ILLINOIS TOOL WORKS INC

The following tables provide information regarding the compensation of our NEOs.

Note: Years prior to becoming an NEO are not presented in this table.

(1)

Mr. Beck’s compensation was paid in his home country currency of Euros (EUR) and has been converted to U.S. Dollars (USD) based on the average daily exchange rate for fiscal year 2024 of 1.0819 (EUR to USD).

(2)

Mr. Santi was employed as our Executive Chairman from January 1, 2024 to March 1, 2024, after which he was elected Non-Executive Chairman of the Board.

(3)

The Salary and Non-Equity Incentive Plan Compensation columns for 2024 include amounts deferred by the executive under the Executive Contributory Retirement Income Plan (ECRIP) and the Savings and Investment Plan. The deferral amounts for each year shown for each NEO can be found in the Footnote 1 Table to the table under the “ITW Retirement Plans—Nonqualified Deferred Compensation” section.

(4)

The Stock Awards column represents PSUs awarded in 2024, 2023, and 2022 for all NEOs, except as disclosed below for Mr. Santi. The amounts shown represent the target amount that may be earned based on the grant date fair value. If the highest level of performance is achieved for these PSUs, the maximum value of these awards at the grant date would be as follows: Mr. O'Herlihy — $4,374,860; Mr. Larsen — $1,949,838; Ms. Lawler — $824,538; Mr. Beck — $724,796; Mr. Escoe — $624,542. The Option Awards column represents stock options awarded in the relevant year, and the assumptions applicable to these valuations can be found in Note 14 of the Notes to Financial Statements—Stock-Based Compensation contained in the Company's Form 10-K for the year ended December 31, 2024. For Mr. Santi, the value in this column for 2024 represents stock awards for his service as a non-employee director and Non-Executive Chairman.

(5)

These amounts include payouts made under the EIP and 2022-2024 Long-term Performance Cash award payouts made under our Long-Term Incentive Plan. The following table shows the award payouts under each plan for 2024.

(6)

This column reflects the aggregate changes in the actuarial present value of each individual's pension benefits. Mr. Santi's amounts include an amount of interest in the applicable calendar year considered to be in excess of market rates credited to the deferred compensation

NEO Compensation

accounts of the NEOs under the ECRIP, discussed in more detail under “Nonqualified Deferred Compensation” below. When a participant attains retirement eligibility at age 55 with 10 years of service, any amounts in his or her ECRIP account deferred prior to January 1, 2010 are entitled to a return of 130 percent of the monthly Moody’s Corporate Bond Yield Average rate, and the excess interest portion is deemed to be amounts exceeding 100 percent of such rate. This additional interest credit applies to all eligible plan participants, including the eligible NEOs. All amounts deferred after December 31, 2009 accrue interest at 100 percent of the Moody’s Rate. The individual amounts of pension benefits and excess interest credits earned in each year are shown in the table below. Mr. Santi received a lump sum payment of his pension in connection with his retirement on March 1, 2024, discussed in more detail under "Pension Benefits" below.

Note: Mr. Larsen, Mr. Escoe, and Ms. Lawler, joined the Company in September 2013, June 2014, and October 2014, respectively. Consequently, their ECRIP deferrals are not eligible for the 130 percent rate. They are also not eligible for a Company-sponsored pension plan.

(7)

These amounts include the Company contributions to the Savings and Investment Plan and ECRIP, as well as perquisites to our NEOs, as outlined in the table below:

• Mr. Beck is not eligible to participate in the Savings and Investment Plan or the ECRIP.

** Perquisites to NEOs in 2024 were as follows: (1) financial planning and tax preparation services (Mr. O'Herlihy, Mr. Larsen, Mr. Escoe, and Ms. Lawler), (2) executive physicals for all NEOs, and (3) a company leased vehicle for Mr. Beck. Additionally, NEOs may use tickets to sporting events that have no incremental cost to ITW.

*** Mr. Santi received a cash retainer of $116,923 for serving as a non-employee director from March 1 to December 31, 2024. He elected to defer his retainer into ITW stock. Additional information on the director fee deferral program may be found in the "Director Compensation" section of this proxy statement. In addition, the Company paid $15,000 to charitable organizations to match gifts made by Mr. Santi under a program which is available to all employees and directors up to a maximum of $15,000 per year.

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NEO Compensation