fully independent Audit, Human Capital &
Compensation and Governance Committees
|
| |
|
|
| Commitment
to shareowner rights |
|
Board
accountability |
|
● Active and ongoing shareowner engagement
● Proxy access with customary terms
● Shareowners can act by written consent
● Shareowners holding 15% of voting
stock can call special meetings
● No charter provisions requiring
more than a simple majority vote of shareowners
● Robust clawback policies
● No hedging, short sales or pledging
of RTX securities by officers or directors
● Rigorous share ownership requirements
for directors and senior management |
|
● Annual Board, Committee and individual
director evaluations
● Annual election of all directors
● Majority voting for directors in
uncontested elections
● Ongoing attention to Board composition
and refreshment
● No re-nomination of a director who
has served for 15 years or reached age 75
● Regular review of Committee assignments
and leadership, with objective to rotate chairs and members at least every five years
● Limits on outside public company
board service
● Process for considering and approving
new outside directorships and paid consulting/advisory engagements
|
20 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE GOVERNANCE
BOARD LEADERSHIP STRUCTURE
CODE OF CONDUCT
Our Code of Conduct reinforces our values and
high governance standards by:
| ● |
Explaining how our values
of Safety, Trust, Respect, Accountability, Collaboration and Innovation must inform our actions |
| ● |
Guiding the conduct of our employees,
officers and directors with each other, our business partners and our communities |
| ● |
Emphasizing the responsibility to
conduct our business with integrity, to respect and protect human rights and to report violations of the Code without fear
of retaliation |
We encourage you to visit the Corporate Governance
section of our website (www.rtx.com) for more information about corporate governance
at RTX and our Code of Conduct.
Board Leadership Structure
CHAIRMAN
The Board’s approach. Under our Corporate
Governance Guidelines, the Board does not have a fixed policy on whether the roles of Chairman of the Board and CEO should be
separate or combined. Instead, the Governance Committee regularly reviews our Board leadership structure, and the Board selects
the structure that it believes will provide the most effective leadership and oversight for RTX at the time.
In consultation with the Board, on February 3,
2025, the Company announced Mr. Hayes’ decision to step down as Executive Chairman of the Board effective April 30, 2025. Mr.
Hayes is not standing for re-election to the Board. The Board reviewed its leadership structure in connection with Mr. Hayes’
decision to step down as Executive Chairman. On February 2, 2025, the Board elected Mr. Calio as its Chairman, effective April
30, 2025, upon which Mr. Calio will succeed Mr. Hayes. Mr. Calio will continue to serve in his role as President & CEO.
In determining that the interests of all shareowners
are best served at this time by combining the role of Chairman and CEO in Mr. Calio, the Board considered several factors, including:
| ● |
Mr. Calio’s knowledge
of and experience with RTX and the aerospace and defense industry, having joined RTX in 2005 and having held various leadership
roles, including serving as President of Pratt & Whitney and as President and Chief Operating Officer of RTX, prior
to being named CEO. |
| ● |
RTX’s operating and financial performance
under Mr. Calio’s leadership. |
| ● |
Mr. Calio’s proven leadership
qualities and the Board’s continued confidence in his ability to lead RTX and the Board. |
| ● |
The benefits of a unified role in
promoting efficient decision-making and successful implementation of RTX’s strategy to execute on its commitments, innovate
for future growth and leverage its breadth and scale to generate significant long-term returns for shareowners. |
| ● |
The importance of maintaining consistent
messaging in leadership communication, both internally and with shareowners and customers. |
| ● |
Our strong, independent Lead Director
of the Board, with robust authority and well-defined duties. |
| ● |
Other features of RTX’s governance
that enable the Board to effectively fulfill its duty to oversee the Company and its affairs. These include: that all directors
(other than Mr. Calio) are independent; frequent executive sessions of the Board; Audit, Governance and Human Capital &
Compensation Committees comprised entirely of independent directors; access to management by directors; and empowerment and
encouragement of all directors to contribute and participate, including by suggesting items for meeting agendas, receiving
meeting agendas and materials in advance, and raising at any meeting items not on the agenda. |
INDEPENDENT LEAD DIRECTOR
To ensure robust independent leadership of the
Board, our Corporate Governance Guidelines provide that when the Chairman of the Board is not independent, our independent directors
must designate from among themselves a Lead Director. This structure provides the appropriate balance between a Chairman, President &
CEO with responsibilities for day-to-day management who collaborates with an empowered independent Lead Director with well-defined
responsibilities, including collaboration on setting meeting agendas and RTX’s long-term strategy.
Mr. Reynolds was unanimously designated as the
Lead Director by RTX’s independent directors because of his deep knowledge of the Company’s business and strategy,
his experience with risk management, financial oversight and governance, and his proven leadership skills and judgment. He is
also highly skilled at promoting open and transparent communications among directors and management, ensuring that matters are
constructively discussed, which supports the effectiveness of the Board’s oversight of management and the business.
RTX
2025 PROXY STATEMENT 21
Table of Contents
CORPORATE GOVERNANCE
BOARD LEADERSHIP STRUCTURE
Our Corporate Governance Guidelines set forth the
roles and responsibilities of the Lead Director, which are designed to promote strong, independent oversight of RTX’s management
and affairs. In selecting Mr. Reynolds as Lead Director, the independent directors considered the experience and capabilities
of each independent director, as well as their willingness and capacity to fulfill the significant responsibilities and time commitment
of the role.
ROLES, RESPONSIBILITIES AND AUTHORITY OF CHAIRMAN,
PRESIDENT & CEO AND LEAD DIRECTOR
The Lead Director and our Chairman, President &
CEO meet and speak with each other regularly about the Company’s strategy and operations and the functioning of the Board.
The Lead Director occupies an independent position of authority and facilitates the exchange of directors’ views regarding
management.
| |
CHAIRMAN,
PRESIDENT & CEO |
 |
|
|
LEAD DIRECTOR |
 |
| |
Christopher T. Calio
Director since 2023 |
|
|
Fredric G. Reynolds
Lead Director since 2023 |
| |
In his capacity as Chairman, Mr. Calio:
●
Presides at all meetings of the
full Board
●
Presides at meetings of shareowners
●
Calls special Board meetings
●
Empowered to call special meetings
of Board Committees
●
In conjunction with the Lead Director,
plans and approves the schedule and agenda for Board meetings
●
Ensures Board materials are appropriate,
sufficient and of high quality
●
Subject to input from the Lead Director,
approves information sent to the Board
●
Engages with significant stakeholders,
as appropriate
Effective on April
30, 2025, Mr. Calio will succeed Mr. Hayes as Chairman of RTX. This will result in the combination of the roles of Chairman
and President & CEO.
|
|
|
●
Presides over all private sessions
of the independent directors, whether regularly scheduled or called at the Lead Director’s discretion
●
Empowered to call special Board
meetings
●
Collaborates with the Chairman,
President & CEO to approve the schedule and set the agenda for Board meetings
●
Provides input to the Chairman,
President & CEO on information sent to the Board
●
Presides at Board meetings when the Chairman, President &
CEO is not present
●
Engages with significant stakeholders,
as requested
●
Oversees the Board’s evaluation
of the performance of the Chairman, President & CEO
●
Communicates regularly with the
Chairman, President & CEO and other directors regarding risk management oversight
●
Facilitates succession planning
and management development
●
Works with the Governance Committee
Chair to lead the Board’s annual self-evaluation process and to review any director’s request to accept a
new outside directorship or other paid engagement
●
Authorizes retention of outside
advisors and consultants who report to the Board
|
As stated above, RTX’s independent directors
meet in private sessions without management present. These sessions are held on a regular schedule and the Lead Director may call
extra sessions as needed.
22 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE
GOVERNANCE
BOARD SELF-EVALUATION
Board Self-Evaluation
The Board believes that robust and constructive
self-evaluation is an essential element of good corporate governance, Board effectiveness and continuous improvement. To this
end, the Board annually evaluates its own performance and the performance of the Committees and of each individual director.
OVERVIEW OF THE SELF-EVALUATION
PROCESS
The Governance Committee designs and has oversight
responsibility for the annual self-evaluation process.
The Lead Director and the Governance Committee
Chair jointly lead the process.
| |
|
| 1 |
Each independent director confers with the Lead
Director or the Governance Committee
Chair to provide feedback, including a candid assessment of peer contributions and performance. |
| |
|
| 2 |
The Lead Director and the Governance
Committee Chair communicate peer feedback to individual directors, making suggestions for improvement where appropriate, and
provide feedback on Committee performance to each Committee chair. |
| |
|
| 3 |
The Committee chairs discuss this
feedback with their Committees. |
| |
|
| 4 |
The Lead Director and the Governance
Committee Chair provide to the full Board a summary of the results of the self-evaluation process and facilitate a Board discussion
about opportunities for improvement and actions that might be taken. |
How it contributes to
Board performance |
|
The self-evaluation informs the Board’s
consideration of:
| ● |
Board roles |
| ● |
Board preparedness, effectiveness and priorities |
| ● |
Committee assignments, leadership and performance |
| ● |
Refreshment objectives, including composition and key skills |
| ● |
Director succession planning |
| ● |
Individual director development |
The self-evaluation process has generated improvements
to our corporate governance practices and the Board’s effectiveness, including:
| ● |
Allocating more time
to private sessions of the independent directors |
| ● |
Restructuring the Committees and
their responsibilities in order to free up additional time at Board meetings for strategy and other discussions |
| ● |
Enhancing breadth of expertise and
experience brought to Committee deliberations through refreshed Committee assignments and leadership |
| During the 2024 self-evaluation process, the Board continued its practice of focusing on: |
| |
|
| ● |
Board and Committee composition,
knowledge, skills, attributes, diversity of experience and size, including changes to Committee responsibilities, assignments
and leadership |
| ● |
The Board’s review and consideration
of CEO and senior management succession planning |
| ● |
The Board’s effectiveness in
performance of its key oversight responsibilities and its communications with management |
RTX
2025 PROXY STATEMENT 23
Table of Contents
CORPORATE
GOVERNANCE
BOARD COMMITTEES
Board Committees
Our Board currently has the following standing Committees: the Audit
Committee, the Governance Committee, the Finance Committee, the Human Capital & Compensation Committee and the Special
Activities Committee. Our Corporate Governance Guidelines require the Governance Committee to periodically review the Board committee
structure and assignments. Due to the relationship between product safety and product quality, and the benefits of increased oversight
over AI, in 2024 the Board approved amendments to the charter of the Governance Committee to expand the Committee’s responsibilities
into the areas of product quality and AI. The Board also gave consideration to individual director development and interests and
the functioning of the Committees and approved changes to assignments for the Audit Committee and the Human Capital &
Compensation Committee.(1)
The Audit Committee, the Governance Committee and
the Human Capital & Compensation Committee are composed exclusively of independent directors. Mr. Calio (who is an active
employee) serves on the Finance Committee and the Special Activities Committee, because the Board believes he brings particular
insights on topics within these Committees’ responsibilities. Mr. Hayes (who is also an active employee) will continue to
serve on the Finance Committee and the Special Activities Committee until April 30, 2025, the effective date of his resignation.
Each Committee has the authority to retain independent
advisors, to approve the fees paid to those advisors and to terminate their engagements.
Each Committee operates under a charter that it reviews annually. These
charters are available on the Corporate Governance section of our website (www.rtx.com).
| (1) |
In addition, Mr. Robert K. Ortberg retired from the Board
effective July 31, 2024. |
| |
|
| |
|
|
|
 |
|
Audit
Leanne G. Caret
Chair
|
 |
| |
|
|
|
2024 MEETINGS: 8
COMMITTEE MEMBERS
Bernard A. Harris, Jr.
Denise L. Ramos
Robert O. Work
Ellen M. Pawlikowski served as a member of the Audit Committee
until May 2, 2024
|
|
●
Assists the Board in overseeing:
the integrity of RTX’s financial statements; the independence, qualifications and performance of RTX’s internal
and external auditors; the Company’s compliance with its policies and procedures, internal controls, Code of Conduct
and applicable laws and regulations; policies and procedures with respect to risk assessment and management; and other
responsibilities as delegated by the Board from time to time
●
Recommends to the Board (for shareowner
approval) a nominee accounting firm to serve as RTX’s independent auditor and maintains responsibility for compensation,
retention and oversight of the auditor
●
Pre-approves all auditing services
and permitted non-audit services to be performed for RTX by its independent auditor
●
Reviews and approves the appointment
and replacement of the senior Internal Audit executive
The Board has determined that each of Ms.
Caret and Ms. Ramos is an “audit committee financial expert,” as defined in the rules of the Securities and
Exchange Commission (“SEC”).
|
24 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE GOVERNANCE
BOARD COMMITTEES
 |
|
Governance and Public Policy
Robert O. Work
Chair |
 |
| |
|
|
|
| 2024 MEETINGS: 5
COMMITTEE MEMBERS
Denise L. Ramos
Fredric G. Reynolds
James A. Winnefeld, Jr.
|
|
●
Provides oversight of the safety
of the Company’s products and services and its quality management system
●
Oversees RTX’s positions on
significant public policy issues
●
Reviews and monitors the development
of RTX’s AI strategy
●
Develops and recommends modifications
to our Corporate Governance Guidelines
●
Identifies and recommends qualified
candidates for election to the Board
●
Reviews periodically the Company’s
policies on retirement age and term limits for non-employee directors
●
Makes recommendations to the Board
for Committee assignments
●
Reviews and monitors the orientation
of new Board members and the continuing education of all directors
●
Oversees the design and conduct
of the annual self-evaluation of the Board, its Committees and individual directors
●
Reviews corporate governance developments
and trends and, where appropriate, makes recommendations to the Board on the Company’s governance
●
Recommends to the Board appropriate
compensation of non-employee directors
|
 |
|
Finance
Brian C. Rogers
Chair |
 |
| |
|
|
|
| 2024 MEETINGS: 5
COMMITTEE MEMBERS
Tracy A. Atkinson
Christopher T. Calio
Gregory J. Hayes
George R. Oliver
Effective April 30, 2025, Gregory J. Hayes
will cease to serve as a member of the Finance Committee
|
|
●
Reviews and monitors the management
of RTX’s financial resources and financial risks
●
Considers plans for significant
acquisitions and divestitures
●
Monitors progress on pending and
completed acquisitions and divestitures
●
Reviews significant financing programs
in support of business objectives
●
Reviews significant capital appropriations
●
Reviews policies and programs related
to: dividends and share repurchases; financing, working and long-term capital requirements; managing exposure with respect
to foreign exchange, interest rates and raw material prices; investment of pension assets; and insurance and risk management
|
RTX
2025 PROXY STATEMENT 25
Table of Contents
CORPORATE GOVERNANCE
BOARD COMMITTEES
 |
|
Human
Capital & Compensation
Tracy A. Atkinson
Chair |
 |
| |
|
|
|
| 2024 MEETINGS: 5
COMMITTEE MEMBERS
George R. Oliver
Ellen M. Pawlikowski
Fredric G. Reynolds
Brian C. Rogers
Ellen M. Pawlikowski joined the Human Capital &
Compensation Committee effective May 2, 2024
James A. Winnefeld, Jr. served as a member
of the Human Capital & Compensation Committee until May 2, 2024
|
|
●
Reviews RTX’s executive compensation
policies and practices to ensure that they adequately and appropriately align executive and shareowner interests
●
Reviews and approves the design
of, and sets performance goals for, our executive annual and long-term incentive programs
●
Evaluates the performance of RTX,
our business units and our NEOs relative to performance goals set by the HCC Committee for the annual and long-term incentive
programs
●
Reviews and approves compensation
for the CEO and other executive officers of the Company
●
Reviews
a risk assessment of RTX’s compensation policies, plans and practices
●
Reviews the Company’s initiatives
relating to human capital management
|
 |
|
Special
Activities
James A. Winnefeld, Jr.
Chair |
 |
| |
|
|
|
| 2024 MEETINGS: 4
COMMITTEE MEMBERS
Christopher T. Calio
Leanne G. Caret
Bernard A. Harris, Jr.
Gregory J. Hayes
Ellen M. Pawlikowski
Robert O. Work
Effective April 30, 2025, Gregory J. Hayes will cease to serve as a member of the Special Activities Committee
|
|
●
Reviews and monitors activities
involving classified business of RTX, including significant classified programs
●
Reviews policies, processes, risk
management and internal controls applicable to classified business
●
Supports the Board as required in
oversight of classified cybersecurity
●
Reviews RTX’s cybersecurity risk exposure with respect to the Company’s
products and management’s efforts to manage that exposure
●
Assists other Committees with their
activities and oversight related to product safety risk and development of technical talent
●
Monitors critical technology gaps
and reviews investments, talent development and other efforts by management to address those gaps
|
26 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE
GOVERNANCE
DIRECTOR INDEPENDENCE
Director Independence
Under RTX’s Director Independence Policy and the New York Stock
Exchange (“NYSE”) listing standards, a majority of our directors must be independent, meaning that they do not have
a direct or indirect material relationship with RTX (other than as a director). The Board’s Director Independence Policy
guides the independence determination and defines certain categories of relationships that will not be considered material relationships
that would impair a director’s independence. This policy is available on the Corporate Governance section of our website
(www.rtx.com).
Before joining the Board and annually thereafter, each director or nominee
completes a questionnaire about relationships and transactions that may require disclosure, may affect independence or may affect
our ability to meet the heightened independence standards for members of the Audit Committee and members of the Human Capital &
Compensation Committee. The Governance Committee’s assessment of independence considers all known relevant facts and circumstances
about the relationships bearing on the independence of a director or nominee. The Board considers potential materiality of a director’s
relationship with RTX both from the director’s standpoint and from the standpoint of persons or organizations with which
the director has an affiliation. The assessment also considers sales and purchases of products and services between RTX (including
its subsidiaries) and other companies or charitable organizations where a director or a nominee (or an immediate family member
of a director or nominee) may have relationships pertinent to the independence determination.
In accordance with the Director Independence Policy and the NYSE listing
standards, the Board has determined that, other than Mr. Calio (who is a current employee of RTX), none of the nominees for election
at the 2025 Annual Meeting has, directly or indirectly, a material relationship with RTX (outside of serving as a director) or
any direct or indirect material interest in any transaction involving RTX. Other than Mr. Calio, each nominee satisfies our independence
criteria and the independence standards of the NYSE and the SEC. Mr. Hayes was also determined by the Board not to be independent
during his tenure on the Board.
The Board’s Role
Our Board provides active and independent oversight and guidance to management
regarding the Company’s long-term strategy and priorities, risk management, CEO and senior management succession planning,
as well as other aspects of our business and affairs. In addition, the Board has adopted robust governance practices to enhance
its effectiveness and is engaged on behalf of our shareowners.
As
part of carrying out its oversight responsibilities, the Board:
●
Annually
reviews the Company’s long-term plan and strategy and those of its business units
●
Engages
in ongoing discussions of near-, medium- and long-term risks and strategic matters, including the geopolitical environment, economic
conditions, industry trends and developments, and their impacts on our business, as well as strategic opportunities and challenges
●
Is
regularly briefed on assessments of the Company’s business portfolio and is engaged in the Company’s mergers, acquisitions,
divestitures and other corporate development activities
●
Reviews
and approves the Company’s annual operating plan, and receives regular updates on management’s progress against its
annual operating plan, including opportunities and challenges that arise
●
Periodically
engages with shareowners on a variety of matters, including the financial performance, capital allocation and business strategy
of the Company
●
Receives
briefings from outside advisors and counsel on strategic, financial, legal and compliance, and other matters
|
|
In
2024, our Board worked closely with management to provide effective oversight of key priorities, including:
●
Our
focus on our commitments to customers, returning value to shareowners and leveraging the breadth and scale of our business
●
Risk
management efforts, including compliance and regulatory risks, risks to our supply chain, and program execution such as delivering
on our GTF fleet management plan
●
Our
strategic investments in technology and innovation to mature existing capabilities and introduce new capabilities for our customers
●
Strategic
initiatives to drive operational excellence and continuous improvement, including through deployment of our CORE operating system
and our Industry 4.0 investments
●
Enhancing
our business systems, with a particular focus on CORE deployment and our safety and quality systems
●
Our
response to evolving geopolitical issues and other external conditions, including inflation and the ongoing conflicts in Ukraine
and the Middle East
●
Execution
of our talent and governance strategies and review of our AI strategy
●
Our
shareowner engagement efforts
●
Senior
management succession planning
|
RTX
2025 PROXY STATEMENT 27
Table of Contents
CORPORATE GOVERNANCE
THE BOARD’S ROLE
RISK MANAGEMENT OVERSIGHT
The chart below shows the current allocation of general risk oversight
functions between management and the Board.
| Management |
|
|
Board of Directors |
|
| Responsible for identifying, assessing, prioritizing
and managing the various risks that the Company faces |
|
Responsible for Board and Committee risk oversight
governance, including allocation of risk oversight responsibilities |
|
●
Employs a comprehensive enterprise risk management
(“ERM”) program
●
Maintains robust internal processes and an effective internal control
environment
|
|
●
Audit Committee oversees management’s
ERM program
●
Board has allocated specific responsibilities to itself
and its Committees for overseeing particular risks, as shown below
|
 |
Full Board |
|
|
|
|
●
Major strategic risks, such as geopolitical
and other external conditions
|
|
●
Enterprise cybersecurity (e.g., IT systems,
factory, supply chain and hosted services) and compliance
|
|
●
Succession planning
●
Significant litigation
●
Government relations
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
 |
 |
 |
 |
 |
Audit Committee
●
Financial reporting
●
Internal controls
●
Auditing matters
●
Taxes
●
Legal, ethical and regulatory compliance programs
|
Governance Committee
●
Corporate governance
●
Conflicts of interest
●
Director independence
●
Product quality
●
Product safety
●
Sustainability
●
Workplace safety
●
Human rights
●
Public policy issues
●
AI
|
Finance Committee
●
Capital structure
●
Financing
●
Pensions
●
Capital transactions
●
Foreign exchange
●
Interest rates
●
Corporate transactions
|
Human Capital & Compensation
Committee
●
Executive compensation and benefits policies, practices
and plans
●
Incentive plan performance metrics and goals
●
Compensation for senior leaders
●
Compensation plan design
●
Executive retention
●
Human capital management initiatives
|
Special Activities Committee
●
Classified business
●
Technology and innovation
●
Product cybersecurity
|
The Board’s risk oversight governance framework is designed to
enable it to understand critical near-, medium- and long-term risks in the Company’s business and strategy, allocate responsibilities
for risk oversight among the full Board and the Committees, evaluate the Company’s risk management processes and whether
they are functioning adequately, and engage in regular communications with management regarding risk trends, developments, mitigation,
major issues and responsive actions. For the sake of efficiency, the full Board retains primary oversight responsibility over
certain risks that cut across the subject area expertise of multiple Committees, such as significant litigation.
The Company maintains robust internal processes and an effective internal
control environment that facilitate the identification and management of risks and regular communication with the Board. A core
element is the Company’s ERM program, which conforms to the Enterprise Risk Management—Integrated Framework established
by the Committee of Sponsoring Organizations of the Treadway Commission and is designed to identify and evaluate the full range
of significant risks to RTX, including legal, compliance, financial, operational, strategic and reputational risks. Our Finance
function, in close collaboration with our Legal, Contracts & Compliance function, leads the ERM program, with an annual
cycle for structured reviews, discussions and mitigation planning. Risks are identified and
28 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE GOVERNANCE
THE BOARD’S ROLE
evaluated through both a “bottom-up” and a “top-down”
process involving senior management and all of the functions and business units. Through this process, senior management considers
trends and developments, as well as the effectiveness of the Company’s mitigation plans. Our risk management processes are
informed by the results of our ERM program, including those relating to our Internal Audit plans, ethics and compliance programs,
financial reporting and SEC disclosures.
The Chief Financial Officer and the General Counsel brief the Board at
least annually on the most significant risks under our ERM program and the associated mitigation plans. They also annually brief
the Audit Committee on the ERM review process. In connection with these ERM reports and briefings, the Board reviews its
allocation of risk oversight responsibilities among itself and the Committees.
In addition to these ERM briefings, management regularly reviews significant
risks, including trends and developments, with the Board and its Committees, providing updates on long-term risks during annual
long-range planning, strategic reviews and through regular reviews of annual operating plans, as well as providing a near- and
medium-term focus on financial performance, market environment updates and presentations on specific associated risk areas. Between
Board and Committee meetings, directors receive updates regarding developments in the Company’s business as well as emerging
risks. In addition, the Lead Director regularly communicates with the CEO and other directors about emerging risks and issues
and the coverage of appropriate risk topics in Board meeting agendas.
Cybersecurity Risk Oversight
Given the nature of our business, we have a robust program for identifying,
assessing and managing cybersecurity risks. These risks include those relating to our internal systems, our products, services
and programs for customers, and our supply chain. The full Board has primary oversight responsibility for “enterprise”
cybersecurity risks, such as those relating to our information and operational technology systems and our suppliers and partners
for those systems, and it receives regular briefings on these risks in addition to briefings on enterprise cybersecurity incidents
and key Company defenses and mitigation strategies. Our Special Activities Committee has primary oversight responsibility for
cybersecurity risks that relate to our products and services, is regularly briefed by management on such risks (including updates
on product and service cybersecurity incidents, defenses and mitigation strategies), and supports the Board in oversight of classified
business cybersecurity, such as with respect to company internal information and operational technology systems. The Audit Committee
also considers cybersecurity and data privacy risks in connection with its financial and compliance risk oversight role.
Product Safety Risk Oversight
Management fosters a strong safety culture and maintains robust safety
programs across our businesses. Product safety is covered by our ERM program, and the Governance Committee has oversight responsibility
for product safety risks (with the Special Activities Committee assisting on classified product safety). The Governance Committee
annually reviews our corporate product safety program, receives an update at each meeting regarding product safety matters (including
incident metrics and managed safety issues) and regularly receives a briefing from each business unit on its product safety management
system, including how the system applies in practice, as well as the business unit’s product safety culture. Our product
safety program also provides for immediate reporting to the Governance Committee in the event of certain significant product safety
incidents.
Product Quality Risk Oversight
RTX is committed to providing our customers with products and services
that meet or exceed our quality representations and requirements. The Governance Committee assumed oversight responsibility for
product quality risks in May 2024 as part of an integrated approach to product safety and quality, given the strong nexus between
these disciplines. Since then, the Governance Committee has met to consider the operation of our quality management systems on
both a Company-wide and business unit-level basis, to consider our product quality culture, and to review the role that our quality
management systems play in our core functions, including supply chain and engineering. Our product quality program includes a
Company-wide Quality Council and a layered quality management audit structure to reduce enterprise risk.
Artificial Intelligence Risk Oversight
AI is an increasingly important part of RTX’s business and operations.
We use AI in the products and services we sell in order to improve the value we provide to our customers. We also use AI in our
business systems to enhance our productivity. In May 2024, the Governance Committee assumed responsibility for overseeing the
development of the Company’s AI strategy in recognition of the need for focused Board oversight of the opportunities and risks
posed by AI technologies. As part of its responsibilities, the Governance Committee reviewed the development of RTX’s Responsible
AI Corporate Policy. The policy articulates RTX’s AI Ethical principles and requires establishment of a management framework
based on well-recognized AI governance elements to ensure our AI use complies with applicable law, these Ethical Principles, our
Code of Conduct and our policies, as well as meeting key stakeholder expectations. The policy also identifies responsible leaders
to implement our AI risk management framework, establish incident response procedures, and develop training, tools and communications
to support RTX employees’ safe and ethical use of AI in our business and operations.
RTX
2025 PROXY STATEMENT 29
Table of Contents
CORPORATE GOVERNANCE
THE BOARD’S ROLE
Enhancing Our Risk Management Systems
Leveraging our breadth and scale includes developing a Company-wide approach
to product safety, product quality and compliance matters. We are committed to ensuring that our products are safe, that they
meet the expectations of our customers and that we execute on our commitments responsibly, acting at all times with integrity
and in compliance with the laws and regulations under which RTX operates. In 2024, the Board played an active role in RTX’s
efforts to enhance our risk management systems to support these commitments, including by:
| ● |
Overseeing efforts to enhance our safety and
quality systems, increase organizational safety awareness and improve incident monitoring and reporting |
| ● |
Overseeing the execution of an inaugural Company-wide product safety
survey, as well as the Company’s follow-up actions in response to the survey |
| ● |
Overseeing a review performed by an independent panel of aerospace
experts regarding Pratt & Whitney’s handling of the GTF powder metal matter |
| ● |
Conducting frequent safety and quality reviews with senior leadership
throughout the year, including multiple reviews of Pratt & Whitney’s progress in executing its GTF fleet management
plan |
| ● |
Holding seven Board and Committee meetings, including four special
meetings, at which the recent settlements entered into by RTX to resolve certain legacy legal matters primarily associated
with the Raytheon Company and Rockwell Collins businesses were reviewed |
| ● |
Overseeing efforts related to RTX’s compliance systems and processes,
with a focus on enhancing our compliance programs in key areas on a Company-wide basis, increasing resources and expertise
in targeted disciplines and ensuring enterprise-wide awareness of the lessons learned from the Company’s resolution
of legacy legal matters primarily associated with the Raytheon Company and Rockwell Collins businesses |
Compensation Risk Oversight
The Human Capital & Compensation Committee (the “HCC Committee”)
believes that executive compensation payouts must:
| ● |
Align with the Company’s financial performance |
| ● |
Be earned in a manner consistent with RTX’s Code of Conduct
and other compliance policies |
| ● |
Promote long-term, sustainable value for shareowners |
| ● |
Provide fair and equitable pay to employees of comparable experience
and performance who perform similar work |
| ● |
Strike a balance between appropriate levels of financial opportunity
and risk |
The HCC Committee identifies, monitors and mitigates compensation risk
in the following ways:
| Sound Incentive Plan Design |
|
Our annual and long-term incentive plans use
complementary performance metrics that are essential indicators of RTX’s financial health. The HCC Committee establishes financial
performance goals that are challenging, yet realistic, and maintains the ability to use its discretion to adjust payouts under
our annual incentive plan (“AIP”) to the extent it believes the calculated results do not accurately reflect the
overall quality of performance for the year. Further, payouts for both AIP and PSUs
are capped at 200% of target. |
| Emphasis on Long-Term Performance |
|
Long-term incentives (“LTI”) are the cornerstone of
RTX’s executive compensation program. Our LTI program incorporates long-term financial performance metrics that are
designed to align executive interests with shareowner interests. |
| Rigorous Share Ownership Requirements |
|
RTX maintains significant share ownership requirements for our senior
executives and directors, which are intended to reduce risk by aligning their economic interests with those of our shareowners.
A significant stake in future performance discourages the pursuit of short-term opportunities that can create excessive risk.
See pages 36-37 for more information. |
30 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE GOVERNANCE
THE BOARD’S ROLE
| Prohibition on Short Sales, Pledging
and Hedging of RTX Securities |
|
RTX prohibits directors, officers and employees
from entering into transactions involving short sales of our securities. Directors and executive officers are also prohibited
from pledging or assigning RTX stock, stock options or other equity interests as collateral for a loan. Transactions in put
options, call options or other derivative securities that have the effect of hedging the value of RTX securities also are
prohibited, whether or not those securities were granted to or held, directly or indirectly, by a director, officer or employee. |
| Clawback Policy |
|
The RTX Corporation Clawback Policy is our comprehensive policy
on recoupment of compensation that covers all RTX employees, including NEOs and executive officers. This policy allows RTX
to recoup annual and LTI compensation in a number of circumstances, including financial restatements, compensation earned
as a result of financial miscalculations, violations of RTX’s Code of Conduct and violations of post-employment restrictive
covenants. Further, in 2023, we adopted the RTX Corporation Executive Officer Clawback Policy that is intended to comply with
SEC regulations and NYSE listing standards. Under this policy, the Company can recoup covered incentive-based compensation
from executive officers (as defined by the SEC) upon the occurrence of any restatement made to correct an error in previously
issued financial statements due to material noncompliance with any financial reporting requirement under the securities laws.
This Policy supplements, but does not replace, the RTX Corporation Clawback Policy. See page 66 for details. |
| Restrictive Covenants |
|
Members of the Company’s Executive Leadership Group (“ELG”),
which includes each of our current NEOs, may not engage in post-employment activities detrimental to RTX, such as disclosing
proprietary information, soliciting RTX employees or engaging in competitive activities. See page 65 for more details. |
Compensation Risk Assessment. During 2024, the HCC Committee engaged
FW Cook as its independent third-party consultant, to perform a compensation risk assessment. As a result of this assessment,
both FW Cook and the HCC Committee concluded that the Company’s incentive plans do not contain risky features that are likely
to have a material and adverse impact on the Company. Further, FW Cook and the HCC Committee concluded that the Company’s
compensation plans, programs and policies contain sufficient risk mitigation factors.
SUCCESSION PLANNING OVERSIGHT
The Board has primary responsibility for CEO and senior management succession
planning. The Board considers effective continuity of leadership to be critical to the Company’s success and supports senior management
in carefully considering and planning for successful leadership transitions. The CEO and the Executive Vice President &
Chief Human Resources Officer regularly meet with the Board to discuss the development of potential candidates for succession
to senior leadership roles, including the CEO role. The Board’s input and feedback are reflected in annual updates to succession
plans. Succession plans include readiness assessments, biographical information and career development plans.
After several years of deliberate succession planning by the Board, Mr.
Calio succeeded Mr. Hayes as CEO effective May 2, 2024, and will succeed Mr. Hayes as Chairman effective April 30, 2025. Mr. Reynolds
continues to serve as the Board’s independent Lead Director. The Board believes that this leadership structure best serves the
needs of the Company. The Board plays an ongoing and continuous role in evaluating the Company’s leadership structure as part
of its oversight of the succession planning process.
ESG OVERSIGHT
Our commitment to innovation and collaboration drives our vision for
a safer, more connected world, and underpins our environmental, social and governance (“ESG”) approach. Our ESG pillars—People,
Planet and Principles—are essential components of the mission-critical work that we perform. As with risk management oversight,
the Board has allocated oversight responsibility for ESG matters and risks to the Committees, while retaining full Board oversight
of ESG matters that cut across the expertise of multiple Committees.
RTX
2025 PROXY STATEMENT 31
Table of Contents
CORPORATE GOVERNANCE
SHAREOWNER ENGAGEMENT
Shareowner Engagement
The Board and RTX management believe in transparent and open communication
with shareowners. Over the years, these engagements have improved our corporate governance practices, led to increased shareowner
rights, enhanced the Board’s composition and improved the design and disclosure of our executive compensation program.
We regularly communicate with our shareowners throughout the year, including
through calls, one-on-one and small group meetings, and conferences. We also engage with our investors each Spring after our Proxy
Statement is filed. In addition, management, at times in conjunction with our independent directors, routinely meets with our
shareowners to discuss a range of matters, including financial performance, capital allocation, business strategy and corporate
governance practices. In 2024, management participated in seven major investor conferences, visited shareowners, and hosted shareowners
at Pratt & Whitney’s facilities in Columbus, Georgia.
| |
In 2024, we engaged with shareowners
holding
RTX Common Stock representing over
58% of our outstanding shares |
Political Activities and Public Policy Engagement
RTX actively participates in the political and public policy process
at the federal, state and local levels on matters that are core to our business interests. We operate in highly regulated industries,
and our government relations initiatives are intended to educate and inform officials and the public on a broad range of public
policy matters that impact our businesses. These initiatives are based on the Company’s interests and needs—not based
on the personal agendas of individual directors, officers or employees—and are conducted in accordance with our Code of
Conduct and applicable laws and regulations.
All political activities of RTX are managed from the highest levels of
the Company. The Board of Directors, directly or through the Governance Committee, is responsible for overseeing the Company’s
conduct of government relations activities, including its positions on significant public policy issues, advocacy efforts and
political spending. The Governance Committee receives regular briefings from management on these matters to ensure that the Company’s
political activities are well aligned with its strategy and values.
The Board also oversees the activities of the Employees of RTX Corporation
Political Action Committee (“RTX PAC”). RTX PAC is voluntary, funded with employee contributions only, nonpartisan
and supports candidates for federal and state office and the national political organizations of both major parties—thus
giving employees, regardless of their political affiliations, a way to speak with a unified voice on issues important to RTX.
RTX PAC is governed by a Steering Committee composed of members of RTX’s Corporate leadership team and considers several
criteria before approving a contribution to a candidate, including a determination that the candidate demonstrates a commitment
to RTX’s core values. RTX PAC does not give to candidates who are under Department of Justice investigation or to those
who are under investigation for a significant violation of Congressional ethics rules. RTX PAC operates in accordance with all
applicable laws and regulations, and its contributions are reflected in public filings with the Federal Election Commission.
The Senior Vice President for Global Government Relations leads RTX’s
government relations and political activities initiatives, reports to the Governance Committee on the Company’s political
and lobbying activities, including the activities of RTX PAC, and works closely with the Company’s Legal, Contracts &
Compliance function to ensure the Company’s political activities comply with all legal requirements, established company
policies and the highest ethical standards.
RTX does not contribute Company funds to federal, state or local office
candidates, Section 527 organizations, Super PACs, independent expenditures or other “grass roots” communications
to the general public related to the support or opposition of federal, state or local candidates, ballot measures or any other
election-related matters.
32 RTX
2025 PROXY STATEMENT
Table of Contents
CORPORATE GOVERNANCE
POLITICAL ACTIVITIES AND PUBLIC POLICY ENGAGEMENT
In the ordinary course of business, RTX also participates in, and pays
membership dues to, certain nonprofit trade associations that help us stay abreast of technical issues, emerging industry standards
and other trends relevant to our business, and provide educational opportunities for employees and support workforce development
initiatives. Some trade associations use a portion of their membership dues for nondeductible purposes, such as lobbying. RTX
does not make payments to trade associations or other tax-exempt organizations that are designated for election-related purposes.
We are transparent with respect to the Company’s political activities
and the activities of RTX PAC, and we fully comply with all applicable public disclosure requirements. In particular:
| ● |
We provide extensive information about our political
activities on our website. |
| ● |
With respect to federal lobbying, we file quarterly lobbying activity
reports and semi-annual lobbying contributions reports with the Clerk of the U.S. House of Representatives and the Secretary
of the U.S. Senate. These reports contain details of our lobbying efforts, political activity and related expenditures in
accordance with the Lobbying Disclosure Act, and are publicly accessible via the House and Senate websites and RTX’s
website. |
| ● |
With respect to state and local lobbying, our activities at the
state and local level are limited and generally involve issues related to economic development and business regulatory matters
in states where we maintain a significant business presence. State and local lobbying activities are disclosed in compliance
with applicable laws and regulations, and, for those jurisdictions that provide online availability, we disclose on our website
where our filed reports can be obtained. |
| ● |
We disclose, through public filings with the Federal Election Commission,
the full list of candidates and committees to which RTX PAC has contributed, and we provide a link to these filings on our
website. |
| ● |
We disclose on our website a listing of the trade associations with
disclosed lobbying expenses to which the Company paid $25,000 or more in membership dues or other contributions during the
prior year, including the portion of such amounts, if any, that are nondeductible as a lobbying or political expenditure.
In 2025, we decided to augment our disclosure by expanding the number of tiered payment ranges in which we list trade associations.
With respect to 2023, as shown in our current disclosure, no contributions to a single trade association with disclosed lobbying
expenses exceeded $600,000. |
Additional information regarding RTX’s
public activities can be found on our website at www.rtx.com under the heading
“Who We Are/Corporate Governance/Public Activities.”
RTX
2025 PROXY STATEMENT 33
Table of Contents
| Compensation of Directors |
Pay Structure
ANNUAL RETAINER
Under the terms of the RTX Corporation Board of Directors Deferred Stock
Unit Plan (“RTX Director DSU Plan”), annual retainers for non-employee directors are payable 40% in cash and 60% in
deferred stock units (“DSUs”). Directors, however, may elect to receive 100% of the annual retainer in DSUs. The annual
retainer paid to non-employee directors for the May 2024 to May 2025 Board cycle is dependent upon the role each director holds,
as follows:
| Role |
Cash
($) |
|
Deferred
Stock Units ($) |
|
Total
Annual
Retainer ($) |
| All Directors (base
retainer) |
$130,000 |
|
$195,000 |
|
$325,000 |
| Additional
Compensation for Services as: |
|
|
|
|
|
| Lead
Director |
$20,000 |
|
$30,000 |
|
$50,000 |
| Audit
Committee Chair |
$16,000 |
|
$24,000 |
|
$40,000 |
| Human
Capital & Compensation Committee Chair |
$14,000 |
|
$21,000 |
|
$35,000 |
| Finance
Committee Chair |
$10,000 |
|
$15,000 |
|
$25,000 |
| Governance
and Public Policy Committee Chair |
$10,000 |
|
$15,000 |
|
$25,000 |
| Special
Activities Committee Chair |
$10,000 |
|
$15,000 |
|
$25,000 |
Annual retainers are paid each year following the Annual Meeting.
Non-employee directors who join the Board or are appointed to a leadership role between the Annual Meeting and the end of September
receive 100% of the annual retainer. Non-employee directors who join the Board or are appointed to a leadership role between October
and the next Annual Meeting receive 50% of the annual retainer.
Non-employee directors do not receive additional compensation
for attending regular Board or Committee meetings, although they do receive a $3,000 fee for special, in-person meetings. The special
meeting fee applies only to formal Board or Committee meetings that are not on the Board’s annual calendar and do not take
place during a regularly scheduled Board meeting. In 2024, there were five special Board and Committee meetings. However, since
these meetings were held telephonically, directors did not receive a special fee.
DEFERRED RESTRICTED STOCK UNITS
Directors appointed to the Board before
October 2019 received a one-time deferred restricted stock unit (“RSU”) award. This award vested in equal portions over
five years, but distribution does not occur until a director retires from the Board. Non-employee directors appointed after October
2019 did not receive a deferred RSU award upon joining the Board. All deferred RSUs held by directors are fully vested.
DIVIDEND TREATMENT
When RTX pays a dividend on RTX Common Stock to shareowners,
directors are credited with additional DSUs and deferred RSUs equal in value to the dividend paid on the corresponding number of
shares of RTX Common Stock.
PLAN DISTRIBUTIONS
DSUs and deferred RSUs are not distributed to directors until
they retire from the Board. Upon retirement, RTX DSUs and deferred RSUs are converted into shares of RTX Common Stock. For our
legacy UTC directors, upon the 2020 spinoff by UTC of Carrier and Otis, DSUs and deferred RSUs originally based in UTC stock were
converted into DSUs and deferred RSUs in the stock of RTX, Carrier and Otis. When these directors retire from the RTX Board, the
Carrier and Otis DSUs and deferred RSUs (if any) will be distributed in cash. Directors can elect to receive distributions in either
a lump sum or in 10- or 15-year installments.
34 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION OF DIRECTORS
2024 DIRECTOR COMPENSATION
2024 Director Compensation
| Name |
|
Fees
Earned or
Paid in Cash ($)(1) |
|
Stock
Award ($)(2) |
|
All
Other
Compensation ($)(3) |
|
Total
($) |
| Tracy
A. Atkinson |
|
$144,000 |
|
$216,000 |
|
$26,925 |
|
$386,925 |
| Leanne
G. Caret(4) |
|
$162,000 |
|
$231,000 |
|
$26,500 |
|
$419,500 |
| Bernard
A. Harris, Jr. |
|
$130,000 |
|
$195,000 |
|
$19,425 |
|
$344,425 |
| George
R. Oliver |
|
$0 |
|
$325,000 |
|
$495 |
|
$325,495 |
| Robert
K. (Kelly) Ortberg(5) |
|
$130,000 |
|
$195,000 |
|
$495 |
|
$325,495 |
| Ellen
M. Pawlikowski |
|
$130,000 |
|
$195,000 |
|
$4,000 |
|
$329,000 |
| Denise
L. Ramos |
|
$0 |
|
$325,000 |
|
$1,925 |
|
$326,925 |
| Fredric
G. Reynolds |
|
$150,000 |
|
$225,000 |
|
$26,925 |
|
$401,925 |
| Brian
C. Rogers |
|
$0 |
|
$350,000 |
|
$26,925 |
|
$376,925 |
| James
A. Winnefeld, Jr. |
|
$0 |
|
$350,000 |
|
$28,540 |
|
$378,540 |
| Robert
O. Work |
|
$140,000 |
|
$210,000 |
|
$6,795 |
|
$356,795 |
| (1) |
Reflects the portion of the directors’ annual retainer paid
in cash. Messrs. Oliver, Rogers and Winnefeld, Jr. and Ms. Ramos elected to receive their annual cash retainer in DSUs, as
detailed in footnote (2). |
| (2) |
Reflects the grant
date fair value of DSU awards credited to the director’s account, including any portion of the annual cash retainer
that the director elected to receive as DSUs. The value of DSU awards is calculated in accordance with FASB ASC Topic 718
using assumptions described in Note 19: Stock Based Compensation, to the Consolidated Financial Statements in RTX’s
2024 Annual Report on Form 10-K. The number of units credited to each director in 2024 was calculated by dividing the value
of the award by the NYSE closing price per share of RTX Common Stock on May 2, 2024, which was the date of the 2024 Annual
Meeting of Shareowners, or for retainers paid to directors upon joining the Board or being appointed to a leadership role
(if applicable), the RTX closing stock price on the grant date. DSU awards are credited with additional units each time the
Company pays a dividend to shareowners and are restricted from distribution while a non-employee director serves on the Board. |
| (3) |
Amounts in this
column include incidental benefits and matching contributions to eligible nonprofit organizations under the Company’s
matching charitable gift program that covers non-employee directors, as well as Company employees. The Company’s matching
charitable gifts paid in 2024 were as follows: Ms. Atkinson, $25,000; Ms. Caret, $25,000; Mr. Harris, Jr., $17,500; Ms. Pawlikowski,
$2,500; Mr. Reynolds, $25,000; Mr. Rogers, $25,000; Mr. Winnefeld, Jr., $25,000; and Mr. Work, $6,300. |
| (4) |
Ms. Caret was
appointed to the role of Audit Committee Chair effective February 15, 2024. As a result, during 2024, Ms. Caret was paid:
(i) 50% of the Audit Committee retainer for the 2024/2025 Board cycle; and (ii) 100% of the base annual retainer for the 2024/2025
Board cycle. |
| (5) |
Mr. Ortberg retired from the Board effective
July 31, 2024. |
CHANGES
TO DIRECTOR COMPENSATION FOR 2025
In its review of directors’ compensation
for the May 2025 to May 2026 Board cycle, the Governance Committee increased the base retainer from $325,000 to $345,000 to better
align with the competitive market. This change will become effective on May 1, 2025, the date of the 2025 Annual Meeting of Shareowners. |
RTX
2025 PROXY STATEMENT 35
Table of Contents
Share Ownership Requirements
Our rigorous share ownership requirements, shown
below, promote and strengthen the alignment of our non-employee directors and senior management with the interests of our shareowners.
6x
base salary for our Executive Chairman and CEO roles |
|
5x
annual base cash retainer for non- employee directors |
|
4x
base salary for our CFO and business unit presidents |
|
3x
base salary for other ELG members |
|
2x
base salary for other officers(1) |
For the purposes of determining compliance with the RTX Share
Ownership Policy, shares are defined as RTX Common Stock held outright (by the executive/director or their spouse), RSUs, restricted
stock awards and shares or share equivalents held in a Company savings plan or deferred compensation plan. Stock options, stock
appreciation rights (“SARs”) and PSUs are excluded from the definition of shares under the RTX Share Ownership Policy.
Non-employee directors must achieve their required
ownership level within five years of joining the Board, and ELG members (including the NEOs) must achieve their ownership levels
within five years of appointment to the ELG or a role requiring a higher level of ownership. Other officers who are not ELG members
must achieve their ownership levels within five years of appointment to an officer role. An individual who has not reached the
applicable ownership level after this five-year period is not permitted to sell RTX shares until that ownership level is achieved.
All directors, ELG members and other officers currently comply with their respective ownership requirements or are on track to
meet them within the five-year period.
| (1) |
Other officers who are not ELG members. |
Beneficial Share Ownership of Directors and
Executive Officers
The following table shows the beneficial ownership of RTX Common
Stock as of February 18, 2025, for: (i) each director and nominee; (ii) each NEO; and (iii) the directors and executive officers
as a group. None of these individuals or the group as a whole beneficially owned more than 1% of RTX Common Stock as of that date.
Unless otherwise noted, each person named in the table has sole voting power and sole investment power.
| Name
of Beneficial Owner |
|
SARs
Exercisable
within 60 days(1) |
|
RSUs
Convertible to
Shares within 60 days(2) |
|
DSUs
Convertible to
Shares within 60 days(3) |
|
Total
Shares
Beneficially Owned(4) |
| Each
current director and nominee for director, including the Executive Chairman and the President & CEO |
| T.
Atkinson |
|
– |
|
– |
|
13,273 |
|
20,153 |
| C.
Calio |
|
113,353 |
|
– |
|
– |
|
226,494 |
| L.
Caret |
|
– |
|
– |
|
5,466 |
|
5,466 |
| B.
Harris, Jr. |
|
– |
|
– |
|
8,950 |
|
8,950 |
| G.
Hayes |
|
489,022 |
|
– |
|
– |
|
1,131,955(5) |
| G.
Oliver |
|
– |
|
– |
|
12,844 |
|
29,110 |
| E.
Pawlikowski |
|
– |
|
– |
|
13,592 |
|
16,791 |
| D.
Ramos |
|
– |
|
1,198 |
|
24,069 |
|
25,267 |
| F.
Reynolds |
|
– |
|
1,223 |
|
21,115 |
|
44,563 |
| B.
Rogers |
|
– |
|
1,223 |
|
32,676 |
|
38,899(6) |
| J.
Winnefeld, Jr. |
|
– |
|
– |
|
19,274 |
|
27,074 |
| R.
Work |
|
– |
|
– |
|
15,122 |
|
20,323 |
36 RTX
2025 PROXY STATEMENT
Table of Contents
SHARE
OWNERSHIP
CERTAIN BENEFICIAL OWNERS
| Name
of Beneficial Owner |
|
SARs
Exercisable
within 60 days(1) |
|
RSUs
Convertible to
Shares within 60 days(2) |
|
DSUs
Convertible to
Shares within 60 days(3) |
|
Total
Shares
Beneficially Owned(4) |
| CFO
and other NEOs who are not also directors |
|
|
|
|
| N.
Mitchill, Jr. |
|
76,223 |
|
– |
|
– |
|
153,203 |
| S.
Eddy |
|
66,671 |
|
– |
|
– |
|
66,797 |
| P.
Jasper |
|
42,888 |
|
– |
|
– |
|
62,839 |
| S.
Timm |
|
23,222 |
|
– |
|
– |
|
34,658 |
| T.
Brunk |
|
4,828 |
|
– |
|
– |
|
10,066 |
| All
current directors, nominees and executive officers as a group (20 in total)(7) |
|
2,057,961 |
| (1) |
Net number of shares of RTX Common Stock that would be issued to the current or former executive officers if their vested SARs were exercised within 60 days of February 18, 2025. Once vested, each SAR can be exercised for the number of shares of RTX Common Stock having a value equal to the difference between the market price on the exercise date and the exercise price of the SAR. The estimated net number of shares of RTX Common Stock was calculated using $123.76 per share, which was the NYSE closing price of RTX Common Stock on February 18, 2025. |
| (2) |
Each non-employee director appointed to the Board prior to October 2019 received deferred RSUs that vest in equal portions over five years and are distributed in shares of RTX Common Stock when the director retires from the Board. The table reflects the vested deferred RSUs, which are the number of shares in which the director has the right to acquire beneficial ownership at any time within 60 days of February 18, 2025, following the director’s retirement from the Board. |
| (3) |
Reflects the previously accrued portion of the non-employee director’s annual retainer earned in DSUs, which are restricted from distribution until retirement. The table reflects the number of shares in which the director or nominee has the right to acquire beneficial ownership at any time within 60 days of February 18, 2025, following the director’s retirement from the Board. |
| (4) |
Reflects holdings by the director, nominee or officer of all shares beneficially owned and awards convertible to shares within 60 days of February 18, 2025. |
| (5) |
Includes shares for which a spouse holds sole voting and investment power: G. Hayes (3,773 shares). |
| (6) |
Includes shares for which voting and investment power is jointly held by the director: B. Rogers (5,000 shares). |
| (7) |
Holdings, as of February 18, 2025, of the directors and executive officers who are listed in the Company’s 2024 Annual Report on Form 10-K. |
Certain Beneficial Owners
The following
table shows all holders known to RTX to be beneficial owners of more than 5% of the outstanding shares of RTX Common
Stock as of December 31, 2024.
| Name and Address |
|
Shares |
|
Percent of
Class |
Vanguard
Group, Inc.(1)
P.O. Box 2600
Valley Forge, PA 19482-2600 |
|
118,479,159 |
|
8.9% |
State
Street Corporation(2)
1 Congress Street, Suite 1
Boston, MA 02114-2016 |
|
112,964,059 |
|
8.5% |
BlackRock,
Inc.(3)
50 Hudson Yards
New York, NY 10001 |
|
98,855,549 |
|
7.4% |
Capital
Research Global Investors(4)
333 South Hope Street, 55th Floor
Los Angeles, CA 90071 |
|
75,753,095 |
|
5.7% |
| (1) |
Based on a Form 13F filed with the SEC by Vanguard Group, Inc. (“Vanguard”) on February 11, 2025, as of December 31, 2024, Vanguard held sole voting power with respect to 18,883 shares of RTX Common Stock, shared voting power with respect to 1,461,178 shares of RTX Common Stock, sole investment discretion with respect to 112,554,088 shares of RTX Common Stock, and no voting or investment discretion with respect to any other shares of RTX Common Stock. Vanguard’s most recent Schedule 13G/A for RTX was filed with the SEC on February 13, 2024. |
| (2) |
Based on a Form 13F filed with the SEC by State Street Corporation (“State Street”) on February 14, 2025, as of December 31, 2024, State Street held sole voting power with respect to 30,587,132 shares of RTX Common Stock, shared voting power with respect to 59,926,080 shares of RTX Common Stock, shared investment discretion with respect to 112,964,059 shares of RTX Common Stock, and no voting or investment discretion with respect to any other shares of RTX Common Stock. State Street’s most recent Schedule 13G/A for RTX was filed with the SEC on January 30, 2024. |
| (3) |
Based on a Form 13F filed with the SEC by BlackRock, Inc. (“BlackRock”) on February 7, 2025, as of December 31, 2024, BlackRock held sole voting power with respect to 92,525,459 shares of RTX Common Stock, sole investment discretion with respect to 98,855,549 shares of RTX Common Stock, and no voting or investment discretion with respect to any other shares of RTX Common Stock. BlackRock’s most recent Schedule 13G/A for RTX was filed on January 26, 2024. |
| (4) |
Based on a Form 13F filed with the SEC by Capital Research Global Investors (“Capital”) on February 13, 2025, as of December 31, 2024, Capital held sole voting power with respect to 75,729,758 shares of RTX Common Stock, shared investment discretion with respect to 75,753,095 shares of RTX Common Stock, and no voting or investment discretion with respect to any other shares of RTX Common Stock. Capital’s most recent Schedule 13G/A for RTX was filed with the SEC on February 9, 2024. |
RTX
2025 PROXY STATEMENT 37
Table of Contents
Proposal 2:
Advisory Vote to Approve
Executive Compensation |
|
What
am I
voting on? |
|
Each
year we ask shareowners to approve, on an advisory basis, the compensation of our Named Executive Officers (“NEOs”).
Before voting, we encourage you to read and consider the Compensation Discussion and Analysis on pages 40-67, along
with the compensation tables on pages 69-85. |
How is shareowner feedback considered?
RTX values and considers shareowner views when making executive
compensation decisions. Over the years, shareowner input has substantially contributed to the philosophy that underpins the design
of our executive compensation program—our Guiding Principles—which are described on page 44 of this Proxy Statement.
We continue to engage with investors each year to solicit their views on our executive compensation programs. The Human Capital &
Compensation Committee (the “HCC Committee”) uses this feedback in its evaluation and oversight of our program. Shareowner
feedback also is reflected in our ongoing effort to make the compensation information in our proxy statements clear and transparent.
Why should I vote for this proposal?
The HCC Committee is committed to designing an executive compensation
program that is structured to advance our fundamental objective: aligning our executives’ compensation with the long-term
interests of our shareowners. The HCC Committee’s primary goal is to ensure that our program rewards financial and operating
performance and effective strategic leadership—key elements in building sustainable shareowner value.
In addition, compensation opportunities are structured to:
| ● |
Facilitate the retention of highly talented executives who are critical to our long-term success |
| ● |
Deliver fair and equitable pay to executives of comparable experience and performance who perform similar work |
| ● |
Require ethical and responsible conduct in pursuit of our goals |
Further, the performance metrics used in our incentive programs
directly align with shareowner interests, with the timing and amount of actual payouts correlated to our short-, medium- and long-term
performance.
Over the past several years, the HCC Committee has taken actions
to reinforce these objectives, such as replacing RSUs with SARs, shifting from qualitative to quantitative non-financial metrics
in our Executive Annual Incentive Plan and eliminating certain executive perquisites.
38 RTX
2025 PROXY STATEMENT
Table of Contents
PROPOSAL
2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Accordingly, the Board recommends that shareowners vote FOR
the following resolution:
“RESOLVED, that the compensation of RTX’s NEOs, as
disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission (the “SEC”), including
the Compensation Discussion and Analysis, compensation tables and related information provided in this Proxy Statement, is hereby
APPROVED on an advisory basis.”
As a matter of law, the approval or disapproval of this Proposal
2 may not be construed as overruling any decision by RTX or the Board, or as imposing any duty or obligation on RTX, the Board
or any individual director.
 |
|
The Board of Directors unanimously recommends
a vote FOR this proposal. |
RTX
2025 PROXY STATEMENT 39
Table of Contents
Compensation Discussion
and Analysis |
|
What’s
in this
section? |
|
In this
section, we discuss our compensation philosophy and explain how our executive compensation program is structured to
advance our fundamental objective of aligning our executives’ compensation with the long-term interests of RTX shareowners.
We also explain how the Human Capital & Compensation Committee of the Board (the “HCC Committee”) determined
compensation for our NEOs listed below, as well as it’s rationale for specific 2024 pay decisions. |
| 2024
NAMED EXECUTIVE OFFICERS (“NEOs”) |
|
|
|
|
 |
|
Christopher
T. Calio
President & Chief Executive Officer
Served as President & Chief Operating Officer until
May 2, 2024, at which point he transitioned to the role of President & Chief Executive Officer.
|
|
 |
|
Neil G. Mitchill, Jr.
Executive Vice President & Chief Financial Officer |
 |
|
Gregory
J. Hayes
Executive Chairman
Served as Chairman & Chief Executive Officer until
May 2, 2024, at which point he continued in the role of Executive Chairman of the Board.
|
|
 |
|
Shane G. Eddy
President, Pratt & Whitney |
 |
|
Philip
J. Jasper
President, Raytheon
Served as President, Mission Systems at Collins Aerospace until
January 7, 2024, when he was appointed to the role of President, Raytheon.
|
|
 |
|
Troy
D. Brunk
President, Collins Aerospace
Served as President, Avionics until January 7, 2024 and President,
Mission Systems until July 17, 2024 (both at Collins Aerospace), when he was appointed to the role of President, Collins Aerospace.
|
 |
|
Stephen
J. Timm
Senior Advisor, Collins Aerospace
Served as President, Collins Aerospace until July 17, 2024,
and continues in a transitional capacity as Special Advisor, Collins Aerospace, until his retirement in March 2025.
|
|
|
|
|
40 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
EXECUTIVE
SUMMARY
Executive Summary
Shareowner Engagement on Compensation
We actively seek—and highly value—feedback from
our shareowners and their advisors. The HCC Committee considers this feedback as part of its ongoing assessment of our program’s
effectiveness.
|
Our 2024 Say-on-Pay Vote
Each year, we consider the results of our advisory vote on executive
compensation (“Say-on-Pay”) from the prior year.
At our 2024 Annual Meeting of Shareowners, approximately 86%
of the votes cast were in favor of the HCC Committee’s 2023 executive compensation decisions.
We interpreted this as an endorsement of our compensation program’s
design and direction.
|
|
 |
In 2024, our shareowner outreach efforts focused on our CEO succession,
the HCC Committee’s pay decisions for our NEOs and how we can enhance our proxy disclosure to ensure it is clear and concise. Overall,
investors were supportive of our current executive compensation program design. The feedback we received on our proxy disclosure
in response to these outreach efforts has been incorporated into this year’s disclosure. For more information on our shareowner
engagement, see page 32.
RTX
2025 PROXY STATEMENT 41
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
2024 Performance Overview
Our unwavering dedication to deliver on our customer commitments
and our pursuit of innovative, next-generation solutions drove our strong 2024 financial performance.
Supported by robust organic sales and double-digit adjusted
operating profit growth, we exceeded both the adjusted net sales and adjusted EPS expectations we communicated to investors for the year.
We saw adjusted segment margin expansion from each of our industry-leading business units—Collins Aerospace, Pratt & Whitney
and Raytheon.
During 2024, we completed the $10 billion accelerated share repurchase
program we announced last year, bringing the total capital we have returned to shareowners since the Merger through dividends
and share buybacks to over $33 billion—far surpassing our original goal of $20 billion by 2025. With a 41% total shareowner
return for the year, our investors saw returns ahead of both the S&P 500 Index and our Core A&D Peers.(1)
Focus on the safety and quality of our products continues
to be our top priority, and in 2024, we made significant progress on our GTF engine fleet management plan. We are on track with the financial
and operational plan announced last year with respect to this matter and remain confident in the long-term health of the GTF fleet.
Bolstered by a robust demand for our products and technologies,
we increased our year-over-year backlog by 11% to $218 billion. To meet this customer demand, we invested over $2.6 billion in capital
expenditures during the year, increasing our manufacturing capacity and improving operational efficiencies through advanced manufacturing,
AI and manufacturing facility expansion.
| As we look to the future, we remain
focused on our mission to protect and connect the world. Through continuous innovation, a commitment to execution, and leveraging
the power of our three connected businesses, we are confident in our ability to meet the growing demand across our portfolio and
to deliver future growth for our shareowners. |
|
At RTX, we strive to solve our
customers’ most challenging problems, deliver long-term value to our shareowners and lead our industry by providing smarter
defense systems, transformative aerospace technologies and sustainable, more connected flight. |
2024 FINANCIAL HIGHLIGHTS
DILUTED
EARNINGS PER SHARE
($ per share) |
|
CASH
FLOW(2)
(in billions) |
 |
|
 |
| |
|
|
NET INCOME
(in billions) |
|
SALES
(in billions) |
 |
|
 |
 |
GAAP |
 |
Non-GAAP(3) |
| (1) |
Core A&D Peer composite returns
are determined by calculating the TSR for each peer company, then a weighted average is applied based on each company’s market
capitalization at the beginning of the measurement period. See page 53 for the companies within our Core A&D Peer group. |
| (2) |
GAAP cash flow is cash flow provided by operating activities
from continuing operations, while non-GAAP cash flow is free cash flow from continuing operations. |
| (3) |
See Appendix A on pages 111-113 for more information
regarding the non-GAAP financial measures shown on this page. |
42 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
| 2024 AT A GLANCE |
|
|
|
|
| |
|
|
|
|
|
|
| 1.39 |
|
6.8% increase |
|
$125 billion |
|
$93 billion |
| book-to-bill ratio |
|
in dividend per share(1) |
|
commercial aerospace
backlog at year-end |
|
defense backlog
at year-end |
| 41% |
|
$3.7
billion |
|
88th consecutive year |
| total shareowner return |
|
returned to investors through
dividends and share repurchases |
|
paying a dividend to our shareowners |
2024 STRATEGIC HIGHLIGHTS
In 2024, we made noteworthy progress on our key strategic
priorities, including:
| Executing
on our customer commitments |
|
Leveraging our breadth and scale |
|
Innovating for future growth |
During the year, we made substantial investments
to expand our manufacturing capacity to meet growing customer demand. Examples include:
●
Pratt & Whitney expanded the GTF engine aftermarket
network to 18 facilities worldwide.
●
Collins Aerospace broke ground on a 70,000 square
foot, $200 million expansion of its Spokane, Washington, carbon brake production facility.
●
Raytheon announced a $115 million investment in
its Redstone Raytheon Missile Integration Facility in Huntsville, Alabama, which will increase the factory’s space for integrating
and delivering on critical defense programs by 50%. |
|
We sought ways to mitigate supply chain disruptions
and inflationary challenges by deploying our people to our suppliers, entering into second-sourcing arrangements, long-term supplier
agreements and other customer pricing initiatives.
We continue to simplify our digital footprint by reducing
the number of systems we use and increasing company-wide applications.
By leveraging the breadth and scale of our businesses
through efforts like these, we exceeded our $2 billion gross cost synergy commitment one year ahead of schedule. |
|
We believe our future success is closely
linked to our ability to develop innovative solutions for our customers. This requires a focused execution of our technology roadmap
and the necessary investments to mature and introduce new capabilities to strengthen our product pipeline. During 2024, we continued
to invest in future innovation with $7.7 billion in Company- and customer-funded spend on research and development.
To complement our technology roadmap, in 2024, RTX Ventures
invested $45.4 million in innovative companies with technology in areas important to our business—including advanced computing,
autonomy, affordable mass, advanced manufacturing, hypersonics, sustainability and AI. |
| (1) |
In the second quarter of 2024, we
increased our quarterly dividend from $0.59 per share to $0.63 per share. |
RTX
2025 PROXY STATEMENT 43
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
How We Align Pay and Performance
Our executive compensation program is structured to advance
our fundamental objective: aligning our executives’ compensation with the long-term interests of our shareowners.
The HCC Committee’s primary goal is to reward and recognize
strong financial and operating performance and effective strategic leadership, which it believes drive long-term, sustainable shareowner
value. This pay-for-performance philosophy is embedded in a set of Guiding Principles that underpin how the HCC Committee approaches
the design of our executive compensation program.
OUR GUIDING PRINCIPLES
|
Total compensation should be sufficiently competitive
to attract, retain and motivate a leadership team capable of maximizing RTX’s performance. Each element should be benchmarked
relative to peers.
Annual and long-term incentive opportunities should reward
the appropriate balance of short-, medium- and long-term financial, strategic and operational business results.
A complete commitment to ethical and corporate responsibility
is fundamental to our compensation program. Compensation should take into account each executive’s responsibility to act at
all times in accordance with our Code of Conduct, our environmental, health, safety and other corporate responsibility objectives,
and our compliance requirements. Financial, strategic and operational performance must not compromise these values. |
|
For our most senior executives, long-term, stock-based
compensation opportunities should significantly outweigh short-term, cash-based opportunities. Annual objectives should complement
sustainable, long-term performance.
A substantial portion of compensation should be variable,
contingent and directly linked to Company, business unit and individual performance. The portion of total compensation contingent
on performance should increase with an executive’s level of responsibility.
The financial interests of executives should be aligned
with the long-term interests of our shareowners through stock-based compensation and performance metrics that correlate with long-term shareowner value.
Compensation programs should be designed to deliver fair
and equitable pay to executives of comparable experience and performance who perform similar work. |
44 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
OVERVIEW OF 2024 PAY DECISIONS
2024 Pay Mix
Consistent with our Guiding Principles, the largest portion
of compensation for our NEOs in 2024 was “at-risk” compensation—annual and LTI awards that are contingent on Company
performance relative to our key metrics and stock price performance. See pages 5, 49-50 and 53 for details on the metrics we use in our
compensation program and why they were chosen.
| (1) |
Percentages calculated based on
2024 total direct compensation, as shown in the table below. NEO average represents the average of all NEOs other than the CEO. |
2024 Total Direct Compensation
In making annual pay decisions, the HCC Committee
focuses primarily on “total direct compensation,” which includes our three principal elements of executive
compensation: base salary, annual incentives and long-term incentives (“LTI”). These elements are discussed in
detail on pages 48-54.
Total direct compensation is set each year to reflect the
HCC Committee’s assessment of Company, business unit and individual performance for the year. 2024 total direct compensation includes
2024 base salary, 2024 annual incentives paid in the first quarter of 2025 and the February 2025 LTI grant values approved by the HCC
Committee, which were based on its assessment of 2024 performance and the competitive market pay for each NEO’s role. This differs
from the February 2024 LTI award grant date fair values (accounting values at the time of grant) shown in the Summary Compensation Table
on page 69, which were based on the HCC Committee’s assessment of 2023 performance and the competitive market pay for each NEO’s
role at that time. For more details on total direct compensation, see page 56.
The following chart shows the 2024 total direct compensation
of our NEOs:
| |
|
Base
Salary ($K)(1) |
|
Annual
Incentive ($K) |
|
LTI
($K)(2) |
|
Total
Direct
Compensation ($K) |
| Christopher T. Calio |
|
$1,450 |
|
$2,760 |
|
$17,150 |
|
$21,360 |
| Neil G. Mitchill,
Jr. |
|
$1,050 |
|
$1,500 |
|
$6,500 |
|
$9,050 |
| Gregory J. Hayes(3) |
|
$1,100 |
|
$2,320 |
|
$0 |
|
$3,420 |
| Shane G. Eddy |
|
$810 |
|
$900 |
|
$4,000 |
|
$5,710 |
| Philip J. Jasper |
|
$790 |
|
$950 |
|
$4,000 |
|
$5,740 |
| Troy D. Brunk |
|
$750 |
|
$565 |
|
$3,500 |
|
$4,815 |
| Stephen J. Timm(4) |
|
$900 |
|
$795 |
|
$0 |
|
$1,695 |
| (1) |
Reflects base salary in effect for
each NEO as of December 31, 2024. These amounts differ from those in the Summary Compensation Table on page 69, which reflect salary
adjustments (if any) made during the year. |
| (2) |
Reflects values approved by the HCC Committee for the
LTI award granted on February 6, 2025. These differ from the values that will be reported in the Summary Compensation Table in 2026,
which will be calculated in accordance with FASB ASC Topic 718, Compensation—Stock Compensation. |
| (3) |
As described on page 4, and as disclosed in the Form
8-K filed by the Company on February 3, 2025, Mr. Hayes decided to step down as Executive Chairman of the Board effective April 30,
2025. As disclosed in the Form 8-K, he was not eligible to receive a 2025 LTI award on February 6, 2025. |
| (4) |
Mr. Timm served as President, Collins Aerospace until
July 17, 2024, at which point he transitioned to the role of Special Advisor, Collins Aerospace until his retirement. Because of
his impending retirement in March 2025, Mr. Timm was not granted an LTI award on February 6, 2025. |
RTX
2025 PROXY STATEMENT 45
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
HOW WE MAKE PAY DECISIONS AND ASSESS OUR PROGRAMS
How We Make Pay Decisions and Assess
Our Programs
Roles and Responsibilities
| Human
Capital & Compensation Committee |
| Oversees our programs |
●
Sets financial, strategic and operational
goals and objectives for the Company, our business units, the Executive Chairman and the CEO, as they relate to the Company’s
annual and long-term incentive programs.
●
Assesses Company, business unit and NEO performance
relative to the preestablished goals and objectives set for the year.
●
Evaluates the competitiveness of officers’
compensation and approves compensation adjustments, as appropriate.
●
Approves program design for executive severance,
change-in-control, supplemental benefit arrangements and the Company’s Executive Leadership Group (“ELG”) program.
●
Appoints executives to the ELG.
●
Reviews risk assessments as they relate to RTX’s
compensation plans, policies and practices.
●
Considers shareowner input regarding executive
compensation decisions and policies.
●
Reviews the Company’s human capital management
initiatives.
●
Engages an independent consultant, including approving
the consultant’s compensation, determining the nature and scope of its services, evaluating its performance, terminating the
engagement and replacing or adding consultants as needed.
|
| Management |
| CEO provides input to the HCC Committee |
●
Presents the HCC Committee with recommendations
for each principal element of compensation for officers other than himself (or for the Executive Chairman, if applicable).
●
Considers the performance of each officer, their
business unit and/or function, market benchmarks, internal equity and retention risk when making such recommendations.
●
Has no role in the performance evaluation or compensation
decisions for himself (or for the Executive Chairman, if applicable).
|
| Other executives provide insight and assistance
|
●
Our Executive Vice President & Chief Human
Resources Officer, along with RTX’s Human Resources staff, provide insight on program design and gather compensation market data
to assist the HCC Committee with its decision-making process.
●
Management also has the responsibility, delegated
to it by the HCC Committee, for the administration of executive compensation plans for RTX employees who are not officers. |
| Independent
Consultant |
Provides an independent perspective and assessment
●
Advises the HCC Committee on a variety of subjects,
including compensation plan design and trends, pay-for-performance analytics, benchmarking data, setting performance goals, governance
and risk assessment.
●
Reports directly to the HCC Committee, participates
in meetings as requested and communicates with the HCC Committee Chair between meetings as necessary. |
| Shareowners |
Provide feedback on our programs
In assessing our programs each year, the HCC Committee
considers feedback we receive from shareowners. Together with other factors, this helps the HCC Committee in its decision-making
process and its ongoing assessment of program effectiveness. |
46 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
HOW WE MAKE PAY DECISIONS AND ASSESS OUR PROGRAMS
2024 Independent Consultant Engagement
In early 2024, the HCC Committee again engaged FW Cook as
its independent consultant for the year. Prior to the engagement, it reviewed the firm’s qualifications, independence and any potential
conflicts of interest. FW Cook did not perform other services for or receive other fees from the Company (except for an incidental amount
of $10,000 for participation in certain business surveys). As a result, the HCC Committee determined that FW Cook qualified as an independent
consultant. During 2024, FW Cook representatives attended all HCC Committee meetings.
No other consulting firm made recommendations to the HCC
Committee on RTX’s peer group composition or on the form, amount or design of executive compensation in 2024. However, the Company
did obtain market data from other compensation consulting firms for various purposes, including benchmarking. Generally, such data is
also available to other consulting clients of these firms.
Our Compensation Peer Group and Use of Market Data
How We Use Peer Group Data. The HCC Committee
believes that to keep our executive compensation program sufficiently competitive, the target value of each principal element of compensation
should approximate the market median of the companies RTX views as competitors for senior executive talent. For this reason, we compare
our executive compensation program to the programs of companies within our Compensation Peer Group (“CPG”). In addition,
we use market data from the aerospace and defense sector, the Fortune 100 and a broader group of companies to gain insight into general
compensation trends and to supplement CPG market data for benchmarking when the HCC Committee finds it necessary or appropriate. The
HCC Committee annually evaluates each compensation element relative to the market for each officer’s role and makes adjustments as appropriate.
However, individual compensation may vary from market median benchmarks based on its assessment of other factors that it considers relevant,
including Company, business unit, function and/or individual performance, job scope, retention risk, internal pay equity and sustained
performance over time.
How Our Compensation Peer Group is Constructed. The
CPG is composed of a mix of industry and non-industry peers. The HCC Committee believes these 20 companies provide a relevant comparison
based on their similarity to RTX in size, geographic footprint and operational complexity, taking into account factors such as revenue,
market capitalization, global scope of operations, manufacturing footprint, research and development activities, and technology and engineering
focus. During 2024, there were no changes to the composition of the CPG. As competitors for executive talent, the CPG is used solely
for the purpose of benchmarking executive compensation, and not as a financial performance metric in our incentive compensation programs.
OUR COMPENSATION PEER GROUP (CPG)
 |
|
 |
|
 |
|
 |
| Aerospace & Defense |
|
Equipment & Machinery |
|
Technology/Communications |
|
Oil & Gas |
| |
|
|
|
|
|
|
Boeing
GE Aerospace
General Dynamics
L3Harris Technologies
Lockheed Martin
Northrop Grumman |
|
3M
Caterpillar
Deere |
|
AT&T
Cisco
HP Inc.
IBM
Intel
Verizon |
|
Chevron |
| |
|
|
|
|
|
|
 |
|
 |
|
 |
|
 |
| Chemicals |
|
Diversified Industrials |
|
Automotive |
|
Freight & Logistics |
| |
|
|
|
|
|
|
| Dow |
|
Honeywell |
|
General Motors |
|
UPS |
RTX
2025 PROXY STATEMENT 47
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
2024 PRINCIPAL ELEMENTS OF COMPENSATION
TIMELINE FOR COMPENSATION DECISIONS
The HCC Committee followed the process shown below in making
pay decisions for each principal component of compensation included in 2024 total direct compensation, which includes the 2025 LTI awards,
as explained on page 56.
| February
2024 |
|
April
2024 |
|
December
2024 |
|
January
2025 |
|
1st
Quarter of 2025 |
Approved 2024 base salary merit adjustments.
Approved 2024 annual incentive performance goals. |
|
2024 base salary merit adjustments took effect. |
|
Reviewed preliminary 2024 Company, business unit and
individual NEO performance. |
|
Reviewed final 2024 Company, business unit and individual
NEO performance.
Approved performance factors and individual 2024 annual
incentive awards.
Approved 2025 LTI awards, reflective of 2024 performance. |
|
2024 annual incentive awards paid.
2025 LTI awards granted. |
2024 Principal
Elements of Compensation
Base Salary
To attract and retain talented and qualified executives,
we provide competitive base salaries that generally target the market median, but may range above or below it based on tenure and experience,
sustained performance over time, job scope and responsibilities, retention risk and internal pay equity. Each year, the HCC Committee
reviews the CEO’s recommendations for base salary merit adjustments for our NEOs, relative to market ranges for each NEO’s role.
It has complete discretion to modify or approve the CEO’s recommendations, and the CEO is not involved in it’s determination of
his base salary (or the base salary of the Executive Chairman, if applicable).
Annual Incentive Awards
Annual incentive awards, which are granted under
the RTX Corporation Executive Annual Incentive Plan (“AIP”), are an integral component of our executive
compensation program. The AIP reinforces Company and business unit goals, promotes the achievement of these goals and enables
us to attract, retain and motivate the highest caliber of executive talent.
HOW ANNUAL INCENTIVE AWARDS ARE DETERMINED
The following formula is the basis for determining the 2024
annual incentive awards for our NEOs:
Though performance relative to preestablished financial and
Corporate Responsibility Scorecard goals is the primary basis for determining the performance factors under the AIP, the HCC Committee
retains the right to make discretionary adjustments to how it measures annual incentive performance to maintain the integrity of the
targets as originally established. In the past, it has made both positive and negative adjustments. Examples of situations that could
result in discretionary adjustments include:
| ● |
Significant, unforeseen circumstances
beyond management’s control that affected performance relative to the established goals, including certain nonrecurring charges and
credits unrelated to operating performance |
| ● |
Changes in tax laws and accounting rules that positively
or negatively impact performance |
| ● |
Changes to the Company’s capital structure (restructuring,
acquisitions and divestitures) |
48 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
2024 PRINCIPAL ELEMENTS OF COMPENSATION
In addition, each NEO begins the year with individual financial,
strategic and/ or operational objectives. Based on the CEO’s performance assessment for the NEOs (other than himself and the Executive
Chairman), it may be recommended that the HCC Committee increase or decrease the award a NEO would otherwise receive based on the approved
performance factor. The HCC Committee considers these recommendations and makes adjustments it deems appropriate. The individual performance
adjustments for our executive officers may range from a -100% adjustment to the performance factor (e.g., a zero payout), up to a 30%
increase to the approved performance factor. However, no payout under the AIP can be greater than 200% of target. In addition, when
determining individual performance adjustments, the HCC Committee also considers each executive’s responsibility to act at all times
in accordance with our Code of Conduct, Company policies and compliance requirements.
2024 ANNUAL INCENTIVE TARGETS
Each NEO has an annual incentive target that is expressed
as a percentage of the NEO’s base salary as in effect on December 1, 2024. These targets are based on relevant market data for
each NEO’s role and generally approximate the median of our peers. Changes in target percentages that occur during the year (usually
due to a change in role) are prorated. Due to their appointments into new roles during 2024, the HCC Committee increased targets for
Messrs. Calio, Jasper and Brunk and decreased Mr. Hayes’ target, as shown below:
| NEO |
|
2023 |
|
2024 |
| Christopher T. Calio |
|
150% |
|
175% |
| Neil G. Mitchill,
Jr. |
|
115% |
|
115% |
| Gregory J. Hayes |
|
200% |
|
125% |
| Shane G. Eddy |
|
105% |
|
105% |
| Philip J. Jasper |
|
80% |
|
105% |
| Troy D. Brunk |
|
80% |
|
105% |
| Stephen J. Timm |
|
105% |
|
105% |
PERFORMANCE METRICS
2024 Performance Metrics and Weightings
The charts below show the 2024 performance metrics and weightings
for our Corporate and business unit executives.
As shown above, for our
Corporate executives, performance for all metrics is measured on a Company-wide basis. For business unit executives, including
Messrs. Eddy, Jasper, Brunk and Timm, our financial metrics relate to both business unit results and Company-wide results, while CRS
performance is measured solely at the RTX level. The HCC Committee believes that financial metrics should motivate our business unit
executives both to deliver on customer commitments and to leverage Company-wide resources to advance technology and innovation.
Payout funding ranges from 0% to 200% of target for all metrics.
RTX
2025 PROXY STATEMENT 49
Table of Contents
COMPENSATION DISCUSSION AND
ANALYSIS
2024 PRINCIPAL ELEMENTS OF COMPENSATION
OUR FINANCIAL PERFORMANCE METRICS
| |
|
Company-Wide
Metrics |
|
Business
Unit Metrics |
| |
|
RTX
Earnings |
|
RTX
FCF |
|
Business
Unit Earnings |
|
Business
Unit FCF |
| How are AIP financial metrics defined? |
|
We start with a GAAP measure: RTX’s net income attributable
to common shareowners.(1) |
|
We
start by subtracting one GAAP measure from another: RTX’s consolidated net cash flow from operating activities, less
RTX’s capital expenditures.(1) |
|
We start with a GAAP measure: segment operating income.(1) |
|
We start with an internal measure based on business unit net cash
flow from operating activities, less business unit capital expenditures. |
| |
|
Then we adjust for the impact of certain items and
external events unrelated to our operating performance. These may include, in any given year, changes in tax laws and accounting
rules, restructuring costs, the impact of acquisitions and divestitures (including acquisition accounting adjustments, if
applicable), and significant and/or nonrecurring items. See Appendix B on page 114 for additional details. |
| Why did the HCC Committee choose these metrics? |
|
The HCC Committee believes adjusted net income is relevant because
it measures the immediate impact of operating decisions on RTX’s overall performance, and includes the impact of items
such as tax, interest and foreign exchange fluctuations, which are managed at the Corporate level. |
|
The
HCC Committee believes that FCF performance is a relevant measure of our ability to generate cash to fund our operations and
key business investments and to return capital to our shareowners. |
|
The HCC Committee believes that operating income, exclusive of
tax, interest and foreign exchange exposure, should be the focus of our business units. |
|
The HCC Committee believes that FCF performance is a relevant measure
of the business units’ ability to generate cash to fund their operations and key business investments. |
| (1) |
As reported in our 2024 Annual Report on Form
10-K. |
Why we use non-GAAP financial metrics for our annual incentives
The HCC Committee believes that, to encourage decision-making aimed at
long-term value creation, annual incentives should reflect the financial impact (positive or negative) of short-term decisions
made in the best interest of RTX’s long-term business strategies. Through the adjustments noted above, our non-GAAP metrics
allow for a clearer assessment of business performance and more closely align our AIP with the annual non-GAAP financial expectations
we communicate to shareowners.
OUR CORPORATE RESPONSIBILITY SCORECARD
For 2024, our AIP Corporate Responsibility Scorecard was comprised of
two categories:
| ● |
Sustainability. Measures
our progress toward our long-term environmental sustainability objectives through two annual metrics: greenhouse gas emissions
and water usage. |
| ● |
People & Culture. Measures
our ability to attract and retain employees with a broad range of experiences, backgrounds and perspectives needed to drive
the innovation required to propel RTX and our industry forward. To measure this, we use two annual metrics: total representation
and employee retention. |
Each of the metrics within our 2024 Corporate Responsibility Scorecard
are measured at the RTX-wide level and are weighted at 5%.
As described on page 6, the metrics for the 2025 AIP will be solely based
on financial performance.
50 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION DISCUSSION
AND ANALYSIS
2024 PRINCIPAL ELEMENTS OF COMPENSATION
HOW WE PERFORMED ON OUR 2024 FINANCIAL GOALS
The HCC Committee established goals for earnings and free cash flow at
threshold, target and maximum performance levels, both for the Company overall and for each business unit. Performance relative
to these goals determines the financial performance factors used to fund the annual incentive pool for Corporate executives and
for executives in each business unit. For 2024, AIP earnings and free cash flow goals were set to align with the expectations
we communicated to investors for the year.
Performance below the threshold level will result in 0% funding for that
metric, while performance above the maximum level cannot exceed the maximum funding level of 200%. Performance that falls between
the threshold, target and maximum levels results in funding between the applicable levels.
2024 COMPANY-WIDE FINANCIAL GOALS, RESULTS
AND FINANCIAL PERFORMANCE FACTORS
| |
|
|
|
2024
Goals |
|
|
|
|
| Financial
Metric |
|
Weight |
|
Threshold
(50% funding) |
|
Target
(100% funding) |
|
Maximum
(200% funding) |
|
2024
Results(1) |
|
Financial
Performance Factors |
| Earnings—adjusted net income
($M) |
|
40% |
|
$6,135 |
|
$7,220 |
|
$8,445 |
|
$7,722 |
|
141% |
| Free Cash Flow ($M) |
|
40% |
|
$4,700 |
|
$5,700 |
|
$7,300 |
|
$5,607 |
|
95% |
| RTX Financial
Performance Factor |
|
|
|
|
|
|
|
|
|
|
|
118% |
RTX’s 2024 GAAP net income of $4,774 million was adjusted to $7,722
million for AIP purposes and RTX’s 2024 free cash flow of $4,534 million was adjusted to $5,607 million for AIP purposes.
These adjusted AIP metrics measure net income and free cash flow exclusive of the impacts of changes in tax laws and accounting
rules, restructuring costs, acquisitions and divestitures (including acquisition accounting adjustments), and significant and/or
nonrecurring items, as well as the impact of certain divestitures on our cost structure.
2024 BUSINESS UNIT FINANCIAL GOALS, RESULTS
AND FINANCIAL PERFORMANCE FACTORS
| |
|
Business Unit Goals and Results(2) |
| |
|
Business Unit Earnings |
|
Business Unit FCF |
| What 2024 financial goals were set for annual incentive purposes? |
|
Adjusted operating income goals ranged from $2,250 million to $4,690
million for our business units. |
|
FCF goals ranged from $1,575 million to $3,750 million for our business
units. |
| What were the financial results used for annual incentive purposes? |
|
Adjusted operating income results ranged from $2,285 million to
$4,512 million for our business units. |
|
FCF results ranged from $1,458 million to $2,936 million for our
business units. |
| What were the resulting financial performance factors
for each metric? |
|
Ranged from 87% to 109% of target. |
|
Ranged from 0% to 92% of target. |
| What
were the financial performance factors after applying the 50% weighting of the Company-wide factor for each metric? |
|
Ranged from 114% to 125% of target. |
|
Ranged from 48% to 93% of target. |
| Combining the factors for each metric shown
above, the financial performance factors for our business units ranged from 81% to 107% of target. |
| (1) |
Adjusted net income and free cash flow are metrics
used solely for AIP purposes and are defined in Appendix B on page 114. These metrics differ from other non-GAAP metrics used
and described in Appendix A. |
| (2) |
See the table on page 50 and Appendix B on page 114 for details
on how we calculate earnings and FCF for the purposes of determining business unit financial performance factors. |
RTX
2025 PROXY STATEMENT 51
Table of Contents
COMPENSATION DISCUSSION AND
ANALYSIS
2024 PRINCIPAL ELEMENTS OF COMPENSATION
HOW WE PERFORMED
ON THE CORPORATE RESPONSIBILITY SCORECARD
The 2024 Corporate
Responsibility Scorecard goals, results and performance factors are shown below:
| |
|
|
|
2024
Goals |
|
|
|
|
| CRS
Metric |
|
Weight |
|
Threshold
(50% funding) |
|
Target
(100% funding) |
|
Maximum
(200% funding) |
|
2024
Results |
|
CRS
Performance
Factors |
| Employee
Retention (%)(1) |
|
5% |
|
93.3% |
|
95.1% |
|
96.9% |
|
96.0% |
|
150% |
| Total
Representation (%)(1) |
|
5% |
|
42.9% |
|
43.3% |
|
44.3% |
|
43.1% |
|
75% |
| People
& Culture |
|
|
|
|
|
|
|
|
|
|
|
113% |
GHG
Emissions vs. 2019 Baseline
(metric tons of CO2)(1) |
|
5% |
|
-18% |
|
-21% |
|
-30% |
|
-21.4% |
|
104% |
Water
Usage vs. 2019 Baseline
(gallons)(1) |
|
5% |
|
-9% |
|
-11% |
|
-20% |
|
-9.7% |
|
68% |
| Sustainability |
|
|
|
|
|
|
|
|
|
|
|
86% |
HOW PERFORMANCE
AFFECTED PAYOUTS
The table below
shows the weighted performance factors for each financial and CRS metric, resulting mathematically in the overall RTX performance
factor.
| RTX
Metrics |
|
Weight |
|
Unweighted
Performance Factor |
|
Weighted
Performance Factor |
| Earnings
(adjusted net income)(1) |
|
40% |
|
141% |
|
56.4% |
| Free
Cash Flow(1) |
|
40% |
|
95% |
|
38.0% |
| Employee
Retention(2) |
|
5% |
|
150% |
|
7.5% |
| Total
Representation(2) |
|
5% |
|
75% |
|
3.8% |
| GHG
Emissions(2) |
|
5% |
|
104% |
|
5.2% |
| Water
Usage(2) |
|
5% |
|
68% |
|
3.4% |
| 2024
RTX Performance Factor |
|
|
|
|
|
114% |
| For
our business units, the weighted performance factors ranged from 84% to 105% of target. |
| (1) |
Adjusted
net income and free cash flow are financial metrics used solely for AIP purposes and are defined in Appendix B on page 114. These
metrics differ from other non-GAAP metrics used and described in Appendix A on pages 111-113. |
| (2) |
As described on page 6, the metrics for the 2025 AIP will be solely
based on financial performance. |
52 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024
PRINCIPAL ELEMENTS OF COMPENSATION
LTI Awards
LTI MIX
The HCC Committee
annually reviews the design of our LTI awards to ensure consistency with our program’s fundamental objective of aligning
the interests of executives and shareowners while attracting and retaining talented senior leaders.
In 2024, the
LTI mix for our NEOs, except for Mr. Brunk, was 60% PSUs and 40% SARs. The HCC Committee believes each LTI vehicle serves a specific
objective:
| ● |
PSUs encourage the achievement
of important financial goals and align payouts with the shareowner experience. |
| ● |
SARs motivate prudent long-term decision making and have strong pay-for-performance alignment since they have no value unless the stock price increases from the price on the grant date. |
Mr. Brunk’s annual
LTI award was granted in February 2024 before he was appointed to the role of President, Collins Aerospace in July 2024.
As a result, his 2024 LTI award comprised of a different LTI mix (40% PSUs, 40% SARs and 20% RSUs) than our other NEOs.
PERFORMANCE
SHARE UNITS
2024–2026
PSUs. 2024 PSUs will vest following the end of a three-year performance
period, subject to Company performance relative to preestablished financial performance goals. Executives must also be employed
by the Company on the vesting date, with exceptions for death, disability, qualifying separation within two years of a change-in-control, retirement and certain involuntary terminations.
PSUs are designed
to deliver market median compensation at target levels of performance. Below- or above-target performance will result in variations
from market median payouts. If performance is at target for all four metrics, 100% of the PSUs granted would vest at the end of
the performance period. Vesting factors can range from 0% if all metrics fall below threshold-level performance to 200% if all
metrics meet or exceed maximum-level performance. Each PSU converts into one share of RTX Common Stock upon vesting. The goals
established for our 2024–2026 PSUs are as follows:
PERFORMANCE
GOALS AND WEIGHTINGS FOR 2024–2026 PSUs
| Metric |
|
Weighting |
|
Threshold
(25% payout) |
|
Target
(100% payout) |
|
Maximum
(200% payout) |
Adjusted
Earnings Per Share(1)
● Measured using a compound
annual growth rate over the three-year performance period
● Goals align with our
mid-range strategic business plan
|
|
 |
|
6.0% |
|
11.8% |
|
15.6% |
Return
on Invested Capital (“ROIC”)(1)
● Calculated using a quarterly
average over the three-year performance period
|
|
 |
|
7.0% |
|
8.1% |
|
8.9% |
TSR
vs. Core A&D Peers(2)
● Measures RTX’s
cumulative three-year TSR(3) percentile rank relative to our nine Core A&D Peers
● Payout for this portion
of the award is capped at 100% of target if RTX’s TSR is negative
|
|
 |
|
25th
percentile |
|
50th
percentile |
|
75th
percentile |
TSR
vs. S&P 500 Index Companies
● Measures RTX’s
cumulative three-year TSR(3) percentile rank relative to the companies within the S&P 500 Index at the beginning
of the performance period
● Payout for this portion
of the award is capped at 100% of target if RTX’s TSR is negative
|
|
 |
|
25th
percentile |
|
50th
percentile |
|
75th
percentile |
| (1) |
Metrics used solely for PSU purposes and are
defined in Appendix B on page 114. These metrics differ from other non-GAAP metrics used and described in Appendix A on pages
111-113. |
| (2) |
Core A&D Peers consist of Airbus, Boeing, GE Aerospace, General
Dynamics, Honeywell, L3Harris, Lockheed Martin, Northrop Grumman and Safran. |
| (3) |
See Appendix B on page 114 for details on how TSR is calculated. |
RTX 2025
PROXY STATEMENT 53
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024 PRINCIPAL
ELEMENTS OF COMPENSATION
What the HCC
Committee Considers when Setting Performance Goals and Measuring Performance. When setting adjusted EPS and ROIC goals for
our PSU awards, the HCC Committee considers various long-term business factors, including planned share buybacks, macroeconomic
market trends and cost-reduction plans. As defined in Appendix B, adjusted EPS and ROIC exclude the impact of changes in tax laws
and/or accounting rules, acquisitions and divestitures (including acquisition accounting adjustments), restructuring, nonrecurring
and other significant, nonoperational items, nonoperating pension and postretirement income or expense, and changes in asset or
liability valuations of deferred compensation plans recognized in interest income/expense. When measuring performance, the HCC
Committee may also make adjustments (positively or negatively) to exclude certain items unrelated to operational performance when
necessary to maintain the validity of the targets as originally formulated.
Limit on Maximum
Vesting Value. If the value of PSUs at vesting (number of PSUs vesting multiplied by the closing price of RTX Common Stock
on the vesting date) is greater than 400% of the value of the PSUs at grant (number of PSUs that would vest at target-level performance
multiplied by the closing RTX stock price on the grant date), the vesting factor will be reduced so that the value delivered to
executives will be no greater than 400% of the grant value.
2022–2024
PSU Vesting. PSU awards granted on February 15, 2022, were subject
to vesting based on RTX’s three-year performance relative to preestablished goals for each of the four metrics shown below. Our
performance over the three-year period resulted in the award vesting at 110% of target.
| Metric(1) |
|
Weight |
|
Threshold |
|
Target |
|
Maximum |
|
Actual |
|
Performance
Factor |
| Adjusted EPS(2) |
|
35% |
|
8.1% |
|
14.1% |
|
17.9% |
|
13.6% |
|
94% |
| ROIC |
|
35% |
|
6.1% |
|
7.1% |
|
7.8% |
|
6.9% |
|
82% |
| TSR
vs. S&P 500 Index Companies |
|
15% |
|
25th
percentile |
|
50th
percentile |
|
75th
percentile |
|
74.6th
percentile |
|
198% |
| TSR vs. Core A&D Peers |
|
15% |
|
25th
percentile |
|
50th
percentile |
|
75th
percentile |
|
55.5th
percentile |
|
122% |
| Final PSU Vesting
Factor |
|
|
|
|
|
|
|
|
|
|
|
110% |
| (1) |
For a definition of performance metrics used for
PSU purposes, see Appendix B on page 114. |
| (2) |
2024 EPS (GAAP) of $3.55 was adjusted to $6.26, in accordance with
the definition we use for measuring PSU performance, as outlined in Appendix B. |
STOCK APPRECIATION
RIGHTS
Our current LTI
award program also includes grants of SARs, which entitle the award recipient to receive, upon exercise, shares of RTX Common
Stock with a market value equal to the difference between the market price of RTX Common Stock on the date the SARs are exercised
and the exercise price that was set at the grant date (i.e., the closing price of RTX Common Stock on the date of grant). SARs
vest and become exercisable three years from the grant date if the recipient is employed by the Company on the vesting date, with
exceptions for death, disability, qualifying separation within two years of a change-in-control, retirement and certain involuntary
terminations. SARs expire 10 years from the grant date.
54 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024
CEO PAY DECISIONS
2024
CEO Pay Decisions
Christopher
T. Calio
President
& Chief Executive Officer
AGE 51
RTX EXPERIENCE
19 YEARS
|
|
 |
Mr. Calio served
as President & Chief Operating Officer until May 2, 2024, when he was appointed to the role of President & Chief Executive
Officer of RTX.
Base Salary.
Mr. Calio received a base salary increase from $1,010,000 to $1,450,000 in connection with his appointment as President &
CEO. Following this increase, Mr. Calio’s base salary was below the market median for his new role.
Annual Incentive
Award. The HCC Committee approved a performance factor of 114% of target for Corporate. The HCC Committee considered this
factor, Mr. Calio’s leadership during 2024 and the individual performance considerations noted here, and approved an annual
incentive award of $2.76 million. This amount is aligned with the Corporate performance factor.
LTI. In
consideration for Mr. Calio’s 2024 performance, the HCC Committee approved a 2025 LTI award of $17.15 million. This amount
is an increase from his 2024 LTI award and is slightly below the CPG median for his role.
| Individual
Performance Highlights |
Mr. Calio
exhibited strong leadership, which resulted in:
| ● |
Achieving strong financial performance during the
year, including: |
| |
– |
Net sales growth of 17.1% (GAAP), 8.8% (adjusted) and organic sales
growth of 11%.(1) |
| |
– |
Diluted EPS of $3.55 (GAAP) and $5.73 (adjusted).(1) |
| |
– |
$7.2 billion in cash flow from operations and over $2.6 billion invested
in capital expenditures, resulting in $4.5 billion in free cash flow.(1) |
| |
– |
Adjusted segment margin expansion at each of our business units. |
| |
– |
$112 billion of new bookings during the year, and increasing our year-over-year backlog by 11% to $218 billion. |
| ● |
Delivering on the promise of the Merger, including: |
| |
– |
Returning $3.7 billion to shareowners through dividends and share buybacks
in 2024, bringing our total to over $33 billion since the Merger, which exceeds our original goal of $20 billion by 2025, and
puts us on track to achieve our revised $36 to $37 billion goal. |
| |
– |
Exceeding our $2 billion gross cost synergy commitment
one year ahead of schedule. |
| ● |
Leveraging the breadth and scale of RTX to drive down costs, improve
performance and deliver groundbreaking technologies, including: |
| |
– |
Simplifying our digital footprint through the elimination of over 250
systems, to streamline our engineering, supply chain and manufacturing processes. |
| |
– |
Executing 60 long-term supplier agreements for unique alloys that we,
and our suppliers, can leverage to reduce lead time and increase cost savings. |
| ● |
Completing the divestiture of two noncore businesses during the year—Raytheon’s
Cybersecurity, Intelligence & Service business and Collins Aerospace’s Hoist & Winch business. |
| ● |
Making significant progress toward the resolution of the Pratt &
Whitney powder metal matter, where we saw increased maintenance, repair and overhaul (“MRO”) capacity, remained on track
with our financial and operational assumptions, and entered into support agreements with most of our impacted customers. |
| (1) |
See Appendix A on pages 111-113 for details. |
RTX 2025
PROXY STATEMENT 55
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024 CEO PAY
DECISIONS
| What is total direct compensation? |
In contrast to
the Summary Compensation Table (on page 69), our discussion of CEO and NEO pay decisions in this Proxy Statement (pages 55-62)
uses a measure called total direct compensation, which the HCC Committee believes provides a more accurate picture of its annual
pay decisions and reflects its most recent assessment of Company, business unit and individual performance, and the competitive
market for each NEO’s role. Total direct compensation includes 2024 base salary as of year-end, 2024 annual incentive for
the completed performance year and LTI as described below.
How the HCC
Committee Views LTI Award Values
| Total Direct Compensation |
|
Includes the value of LTI awards approved
by the HCC Committee and granted in February 2025. |
|
Award values relate to the HCC Committee’s
assessment of 2024 performance and the competitive market pay for each NEO’s role at the time of grant. |
| Summary Compensation Table |
|
Includes the grant date fair value of LTI awards granted in February
2024. |
|
Award values relate back to the HCC Committee’s assessment
of 2023 performance and the competitive market pay for each NEO’s role at the time of grant. |
The SEC rules
require the LTI awards granted in February 2024 to be reported in the Summary Compensation Table of this Proxy Statement, with
a different valuation methodology than we use for total direct compensation. In addition, the compensation values reported in
the Summary Compensation Table include certain elements (e.g., changes in pension values, which are impacted by assumptions, such
as interest rates and other formulaic compensation and benefit components) that we exclude from total direct compensation because
they are not tied to performance and fall outside the scope of the HCC Committee’s annual pay decisions.
CEO TOTAL
DIRECT COMPENSATION: THREE-YEAR COMPARISON(1)
As shown in the
chart below, and as discussed in our Guiding Principles on page 44, the HCC Committee believes that a substantial portion of total
direct compensation should be variable, contingent and directly linked to Company and individual performance. For 2024, 93% of
Mr. Calio’s total direct compensation was “at-risk” variable compensation.
| (1) |
Mr. Calio was appointed President & Chief
Executive Officer effective May 2, 2024. Prior to his appointment, he served in the following roles: President & Chief
Operating Officer (March 1, 2023 to May 1, 2024), Chief Operating Officer (March 1, 2022 to February 28, 2023) and President,
Pratt & Whitney (January 1, 2020 to February 28, 2022). |
| (2) |
Reflects annual LTI award values approved by the HCC Committee.
These values differ from those reported in the Summary Compensation Table on page 69, which are calculated in accordance with
FASB ASC Topic 718. |
56 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024
PAY DECISIONS FOR OTHER NEOS
2024
Pay Decisions for Other NEOs
The HCC Committee
makes annual compensation decisions for our NEOs based on their individual performance and the overall performance of the Company
(and the NEO’s business unit or function, where applicable). In the following pages, we describe the components of total
direct compensation for each NEO for 2024, noting aspects of their individual performance that contributed to the HCC Committee’s
pay decisions (see page 56 for an explanation of total direct compensation).
Neil
G. Mitchill, Jr.
Executive
Vice President & Chief Financial Officer
AGE 49
RTX EXPERIENCE
10 YEARS
|
|
 |
Base Salary.
Mr. Mitchill received a base salary increase from $975,000 to $1,050,000 during 2024. Following this increase, Mr. Mitchill’s
base salary was moderately above the market median for his role.
Annual Incentive
Award. The HCC Committee approved a performance factor of 114% of target for Corporate. The HCC Committee considered this
factor, Mr. Mitchill’s leadership of the RTX finance function and the individual performance considerations noted here,
and approved a $1.5 million award for 2024. This amount is above the Corporate performance factor.
LTI. In
consideration of Mr. Mitchill’s 2024 performance, the HCC Committee approved a $6.5 million 2025 LTI award, an amount that
is slightly above the market median for his role.
| Individual Performance
Highlights |
Mr. Mitchill
exhibited strong leadership in:
| ● |
Overseeing the Company’s strong financial performance,
which included exceeding the adjusted net sales and adjusted EPS expectations we communicated to investors for the year, despite
lower-than-expected aircraft production rates. |
| ● |
Leading RTX’s disciplined capital allocation strategy, including: |
| |
– |
Investing $7.7 billion in Company- and customer-funded research
and development spend and capital expenditures. |
| |
– |
Completing the $10 billion accelerated share repurchase program
we announced last year, contributing to the return of over $33 billion to shareowners through dividends and share buybacks
since the Merger. |
| |
– |
Deploying $45.4 million of capital investments in
14 companies through RTX Ventures. |
| |
– |
Increasing our dividend per share by 6.8%.(1)
|
| |
– |
Paying down $2.5 billion of debt. |
| ● |
Leading our robust investor outreach efforts, including hosting
one major investor conference, participating in two other investor conferences and meeting individually with most of our top
investors. |
| ● |
Exceeding our $2 billion gross cost synergy commitments one year
ahead of schedule. |
| (1) |
In the second quarter of 2024, we increased
our quarterly dividend from $0.59 per share to $0.63 per share. |
RTX 2025
PROXY STATEMENT 57
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024 PAY DECISIONS
FOR OTHER NEOS
Gregory
J. Hayes
Executive
Chairman
AGE 64
RTX EXPERIENCE
35 YEARS
|
|
 |
Mr. Hayes served
as Chairman & Chief Executive Officer until May 2, 2024, at which point he continued in the role of Executive Chairman.
Base Salary.
In connection with his transition to the role of Executive Chairman, the HCC Committee reduced Mr. Hayes’ base salary from
$1,675,000 to $1,100,000, effective May 2, 2024.
Annual Incentive
Award. The HCC Committee approved a performance factor of 114% of target for Corporate. The HCC Committee considered this
factor, Mr. Hayes’ leadership during 2024 and the individual performance considerations noted here, and approved an annual
incentive award of $2.32 million. This amount aligns with the Corporate performance factor.
Leadership
Transition. As previously discussed, Mr. Hayes will step down from his role as Executive Chairman, effective on April 30,
2025. He will remain an employee of the Company in a non-executive officer capacity as Special Advisor to the Chief Executive
Officer until January 2, 2026. Based on the recommendation of the HCC Committee, the Board approved the following compensation
for Mr. Hayes for his service as a Special Advisor to the Chief Executive Officer in 2025. Mr. Hayes will continue to receive
a base salary of $1,100,000, but will not be eligible for an annual incentive award for 2025 or a 2025 LTI award. As an employee,
he will continue to vest in his outstanding LTI awards in accordance with their existing terms and to participate in the health
and welfare benefits and retirement plans in which he is currently a participant. He will also remain eligible for an annual executive
physical, financial planning, ELG disability and enhanced life insurance. Effective April 30, 2025, his personal use of the Corporate
aircraft, security benefits and personal use of Company-provided car and driver will cease.
| Individual Performance Highlights |
Mr.
Hayes exhibited strong leadership in:
| ● |
Advancing RTX priorities through engagement with
customers, government and industry leaders domestically and in key international markets, including: |
| |
– |
Engaging with key government decision-makers, such as members of
Congress, senior executive branch officials and foreign leaders. |
| |
– |
Working with the Chamber of Commerce, Aerospace Industries Association
and Business Roundtable on matters of interest to RTX. |
| ● |
Presiding over meetings of the Board and promoting
a collaborative Board culture while ensuring all agenda items are appropriately and openly discussed, considered and resolved. |
| ● |
Successfully transitioning operational responsibilities to the President & Chief Executive Officer. |
58 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024
PAY DECISIONS FOR OTHER NEOS
Shane
G. Eddy
President,
Pratt & Whitney
AGE 60
RTX EXPERIENCE
15 YEARS
|
|
 |
Base Salary.
Mr. Eddy received a base salary increase from $785,000 to $810,000 during 2024. Following this increase, Mr. Eddy’s base salary
is slightly below the market median for his role.
Annual Incentive
Award. The HCC Committee approved a performance factor of 105% of target for Pratt & Whitney. The HCC Committee considered
this factor, Mr. Eddy’s leadership of our Pratt & Whitney business unit and the individual performance considerations
noted here, and approved a $900,000 award, an amount that aligns with the Pratt & Whitney performance factor.
LTI. In
consideration of Mr. Eddy’s 2024 performance, the HCC Committee approved a $4 million 2025 LTI award, an amount that aligns
with the market median for his role.
| Individual Performance Highlights |
Mr. Eddy exhibited
strong leadership, which resulted in:
| ● |
Pratt & Whitney having significant achievements
in 2024, which included: |
| |
– |
Making substantial progress in meeting our GTF engine fleet management
plan, with thousands of parts inspected and agreements reached with most of our impacted customers. |
| |
– |
Opening a new state-of-the-art facility in Oklahoma City, Oklahoma,
featuring automation and advanced manufacturing technologies that streamline our processes, improve productivity and expand
military engine sustainment capacity. |
| |
– |
Expanding the GTF engine aftermarket network to 18 facilities worldwide. |
| |
– |
Increasing MRO output for the PW1100G-JM engine by approximately
30%, by using CORE practices to optimize the inspection sequence and implementation of concurrent assembly operations. |
| ● |
Pratt & Whitney achieving several substantial
customer wins, which included: |
| |
– |
Securing a $1.3 billion contract for continued development of the
F135 Engine Core Upgrade program, which will deliver enhanced engine durability and performance for all variants of the F35
Joint Strike Fighter and ensure that Pratt & Whitney remains the sole source propulsion provider. |
| |
– |
Increasing GTF engine orders and commitments by nearly 1,000 during
the year from customers, including Avolon, Breeze Airways, Cebu Pacific and Icelandair, bringing the total GTF order book
to more than 11,000. |
RTX 2025
PROXY STATEMENT 59
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024 PAY DECISIONS
FOR OTHER NEOS
Philip
J. Jasper
President,
Raytheon
AGE 56
RTX EXPERIENCE
33 YEARS
|
|
 |
Mr. Jasper served
as President, Mission Systems at Collins Aerospace until January 7, 2024, when he was appointed to the role of President, Raytheon.
Base Salary.
Mr. Jasper received a base salary increase from $665,000 to $790,000 in connection with his appointment as Raytheon’s President.
Following this increase, Mr. Jasper’s base salary is below the market median for his role.
Annual Incentive
Award. The HCC Committee approved a performance factor of 105% of target for Raytheon. The HCC Committee considered this factor,
Mr. Jasper’s leadership of our Raytheon business unit and the individual performance considerations noted here, and approved
a $950,000 award, an amount that is above the Raytheon performance factor.
LTI. In
consideration of Mr. Jasper’s 2024 performance, the HCC Committee approved a $4 million 2025 LTI award, an amount that aligns
with the market median for his role.
| Individual
Performance Highlights |
Mr. Jasper exhibited strong leadership, which
resulted in:
| ● |
Raytheon having significant achievements in 2024,
which included: |
| |
– |
Increasing its backlog from $52 billion in 2023 to $63 billion in
2024. |
| |
– |
Achieving full-rate production approval for the Standard Missile-3 Block IIA, validating the program’s design maturity amid increased demand for the product from the U.S. and allied partners. |
| |
– |
Delivering the first sensor payload for the U.S. Space Force’s Next-Generation Overhead Persistent Infrared missile warning satellite, which is on track for 2025 initial launch capability. |
| ● |
Raytheon achieving several substantial customer wins, which included: |
| |
– |
Securing a $5.6 billion contract for Patriot GEMT missiles from
NATO. |
| |
– |
Securing a $1.3 billion contract option from
the U.S. Army to continue to produce Javelin missiles and associated services through our Javelin Joint Venture. |
| |
– |
Receiving a contract option to continue to produce AN/ SPY-6(V)
radars for the U.S. Navy, which are projected to be deployed on 65 ships over the next 10 years to defend against air, surface
and ballistic threats. |
| |
– |
Receiving two contracts, valued at a total of $2.4 billion, to supply
Germany with additional Patriot air and missile defense systems. |
| |
– |
Securing a $1.9 billion contract award from the U.S. Missile Defense
Agency to produce SM-3 Block IIA rounds for both the U.S. government and Japan’s Ministry of Defense. |
60 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024
PAY DECISIONS FOR OTHER NEOS
Troy
D. Brunk
President,
Collins Aerospace
AGE 55
RTX EXPERIENCE
33 YEARS
|
|
 |
Mr. Brunk served
as President, Avionics until January 7, 2024, and President, Mission Systems until July 17, 2024 (both at Collins Aerospace),
at which point he was appointed to the role of President, Collins Aerospace.
Base Salary.
Mr. Brunk’s base salary was increased from $590,000 to $750,000 during 2024, reflecting his appointment to the ELG and new
role as President, Collins Aerospace. Following the adjustment, Mr. Brunk’s base salary is below the market median for his
new role.
Annual Incentive
Award. The HCC Committee approved a performance factor of 84% of target for Collins Aerospace. The HCC Committee considered
this factor, Mr. Brunk’s leadership of Collins Aerospace and the individual performance considerations noted here, and approved
a $565,000 award. This amount aligns with the Collins Aerospace performance factor.
LTI. In
February 2025, Mr. Brunk was awarded a $3.5 million 2025 LTI award, an amount that is below the market median for his role as
President of Collins Aerospace.
Other. In
February 2024, Mr. Brunk’s was awarded a $1 million 2024 LTI award, reflecting his role at the time of President, Mission Systems
at Collins Aerospace. In connection with his appointment to the ELG and his subsequent promotion to the role of President, Collins
Aerospace during 2024, he was granted a combined $3 million in ELG RSUs. The RTX ELG program is described in detail on pages 64-65.
| Individual Performance Highlights |
Mr. Brunk
exhibited strong leadership, which resulted in:
| ● |
Collins Aerospace having significant achievements
in 2024, which included: |
| |
– |
Demonstrating 80 kilowatts of cooling capacity across a range of
operating conditions for its Enhanced Power and Cooling System (EPACS). |
| |
– |
Teaming with Raytheon to demonstrate Future Vertical Lift capabilities
for the U.S. Army. |
| |
– |
Delivering the 3,000th F-35 Gen III Helmet Mounted Display Systems
(HMDS) to the Joint Strike Fighter through the Collins Elbit Vision System joint venture. |
| |
– |
Unveiling MAYA, a transformative, next-generation business class
concept suite. MAYA provides exceptional |
| |
|
ergonomics with an advanced seating architecture
and integrated ARISE comfort technology that automatically optimizes cushion pressure and regulates environmental temperature,
among other advanced personalized features. |
| ● |
Collins Aerospace achieving several substantial customer wins, which
included: |
| |
– |
Signing a 10-year contract with Air Europa to provide MRO services
for the airline’s fleet of Boeing 787 aircraft, covering electric power, environmental control, avionics, lighting and
cargo, along with predictive fleet maintenance that will provide efficient and timely data-driven services to our customers. |
RTX 2025
PROXY STATEMENT 61
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
2024 PAY DECISIONS
FOR OTHER NEOS
Stephen
J. Timm
Special Advisor,
Collins Aerospace
AGE 56
RTX EXPERIENCE
28 YEARS
|
|
 |
Mr. Timm served
as President, Collins Aerospace until July 17, 2024, and continued in a transitional capacity as Special Advisor, Collins
Aerospace until his retirement in March 2025.
Base Salary.
Mr. Timm received a salary increase from $850,000 to $900,000 during 2024. Following this increase, Mr. Timm’s base
salary was slightly above the market median for his role as President, Collins Aerospace.
Annual Incentive
Award. The HCC Committee approved a performance factor of 84% of target for Collins Aerospace. The HCC Committee considered
this factor, Mr. Timm’s leadership and the individual performance considerations noted here, and approved a $795,000 award.
This amount aligns with the Collins Aerospace performance factor.
LTI. Given
Mr. Timm’s impending retirement from the Company in March 2025, the HCC Committee did not grant him a 2025 LTI award in
February 2025.
| Individual Performance Highlights |
Mr. Timm exhibited
strong leadership, which resulted in:
| ● |
Collins Aerospace having significant achievements
in 2024, which included: |
| |
– |
Deploying an automated smart torque system at the Avionics business,
resulting in zero torque-related defects and savings of approximately 23,000 labor hours. |
| |
– |
Breaking ground on an expansion of its Spokane, Washington, carbon
brake production facility that will increase the facility’s footprint by 50%. |
| ● |
Collins Aerospace achieving several substantial customer wins, which
included: |
| |
– |
Being selected by the Narita International Airport Corporation
in Japan to provide passengers a faster way through the airport terminal by deploying the ARINC |
| |
|
cMUSE system that enables multiple airlines to
share desks and boarding gate
positions and the ARINC SelfServ Common-Use Self-Service kiosks, which allow passengers to
check bags and print boarding passes without waiting for an airport employee. |
| |
– |
Executing a 10-year MRO agreement
related to systems provided for
Air Canada’s Boeing 787 fleet of up to 70 aircraft, including avionics, air management
and electric power systems. |
| |
– |
Being selected (along with Pratt & Whitney) by Airbus
Helicopters to support the development of a hybrid-electric
proposal system for its PioneerLab technology demonstrator, which aims to demonstrate
improvements that enable up to 30% more fuel efficiency. |
62 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
OTHER COMPENSATION ELEMENTS
Other Compensation Elements
Retirement and Deferred Compensation Benefits
Our retirement and deferred compensation plans play
an important role in our executive compensation program by providing an element of financial security that helps us attract and
retain talented executives. Over the years, we have modified these programs to maintain a competitive position within an evolving
market. Many of our NEOs were previously employed by companies that RTX acquired over the years, and therefore retain balances
and/or receive pension accruals under various formulas of these acquired companies’ plans that have since been closed.
DEFINED BENEFIT PLANS
The Company maintains the following qualified and
nonqualified defined benefit plans that apply to our current NEOs:
Qualified Plans
| ● |
The RTX Consolidated Pension
Plan is an accumulation of all qualified pension plans of our legacy companies and companies acquired by our legacy companies. |
| |
– |
For legacy UTC employees,
the relevant plan was closed to new hires on December 31, 2009, and pre-2010 hires stopped accruing benefits on December 31,
2019, when the plan was frozen, except with respect to interest credits on the Cash Balance formula. |
| |
– |
For legacy Rockwell Collins employees, the relevant
plan was closed to new hires and employees stopped accruing benefits on September 30, 2006, when the plan was frozen. The
plan was merged into the RTX Consolidated Pension Plan on December 31, 2018. |
Nonqualified Plans
| ● |
The nonqualified UTC Pension
Preservation Plan (“UTC PPP”) was closed to new hires on December 31, 2009. Legacy UTC employees hired prior to
2010 stopped accruing benefits on December 31, 2019, when the plan was frozen, except with respect to interest credits on
the Cash Balance formula under the plan. |
| ● |
The nonqualified Rockwell Collins Pension Plan
was closed to new hires and employees stopped accruing benefits on September 30, 2006, when the plan was frozen. The plan
was merged into the UTC PPP on December 31, 2018. The majority of the assets under this plan were distributed to participants
upon UTC’s acquisition of Rockwell Collins in 2018, in accordance with the change-in-control provisions of this plan. |
For additional details, refer to the Pension Benefits
section on pages 75-76.
DEFINED CONTRIBUTION AND DEFERRED COMPENSATION
PLANS
The Company maintains the following active and closed
qualified and nonqualified defined contribution and deferred compensation plans that apply to our current NEOs:
Qualified Plans
| ● |
Under the RTX Corporation Savings Plan (“RTX Savings Plan”), all plan participants are eligible to receive Company matching contributions, and for employees (like each of our NEOs) who do not accrue pension benefits under the RTX Consolidated Pension Plan, an additional age-based Company retirement contribution. |
Nonqualified Plans
| ● |
The RTX Corporation Compensation Deferral Plan (“RTX CDP”) provides eligible employees (including each of our NEOs) an opportunity to defer up to 50% of base salary and/or 80% of their annual incentive award. This plan also provides Company matching contributions, and, for employees not accruing pension benefits (like each of our NEOs), Company retirement contributions on earnings above the Internal Revenue Code (“IRC”) limit applicable to the qualified RTX Savings Plan. |
| ● |
RTX executives are eligible to participate in the RTX Corporation PSU Deferral Plan (“RTX PSU Deferral Plan”), which allows deferrals between 10%-100% of vested PSUs. |
| ● |
The UTC Savings Restoration Plan, the UTC Company Automatic Contribution Excess Plan and the UTC Deferred Compensation Plan (applicable to legacy UTC employees) were closed to new contributions on December 31, 2022. The Rockwell Collins Non-Qualified Savings Plan and Sundstrand Corporation Deferred Compensation Plan are also maintained by the Company but closed to new contributions. Account balances for these closed plans remain subject to each participant’s distribution elections. |
For additional details, see the Nonqualified Deferred
Compensation section on pages 77-78.
RTX
2025 PROXY STATEMENT 63
Table of Contents
COMPENSATION DISCUSSION
AND ANALYSIS
OTHER COMPENSATION ELEMENTS
Perquisites and Other Benefits
Our approach to executive perquisites is based on
the HCC Committee’s belief that the continued health and financial well-being of our senior leaders is of vital interest
to the Company and our shareowners. The HCC Committee further believes that these benefits contribute to recruitment and retention
of top talent and are consistent with market practice.
As one of the leading defense contractors to the U.S.
government, we provide certain security benefits for our CEO (and Executive Chairman, if applicable), including personal use of
the corporate aircraft, company-provided cars and drivers (who are trained security personnel), and a home security benefit.
| PERQUISITES
AND BENEFITS(1) |
| Financial
Planning |
|
All
NEOs are eligible to receive a financial planning allowance, which is capped at $13,500 annually. |
| Enhanced Basic
Life Insurance |
|
All NEOs are
covered by an enhanced basic life insurance benefit while employed, equal to three times base salary. |
| Executive Physical |
|
All NEOs are
eligible to participate in the same healthcare benefits offered to other employees of the Company. They are also eligible
for a comprehensive annual executive physical, a benefit that is capped at $5,000 annually. |
| ELG Long-Term
Disability Insurance |
|
The ELG long-term disability program supplements the Company’s standard disability benefit and is paid only upon an ELG member’s disability.
This annual benefit is equal to 80% of the sum of the executive’s base salary and target annual incentive award at the
time of disability. |
| Personal Aircraft
Usage |
|
RTX’s policy
generally allows only our CEO and our Executive Chairman to use the corporate aircraft for personal use, though special approval
may be given to other executives in extraordinary circumstances. The HCC Committee believes this is essential for security
and personal safety, in addition to allowing for more efficient use of time. |
| Company-Provided
Car and Driver |
|
For security
and business efficiency reasons, our CEO and our Executive Chairman have access to Company-provided cars and drivers (who
are trained security personnel) when needed. They are primarily used for business purposes, but also may be used, in limited
circumstances, in situations that have a personal element. |
| Security Benefit |
|
The Company covers
the cost of the installation, maintenance and monitoring of a security system at the personal residences of our CEO and, when
applicable, our Executive Chairman. |
| Entertainment
and Sporting Events |
|
RTX’s senior executives participate in
community and philanthropic activities for the benefit of the Company. This may include attending various cultural,
charitable, civic, entertainment and sporting events for business development and relationship-building purposes and/or
community involvement, and may require the purchase of tickets, catering and parking. Tickets may also be used for
team-building events and sometimes are provided to employees, including our senior executives, for personal use.
|
| (1) |
See footnote (6) of the Summary Compensation
Table on page 70 for more details on these perquisites/benefits. |
Severance and Change-in-Control Arrangements
EXECUTIVE LEADERSHIP GROUP PROGRAM
The ELG program covers the Company’s most senior
leaders and key executives who are potential successors to senior leadership roles. The program has been in place since 1989,
but has been modified over the years to align with best practices and to serve the evolving needs of the Company.
Current Program. The current ELG program, which
covers all of our NEOs, except Mr. Hayes, provides an RSU award with a grant value depending on role (currently no less than $1.5
million) upon an executive’s appointment to the ELG. The ELG RSU award acts as both a retention vehicle and cash severance replacement
tool. The HCC Committee believes ELG RSUs more closely align our executives with the interest of our shareowners than a cash severance
payment would.
ELG RSU awards vest only if there is a qualifying
separation (defined on page 65) and the executive enters into an agreement containing certain restrictive covenants (explained
on page 65). ELG RSUs earn dividend equivalents during the vesting period that are reinvested as additional RSUs each time the
Company pays a dividend to shareowners. These RSUs are subject to the same vesting conditions as the underlying award.
From time to time, the HCC Committee has granted ELG
RSU awards to supplement the original ELG RSU award granted upon ELG appointment. These supplemental awards are generally intended
to reinforce the long-term retention needs of the Company for certain critical ELG talent, or in conjunction with a role expansion.
Supplemental ELG RSUs carry the same terms and conditions as the ELG RSU grant made upon ELG appointment.
64 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
OTHER COMPENSATION ELEMENTS
Legacy Program. Changes to the ELG separation
benefit over the years have been applied prospectively due to existing contractual commitments. As a result, Mr. Hayes is eligible
for an earlier iteration of the program that includes a cash payment equal to 2.5 times base salary upon a qualifying separation.
The base salary that will be used to determine Mr. Hayes’ ELG separation benefit will be his last base salary in effect
as CEO of RTX.
The ELG separation benefit is not treated as compensation
for purposes of determining benefits under the pension plans or any other benefit programs. ELG members are not eligible to participate
in other Company-sponsored severance plans unless required by local law. Distributions are subject to certain restrictions imposed
by IRC Section 409A.
Qualifying Separation. Under the ELG program,
a “qualifying separation” is defined as:
| ● |
A mutually agreeable separation from the Company, including an ELG member’s position being eliminated or diminished by a divestiture, restructuring, shift in priorities or similar event following three years of ELG membership; |
| ● |
Retirement on or after age 62 following three years of ELG membership; or |
| ● |
Involuntary (not for cause) or voluntary (for good reason) terminations within two years after a change-in-control event. |
Restrictive Covenants. Regardless of whether
ELG separation benefits are provided, all ELG members are subject to the following restrictive covenants under the ELG program
and/or the terms of the RTX LTIP: (i) a duty to protect confidential, sensitive and proprietary information; (ii) a two-year,
post-employment employee non-solicitation agreement; (iii) a one-year, post-employment noncompetition agreement; (iv) a two-year,
post-employment non-disparagement agreement; and (v) an intellectual property agreement. Where ELG separation benefits are provided,
ELG members are subject to: (i) an additional one-year, post-employment noncompetition agreement; (ii) a release of claims against
the Company; and (iii) a post-employment cooperation agreement.
LEGACY UTC SENIOR EXECUTIVE SEVERANCE PLAN
Change-in-control severance protection under the legacy
UTC Senior Executive Severance Plan (“SESP”) was designed to ensure continuity of management in potential change-in-control situations. In response to changing market practices, legacy UTC closed this program to new participants effective June
2009. Accordingly, Mr. Hayes is the only executive who remains eligible for the SESP benefit. All other ELG members instead are
covered by the ELG program in a change-in-control event.
The SESP cash severance benefit is equal to 2.99 times
the sum of Mr. Hayes’ base salary and target annual incentive award for the year in which termination occurs, subject to
various restrictive covenants. This benefit would be reduced by 1/36th for each month that termination occurs after age 62 and,
accordingly, is completely phased out at age 65. Benefits under the SESP are subject to a “double trigger,” meaning
that such benefits are provided only if a change-in-control is followed by an involuntary termination or termination by the executive
for “good reason” within two years following a change-in-control. “Good reason” generally includes material,
adverse changes in an executive’s compensation, responsibilities, authority, reporting relationship or work location.
RTX CORPORATION LONG-TERM INCENTIVE PLAN
Under the RTX Corporation Long-Term Incentive Plan,
as amended and restated (“RTX LTIP”), if a change-in-control event occurs and a plan participant has a qualifying
termination within two years of that event, the vesting of outstanding LTI awards granted to such participant under the RTX LTIP
would accelerate. For performance-based awards, performance goals would be deemed achieved at the greater of actual or target
performance levels.
A change-in-control is defined in the RTX LTIP to
generally mean:
| ● |
The acquisition by a person or a group of 20% or more of RTX’s outstanding shares or the combined voting power of RTX’s outstanding voting securities entitled to vote generally in the election of directors; |
| ● |
Incumbent directors no longer constituting a majority of the Board; |
| ● |
A merger or similar event where RTX shareowners own less than 50% of the voting shares of the new organization; or |
| ● |
A complete liquidation or dissolution is approved by RTX’s shareowners. |
A qualifying termination is defined in the RTX LTIP
to mean:
| ● |
An involuntary (not for cause) termination; or |
| ● |
A voluntary termination for “good reason” (as defined in the Plan). |
RTX
2025 PROXY STATEMENT 65
Table of Contents
COMPENSATION DISCUSSION
AND ANALYSIS
OTHER EXECUTIVE COMPENSATION POLICIES AND PRACTICES
Other Executive Compensation
Policies and Practices
We have adopted a number of practices and policies
to help ensure that our executive compensation program operates as intended and aligns with our Guiding Principles (see page 44).
In addition, the HCC Committee identifies, monitors and mitigates compensation risk in a number of important ways, as summarized
on pages 30-31.
Post-Employment Restrictive Covenants
ELG members may not engage in activities after termination
or retirement that are detrimental to RTX, such as disclosing proprietary information, soliciting RTX employees or engaging in
competitive activities. Violations can result in a clawback of annual and LTI awards.
Clawback Policies
RTX CORPORATION CLAWBACK POLICY
The RTX Corporation Clawback Policy—our comprehensive
policy on recoupment of compensation—covers all RTX employees. We have enhanced this policy several times over the years
in response to shareowner feedback and to ensure that it continues to meet the evolving needs of the Company.
Under this policy, in the event of a financial restatement
(whether or not this involves misconduct on the part of the employee) or a recalculation of a financial metric affecting an award,
the Company has the right to recover from any employee (including our NEOs and officers) annual incentive payments and gains realized
from vested LTI awards (including both time-based and performance-based awards).
Clawbacks of annual incentive awards and time-based
and performance-based LTI awards, as well as of compensation realized from prior awards, also may be triggered by violations of
our Code of Conduct, failure to adhere to employee health and safety standards, violations of post-employment restrictive covenants
or the exposure of RTX to excessive risk, as determined under our Enterprise Risk Management program. In addition, we have the
right to recover compensation when an employee’s negligence (including negligent supervision of a subordinate) causes significant
harm to RTX. If required or otherwise appropriate, the Company may publicly disclose the circumstances surrounding the HCC Committee’s
decision to seek recoupment. The Policy can be found on the Corporate Governance page of our website at https://www.rtx.com/who-we-are/corporate-governance#documents.
RTX CORPORATION EXECUTIVE OFFICER CLAWBACK POLICY
The RTX Corporation Executive Officer Clawback Policy
is intended to comply with Section 10D of the Exchange Act and Section 303A of the NYSE Listed Company Manual. This policy requires
the Company to recoup erroneously awarded, covered incentive-based compensation from executive officers (as defined by the SEC)
if any restatement is made to correct an error in previously issued financial statements due to material noncompliance with any
financial reporting requirement under the securities laws. This policy supplements, but does not replace, the RTX Corporation
Clawback Policy and can be found at https://www.rtx.com/who-we-are/corporate-governance#documents.
Equity Award Granting Policy
In December 2024, the Company adopted the RTX Corporation
Equity Award Granting Policy. The policy provides that, in order to minimize the risk of award decisions being made while the
Company is in possession of material non-public information, it is the Company’s intent to grant equity-based awards on regularly
scheduled predetermined dates that fall outside of the period beginning four trading days before, and ending one trading day after,
the filing or furnishing of any periodic report on Form 10-Q or Form 10-K, or any current report on Form 8-K that discloses material
non-public information (“Grant Restriction Period”).
As outlined in the policy, annual equity-based awards
to Company executives are to be granted within the two-week period following the first regularly scheduled Board or HCC Committee
meeting for the year. From time to time, the Company may also grant equity-based awards in connection with a new hire, promotion,
retention or for various other reasons. Such grants are to be made on the first trading day of each month, unless the HCC Committee
approves an exception. If such planned date falls within a Grant Restriction Period, the grant date shall be postponed, to the
extent practicable, to the first trading day following the Grant Restriction Period.
66 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION DISCUSSION
AND ANALYSIS
OTHER EXECUTIVE COMPENSATION POLICIES AND PRACTICES
The RTX Corporation Board of Directors Deferred Stock
Unit Plan outlines the grant timing for non-employee directors. Under the Plan, non-employee directors are granted annual Deferred
Stock Unit awards on the date of our Annual Meeting of Shareowners. New directors joining the Board may be granted a whole or
partial annual DSU award on the date they join the Board. For Board members appointed to a leadership role outside of the standard
Board cycle, the grant date is the date of appointment.
Prohibitions on Certain Transactions Involving
RTX Stock
RTX does not allow its directors, officers or executives
to enter into short sales of RTX Common Stock. Similarly, directors and executive officers may not pledge or assign an interest
in RTX Common Stock or other equity interests as collateral for a loan. Transactions in put options, call options or other derivative
securities that have the effect of hedging the value of RTX securities are also prohibited, whether or not those securities were
granted to or held, directly or indirectly, by the director, officer or employee. In addition, RTX’s LTIP generally prohibits
buyouts/repricing of underwater stock options and SARs without shareowner approval.
Employment Agreements
As a general matter, the HCC Committee does not believe
that fixed-term executive employment contracts guaranteeing minimum levels of compensation over multiple years enhance shareowner
value. Accordingly, our U.S.-based executives do not have such contracts. However, in rare cases involving mergers and acquisitions,
the HCC Committee has found such contracts to be in the Company’s best interests. In addition, over the years, the Company
has acquired companies whose employees have existing contractual agreements. We also enter into employment agreements with executives
based outside the U.S. when local regulations and practices require such agreements.
Tax Deductibility of Incentive Compensation
While the HCC Committee considers corporate tax deductibility
as one of several relevant factors in determining compensation, it retains the flexibility to design and maintain executive compensation
arrangements that it believes will attract and retain executive talent, even if such compensation is not deductible by the Company
for federal income tax purposes. For 2024, RTX’s deduction is limited to $1 million for annual compensation paid to each
of our NEOs, as defined in IRC Section 162(m).
RTX
2025 PROXY STATEMENT 67
Table of Contents
Report of the Human Capital &
Compensation Committee |
| |
| The Human Capital & Compensation Committee establishes and oversees the design and function of RTX’s executive compensation program. We have reviewed and discussed the foregoing Compensation Discussion and Analysis with the management of the Company and have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in RTX’s Proxy Statement for the 2025 Annual Meeting of Shareowners. |
| |
|
|
| Human Capital & Compensation Committee |
|
|
 |
Tracy A. Atkinson, Chair |
|
Fredric G. Reynolds |
| George R. Oliver |
|
Brian C. Rogers |
| Ellen M. Pawlikowski(1) |
|
|
| |
|
| (1) |
Ellen
M. Pawlikowski joined the Human Capital & Compensation Committee effective May 2, 2024. |
68 RTX
2025 PROXY STATEMENT
Table of Contents
Summary Compensation Table
| Year | |
Salary
($)(1) | |
Bonus
($)(2) | |
Stock
Awards
($)(3) | |
Option Awards
($)(4) | |
Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5) | |
All
Other
Compensation
($)(6) | |
Total
($) |
| Christopher T. Calio President & Chief Executive Officer(7) | |
| |
|
| 2024 | |
$1,182,500 | |
$2,760,000 | |
$8,315,559 | |
$5,379,072 | |
$0 | |
$367,700 | |
$18,004,831 |
| 2023 | |
$986,667 | |
$1,410,000 | |
$5,922,384 | |
$3,992,454 | |
$77,771 | |
$354,156 | |
$12,743,432 |
| 2022 | |
$875,000 | |
$1,600,000 | |
$4,293,029 | |
$2,950,366 | |
$0 | |
$283,460 | |
$10,001,855 |
| Neil G. Mitchill, Jr. Executive Vice President & Chief Financial
Officer |
|
| 2024 | |
$1,031,250 | |
$1,500,000 | |
$3,387,907 | |
$2,191,232 | |
$0 | |
$235,983 | |
$8,346,372 |
| 2023 | |
$956,250 | |
$1,100,000 | |
$2,813,482 | |
$1,896,354 | |
$0 | |
$235,785 | |
$7,001,871 |
| 2022 | |
$876,250 | |
$1,200,000 | |
$2,453,365 | |
$1,686,546 | |
$0 | |
$228,389 | |
$6,444,550 |
| Gregory J. Hayes Executive Chairman(8) | |
| |
| |
|
| 2024 | |
$1,200,000 | |
$2,320,000 | |
$6,159,916 | |
$3,984,256 | |
$17,732 | |
$916,554 | |
$14,598,458 |
| 2023 | |
$1,675,000 | |
$2,780,000 | |
$9,772,488 | |
$6,586,686 | |
$13,194 | |
$1,102,091 | |
$21,929,459 |
| 2022 | |
$1,656,250 | |
$3,900,000 | |
$9,352,104 | |
$6,425,871 | |
$9,712 | |
$1,265,099 | |
$22,609,036 |
| Shane G. Eddy President, Pratt & Whitney | |
| |
| |
|
| 2024 | |
$803,750 | |
$900,000 | |
$2,156,111 | |
$1,394,816 | |
$4,248 | |
$207,534 | |
$5,466,459 |
| Philip J. Jasper President, Raytheon(9) | |
| |
| |
|
| 2024 | |
$724,167 | |
$950,000 | |
$2,001,902 | |
$1,294,720 | |
$0 | |
$175,444 | |
$5,146,233 |
| Troy D. Brunk President, Collins Aerospace(10) | |
| |
| |
|
| 2024 | |
$568,462 | |
$565,000 | |
$3,633,256 | |
$400,384 | |
$0 | |
$139,140 | |
$5,306,242 |
| Stephen J. Timm Senior Advisor, Collins Aerospace(11) | |
| |
| |
|
| 2024 | |
$753,846 | |
$795,000 | |
$2,772,009 | |
$1,793,024 | |
$0 | |
$216,093 | |
$6,329,972 |
| 2023 | |
$839,231 | |
$840,000 | |
$2,369,146 | |
$1,597,968 | |
$20,531 | |
$218,992 | |
$5,885,868 |
| 2022 | |
$788,462 | |
$900,000 | |
$3,066,587 | |
$2,107,093 | |
$0 | |
$199,731 | |
$7,061,873 |
| (1) |
Salary. Base salary shown includes any midyear adjustments. |
| (2) |
Bonus. Annual incentive awards provided under the RTX Corporation Executive Annual Incentive Plan are primarily
based on measured performance against preestablished goals (as detailed on pages 49-52). However, the Human Capital &
Compensation Committee (the “HCC Committee”) retains discretion to adjust annual incentive award amounts based
on its assessment of overall performance. Consequently, we report annual incentive awards in the Bonus column rather than
in a Non-Equity Incentive Plan Compensation column. |
| (3) |
Stock Awards. Amounts shown include the grant date fair value of PSUs (with vesting assumed at 100% of target)
and RSUs granted in 2024 under the RTX Corporation Long-Term Incentive Plan, as amended and restated (“RTX LTIP”).
The assumptions made in calculating the fair value of these awards are set forth in Note 19: Stock Based Compensation, to
the Consolidated Financial Statements in RTX’s 2024 Annual Report on Form 10-K (“2024 Form 10-K”). For the
2024 PSUs, if the highest level of performance is achieved for all performance metrics, the grant date fair values would be:
Mr. Calio, $13,570,956; Mr. Mitchill, $5,529,049; Mr. Hayes, $10,052,956; Mr. Eddy, $3,421,304; Mr. Jasper, $3,364,555; Mr.
Brunk $670,350; and Mr. Timm, $4,523,906. |
RTX
2025 PROXY STATEMENT 69
Table of Contents
COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
| (4) |
Option Awards. Amounts shown include the grant date fair value of SARs granted under the RTX
LTIP during 2024. The assumptions made in the valuation of these awards are set forth in Note 19: Stock Based Compensation,
to the Consolidated Financial Statements in RTX’s 2024 Form 10-K. |
| (5) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings. The amounts in this column reflect the
change (if any) in the year-over-year actuarial present value of each NEO’s accrued benefit under the Company’s
defined benefit plans and above-market earnings (if any) under the Company’s deferred compensation plans. The following
NEOs had a negative change in present value of pension benefits from the prior year and as a result, per SEC rules, the change
in present value of pension benefits included in this column is shown as zero: Mr. Calio, ($6,657); Mr. Hayes, ($850,942);
Mr. Jasper, ($6,624); Mr. Brunk, ($4,777); and Mr. Timm, ($4,264). The legacy UTC pension plans were closed effective December
31, 2019, and the legacy Rockwell Collins pension plans were closed on September 30, 2006. As a result, for our NEOs, the
change in pension value is entirely attributable to year-over-year changes in pension plan actuarial assumptions. Mr. Mitchill
was hired after the legacy UTC pension plans were closed to new participants. Actuarial value computations are based on the
assumptions established in accordance with FASB ASC Topic 715 and are discussed in Note 10: Employee Benefit Plans, to the
Consolidated Financial Statements in RTX’s 2024 Form 10-K. RTX’s deferred compensation plans do not provide above-market
rates of return except for the frozen Sundstrand Corporation Deferred Compensation Plan, which was assumed by the Company
upon its acquisition of Sundstrand Corporation in 1999. Mr. Hayes accrued $17,732 in above-market earnings under this plan
in 2024. |
| (6) |
All Other Compensation. The 2024 amounts in this column consist of the following items shown in the table below.
See page 64 for details on executive perquisites and other benefits. |
| |
Name | |
Personal Use
of Corporate
Aircraft(a) | |
Executive Life
Insurance
Premiums(b) | |
Relocation
Benefit(c) | |
Company
Contributions to
Defined
Contribution
Plans(d) | |
Health & Welfare
Benefits(e) | |
Misc.(f) | |
Total |
| |
C. Calio | |
$0 | |
$11,456 | |
$0 | |
$298,283 | |
$26,081 | |
$31,880 | |
$367,700 |
| |
N. Mitchill, Jr. | |
$0 | |
$4,758 | |
$0 | |
$191,813 | |
$32,345 | |
$7,067 | |
$235,983 |
| |
G. Hayes | |
$188,095 | |
$6,611 | |
$197,152 | |
$488,861 | |
$25,685 | |
$10,151 | |
$916,554 |
| |
S. Eddy | |
$0 | |
$3,708 | |
$0 | |
$177,512 | |
$17,027 | |
$9,287 | |
$207,534 |
| |
P. Jasper | |
$0 | |
$3,647 | |
$0 | |
$131,874 | |
$28,216 | |
$11,708 | |
$175,444 |
| |
T. Brunk | |
$0 | |
$3,076 | |
$0 | |
$113,182 | |
$15,458 | |
$7,425 | |
$139,140 |
| |
S. Timm | |
$0 | |
$4,095 | |
$0 | |
$190,131 | |
$19,024 | |
$2,844 | |
$216,093 |
| |
(a) |
Incremental variable operating costs incurred for personal air travel, which includes fuel (calculated
on the basis of aircraft-specific average consumption rates and fleet average fuel costs), fleet average landing and handling
fees, crew lodging and meal allowances, and catering and hourly maintenance contract charges, when applicable. Because fleet-wide
aircraft utilization is primarily for business purposes, capital and other fixed expenditures are not treated as an incremental
cost. |
| |
(b) |
Reflects premiums paid on an enhanced basic life insurance benefit equal to three times base salary. |
| |
(c) |
Costs associated with Mr. Hayes’ relocation, including tax reimbursement payments of $88,915. |
| |
(d) |
Amounts represent total Company contributions into the Company’s defined contribution plans—the qualified
RTX Corporation Savings Plan and the nonqualified RTX Corporation Compensation Deferral Plan. Under these plans, participants
are eligible to receive Company matching contributions and age-based Company retirement contributions. However, Company retirement
contributions are only provided to employees who are not accruing benefits under a Company pension plan. For further details
on RTX’s qualified and nonqualified defined contribution plans, refer to pages 63 and 77-78 of this Proxy Statement. |
| |
(e) |
Costs associated with annual executive physicals and Company-covered health and welfare benefits. The annual executive
physical benefit is capped at $5,000. |
| |
(f) |
Amounts include costs associated with membership and meeting attendance fees for an Aerospace & Defense industry
club, a financial planning benefit, security systems for Messrs. Calio’s and Hayes’ personal residences, personal use of a
Company-provided car and driver used for security purposes, as well as costs associated with a spouse joining an executive
at business events, employee gifts and other incidental items. Further, RTX’s senior executives participate in community
and philanthropic activities for the benefit of the Company. This may include attending various cultural, charitable, civic,
entertainment and sporting events for business development and relationship-building purposes and/or community involvement,
and may require the purchase of tickets, catering and parking. Tickets may also be used for team-building events and sometimes
are provided to employees, including our senior executives, for personal use; the incremental cost of such use is included
in this column. |
| (7) |
Mr. Calio served as President & Chief Operating Officer until May 2, 2024, at which point he was appointed to the role of President & Chief Executive Officer. |
| (8) |
Mr. Hayes served as Chairman & Chief Executive Officer until May 2, 2024, at which point he continued in the role of Executive Chairman. Mr. Hayes’ annual incentive award was prorated using his base salary and annual incentive target for the time he served as CEO (January 1, 2024 to May 1, 2024) and his base salary and annual incentive target for the time he served as Executive Chairman (May 2, 2024 to December 31, 2024). |
| (9) |
Mr. Jasper served as President, Mission Systems at Collins Aerospace until January 7, 2024, at which point he was appointed to the role of President, Raytheon. |
| (10) |
Mr. Brunk served as President, Avionics until January 7, 2024, and President, Mission Systems until July 17, 2024 (both at Collins Aerospace), at which point he was appointed to the role of President, Collins Aerospace. |
| (11) |
Mr. Timm served as President, Collins Aerospace until July 17, 2024, and continued in a transitional capacity as Special Advisor, Collins Aerospace until his retirement in March 2025. |
70 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
GRANTS OF PLAN-BASED AWARDS
Grants
of Plan-Based Awards
| | |
| |
Estimated Future Payouts under Equity
Incentive Plan Awards(1) | |
All
Other Stock
Awards: Number
of Shares of
Stock or Units
(#) | |
All
Other Option
Awards: Number
of Securities
Underlying Options
(#)(2) | |
Exercise or Base
Price of Option
Awards ($/Sh)(3) | |
Grant
Date Fair
Value of Stock
and Option
Awards ($)(4) |
| Grant
Date | |
Approval
Date | |
Threshold (#) | |
Target (#) | |
Maximum (#) | |
|
|
|
| C. Calio | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
3,337 | |
88,975 | |
177,950 | |
– | |
– | |
– | |
$8,315,559 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
– | |
247,200 | |
$91.04 | |
$5,379,072 |
| N. Mitchill, Jr. | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
1,359 | |
36,250 | |
72,500 | |
– | |
– | |
– | |
$3,387,907 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
– | |
100,700 | |
$91.04 | |
$2,191,232 |
| G. Hayes | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
2,472 | |
65,910 | |
131,820 | |
– | |
– | |
– | |
$6,159,916 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
| |
183,100 | |
$91.04 | |
$3,984,256 |
| S. Eddy | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
865 | |
23,070 | |
46,140 | |
– | |
– | |
– | |
$2,156,111 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
– | |
64,100 | |
$91.04 | |
$1,394,816 |
| P. Jasper | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
803 | |
21,420 | |
42,840 | |
– | |
– | |
– | |
$2,001,902 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
– | |
59,500 | |
$91.04 | |
$1,294,720 |
| T. Brunk | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
165 | |
4,395 | |
8,790 | |
– | |
– | |
– | |
$410,755 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
– | |
18,400 | |
$91.04 | |
$400,384 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
2,250(5) | |
– | |
– | |
$204,840 |
| 3/1/2024 | |
2/2/2024 | |
– | |
– | |
– | |
11,326(6) | |
– | |
– | |
$1,017,075 |
| 12/18/2024 | |
12/17/2024 | |
– | |
– | |
– | |
17,480(6) | |
– | |
– | |
$2,000,586 |
| S. Timm | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
2/2/2024 | |
1,112 | |
29,660 | |
59,320 | |
– | |
– | |
– | |
$2,772,009 |
| 2/8/2024 | |
2/2/2024 | |
– | |
– | |
– | |
– | |
82,400 | |
$91.04 | |
$1,793,024 |
| (1) |
Reflects the number of PSUs granted under the RTX LTIP during 2024, which vest based on Company performance
relative to four performance metrics and the executive’s continued employment, except in the case of death, disability,
qualifying separation within two years of a change-in-control, retirement or certain involuntary terminations. Vesting occurs
following the three-year performance period with payouts ranging from 3.75%, if threshold performance is achieved for one
of the TSR metrics that are weighted at 15%, to a maximum payout of 200%, if maximum performance is achieved for all four
metrics. If RTX’s three-year TSR is negative, the payout for each TSR portion of the award is capped at 100%, regardless
of RTX’s performance relative to the companies within the S&P 500 Index and our Core A&D Peers. Unvested PSUs
do not earn dividend equivalents. Vested PSUs are settled in unrestricted shares of RTX Common Stock at the end of the performance
period following the HCC Committee’s review and approval of performance achievement levels. |
| (2) |
Reflects the number of SARs granted under the RTX LTIP during 2024, which vest and become exercisable three years from
the grant date. Vesting is subject to the executive’s continued employment, except in the case of death, disability,
qualifying separation within two years of a change-in-control, retirement and certain involuntary terminations. Exercised
SARs are settled in unrestricted shares of RTX Common Stock. |
| (3) |
The SAR exercise price equals the NYSE closing price of RTX Common Stock on the grant date. |
| (4) |
Reflects the grant date fair value of awards granted in 2024, with vesting assumed at 100% of target for PSUs. Values
are calculated in accordance with FASB ASC Topic 718 but exclude the effect of estimated forfeitures. |
| (5) |
For the February 2024 LTI award, Mr. Brunk received a different LTI mix than our other NEOs (see page 53 for details).
His award included RSUs that vest three years from the grant date, subject to the executive’s continued employment, except
in the case of death, disability, qualifying separation within two years of a change-in-control, retirement and certain involuntary
terminations. Each time the Company pays a dividend to shareowners, dividend equivalents are reinvested as additional RSUs.
The reinvested RSUs vest on the same date as the underlying RSUs. |
| (6) |
ELG RSUs granted to Mr. Brunk in connection with his appointment to the ELG and to the role of President, Collins Aerospace.
ELG RSUs vest in the event of a qualifying separation (as defined under the ELG program and detailed on pages 64-65), death
or disability. Each time the Company pays a dividend to shareowners, dividend equivalents are reinvested as additional RSUs.
The reinvested RSUs vest on the same date as the underlying RSUs. |
RTX
2025 PROXY STATEMENT 71
Table of Contents
COMPENSATION TABLES
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Outstanding
Equity Awards at Fiscal Year-End
| | |
Option
Awards | |
Stock
Awards |
| Grant
Date | |
Number
of
Securities
Underlying
Unexercised
Options (#)
(Exercisable) | |
Number
of
Securities
Underlying
Unexercised
Options (#)
(Unexercisable)(1) | |
Option
Exercise
Price ($)(2) | |
Option
Expiration
Date | |
Number
of
Shares or
Units of Stock
That Have Not
Vested (#) | |
Market
Value of
Shares or Units
of Stock That
Have Not
Vested ($)(3) | |
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#)(4) | |
Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($)(5) |
| C. Calio | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
– | |
247,200 | |
$91.04 | |
2/7/2034 | |
– | |
– | |
177,950 | |
$20,592,374 |
| 2/8/2023 | |
– | |
161,900 | |
$97.65 | |
2/7/2033 | |
– | |
– | |
122,890 | |
$14,220,831 |
| 2/15/2022 | |
– | |
135,400 | |
$94.04 | |
2/14/2032 | |
– | |
– | |
49,132 | |
$5,685,497 |
| 2/8/2021 | |
43,900 | |
– | |
$72.49 | |
2/7/2031 | |
– | |
– | |
– | |
– |
| 2/4/2020 | |
91,912 | |
– | |
$90.73 | |
2/3/2030 | |
– | |
– | |
– | |
– |
| 2/5/2019 | |
54,810 | |
– | |
$71.62 | |
2/4/2029 | |
– | |
– | |
– | |
– |
| 1/2/2018 | |
31,199 | |
– | |
$76.00 | |
1/1/2028 | |
– | |
– | |
– | |
– |
| 1/18/2017 | |
– | |
– | |
– | |
– | |
18,438(6) | |
$2,133,645(6) | |
– | |
– |
| 1/3/2017 | |
8,938 | |
– | |
$82.35 | |
1/2/2027 | |
– | |
– | |
– | |
– |
| N. Mitchill, Jr. | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
– | |
100,700 | |
$91.04 | |
2/8/2034 | |
– | |
– | |
72,500 | |
$8,389,700 |
| 2/8/2023 | |
– | |
76,900 | |
$97.65 | |
2/7/2033 | |
– | |
– | |
58,380 | |
$6,755,734 |
| 2/15/2022 | |
– | |
77,400 | |
$94.04 | |
2/14/2032 | |
– | |
– | |
28,078 | |
$3,249,128 |
| 4/26/2021 | |
16,900 | |
– | |
$81.00 | |
4/25/2031 | |
– | |
– | |
– | |
– |
| 2/8/2021 | |
18,900 | |
– | |
$72.49 | |
2/7/2031 | |
– | |
– | |
– | |
– |
| 2/4/2020 | |
52,280 | |
– | |
$90.73 | |
2/3/2030 | |
– | |
– | |
– | |
– |
| 2/5/2019 | |
46,377 | |
– | |
$71.62 | |
2/4/2029 | |
– | |
– | |
– | |
– |
| 1/2/2018 | |
19,394 | |
– | |
$76.00 | |
1/1/2028 | |
– | |
– | |
– | |
– |
| 2/13/2017 | |
– | |
– | |
– | |
– | |
18,438(6) | |
$2,133,645(6) | |
– | |
– |
| 1/3/2017 | |
8,938 | |
– | |
$82.35 | |
1/2/2027 | |
– | |
– | |
– | |
– |
| G. Hayes | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
– | |
183,100 | |
$91.04 | |
2/7/2034 | |
– | |
– | |
131,820 | |
$15,254,210 |
| 2/8/2023 | |
– | |
267,100 | |
$97.65 | |
2/7/2033 | |
– | |
– | |
202,780 | |
$23,465,702 |
| 2/15/2022 | |
– | |
294,900 | |
$94.04 | |
2/14/2032 | |
– | |
– | |
107,030 | |
$12,385,512 |
| 2/8/2021 | |
181,900 | |
– | |
$72.49 | |
2/7/2031 | |
– | |
– | |
– | |
– |
| 2/4/2020 | |
430,050 | |
– | |
$90.73 | |
2/3/2030 | |
– | |
– | |
– | |
– |
| 2/5/2019 | |
541,357 | |
– | |
$71.62 | |
2/4/2029 | |
– | |
– | |
– | |
– |
72 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | |
Option
Awards | |
Stock
Awards |
| Grant
Date | |
Number
of
Securities
Underlying
Unexercised
Options (#)
(Exercisable) | |
Number
of
Securities
Underlying
Unexercised
Options (#)
(Unexercisable)(1) | |
Option
Exercise
Price ($)(2) | |
Option
Expiration
Date | |
Number
of
Shares or
Units of Stock
That Have Not
Vested (#) | |
Market
Value of
Shares or Units
of Stock That
Have Not
Vested ($)(3) | |
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#)(4) | |
Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($)(5) |
| S. Eddy | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
– | |
64,100 | |
$91.04 | |
2/7/2034 | |
– | |
– | |
46,140 | |
$5,339,321 |
| 2/8/2023 | |
– | |
56,700 | |
$97.65 | |
2/7/2033 | |
– | |
– | |
43,020 | |
$4,978,274 |
| 2/15/2022 | |
– | |
58,000 | |
$94.04 | |
2/14/2032 | |
– | |
– | |
21,060 | |
$2,437,005 |
| 2/8/2021 | |
16,600 | |
– | |
$72.49 | |
2/7/2031 | |
– | |
– | |
– | |
– |
| 2/4/2020 | |
40,475 | |
– | |
$90.73 | |
2/3/2030 | |
– | |
– | |
– | |
– |
| 2/5/2019 | |
50,594 | |
– | |
$71.62 | |
2/4/2029 | |
– | |
– | |
– | |
– |
| 1/2/2018 | |
25,297 | |
– | |
$76.00 | |
1/1/2028 | |
– | |
– | |
– | |
– |
| 1/3/2017 | |
11,917 | |
– | |
$82.35 | |
1/2/2027 | |
– | |
– | |
– | |
– |
| 11/1/2016 | |
– | |
– | |
– | |
– | |
30,217(6) | |
$3,496,711(6) | |
– | |
– |
| 11/1/2016 | |
8,427 | |
– | |
$75.79 | |
10/31/2026 | |
– | |
– | |
– | |
– |
| P. Jasper | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
– | |
59,500 | |
$91.04 | |
2/7/2034 | |
– | |
– | |
42,840 | |
$4,957,445 |
| 2/8/2023 | |
– | |
21,900 | |
$97.65 | |
2/7/2033 | |
2,783(7) | |
$322,049(7) | |
11,060 | |
$1,279,863 |
| 2/15/2022 | |
– | |
26,100 | |
$94.04 | |
2/14/2032 | |
2,961(7) | |
$342,647(7) | |
6,320 | |
$731,293 |
| 2/8/2021 | |
16,100 | |
– | |
$72.49 | |
2/7/2031 | |
– | |
– | |
– | |
– |
| 2/4/2020 | |
37,945 | |
– | |
$90.73 | |
2/3/2030 | |
– | |
– | |
– | |
– |
| 1/28/2020 | |
– | |
– | |
– | |
– | |
12,463(6) | |
$1,442,218(6) | |
– | |
– |
| 2/5/2019 | |
47,052 | |
– | |
$71.62 | |
2/4/2029 | |
– | |
– | |
– | |
– |
| T. Brunk | |
| |
| |
| |
| |
| |
| |
| |
|
| 12/18/2024 | |
– | |
– | |
– | |
– | |
17,480(6) | |
$2,022,786(6) | |
– | |
– |
| 3/1/2024 | |
– | |
– | |
– | |
– | |
11,326(6) | |
$1,310,645(6) | |
– | |
– |
| 2/8/2024 | |
– | |
18,400 | |
$91.04 | |
2/7/2034 | |
2,250(7) | |
$260,370(7) | |
8,790 | |
$1,017,179 |
| 2/8/2023 | |
– | |
12,600 | |
$97.65 | |
2/7/2033 | |
2,400(7) | |
$277,728(7) | |
4,770 | |
$551,984 |
| 2/15/2022 | |
– | |
6,800 | |
$94.04 | |
2/14/2032 | |
3,871(7) | |
$447,952(7) | |
2,459 | |
$284,498 |
| 2/4/2020 | |
11,973 | |
– | |
$90.73 | |
2/3/2030 | |
– | |
– | |
– | |
– |
| S. Timm | |
| |
| |
| |
| |
| |
| |
| |
|
| 2/8/2024 | |
– | |
82,400 | |
$91.04 | |
2/7/2034 | |
– | |
– | |
59,320 | |
$6,864,510 |
| 2/8/2023 | |
– | |
64,800 | |
$97.65 | |
2/7/2033 | |
– | |
– | |
49,160 | |
$5,688,795 |
| 2/15/2022 | |
– | |
96,700 | |
$94.04 | |
2/14/2032 | |
– | |
– | |
35,096 | |
$4,061,251 |
| 2/20/2020 | |
– | |
– | |
– | |
– | |
12,386(6) | |
$1,433,308(6) | |
– | |
– |
RTX
2025 PROXY STATEMENT 73
Table of Contents
COMPENSATION TABLES
OPTIONS EXERCISED AND STOCK VESTED
| (1) |
SARs scheduled to vest on the third anniversary of the grant date, subject to the executive’s
continued employment with the Company, except in the case of death, disability, qualifying separation within two years of
a change-in-control, retirement and certain involuntary terminations. SARs granted on February 15, 2022, vested on February
15, 2025. |
| (2) |
The exercise price of each SAR is equal to the NYSE closing price of RTX Common Stock on the grant date. However, for
SARs granted prior to April 3, 2020, exercise prices shown were adjusted upon the spinoffs of Carrier and Otis, in accordance
with plan rules and the Employee Matters Agreement, as amended. |
| (3) |
Calculated by multiplying the number of unvested RSUs by the NYSE closing price of RTX Common Stock on the last trading
day of 2024. |
| (4) |
PSUs scheduled to vest following the three-year performance/time-based vesting period. Vesting is subject to Company performance
relative to preestablished performance goals and the executive’s continued employment with the Company, except in the
case of death, disability, qualifying separation within two years of a change-in-control, retirement and certain involuntary
terminations. PSUs are settled following the HCC Committee’s certification of performance achievement levels. Pursuant
to SEC rules, the number of shares shown with respect to PSU awards granted in 2023 and 2024 assumes maximum-level performance,
based on vesting estimates as of December 31, 2024. For PSUs granted on February 15, 2022, a performance factor of 110% is
shown, reflecting the number of shares that vested on February 15, 2024. |
| (5) |
Calculated by multiplying the number of unvested PSUs by the NYSE closing price of RTX Common Stock on the last trading
day of 2024. |
| (6) |
ELG RSUs vest in the event of a qualifying separation (as defined under the ELG program and detailed on pages 64-65),
death or disability. Each time the Company pays a dividend to shareowners, dividend equivalents are reinvested as additional
RSUs. The reinvested RSUs vest on the same date as the underlying RSUs. |
| (7) |
RSUs scheduled to vest on the third anniversary of the grant date, subject to the executive’s continued employment
with the Company, except in the case of death, disability, qualifying separation within two years of a change-in-control,
retirement and certain involuntary terminations. Each time the Company pays a dividend to shareowners, dividend equivalents
are reinvested as additional RSUs. The reinvested RSUs vest on the same date as the underlying RSUs. RSUs granted on February
15, 2021, vested on February 15, 2025. |
Options Exercised and Stock Vested
| | |
Option
Awards | |
Stock
Awards |
| Name | |
Number of Shares
Acquired on Exercise (#)(1) | |
Value Realized
on Exercise ($)(2) | |
Number of Shares
Acquired on Vesting (#)(3) | |
Value Realized
on Vesting ($)(4) |
| C. Calio | |
16,003 | |
$516,555 | |
51,384 | |
$4,677,999 |
| N. Mitchill, Jr. | |
26,132 | |
$641,396 | |
40,629 | |
$3,905,030 |
| G. Hayes | |
765,680 | |
$24,987,899 | |
212,927 | |
$19,384,874 |
| S. Eddy | |
7,406 | |
$41,528 | |
17,926 | |
$1,631,983 |
| P. Jasper | |
– | |
– | |
17,545 | |
$1,601,265 |
| T. Brunk | |
21,140 | |
$656,321 | |
3,692 | |
$339,555 |
| S. Timm | |
156,892 | |
$4,026,078 | |
30,677 | |
$2,792,834 |
| (1) |
RTX SARs exercised during 2024. In addition, Mr. Mitchill exercised 8,938 Carrier SARs for a gain of
$352,275, and Mr. Eddy exercised 11,917 Carrier SARs for a gain of $541,655 and 13,874 Otis SARs for a gain of $496,507. These
values are not included in the table above. |
| (2) |
Calculated by multiplying the number of RTX SARs exercised by the difference between the market price of RTX Common Stock
on the exercise date and the exercise price of the award. |
| (3) |
PSUs and RSUs that vested in 2024, including shares withheld to cover U.S. Social Security and Medicare taxes due during
the year as a result of the executive attaining retirement eligible status under the terms of RTX RSU awards. |
| (4) |
Calculated by multiplying the number of vested stock awards by the market price of RTX Common Stock on the vest date.
Messrs. Brunk and Timm deferred $269,569 and $1,885,803, respectively, of their 2021 PSUs into the RTX PSU Deferral Plan (see
pages 77-78). |
74 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
PENSION BENEFITS
Pension
Benefits
Overview of Plans.
Like many other RTX employees, some of our NEOs were
previously employed by companies that we acquired over the years. Benefit accruals earned under the Company’s pension plans depend
upon the employee’s legacy company, the date the employee was hired and the pension formula in use at the time of the accrual.
For our current NEOs, the following Company pension plans
apply:
RTX Consolidated Pension Plan: A tax-qualified, defined
benefit plan that is an accumulation of all qualified pension plans of our legacy companies.
| ● |
For legacy UTC participants, such as Messrs. Calio, Hayes and Eddy, annual compensation and annual
retirement benefits up to IRC limits are recognized through December 31, 2019, the date the relevant plan was frozen. |
| ● |
For legacy Rockwell Collins participants, such as Messrs. Jasper, Brunk and Timm, annual compensation and annual retirement
benefits up to IRC limits are recognized through September 30, 2006, the date the relevant plan was frozen. |
UTC Pension Preservation Plan (“UTC PPP”): An
unfunded, nonqualified defined benefit plan that mirrors the benefit formulas, retirement eligibility provisions and vesting requirements
that applied to legacy UTC and Rockwell Collins participants, respectively, under the RTX Consolidated Pension Plan, but provides
benefits that could not be accrued under the qualified plan due to IRC limits. The Rockwell Collins Non-Qualified Pension Plan
was merged into the UTC PPP in 2018. Benefit formulas under the UTC PPP were frozen at the same time as their equivalent
qualified pension plans.
Pension Formula
Legacy UTC: Legacy UTC employees hired prior to July 1, 2002,
were eligible for a final average earnings (“FAE”) formula through December 31, 2014. After that, they transitioned to
a Cash Balance formula (which was already in use for those hired on or after July 1, 2002, and before January 1, 2010). The legacy
UTC pension plans were frozen on December 31, 2019. There was no pension benefit for those hired in 2010 or later.
Mr. Hayes accrued benefits under both the FAE and Cash Balance formulas,
while Messrs. Calio and Eddy accrued benefits under the Cash Balance formula only. Mr. Mitchill was hired after January 1, 2010,
and was never eligible to participate in the legacy UTC pension plans. The legacy UTC FAE formula and Cash Balance formula are
described in detail in our prior proxy statements.
Legacy Rockwell Collins: For legacy Rockwell Collins employees,
like Messrs. Jasper, Brunk and Timm, benefits were accrued under an FAE formula under the frozen Rockwell Collins qualified and
nonqualified pension plans.
Other formula: For Mr. Hayes, benefits shown in the table
on page 76 also include amounts accrued under a FAE formula used in a Sundstrand Corporation pension plan that was merged into
the legacy UTC pension plan upon UTC’s acquisition of Sundstrand Corporation in 1999.
Distribution Options. Under
the RTX Consolidated Pension Plan, legacy UTC participants can take distributions as either a lump sum or as annuity payments,
while annuity payments are the only option for legacy Rockwell Collins participants. Under the UTC PPP, in addition to lump-sum
and annuity payments, legacy UTC participants may elect annual installments over periods between two and ten years. For legacy
Rockwell Collins participants of the UTC PPP, a lump-sum option is available on the post-2004 portion of the benefit, in addition
to monthly annuity options. The form of payment for nonqualified plans is generally required to be elected in advance of leaving
the Company.
Retirement. For both legacy
UTC and Rockwell Collins participants, the normal retirement age is 65, with early retirement benefits available under the FAE
formula beginning at age 55. FAE benefits are reduced for early retirement prior to age 62. The value of the legacy UTC Cash Balance
account is not impacted by an employee’s age at retirement. As of December 31, 2024, Messrs. Hayes, Jasper, Brunk and Timm
were eligible for early retirement under the FAE formula of their respective plans.
RTX
2025 PROXY STATEMENT 75
Table of Contents
COMPENSATION TABLES
PENSION BENEFITS
| Name | |
Plan
Name | |
Number
of Years
of Credited Service (#) | |
Present
Value of
Accumulated
Benefit ($)(1) | |
Payments
During
Last Fiscal Year ($) |
| C. Calio(2) | |
RTX Consolidated Pension Plan | |
15 | |
$272,477 | |
– |
| |
UTC Pension Preservation Plan | |
15 | |
$229,318 | |
– |
| |
Total | |
| |
$501,795 | |
– |
| N. Mitchill, Jr.(3) | |
RTX Consolidated Pension Plan | |
– | |
– | |
– |
| |
UTC Pension Preservation Plan | |
– | |
– | |
– |
| |
Total | |
| |
– | |
– |
| G. Hayes(2) | |
RTX Consolidated Pension Plan | |
30 | |
$1,466,699 | |
– |
| |
UTC Pension Preservation Plan | |
30 | |
$13,850,008 | |
– |
| |
Total | |
| |
$15,316,707 | |
– |
| S. Eddy(2) | |
RTX Consolidated Pension Plan | |
6 | |
$170,967 | |
– |
| |
UTC Pension Preservation Plan | |
– | |
– | |
– |
| |
Total | |
| |
$170,967 | |
– |
| P. Jasper(4) | |
RTX Consolidated Pension Plan | |
15 | |
$322,705 | |
– |
| |
UTC Pension Preservation Plan | |
15 | |
$10,332 | |
– |
| |
Total | |
| |
$333,037 | |
– |
| T. Brunk(4) | |
RTX Consolidated Pension Plan | |
15 | |
$183,168 | |
– |
| |
UTC Pension Preservation Plan | |
– | |
– | |
– |
| |
Total | |
| |
$183,168 | |
– |
| S. Timm(4) | |
RTX Consolidated Pension Plan | |
10 | |
$203,320 | |
– |
| |
UTC Pension Preservation Plan | |
– | |
– | |
– |
| |
Total | |
| |
$203,320 | |
– |
| (1) |
The assumptions used to determine the present value of the accumulated pension benefit under the Company’s
pension plans are generally consistent with those described in Note 10: Employee Benefit Plans, to the Consolidated Financial
Statements in RTX’s 2024 Form 10-K. More specifically, discount rates ranging from 5.53% to 5.65% for the various pension
plans, Pri-2012 mortality table with a plan-specific adjustment and MP-2021 to project future improvements are used. |
| (2) |
The following additional assumptions are used to determine the present value of the accumulated pension benefit under
the legacy UTC pension plans: (i) retirement at age 62 (or current age, if older) for FAE benefits (the earliest date a participant
can retire without a reduction of benefits due to age) and at age 65 for Cash Balance benefits; (ii) projected lump-sum payments
under the UTC Pension Preservation Plan are calculated using a lump-sum interest rate of 2.26% for Mr. Hayes; and (iii) the
amounts shown assume the following forms of payment: (a) 70% in a monthly annuity and 30% in a lump-sum payment for benefits
accrued under the FAE formula of the RTX Consolidated Pension Plan; (b) a lump-sum payment for benefits accrued under the
Cash Balance formula of the RTX Consolidated Pension Plan and the UTC Pension Preservation Plan; and (c) payments are based
on participant’s elections under the FAE formula of the UTC Pension Preservation Plan. |
| (3) |
Mr. Mitchill was hired after January 1, 2010, and therefore does not participate in the legacy UTC pension plans. |
| (4) |
The present value of the accumulated benefits shown for Messrs. Jasper, Brunk and Timm are based on benefits earned under
the legacy Rockwell Collins qualified and nonqualified defined benefit pension plans, which were frozen on September 30, 2006,
and have since merged into the RTX Consolidated Pension Plan and the UTC Pension Preservation Plan, respectively. The number
of years of credited service reflects the years of service they had when the plans were frozen. Benefit calculations are based
on age, years of service and average annual base salary and annual incentives. All of Messrs. Timm’s and Brunk’s nonqualified
pension benefits, and a portion of Mr. Jasper’s nonqualified pension benefit, were previously distributed upon UTC’s
acquisition of Rockwell Collins in a lump-sum payment in accordance with the change-in-control provisions in that plan. The
following additional assumptions are also used: (i) retirement at age 62, the earliest date a participant can retire without
a reduction of benefits due to age; and (ii) 100% life annuity for benefits under the plan. |
76 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
NONQUALIFIED DEFERRED COMPENSATION
Nonqualified Deferred Compensation
Active Plans. RTX maintains
the following nonqualified deferred compensation plans that remain open to new contributions.
| Plan
Name |
|
Description |
| RTX
Corporation Compensation Deferral Plan (“RTX CDP”) |
|
The
RTX CDP is an unfunded, nonqualified defined contribution plan that opened on January
1, 2023 and provides eligible employees an opportunity to defer up to 50% of base salary
and/or 80% of annual incentive awards. Participants receive Company matching and Company
retirement contributions (if eligible) once they can no longer receive these contributions
into the qualified RTX Corporation Savings Plan due to IRC limits. Participants who accrue
benefits under a Company-sponsored pension plan are not eligible for Company retirement
contributions into this plan.
The
RTX CDP also provides missed Company matching and Company retirement contributions (if applicable) for employees who have
not reached the annual IRC compensation limit, but whose contributions to the qualified RTX Corporation Savings Plan exceed
the IRC annual contributions limit for the year. Participants are immediately vested in their own deferrals and vest in
Company contributions upon the earlier of two years of service with the Company or reaching age 65. Distributions of Company
contributions begin upon a separation of service. Participants may elect to begin distributions of employee deferrals
either upon separation of service from the Company or upon a future date selected by the participant (which may be no
earlier than five years from the date the election was made). RTX CDP balances are distributed in cash, in a lump-sum
payment or in annual installments over periods ranging from two to 15 years per the participant’s election. |
| RTX
Corporation PSU Deferral Plan (“RTX PSU Deferral Plan”) |
|
The
RTX PSU Deferral Plan is an unfunded, nonqualified deferred compensation arrangement that enables executives to defer between
10% and 100% of their vested PSU awards that would otherwise be settled in unrestricted shares of RTX Common Stock. The deferred
portion of the PSU award is converted into deferred stock units that accrue dividend equivalents. Participants may elect to
receive distributions from the plan in a lump sum or in two to 15 annual installments, either upon separation of service from
the Company or at a future date selected by the participant (which may be no earlier than five years from the year the PSUs
are deferred). Distributions are made in whole shares of RTX Common Stock with any fractional units paid in cash. |
Closed Plans. Some of
our NEOs were previously employed by companies that we acquired over the years, and thus retain balances in nonqualified deferred
compensation plans of these acquired companies that have since been closed to new contributions. In addition, we have closed some
of our legacy plans to allow for consistent benefits regardless of an employee’s legacy employer.
Our NEOs hold balances in the
following closed nonqualified deferred compensation plans: (i) UTC Company Automatic Contribution Excess Plan, which closed on
December 31, 2022; (ii) UTC Deferred Compensation Plan, which closed on December 31, 2022; (iii) UTC Savings Restoration Plan,
which closed on December 31, 2022; (iv) Sundstrand Corporation Deferred Compensation Plan, which closed in 1999; (v) Rockwell
Collins Non-Qualified Savings Plan, which closed on December 31, 2019; and (vi) Rockwell Collins Deferred Compensation Plan, which
closed on December 31, 2019. Details on these plans can be found in our previous proxy statements.
| Name | |
Plan | |
Executive
Contributions
in Last FY ($)(1) | |
Registrant
Contributions
in Last FY ($)(2) | |
Aggregate
Earnings in
Last FY ($)(3) | |
Aggregate
Withdrawals/
Distributions ($) | |
Aggregate
Balance at
Last FYE ($)(4) |
| C. Calio | |
RTX Compensation Deferral Plan | |
$150,075 | |
$261,243 | |
$49,904 | |
$0 | |
$884,599 |
| | |
UTC Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$13,203 | |
$0 | |
$324,819 |
| | |
UTC Savings Restoration Plan | |
$0 | |
$0 | |
$127,729 | |
$0 | |
$705,967 |
| N. Mitchill, Jr. | |
RTX Compensation Deferral Plan | |
$115,688 | |
$160,763 | |
$68,111 | |
$0 | |
$666,464 |
| | |
UTC Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$15,399 | |
$0 | |
$378,825 |
| | |
UTC Savings Restoration Plan | |
$0 | |
$0 | |
$171,396 | |
$0 | |
$966,598 |
| G. Hayes | |
RTX Compensation Deferral Plan | |
$223,731 | |
$447,461 | |
$386,194 | |
$0 | |
$2,194,126 |
| | |
UTC Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$171,896 | |
$0 | |
$1,630,308 |
| | |
UTC Deferred Compensation Plan | |
$0 | |
$0 | |
$239,388 | |
$0 | |
$827,325 |
| | |
UTC Savings Restoration Plan | |
$0 | |
$0 | |
$2,185,019 | |
$0 | |
$9,497,417 |
| | |
Sundstrand Corporation Deferred Compensation Plan | |
$0 | |
$0 | |
$43,562 | |
-$16,712 | |
$732,009 |
RTX
2025 PROXY STATEMENT 77
Table of Contents
COMPENSATION TABLES
NONQUALIFIED DEFERRED COMPENSATION
| Name | |
Plan | |
Executive
Contributions
in Last FY ($)(1) | |
Registrant
Contributions
in Last FY ($)(2) | |
Aggregate
Earnings in
Last FY ($)(3) | |
Aggregate
Withdrawals/
Distributions ($) | |
Aggregate
Balance at
Last FYE ($)(4) |
| S.
Eddy | |
RTX
Compensation Deferral Plan | |
$132,933 | |
$142,066 | |
$81,476 | |
$0 | |
$659,588 |
| | |
UTC
Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$50,997 | |
$0 | |
$364,166 |
| | |
UTC
Savings Restoration Plan | |
$0 | |
$0 | |
$183,303 | |
$0 | |
$904,618 |
| P.
Jasper | |
RTX
Compensation Deferral Plan | |
$40,108 | |
$99,587 | |
$48,978 | |
$0 | |
$370,703 |
| | |
UTC
Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$21,787 | |
$0 | |
$191,994 |
| | |
UTC
Savings Restoration Plan | |
$0 | |
$0 | |
$59,890 | |
$0 | |
$342,152 |
| | |
Rockwell
Collins Deferred Compensation Plan | |
$0 | |
$0 | |
$20,853 | |
$0 | |
$200,966 |
| | |
Rockwell
Collins Non-Qualified Savings Plan | |
$0 | |
$0 | |
$218,919 | |
$0 | |
$1,146,311 |
| T.
Brunk | |
RTX
Compensation Deferral Plan | |
$141,202 | |
$75,232 | |
$83,077 | |
$0 | |
$756,540 |
| | |
UTC
Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$27,378 | |
$0 | |
$139,994 |
| | |
UTC
Savings Restoration Plan | |
$0 | |
$0 | |
$34,974 | |
$0 | |
$150,081 |
| | |
UTC
Deferred Compensation Plan | |
$0 | |
$0 | |
$144,162 | |
$0 | |
$721,033 |
| | |
RTX
PSU Deferral Plan | |
$258,524 | |
$0 | |
$77,691 | |
$0 | |
$336,215 |
| | |
Rockwell
Collins Non-Qualified Savings Plan | |
$0 | |
$0 | |
$7,159 | |
$0 | |
$38,526 |
| S.
Timm | |
RTX
Compensation Deferral Plan | |
$88,846 | |
$152,181 | |
$161,504 | |
$0 | |
$1,402,222 |
| | |
UTC
Company Automatic Contribution Excess Plan | |
$0 | |
$0 | |
$33,472 | |
$0 | |
$258,542 |
| | |
UTC
Savings Restoration Plan | |
$0 | |
$0 | |
$51,647 | |
$0 | |
$216,539 |
| | |
UTC
Deferred Compensation Plan | |
$0 | |
$0 | |
$104,133 | |
$0 | |
$1,127,117 |
| | |
RTX
PSU Deferral Plan | |
$1,838,616 | |
$0 | |
$552,532 | |
$0 | |
$2,391,148 |
| | |
Rockwell
Collins Non-Qualified Savings Plan | |
$0 | |
$0 | |
$9,644 | |
$0 | |
$57,403 |
| (1) |
Amounts shown are included in the Salary and Bonus columns of the Summary Compensation Table on page 69, except for contributions into the RTX PSU Deferral Plan, which are included in the Options Exercised and Stock Vested table on page 74. |
| (2) |
Amounts shown are included in the All Other Compensation column of the Summary Compensation Table on page 69. |
| (3) |
Amounts shown reflect hypothetical investment returns (less fees, if applicable) based on fixed income, bond and equity indices selected by the participant. Participants also may elect RTX stock units with dividend reinvestments (except under the UTC Company Automatic Contribution Excess Plan and the Sundstrand Corporation Deferred Compensation Plan). These returns do not constitute above-market earnings, except for $17,732 credited to Mr. Hayes under the closed Sundstrand Corporation Deferred Compensation Plan, which is included in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table on page 69. |
| (4) |
The sum of contributions (by both the executive and RTX) and credited earnings on those prior deferrals, less withdrawals. Of these totals, the following amounts have been included in the Summary Compensation Table in prior years: Mr. Calio, $834,678; Mr. Mitchill, $933,573; Mr. Hayes, $6,406,466; and Mr. Timm, $4,291,643. |
78 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
Potential
Payments upon Termination or Change-in-Control
Descriptions of our Executive
Leadership Group (“ELG”) program, the change-in-control benefit provided under the legacy UTC Senior Executive Severance
Plan and the RTX Corporation Long-Term Incentive Plan (“RTX LTIP”), are provided on pages 64-65.
CHRISTOPHER
T. CALIO
The table below shows the estimated
value of payments and benefits that Mr. Calio would have been entitled to receive had his employment terminated on December 31,
2024, under various hypothetical circumstances.
| | |
Involuntary
Separation
(for
Cause)(1) | |
Involuntary
Separation
(without
Cause)(2) | |
Voluntary
Separation(3) | |
Separation
following a
Change-in-Control(4) |
| Cash Payment(5) | |
$0 | |
$2,417,150 | |
$0 | |
$2,417,150 |
| Pension(6) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health & Welfare Continuation(7) | |
$0 | |
$37,027 | |
$0 | |
$37,027 |
| Accrued Paid Time Off | |
$0 | |
$0 | |
$0 | |
$0 |
| Option Awards(8) | |
$0 | |
$5,861,005 | |
$5,861,005 | |
$11,961,901 |
| Stock Awards(8) | |
$0 | |
$22,039,973 | |
$19,906,328 | |
$42,632,347 |
| Total | |
$0 | |
$30,355,155 | |
$25,767,333 | |
$57,048,425 |
| (1) |
Outstanding LTI awards would be forfeited upon an involuntary separation for cause. |
| (2) |
As of December 31, 2024, Mr. Calio had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of an involuntary separation (without cause), his annual LTI awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. An involuntary (not for cause) separation would constitute a qualifying separation under the terms of the ELG RSU awards and as a result, those RSUs would vest. Annual LTI awards outstanding for less than one year would be forfeited. |
| (3) |
As of December 31, 2024, Mr. Calio had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of a voluntary separation, his annual LTI awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. Annual LTI awards outstanding for less than one year and his ELG RSU award, which does not carry beneficial retirement treatment, would be forfeited in the case of a voluntary separation from the Company, unless the terms of Mr. Calio’s separation were determined to be “mutually agreeable” following three years of service within the ELG. In this case, the Company may elect to vest his ELG RSU award. |
| (4) |
In the event of a qualifying termination within two years of an RTX change-in-control, all outstanding awards would vest in accordance with the RTX LTIP, including PSUs, which would vest at the greater of actual or target performance. |
| (5) |
Upon an involuntary separation (not for cause) or a qualifying separation following a change-in-control, the Company provides a pro rata portion of target annual incentive awards for the period of time employed during the plan year. Since this table assumes a December 31, 2024 separation, a full-year 2024 target annual incentive award is shown. |
| (6) |
An estimated lump-sum present value of the qualified and nonqualified pension benefits payable to Mr. Calio upon a separation from the Company can be found in the Pension Benefits table on page 76. |
| (7) |
Upon an involuntary separation (not for cause) or a qualifying separation following a change-in-control, the Company provides one year of continuation of health and welfare benefits. Amounts shown reflect the estimated cost of one year of health and welfare benefit continuation based on elections as of December 31, 2024. |
| (8) |
Reflects the value of unvested LTI awards that would vest (or remain eligible to vest) following a separation from the Company, calculated using the closing stock price of RTX on the last trading day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
RTX
2025 PROXY STATEMENT 79
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
NEIL G. MITCHILL, JR.
The table below shows the estimated value of payments
and benefits that Mr. Mitchill would have been entitled to receive had his employment terminated on December 31, 2024, under various
hypothetical circumstances.
| | |
Involuntary
Separation
(for
Cause)(1) | |
Involuntary Separation
(without Cause)(2) | |
Voluntary
Separation(3) | |
Separation
following a
Change-in-Control(4) |
| Cash Payment(5) | |
$0 | |
$1,207,500 | |
$0 | |
$1,207,500 |
| Pension(6) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health & Welfare Continuation(7) | |
$0 | |
$35,181 | |
$0 | |
$35,181 |
| Accrued Paid Time Off | |
$0 | |
$0 | |
$0 | |
$0 |
| Option Awards(8) | |
$0 | |
$2,519,217 | |
$0 | |
$5,552,891 |
| Stock Awards(8) | |
$0 | |
$9,608,880 | |
$0 | |
$20,528,207 |
| Total | |
$0 | |
$13,370,778 | |
$0 | |
$27,323,779 |
| (1) |
Outstanding LTI awards would be forfeited upon
an involuntary separation for cause. |
| (2) |
As of December 31, 2024, Mr. Mitchill had not attained retirement
eligibility status under the terms of the RTX LTIP. As a result, in the event of an involuntary separation (without cause),
his annual LTI awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest on
a pro rata basis; and (ii) a pro rata portion of PSUs would remain eligible to vest on the original vesting date, subject
to the achievement of Company performance goals and his execution of a release of claims in favor of the Company. An involuntary
(not for cause) separation would constitute a qualifying separation under the terms of the ELG RSU awards and as a result,
those RSUs would vest. Annual LTI awards outstanding for less than one year, and the pro rata portion of annual LTI awards
(held for more than one year) that do not vest or remain eligible to vest, would be forfeited. |
| (3) |
As of December 31, 2024, Mr. Mitchill had not attained retirement
eligibility status under the terms of the RTX LTIP. As a result, in the event of a voluntary separation from the Company,
all unvested awards would be forfeited, unless the terms of Mr. Mitchill’s separation were determined to be “mutually
agreeable” following three years of service within the ELG. In this case, the Company may elect to vest his ELG RSU
award. |
| (4) |
In the event of a qualifying termination within two years of an
RTX change-in-control, all outstanding awards would vest in accordance with the RTX LTIP, including PSUs, which would vest
at the greater of actual or target performance. |
| (5) |
Upon an involuntary separation (not for cause) or a qualifying
separation following a change-in-control, the Company provides a pro rata portion of target annual incentive awards for the
period of time employed during the plan year. Since this table assumes a December 31, 2024 separation, a full-year 2024 target
annual incentive award is shown. |
| (6) |
Mr. Mitchill does not participate in the Company’s pension
plans. |
| (7) |
Upon an involuntary separation (not for cause), or a qualifying
separation following a change-in-control, the Company provides one year of continuation of health and welfare benefits. Amounts
shown reflect the estimated cost of one year of health and welfare benefit continuation based on elections as of December
31, 2024. |
| (8) |
Reflects the value of unvested LTI awards that would vest (or remain
eligible to vest) following a separation from the Company, calculated using the closing stock price of RTX on the last trading
day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance
as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
80 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
GREGORY J. HAYES
The table below shows the estimated value of payments
and benefits that Mr. Hayes would have been entitled to receive had his employment terminated on December 31, 2024, under various
hypothetical circumstances.
| | |
Involuntary Separation
(for Cause)(1) | |
Involuntary Separation
(without
Cause)(2) | |
Voluntary
Separation(3) | |
Separation following a
Change-in-Control(4) |
| Cash Payment(5)(6) | |
$0 | |
$5,837,500 | |
$4,187,500 | |
$3,911,188 |
| Pension(7) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health & Welfare Continuation(8) | |
$0 | |
$26,353 | |
$0 | |
$26,353 |
| Accrued Paid Time Off | |
$0 | |
$0 | |
$0 | |
$0 |
| Option Awards(9) | |
$0 | |
$11,219,929 | |
$11,219,929 | |
$15,738,837 |
| Stock Awards(9) | |
$0 | |
$35,851,213 | |
$35,851,213 | |
$51,105,424 |
| Total | |
$0 | |
$52,934,995 | |
$51,258,642 | |
$70,781,801 |
| (1) |
Outstanding LTI awards would be forfeited, and
no cash benefit would be payable upon an involuntary separation for cause. |
| (2) |
As of December 31, 2024, Mr. Hayes had attained retirement eligibility
status under the terms of the RTX LTIP. As a result, in the event of an involuntary separation (without cause), his annual
LTI awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding
for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to
vest on the original vesting date, subject to the achievement of Company performance goals. Annual LTI awards outstanding
for less than one year would be forfeited. |
| (3) |
As of December 31, 2024, Mr. Hayes had attained retirement eligibility
status under the terms of the RTX LTIP. As a result, in the event of a voluntary separation from the Company, his annual LTI
awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for
more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest
on the original vesting date, subject to the achievement of Company performance goals. Annual LTI awards outstanding for less
than one year would be forfeited. |
| (4) |
In the event of a qualifying termination within two years of an
RTX change-in-control, Mr. Hayes would receive severance under the legacy UTC Senior Executive Severance Plan (as described
on page 65) and all outstanding awards would vest in accordance with the RTX LTIP, including PSUs, which would vest at the
greater of actual or target performance. The severance benefit provided under the legacy UTC Senior Executive Severance Plan
is equal to 2.99 times the sum of base salary and target annual incentive award for the year of termination, and is reduced
by 1/36th for each month that termination occurs after age 62 and, accordingly, is completely phased out at age 65. |
| (5) |
Mr. Hayes remains eligible for benefits under an earlier version
of the ELG program. Under the terms of his ELG agreement, upon a qualifying separation from the Company (as defined under
the ELG agreement and detailed on pages 64-65), he is eligible to receive a cash payment equal to 2.5 times base salary. As
of December 31, 2024, Mr. Hayes met the definition of qualifying separation under the terms of his ELG agreement, and would
therefore receive this benefit in the case of an involuntary (without cause) or voluntary separation from the Company. Upon
Mr. Hayes’ future qualifying separation from employment, this benefit will be determined based on Mr. Hayes’ base salary in
effect at the time he stepped down from the role of CEO. |
| (6) |
Upon an involuntary separation (not for cause) or a qualifying
separation following a change-in-control, the Company provides a pro rata portion of target annual incentive awards for the
period of time employed during the plan year. Since this table assumes a December 31, 2024 separation, a full-year 2024 target
annual incentive award is shown. |
| (7) |
An estimated lump-sum present value of the qualified and nonqualified
pension benefits payable to Mr. Hayes upon separation from the Company can be found in the Pension Benefits table on page
76. |
| (8) |
Upon an involuntary separation (not for cause), or a qualifying
separation following a change-in-control, the Company provides one year of continuation of health and welfare benefits. Amounts
shown reflect the estimated cost of one year of health and welfare benefit continuation based on elections as of December
31, 2024. |
| (9) |
Reflects the value of unvested LTI awards that would vest (or remain
eligible to vest) following a separation from the Company, calculated using the closing stock price of RTX on the last trading
day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance
as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
RTX
2025 PROXY STATEMENT 81
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL
SHANE G. EDDY
The table below shows the estimated
value of payments and benefits that Mr. Eddy would have been entitled to receive had his employment terminated on December 31,
2024, under various hypothetical circumstances.
| | |
Involuntary Separation
(for Cause)(1) | |
Involuntary Separation
(without Cause)(2) | |
Voluntary
Separation(3) | |
Separation following a
Change-in-Control(4) |
| Cash Payment(5) | |
$0 | |
$850,500 | |
$0 | |
$850,500 |
| Pension(6) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health & Welfare Continuation(7) | |
$0 | |
$26,312 | |
$0 | |
$26,312 |
| Accrued Paid Time Off | |
$0 | |
$0 | |
$0 | |
$0 |
| Option Awards(8) | |
$0 | |
$2,282,009 | |
$2,282,009 | |
$3,863,997 |
| Stock Awards(8) | |
$0 | |
$10,911,991 | |
$7,415,280 | |
$16,251,312 |
| Total | |
$0 | |
$14,070,812 | |
$9,697,289 | |
$20,992,121 |
| (1) |
Outstanding LTI awards would be forfeited upon
an involuntary separation for cause. |
| (2) |
As of December 31, 2024, Mr. Eddy had attained retirement eligibility
status under the terms of the RTX LTIP. As a result, in the event of an involuntary separation (without cause), his annual
LTI awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding
for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to
vest on the original vesting date, subject to the achievement of Company performance goals. An involuntary (not for cause)
separation would constitute a qualifying separation under the terms of the ELG RSU awards and as a result, those RSUs would
vest. Annual LTI awards outstanding for less than one year would be forfeited. |
| (3) |
As of December 31, 2024, Mr. Eddy had attained retirement eligibility
status under the terms of the RTX LTIP. As a result, in the event of a voluntary separation, his annual LTI awards would have
received the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one
year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original
vesting date, subject to the achievement of Company performance goals. Annual LTI awards outstanding for less than one year
and his ELG RSU award, which does not carry beneficial retirement treatment, would be forfeited in the case of a voluntary
separation from the Company, unless the terms of Mr. Eddy’s separation were determined to be “mutually agreeable”
following three years of service within the ELG. In this case, the Company may elect to vest his ELG RSU award. |
| (4) |
In the event of a qualifying termination within two years of an
RTX change-in-control, all outstanding awards would vest in accordance with the RTX LTIP, including PSUs, which would vest
at the greater of actual or target performance. |
| (5) |
Upon an involuntary separation (not for cause) or a qualifying
separation following a change-in-control, the Company provides a pro rata portion of target annual incentive awards for the
period of time employed during the plan year. Since this table assumes a December 31, 2024 separation, a full-year 2024 target
annual incentive award is shown. |
| (6) |
An estimated lump-sum present value of the qualified pension benefits
payable to Mr. Eddy upon separation from the Company can be found in the Pension Benefits table on page 76. |
| (7) |
Upon an involuntary separation (not for cause), or a qualifying
separation following a change-in-control, the Company provides one year of continuation of health and welfare benefits. Amounts
shown reflect the estimated cost of one year of health and welfare benefit continuation based on elections as of December
31, 2024. |
| (8) |
Reflects the value of unvested LTI awards that would vest (or remain
eligible to vest) following a separation from the Company, calculated using the closing stock price of RTX on the last trading
day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance
as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
82 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
PHILIP
J. JASPER
The table below shows the estimated value of payments
and benefits that Mr. Jasper would have been entitled to receive had his employment terminated on December 31, 2024, under various
hypothetical circumstances.
| | |
Involuntary Separation
(for Cause)(1) | |
Involuntary Separation
(without
Cause)(2) | |
Voluntary
Separation(3) | |
Separation following a
Change-in-Control(4) |
| Cash Payment(5) | |
$0 | |
$829,500 | |
$0 | |
$829,500 |
| Pension(6) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health & Welfare Continuation(7) | |
$0 | |
$32,456 | |
$0 | |
$32,456 |
| Accrued Paid Time Off(8) | |
$16,712 | |
$16,712 | |
$16,712 | |
$16,712 |
| Option Awards(9) | |
$0 | |
$961,581 | |
$961,581 | |
$2,430,041 |
| Stock Awards(9) | |
$0 | |
$4,118,070 | |
$2,675,851 | |
$9,075,515 |
| Total | |
$16,712 | |
$5,958,319 | |
$3,654,144 | |
$12,384,224 |
| (1) |
Outstanding LTI awards would be forfeited upon an involuntary separation for cause. |
| (2) |
As of December 31, 2024, Mr. Jasper had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of an involuntary separation (without cause), his annual LTI awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. An involuntary (not for cause) separation would constitute a qualifying separation under the terms of the ELG RSU awards and as a result, those RSUs would vest. Annual LTI awards outstanding for less than one year would be forfeited. |
| (3) |
As of December 31, 2024, Mr. Jasper had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of a voluntary separation, his annual LTI awards would have received the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. Annual LTI awards outstanding for less than one year and his ELG RSU award, which does not carry beneficial retirement treatment, would be forfeited in the case of a voluntary separation from the Company, unless the terms of Mr. Jasper’s separation were determined to be “mutually agreeable” following three years of service within the ELG. In this case, the Company may elect to vest his ELG RSU award. |
| (4) |
In the event of a qualifying termination within two years of an RTX change-in-control, all outstanding awards would vest in accordance with the RTX LTIP, including PSUs, which would vest at the greater of actual or target performance. |
| (5) |
Upon an involuntary separation (not for cause) or a qualifying separation following a change-in-control, the Company provides a pro rata portion of target annual incentive awards for the period of time employed during the plan year. Since this table assumes a December 31, 2024 separation, a full-year 2024 target annual incentive award is shown. |
| (6) |
An estimated lump-sum present value of the qualified and nonqualified pension benefits payable to Mr. Jasper upon separation from the Company can be found in the Pension Benefits table on page 76. |
| (7) |
Upon an involuntary separation (not for cause), or a qualifying separation following a change-in-control, the Company provides one year of continuation of health and welfare benefits. Amounts shown reflect the estimated cost of one year of health and welfare benefit continuation based on elections as of December 31, 2024. |
| (8) |
Reflects the value of accrued (and unused) paid time off that would be paid to Mr. Jasper upon his separation from the Company. |
| (9) |
Reflects the value of unvested LTI awards that would vest (or remain eligible to vest) following a separation from the Company, calculated using the closing stock price of RTX on the last trading day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
RTX
2025 PROXY STATEMENT 83
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
TROY D. BRUNK
The table below shows the estimated value of payments
and benefits that Mr. Brunk would have been entitled to receive had his employment terminated on December 31, 2024, under various
hypothetical circumstances.
| | |
Involuntary Separation
(for Cause)(1) | |
Involuntary Separation
(without Cause)(2) | |
Voluntary
Separation(3) | |
Separation
following a
Change-in-Control(4) |
| Cash Payment(5) | |
$0 | |
$672,750 | |
$0 | |
$672,750 |
| Pension(6) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health & Welfare Continuation(7) | |
$0 | |
$24,966 | |
$0 | |
$24,966 |
| Accrued Paid Time Off | |
$0 | |
$0 | |
$0 | |
$0 |
| Option Awards(8) | |
$0 | |
$375,106 | |
$375,106 | |
$829,218 |
| Stock Awards(8) | |
$0 | |
$1,562,162 | |
$1,562,162 | |
$6,173,141 |
| Total | |
$0 | |
$2,634,984 | |
$1,937,268 | |
$7,700,075 |
| (1) |
Outstanding
LTI awards would be forfeited upon an involuntary separation for cause. |
| (2) |
As of December 31, 2024,
Mr. Brunk had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of an involuntary
separation (without cause), his annual LTI awards would receive the beneficial treatment reserved for retirement-eligible
employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest;
and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance
goals. An involuntary (not for cause) separation would constitute a qualifying separation under the terms of the ELG RSU awards.
However, as of December 31, 2024, Mr. Brunk had not been a member of the ELG for three or more years and as a result, his
ELG RSU awards would be forfeited upon an involuntary (not for cause) separation. Annual LTI awards outstanding for less than
one year would also be forfeited. |
| (3) |
As of December 31, 2024,
Mr. Brunk had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of a voluntary
separation, his annual LTI awards would have received the beneficial treatment reserved for retirement-eligible employees.
These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs
would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. Annual
LTI awards outstanding for less than one year and his ELG RSU award, which does not carry beneficial retirement treatment,
would be forfeited in the case of a voluntary separation from the Company, unless the terms of Mr. Brunk’s separation
were determined to be “mutually agreeable” following three years of service within the ELG. However, as of December
31, 2024, Mr. Brunk had not been in the ELG for three or more years, and therefore would not have been eligible to vest in
his ELG award upon a mutually agreeable separation from the Company. |
| (4) |
In the event of a qualifying
termination within two years of an RTX change-in-control, all outstanding awards would vest in accordance with the RTX LTIP,
including PSUs, which would vest at the greater of actual or target performance. |
| (5) |
Upon an involuntary
separation (not for cause) or a qualifying separation following a change-in-control, the Company provides a pro rata portion
of target annual incentive awards for the period of time employed during the plan year. Since this table assumes a December
31, 2024 separation, a full-year 2024 target annual incentive award is shown. |
| (6) |
An estimated lump-sum
present value of the qualified pension benefits payable to Mr. Brunk upon separation from the Company can be found in the
Pension Benefits table on page 76. |
| (7) |
Upon an involuntary
separation (not for cause), or a qualifying separation following a change-in-control, the Company provides one year of continuation
of health and welfare benefits. Amounts shown reflect the estimated cost of one year of health and welfare benefit continuation
based on elections as of December 31, 2024. |
| (8) |
Reflects the value of
unvested LTI awards that would vest (or remain eligible to vest) following a separation from the Company, calculated using
the closing stock price of RTX on the last trading day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
84 RTX
2025 PROXY STATEMENT
Table of Contents
COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
STEPHEN J. TIMM
The table below shows the estimated value of payments
and benefits that Mr. Timm would have been entitled to receive had his employment terminated on December 31, 2024, under various
hypothetical circumstances.
| | |
Involuntary Separation
(for Cause)(1) | |
Involuntary Separation
(without
Cause)(2) | |
Voluntary
Separation(3) | |
Separation following a
Change-in-Control(4) |
| Cash
Payment(5) | |
$0 | |
$945,000 | |
$0 | |
$945,000 |
| Pension(6) | |
$0 | |
$0 | |
$0 | |
$0 |
| Health
& Welfare Continuation(7) | |
$0 | |
$25,658 | |
$0 | |
$25,658 |
| Accrued
Paid Time Off | |
$0 | |
$0 | |
$0 | |
$0 |
| Option Awards(7) | |
$0 | |
$3,267,392 | |
$3,267,392 | |
$5,301,024 |
| Stock Awards(7) | |
$0 | |
$11,183,354 | |
$9,750,046 | |
$18,047,865 |
| Total | |
$0 | |
$15,421,404 | |
$13,017,438 | |
$24,319,547 |
| (1) |
Outstanding LTI awards would be forfeited upon an involuntary separation for cause. |
| (2) |
As of December 31, 2024, Mr. Timm had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of an involuntary separation (without cause), his annual LTI awards would receive the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. An involuntary (not for cause) separation would constitute a qualifying separation under the terms of the ELG RSU awards and as a result, those RSUs would vest. Annual LTI awards outstanding for less than one year would be forfeited. |
| (3) |
As of December 31, 2024, Mr. Timm had attained retirement eligibility status under the terms of the RTX LTIP. As a result, in the event of a voluntary separation, his annual LTI awards would have received the beneficial treatment reserved for retirement-eligible employees. These awards, if outstanding for more than one year, would be treated as follows: (i) SARs and RSUs would vest; and (ii) PSUs would remain eligible to vest on the original vesting date, subject to the achievement of Company performance goals. Annual LTI awards outstanding for less than one year and his ELG RSU award, which does not carry beneficial retirement treatment, would be forfeited in the case of a voluntary separation from the Company, unless the terms of Mr. Timm’s separation were determined to be “mutually agreeable” following three years of service within the ELG. In this case, the Company may elect to vest his ELG RSU award. |
| (4) |
In the event of a qualifying termination within two years of an RTX change-in-control, all outstanding awards would vest in accordance with the RTX LTIP, including PSUs, which would vest at the greater of actual or target performance. |
| (5) |
Upon an involuntary separation (not for cause) or a qualifying separation following a change-in-control, the Company provides a pro rata portion of target annual incentive awards for the period of time employed during the plan year. Since this table assumes a December 31, 2024 separation, a full-year 2024 target annual incentive award is shown. |
| (6) |
An estimated lump-sum present value of the qualified pension benefits payable to Mr. Timm upon separation from the Company can be found in the Pension Benefits table on page 76. |
| (7) |
Upon an involuntary separation (not for cause), or a qualifying separation following a change-in-control, the Company provides one year of continuation of health and welfare benefits. Amounts shown reflect the estimated cost of one year of health and welfare benefit continuation based on elections as of December 31, 2024. |
| (8) |
Reflects the value of unvested LTI awards that would vest (or remain eligible to vest) following a separation from the Company, calculated using the closing stock price of RTX on the last trading day of 2024 ($115.72). Where included, the 2024 and 2023 PSUs assume maximum-level performance based on estimated performance as of December 31, 2024, and actual performance is used for the 2022 PSUs. |
RTX
2025 PROXY STATEMENT 85
Table of Contents
| |
Background
The following section
discloses the ratio of our median employee’s total annual compensation to the total annual compensation of the CEO.
Below we explain the methodology that we used, in accordance with SEC rules, to identify the median employee and to calculate
the 2024 ratio.
|
|
Identifying the Median
Employee
The Company used the following parameters to identify the employee whose
pay was at the median of all RTX employees globally.
COMPENSATION MEASURE
We identified the median employee on October 1, 2024, by assessing gross
cash compensation paid to employees from October 1, 2023 to September 30, 2024. Gross cash compensation varies by country
and is based on local pay practices, but generally includes:
| ● |
Base salary (including any local allowances) |
| ● |
Incentive pay (including cash bonuses, sales incentives and other
variable pay programs) |
| ● |
Any other cash awards or payments(1) |
Annualized pay. Pay
was annualized for employees who worked a partial year between October 1, 2023, and September 30, 2024. Partial-year employees
may include midyear hires, employees on paid or unpaid leave, and employees on active military duty.
Foreign exchange rates. Foreign currencies
were converted into U.S. dollars as of October 1, 2024, based on the average daily spot rates during September 2024.
EMPLOYEES INCLUDED AND EXCLUDED
For the purposes of identifying the median
employee, we included all active RTX employees (excluding the President & CEO) on October 1, 2024, located in 10 countries
in which RTX has operations. RTX’s employee population in these 10 countries represents approximately 95% (or 176,372) of
our 185,487 active employees on that date. As of October 1, 2024, our global population consisted of 127,197 U.S. employees and
58,290 non-U.S. employees.
We excluded 9,115 employees from 41 countries under the SEC’s
de minimis exemption.(2) No employees of recently acquired entities were excluded from the calculation in 2024.
| (1) |
In some countries, due to differences in payroll
systems and local laws and regulations, gains realized on the vesting and/or exercise of LTI awards, as well as Company contributions
to government-sponsored benefit plans, may be included. |
| (2) |
The countries and approximate number of RTX employees excluded
from the calculation are as follows: Algeria (2), Australia (1,587), Belgium (14), Brazil (111), Cayman Islands (1), Chile
(22), China (including Hong Kong) (2,183), Colombia (25), Costa Rica (2), Denmark (1), Dominican Republic (2), Egypt (10),
El Salvador (2), Greece (5), Indonesia (467), Ireland (233), Israel (1,105), Italy (746), Japan (155), Kenya (11), Korea (36),
Latvia (1), Luxembourg (1), Malaysia (149), Morocco (180), Netherlands (303), New Zealand (427), Norway (4), Oman (4), Qatar
(35), Saudi Arabia (199), South Africa (4), Spain (28), Sweden (4), Switzerland (31), Taiwan (80), Tanzania (14), Thailand
(5), Turkey (631), United Arab Emirates (281) and Vietnam (14). |
86 RTX
2025 PROXY STATEMENT
Table of Contents
CEO
PAY RATIO
CALCULATING
THE RATIO
Calculating the Ratio
METHODOLOGY
Once we identified the median employee using gross cash compensation
as our compensation measure, we then calculated 2024 total compensation for our CEO and for the median employee for the full calendar
year, using the same methodology outlined by the SEC for reporting in the Summary Compensation Table (see page 69). Under this
methodology, compensation includes employee fringe benefits, such as Company contributions to healthcare and retirement plans.
The total compensation for our CEO, Mr. Calio, for fiscal year 2024,
as set forth in the Summary Compensation Table (“SCT”) on page 69, was $18,004,831. However, in accordance with SEC
rules, for purposes of the CEO pay ratio, we have annualized certain elements of his compensation since Mr. Calio served as President & CEO for only a portion of the year. Mr. Calio’s base salary, annual incentive award, and Company contributions to defined
contribution plans that are reported in the All Other Compensation column of the SCT have been annualized. We did not annualize
Mr. Calio’s LTI award, as this award was made in early 2024 in anticipation of his May 2, 2024, transition to the role of CEO.
Also, other elements of pay reported in the All Other Compensation column of the SCT are not impacted by Mr. Calio’s promotion
to the role of CEO, and therefore have not been annualized. Mr. Calio’s annualized total compensation was $18,421,398, with details
shown below:
Summary
Compensation Table
Component |
|
Compensation
for
CEO Pay Ratio |
|
Explanation |
| Base
Salary |
|
$1,450,000 |
|
Annualized
salary. The actual salary paid in 2024 was $1,182,500, as disclosed in the SCT. |
| Bonus |
|
$2,892,750 |
|
Target
AIP annualized for full year multiplied by the Corporate performance factor. |
| Stock
Awards |
|
$8,315,559 |
|
Same
value as SCT, since LTI awards were made in consideration of the expected CEO transition. |
| |
|
| Option
Awards |
|
$5,379,072 |
|
Same
value as SCT, since LTI awards were made in consideration of the expected CEO transition. |
| |
|
| Change
in Pension Value and Non-Qualified Deferred Compensation Earnings |
|
$0 |
|
Mr.
Calio had no compensation attributable to a Change in Pension Value and Non-Qualified Deferred Compensation Earnings during
2024. |
| All
Other Compensation |
|
$384,017 |
|
Company
contributions to defined contribution plans are annualized for Mr. Calio’s base salary in effect on May 2, 2024. All other
elements reported in All Other Compensation are not annualized. |
| Total |
|
$18,421,398 |
|
|
RESULTS
The 2024 total annual compensation value for
Mr. Calio was $18,421,398 and for RTX’s global median employee (as of October 1, 2024), it was $113,094, resulting in a
ratio of 163:1.
With approximately 31% of our employees located
outside the U.S., RTX has operations around the world. We believe paying competitive wages targeted at the median of local labor
markets within our industry is essential to ensuring a productive, engaged workforce and a sustainable business. Consequently,
a global ratio may not be particularly informative without any context for foreign labor markets and the diverse roles of RTX’s
employees around the world.
Comparing RTX’s Ratio to Other Companies
A number of factors unrelated to compensation significantly impact this
calculation and are particularly important when comparing RTX’s ratio to ratios at other companies. These factors include
industry-specific pay differentials, company and organizational structure (e.g., outsourcing versus insourcing), and the geographic
location of employee populations.
RTX
2025 PROXY STATEMENT 87
Table of Contents
| |
Background
The following section provides information
regarding executive pay and performance in accordance with the SEC’s pay versus performance (“PvP”)
disclosure rules. These rules require disclosure of compensation paid to our NEOs using a measure called Compensation
Actually Paid (“CAP”), as well as disclosure of certain aspects of Company performance.
This section does
not reflect how the Human Capital & Compensation Committee (the “HCC Committee”) makes executive compensation
decisions. In addition, this section generally uses different metrics from those used in our compensation plans, as discussed
below. Refer to page 4 for additional details on how we align pay with performance, and page 44 for the Guiding Principles
that underpin how the HCC Committee approaches executive compensation program design.
|
|
Our Most Important Metrics Used for Linking Pay and Performance
The most important metrics the HCC Committee used to link pay to performance
for 2024 are listed below. Performance relative to these metrics determines our annual incentive pool funding and PSU vesting
payouts.
Annual
Incentive Plan |
●
Earnings measure the immediate impact of operating
decisions on the Company’s annual performance. For our Corporate executives, we use adjusted net income as our RTX-wide earnings metric, and for our business units, we use adjusted segment operating income.
●
Free Cash Flow measures our ability to generate cash to
fund our operations and key business investments—whether that means funding critical research and development, strategic
acquisitions, paying down debt or distributing earnings to our shareowners.
|
Performance
Share Units |
●
Adjusted Earnings Per Share measures the Company’s
ability to create long-term, sustainable earnings that will ultimately drive total shareowner return.
●
Return on Invested Capital measures the efficiency with
which we allocate capital resources, considering not just the quantity of earnings but also the quality of earnings and
investments that drive sustainable growth.
●
Total Shareowner Return vs. our Core A&D Peers and the
companies in the S&P 500 Index measures our ability to return value to our shareowners compared to our Core A&D
Peers and a broad index investment opportunity.
|
INDIVIDUAL PERFORMANCE CONSIDERATIONS
Each NEO’s total direct compensation (as defined on page 56) is
also based on rigorous individual performance assessments by the HCC Committee, and on individual and job-specific factors, typically
including job scope and responsibilities, tenure, experience, external market positioning, sustained performance and retention
risk. See pages 55-62 for additional details on the individual performance considerations used to determine 2024 total direct compensation.
88 RTX
2025 PROXY STATEMENT
Table of Contents
PAY
VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE TABLE—COMPENSATION
DEFINITIONS
Pay versus Performance Table—Compensation Definitions
The table below outlines the differences between the values reported
in the Summary Compensation Table on page 69 and the SEC-mandated CAP calculation:
Summary
Compensation
Table (“SCT”) |
|
Basic Concept |
|
●
Includes
a mix of compensation earned during the year (e.g., base salary and annual incentives) and
estimated future pay opportunities (e.g., LTI and pension benefits).
●
Uses accounting conventions to estimate the fair value of LTI awards
on the grant date, which can significantly differ from the value ultimately realized by the NEO.
●
Includes aggregate change in the actuarial present value of pension
benefits, which is impacted by various economic actuarial assumptions that do not necessarily represent the additional benefit earned
by the NEO during the year.
|
| |
How it
is calculated |
|
●
Base salary
paid during the year
●
Annual incentives earned for the applicable year’s
performance
●
Grant date accounting fair value of LTI awards granted
during the year, which reflects the HCC Committee’s evaluation of the prior year’s performance
●
Change in the actuarial present value of pension benefits,
plus above market earnings on nonqualified deferred compensation
●
All other compensation
|
Compensation
Actually Paid |
|
Basic
Concept |
|
●
Like the
SCT, includes a mix of compensation earned during the year (e.g., base salary and annual
incentives), and estimated future pay opportunities (e.g., LTI and pension benefits).
●
Uses the same accounting conventions as the SCT to estimate the value
of LTI. However, the CAP LTI values represent a year-over-year change in the accounting values of unvested LTI awards, LTI awards that
vested or forfeited during the year, as well as the year-end valuation for LTI awards granted during the year. For SARs, this accounting
value at vesting does not represent the actual value realized by the NEO, which will ultimately be determined when the NEO exercises
vested SARs.
●
Includes the pension benefit service cost for the year, which seeks
to neutralize the effect of certain economic actuarial assumptions and more closely estimates the amount actually earned by the NEO during
the relevant year.
|
| |
How
it is calculated |
|
●
Base salary
paid during the year
●
Annual incentives earned for the applicable year’s performance
●
Change in accounting fair value of LTI awards that are
unvested as of year-end and that vested or forfeited during the year (vs. prior year-end values), fair value at year-end of awards granted
during the year, plus any cash dividends paid on these awards during the year
●
Current year service cost of pension benefits and any prior
year service cost of pension benefits (if a plan amendment occurred during the year), plus above-market earnings on nonqualified
deferred compensation
●
All other compensation
|
RTX
2025 PROXY STATEMENT 89
Table of Contents
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE TABLE
Pay versus Performance Table
The required SEC tabular disclosure for the Company’s Principal
Executive Officers (“PEOs”) and average NEOs (excluding the PEOs) is set forth below:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year(1)
(a) |
|
Summary
Compensation
Table Total for
PEO (Hayes)
(b) |
|
Compensation
Actually
Paid to PEO
(Hayes)(2)(4)(5)
(c) |
|
Summary
Compensation
Table Total
for PEO (Calio)
(d) |
|
Compensation
Actually
Paid to PEO
(Calio)(2)(4)(5)
(e) |
|
Average
Summary
Compensation
Table Total for
Non-PEO NEOs
(f) |
|
Average
Compensation
Actually Paid to
Non-PEO
NEOs(3)(4)(5)
(g) |
|
Value
of Initial Fixed $100
Investment
Based on: |
|
|
|
|
| |
|
|
|
|
|
|
Total
Shareowner
Return(6)
(h) |
|
Peer
Group
Total
Shareowner
Return(6)
(i) |
|
Net
Income
(GAAP)(7)
(j) |
|
Adjusted
Earnings
Per Share(8)
(k) |
| 2024 |
|
$14,598,458 |
|
$48,639,528 |
|
$18,004,831 |
|
$43,160,374 |
|
$6,119,056 |
|
$14,130,506 |
|
$145.10 |
|
$133.14 |
|
$4,774 |
|
$6.26 |
| 2023 |
|
$21,929,459 |
|
-$3,811,432 |
|
– |
|
– |
|
$8,225,337 |
|
$267,298 |
|
$103.08 |
|
$116.38 |
|
$3,195 |
|
$5.06 |
| 2022 |
|
$22,609,036 |
|
$45,201,677 |
|
– |
|
– |
|
$7,597,628 |
|
$12,510,354 |
|
$120.47 |
|
$109.00 |
|
$5,216 |
|
$4.78 |
| 2021 |
|
$23,316,063 |
|
$39,680,968 |
|
– |
|
– |
|
$9,666,013 |
|
$11,257,846 |
|
$100.38 |
|
$92.87 |
|
$3,897 |
|
$4.27 |
| 2020 |
|
$20,970,890 |
|
$5,272,381 |
|
– |
|
– |
|
$6,600,910 |
|
$2,373,738 |
|
$81.44 |
|
$82.03 |
|
- $3,109 |
|
$2.73 |
| (1) |
The PEOs for 2024 were Gregory J. Hayes and
Christopher T. Calio, and for 2023-2020, the PEO was Gregory J. Hayes. The NEOs in the 2024 reporting year are: Neil G. Mitchill,
Jr., Shane G. Eddy, Philip J. Jasper, Troy D. Brunk and Stephen J. Timm. The NEOs in the 2023 and 2022 reporting years were:
Neil G. Mitchill, Jr., Christopher T. Calio, Stephen J. Timm and Wesley D. Kremer. The NEOs in the 2021 reporting year were:
Neil G. Mitchill, Jr., Christopher T. Calio, Stephen J. Timm, Michael R. Dumais, Anthony F. O’Brien III and Thomas A.
Kennedy. The NEOs in the 2020 reporting year were: Neil G. Mitchill, Jr., Stephen J. Timm, Michael R. Dumais, Charles D. Gill,
Jr., Robert K. Ortberg and Anthony F. O’Brien III. |
| (2) |
The following amounts were deducted from and added to the SCT to
arrive at the CAP for each of the applicable years for the PEO, as shown in columns (c) and (e): |
| |
|
|
2024
(Hayes) |
|
2024
(Calio) |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
| |
Summary Compensation Table |
|
$14,598,458 |
|
$18,004,831 |
|
$21,929,459 |
|
$22,609,036 |
|
$23,316,063 |
|
$20,970,890 |
| |
Stock Awards |
|
$6,159,916 |
|
$8,315,559 |
|
$9,772,488 |
|
$9,352,104 |
|
$11,740,098 |
|
$7,417,686 |
| |
Option Awards |
|
$3,984,256 |
|
$5,379,072 |
|
$6,586,686 |
|
$6,425,871 |
|
$2,815,812 |
|
$7,178,289 |
| |
Change in Present Value of Pension Benefits |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$1,513,140 |
|
$1,563,318 |
| |
Total Deductions from SCT |
|
$10,144,172 |
|
$13,694,631 |
|
$16,359,174 |
|
$15,777,975 |
|
$16,069,050 |
|
$16,159,293 |
| |
Fair Value of Awards Granted During Year and Unvested as of Year-End |
|
$18,658,660 |
|
$25,189,252 |
|
$9,249,682 |
|
$18,142,022 |
|
$23,685,247 |
|
$10,808,662 |
| |
Fair Value of Awards Granted and Vested During the Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
| |
Change in Fair Value of Prior Year Awards Unvested as of Year-End
|
|
$23,409,788 |
|
$13,150,013 |
|
- $17,590,182 |
|
$15,968,806 |
|
$8,869,318 |
|
- $10,886,768 |
| |
Change in Fair Value of Prior Year Awards that Vested During Year
|
|
$2,116,794 |
|
$510,909 |
|
- $1,041,217 |
|
$4,259,788 |
|
- $120,609 |
|
$538,890 |
| |
Change in Fair Value of Prior Year Awards that Forfeited During
Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
| |
Dividends/Other Earnings Paid on Unvested Awards During Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
| |
Service Cost of Pension Benefits |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
| |
Prior Service Cost of Pension Benefits |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
| |
Total Additions to CAP |
|
$44,185,242 |
|
$38,850,174 |
|
-$9,381,717 |
|
$38,370,616 |
|
$32,433,955 |
|
$460,784 |
| |
Compensation Actually Paid |
|
$48,639,528 |
|
$43,160,374 |
|
-$3,811,432 |
|
$45,201,677 |
|
$39,680,968 |
|
$5,272,381 |
90 RTX
2025 PROXY STATEMENT
Table of Contents
PAY
VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE TABLE
| (3) |
The following amounts were deducted from and
added to the SCT to arrive at the CAP for each of the applicable years for the average non-PEO NEOs, as shown in column (g): |
| |
|
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
| |
Summary Compensation
Table |
|
$6,119,056 |
|
$8,225,337 |
|
$7,597,628 |
|
$9,666,013 |
|
$6,600,910 |
| |
Stock
Awards |
|
$2,790,237 |
|
$3,294,564 |
|
$3,219,892 |
|
$4,389,543 |
|
$1,700,332 |
| |
Option
Awards |
|
$1,414,835 |
|
$2,221,250 |
|
$2,212,775 |
|
$1,093,639 |
|
$1,161,641 |
| |
Change
in Present Value of Pension Benefits |
|
$850 |
|
$462,721 |
|
$0 |
|
$1,461,448 |
|
$1,033,681 |
| |
Total Deductions
from SCT |
|
$4,205,922 |
|
$5,978,534 |
|
$5,432,667 |
|
$6,944,629 |
|
$3,895,654 |
| |
Fair Value of Awards
Granted During Year and Unvested as of Year-End |
|
$7,285,983 |
|
$3,118,865 |
|
$6,246,737 |
|
$6,453,006 |
|
$2,565,703 |
| |
Fair Value of Awards
Granted and Vested During the Year |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
| |
Change in Fair Value
of Prior Year Awards Unvested as of Year-End |
|
$4,596,314 |
|
- $5,105,124 |
|
$3,459,419 |
|
$1,880,243 |
|
- $1,528,238 |
| |
Change in Fair Value
of Prior Year Awards that Vested During Year |
|
$335,076 |
|
- $150,609 |
|
$440,110 |
|
$104,110 |
|
- $918,897 |
| |
Change in Fair Value
of Prior Year Awards that Forfeited During Year |
|
$0 |
|
$0 |
|
$0 |
|
- $326,443 |
|
$0 |
| |
Dividends/Other Earnings
Paid on Unvested Awards During Year |
|
$0 |
|
$26,113 |
|
$30,377 |
|
$99,047 |
|
$11,581 |
| |
Service Cost of Pension
Benefits |
|
$0 |
|
$131,250 |
|
$168,750 |
|
$326,500 |
|
$38,667 |
| |
Prior Service Cost
of Pension Benefits |
|
$0 |
|
$0 |
|
$0 |
|
$0 |
|
- $500,333 |
| |
Total Additions to
CAP |
|
$12,217,373 |
|
- $1,979,504 |
|
$10,345,393 |
|
$8,536,463 |
|
- $331,518 |
| |
Compensation
Actually Paid |
|
$14,130,506 |
|
$267,298 |
|
$12,510,354 |
|
$11,257,846 |
|
$2,373,738 |
| (4) |
The fair value of SARs reported for CAP purposes
in columns (c), (e) and (g) is estimated using a binomial lattice model for the purposes of disclosure in accordance with
the SEC’s PvP rules. The following table shows the assumptions used to determine the fair value for SARs granted between
2017 and 2024 at various dates, as required to calculate CAP. Lattice-based option models incorporate ranges of assumptions
for inputs; those ranges are as follows: |
| |
Grant Year |
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
| |
Volatility |
|
27.90% |
|
28.78%–31.39% |
|
23.79%–32.00% |
|
24.68%–35.00% |
|
27.99%–33.92% |
|
19.76%–31.85% |
|
20.14%–33.33% |
|
9.91%–19.65% |
| |
Expected life
(in years) |
|
5.97 |
|
4.98–6.31 |
|
4.00–5.64 |
|
3.81–5.79 |
|
3.60–6.47 |
|
3.51–6.15 |
|
3.75–4.65 |
|
3.52–3.65 |
| |
Expected
dividend yield |
|
2.18% |
|
2.18%–2.80% |
|
2.17%–2.80% |
|
2.18%–2.80% |
|
2.17%–2.66% |
|
1.91%–2.83% |
|
1.99%–2.83% |
|
1.92%–1.96% |
| |
Risk-free rate |
|
4.38% |
|
3.81%–4.33% |
|
3.81%–4.28% |
|
0.76%–4.71% |
|
0.57%–4.16% |
|
0.32%–2.84% |
|
0.24%–1.67% |
|
1.55%–1.64% |
| (5) |
The fair value of PSUs reported for CAP purposes
in columns (c), (e) and (g) assumes actual performance results (if known) or estimated performance results as of the end of
each reporting year for internal metrics (i.e., EPS and ROIC), and the Monte Carlo value of target-level performance for the
market metrics (i.e., TSR vs. companies in the S&P 500 Index and TSR vs. Core A&D Peers), in accordance with FASB
ACS 718. PSUs will ultimately vest based on measured performance through the end of the three-year performance period for
all metrics. |
| (6) |
Reflects TSR indexed to $100 per share for RTX and the S&P
500 Aerospace & Defense Industry Index, which is the industry line peer group reported in our 2024 Form 10-K. See page
92 for the TSR measurement periods used for each reporting year. |
| (7) |
Values shown are in millions. 2020 GAAP net income includes $438
million for Q1 for UTC pre-Merger (excluding net income generated by Carrier and Otis, which were spun off from UTC on April
3, 2020), and RTX’s post-Merger value of -$3,547 million for Q2–Q4. |
| (8) |
The value shown for 2024 reflects the 2024 Adjusted EPS used to
calculate performance for the 2022-2024 PSUs, as defined in Appendix B of our Proxy Statement filed on March 13, 2023. Adjusted
EPS for 2023 and 2022 are detailed in Appendix A of this Proxy Statement on pages 111-113. Adjusted EPS shown for 2021 is
detailed in Appendix A of our Proxy Statement filed on March 14, 2022. Adjusted EPS shown for 2020 includes $1.38 per share
for Q1 for UTC pre-Merger (excluding earnings generated by Carrier and Otis, which were spun off from UTC on April 3, 2020),
and RTX’s post-Merger value of $1.69 for Q2–Q4. |
RTX
2025 PROXY STATEMENT 91
Table of Contents
PAY VERSUS
PERFORMANCE
RELATIONSHIP BETWEEN CAP AND TSR
Relationship between CAP and TSR
The charts below reflect the relationship between the CEO and Average
NEO CAP (per the SEC’s definition), RTX’s TSR and the SEC-mandated TSR Peer Group—the S&P 500 Aerospace
& Defense Industry Index.
CEO CAP vs. TSR
AVERAGE NEO CAP vs. TSR
HOW TSR USED FOR THE PVP TABLE DIFFERS FROM HOW WE USE TSR IN OUR
PSUS
The SEC’s PvP disclosure rules require a comparison of CAP to RTX’s
TSR and Peer Group TSR over differing time periods. This mandated comparison, and the performance measurement periods used, differ
in the following ways from how our incentive plans are designed:
| ● |
For our PSUs, we compare our TSR to both the
companies within the S&P 500 Index and our Core A&D Peers (together “PSU Peer Groups”)—each weighted
at 15%. For the SEC’s PvP disclosure, we compare our TSR only to the S&P 500 Aerospace & Defense Industry Index. |
| ● |
For our PSUs, we calculate TSR for both RTX and the companies within
our PSU Peer Groups using a November/ December trailing average adjusted closing stock price for both the beginning and ending
of the performance period. However, the PvP disclosures require the use of a point-to-point calculation. |
| ● |
For our PSUs, we measure performance using a
three-year performance period, while the SEC rules require TSR to be calculated based on the following performance periods: |
| Reporting
Year |
|
Beginning |
|
End |
|
Number of Years |
| 2024 |
|
1/2/2020 |
|
12/31/2024 |
|
5 years |
| 2023 |
|
1/2/2020 |
|
12/31/2023 |
|
4 years |
| 2022 |
|
1/2/2020 |
|
12/31/2022 |
|
3 years |
| 2021 |
|
1/2/2020 |
|
12/31/2021 |
|
2 years |
| 2020 |
|
1/2/2020 |
|
12/31/2020 |
|
1 year |
92 RTX
2025 PROXY STATEMENT
Table of Contents
PAY VERSUS PERFORMANCE
RELATIONSHIP BETWEEN CAP AND NET INCOME (GAAP)
Relationship between CAP and Net Income (GAAP)
The charts below reflect the relationship between the CEO and Average
NEO CAP, RTX’s GAAP net income (as required by the SEC), and a supplemental net income metric (adjusted net income) that
we use for our annual incentive plan. Both GAAP and adjusted net income reflect a one-year performance measurement period.
We do not use net income as a metric in our long-term incentive plan.
Since long-term incentives comprise the largest portion of our NEOs’ pay, and CAP values include four years of LTI awards
and only one year of annual incentives in each reporting year, the relationship between CAP and net income is less evident.
CEO CAP vs. NET INCOME
AVERAGE NEO CAP vs. NET
INCOME
| (1) |
Adjusted net income is a financial metric used
solely for AIP purposes and is defined in Appendix B on page 114. This metric may differ from other non-GAAP metrics used
and described in Appendix A. For 2020, GAAP net income includes $438 million for Q1 for UTC pre-Merger (excluding net income
generated by Carrier and Otis, which were spun-off from UTC on April 3, 2020), and RTX’s post-Merger value of -$3,547
million for Q2-Q4. For 2020, adjusted net income includes $1,645 million for Q1 for UTC pre-Merger (including net income generated
by Carrier and Otis, which were spun-off from UTC on April 3, 2020), and RTX’s post-Merger value of $2,467 million for
Q2-Q4. |
HOW NET INCOME USED FOR THE PVP TABLE DIFFERS FROM HOW WE USE NET
INCOME IN OUR ANNUAL INCENTIVE PLAN
The SEC’s PvP disclosure rules require disclosure of the relationship
between CAP and RTX’s net income (GAAP) for each reporting year. This use of GAAP net income differs from the adjusted net
income measure we use for annual incentive purposes, which more closely aligns with the non-GAAP financial expectations and results
we communicate to shareowners.
For our annual incentive plan, GAAP net income is adjusted for changes
in tax laws and accounting rules, restructuring, the impact of acquisitions and divestitures (including acquisition accounting
adjustments), and significant and/or nonrecurring items, as shown in Appendix B on page 114. Our use of this adjusted net income
definition aligns with the HCC Committee’s belief that annual incentives should not be positively or negatively impacted
by short-term decisions made in the best interests of RTX’s long-term business strategies. Adjusted net income encourages
decision-making that considers long-term value creation but does not conflict with our short-term incentive metrics.
RTX
2025 PROXY STATEMENT 93
Table of Contents
PAY VERSUS PERFORMANCE
RELATIONSHIP BETWEEN CAP AND THE COMPANY-SELECTED MEASURE (ADJUSTED
EPS)
Relationship between CAP and
the Company-Selected Measure
(Adjusted EPS)
The charts below reflect the relationship between the CEO CAP and Average
NEO CAP and RTX’s adjusted EPS for the applicable reporting year. This metric is used to determine vesting of our PSUs.
We consider adjusted EPS to be the most important financial measure used to link pay to performance in 2024 because LTI is the
largest component of NEO compensation, PSUs make up 60% of LTI and adjusted EPS performance determines 35% of total PSU vesting.
Further, because we use adjusted EPS when we communicate our earnings expectations to our investors, we believe it is substantially
correlated with our stock price performance, and thus to CAP.
CEO CAP vs. ADJUSTED EPS
AVERAGE NEO CAP vs. ADJUSTED
EPS
| (1) |
The value shown for 2024 reflects the 2024 Adjusted
EPS used to calculate performance for the 2022-2024 PSUs, as defined in Appendix B of our Proxy Statement filed on March 13,
2023. Adjusted EPS for 2023 and 2022 are detailed in Appendix A of this Proxy Statement on pages 111-113. Adjusted EPS
shown for 2021 is detailed in Appendix A of our Proxy Statement filed on March 14, 2022. Adjusted EPS shown for 2020
includes $1.38 per share for Q1 for UTC pre-Merger (excluding earnings generated by Carrier and Otis, which were spun off
from UTC on April 3, 2020), and RTX’s post-Merger value of $1.69 for Q2–Q4. |
94 RTX
2025 PROXY STATEMENT
Table of Contents
Audit Committee Report
The Audit Committee assists the
Board of Directors in its oversight responsibilities relating to: the integrity of RTX’s financial statements; the independence,
qualifications and performance of RTX’s internal and external auditors; the Company’s compliance with its policies and procedures,
internal controls, Code of Conduct and applicable laws and regulations; policies and procedures with respect to risk assessment and management;
and such other responsibilities as delegated by the Board from time to time. The Committee’s specific responsibilities and duties
are set forth in the Audit Committee Charter adopted by the Board, which is available on the Company’s website. The Committee is
composed entirely of independent directors who meet the independence and financial literacy requirements of the NYSE and the SEC.
Management has the primary responsibility for the financial
statements and the financial reporting processes, including the system of internal control over financial reporting. PricewaterhouseCoopers
LLP (“PwC”), the Company’s independent auditor, is responsible for auditing the financial statements prepared by management
and expressing an opinion on both the conformity of the Company’s audited financial statements with U.S. generally accepted accounting
principles and the effectiveness of our internal control over financial reporting. PwC is also responsible for discussing any issues
they believe should be raised to us.
In performing its oversight responsibilities, the Committee
reviewed and discussed, with management and PwC, RTX’s consolidated financial statements as of and for the year ended December
31, 2024, and RTX’s internal control over financial reporting as of December 31, 2024. The Committee also discussed with RTX’s
internal auditors and PwC the overall scope and plans for their respective audits. The Committee also met with the internal auditors
and PwC, with and without management present, to discuss the results of their examinations, the evaluation of RTX’s internal control
over financial reporting, management’s representations regarding internal control over financial reporting and the overall quality
of RTX’s financial reporting.
The Committee has discussed with PwC the matters required
by the applicable requirements of the SEC and the Public Company Accounting and Oversight Board’s (“PCAOB”) Auditing
Standard No. 1301 Communications with Audit Committees. It has also discussed with PwC its independence from RTX and its
management, including communications from PwC required by the PCAOB’s Rule 3526, Communication with Audit Committees Concerning
Independence, Rule 3524, Audit Committee Pre-Approval of Certain Tax Services, and Rule 3525, Audit Committee
Pre-approval of Non-audit Services Related to Internal Control Over Financial Reporting.
The Committee pre-approves all audit and non-audit services
to be provided by PwC and the related fees for those services. The Committee has concluded that PwC’s provision of non-audit services,
as described on pages 96-97, does not impair PwC’s independence as the external auditor.
PwC has reported to the Committee that RTX’s audited
financial statements are fairly presented in accordance with U.S. generally accepted accounting principles. The Committee reviewed management’s
assessment and report on the effectiveness of RTX’s internal control over financial reporting, as well as PwC’s audit report
on the effectiveness of RTX’s internal control over financial reporting, which are both included in RTX’s Annual Report on
Form 10-K for the fiscal year ending on December 31, 2024. Based on the reviews and discussions referred to above, the Committee has
recommended to the Board of Directors that the audited financial statements be included in RTX’s Annual Report on Form 10-K for
the year ending on December 31, 2024, for filing with the SEC.
The Committee has nominated PwC for appointment by the shareowners
at the 2025 Annual Meeting to serve as RTX’s independent auditor for 2025.
Audit Committee
| |
|
|
|
 |
Leanne G. Caret, Chair
Bernard A. Harris, Jr.
|
Denise L. Ramos
Robert O. Work
|
|
RTX
2025 PROXY STATEMENT 95
Table of Contents
Proposal 3:
Appointment of
PricewaterhouseCoopers LLP to
Serve as Independent Auditor for 2025 |
|
What
am I
voting on? |
|
As required by our Bylaws, we are asking shareowners to vote on a proposal to appoint a firm of independent registered public accountants to serve as the Company’s independent auditor until the next annual meeting. PricewaterhouseCoopers LLP (“PwC”), an independent registered public accounting firm, served as RTX’s independent auditor in 2024. For 2025, the Audit Committee has again nominated PwC to be our independent auditor, and the Board of Directors has approved the firm for appointment by the shareowners to serve until the next Annual Meeting in 2026. |
Frequently Asked Questions About
the Auditor
HOW IS THE AUDITOR RETAINED AND REVIEWED BY THE COMPANY?
The Audit Committee is directly responsible for the nomination,
compensation, retention and oversight of the Company’s independent auditor. To fulfill this responsibility, the Committee engages
in an annual evaluation of the independent auditor’s qualifications, performance and independence, and periodically considers the
advisability of selecting a different independent registered public accounting firm to serve in that capacity. PwC, or one of its predecessor
firms, has been retained as RTX’s independent audit firm continuously since 1947.
HOW LONG MAY AN AUDIT PARTNER PROVIDE SERVICES TO RTX?
In accordance with SEC rules and PwC policies, audit partners
are subject to rotation requirements that limit the number of consecutive years an individual partner may provide service to RTX. For
lead and concurring audit partners, the limit is five years. The selection process for the lead audit partner includes a meeting between
the Chair of the Audit Committee and the candidate, as well as consideration of the candidate by the full Committee with input from management.
WILL THE AUDITOR ATTEND THE ANNUAL MEETING?
Representatives of PwC will attend the 2025 Annual Meeting.
The representatives may make a statement and will be available to respond to appropriate questions from shareowners.
WHAT WERE THE AUDITOR’S FEES IN 2024 AND 2023?
| (in thousands) |
|
Audit |
|
Audit-Related |
|
Tax |
|
All Other Fees |
|
Total |
| 2024 |
|
$34,840 |
|
$6,445 |
|
$5,850 |
|
$36 |
|
$47,171 |
| 2023 |
|
$34,385 |
|
$9,342 |
|
$5,232 |
|
$6 |
|
$48,965 |
96 RTX
2025 PROXY STATEMENT
Table of Contents
PROPOSAL 3: APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP TO SERVE AS INDEPENDENT AUDITOR FOR 2025
Audit Fees. Audit fees in both
years consisted of fees for the audit of RTX’s consolidated annual financial statements and the effectiveness of its
internal control over financial reporting, the review of interim financial statements in RTX’s quarterly reports on
Form 10-Q and the performance of audits in accordance with statutory requirements. Audit fees for statutory audits
were approximately $11,700,000 in 2024 and $10,850,000 in 2023.In both years, audit fees also included fees associated with
various SEC filings.
Audit-Related Fees. Audit-related fees in both years
included fees for employee benefit plan audits, special reports pursuant to contractually required attestations and compliance assessments,
and advice regarding the application of generally accepted accounting principles for proposed transactions. Audit-related fees also included
approximately $2,640,000 in 2024 and $5,775,000 in 2023 for fees associated with carve-out audits.
Tax Fees. Tax fees in 2024 and 2023 consisted of approximately
$3,225,000 and $3,355,000, respectively, for U.S. and non-U.S. tax compliance, related planning and assistance with tax refund claims
and expatriate tax services, and approximately $2,625,000 and $1,877,000, respectively, for tax advisory services.
All Other Fees. All other fees in 2024 and 2023 consisted
of fees for licenses to technical accounting research software and, in 2024, subscriptions to a benchmarking tool.
HOW DOES THE COMMITTEE MONITOR AND CONTROL NON-AUDIT
SERVICES?
The Audit Committee has established procedures requiring
its review and advance approval of all engagements for non-audit services provided by PwC. The Committee Chair has the delegated authority
to pre-approve non-audit services with certain limitations and must notify the Committee at its next meeting of each service so approved.
The Committee approved all of PwC’s engagements and fees for 2024 and 2023.
The Committee reviews with PwC whether non-audit services
to be provided are compatible with maintaining the firm’s independence. In addition, the Committee monitors the fees paid to PwC
to ensure that fees paid in any year to PwC for non-audit services do not exceed the fees paid for audit and audit-related services.
Non-audit services consist of those described above, as included in the tax fees and all other fees categories.
WHY SHOULD I VOTE FOR THIS PROPOSAL?
Through its review process, the Audit Committee determined
that PwC has acquired extensive knowledge of the Company’s operations, performance and development through its previous service
as the independent auditor for RTX. The Audit Committee and the Board of Directors believe that the continued retention of PwC as our
independent auditor is in the best interest of the Company and our shareowners.
 |
|
The Board of Directors unanimously recommends
a vote FOR the appointment of PwC to serve as the Company’s Independent Auditor for 2025. |
RTX
2025 PROXY STATEMENT 97
Table of Contents
|
Shareowner Proposal
Proposal 4:
Support Transparency in Lobbying
|
|
| What am I voting on? |
|
Mr. John Chevedden has submitted the proposal, graphic and supporting statement set forth below for inclusion in the Proxy Statement for the 2025 Annual Meeting. The address of, and the number of shares owned by, Mr. Chevedden will be provided upon written or oral request to our Corporate Secretary. |
| Proposal 4 –
Support Transparency in Lobbying |
 |
|
FOR |
 |
Shareholder
Rights |
Resolved, shareholders of RTX request the preparation
of a report, updated annually, disclosing:
| 1. |
Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. |
| 2. |
Payments by RTX used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. |
| 3. |
RTX’s membership in and payments to any tax-exempt organization that writes and endorses model legislation. |
| 4. |
Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above. |
For purposes of this proposal, a
“grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation
or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action
with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other
organization of which RTX is a member.
Both “direct and indirect lobbying” and “grassroots
lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Committee on Governance
and Public Policy and posted on RTX’s website.
Supporting Statement
Full disclosure of RTX’s lobbying activities and expenditures
is needed to assess whether RTX’s lobbying is consistent with its expressed goals and in shareholders’ best interests. RTX
spent $49 million from 2020 – 2023 on federal lobbying. This does not include state lobbying, where RTX also lobbies but disclosure
is uneven or absent. RTX also lobbies abroad, spending between €200,000–299,000 on lobbying in Europe for 2023. RTX’s federal
lobbying has come under scrutiny as it settled charges of bribery and fraud for over $950 million.1
1 https://www.washingtonbabylondc.com/p/exclusive-weapons-giant-rtx-evades.
98 RTX
2025 PROXY STATEMENT
Table of Contents
SHAREOWNER
PROPOSAL
PROPOSAL 4: SUPPORT TRANSPARENCY
IN LOBBYING
Companies can give unlimited amounts to third party groups
that spend millions on lobbying and undisclosed grassroots activity.2 RTX fails to disclose its payments to trade associations
and social welfare groups, or the amounts used for lobbying, to shareholders. RTX’s trade association disclosure is also incomplete,
failing to disclose a top limit for payments over $50,000. RTX belongs to the Business Roundtable, National Association of Manufacturers
(NAM) and US Chamber Commerce, which together spent $101 million on federal lobbying for 2023. And RTX’s disclosure leaves out
its payments to social welfare groups, like the Alliance for Competitive Taxation and US Global Leadership Coalition.
RTX’s lack of disclosure presents reputational risks
when its lobbying contradicts company public positions. For example, RTX supports addressing climate change, yet the Business Roundtable
filed an amicus brief opposing the Securities and Exchange Commission climate risk disclosure rules3 and the Chamber opposed
the Paris climate accord. As RTX has drawn attention for lobbying for tax breaks,4 NAM has attracted attention for predicting
“a million job losses over the next two years without additional tax breaks.”5
Improved RTX lobbying disclosure will protect the reputation
of RTX and preserve shareholder value.
2 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
3 https://www.eenews.net/articles/investors-question-business-roundtabIes-climate-rule-battle/.
4 https://www.defensenews.com/congress/2023/07/26/warren-slams-defense-contractors-over-tax-Iobbying/.
5 https://www.theguardian.com/us-news/2024/jan/12/corporation-tax-break-lobby.
| The Board of Directors Unanimously Recommends That Shareowners
Vote Against This Proposal |
|
After careful consideration, the Board recommends a vote
AGAINST this proposal for the reasons summarized below. Action, at any level of government, often carries the potential to significantly
impact RTX, our shareowners, our employees, our suppliers and our customers. As such, it is incumbent upon our Company to engage in the
legislative, regulatory and political processes in a constructive manner that communicates our views on matters affecting our business
and stakeholders. RTX is committed to ensuring that such engagements adhere to the highest ethical standards and all applicable legal
requirements, and that they align with our values and the interests of our shareowners.
We are also committed to being transparent about such engagements.
Because we already provide detailed disclosure of the matters that are the subject of this proposal, we believe the report requested
by this proposal is unnecessary and would not be a worthwhile use of Company resources. In addition, to be responsive to investors and
to provide even greater transparency, in 2025 we expanded our disclosure regarding contributions made to trade associations. This includes
disclosure of the “top-limit” of contributions made during 2023 (and we plan to take the same approach with respect to our
disclosure of 2024 trade association contribution data).
Our filings with federal, state and local government agencies
are publicly available and report extensive information regarding our lobbying, political and trade association/tax-exempt organization
activities and payments. We have a dedicated Public Activities webpage, located in the Corporate Governance section of our public website
at www.rtx.com, where we already provide detailed information called for by the
proposal, including information regarding, and the Company policies that govern, our lobbying expenditures and trade association/tax-exempt organization activities. Our Public Activities statement, which
can be accessed at https://www.rtx.com/who-we-are/corporate-governance/public-activities, directly addresses the following:
| ● |
The role of the Board of Directors in reviewing and overseeing our political and lobbying activities via our Governance Committee and regular briefings to the Board by management on the U.S. government’s budgetary and policy priorities, proposed legislation and related RTX government relations initiatives. |
| ● |
The role of senior leadership, namely our Senior Vice President for Global Government Relations and our Legal, Contracts & Compliance function, in managing and overseeing our political and lobbying activities in a manner that ensures strict adherence with the law and the standards publicly articulated in the RTX Code of Conduct and RTX’s internal policies governing lobbying, political activity and political contributions. |
| ● |
An explanation of RTX’s internal policy prohibiting contributions from corporate funds to federal, state or local candidates, section 527 organizations, Super PACs, independent expenditures or other “grass roots” communications to the general public related to the support or opposition of candidates, ballot measures or any other election-related matters. |
| ● |
Governance of the Employees of RTX Corporation Political Action Committee (“RTX PAC”), the decision-making process for distributing the voluntary contributions of RTX employees collected by RTX PAC to political candidates, and links to the full list of all candidates and committees to which RTX PAC has contributed historically. |
RTX
2025 PROXY STATEMENT 99
Table of Contents
SHAREOWNER
PROPOSAL
PROPOSAL 4: SUPPORT TRANSPARENCY
IN LOBBYING
| ● |
A listing of trade associations or other tax-exempt organizations with disclosed lobbying expenses to which RTX paid dues or made other contributions of $25,000 or more during the previous calendar year; the portion of such payments, if any, deemed nondeductible as a lobbying or political expenditure under IRC Section 162(e)(1); and an explanation of RTX’s policy to refrain from making payments to any such organizations that are designated for election-related purposes. In 2025, we decided to augment our disclosure by expanding the number of tiered payment ranges in which we list trade associations. With respect to 2023, as shown in our disclosure, no contributions to a single trade association with disclosed lobbying expenses exceeded $600,000. |
| ● |
An overview of RTX’s U.S. federal and state lobbying policies and compliance procedures; links to the federal database where RTX’s historical lobbying disclosures, as well as those of our external consultant lobbyists, can be located, including information on all lobbying expenditures, issues lobbied and political contributions as reported to the U.S. Congress in accordance with the Lobbying Disclosure Act; and links to the lobbying disclosure databases available online for all state and local jurisdictions in which RTX employs a registered lobbyist. |
RTX is a recognized industry leader in these areas and was
named a “trendsetter” by the CPA-Zicklin Index of Corporate Political Disclosure and Accountability, the leading industry
watchdog on political accountability. In fact, RTX’s CPA-Zicklin Index of Corporate Political Disclosure and Accountability score
increased from 91.4 in 2023 to 94.3 in 2024, demonstrating our continued commitment to transparency. The 2024 CPA-Zicklin Index of Corporate
Political Disclosure and Accountability can be accessed at https://www.politicalaccountability.net/wp-content/uploads/2025/01/2024-CPA-Zicklin-Index.pdf.
This is the second year in a row that RTX has received this
proposal from the proponent. In 2023, 2024 and 2025, the Company sought to engage constructively with the proponent in order to better
understand his position and to assess his concerns in light of the best interests of the Company and its stakeholders. These engagements
yielded no productive dialogue. As RTX already provides extensive public disclosure of our lobbying, political and trade association/tax-exempt
organization activities and payments, and has robust and transparent policies governing management and Board oversight over such matters
and the associated expenses, we believe that implementation of this proposal would result in redundant disclosures and unnecessary expenditure
of the Company’s resources.
 |
|
The Board of Directors unanimously recommends that shareowners vote AGAINST this proposal. Proxies solicited by the Board will be so voted unless shareowners specify otherwise in their proxies. |
100 RTX
2025 PROXY STATEMENT
Table of Contents
Frequently
Asked Questions
About the Annual Meeting |
|
| Your vote is very important! |
|
WHY AM I BEING PROVIDED WITH THESE PROXY MATERIALS?
We are providing these proxy materials to you in connection
with the solicitation by the Board of Directors of RTX Corporation of proxies to be voted at our 2025 Annual Meeting of Shareowners
and at any postponed or reconvened meeting.
WILL THE ANNUAL MEETING ALSO BE HELD IN PERSON OR
ONLY VIRTUALLY?
As noted in the Notice at the beginning of this Proxy
Statement, the 2025 Annual Meeting will be in a virtual format only.
|
WHO CAN ATTEND THE ANNUAL MEETING?
Shareowners holding RTX stock as of the close of business
on the record date, March 4, 2025, are entitled to attend the Annual Meeting to be held virtually via www.virtualshareholdermeeting.com/RTX2025.
To be admitted to the Annual Meeting via the website, shareowners must enter the 16-digit voting control number found on their proxy
card, voting instruction form, notice of internet availability of proxy materials or email notification.
WHO CAN VOTE AT THE MEETING?
Shareowners of record as of March 4, 2025 and shareowners
holding a proxy for the 2025 Annual Meeting provided by their bank, broker or nominee may vote during the Annual Meeting to be held virtually
by following the instructions available on the meeting website. If you vote prior to the meeting by using the internet, toll-free telephone
number, proxy card or voting instruction form, you do not need to take any action during the meeting unless you wish to change your vote.
A list of shareowners of record will be available at www.virtualshareholdermeeting.com/RTX2025 during
the Annual Meeting for inspection by shareowners for any legally valid purpose related to the Annual Meeting.
WHEN IS THE ANNUAL MEETING?
We will hold our Annual Meeting on May 1, 2025, at 8:00 a.m.
Eastern time. If you plan to attend the Annual Meeting, you should log into the website at www.virtualshareholdermeeting.com/RTX2025 approximately
fifteen minutes before the meeting is scheduled to begin.
WILL THERE BE AN OPPORTUNITY TO ASK QUESTIONS BEFORE OR
DURING THE MEETING?
Time will be allotted after the adjournment of the formal
meeting for a Question and Answer period. Shareowners will be able to submit questions relevant to the business of the meeting either
in advance of the Annual Meeting via www.proxyvote.com or during the meeting via www.virtualshareholdermeeting.com/RTX2025 by typing the question into the indicated question box and clicking “Submit.” Time may not permit the answering
of every question submitted during the Question and Answer period. Questions relevant to the business of the meeting to which a response
is not provided during the Question and Answer period will be addressed on www.rtx.com/Investors
following the meeting. To ask questions, you will need to have your voting control number found on your proxy card, voting instruction
form, notice of internet availability of proxy materials or email notification.
RTX
2025 PROXY STATEMENT 101
Table of Contents
FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING
WHAT CAN I DO IF I HAVE TROUBLE LOGGING INTO THE ANNUAL
MEETING?
If you encounter any difficulties accessing the virtual meeting
during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting login page.
DOES THE COMPANY HAVE A POLICY ABOUT DIRECTORS’
ATTENDANCE AT THE ANNUAL MEETING?
The Company does not have a formal policy requiring that
directors attend the Annual Meeting, but directors are encouraged to do so unless there is an unavoidable scheduling conflict. All directors
at the time attended the 2024 Annual Meeting.
WHAT IS THE QUORUM REQUIREMENT FOR THE ANNUAL MEETING?
Under the Company’s Bylaws, a quorum is required to
transact business at the Annual Meeting. The holders of a majority of the outstanding shares of RTX Common Stock as of the record date,
present either virtually in person or by proxy and entitled to vote, will constitute a quorum. As of the record date, March 4, 2025,
1,335,089,924 shares of Common Stock were issued and outstanding. Abstentions and “broker non-votes” are counted as present
and entitled to vote for purposes of determining a quorum.
HOW DO I VOTE?
Registered Shareowners:
 |
Internet
You can vote
online at: www.proxyvote.com.
|
Internet and telephone voting facilities will be available
24 hours a day until 11:59 p.m. Eastern time on April 30, 2025 (except for participants in a company savings plan as described on
page 103 and beneficial holders who must vote by the time specified in their voting instruction form).
To authenticate your internet or telephone vote, you
will need to enter your confidential voter control number as shown on the voting materials you received. If you vote online or by
telephone, you do not need to return a proxy card or voting instruction form.
|
 |
Telephone
In the United
States or Canada, you can vote by telephone. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions
have been properly recorded.
You can find the telephone number on your proxy card,
voting instruction form or other communications.
|
 |
Mail
You can mail the proxy card or voting instruction form
enclosed with your printed proxy materials. Mark, sign and date your proxy card or voting instruction form, and return it in the
prepaid envelope we have provided, or in an envelope addressed to:
Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
NY 11717
Please allow sufficient time for delivery of your proxy
card or voting instruction form if you decide to vote by mail.
|
 |
During the Meeting
Shareowners as of the close of business
on the record date, March 4, 2025, are entitled to virtually attend and vote during the Annual Meeting online via www.virtualshareholdermeeting.com/RTX2025.
If you have already voted online, by telephone or by
mail, your vote during the Annual Meeting will supersede your earlier vote.
|
102 RTX
2025 PROXY STATEMENT
Table of Contents
FREQUENTLY ASKED QUESTIONS
ABOUT THE ANNUAL MEETING
Beneficial Shareowners. If you own shares in
street name through an account with a bank, brokerage firm or other intermediary, then your intermediary will send you printed copies
of the proxy materials or provide instructions on how to access proxy materials electronically. You are entitled to direct the intermediary
how to vote your shares by following the voting instructions that the intermediary provides to you.
Shares Held in a Savings Plan Sponsored by RTX. You
can direct the voting of your proportionate interest in shares of RTX Common Stock held by the ESOP Fund and the Company Stock Fund under
an RTX savings plan by returning a voting instruction card or providing voting instructions by the internet or by telephone. If you do
not provide voting instructions (or if your instructions are incomplete or unclear) as to one or more of the matters to be voted on,
the plan trustees will vote your proportionate interest in shares held by the ESOP Fund for the voting choice with respect to each applicable
proposal that receives the greatest number of votes based on voting instructions received from ESOP Fund participants. Similarly, the
plan trustees will vote your uninstructed proportionate interest in shares held by the Company Stock Fund for the voting choice with
respect to each applicable proposal that receives the greatest number of votes based on voting instructions received from the Company
Stock Fund participants. For shares of RTX Common Stock held in the ESOP Fund that are not allocated to participant accounts, the plan
trustees will vote the unallocated shares for the voting choice with respect to each applicable proposal that receives the greatest number
of votes from those ESOP Fund participants who have submitted voting instructions.
Earlier Voting Deadline for Participants in a Savings
Plan Sponsored by RTX. Broadridge Financial Solutions must receive your voting instructions by 11:59 p.m. Eastern time on Monday,
April 28, 2025, so that it will have time to tabulate all voting instructions of participants and communicate those instructions to the
trustees, who will vote the shares held by the savings plans. Because the plan trustees are designated to vote on your behalf, you will
not be able to vote your shares held in a savings plan virtually at the Annual Meeting.
Changing Your Vote. If you are a registered shareowner:
| |
●
If you voted by telephone or the internet, access the method you used and follow the instructions given for revoking a proxy. |
|
●
If you mailed a signed proxy card, mail a new
proxy card with a later date (which will override your earlier proxy card).
OR
●
Vote virtually during the Annual Meeting.
|
If you are a beneficial shareowner, ask your bank, brokerage
firm or other intermediary how to revoke or change your voting instructions.
HOW WILL MY SHARES BE VOTED?
Each share of RTX Common Stock is entitled to one vote. Your
shares will be voted in accordance with your instructions. In addition, if you have returned a signed proxy card or submitted voting
instructions by telephone or the internet, the proxy holders will have, and intend to exercise, discretion to vote your shares (other
than shares held in an RTX employee savings plan) in accordance with their best judgment on any matters not identified in this Proxy
Statement that are brought to a vote at the Annual Meeting. We do not know of any such additional matters at this time.
If your shares are registered in your name and you sign and
return a proxy card or vote by telephone or the internet but do not give voting instructions on a particular matter, the proxy holders
will be authorized to vote your shares on that matter in accordance with the Board’s recommendation on the matter. If you hold
your shares through an account with a broker and do not give voting instructions on a matter, your broker is entitled under New York
Stock Exchange rules to vote your shares in its discretion only on Proposal 3 (appointment of the Independent Auditor) and is required
to withhold a vote on each of the other Proposals, resulting in a so-called “broker non-vote.”
RTX
2025 PROXY STATEMENT 103
Table of Contents
FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING
HOW DO ABSTENTIONS AND BROKER NON-VOTES AFFECT
THE VOTING RESULTS?
| Matter |
|
Vote
Required for Approval |
|
Impact
of Abstentions |
|
Impact
of Broker Non-Votes |
| Election of Directors |
|
Votes for a nominee must exceed 50% of the votes cast with respect to that nominee. |
|
Not counted as votes cast; no impact on outcome. |
|
Not counted as votes cast; no impact on outcome. |
| Advisory Vote to Approve Executive Compensation |
|
The affirmative vote of the holders of a majority of shares of our common stock, present at the Annual Meeting or represented by proxy and entitled to vote, is required for approval. |
|
An abstention is treated as present and entitled to vote and therefore has the effect of a vote against approval. |
|
Not counted as shares entitled to vote; no impact on outcome. |
| Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2025 |
|
The affirmative vote of the holders of a majority of shares of our common stock, present at the Annual Meeting or represented by proxy and entitled to vote, is required for approval. |
|
An abstention is treated as present and entitled to vote and therefore has the effect of a vote against approval. |
|
Discretionary voting permitted. |
| Shareowner Proposal Requesting a Lobbying Transparency Report |
|
The affirmative vote of the holders of a majority of shares of our common stock, present at the Annual Meeting or represented by proxy and entitled to vote, is required for approval. |
|
An abstention is treated as present and entitled to vote and therefore has the effect of a vote against approval. |
|
Not counted as shares entitled to vote; no impact on outcome. |
WHAT HAPPENS IF A DIRECTOR IN
AN UNCONTESTED ELECTION RECEIVES MORE VOTES “AGAINST” THAN “FOR” THEIR ELECTION?
In an uncontested election of directors, any nominee for
director who is an incumbent director and who receives a greater number of votes cast “against” than votes cast “for”
their election must, under RTX’s Governance Guidelines, promptly tender their resignation to the Chair of the Governance Committee
following certification of the shareowner vote. The Governance Committee must promptly make a recommendation to the Board about whether
to accept or reject the tendered resignation. The director who tendered a resignation may not participate in the Governance Committee’s
recommendation or the Board’s consideration.
Under our Corporate Governance Guidelines, the Board must
act on the Governance Committee’s recommendation no later than 90 days after the date of the shareowners’ meeting. Regardless
of whether the Board accepts or rejects the resignation, RTX must promptly file a Report on Form 8-K with the SEC that explains the process
by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation.
If a director’s resignation is accepted, the Governance
Committee also will recommend to the Board whether to fill the vacancy or to reduce the size of the Board. Under the RTX Bylaws, a vacancy
arising in these circumstances may be filled, at the discretion of the Board, by a majority vote of the directors or at a special meeting
of shareowners called by the Board in accordance with the Bylaws.
WHO COUNTS THE VOTES?
Broadridge Financial Solutions (“Broadridge”),
an independent entity, will tabulate the votes. At the Annual Meeting, a representative of Broadridge will act as the independent Inspector
of Election and in this capacity will supervise the voting, decide the validity of proxies and certify the results.
Broadridge has been instructed to keep the vote of each shareowner
confidential and the vote may not be disclosed, except in legal proceedings or for the purpose of soliciting shareowner votes in a contested
proxy solicitation.
104 RTX
2025 PROXY STATEMENT
Table of Contents
FREQUENTLY ASKED QUESTIONS
ABOUT THE ANNUAL MEETING
HOW MAY THE COMPANY SOLICIT MY PROXY?
We will pay the cost of soliciting proxies. Proxies may be
solicited on behalf of RTX by directors, officers or employees of RTX in person or by telephone, facsimile or other electronic means.
We have retained D.F. King & Co., Inc. (“D.F. King”) to assist in the distribution and solicitation of proxies. Based
on our agreement with D.F. King, we anticipate paying fees ranging from approximately $35,000 up to approximately $100,000, plus out-of-pocket expenses, for these services, depending upon the extent of proxy solicitation efforts undertaken.
As required by the SEC and the NYSE, we also will reimburse
brokerage firms and other custodians, nominees and fiduciaries for their expenses incurred in sending proxies and proxy materials to
beneficial owners of our Common Stock.
WHY DID I RECEIVE A NOTICE OF INTERNET AVAILABILITY?
To conserve natural resources and reduce costs, we are sending
most shareowners a notice of internet availability of proxy materials, as permitted by SEC rules. The notice of internet availability
of proxy materials explains how you can access RTX’s proxy materials on the internet and how to obtain printed copies if you prefer.
It also explains how you can choose either electronic or print delivery of proxy materials for future annual meetings.
HOW CAN I RECEIVE MY PROXY MATERIALS ELECTRONICALLY?
To conserve resources and reduce costs, we encourage shareowners
to access their proxy materials electronically.
If you are a registered shareowner, you can sign up at www.computershare-na.com/green to get electronic access to proxy materials for future meetings, rather than receiving them in the mail.
Once you sign up, you will receive an email each year explaining how to access RTX’s Annual Report and Proxy Statement, and how
to vote online. Your enrollment for electronic access will remain in effect unless you cancel it, which you can do up to two weeks before
the record date for any future annual meeting.
If you are a beneficial shareowner, you may obtain electronic
access to proxy materials by contacting your bank, brokerage firm or other intermediary, or by contacting Broadridge at https://enroll.icsdelivery.com/rtx.
WHAT IF I SHARE THE SAME ADDRESS AS ANOTHER RTX SHAREOWNER?
If you share an address with one or more other RTX shareowners,
you may have received only a single copy of the Annual Report, Proxy Statement or notice of internet availability of proxy materials
for your entire household. This practice, known as “householding,” is intended to conserve resources and reduce printing
and mailing costs.
If you are a registered shareowner and you prefer to receive
a separate Annual Report, Proxy Statement or notice of internet availability of proxy materials this year or in the future, or if you
are receiving multiple copies at your address and would like to enroll in “householding” and receive a single copy, please
contact Computershare at 1-800-488-9281. If you are a beneficial shareowner, please contact your bank, brokerage firm or other intermediary
to make your request. There is no charge for separate copies.
HOW CAN I RECEIVE A COPY OF THE COMPANY’S 2024 ANNUAL
REPORT ON FORM 10-K?
RTX will provide, without charge, a copy of the Annual Report
on Form 10-K to any shareowner upon a request directed to the RTX Corporate Secretary (see page 106 for contact information).
HOW DO I SUBMIT PROPOSALS AND NOMINATIONS FOR THE 2026
ANNUAL MEETING?
Shareowner Proposals. To submit a shareowner
proposal to be considered for inclusion in RTX’s Proxy Statement for the 2026 Annual Meeting under SEC Rule 14a-8, you must send
the proposal to our Corporate Secretary. The Corporate Secretary must receive the proposal in writing by close of the Company’s regular
business hours at 5:00 p.m. Eastern time on November 10, 2025.
RTX
2025 PROXY STATEMENT 105
Table of Contents
FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING
To introduce a proposal for vote at the 2026 Annual Meeting
(other than a shareowner proposal included in the Proxy Statement in accordance with SEC Rule 14a-8), RTX’s Bylaws require that
the shareowner send advance written notice to the RTX Corporate Secretary for receipt no earlier than January 1, 2026, and no later than
January 31, 2026. This notice must include the information specified by Section 1.10 of the Bylaws, a copy of which is available on our
website at www.rtx.com.
Director Nominations at the 2026 Annual Meeting. RTX’s
Bylaws require that a shareowner who wishes to nominate a candidate for election as a director at the 2026 Annual Meeting (other than
pursuant to the “proxy access” provisions of Section 1.12 of the Bylaws) must send advance written notice to the RTX Corporate
Secretary for receipt no earlier than January 1, 2026, and no later than January 31, 2026. This notice must include the information,
documents and agreements specified by Section 1.10 of the Bylaws, a copy of which is available on our website at www.rtx.com.
Director Nominations by Proxy Access. RTX’s
Bylaws require that an eligible shareowner who wishes to have a nominee of that shareowner included in RTX’s proxy materials for
the 2026 Annual Meeting pursuant to the “proxy access” provisions of Section 1.12 of our Bylaws send advance written notice
to the RTX Corporate Secretary for receipt no earlier than October 11, 2025, and no later than November 10, 2025. This notice must include
the information, documents and agreements specified by Section 1.12 of the Bylaws, a copy of which is available on our website at www.rtx.com.
HOW DO I CONTACT THE CORPORATE SECRETARY’S OFFICE?
Shareowners may contact RTX’s Corporate Secretary’s
Office by one of the two methods shown below:
| Communication Method |
Contact
Information |
| Write a letter |
RTX Corporate Secretary
RTX Corporation
1000 Wilson Blvd.
Arlington, VA 22209 |
| Send an email |
corpsec@rtx.com |
| Our
Bylaws and other governance documents are available under the Corporate Governance section of the Company
website at www.rtx.com. |
106 RTX
2025 PROXY STATEMENT
Table of Contents
| Other Important Information |
|
Cautionary Note Concerning Factors That
May Affect Future Results. This Proxy Statement contains statements which, to the extent they are not statements of
historical or present fact, constitute “forward-looking statements” under the securities laws. From time to time,
oral or written forward-looking statements may also be included in other information released to the public. These
forward-looking statements are intended to provide management’s current expectations or plans for our future operating
and financial performance, based on assumptions currently believed to be valid, and are not statements of historical fact.
Forward-looking statements can be identified by the use of words such as “believe,” “expect,”
“expectations,” “plans,” “strategy,” “prospects,” “estimate,”
“project,” “target,” “commit,” “commitment,” “anticipate,”
“will,” “should,” “see,” “guidance,” “outlook,”
“goals,” “objectives,” “confident,” “on track,” and other words of similar
meaning. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash
flow, results of operations, uses of cash, share repurchases, tax payments and rates, research and development spending, cost
savings, other measures of financial performance, potential future plans, strategies or transactions, credit ratings and net
indebtedness, a rare condition in powder metal used to manufacture certain engine parts requiring accelerated inspection of
the PW1100G-JM Geared Turbofan fleet, which powers the A320neo family of aircraft (the “Powder Metal Matter”),
and related matters and activities, including without limitation other engine models that may be impacted, the pending
disposition of Collins’ actuation and flight control business, targets and commitments (including for share repurchases
or otherwise), and other statements which are not solely historical facts. All Forward-looking statements involve risks,
uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in the
forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking statements
contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties, and other factors include,
without limitation:
| ● |
the effect of changes in economic, capital market, and political conditions in the U.S. and globally, such as from the global sanctions and export controls with respect to Russia, and any changes therein, and including changes related to financial market conditions, banking industry disruptions, fluctuations in commodity prices or supply (including energy supply), inflation, interest rates and foreign currency exchange rates, disruptions in global supply chain and labor markets, levels of consumer and business confidence, the imposition of tariffs, and geopolitical risks, including, without limitation, in the Middle East and Ukraine; |
| ● |
risks associated with U.S. government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration, a continuing resolution, a government shutdown, the debt ceiling or measures taken to avoid default, or otherwise, and uncertain funding of programs; |
| ● |
risks relating to our performance on our contracts and programs, including our ability to control costs, the mix of our contracts and programs, and our inability to pass some or all of our costs on fixed price contracts to the customer, and risks related to our dependence on U.S. government approvals for international contracts; |
| ● |
challenges in the development, certification, production, delivery, support, and performance of RTX advanced technologies and new products and services and the realization of the anticipated benefits (including our expected returns under customer contracts), as well as the challenges of operating in RTX’s highly-competitive industries both domestically and abroad; |
| ● |
risks relating to RTX’s reliance on U.S. and non-U.S. suppliers and commodity markets, including the effect of sanctions, tariffs, delays, and disruptions in the delivery of materials and services to RTX or its suppliers and cost increases; |
| ● |
risks relating to RTX’s international operations from, among other things, changes in trade policies and implementation of sanctions, foreign currency fluctuations, economic conditions, political factors, sales methods, U.S. or local government regulations, and our dependence on U.S. government approvals for international contracts; |
| ● |
the condition of the aerospace industry; |
| ● |
potential changes in U.S. government policy positions, including changes in DoD policies or priorities; |
| ● |
the ability of RTX to attract, train, qualify, and retain qualified personnel and maintain its culture and high ethical standards, and the ability of our personnel to continue to operate our facilities and businesses around the world; |
| ● |
the scope, nature, timing, and challenges of managing acquisitions, investments, divestitures (including the pending disposition of Collins’ actuation and flight control business), and other transactions, including the realization of synergies and opportunities for growth and innovation, the assumption of liabilities, and other risks and incurrence of related costs and expenses, and risks related to completion of announced divestitures; |
| ● |
compliance with legal, environmental, regulatory, and other requirements, including, among other things, obtaining regulatory approvals for new technologies and products, and export and import requirements such as the International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anticorruption requirements, such as the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and other regulations in the U.S. and other countries in which RTX and its businesses operate; |
RTX
2025 PROXY STATEMENT 107
Table of Contents
OTHER IMPORTANT INFORMATION
| ● |
the outcome of pending, threatened, and future legal proceedings, investigations, and other contingencies, including those related to U.S. government audits and disputes and the potential for suspension or debarment of U.S. government contracting or export privileges as a result thereof; |
| ● |
risks relating to the previously disclosed deferred prosecution agreements entered into between the Company and the Department of Justice (“DOJ”), the Securities and Exchange Commission (“SEC”) administrative order imposed on the Company, the consent agreement between the Company and the Department of State, and the related investigations by the SEC and DOJ, each as previously disclosed in our 2024 Annual Report on Form 10-K; |
| ● |
factors that could impact RTX’s ability to engage in desirable capital-raising or strategic transactions, including its credit rating, capital structure, levels of indebtedness, and related obligations, capital expenditures, and research and development spending, and capital deployment strategy including with respect to share repurchases, and the availability of credit, borrowing costs, credit market conditions, and other factors; |
| ● |
uncertainties associated with the timing and scope of future repurchases by RTX of its common stock, or declarations of cash dividends, which may be discontinued, accelerated, suspended, or delayed at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; |
| ● |
risks relating to realizing expected benefits from, incurring costs for, and successfully managing strategic initiatives such as cost reduction, restructuring, digital transformation, and other operational initiatives; |
| ● |
risks of additional tax exposures due to new tax legislation or other developments in the U.S. and other countries in which RTX and its businesses operate; |
| ● |
risks relating to addressing the Powder Metal Matter, including, without limitation, the number and expected timing of shop visits, inspection results and scope of work to be performed, turnaround time, availability of parts, available capacity at overhaul facilities, outcomes of negotiations with impacted customers, and risks related to other engine models that may be impacted by the Powder Metal Matter, and in each case the timing and costs relating thereto, as well as other issues that could impact RTX product performance, including quality, reliability, or durability; |
| ● |
changes in production volumes of one or more of our significant customers as a result of business, labor, or other challenges, and the resulting effect on its or their demand for our products and services; |
| ● |
risks relating to an RTX product safety failure, quality issue, or other failure affecting RTX’s or its customers’ or suppliers’ products or systems; |
| ● |
risks relating to cybersecurity, including cyber-attacks on RTX’s information technology infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations; |
| ● |
risks relating to insufficient indemnity or insurance coverage; |
| ● |
risks relating to artificial intelligence; |
| ● |
risks relating to our intellectual property and certain third-party intellectual property; |
| ● |
threats to RTX facilities and personnel, as well as other events outside of RTX’s control such as public health crises, damaging weather, or other acts of nature; |
| ● |
the effect of changes in accounting estimates for our programs on our financial results; |
| ● |
the effect of changes in pension and other postretirement plan estimates and assumptions and contributions; |
| ● |
risks relating to an impairment of goodwill and other intangible assets; |
| ● |
the effects of climate change and changing or new climate-related regulations, customer and market demands, products and technologies; and |
| ● |
the intended qualification of (1) the Raytheon merger as a tax-free reorganization and (2) the separation transactions and other internal restructurings as tax-free to RTX (formerly known as United Technologies Corporation) and former United Technologies Corporation shareowners, in each case, for U.S. federal income tax purposes. |
In addition, our 2024 Annual Report on Form
10-K includes important information as to risks, uncertainties and other factors that may cause actual results to differ materially
from those expressed or implied in the forward-looking statements. See “Note 17: Commitments and Contingencies” within
Item 8 of the Form 10-K, the section titled “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” under the headings “Business Overview,” “Critical Accounting Estimates,” “Results
of Operations,” and “Liquidity and Financial Condition,” within Item 7 of the Form 10-K, and the sections titled
Item 1A. “Risk Factors” and Item 3. “Legal Proceedings,” of the Form 10-K. The Form 10-K also includes
important information as to these factors in the section titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” under the heading “Government Matters,” within Item 7 of the Form 10-K,
and in the “Business” section under the headings “General,” “Business Segments,” “Other
Matters Relating to Our Business,” and “Regulatory Matters.” The forward-looking statements speak only as of
the date of this Proxy Statement or, in the case of any document incorporated by reference, the date of that document. We undertake
no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ
materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings
with the SEC.
108 RTX
2025 PROXY STATEMENT
Table of Contents
OTHER IMPORTANT INFORMATION
Corporate Governance Information, our Code of Conduct and How to Contact
the Board. RTX’s Corporate Governance Guidelines (and related documents), the charters for each Board Committee and
RTX’s Code of Conduct are available on RTX’s website (www.rtx.com). Printed copies
will be provided, without charge, to any shareowner upon a request addressed to the RTX Corporate Secretary through the contact
information provided on page 106. The Code of Conduct applies to all directors and employees, including the principal executive,
financial and accounting officers. Shareowners and other interested persons may send communications to the Board, the Lead Director
or one or more independent directors by: (i) using the contact information provided on the Corporate Governance section of RTX’s
website (www.rtx.com); or (ii) letters addressed to the RTX Corporate Secretary (see page
106 for contact information). Communications relating to RTX’s accounting, internal controls, auditing matters or business
practices will be reviewed by the Corporate Vice President, Global Ethics and Compliance, and reported to the Audit Committee
pursuant to the RTX Corporate Governance Guidelines. All other communications will be reviewed by the RTX Corporate Secretary
and reported to the Board, as appropriate, pursuant to the Corporate Governance Guidelines.
Transactions with Related Persons. RTX has a written policy that
requires the Governance Committee to review and determine whether to approve or ratify transactions exceeding $120,000 in which
RTX or a subsidiary is a participant and in which a related person has a direct or indirect material interest. A related person
is defined as an RTX director or executive officer, a beneficial owner of more than five percent of RTX’s outstanding shares,
or an immediate family member of any of the foregoing persons. Under the policy, any potential related person transaction must
be reported for review by the RTX Corporate Secretary who will, in consultation with the Corporate Vice President, Global Ethics
and Compliance, assess whether the transaction may require review, approval or ratification by the Governance Committee. The Governance
Committee determines whether each transaction presented to it should be approved (or, where applicable, ratified) or disapproved
based on whether the transaction is determined to be in, or not inconsistent with, the best interests of RTX and its shareowners.
In making this determination, the Governance Committee must take into consideration whether the transaction is on terms no less
favorable to RTX than those available under similar circumstances with unaffiliated third parties and the extent of the related
person’s interest in the transaction. The policy generally permits employment of relatives of related persons possessing
qualifications consistent with RTX’s requirements for non-related persons in similar circumstances, provided the employment
is approved by the Executive Vice President & Chief Human Resources Officer and the Corporate Vice President, Global Ethics
and Compliance.
State Street Corporation (“State Street”), acting in various
fiduciary capacities, filed a Schedule 13G with the SEC reporting that as of December 31, 2024, State Street and certain of its
subsidiaries collectively were the beneficial owners of more than five percent of RTX’s outstanding shares of Common Stock.
A subsidiary of State Street is the trustee for the RTX Savings Plan Master Trust. Other State Street subsidiaries provide investment
management services. During 2024, RTX paid State Street and its subsidiaries approximately $4.1 million for services as trustee,
as investment managers and for administrative and other services.
BlackRock, Inc. (“BlackRock”) filed a Schedule 13G with the
SEC reporting that as of December 31, 2024, BlackRock and certain of its subsidiaries collectively were the beneficial owners
of more than five percent of RTX’s outstanding shares of Common Stock. During 2024, BlackRock acted as an investment manager
for certain assets within RTX’s global pension plans and employee savings plans. BlackRock received approximately $1.4 million
for such services.
Zachary Hayes, an employee of Collins Aerospace, is the son of RTX’s
Executive Chairman, Gregory Hayes. In 2024, Zachary Hayes received approximately $147,199 in total compensation, consisting of
his salary and participation in employee benefit plans and programs generally made available to employees of similar responsibility
levels.
Uri Shafir, the brother-in-law of RTX’s Executive Chairman, Gregory
Hayes, is an employee of RTX’s Corporate Office. In 2024, Mr. Shafir received approximately $313,636 in total compensation,
consisting of his salary and participation in employee benefit plans and programs generally made available to employees of similar
responsibility levels.
Melissa Spiegelhalter, an employee of Collins Aerospace, is the sister-in-law of Stephen Timm, Special Advisor to the President & CEO and former President of Collins Aerospace. In 2024, Ms. Spiegelhalter
received approximately $145,138 in total compensation, consisting of her salary and participation in employee benefit plans and
programs generally made available to employees of similar responsibility levels.
RTX
2025 PROXY STATEMENT 109
Table of Contents
OTHER IMPORTANT INFORMATION
Emiliya S. West, an employee of RTX’s Corporate Office, is the
sister-in-law of RTX’s Executive Chairman, Gregory Hayes. In 2024, Ms. West received approximately $243,019 in total compensation,
consisting of her salary and participation in employee benefit plans and programs generally made available to employees of similar
responsibility levels.
Roderick Williams, an employee of Pratt & Whitney, is the spouse
of Dantaya Williams, RTX’s Executive Vice President & Chief Human Resources Officer. In 2024, Mr. Williams received
approximately $287,121 in total compensation, consisting of his salary and participation in employee benefit plans and programs
generally made available to employees of similar responsibility levels.
Hunter Brunk, an employee of Collins Aerospace, is the son of Troy Brunk,
the President of Collins Aerospace. In 2024, Mr. Hunter Brunk received approximately $143,133 in total compensation, consisting
of his salary and participation in employee benefit plans and programs generally made available to employees of similar responsibility
levels.
Trevor Brunk, an employee of Collins Aerospace, is the son of Troy Brunk,
the President of Collins Aerospace. In 2024, Mr. Trevor Brunk received approximately $143,064 in total compensation, consisting
of his salary and participation in employee benefit plans and programs generally made available to employees of similar responsibility
levels.
Each of the relationships described above was reviewed and approved in
accordance with RTX’s Related Person Transactions Policy, which is available on our website (www.rtx.com).
Delinquent Section 16(a) Reports. Section 16(a) of the Securities
Exchange Act of 1934 requires our directors, executive officers and persons who beneficially own more than 10% of a registered
class of our equity securities to file reports of holdings and transactions in our Common Stock with the SEC and the NYSE. Based
on our records and other information, we believe that, in 2024, none of our directors, executive officers or 10% shareowners failed
to file a required report on time.
Incorporation by Reference. In connection with our discussion
of director and executive compensation, we have incorporated by reference in this Proxy Statement certain information from Note
10: Employee Benefit Plans and Note 19: Stock Based Compensation, to the Consolidated Financial Statements in RTX’s 2024
Annual Report on Form 10-K filed on February 3, 2025. These are the only portions of such filings that are incorporated by reference
in this Proxy Statement.
Company Names, Trademarks and Trade Names. RTX Corporation and
its subsidiaries’ names, abbreviations thereof, logos and product and service designators are either the registered or unregistered
trademarks or trade names of RTX Corporation and its subsidiaries. Names of other companies and organizations, abbreviations thereof,
logos of other companies and organizations, and product and service designators of other companies are either the registered or
unregistered trademarks or trade names of their respective owners.
Websites. The links to our website or any third-party website
provided in these proxy materials have been provided for convenience purposes only, and the content contained therein is not incorporated
by reference into these proxy materials unless otherwise specified.
110 RTX
2025 PROXY STATEMENT
Table of Contents
| Appendix A: Reconciliation of GAAP Measures to Corresponding Non-GAAP Measures |
|
The financial information presented is on a
continuing operations basis.
RECONCILIATION OF NET SALES (GAAP) TO ADJUSTED
NET SALES (NON-GAAP) AND SEGMENT OPERATING PROFIT MARGIN (GAAP) TO ADJUSTED SEGMENT OPERATING PROFIT MARGIN (NON-GAAP)
| (dollars
in millions) |
|
2022 |
|
2023 |
|
2024 |
| Net sales |
|
$67,074 |
|
$68,920 |
|
$80,738 |
| Reconciliation
to segment net sales: |
|
|
|
|
|
|
| Eliminations
and other |
|
$1,684 |
|
$1,979 |
|
$2,325 |
| Segment Net Sales |
|
$68,758 |
|
$70,899 |
|
$83,063 |
| Reconciliation
to adjusted segment net sales: |
|
|
|
|
|
|
| Net significant
and/or non-recurring items |
|
– |
|
$5,346 |
|
$70 |
| Adjusted Segment Net Sales |
|
$68,758 |
|
$76,245 |
|
$83,133 |
| Reconciliation
to adjusted net sales: |
|
|
|
|
|
|
| Eliminations and other |
|
($1,684) |
|
($1,940) |
|
($2,325) |
| Adjusted net sales |
|
$67,074 |
|
$74,305 |
|
$80,808 |
| Operating Profit |
|
$5,504 |
|
$3,561 |
|
$6,538 |
| Operating Profit Margin |
|
8.2% |
|
5.2% |
|
8.1% |
| Reconciliation
to segment operating profit: |
|
|
|
|
|
|
| Eliminations
and other |
|
$23 |
|
$42 |
|
$48 |
| Corporate expenses
and other unallocated items |
|
$318 |
|
$275 |
|
$933 |
| FAS/CAS operating
adjustment |
|
($1,399) |
|
($1,127) |
|
($833) |
| Acquisition
accounting adjustments |
|
$1,893 |
|
$1,998 |
|
$2,058 |
| Segment Operating
Profit |
|
$6,339 |
|
$4,749 |
|
$8,744 |
| Segment Operating Profit Margin |
|
9.2% |
|
6.7% |
|
10.5% |
| Reconciliation
to adjusted segment operating profit: |
|
|
|
|
|
|
| Restructuring |
|
$49 |
|
$187 |
|
$185 |
| Net significant
and/or non-recurring items |
|
$407 |
|
$3,082 |
|
$576 |
| Adjusted Segment Operating Profit |
|
$6,795 |
|
$8,018 |
|
$9,505 |
| Adjusted Segment Operating Profit
Margin |
|
9.9% |
|
10.5% |
|
11.4% |
RTX
2025 PROXY STATEMENT 111
Table of Contents
APPENDIX A: RECONCILIATION OF GAAP MEASURES
TO CORRESPONDING NON-GAAP MEASURES
RECONCILIATION OF NET INCOME AND DILUTED EARNINGS
PER SHARE (GAAP) TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP)
| (dollars
in millions, except per share amounts) |
|
2022 |
|
2023 |
|
2024 |
| Net income from continuing operations attributable to common shareowners |
|
$5,216 |
|
$3,195 |
|
$4,774 |
| Adjustments to net income from continuing operations
attributable to common shareowners: |
|
|
|
|
|
|
| Restructuring costs |
|
$115 |
|
$246 |
|
$194 |
| Acquisition accounting adjustments |
|
$1,893 |
|
$1,998 |
|
$2,058 |
| Significant and/or nonrecurring items included in operating profit |
|
$401 |
|
$3,090 |
|
$1,393 |
| Significant and/or nonrecurring items included in non-service pension
income |
|
$2 |
|
$4 |
|
– |
| Significant and/or nonrecurring items included in interest expense,
net |
|
– |
|
($11) |
|
($67) |
| Tax effect of restructuring and significant and/or nonrecurring
items above |
|
($518) |
|
($1,191) |
|
($516) |
| Significant and/or nonrecurring items included in income tax expense
(benefit) |
|
– |
|
($48) |
|
($140) |
| Significant and/or nonrecurring items included in noncontrolling
Interest |
|
($11) |
|
($20) |
|
$9 |
| Total adjustments to net income from continuing operations attributable
to common shareowners |
|
$1,882 |
|
$4,068 |
|
$2,931 |
| Adjusted
net income from continuing operations attributable to common shareowners |
|
$7,098 |
|
$7,263 |
|
$7,705 |
| Weighted average diluted shares outstanding |
|
1,485.9 |
|
1,435.4 |
|
1,343.6 |
| Diluted earnings per share—net income from continuing operations |
|
$3.51 |
|
$2.23 |
|
$3.55 |
| Impact of significant and/or nonrecurring items on diluted earnings
per share |
|
$1.27 |
|
$2.83 |
|
$2.18 |
| Adjusted
diluted earnings per share—net income from continuing operations |
|
$4.78 |
|
$5.06 |
|
$5.73 |
RECONCILIATION OF CASH FLOW
FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS (GAAP) TO FREE CASH FLOW (NON-GAAP)
| (dollars in millions) |
|
2022 |
|
2023 |
|
2024 |
| Net cash flows provided by operating activities from continuing operations |
|
$7,168 |
|
$7,883 |
|
$7,159 |
| Less: Capital expenditures |
|
$2,288 |
|
$2,415 |
|
$2,625 |
| Free cash flow from continuing operations |
|
$4,880 |
|
$5,468 |
|
$4,534 |
RECONCILIATION OF ORGANIC
SALES
| (dollars in millions) |
|
Twelve Months Ended December 31, 2024 compared to the Twelve Months Ended December 31, 2023 |
|
| |
|
Total
Reported
Change |
|
Acquisitions &
Divestitures
Change |
|
FX/Other
Change(1) |
|
Organic
Change |
|
Prior Year Adjusted
Sales(2) |
|
Organic Change as a %
of Adjusted Sales |
| Collins Aerospace |
|
$2,031 |
|
($18) |
|
($47) |
|
$2,096 |
|
$26,198 |
|
8% |
| Pratt & Whitney |
|
$9,770 |
|
– |
|
$5,384 |
|
$4,386 |
|
$23,697 |
|
19% |
| Raytheon |
|
$363 |
|
($1,274) |
|
($54) |
|
$1,691 |
|
$26,350 |
|
6% |
| Eliminations and other(3) |
|
($346) |
|
$1 |
|
$10 |
|
($357) |
|
($1,940) |
|
18% |
| Consolidated |
|
$11,818 |
|
($1,291) |
|
$5,293 |
|
$7,816 |
|
$74,305 |
|
11% |
| (1) |
FX/Other Change includes the transactional impact of foreign exchange hedging at Pratt & Whitney Canada, which is included in Pratt & Whitney’s FX/Other Change, but excluded for Consolidated RTX. |
| (2) |
For the full Non-GAAP reconciliation of adjusted sales, refer to “Reconciliation of Adjusted (Non-GAAP) Results - Net Sales and Adjusted Net Sales and Segment Operating Profit Margin and Adjusted Segment Operating Profit Margin.” |
| (3) |
Includes other significant nonoperational items and/or significant operational items that may occur at irregular intervals. |
112 RTX
2025 PROXY STATEMENT
Table of Contents
APPENDIX A: RECONCILIATION
OF GAAP MEASURES TO CORRESPONDING NON-GAAP MEASURES
USE AND
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES
The Company reports its financial results in
accordance with accounting principles generally accepted in the United States (“GAAP”). We supplement the reporting
of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented
provides investors with additional useful information but should not be considered in isolation or as substitutes for the related
GAAP measures. We believe that these non-GAAP measures provide investors with additional insight into the Company’s ongoing
business performance. Other companies may define non-GAAP measures differently, which limits the usefulness of these measures
for comparisons with such other companies. We encourage investors to review our financial statements and publicly-filed reports
in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures to the corresponding
amounts prepared in accordance with GAAP appears in the tables in this Appendix. Below are our non-GAAP financial measures:
| Non-GAAP measure |
Definition |
| Adjusted net sales |
Represents
consolidated net sales (a GAAP measure), excluding net significant and/or nonrecurring items(1) (hereinafter referred
to as “net significant and/or nonrecurring items”). |
| Organic sales |
Organic sales represents the change in consolidated net sales (a
GAAP measure), excluding the impact of foreign currency translation, acquisitions and divestitures completed in the preceding
twelve months and net significant and/or nonrecurring items. |
| Adjusted operating profit (loss) and margin |
Adjusted operating profit (loss) represents operating profit (loss)
(a GAAP measure), excluding restructuring costs, acquisition accounting adjustments and net significant and/or nonrecurring
items. Adjusted operating profit margin represents adjusted operating profit (loss) as a percentage of adjusted net sales. |
| Segment operating profit (loss) and margin |
Segment
operating profit (loss) represents operating profit (loss) (a GAAP measure) excluding Acquisition Accounting Adjustments,(2)
the FAS/CAS operating adjustment,(3)
Corporate expenses and other unallocated items, and Eliminations and other. Segment
operating profit margin represents segment operating profit (loss) as a percentage of segment sales (net sales, excluding
Eliminations and other). |
| Adjusted segment sales |
Represents consolidated net sales (a GAAP measure) excluding
eliminations and other and net significant and/or nonrecurring items.
|
| Adjusted segment operating profit (loss) and margin |
Adjusted segment operating profit (loss) represents segment operating
profit (loss) excluding restructuring costs, and net significant and/or nonrecurring items. Adjusted segment operating profit
margin represents adjusted segment operating profit (loss) as a percentage of adjusted segment sales (adjusted net sales excluding
Eliminations and other). |
| Adjusted net income |
Adjusted net income represents net income from continuing operations
(a GAAP measure), excluding restructuring costs, acquisition accounting adjustments and net significant and/or nonrecurring
items. |
| Adjusted earnings per share (EPS) |
Adjusted EPS represents diluted earnings per share from continuing
operations (a GAAP measure), excluding restructuring costs, acquisition accounting adjustments and net significant and/or
nonrecurring items. |
| Free cash flow |
Free cash flow represents cash flow from operations (a GAAP measure)
less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for
assessing RTX’s ability to fund its activities, including the financing of acquisitions, debt service, repurchases of
RTX’s common stock and distribution of earnings to shareowners. |
| (1) |
Net significant and/or nonrecurring items represent significant nonoperational items and/or significant operational items that may occur at irregular intervals. |
| (2) |
Acquisition Accounting Adjustments include the amortization of acquired intangible assets related to acquisitions, the amortization of the property, plant and equipment fair value adjustment acquired through acquisitions, the amortization of customer contractual obligations related to loss making or below market contracts acquired, and goodwill impairment. |
| (3) |
The FAS/CAS operating adjustment represents the difference between the service cost component of our pension and postretirement benefit (PRB) expense under the Financial Accounting Standards (FAS) requirements of GAAP and our pension and PRB expense under US Government Cost Accounting Standards (CAS) primarily related to our Raytheon segment. |
When we provide our expectation for adjusted net sales, organic sales,
adjusted operating profit (loss) and margin, adjusted segment operating profit (loss) and margin, adjusted EPS and free cash flow
on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures,
as described above, generally is not available without unreasonable effort due to potentially high variability, complexity, and
low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains
and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing
of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the
excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.
RTX
2025 PROXY STATEMENT 113
Table of Contents
Appendix B: Performance Metrics
Used in Incentive
Compensation Plans |
|
Performance metrics defined below are used solely
for 2024 incentive plan purposes. All financial performance measures are based on results from continuing operations, unless otherwise
noted.
| Plan |
|
Metric |
|
RTX |
|
Business Units |
| Annual incentives |
|
Earnings |
|
RTX’s net income attributable to common shareowners (as reported in the 2024 Annual Report on Form 10-K), adjusted for changes in tax laws and accounting rules, restructuring, the impact of acquisitions and divestitures (including acquisition accounting adjustments), and significant and/or nonrecurring items. |
|
Segment operating income (as reported in the 2024 Annual Report on Form 10-K), adjusted for changes in tax laws and accounting rules, restructuring costs, the impact of acquisitions and divestitures, and significant and/or nonrecurring items. |
| |
Free Cash Flow |
|
Consolidated net cash flow provided by operating activities, less capital expenditures (both as reported in the 2024 Annual Report on Form 10-K), adjusted for changes in tax laws and accounting rules, restructuring, the impact of acquisitions
and divestitures, and significant and/or nonrecurring items. |
|
Internal measure based on business unit net cash flow provided by operating activities, less capital expenditures, adjusted for changes in tax laws and accounting rules, restructuring, the impact of acquisitions and divestitures, and significant and/or nonrecurring items. |
| |
Employee Retention(1) |
|
The number of employees who did not separate from RTX due to what the Company considers voluntary controllable reasons, divided by the average month-end RTX employee headcount during the year. |
| |
Total Representation(1) |
|
RTX’s global women and U.S. people of color professional and management employees, as a percentage of all of RTX’s global professional and management employees as of year-end. |
| |
Greenhouse Gas Emissions(1) |
|
Amount of greenhouse gas emissions (in metric tons of CO2) RTX emitted during the year relative to the 2019 baseline. |
| |
Water Usage(1) |
|
Amount of water (in gallons) RTX used during the year relative to the 2019 baseline. |
| Long-term incentives |
|
Adjusted Earnings Per Share |
|
Net income from continuing operations divided by weighted average diluted shares outstanding, subject to adjustments for changes in tax laws and/or accounting rules, the impact of acquisitions and divestitures (including acquisition accounting adjustments), restructuring, nonrecurring and other significant, nonoperational items, nonoperating pension and postretirement income or expense, and changes in asset or liability valuations of deferred compensation plans recognized in interest income/expense. |
| |
Return on Invested Capital |
|
Quarterly average of the ratio of net operating profit after tax (“NOPAT”) to Invested Capital (total debt less cash plus equity), on a continuing operations basis, and subject to certain adjustments as detailed below. NOPAT excludes noncontrolling interest, non-service pension income/expense, the impact of acquisitions and divestitures (including acquisition accounting adjustments), the impact of foreign exchange fluctuations, material one-time tax charges, restructuring, nonrecurring and other significant, nonoperational items, and changes in tax laws and/or accounting rules. Invested Capital excludes accumulated other comprehensive income, cash and equivalents, acquisition and divestiture borrowings, the impact of acquisitions and divestitures, and changes in tax laws and/or accounting rules. |
| |
Relative Total Shareowner Return |
|
The percentage change in stock price over the cumulative three-year performance period (plus reinvested dividends) divided by the stock price at the beginning of the performance period, calculated using the trailing November/December average adjusted closing stock price prior to and at the end of the three-year period for RTX and each of the companies within the S&P 500 Index and our Core A&D Peers. |
| (1) |
As described on page 6, metrics for the 2025 AIP will be solely based on financial performance. |
114 RTX
2025 PROXY STATEMENT
Table of Contents
RTX’s business operating system, CORE,
fuels a culture of continuous improvement across our company. This enables us to drive operational excellence, deliver groundbreaking
solutions, and help our customers meet their most critical needs.
| Customer
Oriented Results and Excellence™ |
| © 2025 RTX Corporation. All rights reserved. |
|
CORE and Customer Oriented Results and Excellence are trademarks of RTX Corporation. |
Table of Contents
Table of Contents
RTX CORPORATION
1000 WILSON BOULEVARD
ARLINGTON, VIRGINIA 22209
 |
|
SCAN TO
VIEW MATERIALS & VOTE |
|
 |
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions up until 11:59 P.M. Eastern Time on
April 30, 2025 for shares held directly and up until 11:59 P.M. Eastern Time on April 28, 2025
for shares held in a company savings plan. Have your proxy card in hand when you access
the web site listed above and follow the instructions to complete an electronic voting
instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/RTX2025
You may attend the meeting via the Internet and vote during the meeting if you are a direct
shareowner. Have the information that is printed in the box marked by the arrow available
and follow the instructions.
For shares held through a company savings plan, you must vote prior to the meeting, but
may still attend the meeting.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time
on April 30, 2025 for shares held directly and up until 11:59 P.M. Eastern Time on April 28, 2025
for shares held in a company savings plan. Have your proxy card in hand when you call and
then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have
provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717.
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
|
| V60154-P22475-Z89079 |
KEEP THIS PORTION FOR YOUR RECORDS |
|
DETACH AND RETURN THIS PORTION ONLY |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
RTX CORPORATION
| The Board of Directors recommends a vote FOR the listed nominees under Item 1. |
| |
|
|
|
| Item 1 - |
Election of Directors |
|
|
|
|
| |
|
For |
Against |
Abstain |
|
| |
Nominees: |
|
|
|
|
| |
|
|
|
|
|
|
1a. |
Tracy A. Atkinson |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1b. |
Christopher T. Calio |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1c. |
Leanne G. Caret |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1d. |
Bernard A. Harris, Jr. |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1e. |
George R. Oliver |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1f. |
Ellen M. Pawlikowski |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1g. |
Denise L. Ramos |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1h. |
Fredric G. Reynolds |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1i. |
Brian C. Rogers |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1j. |
James A. Winnefeld, Jr. |
☐ |
☐ |
☐ |
|
|
|
|
|
|
|
|
1k. |
Robert O. Work |
☐ |
☐ |
☐ |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
| |
| |
| |
| |
| |
| |
| COMPANY PROPOSALS: The Board of Directors recommends a vote
FOR Items 2 and 3. |
For |
Against |
Abstain |
| |
|
|
|
|
| Item 2 - |
Advisory Vote to Approve Executive Compensation |
☐ |
☐ |
☐ |
| |
|
|
|
|
| Item 3 - |
Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2025 |
☐ |
☐ |
☐ |
| |
|
|
|
|
| SHAREOWNER PROPOSAL: The Board of Directors recommends a vote AGAINST Item 4. |
|
|
|
| |
|
|
|
|
| Item 4 - |
Shareowner Proposal Requesting a Lobbying Transparency
Report |
☐ |
☐ |
☐ |
| |
|
|
|
|
| |
|
|
|
| |
| |
| Please date and sign name exactly as it appears hereon. Executors, administrators, trustees, etc. should so indicate when signing. If the shareowner is a corporation, the full corporate
name should be inserted and the proxy signed by an officer of the corporation indicating his/her title. |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
|
| Signature [PLEASE SIGN WITHIN BOX] |
Date |
|
Signature (Joint Owners) |
Date |
|
Table of Contents
Thursday,
May 1, 2025, 8:00 a.m. Eastern Time
www.virtualshareholdermeeting.com/RTX2025
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREOWNERS
THURSDAY, MAY 1, 2025
The undersigned hereby appoints Christopher T. Calio, Neil G. Mitchill, Jr. and Ramsaran Maharajh, or any of them, as proxies, each with full
power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot (with discretionary
authority as to any and all other business that may properly come before the meeting), all of the shares of Common Stock of RTX Corporation
that the Shareowner(s) is/are entitled to vote at the Annual Meeting of Shareowners to be held at 8:00 a.m. Eastern Time on Thursday,
May 1, 2025 virtually at www.virtualshareholdermeeting.com/RTX2025, and at any adjournment, continuation or postponement thereof.
THIS PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREOWNER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS.
If
the undersigned is a participant in a company savings plan and has shares of Common Stock of RTX Corporation allocated to their
plan account, the undersigned hereby instructs the plan trustee to vote all such shares of stock in accordance with the instructions
on the reverse side of this ballot at the Annual Meeting and at any adjournment, continuation or postponement thereof. IF NO
VOTING INSTRUCTION IS PROVIDED, THE PLAN TRUSTEE WILL VOTE THE SHARES ALLOCATED TO THE PARTICIPANT’S PLAN ACCOUNT IN ACCORDANCE
WITH THE PROPER VOTING INSTRUCTIONS THE TRUSTEE RECEIVES WITH RESPECT TO A PLURALITY OF PLAN SHARES FOR WHICH THE TRUSTEE RECEIVES
PROPER VOTING INSTRUCTIONS.
IF YOU ARE NOT VOTING ON THE INTERNET OR BY TELEPHONE, PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
