DEF 14A of Illinois Tool Works Inc, Mar 27, 2026

DEF 14A of Illinois Tool Works Inc

Filed Mar 27, 2026 · FY20250001193125-26-127599

Open on EDGAR

  1. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    2025 Segment Operating Margin vs. Segment Peer Group Average1

  2. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | | ITW Operating Margin | | Segment Peer Group Operating Margin1 |

  3. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | 1 | See Appendix A for segment peer group definitions. | | 2 | Test & Measurement and Electronics and Polymers & Fluids exclude 130 basis points and 150 basis points, respectively, of unfavorable operating margin impact of amortization expense related to intangible assets. |

  4. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | ii | |

  5. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    Letter from our Non-Executive Chairman and Independent Lead Director Dear Fellow Shareholders, On behalf of the Board of Directors and our senior leadership team, we are pleased to invite you to attend ITW’s Annual Meeting of Stockholders, which will be held virtually on Friday, May 8, 2026, at 8:30 a.m. Central Time (the “Annual Meeting”). You may attend the meeting by visiting the login page at www.virtualshareholdermeeting.com/ITW2026. We encourage you to review this Proxy Statement, which outlines the proposals on which you will have a chance to vote. Your vote is important. Whether or not you plan to attend the Annual Meeting, please vote as soon as possible on the Internet, by telephone or by mail, by reviewing the instructions on the enclosed proxy card or the electronic proxy material delivery notice. Looking back on 2025, ITW’s strong Business Model and diverse, high-quality portfolio fueled another year of excellent operational and financial results. We consistently exceeded end market growth, boosted profitability and margins, and achieved best-in-class operating margin, and after-tax return on invested capital. 2025 marked the second year of the Next Phase (2024-2030) Enterprise Strategy, and we made significant progress toward our long-term strategic objectives. With organic growth as our top priority, we continue to target 4%+ high-quality growth through the cycle. Customer-Back Innovation (“CBI”) is central to this mission. We are encouraged by our 2.4% CBI contribution to revenue growth in 2025 – an improvement of 40 basis points over 2024 – as we continue to advance toward our 3%+ CBI target by 2030. This progress reinforces our momentum towards making above-market organic growth a core strength for ITW, matching our best-in-class financial performance and operational excellence. Sincerely,

  6. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | E. Scott Santi Non-Executive Chairman | | Richard H. Lenny Independent Lead Director | |

  7. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | 2026 PROXY STATEMENT | iii |

  8. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    Notice of 2026 Annual Meeting of Stockholders

  9. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | | | | | Time and Date | Virtual Meeting | Record Date | | May 8, 2026 8:30 AM Central Time | Live via webcast: www.virtualshareholdermeeting.com/ITW2026 | Only stockholders of record at the close of business on March 9, 2026 are entitled to vote |

  10. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    Items of Business

  11. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    | 1 | | 2 | | 3 | | 4 | | | | To elect the thirteen director nominees named in this Proxy Statement | | To approve, on an advisory basis, the Company’s executive compensation | | To ratify the appointment of Deloitte & Touche LLP as ITW’s independent registered public accounting firm for 2026 | | To consider a non-binding stockholder proposal for Directors Who Fail To Obtain a Majority Vote | | | “FOR” each director nominee | | “FOR” | | “FOR” | | “AGAINST” | | | See Page 9 | | See Page 32 | | See Page 67 | | See Page 70 |

  12. 2025 Segment Operating Margin vs. Segment Peer Group Average1

    To conduct any other business as may be properly brought before the meeting.

  13. ITW’s Long-term Enterprise Strategy: Leveraging ITW’s Powerful Business Model to Its Full Potential

    ITW’s Long-term Enterprise Strategy: Leveraging ITW’s Powerful Business Model to Its Full Potential Since 2012, we have successfully transformed ITW from a “middle of the pack” industrial company to one of the highest-quality, best performing, and most respected industrial companies in the world. In doing so, we demonstrated that ITW has the most powerful and competitive business model in the industrial arena. Best-in-Class Business Model = Best-in-Class Performance

  14. ITW’s Long-term Enterprise Strategy: Leveraging ITW’s Powerful Business Model to Its Full Potential

    | | 2012 | 2025 | | Revenue | $17.9B | $16.0B | | Operating Income | $2.8B | $4.2B | | Operating Margin | 15.9% | 26.3% | | Earnings Per Share (EPS) | $3.211 | $10.49 | | After-tax ROIC1 | 14.5%2 | 29.3% | | Dividends Declared per Share | $1.48 | $6.22 | | Market Cap3 | $23B | $71B |

  15. ITW’s Long-term Enterprise Strategy: Leveraging ITW’s Powerful Business Model to Its Full Potential

    | 1 | After-tax ROIC and 2012 adjusted EPS are non-GAAP measures — see Appendix A for information regarding these non-GAAP measures. | | 2 | As reported in the Company's 2013 Form 10-K. | | 3 | As of January 1, 2012 and December 31, 2025. |

  16. ITW’s Long-term Enterprise Strategy: Leveraging ITW’s Powerful Business Model to Its Full Potential

    | 1 | |

  17. ITW and Sustainability

    | Director since: 2012 | Independent: Yes | Committees: Audit, Finance | | Other Public Directorships • Sysco Corporation: Chairman of the Sustainability Committee and member of the Corporate Governance and Nominating and Executive Committees. Professional Background • Retired as President of UPS International and Senior Vice President of United Parcel Service, Inc. (UPS), a global package delivery, supply chain management and freight forwarding company, having served in these capacities from 2008 to 2013. • Over 38 years of experience at UPS, serving in various areas with increasing levels of responsibility, including global operations, finance, accounting, information systems, mergers and acquisitions, marketing and business development. His service at UPS included President, Global Freight Forwarding and corporate controller. • Served as Executive Chairman of Radial, Inc., a global fulfillment, customer care and omnichannel technology company from 2016 to 2017 and as Vice Chairman of eBay Enterprise/Innotrac, the predecessor business to Radial from 2015 to 2016. • Has served on the board of the US China Business Council, the Guangdong Economic Council and the Turkey Economic Advisory Council and as a delegate to the World Economic Forum, Davos, Switzerland, from 2009 to 2013. Skills and Qualifications Mr. Brutto’s significant strategic, operational, and financial leadership experience with a major global company, including the establishment of operations in 35 countries, along with his significant international business experience and board leadership role in the area of Sustainability, bring valuable perspectives to our Board. | | |

  18. ITW and Sustainability

    | Director since: 1994 | Independent: Yes | Committees: Compensation, Corporate Governance and Nominating, Executive (Chair) | | Other Public Directorships • Northern Trust Corporation: Member of the Corporate Governance and Human Capital and Compensation Committees. Professional Background • Has served as Chairman and CEO of Owl Creek Partners, LLC, a private equity firm, since 2010. • Founder of Susan Crown Exchange Inc., a social investment organization. • Served two terms as a Fellow of the Yale Corporation, and serves as Chair Emeritus of Rush University Medical Center and the Rush System for Health, and a director of The Brookings Institution as well as several other civic and not-for-profit organizations. • Served as Vice President of Henry Crown and Company, a business with diversified investments, from 1984 to 2015. Skills and Qualifications Ms. Crown’s long-standing board service at a global banking and financial institution and her extensive board service and leadership roles with many civic and not-for-profit organizations bring valuable perspectives to our Board. Ms. Crown’s experience includes executive experience in diversified manufacturing, management, corporate governance and strategy. | | |

  19. ITW and Sustainability

    | Director since: 2021 | Independent: Yes | Committees: Compensation, Corporate Governance and Nominating | | Other Public Directorships • None Professional Background • Has been Executive Vice President, Chief Human Resources Officer of UPS International, a global package delivery, supply chain management and freight forwarding company, since January 2021. In his role he is responsible for human resources strategy and operations. • Served as Chief Human Resources Officer and Senior Vice President, Communications, Occupational Health and Aviation, DuPont de Nemours, Inc., an American multinational chemical company, from 2018 to 2020, prior to joining UPS International. • Served as Chief Human Resources Officer for Xerox Corporation from 2015 to 2018. • Served in various human capital management leadership roles at Advanced Micro Devices (AMD), Shell Oil and Honeywell International prior to Xerox Corporation. • Throughout his professional career, he has focused on building successful company cultures. • Serves as a director of a number of professional, civic and not-for-profit organizations. Skills and Qualifications Mr. Ford’s deep knowledge of talent management, human capital strategy, risk management and operations gained from executive experience and senior leadership roles with large public global companies spanning industries from distribution and logistics to manufacturing to technology, brings valuable perspectives to our Board. | | |

  20. ITW and Sustainability

    | Director since: 2022 | Independent: Yes | Committees: Audit, Finance | | Other Public Directorships • Booking Holdings Inc.: Member of the Audit Committee. • CDW Corporation: Chair of the Audit Committee and member of the Nominating and Governance Committee. • AT&T Inc.: Member of the Human Resources and Corporate Development and Finance Committees. Professional Background • Has been a Senior Advisor of Permira Advisers, a British global investment firm, since January 2023. • Has been on the Board of Directors of Zendesk Inc., a privately held Danish-American software products company, since December 2023. • Retired as US Chair and Managing Partner (CEO) of Ernst & Young LLP (EY), a global professional services firm, having served in that capacity from 2018 to July 2022. • A Certified Public Accountant with over 30 years of service at EY serving in various roles with increasing levels of responsibility. • During her career at EY, Ms. Grier gained significant broad-based experience working with the boards of many of the largest companies worldwide. Skills and Qualifications Ms. Grier’s experience working with boards and audit committees of global companies, her leadership role at a major professional services firm, as well as her experience with risk and crisis management, financial reporting, leadership development and talent strategy, and corporate governance, bring valuable perspectives to our Board. | | |

  21. ITW and Sustainability

    | Director since: 2012 | Independent: Yes | Committees: Compensation, Corporate Governance and Nominating, Executive | | Other Public Directorships • None Professional Background • Retired as President and Chief Executive Officer of The Timken Company, a manufacturer of bearings, alloy and specialty steels and components, having served in that capacity from 2002 to 2014. • Served as Timken’s President and Chief Operating Officer from 1999 to 2002. • Joined Timken in 1984 and held positions in various functional areas of Timken with increasing levels of responsibility, including purchasing and logistics, manufacturing and international operations. • Led Timken’s automotive business in North America and Timken’s bearing business activities in Asia and Latin America from 1996 to 1999. • Previously served as a director of AB Volvo. • Served as a director of the US China Business Council and a number of other industry and not-for-profit organization boards. Skills and Qualifications Mr. Griffith’s extensive knowledge of manufacturing and operations, finance, human resources, risk management and corporate social responsibility matters gained from experience as Chief Executive Officer of a global industrial manufacturer, along with his international business and engineering experience, bring valuable perspectives to our Board. In addition, his past service on the boards of other companies gives him a broad understanding of governance issues facing public companies. | | |

  22. ITW and Sustainability

    | Director since: 2016 | Independent: Yes | Committees: Audit (Chair), Finance, Executive | | Other Public Directorships • The J.M. Smucker Company: Member of the Audit Committee. • Northern Trust Corporation: Lead Director, Chair of the Corporate Governance Committee and member of the Audit, Human Capital and Compensation, Risk, Technology and Operations and Executive Committees. Professional Background • Retired as Vice Chairman, Client Service of PricewaterhouseCoopers LLP (PwC), a global professional services firm, in June 2016, having served in that capacity since 2007. Served as PwC’s Greater Chicago Market Managing Partner from 2003 to 2013 and, prior thereto, Managing Partner of the Cleveland Office. • Gained significant broad-based experience working with boards and audit committees of Fortune 500 global organizations across multiple markets and industry sectors during his career at PwC. • A Certified Public Accountant since 1977. • Has significant expertise as a participating board member of a number of professional, civic and not-for-profit organizations. Skills and Qualifications Mr. Henderson’s extensive experience in managing and overseeing businesses and working with the boards and audit committees of complex global companies, his other board leadership roles and leadership roles at a major professional services firm, as well as his experience with risk oversight, bring valuable perspectives to our Board. | | |

  23. ITW and Sustainability

    | Director since: 2024 | Independent: Yes | Committees: Audit | | Other Public Directorships • Transcat, Inc. (effective March 29, 2026): Member of Executive Committee. Professional Background • To serve as President and Chief Executive Officer of Transcat, Inc., effective March 29, 2026. • Served as Chief Executive Officer of The Pittsburgh Paints Company from December 2024 to February 2025. • Served as Senior Vice President, Architectural Coatings, U.S. and Canada, and Traffic Solutions Business of PPG Industries, Inc., a global manufacturer and distributor of paints, coatings and specialty materials from May 2022 to December 2024. • Served as Vice President, Architectural Coatings, U.S. and Canada of PPG Industries, Inc. from May 2019 to May 2022. • Served as Vice President and President, Life Fitness, for Brunswick Corporation from January 2017 to December 2018. • Served in various roles with increasing levels of responsibility for General Electric Company, including as a GE Company Officer. • Served five years as an Officer in the U.S. Army, and currently serves as a director on multiple not-for-profit organizations. Skills and Qualifications Mr. Irick’s deep knowledge of global manufacturing, distribution and operations gained from executive leadership roles at various large manufacturing companies brings valuable perspectives to our Board. In addition, his experience leading business units and supervising chief financial officers gives him an understanding of financial reporting issues facing public companies. | | |

  24. ITW and Sustainability

    | Director since: 2014 | Independent: Yes | Committees: Compensation (Chair), Corporate Governance and Nominating, Executive | | Other Public Directorships • Conagra Brands, Inc.: Non-Executive Chairman of the Board, Chair of the Executive Committee and member of the Nominating and Corporate Governance and Human Resources Committees. Professional Background • He previously served as a director of McDonald's Corporation and Discover Financial Services. • Served as Chairman of Information Resources, Inc., a privately held producer of market and shopper information, from 2013 to 2018. • Served as senior advisor of Friedman Fleischer & Lowe LLC, a private equity firm, from 2014 to 2016, after serving as an operating partner of that firm. • Served as Chairman, President and Chief Executive Officer of The Hershey Company, a manufacturer, distributor and marketer of candy, snacks and candy-related grocery products from 2001 through 2007. • Served as President, Nabisco Biscuit Company, and President of Pillsbury, North America prior to joining The Hershey Company. Skills and Qualifications Mr. Lenny’s extensive knowledge of strategy, finance, supply chain management and distribution, human resources, sustainability and corporate social responsibility matters gained from experience as Chief Executive Officer of a global Fortune 500 company brings valuable perspectives to our Board. In addition, his current and former board leadership positions in large public companies give him a broad understanding of governance issues facing public companies. | | |

  25. ITW and Sustainability

    | Director since: 2024 | Independent: No | Committees: Executive | | Other Public Directorships • Masco Corporation: Member of the Compensation and Talent and Corporate Governance and Nominating Committees. Professional Background • Has served as the President & Chief Executive Officer of ITW since January 2024. • Served as Vice Chairman of ITW from August 2015 to December 2023. • Served as Executive Vice President for ITW’s Food Equipment segment from 2010 to 2015. • Previously served as Group President, Food Equipment segment, and worldwide Group President, Polymers & Fluids segment. • Serves on the boards of numerous civic and not-for-profit organizations. Skills and Qualifications Mr. O’Herlihy’s deep understanding of the Company’s business operations, operating philosophy and culture, his expertise in the application of ITW’s Business Model, and his track record of leadership at ITW, bring valuable perspectives to our Board. In addition, his service on the board of another public company gives him an understanding of governance issues facing public companies. | | |

  26. ITW and Sustainability

    | Director since: 2012 | Independent: No | Committees: Executive | | Other Public Directorships • W.W. Grainger, Inc.: Lead Director, Chair of the Board Affairs and Nominating Committee and member of the Audit Committee. Professional Background • Serves as Non-Executive Chairman of ITW since March 1, 2024. Served as Chairman of ITW since May 2015 and served as Chief Executive Officer from November 2012 to January 1, 2024. • Served as President and Chief Executive Officer of ITW from November 2012 to May 2015 and as President and Chief Operating Officer from October to November 2012. • Served as Vice Chairman of ITW from December 2008 to October 2012 and Executive Vice President from October 2004 to December 2008. • Serves on the boards of numerous civic and not-for-profit organizations. Skills and Qualifications Mr. Santi’s deep understanding of the Company’s business operations, operating philosophy and culture, his expertise in the application of ITW’s Business Model, as well as his demonstrated success and proven quality of leadership, bring indispensable perspectives to our Board and strong leadership as Chairman. In addition, his service on the board of another public company gives him an understanding of governance issues facing public companies. | | |

  27. ITW and Sustainability

    | Director since: New Nominee | Independent: Yes | Committees: N/A | | Other Public Directorships • Director of UL Solutions Inc. Professional Background • Has been President and Chief Executive Officer of UL Solutions Inc., a global safety science company since September 2019. • Served as a director of Norfolk Southern Corporation from January 2018 to May 2024. • Served as President and CEO of USG Corporation from November 2016 to April 2019. • Served as a director of USG Corporation from September 2016 to April 2019. • Serves as a director of numerous professional, civic and not-for-profit organizations. Skills and Qualifications Ms. Scanlon will bring extensive executive leadership experience, including leading large organizations through international growth, digital transformation, and sustainability initiatives. She also has extensive board experience, which provides her with valuable insight into governance, risk oversight, and long‑term strategic planning. These skills make her a strong and well‑qualified contributor to our Board. | | |

  28. ITW and Sustainability

    | Director since: 2009 | Independent: Yes | Committees: Audit, Finance (Chair), Executive | | Other Public Directorships • Northern Trust Corporation: Chair of the Audit Committee and member of the Risk and Executive Committees. Professional Background • Has served as Executive Vice President for Policy and Legal Affairs and General Counsel of Mutual Fund Directors Forum, a not-for-profit membership organization for independent investment company directors and an advocate on important policy matters, since 2005. • Held several positions with increasing levels of responsibility at the Securities and Exchange Commission from 1996 to 2005, serving as Associate Director, Division of Investment Management, from 2001 to 2005. Skills and Qualifications Mr. Smith’s extensive leadership experience in the finance industry and executive experience with a mutual fund industry organization, along with his legal and regulatory experience, bring valuable perspectives to our Board. In addition, his service on the board of another public company gives him an understanding of governance issues facing public companies. | | |

  29. ITW and Sustainability

    | Director since: 2008 | Independent: Yes | Committees: Compensation, Corporate Governance and Nominating (Chair), Executive | | Other Public Directorships • None Professional Background • Retired as Executive Vice President and Chief Administrative Officer of Exelon Corporation and President of Exelon Business Services Company, an electric and gas utility company, in October 2005, a position she had held since 2003. • Served as Chairman and Chief Executive Officer of Exelon Energy Delivery from 2000 to 2003. • Served as Executive Vice President of Unicom and its chief subsidiary, ComEd, having joined ComEd as General Counsel in 1993, where her experience included supervision and oversight of legal matters and risk management. • Previously served as a director of State Farm Mutual Automobile Insurance Company and Domtar Corporation. Skills and Qualifications Ms. Strobel’s deep knowledge of human capital management, finance, risk management and sustainability matters gained from executive and legal leadership roles with a leading energy provider brings valuable perspectives to our Board. In addition, her past service on the boards of other companies gives her an understanding of compensation and corporate governance issues. | | |

  30. Richard H. Lenny, Independent Lead Director

    Richard H. Lenny, Independent Lead Director Since 2015, the Board has elected a strong independent director as Lead Director. The Board believes that this structure promotes independence. The highly experienced lead independent director with well-defined responsibilities, along with the Company’s experienced and engaged independent directors, provide effective oversight of the Company’s management. The Board has annually elected Mr. Richard H. Lenny as Lead Director since 2020. Mr. Lenny is a highly experienced director who has held several board and management leadership roles and currently serves as Non-Executive Chairman of the Board of Conagra Brands, Inc. In conjunction with the Board’s role in overall strategy and succession planning as described below, Mr. Lenny actively engages with our Chairman and our CEO on such matters. Additionally, Mr. Lenny works closely with our Chairman and has direct input into meeting agendas that guide the Board in performing its oversight function, including with respect to the Company’s sustainability strategies, Board and executive succession, and Board evaluations. In addition to the duties and responsibilities noted above, the Corporate Governance Guidelines state that the Lead Director will:

  31. Richard H. Lenny, Independent Lead Director

    | • preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors; • act as a key liaison between the Chairman and the independent directors; • have the authority to call meetings of the independent directors, when necessary; • collaborate with the Chairman on meeting agendas for the Board; | • communicate Board member feedback to the Chairman; • if requested by major stockholders, ensure that he or she is available for consultation and direct communication; and • perform such other duties as requested by the Board. |

  32. Richard H. Lenny, Independent Lead Director

    Meeting Attendance; Executive Sessions The Board met five times during 2025. Non-employee directors met five times in 2025 in regularly scheduled executive sessions in conjunction with the regular Board meetings. The Company strongly encourages its directors to attend all Board and Committee meetings and the Annual Meeting of Stockholders. In 2025, all of the directors attended 100 percent of the meetings of the Board and the Committees on which they served and the Annual Meeting of Stockholders.

  33. Richard H. Lenny, Independent Lead Director

    | 19 | |

  34. Richard H. Lenny, Independent Lead Director

    Director Education and Orientation Program The Company provides its directors with extensive onboarding materials covering our corporate governance practices and policies, the ITW Business Model, ITW’s Enterprise Strategy, financial performance, talent development, and sustainability strategy. New directors also have individual meetings with the Chairman, Lead Director, other Board members and senior executives. The Company provides directors with access to professional development training opportunities, including membership in the National Association of Corporate Directors. Each year management and outside experts present to the Board on a variety of topics, including strategic planning, regulatory developments, cybersecurity, sustainability initiatives, and business updates on the Company’s operating segments. As part of their Board service, directors periodically visit ITW businesses in various locations, including international locations, to gain a deeper understanding of the ITW business model in practice, to meet members of management and other employees, and to learn about the Company’s operating segments. Annual Board and Committee Evaluations The Board and the Audit, Compensation, Finance, and Corporate Governance and Nominating Committees conduct annual evaluations that assess the effectiveness, processes, skills, functions and other matters relevant to the Board as a whole or to the particular committee. Results of the evaluations are summarized and discussed at Board and committees meetings. In addition, the Board conducts a peer review evaluation led by our independent Lead Director, whereby each Board member evaluates the contributions of the other Board members, and each director receives feedback from this peer review from our independent Lead Director. The evaluation process provides the Board with actionable feedback to enhance its performance and effectiveness. Committees of the Board Our Board has established and delegated certain authorities and responsibilities to five committees: Audit, Compensation, Corporate Governance and Nominating, Finance and Executive committees. Under the terms of the respective charters, each member of the Audit, Compensation, and Corporate Governance and Nominating Committees must meet applicable NYSE and SEC independence requirements. Each committee regularly reports its activities to the full Board.

  35. Independent Compensation Consultant

    Independent Compensation Consultant Under its charter, the Compensation Committee may retain an independent compensation consultant or other advisors. In 2025, the Compensation Committee engaged Meridian Compensation Partners LLC (“Meridian”), an independent advisor to review the Company’s overall executive compensation program, review the peer group of companies used by the Compensation Committee for comparison purposes and assess our compensation governance process. Based on representations from Meridian and executive officers and directors of the Company, the Compensation Committee has determined that Meridian and their respective individual compensation advisors to the committee are independent. See “Compensation Discussion and Analysis—How We Make Compensation Decisions—Role of the Independent Compensation Consultant.” Additional information on the Compensation Committee, its activities, its relationship with its compensation consultant and the role of management in setting compensation is provided under “Compensation Discussion and Analysis.”

  36. Executive Succession Planning

    | Director Compensation Mix | | Additional Annual Retainers | | | Annual Cash Retainer: | $140,000 | Lead Director: | $45,000 | | | | Non-Executive Chairman Annual Stock Grant: | $250,000 | | Annual Stock Grant: | $185,000 | Committee Chairs: | | | | | | | | | | • Audit Committee • Compensation Committee • Corporate Governance and Nominating Committee • Finance Committee • Executive Committee | $25,000 $25,000 $20,000 $15,000 $5,000 |

  37. Executive Succession Planning

    | Director Compensation |

  38. Executive Succession Planning

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(4) | All Other Compensation ($)(6) | Total ($) | | Daniel J. Brutto | 140,000 | 184,890 | 15,000 | 339,890 | | Susan Crown | 145,000 | 184,890(5) | 15,000 | 344,890 | | Darrell L. Ford | 140,000(2) | 184,890(5) | | 324,890 | | Kelly J. Grier | 140,000 | 184,890 | 15,000 | 339,890 | | James W. Griffith | 140,000 | 184,890(5) | 15,000 | 339,890 | | Jay L. Henderson | 165,000 | 184,890 | | 349,890 | | Jaime Irick | 140,000 | 184,890 | 15,000 | 339,890 | | Richard H. Lenny | 210,000 | 184,890(5) | 15,000 | 409,890 | | E. Scott Santi | 140,000(2) | 434,722(5) | 15,000 | 589,722 | | David B. Smith, Jr. | 155,000(3) | 184,890 | 15,000 | 354,890 | | Pamela B. Strobel | 160,000 | 184,890 | 16,410(7) | 361,300 |

  39. Executive Succession Planning

    Beneficial Ownership of Common Stock Directors and Executive Officers The table below shows the number of shares of ITW common stock beneficially owned as of March 9, 2026, by each director, the director nominee, and NEO, as well as by all of them as a group, except as otherwise noted. The “percent of class” calculation is based on 288,078,076 shares of ITW common stock outstanding as of March 9, 2026. In general, beneficial ownership includes any shares a director or executive officer can vote or dispose of, as well as stock options, restricted stock units and performance share units (including accrued dividends thereon) that are currently vested or that become vested within 60 days. Except as otherwise noted, the stockholders named in this table have sole voting and investment power for all shares shown as beneficially owned by them.

  40. Executive Succession Planning

    | * Less than 1% | | (1) Includes 5,601 deferred shares. | | (2) Includes (a) 4,000 shares owned by Ms. Crown’s spouse; (b) 4,000 shares held in trusts of which Ms. Crown’s children are beneficiaries, as to which she disclaims beneficial ownership; and (c) 20,393 deferred shares. | | (3) Includes 6,981 deferred shares. | | (4) Includes 209 deferred shares. | | (5) Includes 15,658 deferred shares. | | (6) Includes (a) 16,740 deferred shares; (b) 8 shares owned jointly with Mr. Lenny’s spouse; and (c) 2,575 shares as to which Mr. Lenny has shared voting and investment power, which shares are held as tenants in common with his spouse through trusts. | | (7) Includes 4,866 deferred shares and 544,668 shares covered by stock options. | | (8) Includes (a) 12,699 held in a personal trust; (b) 15,517 shares in trusts of which Mr. Smith’s children are beneficiaries, as to which he disclaims beneficial ownership; (c) 81,301 shares held in a trust by his spouse; and (d) 255,900 shares held in a trust with respect to which Mr. Smith shares voting and investment power. | | (9) Includes 32,374 deferred shares. | | (10) Includes 1,963 shares allocated to Mr. O’Herlihy’s account in the ITW Savings and Investment Plan and 286,880 shares covered by stock options. |

  41. Executive Succession Planning

    | (11) Includes 129,651 shares covered by stock options. | | (12) Includes 55,244 shares covered by stock options. | | (13) Includes 1,482 shares allocated to Mr. Escoe’s account in the ITW Savings and Investment Plan and 48,857 shares covered by stock options. | | (14) Includes 498 shares allocated to Ms. Lawler’s account in the ITW Savings and Investment Plan and 91,049 shares covered by stock options. | | (15) The total number of shares shown reflects shares owned as of March 9, 2026, for all directors and officers. |

  42. Executive Succession Planning

    The Next Phase of Our Enterprise Strategy: 2024 to 2030 In 2024, we launched the Next Phase of our Enterprise Strategy. In this Next Phase, we are continuing to improve the quality of practice in our proprietary business model, while pivoting decisively to build above-market organic growth, fueled by CBI execution, into a core ITW strength. Achieving high-quality organic growth of 4+ percent through the cycle is our highest priority in the Next Phase. Simply put, our goal is to build high-quality, above-market organic growth into a defining ITW strength on par with our best-in-class operational capabilities and financial performance by 2030. Organic Growth Fueled by Customer-Back Innovation CBI is the most impactful driver in achieving our organic growth target, and our goal is to position the Company to consistently deliver a 3+ percent CBI annual contribution to revenue growth by 2030. At ITW, CBI means that our divisions partner with key customers as trusted problem solvers, addressing their most critical challenges. Our innovation efforts are division-led and are centered around customer needs, not a corporate research and development center. This approach, built on decades of innovation experience, delivers better outcomes for our customers and higher growth and returns on investment for ITW. Leveraging the proven methodologies that significantly strengthened our 80/20 Front-to-Back capability over the last decade, we are reinvigorating and improving our CBI capabilities in this Next Phase, and in 2024, we launched our new CBI framework in every ITW division. CBI has also been incorporated as a metric in our performance-based long-term incentive plan. In 2025, it was exciting to see the energy and enthusiasm in our divisions as they apply the framework to their specific market needs and implement their innovation strategies to drive above-market organic growth. Our proprietary innovations are protected by a robust portfolio of approximately 21,800 patents. Patent filings, a key leading indicator of CBI yield, increased by 9 percent in 2025 (18 percent in 2024). While we still have some work ahead of us as we position the Company to deliver 3+ percent CBI yield by 2030, we are pleased with the progress so far, achieving 2.4 percent in 2025, more than double historical levels and 0.4 percent higher than 2024. 2030 Performance Goals How We Align Executive Compensation with Our Long-Term Enterprise Strategy The independent members of our Board and Compensation Committee (the “Committee”) are responsible for aligning executive incentives with the Company’s strategy and the best interests of our stockholders. The Board believes that the Company has a strong track record of thoughtful and diligent governance and execution with respect to aligning executive incentives, as evidenced by our stockholders’ overwhelming and continuing support for our annual advisory vote on executive compensation. The Committee uses our long-term Enterprise Strategy as a framework to guide our executive compensation decisions. Our programs are designed to be highly performance-oriented, with rigorous financial goals to reward our executives for best-in-class performance. We regularly review our annual and long-term incentive plan metrics to ensure ongoing alignment with the strategy’s initiatives and performance objectives.

  43. Executive Succession Planning

    We currently link 50 percent of our executives’ target long-term incentive opportunity to Performance Share Units (“PSUs”), with four performance goals: three-year average (i) operating margin; (ii) After-tax ROIC; (iii) EPS growth; and (iv) CBI Yield. CBI Yield was first added as a metric in 2025 and is the year-over-year increase in revenue generated by a new product or service that provides an increase to customer value as compared to existing available products. The remaining 50 percent of our target long-term incentive opportunity consisted of stock option awards that only provide compensation value as our stock price increases. Notably, we do not provide any time-vested full value equity awards (i.e. restricted stock units) to our NEOs. ITW’s Focus on Performance-Based Compensation in 2025 Variable pay makes up a substantial portion of Chief Executive Officer (“CEO”) and NEO compensation, as illustrated in the graphs below. We believe that the mix of incentives in our executive compensation plans continues to support the achievement of the current phase of our strategy. For 2025, the mix of compensation for our CEO and NEOs was:

  44. Executive Succession Planning

    Note: The charts above reflect total compensation awarded to the CEO and other NEOs in 2025, which is the sum of base salary, target EIP and the grant date fair value of equity incentives. As disclosed in last year’s Proxy Statement, in 2025, the Compensation Committee approved eliminating the cash portion of the performance awards and made performance awards solely payable in stock-settled PSUs. This change supports ITW’s pay-for-performance compensation philosophy, and ensures our executives continued close alignment with stockholders through the Next Phase of ITW’s Enterprise Strategy. Accordingly, the long-term incentive mix for 2025 was granted in 50 percent Performance Share Units and 50 percent stock options. The metrics in our annual and long-term incentive plans are designed to reward superior Company and business segment performance. The following table shows the performance metrics for the NEOs used in the Company’s 2025 annual Executive Incentive Plan (“EIP”) and 2025-2027 PSUs awards granted under the Long-Term Incentive Plan.

  45. Executive Succession Planning

    | Plan | Performance Measure | Weight | | 2025 Executive Incentive Plan | Organic Revenue Growth | 40% | | | Operating Income Growth | 60% | | 2025-2027 Performance Share Units | Operating Margin | 25% | | | After-tax ROIC | 25% | | | EPS Growth | 25% | | | CBI Yield | 25% |

  46. Executive Succession Planning

    | | | Compensation Component | | | | | | | CEO | Other NEOs Avg. | Form | Objective | | | Base Salary | | | Cash | • Offer competitive pay levels to attract and retain highly qualified leaders • Reflective of individual performance, experience and scope of responsibility | | | Annual Executive Incentive Plan | | | Cash | • Motivate executives to achieve annual Company and business segment performance goals | | | | | | | • Reward executives for delivering on the long-term performance goals aligned with the Company’s strategy and creating long-term stockholder value | | | Performance Share Units (PSUs) | | | Equity | | | | Stock Options | | | Equity | |

  47. Executive Succession Planning

    | What We Do | What We Don’t Do | | Pay for Performance: Our NEOs’ average total target compensation is 81% performance based. Robust Stock Ownership Guidelines: We have stock ownership guidelines of 6 x salary for CEO, 3 x salary for Executive Vice Presidents and CFO, and 2 x salary for Senior Vice Presidents. Executives must retain the net after-tax shares of vested or exercised awards if an executive does not meet the guidelines within five years. Annual “Say on Pay” Vote: We hold an annual advisory vote for our stockholders to review and approve our executive compensation programs. Independent Compensation Consultant: The Committee: (1) engages an independent compensation consultant who advises the Committee on regulatory and other current trends and key developments in executive compensation and (2) reassesses its consultant’s independence annually. Annual CEO and NEO Performance Review: The Committee conducts an annual review of the performance of the CEO, as well as the other executive officers. Annual Review of Compensation Programs: The Committee, with input from its independent compensation consultant, conducts an annual review of our executive compensation programs, considering business strategies, best practices and good governance. Clawback Policy: Our Compensation Recovery Policy, updated in 2023, provides for the mandatory reimbursement of incentives if a material financial restatement is required, whether or not based on misconduct, and equity forfeiture provisions for violations of restrictive covenants and certain misconduct whether or not related to restatement. Annual Compensation Risk Assessment: Each year we perform an assessment of risks that could result from our executive compensation practices. | Employment Agreements: We do not provide U.S.-based executive officers with employment agreements. Tax Gross-ups: We do not provide tax gross-ups as part of our change-in-control agreements. Repricing: We do not allow share repricing within our stock option plan. Hedging/Pledging of Company Equity Securities: We prohibit executive officers and directors from engaging in any transaction that is designed to hedge or offset a decrease in the market value of ITW common stock and from pledging ITW equity securities. Dividends on Unvested Equity Awards: Dividends accrued on unvested equity awards, including restricted stock units and performance share units, are not paid unless the awards vest. Single-Trigger Change-In-Control Vesting/Benefits: We do not allow immediate vesting of equity awards that are continued or replaced upon a change-in-control; all such awards allow only double-trigger vesting (change-in-control and termination of employment). |

  48. Role of the Independent Compensation Consultant

    Role of the Independent Compensation Consultant The Compensation Committee has engaged an independent advisor, Meridian Compensation Partners LLC “Meridian”). The Compensation Committee's consultant works directly on its behalf and in cooperation with management to review ITW’s executive compensation programs, confirm appropriateness of our peer companies, and assess our compensation governance processes. In 2025, Meridian conducted a marketplace review of the compensation we pay to our executive officers. Meridian provided the Compensation Committee with relevant market data, including a review of our pay and performance and that of our peers, reviewed the peer companies we use for comparison purposes, and benchmarked our compensation against our peer companies. Meridian also assisted the Compensation Committee with its assessment of compensation-related risk. With respect to CEO compensation, on an annual basis, the Company’s consultant provides an independent recommendation to the Compensation Committee for its consideration. In developing its recommendation, the consultant relies on its understanding of ITW’s business, strategy and compensation programs, as well as their own independent research and analysis including ITW’s peer group. The consultant does not meet with the CEO with respect to his compensation. Peer Group The Compensation Committee has identified a group of comparable companies, which we refer to as the peer group, to benchmark executive compensation and provide competitive market data to be used in establishing and recommending each component of compensation. The peer group is reviewed annually by the Compensation Committee with assistance from its independent compensation consultant. In 2025, the Compensation Committee utilized market data from the peer group’s public disclosures, as well as a custom survey consisting of the peers below, as provided by Aon plc, a global provider of compensation data. In connection with its annual review in 2025, the Compensation Committee determined that no change to the peer group was warranted.

  49. Role of the Independent Compensation Consultant

    | 2026 PROXY STATEMENT | 40 |

  50. Role of the Independent Compensation Consultant

    | Peer Group Selection Criteria: | 2025 Peer Group | | | • U.S. publicly traded companies from ITW’s same and related industries, identified based on Standard & Poor’s Global Industry Classification Standard (GICS) codes; • Companies with one-fourth to four times our revenue and market capitalization with broadly similar businesses and pay models; • Companies that compete for the same customers with similar products and/or services; and • Companies with whom we may compete for executive talent. | 3M Company Caterpillar Inc. Cummins Inc. Deere & Company Dover Corporation Eaton Corporation plc Ecolab Inc. Emerson Electric Co. Fortive Corporation | General Dynamics Corporation Honeywell International Inc. Johnson Controls International plc Parker-Hannifin Corporation PPG Industries, Inc. Rockwell Automation, Inc. Stanley Black & Decker, Inc. Trane Technologies plc |

  51. Role of the Independent Compensation Consultant

    The median revenue of the peer group was $19.9 billion based on the twelve-month average of reported financial results through March 1, 2025, and the median market capitalization was $68.6 billion as of March 1, 2025, versus $15.9 billion and $77.5 billion, respectively, for ITW. The nature of our decentralized and diverse lines of business presents challenges in identifying similar organizations for comparison purposes; however, we believe that the selected peer group provides relevant comparisons. Compensation Decisions and Individual Compensation Levels On an annual basis, the CEO reviews the total compensation of the other NEOs and makes recommendations to the Compensation Committee based on his assessment of each executive’s individual performance and peer group compensation information. The Compensation Committee makes recommendations to the independent directors regarding the CEO’s compensation based on an assessment of the CEO’s performance and peer group compensation information. There are no material differences in the policies and decision processes used in setting compensation for the CEO and the other NEOs. However, the different levels of compensation for the NEOs, as shown in the Summary Compensation Table of this Proxy Statement, reflect internal factors such as each executive’s scope of responsibility, performance, impact on profitable growth and breadth of experience, as well as compensation data from the peer group. Components of the 2025 Executive Compensation Program Base Salary In determining base salary, the CEO (with respect to the other executive officers) and the Compensation Committee consider the size and scope of the executive officers’ responsibilities, experience, performance, market data and the median base salary of similar positions at our peer group companies. The Compensation Committee believes that median base salary is an appropriate general reference point to use for encouraging solid performance. Base salaries are reviewed annually, and adjustments are intended to recognize performance and contributions over the prior year, as well as any significant changes in duties or scope of responsibility. For 2025, the Committee recommended a 3.5 percent base salary increase for Mr. O’Herlihy, which was approved by the Board's independent directors. For the other NEOs, the Compensation Committee recommended base pay merit increases ranging from 3.0 to 4.0 percent.

  52. Role of the Independent Compensation Consultant

    | 41 | |

  53. Role of the Independent Compensation Consultant

    Annual Executive Incentive Plan We believe that executives generally should be rewarded for their contributions to the overall financial success measured by income and organic revenue growth of the Company as a whole, and, if applicable, the business segment he or she leads. Achieving our annual financial objectives is important to executing on our current strategic objectives and delivering long-term value to stockholders. The Compensation Committee determines and approves the performance results and awards for the NEOs and recommends the CEO’s annual incentive award amount for approval by the independent directors of the Board. The Company provides annual incentive award opportunities to the NEOs through the EIP. The Compensation Committee determined each NEO’s 2025 award target based on responsibilities, experience, performance, market data and the median target incentive opportunity of similar positions at our peer group companies. Based on achieved results against performance goals, an NEO may earn between zero and 200 percent of his or her award target. For 2025, the Compensation Committee approved the following performance metrics and weightings:

  54. 2025 EIP Company Financial Targets

    | | Operating Income Growth vs. Prior Year | Operating Income Growth Payout (as a % of Target) | Organic Revenue Growth | Organic Revenue Payout (as a % of Target) | | Maximum | 115% | 200% | 3.5% | 200% | | Target | 105% | 100% | 1.0% | 100% | | Threshold | 85% | 50% | 0.0% | 0% |

  55. 2025 EIP Company Performance Results

    | Operating Income Growth vs. Prior Year(1)(2) | | | | Organic Revenue Growth(1) | | | | | | 2024 | 2025 | Achievement Percent | Payout Percent | 2024 | 2025 | Achievement Percent | Payout Percent | Total Payout Percent | | $4.1B | $4.2B | 100.9% | 89.9% | $15.9B | $15.9B | 0% | 0.0% | 53.9% |

  56. 2025 EIP Total Payouts

    2025 EIP Total Payouts The total payouts to the NEOs for Company performance results were 53.9% of the target award level. The chart below shows the final payout percentage for each NEO.

  57. 2025 EIP Total Payouts

    | Named Executive Officer | Award Target (as a % of Base Salary) | 2025 Salary | Total Payout Percent | Total Payout Amount(3) | | Christopher A. O’Herlihy | 160% | $1,345,000 | 53.9% | $1,160,789 | | Michael M. Larsen | 110% | $984,363 | 53.9% | $584,062 | | Axel R.J. Beck(1)(2) | 90% | $665,769 | 66.5% | $398,342 | | T. Kenneth Escoe(1) | 90% | $570,424 | 77.0% | $395,098 | | Mary K. Lawler | 80% | $676,152 | 53.9% | $291,773 |

  58. 2025 EIP Total Payouts

    | (1) 50% of the total payout percentage for Messrs. Beck and Escoe is based on their respective business segment’s results (79.1% and 100.1% of target, respectively) and the other 50% is based on total Company results. Performance targets and payouts for the business segments were determined in a similar manner as overall Company performance targets and payouts. | | (2) Mr. Beck’s salary and EIP payout were paid in his home country currency of Euros (EUR) and have been converted to U.S. Dollars (USD) based on the average daily exchange rate for fiscal year 2025 of 1.1299 (EUR to USD). | | (3) These amounts are included in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.” The award payout is calculated as a percentage of base salary. |

  59. 2025 EIP Total Payouts

    | Long-Term Incentives The value of the overall long-term incentive award for the CEO is determined by the Compensation Committee, subject to approval by the independent directors of the Board. Awards to the other NEOs are recommended by the CEO to the Compensation Committee for approval. The key factors in determining the awards are the executive’s position, performance, potential to contribute to the long-term success of the Company, breadth of experience, and prior awards. In addition, although we generally do not establish any specific target or prescribed value in relation to the peer group, comparisons are made to long-term incentive levels in the peer group and market compensation data. | | | | Long-Term Incentive Philosophy We believe that ensuring the long-term growth and profitability of the business is a primary management responsibility. Therefore, a significant portion of an executive officer’s compensation should be directly linked to key financial performance measures that consider the long-term perspective, such as operating margin, After-tax ROIC, EPS growth, CBI Yield, and ITW’s share price over time. |

  60. 2025 EIP Total Payouts

    | | Stock Options | PSU | | LTI Mix | | |

  61. 2025 EIP Total Payouts

    | 43 | |

  62. 2025 EIP Total Payouts

    In 2025, the value of the NEOs’ long-term incentive awards consisted of 50 percent in the form of stock options and 50 percent in PSUs. We believe that stock options are an effective incentive because they directly align the interest of the executives with those of our stockholders. Similarly, we believe the PSUs are effective because they incent executive leaders to achieve key long-term financial goals. Stock options are combined with PSUs to closely align the realized value of long-term incentives with the financial performance objectives of the Company’s strategy and total shareholder return. The Compensation Committee has established specific vesting and expiration provisions associated with termination of employment due to death, disability and retirement, as defined in the applicable awards, and forfeiture provisions upon other termination of employment. The Compensation Committee, in its sole discretion, may deem a long-term incentive award, whether vested or unvested, to be immediately forfeited if the recipient competes with the Company, engages in misconduct or conduct that is against the business interests of the Company, or divulges confidential information about the Company to others.

  63. 2025 Stock Option Awards

    2025 Stock Option Awards The 2025 stock options vest in equal installments over a four-year period ending in 2029. Stock options are awarded with an exercise price equal to the fair market value of the common stock on the date of grant and normally expire ten years after the award date. The Committee awards non-qualified stock options because it believes that the tax benefits to the Company from non-qualified stock options outweigh the potential tax benefits to the NEOs from incentive stock options.

  64. 2025-2027 Performance Share Units

    2025-2027 Performance Share Units The PSUs vest three years from the date of grant, subject to the Compensation Committee’s certification of the achievement of the performance goals set at the beginning of the performance period. PSUs are awarded based on the fair market value of one share of ITW common stock on the date of the award. Dividend equivalents are accrued and added in the form of units to the original PSU awards as reinvested dividends. These reinvested dividends are paid only on PSUs earned at the end of the performance period. The goals for the 2025 PSUs are equally weighted and based on three-year average operating margin, After-tax ROIC, EPS growth, and CBI Yield. The payout range for PSUs is 50 to 200 percent of the target award for threshold to maximum performance. Performance below threshold results in no payout for the weighted portion for that metric. The payout at the end of the performance period will be based on the following payout scale:

  65. 2025-2027 Performance Share Units

    | | Operating Margin | After-tax ROIC | EPS Growth | CBI Yield | Payout (as a % of Target) | | Maximum | 27.5% | 27.0% | 12.0% | 3.0% | 200% | | Target | 25.5% | 25.0% | 9.0% | 2.5% | 100% | | Threshold | 20.0% | 20.0% | 4.0% | 2.0% | 50% |

  66. 2025-2027 Performance Share Units

    Notes: • Interpolation is used for measuring achievement between threshold and target and between target and maximum. After-tax ROIC and EPS growth were calculated using an effective tax rate of 23.5% for each of the years in the performance period.

  67. 2025-2027 Performance Share Units

    | 2026 PROXY STATEMENT | 44 |

  68. 2023-2025 Performance Share Units and Performance Cash Awards Payout

    2023-2025 Performance Share Units and Performance Cash Awards Payout In 2023, executives were awarded PSUs and Performance Cash awards with a three-year performance period from January 1, 2023 to December 31, 2025. The awards had incorporated three equally weighted financial metrics (operating margin, After-tax ROIC, and EPS growth). The table below details the performance and associated payouts of the 2023-2025 PSU and Performance Cash awards:

  69. 2023-2025 Performance Share Units and Performance Cash Awards Payout

    | | Long-Term Performance Results | | | | Performance Scale and Payout | | | | | Metrics (Weighting) | FY 2023 | FY 2024 | FY 2025 | 3 Year Average | Threshold 50% of Target | Target 100% of Target | Maximum 200% of Target | Payout % of Target | | Operating Margin (1/3rd) | 25.1% | 26.1% | 26.3% | 25.8% | 20.0% | 24.0% | 26.0% | 191.7% | | After-tax ROIC (1/3rd)(1) | 30.3% | 30.4% | 29.4% | 30.0% | 20.0% | 25.0% | 27.0% | 200.0% | | EPS Growth (1/3rd)(1)(2) | 7.2% | 5.1% | 2.6% | 5.0% | 4.0% | 9.0% | 12.0% | 59.6% | | Total Payout % of Target: | | | | | | | | 150.4% |

  70. 2023-2025 Performance Share Units and Performance Cash Awards Payout

    | (1) After-tax ROIC and EPS growth were calculated using an effective tax rate of 23.5% for each of the years in the performance period. | | (2) 2024 EPS excludes the $0.30 favorable impact related to the LIFO accounting method change in the first quarter of 2024 and the $1.26 net gain related to the Wilsonart transaction in the third quarter of 2024. |

  71. Timing of Long-Term Incentive Awards

    Timing of Long-Term Incentive Awards The Compensation Committee meets in February of each year following the Company’s public release of its earnings results for the most recently completed fiscal year to review and approve long-term incentive awards for the executive officers. Long-term awards are made in compliance with the Long-Term Incentive Plan, including the requirement that stock options may not be awarded with an exercise price less than 100 percent of the fair market value of ITW’s common stock on the date of grant. The exercise price of the awards is based on the closing price of ITW’s stock on the date of the award. We do not time award grant dates for the purpose of enhancing the value of executive compensation. See the “Long-Standing Practices Regarding Stock Option Grants” section below for additional details on our granting practices related to stock options. Benefits and Perquisites Our NEOs participate in the same health, disability, life insurance, and retirement benefit plans and programs provided to the Company’s U.S.-based non-union employees, other than Mr. Beck who is based in Germany. Our executive officers are offered the opportunity to participate in a comprehensive annual physical paid by the Company, which is an extension of our Company’s wellness program that encourages healthy lifestyles and preventative medical care. The Company also offers financial counseling and optional tax preparation services for select executives and occasionally offers the use of tickets to sporting events (there is no incremental expense to the Company for these tickets). Mr. Beck is provided a company-leased vehicle, consistent with market practices in his home country of Germany. ITW’s perquisites are consistent with market practices and do not comprise a substantive element of our compensation programs.

  72. Timing of Long-Term Incentive Awards

    | 45 | |

  73. Timing of Long-Term Incentive Awards

    Compensation Governance Practices and Policies Stock Ownership Guidelines We believe that stock ownership is important because it aligns the interests of our management with those of our stockholders and mitigates compensation-related risk. Because of the importance of stock ownership, the Board and the Compensation Committee have adopted stock ownership guidelines for executive officers. The guidelines for stock ownership as a multiple of executive officers’ base salaries and are as follows:

  74. Timing of Long-Term Incentive Awards

    | Title | Guideline | | Chief Executive Officer | 6 times salary | | Executive Vice Presidents and Chief Financial Officer | 3 times salary | | Senior Vice Presidents | 2 times salary |

  75. Timing of Long-Term Incentive Awards

    If the applicable ownership guideline is not met within the five-year time period, the covered executive officer must retain 100 percent of the net after-tax shares received from the vesting or any subsequent exercise of awards until the ownership guidelines are met. The achievement of these guidelines is reviewed annually. The Board believes that its stock ownership guidelines are appropriate, reasonable, and attainable given the responsibilities and compensation levels of our executive officers. Hedging and Anti-Pledging Policy Pursuant to the Company’s Hedging and Anti-Pledging Policy, all employees (including executive officers) and directors who receive equity-based awards from the Company are prohibited from trading ITW stock options or engaging in short sales of ITW stock. In addition, all executive officers and directors and their designees are prohibited from purchasing or selling any financial instrument or otherwise engaging in any transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of ITW equity securities. In addition, since April 2013, our executive officers and directors have been prohibited from pledging ITW stock, and all pledged shares are excluded from ownership for purposes of our stock ownership guidelines. Compensation Recovery Policy In 2010, we adopted a compensation recovery policy (the “2010 Clawback Policy”) that covered our current and former officers subject to Section 16 of the Securities Exchange Act of 1934 (“Section 16”). Under the 2010 Clawback Policy, if there was a financial restatement, certain cash- and equity-based incentive compensation received would be subject to repayment, in the Compensation Committee’s discretion, to the extent it was based on the erroneous financial results. In 2023, we adopted an updated compensation recovery policy (the “2023 Clawback Policy”) intended to comply with applicable SEC and New York Stock Exchange rules, which also covers our current and former Section 16 officers. Under the 2023 Clawback Policy, if there is a restatement of our financial results, certain incentive-based compensation paid or awarded within three years will be subject to mandatory repayment (with limited exceptions) if the amount of such compensation was based upon the achievement of restated financial results. The Company cannot indemnify any Section 16 officer against such repayment. In addition, forfeiture provisions in the terms of awards under our equity incentive plan provide flexibility to cancel outstanding grants for violation of non-compete and confidentiality restrictive covenants, and for engaging in misconduct or conduct that is against the business interests of the Company. 2025 Risk Assessment The Compensation Committee, together with management and the Compensation Committee’s independent consultant, Meridian, annually considers potential risks when reviewing our compensation program for all employees, including our executive officers. Based on this assessment, the Compensation Committee concluded that our 2025 compensation program does not create risks that are reasonably likely to have a material adverse effect on the Company. In making this determination, the

  76. Timing of Long-Term Incentive Awards

    | 2026 PROXY STATEMENT | 46 |

  77. Timing of Long-Term Incentive Awards

    Compensation Committee reviewed the key design elements of our compensation program, as well how any potential risks may be mitigated, including: A Balanced Mix of Compensation Components – The target compensation mix for our executive officers is composed of base salary, annual cash incentives and long-term equity incentives, representing a mix that is not overly weighted toward short-term incentives. • Multiple Performance Factors – Our incentive compensation plans use Company-wide measures, which encourage focus on the achievement of objectives for the overall benefit of the Company. Multiple financial goals also prevent an overemphasis on any one metric. • Long-Term Incentives – Our long-term incentives are equity-based, with our PSU awards subject to performance goals. PSUs have a three-year vesting schedule, and stock options have a four-year vesting schedule. • Capped Incentive Awards – Annual incentives and PSUs are capped at 200 percent of target. • Stock Ownership Guidelines – Our guidelines call for significant share ownership, which further aligns the interests of our executive officers and directors with the long-term interests of our stockholders, and we have a holding-period requirement for individuals who have not achieved their guidelines in the targeted period. • Compensation Recovery Policy – Our SEC-compliant compensation recovery policy requires the Compensation Committee to clawback past incentive compensation in the event of a financial restatement regardless of fault. • Prohibition on Hedging and Pledging – Executive officers and directors are subject to Company policy that prohibits hedging and pledging activities with respect to ITW stock. • Committee Oversight – The Compensation Committee has the ultimate authority to determine, and reduce if appropriate, compensation provided to our executive officers. • Independent Compensation Consultant – The Compensation Committee retains an outside independent compensation consultant. Committee’s Independent Consultant Meridian, the independent compensation consultant, has been retained by and reports directly to the Compensation Committee. It also provides peer group directors’ compensation data to the Corporate Governance and Nominating Committee; it does not have any other consulting engagements with management or ITW. Based on its consideration of factors under NYSE listing standards, the Compensation Committee concluded that the work performed by Meridian and its senior advisor involved in the engagement did not raise any conflict of interest or independence concerns.

  78. Timing of Long-Term Incentive Awards

    | 47 | |

  79. Timing of Long-Term Incentive Awards

    NEO Compensation Summary Compensation Table The tables below provide information regarding the compensation of our NEOs.

  80. Timing of Long-Term Incentive Awards

    | Name and Principal Position | Year | Salary(2) | Bonus | Stock Awards(3) | Option Awards(3) | Non-Equity Incentive Plan Compensation(2)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation(5) | Total(6) | | Christopher A. O’Herlihy | 2025 | $1,337,271 | — | $5,249,957 | $5,249,996 | $2,702,389 | $255,793 | $415,605 | $15,211,011 | | President & Chief Executive Officer | 2024 | $1,300,000 | — | $2,187,430 | $4,374,988 | $2,514,128 | $156,627 | $399,472 | $10,932,645 | | | 2023 | $919,770 | — | $1,024,983 | $2,049,992 | $2,401,550 | $213,183 | $289,363 | $6,898,841 | | Michael M. Larsen | 2025 | $977,860 | — | $2,074,946 | $2,074,967 | $1,994,062 | — | $238,666 | $7,360,501 | | Senior Vice President and | 2024 | $942,227 | — | $974,919 | $1,949,996 | $1,872,085 | — | $235,926 | $5,975,153 | | Chief Financial Officer | 2023 | $909,761 | — | $937,370 | $1,874,973 | $2,256,573 | — | $244,616 | $6,223,293 | | Axel R.J. Beck(1) | 2025 | $665,769 | — | $774,846 | $774,973 | $924,742 | $53,263 | $32,716 | $3,226,309 | | Executive Vice President | 2024 | $618,918 | — | $362,398 | $724,980 | $706,559 | $159,678 | $22,181 | $2,594,714 | | | 2023 | $597,878 | — | $349,983 | $699,942 | $1,033,438 | $156,136 | $24,126 | $2,861,503 | | T. Kenneth Escoe | 2025 | $567,570 | — | $749,810 | $749,999 | $808,698 | — | $151,652 | $3,027,729 | | Executive Vice President | 2024 | $551,655 | — | $312,271 | $624,959 | $1,024,373 | — | $175,929 | $2,689,187 | | Mary K. Lawler | 2025 | $671,685 | — | $899,771 | $899,985 | $893,373 | — | $146,940 | $3,511,754 | | Senior Vice President and | 2024 | $647,209 | — | $412,269 | $824,932 | $844,095 | — | $148,021 | $2,876,526 | | Chief Human Resources Officer | 2023 | $624,908 | — | $399,913 | $799,943 | $1,044,797 | — | $156,690 | $3,026,251 |

  81. Annual Executive Incentive Plan

    Annual Executive Incentive Plan The EIP provides that if a participant is employed as of the last day of the fiscal year, he or she would receive any amounts earned under the EIP for that fiscal year. In the event an NEO becomes permanently disabled or dies, the NEO would be eligible for a pro-rated payout under the EIP. In the event of a termination upon retirement (defined as age 55 with ten years of service or age 65 with 5 years of service), the executive would be eligible for a pro-rata award payment. Messrs. O’Herlihy, Larsen, and Beck and Ms. Lawler meet the retirement criteria as of December 31, 2025. If termination of employment other than for death, disability, retirement or change-in-control occurs prior to the last day of the fiscal year, a participant forfeits his or her award; however, the Compensation Committee has the discretion to award an amount prorated for the portion of the fiscal year that the participant was employed. Actual amounts earned by the NEOs based on performance in 2025 are discussed in more detail above in “Compensation Discussion and Analysis—Components of the 2025 Executive Compensation Program - Annual Executive Incentive Plan.”

  82. Annual Executive Incentive Plan

    | 2026 PROXY STATEMENT | 56 |

  83. Relationship Between Compensation Actually Paid (CAP) and Performance Metrics

    Relationship Between Compensation Actually Paid (CAP) and Performance Metrics The charts below illustrate the relationship between Compensation Actually Paid to both the PEO and average Non-PEO to performance metrics required for disclosure: (a) TSR based on the value of an initial fixed $100 invested in ITW Common Stock and ITW's 2025 Peer Group, including the reinvestment of dividends, (b) net income, and (c) After-tax ROIC.

  84. Relationship Between Compensation Actually Paid (CAP) and Performance Metrics

    | Compensation Actually Paid vs TSR | Compensation Actually Paid vs Net Income | Compensation Actually Paid vs After-tax ROIC* | | | | | | | | * After-tax ROIC is a non-GAAP measure. See Appendix A for information regarding this non-GAAP measure. |

  85. Relationship Between Compensation Actually Paid (CAP) and Performance Metrics

    | 2026 PROXY STATEMENT | 66 |

  86. Relationship Between Compensation Actually Paid (CAP) and Performance Metrics

    The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit ITW’s financial statements. The Audit Committee is also directly involved in the selection of the independent registered public accounting firm’s lead engagement partner in conjunction with the mandatory rotation of the lead engagement partner. The Audit Committee and the Board are requesting, as a matter of good corporate governance, that stockholders ratify the selection of Deloitte & Touche LLP (“Deloitte”) to serve as ITW’s independent registered public accounting firm for the fiscal year ending December 31, 2026. Deloitte has been serving as the Company’s independent registered public accounting firm since 2002, and the Audit Committee and the Board believe that Deloitte is best positioned to continue in this role for the fiscal year ending December 31, 2026.

  87. Our Stockholders Have Shown Consistent Support for our Director Nominees

    Our Stockholders Have Shown Consistent Support for our Director Nominees Our stockholders have consistently shown strong support of our director nominees. Notably, no ITW director nominees have failed to receive a majority of the votes cast in an uncontested election, reflecting stockholder’s confidence in the Board’s oversight of the Company’s long-term strategy. ITW has never had a holdover director, and the Board has not disregarded stockholder votes in uncontested elections. Last year, all of our directors received over 93% stockholder support. The proponent asserts that a mandatory resignation requirement would serve as an incentive for director performance. The Board believes that a director’s accountability and performance are incentivized through established governance practices, including annual elections, Board and individual evaluations, active shareholder engagement, and ongoing Board refreshment and succession planning.