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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

☑

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

Raytheon Technologies 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

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Raytheon Technologies Notice of 2023 Annual Meeting of Shareowners and Proxy Statement

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Our Values

At Raytheon Technologies, we hold ourselves to
the highest standard and live by our values:

		Trust
		We act with integrity and do the right thing.
		Respect
		We embrace diverse perspectives and treat others the way they want to be treated.
		Accountability
		We honor our commitments, expect excellence and take pride in our work.
		Collaboration
		We share insights, learn together and act as a team.
		Innovation
		We experiment, design, build and transform with speed and agility.

These values drive our actions, behaviors and
performance to create a safer, more connected world.

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March 13, 2023

Notice of 2023 Annual Meeting of Shareowners

 

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT     i

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareowners to be held on May 2, 2023. This Notice of the 2023 Annual Meeting of Shareowners and Proxy Statement, as well as RTX’s 2022 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 Raytheon Technologies Corporation (“RTX,” the “Company” or the “Corporation”) is soliciting proxies to be voted at our 2023 Annual Meeting of Shareowners on May 2, 2023, 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 13, 2023. At the meeting, votes will be taken on the matters listed in the Notice of 2023 Annual Meeting of Shareowners.

 

ii      RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT

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	Proxy Summary
	This section highlights selected information in this Proxy Statement. Please review the entire Proxy Statement and our 2022 Annual Report before voting your shares.

	Annual Meeting Agenda
					Board recommendation		Page numbers
	Proposal 1:		Election of Directors		FOR each director nominee		10-19
	Proposal 2:		Advisory Vote to Approve Executive Compensation		FOR		37-38
	Proposal 3:		Advisory Vote on the Frequency of Shareowner Votes on Named Executive Officer Compensation		FOR every ONE YEAR		39
	Proposal 4:		Appoint PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2023		FOR		91-92
	Proposal 5:		Approve an Amendment to the Restated Certificate of Incorporation to Repeal Article Ninth		FOR		93-94
	Proposal 6:		Approve an Amendment to the Restated Certificate of Incorporation to Eliminate Personal Liability of Officers for Monetary Damages for Breach of Fiduciary Duty as an Officer		FOR		95-96
	Proposal 7:		Shareowner Proposal Requesting the Board Adopt an Independent Board Chair Policy		AGAINST		97-99
	Proposal 8:		Shareowner Proposal Requesting a Report on Greenhouse Gas Reduction Plan		AGAINST		100-102
	2022 Performance Highlights
	In 2022, we advanced our key strategic priorities and delivered solid results while operating in a challenging external environment. We achieved the adjusted earnings per share (“EPS”) and sales goals, and exceeded the free cash flow (“FCF”) goal we communicated to our investors in early 2022.(1) Our investors saw a total shareowner return (“TSR”) of 20% during the year, a return that outperformed both the S&P 500 Index (-18.1%) and the S&P 500 Aerospace & Defense Industry Index (17.4%). We also returned $5.9 billion to investors through a combination of dividends and share repurchases and increased our commercial and defense backlogs by 14% and 9.5% to $106 billion and $69 billion, respectively. Despite persistent global supply chain pressures, labor shortages, increased inflation and disruption from global sanctions against Russia, we demonstrated our business resilience in 2022. To support the commercial aerospace industry’s recovery, we delivered on robust aftermarket demand for our products and services and increased new equipment deliveries to meet our commercial customers’ needs. We won key defense awards, delivered a defense book-to-bill ratio of 1.16, and ramped up production on several programs to assist in the defense of Ukraine. With our balanced portfolio of leading commercial aerospace and defense businesses, combined with our continued focus on our key strategic priorities, we are well positioned to capitalize on the commercial aerospace industry’s recovery and increased global defense spending to deliver on our commitments to shareowners.

(1)

In early 2022, the Company communicated financial expectations to investors reflecting the assumption that the provision of the 2017 Tax Cuts and Jobs Act requiring research and experimental expenditures to be capitalized for tax purposes would be repealed in 2022. At that time, the Company determined that if this provision was not repealed in 2022, our financial results would be adjusted as needed to neutralize the law’s impact (positive or negative). Ultimately, the tax law was not repealed, resulting in both positive and negative impacts to our financial results for the year. All non-GAAP financial expectations and results shown reflect the law’s impact. Adjusted EPS and FCF are non-GAAP financial measures, see Appendix A on pages 113-114 for more information.

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT     1

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Proxy Summary | 2022 Performance Highlights

FINANCIAL PERFORMANCE⁽¹⁾

We delivered solid financial results in 2022.

DILUTED EARNINGS PER SHARE		CASH FLOW(2)
($ per share)		(in billions)
NET INCOME		SALES
(in billions)		(in billions)
2022 AT A GLANCE
20% TSR		7.7% increase
outpaced the S&P 500 Index and the S&P 500 Aerospace  & Defense Industry Index		in dividend per share
$69 billion		86th consecutive year
defense backlog at year-end		paying a dividend to our shareowners
$106 billion		$5.9 billion
commercial aerospace backlog at year-end		returned to investors through dividends and share repurchases
25%
aftermarket sales growth at our commercial businesses

(1)	See Appendix A on pages 113-114 for more information regarding non-GAAP financial measures.
(2)	GAAP cash flow is cash flow from operating activities of continuing operations, while non-GAAP cash flow is free cash flow from continuing operations.

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Proxy Summary | 2022 Performance Highlights

PROGRESS ON OUR KEY STRATEGIC PRIORITIES

In 2022, we made noteworthy progress toward our key strategic priorities, including:

 

 

(1)	United Technologies Corporation (“UTC”) and Raytheon Company (“RTN”) merged on April 3, 2020 (the “Merger”).

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT    3

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Proxy Summary | Executive Compensation Overview

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 “Committee”) has been to design a program that rewards both financial and operating performance, effective strategic leadership, and also advances our commitment to our environmental, social and governance (“ESG”) initiatives—all key elements in building sustainable shareowner value. This pay-for-performance philosophy is embedded into our Guiding Principles (see page 44) that underpin how the Committee has approached program design.

How does our executive compensation program align pay with performance?

●	We use performance metrics and objectives that recognize and reward performance contributions that drive strategy into action, maximize performance and deliver results.
●	The largest portion of compensation for our Named Executive Officers (“NEOs”) is “at-risk” compensation—annual and long-term incentive awards that are contingent on Company performance on our key metrics and objectives, in addition to our stock price performance.

2022 Pay Decisions

In making annual pay decisions, the 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”). See pages 48-54 for details.

Total direct compensation reflects how an executive’s pay relates to the Committee’s assessment of Company, business unit and individual performance for the year. For this reason, 2022 total direct compensation includes 2022 base salary, 2022 annual incentives and the LTI grant values approved by the Committee in February 2023, which were based on its assessment of 2022 performance. The February 2022 LTI award grant date fair values shown in the Summary Compensation Table on page 67, reflect the Committee’s assessment of 2021 performance (and accounting values at the time of grant), and therefore are excluded from 2022 total direct compensation. Total direct compensation also uses year-end salary levels and does not reflect any mid-year salary changes that may have occurred. For more details on total direct compensation, see page 56.

The table below shows 2022 total direct compensation for our NEOs.

2022 PAY DECISIONS AND PAY MIX

				Base Salary ($K)(1)		Annual Incentive ($K)		LTI ($K)(2)		Total ($K)
Gregory J. Hayes				$1,675		$3,900		$16,500		$22,075
Neil G. Mitchill, Jr.				$900		$1,200		$4,750		$6,850
Christopher T. Calio				$900		$1,600		$10,000		$12,500
Stephen J. Timm				$800		$900		$4,000		$5,700
Wesley D. Kremer				$875		$700		$3,500		$5,075

(1)	Reflects the base salary in effect for each NEO as of December 31, 2022. Values above differ from those in the Summary Compensation Table on page 67, since they do not reflect the impact of salary adjustments (if any) made during the year.
(2)	Reflects values approved by the Committee for the LTI award granted on February 8, 2023. These values differ from those that will be reported in the Summary Compensation Table in 2024, which will be calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation.

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Proxy Summary | Executive Compensation Overview

2022 Performance Metrics

The Committee believes that the metrics used for our annual and long-term incentive plans are essential indicators of the long-term health of our Company, and measure a particularly salient aspect of Company performance, therefore, serving the fundamental objective of our executive compensation program.

Metrics for Annual Incentives*
FINANCIAL METRICS Earnings measure the immediate impact of operating decisions on the Company’s annual performance. For our Corporate executives, we use net income as our RTX-wide earnings metric and for our business units, we use 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”) People & Culture (“P&C”) measures our progress toward our long-term diversity, equity and inclusion and talent objectives. Sustainability & Safety (“S&S”) measures our progress toward our long-term objectives for environmental sustainability and employee health and safety.
Metrics for Performance Share Units (“PSUs”)*
Earnings Per Share (“EPS”) measures the Company’s ability to create long-term, sustainable earnings that will ultimately drive total shareowner return. 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 Aerospace & Defense (“A&D”) Peers, and reinforces our program’s pay-for-performance objectives.

*	See Appendix B on page 115 for definitions of these financial metrics.

How 2022 Performance Affected Incentive Payouts

Annual Incentives. In 2022, the Committee set performance goals for the annual incentive financial metrics noted above and established objectives for our Corporate Responsibility Scorecard, as discussed in more detail on pages 49-52. The following chart shows the financial goals set for annual incentive purposes, RTX’s 2022 performance relative to these goals, the Committee’s assessment of CRS performance, and how these results translated into the 2022 RTX performance factor.

Metric*		Weight		Threshold		Target		Maximum		Actual		Performance Factor
RTX Earnings—Net Income ($M)		40%		$6,340		$7,165		$8,240		$7,178		101%
RTX Free Cash Flow ($M)		40%		$5,250		$6,250		$7,750		$6,804		137%
RTX People & Culture		10%		Performance evaluated by the Committee								100%
RTX Sustainability & Safety		10%		Performance evaluated by the Committee								105%
RTX Performance Factor												116%

*

Results for our business units differ from the above and are calculated separately (see pages 51-52 for details). Annual incentive financial goals and results are based on non-GAAP financial measures. See page 50 for details on how we measure performance for annual incentive plan purposes and Appendix B on page 115 for definitions of the financial metrics referenced in this chart.

PSUs. We had no PSUs vest during 2022. All PSUs granted prior to the Merger were converted into RSUs upon the Merger. Our next PSU vesting will occur in early 2024 when our 2021 PSUs become eligible to vest subject to performance through 2023. See page 54 for additional details.

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT     5

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PROXY SUMMARY | GOVERNANCE AND BOARD OVERVIEW

Governance and Board Overview

BOARD NOMINEES

						Skills and Expertise																		Diversity
		Director Since*		Other Public Boards		Financial		Government		International		Experience in Industry		Risk Management/ Oversight		Senior Leadership		Environmental, Social and Governance (ESG)		Technology/ Cybersecurity		Manufacturing, Operations and Supply Chain		White		Black or African American		Asian		Gender
Tracy A. Atkinson Retired Executive Vice President & Chief Administrative Officer, State Street Corporation		2020 (2014)		2
Leanne G. Caret Retired Executive Vice President, The Boeing Company and Former CEO, Boeing Defense, Space and Security		2023		1
Bernard A. Harris, Jr. Chief Executive Officer and Managing Partner, Vesalius Ventures, Inc.		2021		1
Gregory J. Hayes Chairman & Chief Executive Officer, Raytheon Technologies Corporation		2014		1
George R. Oliver Chairman & Chief Executive Officer, Johnson Controls International plc		2020 (2013)		1
Robert K. (Kelly) Ortberg Retired Chairman, President & Chief Executive Officer, Rockwell Collins, Inc.		2020		1
Dinesh C. Paliwal Partner, Americas Private Equity, KKR and Retired Chairman & CEO, Harman International		2020 (2016)		1
Ellen M. Pawlikowski General U.S. Air Force (Retired) and Former Commander, Air Force Materiel Command		2020 (2018)		2
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 (2017)		1
Robert O. Work Retired Deputy Secretary of Defense, U.S. Department of Defense		2020 (2017)		0

*

For the former Raytheon Company (RTN) directors who became members of the Company’s Board of Directors upon the Merger that closed on April 3, 2020, the start of their service as RTN directors is shown in parentheses.

Female   Male

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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.

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT     7

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PROXY SUMMARY | GOVERNANCE AND BOARD OVERVIEW

These nominees reflect the significant changes to the Board in connection with the Merger and refreshment efforts since the Merger, including the addition of two new directors over the past three years.

TENURE ON RTX BOARD(1)		AGE OF NOMINEES

(1)	Includes board service on the RTN Board prior to Merger for former RTN directors.

BOARD ENGAGEMENT IN 2022

In 2022, our Board actively engaged with management on a range of matters, providing strong oversight and invaluable guidance to enable the Company to navigate through a challenging operating environment and to execute on the key priorities that underpin our business strategy.

99%		99%		100%
Overall attendance by directors at the six Board meetings during 2022		Overall attendance by directors at Board and committee meetings in 2022		Overall attendance by directors at the 2022 Annual Meeting

Notable areas of Board focus:		Other notable Board actions:
●   Our response to a range of challenges presented by the Ukraine conflict, the geopolitical environment and inflation ●   Our execution of ESG-related initiatives in furtherance of our ESG strategy and vision ●   Risk management, with a particular focus on cybersecurity, product safety and compliance risks ●   Our shareowner engagement efforts ●   CEO and senior management succession planning		●   In connection with its continuing focus on Board composition and refreshment, added a new director to the Board, amended the director retirement age from 72 to 75 and adopted a 15-year term limit, as well as considered and changed the key skills and expertise that should be represented on the Board as a whole ●   Demonstrated its commitment to strong corporate governance and responsiveness to shareowners by including a proposal to complete the repeal of the sole supermajority voting provision in our charter ●   Amended governance documents to remove Merger-related provisions while preserving post-Merger enhancements

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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.

Orientation and Continuing Education New directors participate in individualized orientation sessions to learn the roles and responsibilities of the Board and the committees on which they will serve. They also learn about the Company’s strategy, our businesses, our compliance programs, our financial statements, and any significant financial, accounting and risk management issues. Outside continuing education programs are made available to directors at the Company’s expense.		Site Visits As part of our directors’ continuing education, the Board strives to visit at least one of our businesses each year. This gives directors a first-hand understanding of the operations of that business and the opportunity to interact with employees and key executives.
Strategy and Business Plan Reviews Annually, the Board holds an offsite meeting with senior management to review the strategy and long-range plans for each of our businesses and to discuss other topics, such as key Company areas of focus and significant and emerging risks.		Direct Interaction with Management Our CEO and other members of senior management communicate with directors on a regular basis outside of regularly scheduled Board and Committee meetings, including through periodic written updates and special meetings.
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, 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.

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT     9

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Proposal 1: Election of Directors

What am I voting on?

We are seeking your support for the election of the thirteen individuals nominated to serve on the Board of Directors until the 2024 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. In 2022, it explicitly added Environmental, Social and Governance (“ESG”) and Manufacturing, Operations and Supply Chain as key skills and expertise that should be represented on the Board, reflecting the importance of these areas from a strategic, operational and risk standpoint. See “Key Skills and Expertise” on page 11.

Further, the Governance Committee continues to recognize the value of selecting directors who come from various backgrounds and professions and are diverse in age, gender, race and ethnicity, to ensure that the Board as a whole has a wealth of experiences and perspectives to inform its decisions. We believe diversity makes our business stronger and more innovative and is critical to the Company’s long-term success.

We have added two directors since the Merger, both of whom are diverse. For more information about diversity on our Board, see “Nominees” on page 6, “Nominee Highlights” on page 7, and “Board Composition and Refreshment” on page 12.

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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 13-19, 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 Directors with 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.				Technology/Cybersecurity 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, and also serve a critical role in the Board’s oversight of cybersecurity risks.
		Experience in Industry Directors with experience in the aerospace and defense markets in which RTX operates, 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.				Government 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 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.				Environmental, Social and Governance (ESG) Directors with experience in environmental 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 Directors with knowledge and experience in managing major risk exposures 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.				Manufacturing, Operations and Supply Chain 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.

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PROPOSAL 1: ELECTION OF DIRECTORS | BOARD COMPOSITION AND REFRESHMENT

Board Composition and Refreshment

The Board believes that it benefits from a mix of new directors who bring fresh perspectives and longer-serving directors who bring valuable experience, continuity and a deep understanding of the Company. The Board strives to maintain an appropriate balance of tenure, turnover, diversity, attributes, viewpoints and experiences. Since the Merger of UTC and Raytheon Company in April of 2020, three directors have left the Board, while Bernard A. Harris, Jr. and Leanne G. Caret have joined the Board. In addition, one of our current directors, Margaret L. O’Sullivan, has decided to step down from the Board at the 2023 Annual Meeting due to increased outside demands on her time. Given the significant changes to the Board in connection with the Merger, and the changes in Board composition since the Merger, our Board believes that our nominees represent the right mix of newer and longer-serving directors, and that they have the appropriate attributes, experiences and perspectives to guide the Company and provide effective oversight of our strategy and business plans. For more information about the skills, experience and diversity of our directors, see “Nominee Highlights” on page 7.		TENURE OF RTX BOARD NOMINEES*
		*   Includes board service on RTN Board prior to Merger for former RTN directors.

In 2022, in recognition of its members’ relatively low tenures, the benefits of retaining certain directors with historical knowledge and perspective, as well as key skills and experiences, and the broader trend of accomplished individuals working longer, the Board amended its policy to increase the director retirement age from 72 to 75. However, in conjunction with this change, the Board also adopted a formal 15-year term limit.

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 22 for more detail on the annual self-evaluation process)

As described above, in 2022 the Governance Committee explicitly added ESG, as well as Manufacturing, Operations and Supply Chain, to the set of identified skills and expertise. Our Board has added two new directors since the Merger who bring important skills and expertise and enhance Board diversity.

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 Board has delegated the identification and evaluation process for director candidates to the Governance Committee. Potential directors can be brought to the Committee’s attention in different ways, as shown on below. The Committee screens and evaluates all candidates, regardless of who recommends them, using the criteria described under “Criteria for Board Membership” on page 10.

 

To ensure that there is a large and diverse pool of potential directors, 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 108 for contact information).

Current Board members who become aware of suitable candidates may recommend them to the Governance Committee from time to time.

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

Nominees

The Board, upon the recommendation of the Governance Committee, has nominated for election the thirteen individuals listed in this Proxy Statement. All are current directors of RTX. One of our current directors, Margaret L. O’Sullivan, will not be standing for re-election to the Board at the Annual Meeting due to the additional demands on her time resulting from her new position recently announced by Harvard University Kennedy School of Government. We congratulate Dr. O’Sullivan on her appointment and thank her for her leadership and numerous contributions to RTX.

The Board of Directors unanimously recommends a vote FOR each of the following nominees:

 

Tracy A. Atkinson INDEPENDENT DIRECTOR Retired Executive Vice President & Chief Administrative Officer, State Street Corporation AGE 58 DIRECTOR SINCE 2020 (2014*) BOARD COMMITTEES Human Capital & Compensation (Chair), Finance Key Skills and Expertise     FINANCIAL          SENIOR LEADERSHIP          RISK MANAGEMENT/OVERSIGHT

 

RAYTHEON TECHNOLOGIES 2023 PROXY STATEMENT    13

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

Leanne G. Caret INDEPENDENT DIRECTOR Retired Executive Vice President, The Boeing Company and Former CEO, Boeing Defense, Space and Security AGE 56 DIRECTOR SINCE 2023 BOARD COMMITTEES Audit, Special Activities Key Skills and Expertise     FINANCIAL          EXPERIENCE IN INDUSTRY          MANUFACTURING, OPERATIONS & SUPPLY CHAIN

 

Bernard A. Harris, Jr. INDEPENDENT DIRECTOR Chief Executive Officer and Managing Partner, Vesalius Ventures, Inc. AGE 66 DIRECTOR SINCE 2021 BOARD COMMITTEES Audit, Special Activities Key Skills and Expertise   EXPERIENCE IN INDUSTRY      ESG     TECHNOLOGY/CYBERSECURITY

 

 

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

Gregory J. Hayes Chairman & Chief Executive Officer, Raytheon Technologies Corporation AGE 62 DIRECTOR SINCE 2014 BOARD COMMITTEES Finance, Special Activities Key Skills and Expertise   SENIOR LEADERSHIP    FINANCIAL     EXPERIENCE IN INDUSTRY

 

George R. Oliver INDEPENDENT DIRECTOR Chairman & Chief Executive Officer, Johnson Controls International plc AGE 62 DIRECTOR SINCE 2020 (2013*) BOARD COMMITTEES Human Capital & Compensation, Finance Key Skills and Expertise   INTERNATIONAL     SENIOR LEADERSHIP     MANUFACTURING, OPERATIONS & SUPPLY CHAIN

 

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

Robert K. (Kelly) Ortberg Retired Chairman, President & Chief Executive Officer, Rockwell Collins, Inc. AGE 62 DIRECTOR SINCE 2020 BOARD COMMITTEES Finance, Special Activities Key Skills and Expertise   EXPERIENCE IN INDUSTRY     SENIOR LEADERSHIP   TECHNOLOGY/CYBERSECURITY

 

Dinesh C. Paliwal INDEPENDENT LEAD DIRECTOR Partner, Americas Private Equity, KKR Retired Chairman & CEO, Harman International AGE 65 DIRECTOR SINCE 2020 (2016*) BOARD COMMITTEES Governance and Public Policy, Human Capital & Compensation Key Skills and Expertise   TECHNOLOGY/CYBERSECURITY     INTERNATIONAL      SENIOR LEADERSHIP

 

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

Ellen M. Pawlikowski INDEPENDENT DIRECTOR General, U.S. Air Force (Retired) and Former Commander, Air Force Materiel Command AGE 66 DIRECTOR SINCE 2020 (2018*) BOARD COMMITTEES Audit, Special Activities Key Skills and Expertise   GOVERNMENT    SENIOR LEADERSHIP       EXPERIENCE IN INDUSTRY

 

Denise L. Ramos INDEPENDENT DIRECTOR Retired Chief Executive Officer & President, ITT Inc. AGE 66 DIRECTOR SINCE 2018 BOARD COMMITTEES Audit, Finance Key Skills and Expertise    MANUFACTURING, OPERATIONS & SUPPLY CHAIN      SENIOR LEADERSHIP    FINANCIAL

 

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

Fredric G. Reynolds INDEPENDENT DIRECTOR Retired Executive Vice President & Chief Financial Officer, CBS Corporation AGE 72 DIRECTOR SINCE 2016 BOARD COMMITTEES Audit (Chair), Governance and Public Policy   Key Skills and Expertise   FINANCIAL   RISK MANAGEMENT/OVERSIGHT   SENIOR LEADERSHIP

 

Brian C. Rogers INDEPENDENT DIRECTOR Retired Chairman, T. Rowe Price Group, Inc. AGE 67 DIRECTOR SINCE 2016 BOARD COMMITTEES Finance (Chair), Human Capital & Compensation Key Skills and Expertise   FINANCIAL   RISK MANAGEMENT/OVERSIGHT     SENIOR LEADERSHIP

 

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PROPOSAL 1: ELECTION OF DIRECTORS | NOMINEES

James A. Winnefeld, Jr. INDEPENDENT DIRECTOR Admiral, U.S. Navy (Retired) and Former Vice Chairman of the Joint Chiefs of Staff AGE 66 DIRECTOR SINCE 2020 (2017*) BOARD COMMITTEES Special Activities (Chair), Human Capital & Compensation, Governance and Public Policy Key Skills and Expertise   GOVERNMENT      EXPERIENCE IN INDUSTRY     RISK MANAGEMENT/OVERSIGHT

 

Robert O. Work INDEPENDENT DIRECTOR Retired Deputy Secretary of Defense, U.S. Department of Defense AGE 70 DIRECTOR SINCE 2020 (2017*) BOARD COMMITTEES Governance and Public Policy (Chair), Audit, Special Activities Key Skills and Expertise   GOVERNMENT   EXPERIENCE IN INDUSTRY     ESG

 

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Corporate Governance

Our Continuing Commitment to Sound Corporate Governance

RTX is committed to strong corporate governance practices that are designed to maintain high standards of oversight, accountability, integrity and ethics that go beyond legal and regulatory requirements. The Board believes this commitment promotes long-term shareowner value.

GOVERNANCE BEST PRACTICES

Our Board has adopted robust governance practices and continuously reviews and considers these practices to enhance its effectiveness.

Effective Board oversight		Commitment to shareowner rights
●   Qualified Board with diverse mix of perspectives and tenures ●   Regular Board review of strategic plans and priorities ●   Regular Board/committee review of significant risks, including cybersecurity risks ●   Annual Board evaluation of CEO performance ●   CEO and senior management succession planning		●   Active and ongoing shareowner engagement ●   Proxy access with market terms ●   Shareowners can act by written consent ●   Shareowners holding 15% of voting stock can call special meetings ●   Robust Clawback Policy ●   No hedging, short sales or pledging of RTX securities by officers or directors ●   Rigorous share ownership requirements for directors and senior management
Board independence		Board accountability
●   11 out of 13 director nominees are independent ●   Robust independent Lead Director role with clear responsibilities ●   Independent directors meet regularly without management ●   Fully independent Audit, Human Capital & Compensation and Governance Committees		●   Annual Board, committee and individual director evaluations ●   Annual election of all directors ●   Majority voting for directors in uncontested elections ●   Ongoing consideration of Board composition and refreshment ●   Limits on outside public company board service ●   Approval process for outside directorships and paid consulting/advisory engagements

CODE OF CONDUCT

This commitment to sound governance is also reflected in our Code of Conduct, which reinforces our values and high standards by:

●	Explaining how our values of Trust, Respect, Accountability, Collaboration and Innovation must inform our actions
●	Guiding employees’ conduct 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.

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CORPORATE GOVERNANCE | BOARD LEADERSHIP STRUCTURE

Board Leadership Structure

The Board believes the interests of all shareowners are best served at this time through the current combined Chair and CEO leadership structure. This arrangement has created and sustained an environment in which the Board works collaboratively with management while ensuring that our independent directors can effectively oversee performance and hold senior leaders accountable. To ensure robust independent leadership on the Board, our corporate governance guidelines provide that when the Chair 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 Chair and CEO with responsibilities for day-to-day management, Board leadership and setting long-term strategy, and an empowered independent Lead Director with well-defined responsibilities.

The Lead Director’s responsibilities include facilitating our Board’s independent oversight of management and its review of CEO performance, promoting communication between senior management and our Board about issues such as management development and succession planning, executive compensation, risk management, and Company performance, and engaging and communicating with shareowners and other shareowners as appropriate. (A more complete list of responsibilities appears below.)

The Governance Committee regularly reviews our Board leadership structure. Under our Corporate Governance Guidelines, the Board does not have a fixed policy on whether the roles of Chair of the Board and CEO should be separate or combined. Instead, the Board selects the structure that it believes will provide the most effective leadership and oversight for the Company in the circumstances. In making this decision, the Board considers a range of factors, including: the Company’s operating and financial performance; any recent or anticipated changes in the CEO role; the effectiveness of the processes and structures for Board interaction with and oversight of management; and the importance of maintaining a single voice in leadership communications and Board oversight, both internally and with investors and customers.

INDEPENDENT LEAD DIRECTOR

The Board has designated Mr. Paliwal to serve as the Lead Director.

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. Among these roles and responsibilities, the Lead Director:

●   Presides over regularly scheduled private sessions of the independent directors and additional private sessions called at his/her discretion ●   Serves as Chair of the Board when the Chair is not present ●   Engages with significant constituencies, as requested ●   Collaborates with the CEO to plan and set the agenda for Board meetings ●   Oversees the performance evaluation and compensation for our CEO		●   Engages in regular communication with the CEO and other directors regarding risk management oversight, as discussed on page 28 ●   Facilitates succession planning and management development ●   Works with the Chair of the Governance Committee to lead the Board’s annual self-evaluation process and review any director’s request to accept a new outside directorship or other paid engagement per the Corporate Governance Guidelines ●   Authorizes retention of outside advisors and consultants who report to the Board on board-wide issues

As indicated 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.

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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, the performance of the standing committees and each individual director.

OVERVIEW OF THE SELF-EVALUATION PROCESS

Oversight and leadership		How it works
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 self-evaluation process.		1 Each independent director confers with the Lead Director or the Chair of the Governance Committee to provide feedback, including candid assessment of peer contributions and performance. 2 The Lead Director and the Chair of the Governance Committee communicate peer feedback to individual directors and provide feedback on committee performance to each committee chair.		3 The committee chairs then discuss this feedback with their committees. 4 The Lead Director and the Governance Committee Chair then provide to the full Board a summary of the results of the self-evaluation process, and facilitate a Board discussion about potential areas of 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 diversity ●   Director succession planning ●   Individual director development		It 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 standing committees and their responsibilities in order to free up additional time at Board meetings for strategy and other discussions ●   Improving the Board’s self-evaluation process itself

In the 2022 self-evaluation process, the Board focused on: ●   Board and committee composition, knowledge, skills, attributes, diversity and size, including changes to committee assignments; ●   The Board’s review and consideration of CEO and senior management succession planning; and ●   The Board’s effectiveness in performance of its key oversight responsibilities and its communications with management.

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CORPORATE GOVERNANCE | BOARD COMMITTEES

Board Committees

Our Board currently has the following standing committees: the Audit Committee, the Committee on Governance and Public Policy, the Finance Committee, the Human Capital & Compensation Committee, and the Special Activities Committee. Following the 2022 Annual Meeting, the Board removed certain provisions from our Corporate Governance Guidelines and Bylaws mandated through April 3, 2022, under the terms of the Merger, which had set parameters for committee composition. Due to this removal, as well as recent Board refreshment, the Board considered the composition and functioning of the committees and approved changes to assignments for all committees.

The Audit, Governance and Public Policy, and Human Capital & Compensation Committees are each composed exclusively of independent directors. Mr. Hayes (an active employee) and Mr. Ortberg (a former employee) serve on the Finance and Special Activities Committees (which are not required committees under New York Stock Exchange (“NYSE”) or Securities and Exchange Commission (“SEC”) rules), because the Board believes these individuals bring particular insights on topics within these committees’ responsibilities.

Each standing 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).

		Audit Fredric G. Reynolds Chair
2022 MEETINGS: 7 COMMITTEE MEMBERS Leanne G. Caret Bernard A. Harris, Jr. Ellen M. Pawlikowski Denise L. Ramos Robert O. Work		●   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; and policies and procedures for assessing and managing financial, operational, compliance and other risks ●   Nominates (for shareowner approval) an 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 Mr. Reynolds, Ms. Caret and Ms. Ramos each are “audit committee financial experts,” as defined in the SEC rules.

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CORPORATE GOVERNANCE | BOARD COMMITTEES

		Governance and Public Policy Robert O. Work Chair
2022 MEETINGS: 5 COMMITTEE MEMBERS Margaret L. O’Sullivan Dinesh C. Paliwal Fredric G. Reynolds James A. Winnefeld, Jr.		●   Reviews and oversees RTX’s positions on significant public policy issues and its policies and objectives with respect to sustainability, product and workplace safety, human rights, and elements of DE&I that do not fall under human capital management ●   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 tenure 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
2022 MEETINGS: 4 COMMITTEE MEMBERS Tracy A. Atkinson Gregory J. Hayes George R. Oliver Robert K. Ortberg Denise L. Ramos		●   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

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CORPORATE GOVERNANCE | BOARD COMMITTEES

		Human Capital & Compensation Tracy A. Atkinson Chair
2022 MEETINGS: 5 COMMITTEE MEMBERS George R. Oliver Dinesh C. Paliwal Brian C. Rogers James A. Winnefeld, Jr.		●   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 annual and long-term incentive programs for executives ●   Evaluates the performance of RTX, our business units and our NEOs relative to performance goals set by the 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 recruiting, retention, career development, DE&I, and other aspects of human capital management

		Special Activities James A. Winnefeld, Jr. Chair
2022 MEETINGS: 4 COMMITTEE MEMBERS Leanne G. Caret Bernard A. Harris, Jr. Gregory J. Hayes Robert K. Ortberg Margaret L. O’Sullivan Ellen M. Pawlikowski Robert O. Work		●   Reviews and monitors activities involving classified business of RTX ●   Reviews policies, processes, risk management and internal controls applicable to classified business ●   Reviews RTX’s cybersecurity risk exposure and management’s efforts to manage that exposure ●   Assists other committees of the Board with their activities and oversight related to product safety risk and development of technical talent ●   Monitors critical technology gaps and reviews the investments, talent development and other efforts by management to address those gaps

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CORPORATE GOVERNANCE | DIRECTOR INDEPENDENCE

Director Independence

Under RTX’s Director Independence Policy and the 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 Director Independence Policy guides the independence determination and defines certain categories of relationships that the Board has determined will not be considered material relationships that would impair a director’s independence. The policy is available on the Corporate Governance section of our website (www.rtx.com).

Before joining the Board and each year thereafter, each director or nominee completes a questionnaire about relationships and transactions that may require disclosure, may affect the independence determination for that individual, or may affect our ability to meet the heightened independence standards for members of the Audit Committee and 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, in the ordinary course of business, between RTX (including its subsidiaries) and other companies or charitable organizations where a director or a nominee (or immediate family members) 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. Hayes (who is a current employee of RTX) and Mr. Ortberg (who retired from employment with RTX in February 2021), none of the nominees for election at the 2023 Annual Meeting has, directly or indirectly, a material relationship with RTX, or any direct or indirect material interest in any transaction involving RTX. Other than Messrs. Hayes and Ortberg, each nominee satisfies our independence criteria.

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, and ESG, 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 its oversight role, the Board:

●   Annually reviews the Company’s long-term plan and objectives 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 challenges and opportunities ●   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 ●   Receives regular updates on management’s progress and execution of the Company’s strategy and reviews and   approves the Company’s annual operating plan ●   Periodically receives briefings from outside advisors and counsel on strategic, financial, legal and compliance, and other matters

In 2022, our Board worked closely with management to provide effective oversight of execution on key priorities that underpin our business strategy, including:

●   Our response to a range of challenges presented by the Ukraine conflict and the geopolitical environment and inflation ●   Our execution of ESG-related initiatives in furtherance of our ESG strategy and vision ●   Our risk management efforts, with a particular focus on cybersecurity, product safety and compliance risks ●   Our shareowner engagement efforts

●   CEO and senior management succession planning ●   Our focus on operational excellence and financial performance ●   Our strategic investments in technology and innovation ●   Meeting our commitment to return capital to investors

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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 ●   Employs a comprehensive enterprise risk management (“ERM”) program ●   Maintains robust internal processes and an effective   internal control environment		Responsible for Board/committee risk oversight governance, including allocation of risk oversight responsibilities ●   Audit Committee oversees management’s ERM program ●   Board has allocated responsibilities to itself and its   committees for overseeing particular risks, as shown below

 

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 its committees, evaluate the Company’s risk management processes and whether they are functioning adequately, and engage in regular communications with management regarding risk trends and developments. 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 leads the ERM program, with an annual cycle for structured reviews, discussions, and mitigation planning. Risks are identified and evaluated through both a “bottom-up”

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CORPORATE GOVERNANCE | THE BOARD’S ROLE

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, our ethics and compliance programs, and our financial reporting and SEC disclosures.

The Chief Financial Officer and General Counsel report to 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 its 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, management is highly focused on identifying and managing a broad range of cybersecurity risks. These risks include those relating to our internal systems, as well as to our products, services and programs for customers. Our Special Activities Committee has primary oversight responsibility for cybersecurity risks and is regularly briefed by management on such risks as they relate to our information and operational technology systems, our suppliers and partners, and our products and services, in addition to briefings on cyber incidents and key Company defenses and mitigation strategies. The Audit Committee also considers cybersecurity and data privacy risks in connection with its financial and compliance risk oversight role. Lastly, the full Board receives periodic briefings from management on the Company’s cybersecurity program.

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 Company product safety risks (with the Special Activities Committee assisting on classified product safety). The Governance Committee annually reviews our corporate product safety program, receives a dashboard reporting on product safety matters (including incident metrics and managed safety issues) at each meeting, and regularly receives a briefing from each business unit on its product safety management system and culture. Our product safety program also provides for immediate reporting to the Governance Committee in the event of certain significant product safety incidents.

Compensation Risk Oversight

The Human Capital & Compensation 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
●	Promote long-term, sustainable value for shareowners
●	Provide fair and equitable pay regardless of race and gender
●	Strike a balance between appropriate levels of financial opportunity and risk

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CORPORATE GOVERNANCE | THE BOARD’S ROLE

The 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 the financial health of our Company. The 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, to the extent it believes the calculated results do not accurately reflect the overall quality of performance for the year. Further, payouts for both annual incentive awards 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. These requirements are intended to reduce risk by aligning the economic interests of executives and directors with those of our shareowners. A significant stake in future performance discourages the pursuit of short-term opportunities that can create excessive risk. See page 35 for more information.
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		RTX maintains a comprehensive policy on recoupment of both annual and long-term incentive compensation (see page 65 for more details). The policy allows RTX to recoup 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.
Post-Employment 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 63 for more details.

Compensation Risk Assessment. During 2022, the Committee engaged Frederic W. Cook & Co. (“FW Cook”), the Committee’s independent third-party consultant, to perform a compensation risk assessment. As a result of this assessment, both FW Cook and the Committee concluded that the Company’s compensation incentive plans do not contain risky features that could have a material and adverse impact on the Company. Further, 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 and in recent years has particularly focused on senior leadership succession in connection with and following the Merger. The CEO and the Executive Vice President & Chief Human Resources Officer regularly brief the Board on succession planning for key senior leadership roles, including the CEO role. The Board’s views are incorporated into succession plans, which are updated annually based on this feedback. Succession plans include readiness assessments, biographical information and career development plans.

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. In 2021, with the Board’s engagement, we developed our comprehensive ESG strategy, which sets forward-looking aspirations aligned with our focus areas and business strategy, while supporting the advancement of people, lifting up underserved communities and addressing the global challenges of climate change. In 2022, we continued to build on and integrate this strategy throughout our business, we held ourselves accountable for making progress on our ESG objectives in our annual incentive plans, and increased our transparency to our stakeholders, as demonstrated by our first annual ESG Report being published in April 2022. Our ESG Report can be found by visiting our website at: https://www.rtx.com/our-responsibility/our-vision.

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CORPORATE GOVERNANCE | THE BOARD’S ROLE

Our ESG Strategy: People, Planet and Principles

ESG Oversight Structure

Our CEO is ultimately responsible for ESG strategy and performance, with oversight by our Board of Directors. As with risk management oversight, the Board has allocated oversight responsibility for ESG matters and risks to its committees, while retaining full Board oversight of matters that cut across the expertise of multiple committees. These include, among other areas, sustainable technology and innovation, climate risk, and business resilience and crisis management.

Governance Committee ●  Environmental stewardship & compliance ●  Energy & greenhouse gas emissions ●  Health, safety & wellness ●  Community vitality ●  Product safety ●  Human rights			Human Capital & Compensation Committee ●  Human capital management, including DE&I and talent attraction, development and engagement ●  Compensation plans			Audit Committee ●  Ethics & compliance ●  Data privacy ●  Product quality			Special Activities Committee ●  Data security ●  Classified product safety ●  Classified business compliance

The committees are regularly briefed by management on ESG-related matters for which they have responsibility, including briefings on the Company’s programs, initiatives, goals, risks and opportunities relating to these matters. The Board also discusses ESG risks and opportunities in the context of its review of the Company’s top enterprise risks and mitigation plans, strategic priorities, potential investments, and operating and long-term planning.

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CORPORATE GOVERNANCE | SHAREOWNER ENGAGEMENT AND RESPONSIVENESS

Shareowner Engagement and Responsiveness

The Board and management believe in transparent and open communication with investors. Over the years, these engagements have improved our corporate governance practices, increased shareowner rights, enhanced the Board’s composition, and improved the design and disclosure of our executive compensation program.

We regularly communicate with our investors throughout the year, including through calls, one-on-one and small group meetings, and conferences or other events. We also engage with our investors in the spring after our Proxy Statement is filed, as well as outside of proxy season, typically in the late summer and fall, when we solicit feedback on our executive compensation program, ESG initiatives, and corporate governance practices.

2022 SHAREOWNER ENGAGEMENT OUTSIDE OF PROXY SEASON

When		Who		Topics		Objectives				Outcome
Summer and fall of 2022		Institutional investors representing nearly 45% of our shares		●  ESG accomplishments in the last year, including publication of our first annual ESG Report ●  Ongoing activities in specific ESG areas, such as sustainable technologies/innovation, greenhouse gas emissions, DE&I, and talent management and attraction		●  Enhance investor understanding of our ESG journey, including our areas of focus and our roadmap for increased transparency and accountability				●  Incorporated feedback into our ESG roadmap, as well as the content of our second annual ESG Report (scheduled to be published in the second quarter of 2023)
				●  Key elements of our 2022 executive compensation program, including the Corporate Responsibility Scorecard		●  Enhance investor understanding of, and obtain feedback on, our executive compensation program				●  Provided feedback to Human Capital & Compensation Committee
				●  Charter supermajority voting provision		●  Communicate intention to complete repeal of supermajority voting provision				●  Recommended shareowner approval of repeal (see Proposal 5 on pages 93-94)

In 2022, we engaged with institutional investors holding RTX Common Stock representing nearly 45% of our shares outstanding on ESG and compensation matters.

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CORPORATE GOVERNANCE | PUBLIC POLICY ENGAGEMENT

PROPOSAL TO MODERNIZE CHARTER

As part of our ongoing efforts to be responsive to shareowner feedback and ensure RTX follows sound corporate governance practices, and based on our shareowners’ approval in 2022 of an amendment to Article Ninth of our Restated Certificate of Incorporation, we are asking our shareowners to repeal Article Ninth in its entirety at the 2023 Annual Meeting. This would eliminate the only provision in RTX’s governing documents that requires a shareowner supermajority vote. This reflects the Board’s commitment to strong governance and accountability to shareowners and the Governance Committee’s careful consideration of recent shareowner feedback. To read the full proposal, see pages 93-94.

Public Policy Engagement

RTX’s government relations initiatives are intended to educate and inform officials and the public on a broad range of public policy issues that are important to 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. We also have in place a Government Relations Policy relating to lobbying, political activities and contributions that is intended to promote compliance with all relevant federal, state and local laws, as well as our own governance processes and procedures.

The Board directly, or through the Governance Committee, provides oversight of the Company’s government relations activities, including activities of the Employees of Raytheon Technologies Corporation Political Action Committee (“RAYPAC”). RAYPAC is nonpartisan and supports candidates for federal, state and local 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. RAYPAC considers several criteria before approving a contribution to a candidate, including a determination that the candidate demonstrates a commitment to RTX’s core values of trust, respect, accountability, and collaboration. RAYPAC 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. RAYPAC operates in accordance with all applicable laws and regulations, and its contributions are reflected in public filings with the Federal Election Commission.

RTX does not contribute company funds to candidates for federal, state and local office or to state and local party committees. We also do not make contributions to initiatives that expressly advocate the election or defeat of a federal, state or local candidate, nor do we provide funding to support or oppose ballot measures.

We publicly disclose our federal lobbying activities and expenditures through reports we file with Congress. Likewise, RTX’s state and local lobbying activities are disclosed in compliance with all applicable laws and regulations. Our activities at the state and local level are limited and generally involve issues related to economic development and business regulatory matters.

In the ordinary course of business, RTX also contributes to non-profit trade associations that help us stay abreast of technical issues, emerging industry standards, and other trends relevant to our business, and that also engage in public advocacy and education on behalf of their membership.

Additional information on RTX’s public activities, including links to our Code of Conduct, the Government Relations Policy, PAC filings, federal lobbying reports and association payments (including the portions, if any, used for lobbying) can be found on our website at www.rtx.com under the heading “Our Company/Corporate Governance/Public Activities.”

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Compensation of Directors

Pay Structure

ANNUAL RETAINER

Under the terms of the Raytheon Technologies 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 April 2022 to April 2023 Board cycle is dependent upon the role each director holds, as follows:

Role		Cash ($)		Deferred Stock Units ($)		Total Annual Retainer ($)
All Directors (base retainer)		$124,000		$186,000		$310,000
Additional Compensation for Services as:*
Lead Director		$32,000		$48,000		$80,000
Audit Committee Chair		$16,000		$24,000		$40,000
Audit Committee Member		$12,000		$18,000		$30,000
Human Capital & Compensation Committee Chair		$10,000		$15,000		$25,000
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

*	Directors serving in multiple leadership roles receive incremental compensation for each role.

Annual retainers are paid each year following the Annual Meeting. Non-employee directors joining the Board between the Annual Meeting and the end of September receive 100% of the annual retainer, while those who join the Board between the beginning of October and the next Annual Meeting receive 50% of the annual retainer. DSUs are 100% vested at the time of grant, but distribution does not occur until after a non-employee director retires from the Board (see “Plan Distributions” on page 34).

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 a formal Board or committee meeting that was not on the Board’s annual calendar, and does not take place during a regularly scheduled Board meeting. In 2022, there were no special, in-person meetings.

DEFERRED RESTRICTED STOCK UNITS

Directors appointed to the Board before October 2019 received a one-time deferred RSU award. This award vests in equal portions over five years but is not distributed 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.

DIVIDEND TREATMENT

When RTX pays a dividend on 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.

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COMPENSATION OF DIRECTORS | 2022 DIRECTOR COMPENSATION

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, vested DSUs and deferred RSUs originally based in UTC stock were converted into vested 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.

2022 Director Compensation

Name		Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)		All Other Compensation ($)(3)		Total ($)
Tracy A. Atkinson		$146,000		$219,000		$26,888		$391,888
Leanne G. Caret(4)		$0		$0		$0		$0
Bernard A. Harris, Jr.		$136,000		$204,000		$1,888		$341,888
George R. Oliver		$124,000		$186,000		$1,888		$311,888
Robert K. (Kelly) Ortberg		$124,000		$186,000		$12,209		$322,209
Margaret L. O’Sullivan		$124,000		$186,000		$1,559		$311,559
Dinesh C. Paliwal		$0		$390,000		$25,650		$415,650
Ellen M. Pawlikowski		$136,000		$204,000		$11,559		$351,559
Denise L. Ramos		$0		$340,000		$11,888		$351,888
Fredric G. Reynolds		$140,000		$210,000		$25,650		$375,650
Brian C. Rogers		$0		$335,000		$2,209		$337,209
James A. Winnefeld, Jr.		$0		$335,000		$26,888		$361,888
Robert O. Work		$146,000		$219,000		$329		$365,329

(1)	Reflects the portion of the directors’ annual retainer paid in cash. Messrs. Paliwal, 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 21: Stock Based Compensation, to the Consolidated Financial Statements in RTX’s 2022 Annual Report on Form 10-K. The number of units credited to each director in 2022 was calculated by dividing the value of the award by $99.61, the NYSE closing price per share of RTX Common Stock on April 25, 2022, which was the date of the 2022 Annual Meeting. Since DSU awards vest on the grant date but are not distributed until the director retires from the Board, the only unvested units as of December 31, 2022, are unvested portions of the deferred RSU awards received by directors who joined the Board before October 2019, which includes 292 units held by Ms. Ramos. The aggregate number of shares underlying awards outstanding for each director (except unvested deferred RSUs), can be found in the table on pages 35-36.
(3)	Amounts in this column include incidental benefits and matching contributions to eligible non-profit 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 2022 were as follows: Ms. Atkinson, $25,000; Mr. Ortberg, $10,000; Mr. Paliwal, $25,000; Ms. Pawlikowski, $10,000; Ms. Ramos, $10,000; Mr. Reynolds, $25,000 and Mr. Winnefeld, Jr., $25,000.
(4)	Ms. Caret joined the Board in January 2023, and therefore, did not receive compensation during 2022.

CHANGES TO DIRECTOR COMPENSATION FOR 2023

The Committee on Governance and Public Policy, with guidance from the independent compensation consultant, made the following changes to the non-employee director compensation structure that will become effective on May 2, 2023, the date of the 2023 Annual Meeting of Shareowners:

●	Increased the total annual base retainer for directors from $310,000 to $325,000
●	Eliminated the Audit Committee member retainer of $30,000
●	Increased the Human Capital & Compensation Committee Chair retainer from $25,000 to $35,000

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Share Ownership

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		5X		4X		3X		2X
base salary for our Chairman & CEO		annual base cash retainer for non-employee directors		base salary for our CFO, COO and business unit presidents		base salary for other ELG members		base salary for other officers*

Shares for the purposes of determining compliance with the RTX Share Ownership Policy are defined as RTX Common Stock held outright (by the executive/director or their spouse), restricted stock units, restricted stock awards, shares or share equivalents held in a Company savings plan or deferred compensation plan. Stock options, stock appreciation rights, and performance share units 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. 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.

*	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 8, 2023, 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 director and nominee for director, including CEO
T. Atkinson		-		-		8,416		15,296
L. Caret		-		-		1,036		1,036
B. Harris, Jr.		-		-		4,709		4,709
G. Hayes		334,004		-		-		801,339(5)
G. Oliver		-		-		7,111		23,377
R. Ortberg		79,561		-		4,294		299,851
M. O’Sullivan		-		1,068		11,347		12,415
D. Paliwal		-		-		15,016		36,073(6)
E. Pawlikowski		-		-		7,823		11,022
D. Ramos		-		1,141		16,566		17,707
F. Reynolds		-		1,165		15,478		38,868
B. Rogers		-		1,165		24,275		30,440(6)
J. Winnefeld, Jr.		-		-		12,841		20,541
R. Work		-		-		10,295		15,496

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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.		27,102		-		-		64,655
C. Calio		33,676		-		-		89,835
S. Timm		12,176		-		-		29,572
W. Kremer		-		-		-		77,443
All directors, nominees and executive officers as a group (23 in total)(7)								1,684,853

(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 8, 2023. 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 $97.65 per share, which was the NYSE closing price of RTX Common Stock on February 8, 2023.
(2)	Non-employee director deferred RSUs 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 portion of the RSUs, which are 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 8, 2023, following the director’s retirement from the Board.
(3)	Previously accrued portion of the non-employee director’s annual retainer earned in DSUs, which are vested on the grant date but are not converted into RTX Common Stock and distributed 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 8, 2023, following the director’s retirement from the Board.
(4)	Reflects holdings by the director, nominee or officer of all shares beneficially owned (including unvested shares of restricted stock) and awards convertible to shares within 60 days of February 8, 2023.
(5)	Includes shares for which a spouse holds sole voting and investment power: G. Hayes (3,640 shares).
(6)	Includes shares for which voting and investment power is jointly held by the director: D. Paliwal (21,057 shares) and B. Rogers (5,000 shares).
(7)	Holdings, as of February 8, 2023, of the directors and executive officers who are listed in the Company’s 2022 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, 2022.

Name and Address		Shares		Percent of Class
State Street Corporation(1) State Street Financial Center One Lincoln Street Boston, MA 02111		125,892,213		8.6%
The Vanguard Group(2) 100 Vanguard Boulevard Malvern, PA 19355		124,014,262		8.4%
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055		101,153,028		6.9%
Capital Research Global Investors(4) 333 South Hope Street, 55th Floor Los Angeles, CA 90071		80,724,763		5.5%

(1)	State Street Corporation reported in a joint SEC filing that, as of December 31, 2022, it beneficially owned in the aggregate 125,892,213 shares of RTX Common Stock, it held shared voting power with respect to 119,214,854 shares of RTX Common Stock and shared dispositive power with respect to 125,881,576 shares of RTX Common Stock, and it did not hold sole voting power or sole dispositive power with respect to any shares of RTX Common Stock. In the same joint SEC filing, State Street Global Advisors Trust Company, a subsidiary of State Street Corporation, reported that, as of December 31, 2022, it beneficially owned 106,153,236 shares of RTX Common Stock, it held shared voting power with respect to 31,754,641 shares of RTX Common Stock and shared dispositive power with respect to 106,149,156 shares of RTX Common Stock, and it did not hold sole voting power or sole dispositive power with respect to any shares of RTX Common Stock.
(2)	The Vanguard Group reported in an SEC filing that, as of December 31, 2022, it held shared voting power with respect to 1,856,821 shares of RTX Common Stock, sole dispositive power with respect to 118,120,234 shares of RTX Common Stock and shared dispositive power with respect to 5,894,028 shares of RTX Common Stock, and it did not hold sole voting power with respect to any shares of RTX Common Stock.
(3)	BlackRock, Inc. reported in an SEC filing that, as of December 31, 2022, it held sole voting power with respect to 92,625,698 shares of RTX Common Stock and sole dispositive power with respect to 101,153,028 shares of RTX Common Stock, and it did not hold shared voting power or shared dispositive power with respect to any shares of RTX Common Stock.
(4)	Capital Research Global Investors, a division of Capital Research and Management Company, reported in an SEC filing that, as of December 31, 2022, it held sole voting power with respect to 80,684,431 shares of RTX Common Stock and sole dispositive power with respect to 80,724,763 shares of RTX Common Stock, and it did not hold shared voting power or shared dispositive power with respect to any shares of RTX Common Stock.

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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 40-65, along with the compensation tables on pages 67-81.

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. Each year we engage with investors to solicit their views on our executive compensation programs. The Human Capital & Compensation Committee (the “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 clearer and more transparent.

Why should I vote for this proposal?

The 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 Committee’s primary goal is to design a program that rewards financial and operating performance, effective strategic leadership, and advances our commitment to our ESG initiatives—all key elements in building sustainable shareowner value.

To reinforce these objectives, the Committee has selected performance metrics for our incentive programs that align with shareowner interests by correlating the timing and amount of actual payouts to our short-, medium- and long-term performance.

In addition, compensation opportunities under these programs are structured to:

●	Reward the appropriate balance of financial, strategic and operational business results
●	Align executives’ pay with Company performance and the shareowner experience
●	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, regardless of race or gender
●	Require ethical and responsible conduct in pursuit of these goals

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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, 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.

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Proposal 3: Advisory Vote on the Frequency of Shareowner Votes on Named Executive Officer Compensation

What am I voting on?

Pursuant to SEC requirements, every six years we ask shareowners to vote, on an advisory basis, on the frequency of future advisory shareowner votes to approve the compensation of the Company’s NEOs – whether every year, every two years or every three years.

Why should I vote for this proposal?

Since the Company began holding an advisory “Say-on-Pay” vote in 2011, it has submitted its executive compensation to an advisory vote every year. The Board believes that an advisory vote on NEO compensation that occurs every year is the most appropriate alternative. An annual “Say-on-Pay” vote enables shareowners to provide frequent, direct input to the Company regarding its compensation philosophy, policies and practices. Holding the vote at one-year intervals also enhances shareowner communication by providing a clear, simple means for the Company to ascertain general investor sentiment regarding the Company’s executive compensation program. While the vote on this proposal is advisory, the Board values the views of our shareowners and will carefully consider the results of it in determining the frequency of future “Say-on-Pay” votes.

The Board of Directors unanimously recommends a vote for a shareowner advisory vote on the compensation of the Named Executive Officers every ONE YEAR.

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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 “Committee”) determined compensation for our NEOs listed below, as well as the Committee’s rationale for specific 2022 pay decisions.

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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 Committee considers this feedback as part of its ongoing assessment of our program’s effectiveness.

Our 2022 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 2022 Annual Meeting of Shareowners, approximately 95% of the votes cast were in favor of the Committee’s 2021 executive compensation decisions. We interpreted this as an endorsement of our compensation program’s design and direction.

Investor Outreach

Our investor outreach efforts this past year focused on the Company’s ongoing ESG efforts, the design of our executive compensation programs 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, including how our Corporate Responsibility Scorecard is structured. 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 31.

2022 Performance Overview

Our 2022 performance—achieved in the face of widespread global supply chain pressures, labor shortages, increased inflation, and disruption from global sanctions against Russia—demonstrated the resiliency of our differentiated technologies and our balanced portfolio of commercial aerospace and defense businesses.

In 2022, our commercial businesses saw aftermarket sales growth of 25% and increased deliveries of new equipment, while our defense businesses completed the year with a book-to-bill ratio of 1.16—all of which contributed to our achievement of the adjusted earnings per share (“EPS”), sales and free cash flow expectations we communicated to investors for the year.⁽¹⁾ We also increased our commercial aerospace and defense backlogs by 14% and 9.5% to $106 billion and $69 billion, respectively, and our investors saw a TSR of 20%—a return that significantly outperformed the S&P 500 Index (-18.1%) and our Core A&D Peers (9.4%).

(1)

In early 2022, the Company communicated financial expectations to investors reflecting the assumption that the provision of the 2017 Tax Cuts and Jobs Act requiring research and experimental expenditures to be capitalized for tax purposes would be repealed in 2022. At that time, the Company determined that if this provision was not repealed in 2022, our financial results would be adjusted as needed to neutralize the law’s impact (positive or negative). Ultimately, the tax law was not repealed, resulting in both positive and negative impacts to our financial results for the year. All non-GAAP financial expectations and results shown reflect the law’s impact. Adjusted EPS and free cash flow are non-GAAP financial measures, see Appendix A on pages 113-114 for more information.

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COMPENSATION DISCUSSION AND ANALYSIS | EXECUTIVE SUMMARY

2022 FINANCIAL PERFORMANCE AT A GLANCE

20% TSR		7.7% increase		86th consecutive year
outpaced the 9.4% TSR of our Core A&D Peers(3)		in dividend per share		paying a dividend to shareowners
$69 billion		$106 billion		$5.9 billion
defense backlog at year-end		commercial aerospace backlog at year-end		returned to investors through dividends and share repurchases

TSR PERFORMANCE SINCE THE MERGER VS. CORE A&D PEERS

Since the Merger, we’ve been tested—by the pandemic, by inflation and supply chain issues, by labor shortages, and sanctions against Russia. And we have demonstrated our resilience. We’ve strived to maintain our commitments to our customers and communities, and we’ve built a backlog that supports our position as an industry leader. Our advanced technologies and capabilities are shaping the future of the defense, commercial aerospace and space industries. Our shareowners have seen the benefit of the Merger through TSR growth that has outperformed nearly all of our Core Aerospace & Defense Peers, as shown below:

CUMULATIVE TSR SINCE MERGER

(4/3/2020–12/31/2022)

(1)	See Appendix A on pages 113-114 for more information regarding non-GAAP financial measures.
(2)	GAAP cash flow is cash flow from operating activities of continuing operations, while non-GAAP cash flow is free cash flow from continuing operations.
(3)	Core A&D Peers are used for measuring TSR performance for our PSUs. The companies included in the peer group are: Airbus, Boeing, General Electric, General Dynamics, Honeywell, L3Harris, Lockheed Martin, Northrop Grumman and Safran. Aggregate TSR for peer group is weighted by year-end market capitalization.

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COMPENSATION DISCUSSION AND ANALYSIS | EXECUTIVE SUMMARY

PROGRESS ON OUR KEY STRATEGIC PRIORITIES

We believe the advancement of our key strategic priorities will position us to solve our customers’ most challenging problems, deliver long-term growth to our shareowners, and transform our industry by delivering smarter defense systems, intelligent space technologies and sustainable, more connected flight. In 2022, we made noteworthy progress towards these priorities, including:

 

 

Driving structural cost reductions

Delivering the highest quality, most cost-efficient products to our customers is key to supporting product demand and sustained business growth.

During 2022, we continued our digital transformation and enterprise-wide deployment of our CORE operating system, part of our ongoing effort to drive process improvement and operational efficiencies. We also made significant strategic investments in Industry 4.0 modernization, smart factories and automation, including at Raytheon Intelligence & Space’s McKinney, Texas factory and Pratt & Whitney’s new Asheville, North Carolina factory. These investments will help us continue to deliver for our customers while driving margin expansion and shareowner returns.

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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 Committee’s primary goal is to reward and recognize strong financial and operating performance, effective strategic leadership, and advancements our ESG initiatives, all of which the Committee believes drive long-term, sustainable shareowner value. This pay-for-performance philosophy is embedded into a set of Guiding Principles that underpin how the Committee approaches the design of our executive compensation program.

OUR GUIDING PRINCIPLES

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OVERVIEW OF 2022 PAY DECISIONS

2022 Pay Mix

Consistent with our Guiding Principles, the largest portion of compensation for our NEOs in 2022 was “at-risk” compensation—annual and long-term incentive awards that are contingent on Company performance relative to our key metrics and stock price performance. See pages 5, 49 and 54 for details on the metrics we use in our compensation program and why they were chosen.

(1)	Percentages calculated based on 2022 total direct compensation, as shown below.

2022 Total Direct Compensation

In making annual pay decisions, the Committee focuses primarily on “total direct compensation,” which includes our three principal elements of executive compensation: base salary, annual incentives and long-term incentives. These elements are discussed in detail on pages 48-54.

Total direct compensation reflects how an executive’s pay relates to the Committee’s assessment of Company, business unit and individual performance for the year. For this reason, 2022 total direct compensation includes 2022 base salary, 2022 annual incentives and the LTI grant values approved by the Committee in February 2023, which were based on its assessment of 2022 performance. This differs from the February 2022 LTI award grant date fair values shown in the Summary Compensation Table on page 67, which were based on the Committee’s assessment of 2021 performance and the accounting value at the time of grant. For more details on total direct compensation, see page 56.

The following chart shows the 2022 total direct compensation of our NEOs:

		Base Salary ($K)(1)		Annual Incentive ($K)		LTI ($K)(2)		Total Direct Compensation ($K)
Gregory J. Hayes		$1,675		$3,900		$16,500		$22,075
Neil G. Mitchill, Jr.		$900		$1,200		$4,750		$6,850
Christopher T. Calio		$900		$1,600		$10,000		$12,500
Stephen J. Timm		$800		$900		$4,000		$5,700
Wesley D. Kremer		$875		$700		$3,500		$5,075

(1)	Reflects the base salary in effect for each NEO as of December 31, 2022. Values above differ from those in the Summary Compensation Table on page 67, which reflect salary adjustments (if any) made during the year.
(2)	Reflects values approved by the Committee for the LTI award granted on February 8, 2023. These values differ from the values that will be reported in the Summary Compensation Table in 2024, which will be calculated in accordance with FASB ASC Topic 718, Compensation—Stock Compensation.

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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

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS | HOW WE MAKE PAY DECISIONS AND ASSESS OUR PROGRAMS

2022 Independent Consultant Engagement

In early 2022, the Committee again engaged Frederic W. Cook & Co. (“FW Cook”) as its independent consultant for the year. Prior to the engagement, the Committee 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. As a result, the Committee determined that FW Cook qualified as an independent consultant. During 2022, FW Cook representatives attended all Committee meetings.

No other consulting firm made recommendations to the Committee on RTX’s peer group composition or on the form, amount or design of executive compensation in 2022. However, the Committee 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 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 when the Committee finds it necessary or appropriate. The 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 the Committee’s 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 tenure.

How Our Compensation Peer Group is Constructed. The CPG, shown below, is composed of a mix of industry and non-industry peers. The 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. We use the CPG solely for the purpose of benchmarking executive compensation. As a result, we do not use the relative financial performance of the CPG as a performance metric in our incentive compensation programs.

OUR COMPENSATION PEER GROUP (CPG)

Aerospace & Defense		Equipment & Machinery		Technology/Communications		Oil & Gas
Boeing		3M		AT&T		Chevron
General Dynamics		Caterpillar		Cisco
L3Harris Technologies		Deere		HP Inc.
Lockheed Martin				IBM
Northrop Grumman				Intel
				Verizon
Chemicals		Diversified Industrials		Automotive		Freight & Logistics
Dow		General Electric		General Motors		UPS
		Honeywell

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COMPENSATION DISCUSSION AND ANALYSIS  |  2022 PRINCIPAL ELEMENTS OF COMPENSATION

TIMELINE FOR COMPENSATION DECISIONS

The Committee followed the process shown below in making pay decisions for each principal component of compensation included in 2022 total direct compensation, which includes the 2023 LTI awards as explained on page 56. Total direct compensation for each of our NEOs is shown on page 45.

February 2022		April 2022		December 2022		February 2023		1st Quarter of 2023
Approved 2022 base salary merit adjustments. Approved 2022 annual incentive performance goals.		2022 base salary adjustments took effect.		Reviewed preliminary 2022 Company, business unit and individual NEO performance.		Reviewed final 2022 Company, business unit and individual NEO performance. Approved performance factors and individual payouts for 2022 annual incentive awards. Approved and granted 2023 LTI awards reflective of 2022 performance.		2022 annual incentive awards paid.

2022 Principal Elements of Compensation

Base Salary

To attract and retain talented and qualified executives, we provide competitive base salaries that are generally targeted at the peer group market median but may range above or below it based on tenure, experience, sustained performance over time, job scope and responsibilities, retention risk and internal pay equity. Each year, the Committee reviews the CEO’s recommendations for base salary merit adjustments for our officers relative to market ranges for similar roles. The Committee has complete discretion to modify or approve the CEO’s recommendations, and the CEO is not involved in the Committee’s determination of his own base salary.

Annual Incentive Awards

Annual incentive awards, which are granted under the Raytheon Technologies 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 annual incentive awards for our NEOs:

Though performance relative to pre-established financial goals is the primary basis for determining the financial performance factors, the Committee retains the right to make discretionary adjustments to the overall performance factors if it determines that such financial performance does not accurately reflect the overall quality of performance for the year. In the past, the Committee has made both positive and negative adjustments (see Appendix B on page 115 for additional details). Examples of situations that could result in discretionary adjustments to performance factors include:

●	Significant, unforeseen circumstances beyond management’s control that affected financial performance relative to the established goals, including certain non-recurring charges and credits unrelated to operating performance

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●	Changes in tax laws and accounting rules that positively or negatively impact performance
●	Changes to the Company’s capital structure (restructuring and acquisitions and divestitures)

In addition, our NEOs begin the year with individual financial, strategic and/or operational objectives. Based on the CEO’s assessment of an NEO’s performance, he may recommend that the Committee use its discretion to increase or decrease the award the NEO would otherwise receive based on the approved performance factor. The Committee considers these recommendations and makes adjustments it deems appropriate, ranging anywhere from -100% to +30% of the approved performance factor.

2022 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, 2022. These targets are based on relevant market data for each NEO’s role and generally approximate the median of our CPG.

Below are the target percentages for each NEO as of year-end.

 

PERFORMANCE METRICS

2022 Performance Metrics and Weightings for Annual Incentives

The charts below show the 2022 performance metrics and weightings for our Corporate and business unit executives.

					Financial Goals				Corporate Responsibility Scorecard Objectives
					Earnings		Free Cash Flow		People & Culture		Sustainability & Safety
Corporate Executives Funding based entirely on Company-wide  performance
Business Unit Executives Funding based equally on business unit performance and Company-wide performance
Company-Wide    Business Unit

As shown above, performance on each metric is measured on a Company-wide basis for our Corporate executives. For business unit executives, however, business unit results and Company-wide results are weighted equally. The Committee believes that, at the business unit level, annual incentive awards should motivate executives both to deliver on customer commitments and to leverage Company-wide resources to advance technology and innovation and drive progress toward our corporate responsibility objectives. In the case of both financial goals and CRS objectives, payout funding ranges from 0% to 200% of target.

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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.*		We start by subtracting one GAAP measure from another: RTX’s consolidated net cash flow from operating activities*, less RTX’s capital expenditures.*		We start with a GAAP measure: business unit operating income.*		We start with an internal measure based on business unit net cash flow from operating activities, less 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), and significant and/or non-recurring items. See Appendix B on page 115 for additional details.
Why did the Committee choose these metrics?		The 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 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 Committee believes that operating income, exclusive of tax, interest and foreign exchange exposure, should be the focus of our business units.		The 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.
Why do we use non- GAAP financial metrics for annual incentives?		The Committee believes annual incentives should not be positively or negatively impacted by short-term decisions made in the best interest of RTX’s long-term business strategies. Our non-GAAP performance measures encourage decision-making that considers long-term value creation but does not conflict with our short-term incentive metrics. Adjustments noted above allow for a clearer assessment of business performance and help to align our annual incentive goals with the non-GAAP financial expectations we communicate to shareowners.

*	As reported in our 2022 Annual Report on Form 10-K.

OUR CORPORATE RESPONSIBILITY SCORECARD

RTX is committed to building a company that embraces diversity, equity and inclusion, ensuring our operations do not compromise the environmental health of future generations, and creating a safe workplace for our employees. For us, advancing these commitments are both a business and social imperative that requires our leadership team be held accountable for making tangible progress. RTX management and the Board of Directors view ESG as integral to our long-term strategy, our business operations, our values and how we engage with our stakeholders.

In line with this continued emphasis on ESG, and to accelerate the pace of our progress, our Executive Annual Incentive Plan includes a Corporate Responsibility Scorecard (“CRS”), comprised of two categories—People & Culture and Sustainability & Safety—each weighted at 10%. The CRS objectives listed below reinforce the Company’s commitment to our long-term goals and strengthen alignment between the interests of executives and shareowners.

		People & Culture				Sustainability & Safety
		Diversity Representation		Culture of Inclusion		Environmental		Health & Safety
What objectives are in the 2022 Corporate Responsibility Scorecard?		●   Enhance diverse representation through external hires, promotions and retention		●   Enhance employee engagement and retention by driving employee belonging, well-being and success ●   Drive an inclusive culture through DE&I programming, Employee Resource Groups, and mentorships/sponsorships ●   Develop and move talent across the enterprise		●   Reduce greenhouse gas emissions ●   Reduce waste generation ●   Reduce water usage		●   Reduce enterprise-wide environmental, health and safety risks ●   Reduce ergonomic risk
Are the objectives in the CRS weighted?		The Committee believes the relative importance of the objectives within the CRS will evolve over time and has not assigned specific weightings to these objectives. This allows the Committee to maintain flexibility in its performance evaluation process.

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HOW WE PERFORMED ON OUR 2022 FINANCIAL GOALS

The 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.

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.

2022 COMPANY-WIDE FINANCIAL GOALS, RESULTS AND FINANCIAL PERFORMANCE FACTORS

				2022 Goals
Financial Metric		Weight		Threshold (50% funding)		Target (100% funding)		Maximum (200% funding)		2022 Results(1)		Financial Performance Factors
Earnings—adjusted net income ($M)		40%		$6,340		$7,165		$8,240		$7,178		101%
Free Cash Flow ($M)		40%		$5,250		$6,250		$7,750		$6,804		137%

(1)	See the table on page 50 and Appendix B on page 115 for details on how we calculate earnings and FCF for the purposes of determining corporate financial performance factors.

Like the financial expectations we communicated to investors for 2022, the goals for each metric, established early in the year, reflected the assumption that the provision of the 2017 Tax Cuts and Jobs Act requiring research and experimental expenditures to be capitalized for tax purposes would be repealed. At that time, the Committee determined that if this provision was not repealed, the result for each metric would be adjusted as needed to neutralize the law’s impact (positive or negative) on annual incentive awards. Ultimately, this tax law was not repealed, resulting in $1.6 billion of incremental cash taxes, negatively impacting our free cash flow and a net $99 million increase to our earnings. Consistent with how financial expectations were originally communicated to investors, the Committee neutralized these impacts when measuring performance for annual incentive purposes.

The Committee also adjusted for the impact of the Company’s divestiture of its Russian businesses, which was driven by the ongoing war in Ukraine and the associated U.S. sanctions, in addition to other acquisition and divestitures, as well as restructuring activities. All adjustments made in 2022, align with the definition we use to measure annual incentive performance—exclusive of the impacts of changes in tax laws and accounting rules, restructuring costs, acquisitions and divestitures, and significant and/or non-recurring items.

As a result, RTX’s 2022 GAAP net income of $5,216 million was adjusted for annual incentive purposes to $7,178 million and RTX’s 2022 free cash flow of $4,880 million was adjusted to $6,804 million to account for these one-time items.

2022 BUSINESS UNIT FINANCIAL GOALS, RESULTS AND FINANCIAL PERFORMANCE FACTORS

		Business Unit Goals and Results(1)
		Business Unit Earnings		Business Unit FCF
What 2022 financial goals were set for annual incentive purposes?		Adjusted operating income goals ranged from $1,100 million to $2,630 million for our business units.		FCF goals ranged from $1,005 million to $2,000 million for our business units.
What were the financial results used for annual incentive purposes?		Adjusted business unit operating income ranged from $1,332 million to $2,723 million.		FCF results used for annual incentive purposes ranged from $863 million to $2,067 million.
What were the resulting financial performance factors?		Ranged from 0% to 200% of target.		Ranged from 0% to 200% of target.
What were the financial performance factors after applying the 50% weighting of the Company-wide factor?		Ranged from 51% to 151% of target.		Ranged from 69% to 169% of target.

(1)	See the table on page 50 and Appendix B on page 115 for details on how we calculate earnings and FCF for the purposes of determining business unit financial performance factors.

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HOW WE PERFORMED ON THE CORPORATE RESPONSIBILITY SCORECARD

Throughout the course of the year, the Committee conducted a comprehensive analysis of the Company’s and each business unit’s efforts in driving progress on our CRS objectives. To help the Committee in its qualitative assessment, this analysis incorporated both quantitative and qualitative data, including diversity representation progress in 16 different categories, and measured progress toward the Company’s five-year environmental and safety aspirations.

The Committee also approved CRS performance factors for each of the business units, ranging from 95% to 105% for the People & Culture category and 105% to 110% for the Sustainability & Safety category. With the Company-wide CRS performance factors weighted at 50%, the overall CRS performance factors for our business units ranged from 98% to 103% for People & Culture and from 103% to 108% for Sustainability & Safety.

HOW PERFORMANCE AFFECTED PAYOUTS

Below are the weighted results for Corporate executives when combining both the financial performance factors and the CRS performance factors, resulting in the overall RTX performance factor approved by the Committee.

RTX Metrics		Weight		Unweighted Performance Factor		Weighted Performance Factor
Earnings (adjusted net income)		40%		101%		40%
Free Cash Flow		40%		137%		55%
People & Culture		10%		100%		10%
Sustainability & Safety		10%		105%		11%
				Overall RTX Performance Factor		116%

Weighted performance factors for our business units ranged from 68% to 148% of target. The Committee did not apply any discretionary adjustments to the 2022 performance factors for RTX or our business units.

HOW DID OUR ANNUAL INCENTIVE PLAN DESIGN CHANGE FOR 2023?		As part of our continued emphasis on ESG and the Company’s post-Merger evolution, the Committee determined that for 2023, our Corporate Responsibility Scorecard will not be evaluated on a qualitative basis, but instead will comprise the following RTX-wide metrics with pre-established quantitative goals:
		CRS Category		Weight		Metric
		People & Culture		5%		Total representation percentage
				5%		Employee retention rate
		Sustainability		5%		Greenhouse gas emissions
				5%		Water usage

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COMPENSATION DISCUSSION AND ANALYSIS  |   2022 PRINCIPAL ELEMENTS OF COMPENSATION

Long-Term Incentive (“LTI”) Awards

The 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. Our annual LTI awards are subject to three-year, service-based (and in the case of PSUs, performance-based) vesting requirements, with exceptions for death, disability, retirement, change-in-control and certain qualifying involuntary terminations.

LTI MIX

Based on an evaluation of the plan’s design conducted in 2021, the Committee made a change to the LTI mix for our senior executives that went into effect beginning with awards granted in 2022, as shown below:

The Committee believed RSUs were appropriate to support senior executive retention during the years up to and following the Merger, and in light of the uncertainty surrounding the COVID-19 pandemic and its impact on our business and industry.

However, as the uncertainty of COVID-19 subsides and the Merger integration nears completion, the Committee believes that for our most senior executives, SARs better support our pay-for-performance philosophy than RSUs because SARs have no value if our stock price does not increase above the price on the grant date. The Committee also believes that the 10-year term of SARs motivates prudent long-term decision-making that drives sustainable value creation for shareowners.

PERFORMANCE SHARE UNITS

Our 2022 PSUs will vest following the end of a three-year performance period, subject to Company performance relative to pre-established EPS, ROIC and TSR performance goals (detailed in the table on page 54). Executives must also be employed by the Company on the vest date, with limited exceptions as noted above.

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. Payouts range from 0%, if all metrics fall below threshold-level performance, to 200% of target, if all metrics meet or exceed the maximum-level performance. Each PSU converts into one share of RTX Common Stock upon vest. Unvested PSUs do not earn dividend equivalents.

Due to the challenges in setting long-term financial performance goals in early 2021, as a result of the COVID-19 pandemic and its impact on the aerospace industry, the Committee used a modified PSU design for 2021, setting one-year EPS and ROIC goals and increasing the three-year TSR weighting. As the uncertainty around the pandemic waned, the Committee determined it should return to three-year financial performance goals for all metrics and our prior metric weightings, thus ensuring that our 2022 PSUs align with our long-term strategic plan.

The change in PSU weightings is shown below.

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COMPENSATION DISCUSSION AND ANALYSIS  |  2022 PRINCIPAL ELEMENTS OF COMPENSATION

PERFORMANCE GOALS AND WEIGHTINGS FOR 2022–2024 PSUs

Metric(1)		Weighting		Threshold (25% payout)		Target (100% payout)		Maximum (200% payout)
Adjusted Earnings Per Share				8.1%		14.1%		17.9%
●  Measured using a compound annual growth rate (CAGR) over the three-year performance period ●  Aligns with our mid-range strategic business plan ●  Reflects what the Committee determined to be a challenging, yet attainable goal
Return on Invested Capital ●  Calculated using a quarterly average over the performance period				6.1%		7.1%		7.8%
Total Shareowner Return (“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)	Performance goals are based on non-GAAP financial measures. See Appendix B on page 115 for a definition of how these measures are calculated for PSU purposes.
(2)	Core A&D Peers include: Airbus, Boeing, General Electric, General Dynamics, Honeywell, L3Harris, Lockheed Martin, Northrop Grumman and Safran.
(3)	Beginning and ending periods are measured using the November/December trailing average.

Limit on Maximum Vesting Value. If the value of PSUs at vesting (valued by multiplying the number of PSUs vesting by the closing RTX stock price on the vest date) is greater than 400% of the value of the PSUs at grant (valued by multiplying the number of PSUs at target-level performance by the closing RTX stock price on the grant date), the vesting factor will be reduced so that the value delivered to our executives will be no greater than 400% of the grant value.

What the Committee Considers when Setting Performance Goals. When setting financial performance goals for our PSU awards, the Committee considers various long-term business factors, including, but not limited to, planned share buybacks, macroeconomic market trends, pension headwinds/tailwinds and cost reduction plans. EPS and ROIC are defined to exclude the impact of changes in tax laws and/or accounting rules, acquisitions and divestitures (including acquisition accounting adjustments), restructuring, and significant and/or non-recurring items. The Committee may also adjust (positively or negatively) to exclude certain items unrelated to operational performance, such as the impact of material changes in non-service pension and unplanned share buybacks. Such adjustment may be made when necessary to maintain the validity of the targets as originally formulated. See Appendix B on page 115 to learn how we calculate these metrics.

No PSU Vesting in 2022. We had no PSUs eligible to vest during 2022. Company-wide performance goals for PSUs granted by our legacy companies prior to the Merger were no longer measurable following the Merger. As a result, at the time of the Merger, all outstanding PSUs had performance measured as of the date of the Merger and were then converted into RSUs that remained eligible to vest on the original vest date. Our next PSU vesting will occur in early 2024, when our 2021 PSUs become eligible to vest subject to performance through 2023.

STOCK APPRECIATION RIGHTS

SARs 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 still employed by the Company at that time, and expire 10 years from the grant date.

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COMPENSATION DISCUSSION AND ANALYSIS  |   2022 CEO PAY DECISIONS

2022 CEO Pay Decisions

Gregory J. Hayes Chairman & Chief Executive Officer AGE 62 RTX EXPERIENCE 33 YEARS

Individual Performance Highlights

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CEO TOTAL DIRECT COMPENSATION: THREE-YEAR COMPARISON

As shown in the chart below, and as discussed in our Guiding Principles on page 44, the Committee believes that a substantial portion of total direct compensation should be variable, contingent and directly linked to Company and individual performance. In 2022, 93% of Mr. Hayes’ total direct compensation was “at-risk” variable compensation.

(1)	Does not reflect the 20% base salary reduction associated with the COVID-19 pandemic for the period between June and December of 2020.
(2)	Reflects annual LTI award values approved by the Committee. These values differ from the values reported in the Summary Compensation Table (on page 67), which are calculated in accordance with FASB ASC Topic 718.

As part of the Merger, the Company entered into a fixed-term employment agreement with Mr. Hayes that became effective upon the Merger and will expire on the third anniversary of the Merger (April 3, 2023), or an earlier termination of employment. See pages 63 and 78-79 for details.

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COMPENSATION DISCUSSION AND ANALYSIS  |  2022 PAY DECISIONS FOR OTHER NEOS

2022 Pay Decisions for Other NEOs

The 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/function, where applicable). In the following pages, we describe the components of total direct compensation for each NEO for 2022, noting aspects of their individual performance that contributed to the 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 47 RTX EXPERIENCE 8 YEARS

Individual Performance Highlights

 

(1)

In early 2022, the Company communicated financial expectations to investors reflecting the assumption that the provision of the 2017 Tax Cuts and Jobs Act requiring research and experimental expenditures to be capitalized for tax purposes would be repealed in 2022. At that time, the Company determined that if this provision was not repealed in 2022, our financial results would be adjusted as needed to neutralize the law’s impact (positive or negative). Ultimately, the tax law was not repealed, and resulted in both positive and negative impacts to our financial results for the year. All non-GAAP financial expectations and results shown reflect the law’s impact.

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COMPENSATION DISCUSSION AND ANALYSIS  |  2022 PAY DECISIONS FOR OTHER NEOS

Christopher T. Calio President & Chief Operating Officer AGE 49 RTX EXPERIENCE 17 YEARS

Individual Performance Highlights

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COMPENSATION DISCUSSION AND ANALYSIS  |  2022 PAY DECISIONS FOR OTHER NEOS

Stephen J. Timm President, Collins Aerospace AGE 54 RTX EXPERIENCE 26 YEARS

Individual Performance Highlights

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COMPENSATION DISCUSSION AND ANALYSIS  |  2022 PAY DECISIONS FOR OTHER NEOS

Wesley D. Kremer President, Raytheon Missiles & Defense (“RMD”) AGE 58 RTX EXPERIENCE 20 YEARS

 

Individual Performance Highlights

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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 within our overall 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.

As a result of the Merger, during 2022, our NEOs were eligible to participate in the plans of their legacy companies. However, effective January 1, 2023, all NEOs will participate in the same defined contribution plans. Further, some of our NEOs were previously employed by companies that were acquired by either legacy UTC or RTN, and these NEOs may therefore retain balances and/or receive pension accruals under the different formulas of these acquired companies’ plans that have since been frozen.

DEFINED BENEFIT PLANS

Both legacy companies had qualified and nonqualified defined benefit plans:

●	The qualified Raytheon Technologies Corporation Consolidated Pension Plan and the nonqualified UTC Pension Preservation Plan were closed to new participants hired after January 1, 2010, and were also closed for pre-2010 hires on December 31, 2019. As a result, legacy UTC employees no longer accrue benefits under these plans, except with respect to interest credits on the cash balance formula of these plans.
●	The qualified RTN Salaried Pension Plan, the qualified RTN Retirement Plan and the nonqualified RTN Parity Pension Plan provide benefits only to legacy RTN employees hired prior to January 1, 2007. Participants continue to accrue pension benefits under these plans, but the final average earnings (“FAE”) formula was frozen as of December 31, 2022. Effective January 1, 2023, participants began accruing pension benefits under a new cash balance formula that provides annual pay and interest credits.
●	The RTN Supplemental Executive Retirement Plan (“RTN SERP”) is an unfunded, nonqualified plan for eligible senior executives. Service accruals continue under the RTN SERP benefit, but the FAE formula used to determine the benefit prior to any offsets was frozen on December 31, 2022.

For additional details, refer to the Pension Benefits section on pages 72-75.

DEFINED CONTRIBUTION AND DEFERRED COMPENSATION PLANS

Both legacy companies also maintained qualified and nonqualified defined contribution and deferred compensation plans:

●	Qualified Plans. The UTC Employee Savings Plan remains open to legacy UTC employees and the RTN Savings and Investment Plan remains open to legacy RTN employees through December 31, 2022. Effective January 1, 2023, the legacy RTN plan was merged into the legacy UTC plan and the name of the plan was changed to the Raytheon Technologies Corporation Savings Plan (“Savings Plan”).
●	Nonqualified Plans. The UTC Savings Restoration Plan, the UTC Company Automatic Contribution Excess Plan, the UTC Deferred Compensation Plan (applicable to legacy UTC employees) and the RTN Deferred Compensation Plan (applicable to legacy RTN employees) were closed December 31, 2022, to new contributions. Account balances for these plans remain subject to each participant’s distribution elections under the applicable plan.
	Effective January 1, 2023, eligible RTX employees (regardless of legacy company) may participate in two nonqualified plans—the UTC LTIP Performance Share Unit Plan, which has been renamed the Raytheon Technologies Corporation PSU Deferral Plan, and the new Raytheon Technologies Corporation Compensation Deferral Plan (“CDP”). The CDP gives eligible employees an opportunity to defer up to 50% of base salary and/or 80% of their annual incentive award, and to receive company matching and company retirement contributions once the participant can no longer receive these contributions into the qualified Savings Plan due to exceeding an Internal Revenue Code limit.

For additional details, see the Nonqualified Deferred Compensation section on pages 76-77.

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COMPENSATION DISCUSSION AND ANALYSIS | OTHER COMPENSATION ELEMENTS

Perquisites and Other Benefits

We provide our senior executives with certain perquisites and other benefits, which the Committee believes contribute to recruitment and retention and are consistent with market practice. During 2022, we continued the post-Merger harmonization of perquisites and other benefits across RTX.

Our approach to executive perquisites is based on the 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. Perquisites and other benefits for our NEOs generally consist of enhanced basic life and long-term disability insurance, an executive physical and a financial planning allowance. Other perquisites provided by our legacy companies will be phased out, or in some cases, grandfathered.

Further, as one of the leading defense contractors to the United States government, we will also continue to provide our CEO with certain additional benefits for his safety and security, including personal use of the Corporate aircraft, a company-provided car and drivers (who are trained security personnel), and home security monitoring.

STATUS OF PERQUISITES AND BENEFITS*

Continuing
Financial Planning		All NEOs are eligible to receive a financial planning allowance, which is capped at $13,500 annually.
Enhanced Basic Life Insurance		Our NEOs are covered by an enhanced basic life insurance benefit while employed, equal to three times base salary (except for Mr. Kremer who is covered by the legacy RTN split dollar life insurance policy detailed below).
Executive Physical		All NEOs are eligible to participate in the same healthcare benefits offered to other employees of the Company. However, 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 is an annual benefit paid only upon disability, 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 allows our CEO (and Executive Chair, if applicable) to use the corporate aircraft for personal use, though special approval may be given to other executives in extraordinary circumstances. The Committee believes this is essential for our CEO’s security and personal safety, in addition to being a more efficient use of his time.
Company-Provided Car and Driver		For security reasons, our CEO (and Executive Chair, if applicable) has access to a company-provided car and drivers (who are trained security personnel) when needed. This is primarily used for business purposes, but also may be used, in limited circumstances, in situations that may have a personal element.
Security Monitoring		The Company covers the cost of security system monitoring at the personal residence of our CEO (and Executive Chair, if applicable).
Phasing Out
Company Car		Legacy UTC executives receive an annual allowance toward the cost of a leased vehicle and ancillary vehicle benefits. The value of the allowance varies by ELG appointment date. Lease payments above the annual allowance are paid directly by the executive. In 2021, we announced that the legacy UTC leased vehicle benefit would cease at the time the current individual leases expire. We expect this program to be closed in its entirety by early 2024.
Split Dollar Life Insurance		Legacy RTN provided its senior executives with split dollar life insurance policies with benefits up to four times base salary (capped at $3 million during employment). Following retirement, coverage reduces by 12.5% annually over five years, and after five years (or at age 65, if earlier), the benefit equals 100% of final base salary. The benefit has been grandfathered for legacy RTN senior executives with existing policies, but the Company has not entered into additional policies since the Merger and has eliminated this benefit prospectively for new senior leaders.

*	See footnote (6) of the Summary Compensation Table on page 67 for more details on these perquisites/benefits for 2022.

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COMPENSATION DISCUSSION AND ANALYSIS  | OTHER COMPENSATION ELEMENTS

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 a number of times over the years to align with best practices and to serve the evolving needs of the Company.

The current program, which covers all of our NEOs except Mr. Hayes, provides an RSU award with a grant value between $1 and $2 million (amount varies depending on role). The ELG RSU award is granted to executives upon their appointment to the ELG and vests only if there is a qualifying separation (defined below), and the executive enters into an agreement containing certain restrictive covenants (explained below). 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.

The ELG RSU award acts as a cash severance replacement tool, which the Committee believes more closely aligns our executives with the interest of our shareowners than an outright cash severance payment.

The changes to the ELG separation benefit over the years have been applied prospectively due to existing contractual commitments. As a result, Mr. Hayes is grandfathered into an earlier iteration of the program that includes a cash payment equal to 2.5 times base salary upon a qualifying separation. However, he is not eligible to receive the ELG cash payment during the three-year term of his post-Merger employment agreement (see below).

The ELG separation benefit is not treated as compensation for purposes of determining benefits under the pension plans or any other benefit programs. Distributions are subject to certain restrictions imposed by Internal Revenue Code Section 409A.

Under the ELG program, a “qualifying separation” is defined as:

●	A mutually agreeable separation from the Company due to 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 of a change-in-control event.

Restrictive covenants that apply to ELG benefits:

●

For all ELG members—regardless of when the executive was appointed to the ELG, separation benefits are conditioned upon enhanced post-employment restrictive covenants designed to protect the Company’s interests, including: (i) non-competition; (ii) employee non-solicitation; (iii) non-disparagement; (iv) protection of confidential, sensitive and proprietary information; and (v) post-termination cooperation.

●

For ELG members appointed on or after April 2013—in addition to the above, a post-employment, non-competition covenant applies, regardless of whether separation benefits are provided.

EMPLOYMENT AGREEMENT WITH MR. HAYES

When UTC and RTN agreed to an all-stock “merger of equals,” UTC entered into an employment agreement with Mr. Hayes, which will expire on the Merger’s third anniversary (April 3, 2023) or an earlier termination of employment.

During the term of the agreement, Mr. Hayes is to receive an annual base salary of no less than $1.6 million (which may be increased from time to time for merit adjustments), and a target annual incentive opportunity of 200% of base salary.

Under the employment agreement, in the event of Mr. Hayes’ termination of employment before April 3, 2023, either by the Company without cause or by Mr. Hayes for good reason (both terms are defined in the agreement, as amended), he will be entitled to receive certain severance benefits (see page 78 for details). However, he will not be entitled to severance benefits under his ELG agreement or under the legacy UTC Senior Executive Severance Plan (applicable only in the event of a “change-in-control” of RTX, as described on page 64). Under the employment agreement, Mr. Hayes also is subject to a permanent confidentiality covenant, a one-year non-competition covenant, and a two-year customer and employee non-solicitation covenant. Separation benefits under the employment agreement are subject to Mr. Hayes’ execution of a release of claims in favor of the Company.

If Mr. Hayes separates on or after April 3, 2023, he will be eligible for severance benefits under his ELG agreement (as detailed above) or the legacy UTC Senior Executive Severance Plan (only in the case of an RTX change-in-control, as detailed on page 64).

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COMPENSATION DISCUSSION AND ANALYSIS  |  OTHER COMPENSATION ELEMENTS

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.

While the Merger of UTC and RTN was executed as a “merger of equals,” it did not meet the definition of a change-in-control under the SESP, and no benefits were triggered for Mr. Hayes. Moreover, if a change-in-control were to occur while his three-year employment agreement is in place, Mr. Hayes would not be eligible for SESP benefits.

The SESP cash severance benefit is equal to 2.99x the sum of his 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,” where 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.

RAYTHEON TECHNOLOGIES CORPORATION 2018 LONG-TERM INCENTIVE PLAN

Under the Raytheon Technologies Corporation 2018 Long-Term Incentive Plan, as amended and restated (“RTX LTIP”), if a future RTX 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).

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COMPENSATION DISCUSSION AND ANALYSIS | OTHER EXECUTIVE COMPENSATION POLICIES AND PRACTICES

Other Executive Compensation Policies and Practices

We adopted a number of practices and policies to help ensure that our executive compensation program operates as intended and aligns with the guiding principles that underpin it (see page 44). In addition, the Committee identifies, monitors and mitigates compensation risk in a number of important ways, as summarized on pages 28-29.

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 long-term incentive awards.

Clawback Policy

RTX has a comprehensive policy on recoupment (“clawback”) of compensation, which we have enhanced several times over the years in response to shareowner feedback and to ensure that our policy continues to meet the evolving needs of the Company.

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) annual incentive payments and gains realized from vested long-term incentive awards.

Clawbacks of annual and long-term incentive awards, and 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 (for details on this program refer to pages 27-28). In addition, we have the right to recover compensation when an executive’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 Committee’s decision to seek recoupment. Our Clawback Policy can be found on the Corporate Governance page of our website at www.rtx.com/our-company/corporate-governance#Governance-Documents-and-Policies.

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 stock appreciation rights without shareowner approval.

Employment Agreements

As a general matter, the Committee does not believe that fixed-term executive employment contracts guaranteeing minimum levels of compensation over multiple years enhance shareowner value. Accordingly, the vast majority of our U.S.-based executives do not have such contracts. However, in rare cases involving mergers and acquisitions, the Committee has found such contracts to be in the Company’s best interests.

When the Merger agreement between UTC and RTN was signed in 2019, the Company executed limited-duration employment agreements with Mr. Hayes and the RTN CEO prior to the Merger, which became effective upon the Merger in April 2020. Mr. Hayes’ agreement will expire on the third anniversary of the Merger, which is April 3, 2023. See pages 63 and 78-79 for additional details.

We also enter into employment agreements with executives based outside the United States when local regulations and practices require such agreements.

Tax Deductibility of Incentive Compensation

As a general matter, while the 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 2022, Internal Revenue Code (“IRC”) Section 162(m) limited RTX’s deduction to $1 million for annual compensation paid to our NEOs, as defined in IRC Section 162(m).

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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 2023 Annual Meeting.

Human Capital & Compensation Committee*
	Tracy A. Atkinson, Chair	Dinesh C. Paliwal	James A. Winnefeld, Jr.
	George R. Oliver	Brian C. Rogers

*	Prior to December 12, 2022, Mr. Fredric G. Reynolds and Ms. Denise L. Ramos served on the Committee. Effective December 12, 2022, Mr. George R. Oliver joined the Committee.

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Compensation Tables

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 ($)		Total Without Change in Pension Value ($)
Gregory J. Hayes    Chairman & Chief Executive Officer
2022		$1,656,250		$3,900,000		$9,352,104		$6,425,871		$9,712		$1,265,099		$22,609,036		$22,609,036
2021		$1,600,000		$4,992,000		$11,740,098		$2,815,812		$1,522,891		$645,262		$23,316,063		$21,802,923
2020		$1,413,333		$2,500,000		$7,417,686		$7,178,289		$1,573,784		$887,798		$20,970,890		$19,407,572
Neil G. Mitchill, Jr.    Executive Vice President & Chief Financial Officer
2022		$876,250		$1,200,000		$2,453,365		$1,686,546		$0		$228,389		$6,444,550		$6,444,550
2021		$760,606		$1,200,000		$2,424,908		$584,773		$0		$165,108		$5,135,395		$5,135,395
2020		$612,083		$500,000		$886,283		$841,522		$0		$159,526		$2,999,414		$2,999,414
Christopher T. Calio     President & Chief Operating Officer(7)
2022		$875,000		$1,600,000		$4,293,029		$2,950,366		$0		$283,460		$10,001,855		$10,001,855
2021		$723,083		$1,200,000		$2,833,966		$679,572		$0		$209,797		$5,646,418		$5,646,418
Stephen J. Timm     President, Collins Aerospace
2022		$788,462		$900,000		$3,066,587		$2,107,093		$0		$199,731		$7,061,873		$7,061,873
2021		$718,500		$1,200,000		$2,833,966		$679,572		$0		$176,193		$5,608,231		$5,608,231
2020		$613,447		$600,000		$2,358,302		$1,282,991		$55,427		$435,300		$5,345,467		$5,290,040
Wesley D. Kremer    President, Raytheon Missiles & Defense
2022		$872,321		$700,000		$3,066,587		$2,107,093		$0		$136,232		$6,882,233		$6,882,233

(1)	Salary. Base salary shown includes any mid-year adjustments.