____________________________________________________________________________________________________________________

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

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☒    Definitive Proxy Statement

☐    Definitive Additional Materials

☐    Soliciting Material Pursuant to §240.14a-12

ILLINOIS TOOL WORKS INC.

(Name of Registrant as Specified In Its Charter)

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

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☐    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

____________________________________________________________________________________________________________________

About ITW

Founded in 1912, Illinois Tool Works Inc. (NYSE: ITW) is a global industrial company built around a differentiated and proprietary business model. The company’s seven industry-leading segments leverage the ITW Business Model to generate solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 46,000 dedicated colleagues around the world thrive in the company’s decentralized, entrepreneurial culture. In 2022, the Company achieved revenue of $15.9 billion, with roughly half coming from outside North America. To learn more, please visit www.itw.com.

ITW's Proprietary Business Model Has Three Elements:
•80/20 Front-to-Back defines how we operate. It is a unique set of proprietary tools and methodologies that our divisions use to structure and operate their businesses to (a) maximize the performance, execution, and value-add they provide to their largest and most profitable customers, and (b) minimize the costs, complexity, and distractions associated with serving small customers. Through the application of ITW’s 80/20 Front-to-Back process, our divisions deliver best-in-class customer-facing execution, high-quality organic growth, and superior profitability and return on capital performance. •Customer-Back Innovation drives how we innovate. At ITW, we innovate from the customer back, not from the research and development center out. Our divisions partner with their key customers to create unique solutions that solve difficult technical challenges and improve business performance.
•Our Decentralized, Entrepreneurial Culture is the key to how we execute. Our people are clear about what is expected of them with regard to our business model, our strategy, and our values. Within this framework, we empower our business teams to make decisions and customize their approach in order to maximize the relevance and impact of the ITW Business Model for their specific customers and end markets. Our people thrive in ITW’s “flexibility within the framework” culture; they think and act like entrepreneurs, they are accountable, and they deliver.

ITW’s High-Quality Diversified Business Portfolio

While ITW’s seven market-leading business segments operate in different industries, each segment is able to leverage the ITW Business Model to generate high-quality organic growth with best-in-class margins and returns.

2022 Operating Margin by Segment vs. Peer Average1

ITW’s operating margin in 2022 was 24% vs. 14% average for proxy peers

1See Appendix A for segment peer group definition.

2Test & Measurement and Electronics and Polymers & Fluids exclude 190 bps and 220 bps, respectively, of unfavorable operating margin impact of amortization expense related to intangible assets.

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 5, 2023, at 8:30 a.m. Central Time. You may join at www.virtualshareholdermeeeting.com/ITW2023.

You will have a chance to vote at the meeting on the matters set forth in the following Notice of Annual Meeting and the Proxy Statement. There will also be time for questions. 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.

Our Enterprise Strategy is focused on leveraging the ITW Business Model to consistently deliver top-tier performance in any environment and once again in 2022, our teams around the world did just that. Despite continuing supply chain disruptions and significant input cost inflation, the ITW team delivered world-class service to our customers and robust financial results for our shareholders. Organic growth was 12 percent for the second year in a row, and margins and returns on capital remained #1 in our peer group. Since we launched our Enterprise Strategy in 2012, we have generated a Total Shareholder Return (TSR) of 356 percent versus 226 percent for the S&P 500.

In 2022 we also continued to make strong progress in the execution of ITW’s Sustainability Strategy. ITW’s longstanding commitment to sustainability is rooted in our core values and fundamental to who we are as a company. Supported by strong governance practices and our commitment to “do what we say” execution in every aspect of our business, we are inspired to continue to make a difference for our people, our communities, and the environment. Please see ITW’s 2022 Sustainability Report at www.itw.com/sustainability for details of the company’s sustainability strategy and our progress in executing it.

We welcome our newest director, Kelly Grier, who brings to the board her valuable experience and perspectives as the retired US Chair and Managing Partner (CEO) of Ernst & Young LLP. We also remember our director emeritus Harold B. Smith, Jr., who passed away in 2022. Harold served the company for over 70 years as an active member of the leadership team and as a member of our board of directors. We are immensely grateful for his guidance, support, and his unwavering dedication and commitment to ITW and our long-term success.

Sincerely,

E. Scott Santi Chairman and CEO		Richard H. Lenny Independent Lead Director

2023 PROXY STATEMENT i

Notice of Annual Meeting of Stockholders

Time and Date	Virtual Meeting	Record Date
May 5, 2023 8:30 AM Central Time	The Annual Meeting will be held in virtual format at: www.virtualshareholdermeeting.com/ITW2023	Only stockholders of record at the close of business on March 6, 2023 are entitled to vote.

Items of Business

1		2		3		4		5
	To elect the ten director nominees named in this proxy statement		To hold an advisory vote on executive compensation		To hold an advisory vote on the frequency of the advisory vote on executive compensation		To ratify the appointment of Deloitte & Touche LLP as ITW’s independent registered public accounting firm for 2023		To consider a non-binding stockholder proposal for an Independent Board Chairman, if properly presented
	“FOR” each director nominee		“FOR”		“ONE-YEAR”		“FOR”		“AGAINST”
	Page 8		Page 26		Page 59		Page 60		Page 63

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

Virtual Meeting

The Annual Meeting will be held in virtual format and will be accessible to all of our stockholders. The virtual Annual Meeting will afford our stockholders the same rights and opportunities as an in-person meeting, allowing for active participation by all of our stockholders at no cost, regardless of their geographic location. To attend the Annual Meeting, vote and submit questions during the Annual Meeting, go to www.virtualshareholdermeeting.com/ITW2023 on the date of the meeting.

Form 10-K

Our Form 10-K for fiscal year 2022 is enclosed if you received proxy materials by mail. The Form 10-K is accessible on the Internet at www.proxyvote.com if you received the Notice of Internet Availability of Proxy Materials or previously consented to electronic delivery of proxy materials.

By Order of the Board of Directors,

Jennifer K. Schott
Secretary
March 24, 2023

ii  

Notice of Annual Meeting of Stockholders

Your Vote is Important

You may vote your shares in one of the following four ways:

By Telephone	By Internet	By Mail	At the meeting
Toll-free by calling 1-800-690-6903	See the instructions at www.proxyvote.com	If you received these proxy materials by mail, by signing, dating and mailing the enclosed proxy card	Virtually attend our Annual Meeting, where you can submit a vote

If you vote by telephone or Internet, you should have your proxy card, Notice of Internet Availability of Proxy Materials or voter instruction card in hand when you call or go to www.proxyvote.com. If you hold your shares through a bank or broker that does not offer telephone or Internet voting, please complete and return your proxy card by mail. If you receive more than one proxy card, Notice of Internet Availability or voter instruction card that has a 16-digit control number, you must vote each separately to ensure that all shares you own are voted.

If you plan to attend the meeting, you may vote at the Annual Meeting. To do so, you must be a holder of Illinois Tool Works Inc. shares as of the record date of March 6, 2023, and visit www.virtualshareholdermeeting.com/ITW2023 on the date of the meeting. You will log into the Annual Meeting by entering your unique 16-digit control number found on your proxy card, Notice of Internet Availability or voter instruction card, as applicable. You may log into the Annual Meeting beginning at 8:15 a.m, Central Time, on May 5, 2023 and the Annual Meeting will begin promptly at 8:30 a.m., Central Time. As part of the Annual Meeting, we will hold a live question and answer session, during which we intend to answer questions that are submitted in writing during the meeting by our stockholders who log in with their unique 16-digit control number and are pertinent to the Company and the business of the meeting, as time permits. For more information about how to attend the Annual Meeting online, please see “Other Information—Voting and Virtual Annual Meeting Information” in this proxy statement.

Whether or not you plan to virtually attend the meeting, please vote as soon as possible. Under New York Stock Exchange rules, your broker will NOT be able to vote your shares on Proposals 1, 2, 3 or 5 unless it receives specific instructions from you. If you hold your shares through a bank or brokerage account, we strongly encourage you to return the voting instruction card to your bank, broker or other holder of record so that your vote is counted.

Avoid escheatment. We have been advised that some states are strictly enforcing unclaimed property laws and requiring shares held in “inactive” accounts to be escheated to the state in which the stockholder was last known to reside. One way you can show that your account is active is to vote your shares.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 5, 2023: The Form 10-K and this 2023 Proxy Statement are available on the Company’s website at www.itw.com under the “Investor Relations” link. Paper copies are available without charge upon written request to the Company at Illinois Tool Works Inc., 155 Harlem Avenue, Glenview, Illinois 60025, Attention: Secretary.

2023 PROXY STATEMENT iii

Table of Contents

A Letter to Our Shareholders		i
Notice of Annual Meeting of Stockholders		ii
Company Highlights		1
Proxy Summary		4
	Proposal 1 – Election of Directors	8
	Director Election	8
	Director Qualifications and Succession Planning	8
	Board Biographies	10
	Board Independence	15
	Director Candidate Selection Process	15
	Shareholder Nominations	15
Corporate Governance		16
	Board of Directors and its Committees	16
	Board's Role in Risk Oversight	20
	Key Areas of Board Oversight	21
	Shareholder Engagement	22
	Other Governance Matters	23
Director Compensation		24
	Annual Fees	24
	Directors’ Deferred Fee Plan	24
	ITW Common Stock Grant	24
	Director Compensation in Fiscal Year 2022	25
Executive Compensation		26
	Proposal 2 – Advisory Vote on Executive Compensation	26
Compensation Discussion and Analysis		27
	Executive Overview	28
	Executive Compensation Highlights	32
	How We Make Compensation Decisions	34
	Components of the 2022 Executive Compensation Program	35
	Compensation Governance Practices and Policies	39

NEO Compensation		43
	Summary Compensation Table	43
	Grants of Plan-Based Awards	45
	Outstanding Equity Awards at Fiscal Year-End 2022	46
	Option Exercises and Stock Vested	47
	Pension Benefits	47
	ITW Retirement Plans	48
	Potential Payments upon Termination	51
	Summary of Termination and Change-in-Control Provisions	52
	Termination and Change-in-Control Payments and Benefits	53
	Compensation Committee Report	55
	Equity Compensation Plan Information	56
	Pay Ratio	56
Pay Versus Performance		57
	Proposal 3 – Advisory Vote on Frequency of Advisory Vote on Executive Compensation	60
	Proposal 4 – Ratification of the Appointment of Independent Registered Public Accounting Firm	61
	Audit Committee Report	63
	Proposal 5 – Non-Binding Stockholder Proposal for an Independent Board Chairman	64
Beneficial Ownership of Common Stock		67
Other Information		69
	Voting and Virtual Annual Meeting Information	69
	Submitting Proxy Proposals and Director Nominations for the 2024 Annual Meeting	72
Appendix A		A-1

This proxy statement and the accompanying materials are first being mailed or made available to stockholders on or about March 24, 2023.

Forward-Looking Statements

This proxy statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “expect,” “plan,” “intend,” “may,” “strategy,” “target,” “goals,” “anticipate,” and other similar words, including, without limitation, statements regarding the Company’s long-term Enterprise Strategy objectives, core TSR model targets, performance targets and environmental, social and governance matters, including targets and goals. These statements are subject to certain risks, uncertainties, and other factors, which could cause actual results to differ materially from those anticipated. Such risks include those contained in ITW’s Form 10-K for the year ended December 31, 2022 and other documents ITW files with the Securities and Exchange Commission ("SEC"). These risks are not all-inclusive and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Any forward-looking statements made by ITW speak only as of the date on which they are made. ITW is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.

iv  

Company Highlights

51 Countries 84 Divisions ~46,000 Colleagues ~19,200 Granted & Pending Patents

2022 Performance Highlights

$9.77, +15% Record Earnings Per Share	$15.9B, +10% Revenue	$3.8B, +9% Record Operating Income
29.1%1 After-tax ROIC	23.8%2 Operating Margin	$5.06, +7% Dividends Declared

1Excluding the impact from acquisitions, After-tax ROIC in 2022 was 31.2%. After-tax ROIC is a non-GAAP measure -- see Appendix A for information regarding this and other non-GAAP measures.

2Excluding the impact from acquisitions, 2022 Operating Margin was 24.4%.

ITW's Core TSR Model

2023 PROXY STATEMENT 1

Company Highlights

ITW’s Enterprise Strategy

Since 2012, the core focus of our strategy is to leverage ITW's powerful and proprietary competitive advantages — what we refer to as the ITW Business Model — to consistently deliver top-tier performance in any environment.

During the global pandemic, we leveraged our financial strength and best-in-class margins to remain fully invested in our long-term Enterprise Strategy initiatives and rather than "hunkering down," we focused every ITW division on positioning their business to "Win the Recovery" with their customers and in their markets.

ITW's Performance Since the Launch of Our Enterprise Strategy in 2012

	2012	2022
Revenue	$17.9B	$15.9B
Operating Income	$2.8B	$3.8B
Operating Margin	15.9%	23.8%
Earnings Per Share (EPS)	$3.211	$9.77
After-tax ROIC1	14.5%2	29.1%
Dividends Declared per Share	$1.48	$5.06
Market Cap3	$23B	$67B
ITW PE Multiple v. Peer Average	Parity	20%+

1After-tax ROIC and 2012 adjusted EPS are non-GAAP measures -- see Appendix A for information regarding these non-GAAP measures.

2As reported in the Company's 2013 Form 10-K.

3As of January 1, 2012 and December 31, 2022.

Total Shareholder Return Since 2012

*    See page 35 for proxy peer group definition.

2

Company Highlights

Sustainability Strategy

ITW’s longstanding commitment to sustainability is rooted in our core values and fundamental to who we are as a company. With a foundation of strong governance practices, we are inspired to make a difference for our people, our communities and the environment. Our Sustainability Report, published annually and available on our website at www.itw.com/sustainability, contains additional information about our initiatives and progress in each of the four key elements that comprise our sustainability strategy. Information in the Sustainability Report or on the Company’s website is not incorporated herein by reference.

•Supported by unwavering management commitment and engaged Board oversight, we operate our businesses with a demonstrated commitment to the highest level of ethical conduct, everywhere in the company every day.

•This commitment is reinforced by strong policies and practices related to fair, ethical and honest business dealings, robust governance, and compliance with applicable laws, while demonstrating respect for human rights at ITW and throughout our supply chain.

We are committed to operating our business in a way that demonstrates our dedication to global environmental sustainability. This commitment is reflected in the following priorities:

•Improving our environmental performance on an ongoing basis, including through setting and achieving increasingly ambitious greenhouse gas (GHG) emissions reduction goals;

•In 2022, ITW’s Board of Directors approved a new absolute goal to reduce by 2030 our Scope 1 and Scope 2 GHG emissions by 50% from a 2021 baseline;

•Working with suppliers who operate with similar dedication to global environmental sustainability and human rights; and

•Partnering with our customers in innovating solutions that address their needs for environmentally responsible products.

•We strive every day to foster a proactive safety culture through the execution of our Enterprise Safety Strategy, which is based on a philosophy that every accident is preventable and with a shared goal of zero accidents.

•We support our colleagues’ professional development and long-term career growth and invest in these activities. We recognize and reward colleagues who perform well, have a strong preference for promoting our internal talent, and celebrate the entrepreneurial spirit of our ITW colleagues.

•We believe that we are at our best when we bring together unique perspectives, experiences and ideas. We strive to create diverse and inclusive workplaces where all our ITW colleagues can perform to their full potential.

•As a global employer, we are committed to providing market competitive benefits and compensation, maintaining fair labor practices and pay equity and ensuring a work environment that reflects our core values and culture everywhere we operate.

•Recognizing the importance of our responsibility beyond our business operations, we encourage and support our colleagues globally in their efforts to make positive contributions, through financial gifts and volunteerism, to the communities where they live and work.

•As a company we are committed to supporting programs and initiatives to improve access to a high-quality education and workforce/career preparation for youth in underserved communities, both in the U.S. and around the world.

2023 PROXY STATEMENT 3

Proxy Summary

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.

Director Nominees

		Age	Director Since	Other Public Boards	2022 Committee Membership1
	Daniel J. Brutto Retired President of UPS International and Senior Vice President of United Parcel Service, Inc.	66	2012	1
	Susan Crown Chairman and CEO of Owl Creek Partners, LLC	64	1994	1
	Darrell L. Ford Executive Vice President, Chief Human Resources Officer of UPS International	58	2021	0
	Kelly J. Grier Retired US Chair and Managing Partner (CEO) of Ernst & Young LLP	53	2022	0
	James W. Griffith Retired President and CEO of The Timken Company	69	2012	0
	Jay L. Henderson Retired Vice Chairman, Client Service of PricewaterhouseCoopers LLP	67	2016	2
	Richard H. Lenny Independent Lead Director; Non-Executive Chairman of Conagra Brands, Inc.	71	2014	2
	E. Scott Santi* Chairman of the Board and CEO of Illinois Tool Works Inc.	61	2012	1
	David B. Smith, Jr. Executive Vice President for Policy and Legal Affairs and General Counsel of Mutual Fund Directors Forum	56	2009	1
	Pamela B. Strobel Retired Executive Vice President and Chief Administrative Officer of Exelon Corporation and President of Exelon Business Services Company	70	2008	0

	Audit Committee		Executive Committee		Corporate Governance and Nominating Committee		Chair	* Non-Independent
	Compensation Committee		Finance Committee

1Mr. Anré Williams, who is not standing for re-election at the 2023 Annual Meeting, was the Chair of the Compensation Committee throughout 2022.

4

Proxy Summary

Board Snapshot

Our director nominees include ten current Board members. See “Proposal No. 1—Election of Directors” for biographical and other information about our director nominees.

Director Age	Diversity	Independence	Tenure

Governance Profile

Board Composition
•Annual Election of All Directors	Yes
•Majority Voting for Directors with Director Resignation Policy	Yes
•Number of Independent Directors Standing for Election	9
•Total Number of Director Nominees	10
•Average Age of Director Nominees	64
•Independent Lead Director	Yes
•Mandatory Retirement Age	Yes

Compensation
•Annual Advisory Approval of Executive Compensation	Yes
•Stock Ownership Requirements for Executives and Directors	Yes
•Anti-Hedging, Anti-Short-Sale and Anti-Pledging Policies	Yes
•Compensation/Clawback Policy (based on material financial restatement regardless of misconduct)	Yes

Corporate Governance
•Regular Executive Sessions of Independent Directors	Yes
•Annual Board and Committee Self-Evaluations	Yes
•Annual Independent Director Evaluation of Chairman and CEO	Yes
•Risk Oversight by Full Board and Committees	Yes
•Strong Board Oversight of Sustainability	Yes
•Strong Board Oversight of Cybersecurity	Yes
•Shareholder Engagement Program	Yes
•Code of Conduct for Members of the Board of Directors	Yes
•Stockholder Ability to Call Special Meetings	Yes
•Proxy Access	Yes
•Simple Majority Vote to Amend Charter and By-Laws	Yes
•Exclusive Venue Requirement	No
•Poison Pill	No

2023 PROXY STATEMENT 5

Proxy Summary

Overview

The Compensation Committee adopted our executive compensation pay-for-performance philosophy which is designed to deliver competitive total compensation upon the achievement of our strategy objectives, which will attract, motivate and retain leaders who drive the creation of long-term stockholder value.

Our decisions surrounding executive compensation are guided by this pay-for-performance philosophy. The programs are weighted toward variable compensation elements (annual cash incentives and long-term incentives), with reward opportunities tied to stock price appreciation and achievement of rigorous financial performance metrics. We have not granted time-vested full value equity awards to our NEOs.

Our executive compensation programs are also governed by practices and policies aligned to the interests of our stockholders, as the table below highlights.

What We Do

What We Don’t Do

Pay for Performance: Our NEOs’ average total target compensation is 83% performance based.  Robust Stock Ownership Guidelines: We have stock ownership guidelines for our executive officers of 6 x salary for CEO, 3 x salary for Vice Chairman, 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 provides for the 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 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 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 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).

6

Proxy Summary

The Board recommends that the advisory vote on executive compensation (“Say on Pay”) continue to be submitted to the stockholders every year because an annual vote provides feedback for our Compensation Committee that can be taken into account when making compensation decisions and setting our compensation philosophy, policies and practices.

The Board recommends that stockholders ratify the appointment of Deloitte & Touche LLP (Deloitte) as the Company’s independent registered public accounting firm for 2023. The Audit Committee and the Board believe that it is in the best interests of the Company and its stockholders to retain Deloitte as the Company’s independent auditor based on its ability to handle the breadth and complexity of ITW’s global operations, its familiarity with our businesses and the appropriateness of Deloitte’s fees.

2023 PROXY STATEMENT 7

Stockholders are being asked to elect the ten director nominees named in this proxy statement at our Annual Meeting. The individuals listed below have been nominated by the Board of Directors as recommended by the Corporate Governance and Nominating Committee. See “Director Candidate Selection Process” for more information regarding our candidate selection process. If elected, each director nominee will serve until the 2024 Annual Meeting, until a qualified successor director has been elected, or until he or she resigns or is removed.

We will vote your shares as you specify on the proxy card, by telephone, by Internet or by mail. If you do not specify how you want your shares voted, we will vote them “FOR” the election of all the nominees listed below. If unforeseen circumstances (such as death or disability) make it necessary for the Board of Directors to substitute another person for any of the nominees, we will vote your shares “FOR” that other person. The Board of Directors does not anticipate that any nominee will be unable to serve.

Each nominee for director brings a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a variety of areas. Set forth below is biographical information provided by the nominees, as well as a description of the experiences, qualifications, skills and attributes that led the Corporate Governance and Nominating Committee and the Board to conclude that each nominee should serve as a director of the Company.

Director Election

Our by-laws provide for the election of directors in uncontested elections by majority vote. Under this majority vote standard, each director must be elected by a majority of the votes cast with respect to that director. For this purpose, a majority of the votes cast means that the number of shares voted “for” a director exceeds the number of shares voted “against” that director. In a contested election, directors will be elected by a plurality of the votes represented in person or by proxy at the meeting. An election is contested if the number of nominees exceeds the number of directors to be elected. Whether an election is contested or not is determined ten days in advance of when we file our definitive proxy statement with the SEC. This year’s election is uncontested, and the majority vote standard will apply.

If a nominee who is serving as a director is not elected at an annual meeting, Delaware law provides that the director would continue to serve on the Board as a “holdover director” until his or her successor is elected. Our Corporate Governance Guidelines, however, require any nominee for director who fails to receive a majority of the votes cast for his or her election to tender his or her resignation. The Corporate Governance and Nominating Committee of the Board will consider the resignation and recommend to the Board whether to accept or reject it. In considering the resignation, the Committee will take into account such factors as any stated reasons stockholders voted against the election of the director, the length of service and qualifications of the director, the director’s contributions to the Company, and our Corporate Governance Guidelines. The Board will act on the Committee’s recommendation within 90 days of the Company's annual meeting, and no director who failed to receive a majority of the votes cast will participate in the Committee's recommendation or Board consideration regarding the tendered resignation.

Director Qualifications and Succession Planning

The Corporate Governance and Nominating Committee periodically reviews with the Board the skills and characteristics required of Board members in the context of the current make-up of the Board and screens and recommends director nominees to the full Board. When evaluating director nominees, the Board considers skills such as an understanding of manufacturing, finance, corporate governance, human capital management, risk management, global operations and experience, as well as age, diversity (including racial, ethnic and gender diversity), and ability to provide insight and direction on the Company’s key strategic initiatives. In addition to skills and experience, Board candidates are considered based upon various criteria, such as their personal integrity and

8

Proposal 1 - Election of Directors

judgment, global business and social perspective, and concern for the long-term interests of our stockholders. Although there is no specific policy regarding Board diversity quotas, racial, ethnic and gender diversity are important factors considered in the director selection process. Of the ten director nominees, three are female and one is an African-American male. In addition, directors must have time available to devote to Board activities and to enhance their knowledge of the global manufacturing environment. Accordingly, we seek to attract and retain a diverse board composed of highly qualified directors who have sufficient time to attend to their duties and responsibilities to the Company.

Pursuant to ITW’s Corporate Governance Guidelines, a director may not stand for re-election after his or her 75th birthday, except in rare circumstances approved by the Board. The Committee believes it is important to replace skills that may be lost as directors approach retirement age and to identify skills to supplement existing board experience. The Committee discusses with the full Board its analysis of the characteristics and key attributes for future Board candidates. After receiving recommendations for nominations from the Corporate Governance and Nominating Committee, the Board nominates or elects candidates for director.

	Director Experience, Attributes and Skills
	Other Public Company Board/Corporate Governance Experience
	Executive Leadership
	Global
	Manufacturing & Operations
	Finance/Capital Allocation
	Risk Management
	Human Capital Management
	Corporate Responsibility/ Sustainability
	Women
	Racial/Ethnic Diversity

2023 PROXY STATEMENT 9

Proposal 1 - Election of Directors

Board Biographies

Director since: 2012	Independent: Yes	Committees: Audit, Finance
Public Directorships •Sysco Corporation: Chairman of the Corporate Social Responsibility 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 Corporate Social Responsibility, bring valuable perspectives to our Board.

Director since: 1994	Independent: Yes	Committees: Compensation, Corporate Governance and Nominating, Executive Committee (Chair)
Public Directorships •Northern Trust Corporation: Member of the Business Risk and Compensation and Benefits 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 is currently Chairperson of Rush University Medical Center, 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.

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Proposal 1 - Election of Directors

Director since: 2021	Independent: Yes	Committees: Audit, Compensation
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. 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.

Director since: 2022	Independent: Yes	Committees: Audit, Finance
Public Directorships •None Professional Background •Has been a Senior Advisor of Permira Advisers since January 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 and has 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, diversity, equity and inclusion and corporate governance, bring valuable perspectives to our Board.

2023 PROXY STATEMENT 11

Proposal 1 - Election of Directors

Director since: 2012	Independent: Yes	Committees: Compensation, Corporate Governance and Nominating, Executive
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.

Director since: 2016	Independent: Yes	Committees: Audit, Finance
Public Directorships •The J.M. Smucker Company: Member of the Audit Committee. •Northern Trust Corporation: Lead Director, Audit Committee Chair and a member of the Capital Governance, Human Capital and Compensation, Corporate Governance 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.

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Proposal 1 - Election of Directors

Director since: 2014	Independent: Yes	Committees: Compensation, Corporate Governance and Nominating (Chair), Executive
Public Directorships •Conagra Brands, Inc.: Non-executive Chairman of the Board, Chair of the Executive Committee and a member of the Human Resources and Nominating and Corporate Governance Committees. •McDonald’s Corporation: Chairman of the Compensation Committee and a member of the Sustainability and Corporate Responsibility Committee. Professional Background •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. •He previously served as a director of Discover Financial Services. 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.

Director since: 2012	Independent: No	Committees: Executive
Public Directorships •W.W. Grainger, Inc.: Member of the Audit Committee and Board Affairs and Nominating Committee. Professional Background •Has served as Chairman of ITW since May 2015 and as Chief Executive Officer since November 2012. •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.

2023 PROXY STATEMENT 13

Proposal 1 - Election of Directors

Director since: 2009	Independent: Yes	Committees: Audit, Finance (Chair)
Public Directorships •Northern Trust Corporation: Member of the Audit and Executive Committees and the Chairman of the Capital Governance Committee. 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.

Director since: 2008	Independent: Yes	Committees: Audit (Chair), Corporate Governance and Nominating, Executive
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 current and past service on the boards of other companies gives her an understanding of compensation and corporate governance issues.

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Proposal 1 - Election of Directors

Board Independence

Our Corporate Governance and Nominating Committee conducts an annual review and makes a recommendation to the full Board as to whether each of our directors meets the applicable independence standards of the NYSE. In accordance with the NYSE listing standards, our Board of Directors has adopted categorical standards for director independence, including heightened standards applicable to members of our Audit and Compensation Committees. A copy of the Company’s Categorical Standards for Director Independence are included in our Corporate Governance Guidelines that are posted on our website at: https://investor.itw.com. A director will not be considered independent unless the Board of Directors determines that the director has no material relationship with the Company (directly, or as a partner, stockholder or officer of an organization that has a material relationship with the Company).

The Board has determined that, other than E. Scott Santi, each of our current directors has no material relationship with the Company other than as a director and is independent within the meaning of the Company’s Categorical Standards for Director Independence and the listing standards of the NYSE. In making its independence determinations, the Board of Directors has broadly considered all relevant facts and circumstances including that: (1) Ms. Crown and Messrs. Henderson and Smith serve as directors of Northern Trust Corporation and its subsidiary, The Northern Trust Company, with which the Company has a commercial banking relationship; (2) Messrs. Brutto, Henderson and Lenny serve as directors of companies that have an existing customer or supplier relationship with the Company; and (3) Messrs. Ford and Williams are officers of companies with which we conduct business. The Board has concluded that these relationships are not material and, therefore, do not impair the independence of these directors.

Director Candidate Selection Process

The Corporate Governance and Nominating Committee, or other members of the Board of Directors, may identify a need to add new members to the Board of Directors with specific skills or to fill a vacancy on the Board. At that time, the Corporate Governance and Nominating Committee would initiate a search, seeking input from Board members and senior management and, to the extent it deems appropriate, engaging a search firm. An initial qualified candidate or a slate of qualified candidates would be identified and presented to the Committee for its evaluation. Candidates whose skills, background and qualifications are deemed to be a good fit with the Board then meet with a number of individual directors and senior executives for further evaluation. The Committee would then seek full Board approval of the selected candidate(s).

Shareholder Nominations

Our by-laws permit any stockholder or group of up to 20 stockholders meeting certain ownership requirements to nominate a director candidate or candidates for inclusion in our proxy statement and form of proxy. For a description of the process for submitting a director candidate through the use of proxy access, see “Other Information—Submitting Proxy Proposals and Director Nominations for the 2024 Annual Meeting—How do I use proxy access to nominate a director candidate to be included in ITW’s 2024 Proxy Statement?” Our by-laws also permit stockholders to nominate directors for consideration at an annual meeting of stockholders without requiring that their nominees be included in our proxy statement and form of proxy. The Corporate Governance and Nominating Committee will consider a candidate who has been properly nominated pursuant to Article II, Section 10 of the Company’s by-laws by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by other sources, but the Committee has no obligation to recommend that candidate for nomination. For a description of the process for submitting a director candidate without proxy access, see “Other Information—Submitting Proxy Proposals and Director Nominations for the 2024 Annual Meeting—How do I nominate a director candidate who would not be included in ITW’s Proxy Statement?”

2023 PROXY STATEMENT 15

Corporate Governance

Board of Directors and its Committees

Board Leadership Structure

E. Scott Santi, Chairman and CEO

Pursuant to the Company’s Corporate Governance Guidelines, the Board examines whether the role of Chairman and CEO should be combined each time the Board elects a new CEO, and may determine to separate or combine the offices of Chairman and CEO at such other times as it deems appropriate. E. Scott Santi was elected President and CEO in November 2012, and the Board decided to separate the roles of Chairman and CEO at that time. Given Mr. Santi’s successful transition into the CEO role and his deep knowledge and understanding of the Company’s business model, operations and culture, the Board determined that he is best positioned to lead the Board in its ongoing oversight of the Company’s operations and strategy. In May 2015, the Board elected Mr. Santi Chairman of the Board and CEO.

The Board annually reviews its leadership structure as well as the composition and leadership of the Board Committees, and confirms or makes adjustments to Board leadership positions and Committee composition through annual Board action. The Board continues to believe that Mr. Santi is best positioned to lead the Board given his demonstrated success and quality of leadership.

Richard H. Lenny, Independent Lead Director

Since the roles of Chairman and CEO were combined in 2015, the Board has elected a strong independent director as Lead Director. The Board believes that this structure, which calls for a strong, independent and highly experienced lead director with well-defined responsibilities, along with the Company’s experienced and engaged independent directors, provide effective oversight of the Company’s management. Mr. Richard H. Lenny was appointed Lead Director by the Board effective May 8, 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. and as a member of the Board of McDonald’s Corporation. In conjunction with the Board’s role in overall strategy and succession planning as described below, Mr. Lenny actively engages with our Chairman and CEO on such matters. Additionally, Mr. Lenny works closely with our Chairman and CEO 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:

•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; •approve meeting agendas, schedules and information sent to the Board; •communicate Board member feedback to the chairman after each Board meeting; •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.

Board Committees

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 New York Stock Exchange (NYSE) and SEC independence requirements. Each committee regularly reports its activities to the full Board of Directors.

16

Corporate Governance

Key Responsibilities

•Responsible for the integrity of the Company’s financial statements, compliance with legal and regulatory requirements, the independence and performance of ITW’s independent registered public accounting firm, and the performance of the Company’s internal audit function.

•Responsible for the oversight and engagement of our independent registered public accounting firm and assists the Board with respect to matters involving and overseeing accounting, financial reporting, and internal audit functions.

•Annually reviews legal affairs and environmental, safety and health matters that may have a material impact on the Company’s financial statements or the Company’s compliance policies, as required by the Company’s Corporate Governance Guidelines and Audit Committee charter.

•Reviews and evaluates certain of our policies and practices with respect to risk assessment and risk management, including major financial risk exposures and steps taken by management to monitor and control such exposures.

•Receives quarterly cybersecurity reports from management.

Additional information on the Audit Committee and its activities is set forth under “Audit Committee Report.”

Key Responsibilities

•Establishes and oversees the Company’s executive compensation philosophy, programs and policies, including ensuring that executive compensation is aligned with Company and individual performance.

•Recommends to the other independent directors compensation for the chief executive officer, reviews and approves the chief executive officer’s recommendations regarding the compensation of our other executive officers, and makes recommendations regarding new incentive compensation and equity-based plans or amendments to any existing plans.

•Reviews and evaluates risks arising from our compensation policies and practices and providing input to management on whether such policies and practices may have a material adverse effect on the Company.

Independent Compensation Consultant

Under its charter, the Compensation Committee may retain an independent compensation consultant or other advisors. The Compensation Committee engaged independent consultants Meridian Compensation Partners LLC (Meridian) beginning in June 2021 as its 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 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.”

*    Not standing for re-election at the 2023 Annual Meeting.

2023 PROXY STATEMENT 17

Corporate Governance

Key Responsibilities

•Identifies, evaluates and recommends director candidates.

•Develops, administers and recommends corporate governance guidelines.

•Reviews and makes recommendations on matters of corporate governance and associated risks.

•Oversees the evaluations of the performance and procedures of the Board and individual directors.

•Makes recommendations as to Board committees and Board size.

•Makes a recommendation to the Board regarding the determination of director independence for the Board, the Audit Committee and the Compensation Committee.

•Reviews the Board qualification criteria for Board members.

•Oversees and makes recommendations to the independent directors regarding non-employee director compensation.

•Reviews and makes recommendations to the Board with respect to shareholder proposals.

Key Responsibilities

•Reviews, evaluates and recommends management’s proposals to the Board relating to the Company’s financings and dividend policy.

•Periodically reviews and evaluates the Company’s capital structure and capital allocation strategy as well as risks arising from the Company’s treasury function.

•Reviews and evaluates an annual summary of the funding and investment status of significant benefit plans sponsored by the Company globally.

Key Responsibilities

•May act on behalf of the Board if a matter requires Board action between meetings of the full Board. The Executive Committee’s authority in certain matters is limited by law and our by-laws.

*    Not standing for re-election at the 2023 Annual Meeting.

18

Corporate Governance

Meetings and Attendance; Executive Sessions

The Company’s Board of Directors met five times during 2022. Non-employee directors, all of whom are independent, met five times 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 2022, our directors attended 96% of the total number of meetings of our Board and respective Committees on which they served, and each director attended 75% or more of such meetings. In addition, in 2022 all of the directors attended the Annual Meeting of Stockholders.

Director Education and Orientation Program

The Company provides its new 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 National Association of Corporate Directors, as well as subscriptions to a publication focused on governance issues for public company 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 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.

Board Evaluations

The Board of Directors and the Audit, Compensation, 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 committee 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.

2023 PROXY STATEMENT 19

Corporate Governance

Board’s Role in Risk Oversight

ITW’s Board of Directors is responsible for providing oversight and strategic guidance to management to support the long-term interests of our stakeholders.

	Board of Directors •The Board of Directors is responsible for the overall risk oversight of the Company with a focus on the most significant risks facing the Company. •The Board has a formal process to review identified key enterprise risks, including, but not limited to, legal/compliance, controllership/tax, key leader continuity/succession, supply chain integrity/continuity, cybersecurity, environmental stewardship, and significant external event risks, annually or more frequently, if appropriate. •Throughout 2022, the Board continued to oversee the Company’s strategy and response to the COVID-19 pandemic, including with respect to the health, safety and financial challenges presented, receiving regular updates from management. •Regular access to information provided the Board with opportunities to effectively exercise its oversight function and provide leadership and support to management in a challenging environment.
	Audit Committee •The Board has delegated to the Audit Committee the responsibility to review and evaluate the Company’s overall financial and compliance risk policies and practices, including certain legal affairs and environmental, safety and health matters and related policies.	Compensation Committee •The Board has delegated to the Compensation Committee the responsibility to review and evaluate the risks arising from the Company’s compensation policies and practices. •The Compensation Committee also advises management on whether the Company’s compensation policies and practices may have a material adverse effect on the Company.
	Corporate Governance and Nominating Committee •The Board has delegated to the Corporate Governance and Nominating Committee the responsibility to advise the Board on matters of corporate governance and associated risks.	Finance Committee •The Board has delegated to the Finance Committee the responsibility to review and evaluate the risks relating to financings, capital structure, pension obligations, and other treasury functions.
	•In instances where a particular committee reviews certain risks, that committee reports on those risks to the full Board on a regular basis.
	Management •The Board’s oversight process builds upon management’s annual enterprise risk assessment. •Company management presents on the enterprise risks, at least annually, at meetings of the Company’s Board and Board committees, providing them with an opportunity to discuss the risks and the Company’s risk mitigation processes.

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Corporate Governance

Key Areas of Board Oversight

Board Oversight of Strategy

The Board has an active role in the Company’s overall strategy. Each year, the Board conducts a comprehensive, in-depth review of the Company’s long-term strategy and actively monitors and reviews management’s progress in executing it. The Board also conducts an annual review of the Company’s corporate governance practices. In addition, throughout the year the Board conducts individual segment strategy reviews with segment leadership.

Board Oversight of Cybersecurity

The Board annually reviews and evaluates the company’s cybersecurity policies and practices with respect to risk management as well as steps taken by management to monitor and control such exposures. In addition, the Audit Committee receives quarterly cybersecurity reports from management.

Board Oversight of Sustainability

The Board and management are committed to operating our business in a way that demonstrates our dedication to global environmental sustainability. The Board plays an active role in the oversight of ITW’s sustainability strategy, including environmental, social and governance (ESG) matters. The Board receives periodic updates from management regarding the Company’s ESG initiatives and progress, which may include discussions relating to ESG risks, priorities and reporting, and annually reviews and approves the Company’s ESG strategy. As a result of the Board’s annual review of enterprise risks in 2022, the plastics in consumer packaging risk was expanded to environmental stewardship risk to include a wider range of products, risks related to changing laws and stakeholder views, and the impact of climate change. Additionally, Board committees may also review components of the ESG strategy that fall within their purview.

Executive Succession Planning

The Board recognizes that one of its most important duties is to ensure continuity in the Company’s senior leadership by overseeing the development of executive talent and planning for the effective succession of the Company’s CEO and the executive leadership team. In order to ensure that the succession planning and leadership development process supports and enhances ITW’s strategic objectives, including the Company’s diversity goals, the Board regularly consults with the CEO on the Company’s organizational needs, its leadership pipeline and the succession plans for critical leadership positions.

On an annual basis, the Board also conducts a detailed review of executive succession plans, in addition to addressing the Company’s talent management initiatives and discussing individuals who are considered potential future senior executives of the Company. Similarly, leadership development, including succession planning, is a top priority of the CEO and the senior executive team.

2023 PROXY STATEMENT 21

Corporate Governance

Shareholder Engagement

Shareholder Outreach Activities

We believe regular, proactive communications with our shareholders to be in the long-term best interests of the Company.

How We Engage with Our Shareholders Our investor communications and outreach typically include the following:   Investor day meetings   Quarterly conference calls   Investor conferences   Analyst meetings and calls throughout the year at the request of investors   Annual ESG-focused engagement Topics We Discuss with Our Shareholders The meetings provide a forum to engage with our shareholders on topics including:   Strategy   Financial performance   Risk management   Talent development   Compensation   Corporate governance   Social and environmental matters Throughout 2022, management representatives led numerous meetings on these topics and sought valuable feedback from our shareholders. We regularly engage with shareholders holding more than a majority of our shares regarding environmental, social and governance topics, shareholder proposals and any other topics of interest to our shareholders, and we share feedback we receive from our shareholders with our Board.

We received valuable inputs from our shareholders related to our progress in executing our sustainability strategy. We also received supportive feedback regarding Board composition, diversity and inclusion strategies, goals and progress, employee resource groups, our greenhouse gas emissions reduction strategies, goals and progress, and our continuous journey to utilize the SASB Materiality Map® and the Task Force on Climate-related Financial Disclosures (TCFD) framework to guide our sustainability-related disclosures.

Overall, the discussions were positive, with shareholders expressing support for the Company’s Board, current governance practices and progress in executing our sustainability strategy.

How to Communicate with our Directors

Shareholders and other interested parties may communicate with any of our directors, including our independent Lead Director, or with the independent directors as a group by sending an e-mail to independentdirectors@itw.com or by writing to the independent directors as a group or to any of our directors c/o Illinois Tool Works Inc., 155 Harlem Avenue, Glenview, IL 60025, Attention: Secretary, with a designation on the outside of the envelope as a “Board Communication.” Relevant communications will be forwarded by the Secretary to the appropriate directors depending on the facts and circumstances outlined in the communication.

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Corporate Governance

Other Governance Matters

Corporate Governance Policies and Code of Conduct

One of our core values is integrity, and we have long believed that strong corporate governance is important to assure that the Company is managed for the long-term benefit of its stockholders. Accordingly, we continuously review our corporate governance policies and practices not only for compliance with applicable laws, the rules and regulations of the SEC, and the listing standards of the NYSE, but also for strong corporate governance and social and environmental responsibility principles and standards of behavior.

•Our Corporate Governance Guidelines provide a framework for the effective governance of the Company and address such matters as Board structure, Board governance and the responsibilities of the independent Lead Director.

•Our Code of Conduct sets forth standards of conduct applicable to all employees and directors, and all relevant aspects of our Code of Conduct are also applied to our suppliers through our Supplier Code of Conduct.

•Our Global Anti-Corruption Policy emphasizes the importance of complying with anti-corruption laws of all countries in which ITW and our divisions, subsidiaries, agents, consultants and affiliates operate.

•Our Code of Ethics sets forth standards of ethical dealing, full and fair disclosure and compliance applicable to our CEO, Vice Chairman, CFO, and all key financial personnel.

•Our Sustainability Report describes our sustainability strategy and our commitment to robust governance and ethics, our people, our communities and our environment and provides information about our goals and progress in these areas.

The Audit, Compensation and Corporate Governance and Nominating Committees each review their Committee charters annually and recommend that the Board of Directors approve any changes. Our website (https://investor.itw.com) includes the charters of these committees, the Company’s Corporate Governance Guidelines, the Code of Conduct, the Global Anti-Corruption Policy, the Code of Ethics for the Chief Executive Officer and key financial and accounting personnel, and the Sustainability Report, none of which is incorporated herein by reference. Any amendments to or waivers of the Code of Ethics will be promptly posted on our website. Copies of these documents will be provided, without charge, upon request.

Certain Relationships and Related-Party Transactions

We review related-party transactions in accordance with our Code of Conduct, by-laws and Corporate Governance Guidelines, rather than a separate written policy. A related-party transaction is a transaction involving the Company and any of the following persons: a director, director nominee or executive officer of the Company; a holder of more than 5% of ITW common stock; or an immediate family member or person sharing the household of any of these persons.

The ITW Code of Conduct states that our directors, officers and employees must avoid engaging in any activity that might create a conflict of interest or a perception of a conflict of interest. These individuals are required to raise for consideration any proposed or actual transaction that they believe may create a conflict of interest. Our by-laws provide that no related-party transaction is void or voidable solely because a director has an interest if (1) the material facts are disclosed to or known by the Board of Directors and the transaction is approved by the disinterested directors or an appropriate Board committee comprised of disinterested directors, (2) the material facts are disclosed to or known by the stockholders and the transaction is approved by the stockholders, or (3) the transaction is fair to the Company as of the time it is approved. Our Corporate Governance Guidelines provide that the Board will apply established Categorical Standards for Director Independence in making its independence determinations. Under the standards, certain relationships between the Company and a director would preclude a director from being considered independent.

On an annual basis, each director, director nominee and executive officer completes a Directors’ and Officers’ Questionnaire, which requires disclosure of any transactions with the Company in which he or she, or any member of his or her immediate family, has a direct or indirect material interest. The Corporate Governance and Nominating Committee reviews the results of these questionnaires and discusses any related-party transaction disclosed therein.

In addition, under its charter, the Audit Committee is responsible to conduct a reasonable prior review, and provide oversight, of all material related-party transactions for potential conflicts of interest and to approve such transactions only if it determines the transaction is consistent with the interests of the Company and its shareholders. In reviewing related-party transactions, the Audit Committee considers the factors set forth in our Code of Conduct, by-laws and Corporate Governance Guidelines, as well as other factors, including the Company’s rationale for entering into the transaction, alternatives to the transaction, whether the transaction is on terms at least as fair to the Company as would be the case were the transaction entered into with a third party, and the potential for an actual or apparent conflict of interest. No member of the Audit Committee having an interest in a related-party transaction may participate in any decision regarding that transaction.

2023 PROXY STATEMENT 23

Director Compensation

Our non-employee directors receive retainer-only compensation with no fees for attending meetings, which is an expected part of Board service. Our committee chairs and Lead Director receive additional retainers for their service in these capacities, and all Board members receive an annual equity grant based on a fixed-value amount with immediate vesting that avoids entrenchment. Our directors’ compensation is compared to that of the same peer group of companies used for executive compensation comparisons.

The Corporate Governance and Nominating Committee oversees and makes recommendations to the Board regarding non-employee director compensation based on comparisons of financial performance and median compensation levels of our peer group. Our 2022 peer group directors’ compensation data was prepared by Meridian.

Annual Fees

The following table shows the non-employee director compensation for 2022. Non-employee directors are given the opportunity to elect to receive all or a portion of their annual cash retainer, including chair and Lead Director fees, in an equivalent value of ITW common stock pursuant to our 2015 Long-Term Incentive Plan. The number of ITW shares to be issued to a director is determined by dividing the dollar amount of the fee subject to the election by the fair market value of ITW common stock on the date the fee otherwise would have been paid in cash.

Director Compensation Mix		Annual Committee Chair/Lead Director Cash Retainers:
Annual Cash Retainer:	$135,000	Lead Director:	$35,000
Annual Stock Grant:	$170,000	Committees:
		•Audit Committee •Compensation Committee •Corporate Governance and Nominating Committee •Finance Committee •Executive Committee	$25,000 $25,000 $20,000 $15,000 $5,000

Directors’ Deferred Fee Plan

Non-employee directors can defer receipt of all or a portion of their annual cash retainer, including chair and Lead Director fees, and/or stock grant until retirement or resignation. Deferred cash amounts are credited with interest quarterly at 120% of the applicable federal long-term rate for the quarter. Cash fees may be deferred as cash or ITW common stock. If a director elects to defer receipt of any ITW common stock to be received in lieu of a cash payment and/or any portion of his or her stock grant, the deferred shares are credited as stock units to an account in the director’s name. The account receives share-equivalent credit for cash dividends and is adjusted for stock dividends, splits, combinations or other changes in ITW common stock upon retirement, resignation or a corporate change (as defined in our 2015 Long-Term Incentive Plan), with any fractional shares paid in cash.

ITW Common Stock Grant

The Company grants stock to its non-employee directors under our 2015 Long-Term Incentive Plan, which links this element of compensation to long-term performance. Under our director compensation program, non-employee directors serving in 2022 received an annual stock grant equivalent in value to approximately $170,000.

24

Director Compensation

Director Compensation in Fiscal Year 2022

The following table summarizes the compensation for our non-employee directors who served during 2022.

Name	Cash Fees Paid or Deferred ($)(1)		Stock Awards Issued or Deferred ($)(3)		All Other Compensation ($)(6)	Total ($)
Daniel J. Brutto	135,000		169,927		—	304,927
Susan Crown	140,000		169,927	(4)	15,000	324,927
Darrell L. Ford	135,000	(2)	169,927	(4)	—	304,927
Kelly J. Grier	41,821	(2)	—	(5)	15,000	56,821
James W. Griffith	135,000		169,927	(4)	—	304,927
Jay L. Henderson	135,000		169,927		—	304,927
Richard H. Lenny	190,000		169,927	(4)	16,000	375,927
David B. Smith, Jr.	150,000		169,927		15,000	334,927
Pamela B. Strobel	160,000		169,927	(4)	15,500	345,427
Anré D. Williams	160,000		169,927		—	329,927

(1)Cash fees include the $135,000 annual retainer, Lead Director fee and committee chair fees, as applicable.

(2)The table below reflects directors who elected to convert some or all cash fees earned in 2022 into shares of ITW common stock and to defer receipt of those shares.

Name	Fees Deferred in 2022	Number of Shares Deferred in 2022
Darrell L. Ford	$135,000	625
Kelly J. Grier	$41,821	194

(3)Each director serving in 2022 received an annual stock grant of 812 shares equivalent in value to approximately $170,000.

(4)These directors elected to defer receipt of their entire stock grant.

(5)Ms. Grier joined the Board after the date of the 2022 stock grant.

(6)Represents amounts paid by the Company to charitable organizations as part of the Company’s matching gift program, which is available to all employees and directors up to a maximum of $15,000 per year. In 2022, the Company offered to all employees and directors an additional Company match for the Ukraine Relief Campaign.

2023 PROXY STATEMENT 25

Executive Compensation

In accordance with the recommendation by the Board and the preference expressed by our stockholders at the 2017 Annual Meeting, the Company has an advisory vote on executive compensation annually. The Company is seeking your advisory vote on our executive compensation, as disclosed in the “Compensation Discussion and Analysis” section, the compensation tables and any related material disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules. The Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation, but because your vote is advisory, it will not be binding on the Compensation Committee, the Board or the Company.

We believe that our executive compensation program is competitive and closely aligned with our strategic performance goals and the long-term interests of our stockholders. Our compensation program and structure are more fully described in the “Compensation Discussion and Analysis” and “NEO Compensation” sections of this proxy statement. We encourage you to closely review this information before voting on the compensation we paid to our NEOs in 2022.

We ask our stockholders to approve, on an advisory basis, the compensation of our NEOs by voting “FOR” the following resolution:

Resolved: that the compensation of the named executive officers of Illinois Tool Works Inc. (the Company) as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission under “Compensation Discussion and Analysis,” in the Summary Compensation Table, the related compensation tables and the related narrative disclosures in the Company’s proxy statement for its 2023 Annual Meeting, is hereby approved.

26

Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides detailed information about our 2022 compensation programs, policies, and practices, as well as the principles and philosophy utilized by the Compensation Committee (the Committee) regarding these programs for the named executive officers (NEOs) in the Summary Compensation Table. For 2022, our NEOs are:

•E. Scott Santi, Chairman and Chief Executive Officer

•Christopher A. O’Herlihy, Vice Chairman

•Michael M. Larsen, Senior Vice President and Chief Financial Officer

•Mary K. Lawler, Senior Vice President and Chief Human Resources Officer

•Michael R. Zimmerman, Executive Vice President

•Lei Z. Schlitz, Former Executive Vice President (resigned from ITW effective November 4, 2022)

Executive Compensation Table of Contents

Compensation Discussion and Analysis	27
Executive Overview	28
Executive Compensation Highlights	32
How We Make Compensation Decisions	34
Components of the 2022 Executive Compensation Program	35
Base Salary	35
Annual Executive Incentive Plan	36
Long-Term Incentives	37
Compensation Governance Practices and Policies	39

NEO Compensation	43
Summary Compensation Table	43
Grants of Plan-Based Awards	45
Outstanding Equity Awards at Fiscal Year-End 2022	46
Option Exercises and Stock Vested	47
Pension Benefits	47
ITW Retirement Plans	48
Potential Payments upon Termination	51
Summary of Termination and Change-in-Control Provisions	52
Termination and Change-in-Control Payments and Benefits	53
Compensation Committee Report	55

2023 PROXY STATEMENT 27

Compensation Discussion and Analysis

Executive Overview

Our Business Model The ITW Business Model is the core source of our competitive advantage as a company. It drives our ability to win with customers and deliver differentiated returns for our shareholders. It is a powerful and proprietary set of strategic, operational, and cultural practices that have been in a state of continual development and evolution inside the Company for over 30 years.                                                                                                                                                                                                                 In late 2012, we launched our Enterprise Strategy with the explicit goal of positioning ITW to deliver solid growth with best-in-class margins and returns by focusing the entire Company on utilizing our highly differentiated and proprietary ITW Business Model to its full potential.

Our Long-term Enterprise Strategy

In launching our long-term Enterprise Strategy ten years ago, we began the Company’s transition to fully leverage the compelling performance potential of the ITW Business Model. The Company undertook a complete review of our performance and began executing a multi-step approach to shift our primary growth engine to organic revenue growth, while delivering best-in-class margins and returns. Key initiatives of our Enterprise Strategy included portfolio realignment, business structure simplification, strategic sourcing, and the diligent re-application of ITW’s proprietary 80/20 Front-to-Back process to optimize our segments for profitable growth.

Since implementing our Enterprise Strategy in 2012, ITW’s operating margin has increased from 15.9 percent to 23.8 percent and After-tax Return on Average Invested Capital (After-tax ROIC)** has increased from 14.5 percent to 29.1 percent. Over this same period, we have grown Earnings Per Share (EPS) by a compound annual rate of 12 percent, and the Company’s market capitalization has almost tripled.

Operating Margin

After-tax ROIC**

Earnings Per Share (diluted)

Market Capitalization****

*    As reported in the Company’s 2012 Form 10-K.

**    After-tax ROIC and 2012 adjusted EPS are non-GAAP measures. See Appendix A for information regarding these non-GAAP measures.

***    As reported in the Company’s 2013 Form 10-K.

****    As of January 1, 2012 and December 31, 2022.

28

Compensation Discussion and Analysis

2022: Record Financial Performance in a Challenging Environment

Throughout 2022, our teams did an exceptional job of delivering for our customers, while responding quickly and decisively to rapidly rising input costs, navigating supply chain disruptions, and aggressively executing our "Win the Recovery" strategy. As a result, ITW delivered the following 2022 financial performance highlights:

•Revenue of $15.9B, an increase of 10%

•Organic revenue growth of 12%, for the second year in a row

•Record GAAP EPS of $9.77, up 15%

•Peer group best-in-class After-tax ROIC1 of 29.1%2

•Peer group best-in-class operating margin of 23.8 %

•Annual dividend increase of 7% (raised for the 59th consecutive year)

Organic Revenue Growth	Operating Margin
After-tax ROIC1	Earnings Per Share (diluted)

1After-tax ROIC is a non-GAAP measure. See Appendix A for information regarding this and other non-GAAP measures.

2Excluding the impact from acquisitions, After-tax ROIC in 2022 was 31.2%.

3Excluding the impact from acquisitions, 2022 Operating Margin was 24.4%.

2023 PROXY STATEMENT 29

Compensation Discussion and Analysis

We delivered these results while continuing to drive meaningful progress on our path to ITW's full potential through the execution of our long-term Enterprise Strategy. Our decision to stay invested in our strategy and in our people throughout the pandemic and the quality of our teams’ execution of our “Win the Recovery” focus coming out of it are powering the strong organic revenue growth and financial results the Company is currently delivering. ITW is well-positioned to continue to deliver best-in-class performance, maintain solid organic growth in further slowing end markets, and sustain our best-in-class margins and returns in 2023 and beyond.

The high quality of ITW’s operational and financial performance over the past decade and in particular during the global pandemic demonstrates that ITW is a company that has the enduring competitive advantages, agility, and resilience necessary to consistently deliver top-tier performance in any environment.

How We Align Executive Compensation with Our Long-Term Enterprise Strategy

The independent members of our Board of Directors and Compensation 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 Compensation 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.

We generally link 50 percent of our executives’ target long-term incentive opportunity to performance awards consisting of share-based units and cash, with three performance goals: three-year average (i) Operating Margin, (ii) After-tax ROIC, and (iii) EPS growth. The remaining 50 percent of our target long-term incentive opportunity consists 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 2022

Variable pay makes up a substantial portion of 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 2022, the mix of compensation for our CEO and NEOs was:

CEO
Other NEOs

Note: The charts above reflect total compensation awarded to the CEO and other NEOs in 2022, which is the sum of base salary, target EIP and the grant date fair value of long-term cash and equity incentives.

30

Compensation Discussion and Analysis

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 financial performance metrics for the NEOs used in the Company’s 2022 Executive Incentive Plan (EIP) and 2022-2024 Performance Share Units (PSUs) and Performance Cash awards granted under the long-term incentive plan.

Plan	Performance Measure	Weight
2022 Executive Incentive Plan (EIP)	Organic Revenue Growth	40	%
	Operating Income Growth	60	%
2022-2024 Performance Share Units & Long-term Performance Cash	Operating Margin	33.33	%
	After-tax ROIC	33.33	%
	EPS Growth	33.33	%

ITW 3-Year CEO Pay Versus Cumulative TSR Comparison

Each component of the Company’s compensation structure plays an integral role in motivating our executives to maximize ITW’s long term performance potential. As noted above, 92 percent of the CEO’s 2022 compensation is variable pay tied to the successful achievement of the Enterprise Strategy’s long-term performance objectives. The following table shows total CEO pay relative to the Company’s cumulative TSR performance over the last 3 years.

ITW 3-Year CEO Pay Versus Indexed TSR (2020-2022)

Notes:

•CEO Pay represents Mr. Santi’s compensation levels based upon salary and annual incentive compensation as reported in the Summary Compensation Table (SCT), annual Performance Share Units (PSUs) and Long-term Performance Cash valued at year end at target performance, and stock option values based on a lattice-based valuation model valued at year end.

•Indexed TSR line assumes $100 invested on 12/31/2019 in ITW stock, including the reinvestment of dividends.

2023 PROXY STATEMENT 31

Compensation Discussion and Analysis

Executive Compensation Highlights

Compensation Philosophy

Philosophy	Key Components
Our executive compensation philosophy is designed to deliver competitive total compensation upon the achievement of our strategic objectives, which will attract, motivate and retain leaders who drive the creation of long-term stockholder value.	Target total compensation is based on the median of our peer group and other relevant external market data. Actual compensation is determined by achievement of results based on our goals aligned with ITW’s strategy.
	Individual executive compensation is then established based on an executive’s scope of responsibility, impact on profitable growth, individual performance and breadth of experience.
	Pay-for-performance through short- and long-term incentives links compensation to Company and business segment performance. This “pay-at-risk” aligns executive interests with those of our stockholders to help ensure the short- and long-term growth of ITW.

Compensation Objectives

We emphasize a total compensation approach in establishing individual executive compensation levels with each component of compensation serving a specific purpose. In addition to paying a competitive base salary, we use a mix of different performance-based components of compensation that reward different aspects of Company, business segment, and individual performance. Our 2022 executive compensation program consisted of both fixed (base salary) and variable (annual cash incentives and long-term incentive compensation) components, as illustrated below:

		Compensation Component
		CEO	Other NEOs	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 (EIP)			Cash	•Motivate executives to achieve annual Company and business segment performance goals
	Performance Cash			Cash
	Performance Share Units (PSUs)			Equity	•Reward executives for delivering on the long-term performance goals aligned with the Company’s strategy and creating long-term stockholder value
	Stock Options			Equity

32

Compensation Discussion and Analysis

Ongoing Best Practices

We regularly review and refine our executive compensation programs to ensure they continue to address practices and policies that are aligned with our pay-for-performance philosophy and the interests of our stockholders. In this regard, our 2022 compensation program reflects the following:

What We Do

What We Don’t Do

Pay for Performance: Our NEOs’ average total target compensation is 83% performance based.  Robust Stock Ownership Guidelines: We have stock ownership guidelines for our executive officers of 6 x salary for CEO, 3 x salary for Vice Chairman, 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 provides for the 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 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 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 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).

Say on Pay Advisory Voting Results

In 2020, 2021 and 2022, 95.0 percent, 93.9 percent, and 93.4 percent, respectively, of votes cast by stockholders approved the compensation of our NEOs. The Committee believes these favorable votes confirm the pay of our NEOs is appropriately aligned with the performance of the Company and the interests of our stockholders. The Committee therefore determined that it was not necessary to make any changes to our executive compensation practices during 2022 as a result of the Say on Pay votes.

2023 PROXY STATEMENT 33

Compensation Discussion and Analysis

How We Make Compensation Decisions

Role of the Compensation Committee

The Committee conducts an annual review of ITW’s practices and the compensation of our executive officers to ensure:

•The components of the total compensation package are aligned with the market to attract and retain the caliber of talent required to deliver on our business strategies;

•Compensation decisions are appropriately differentiated to reflect the contributions of our highest performers; and

•Our incentive plans drive performance aligned with our strategy and the Company’s culture and values.

In making its executive compensation decisions and recommendations, the Committee is guided by the following factors:

•Our compensation philosophy;

•Compensation comparisons from a peer group of diversified multinational industrial companies with similar size, value, and complexity; and

•Our executive's contribution to our short- and long-term goals based on profitable growth and strong returns on capital.

See “Board of Directors and its Committees—Compensation Committee” under “Proposal 1—Election of Directors” for more information about the function of the Committee.

Role of the Compensation Consultant

The Committee engaged with an independent advisor, Meridian Compensation Partners LLC ("Meridian"). The 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 2022, Meridian conducted a marketplace review of the compensation we pay to our executive officers. Meridian provided the 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 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 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.

34

Compensation Discussion and Analysis

Peer Companies

The 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 Committee with assistance from its independent compensation consultant.

In 2022, the 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 2022, the Committee determined that no changes to the peer group were warranted.

Peer Group Selection Criteria:	2022 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

The revenue median of the peer group was $18.9 billion based on the twelve-month average of reported financial results through July 1, 2022, and the median market capitalization was $33.7 billion as of July 1, 2022, versus $14.9 billion and $57.0 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 NEOs and makes recommendations to the Committee based on his assessment of each executive’s individual performance and peer group compensation information. The 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 2022 Executive Compensation Program

Base Salary

In determining base salary, the CEO and the 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 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 2022, the Committee recommended a 3.7 percent base salary increase for Mr. Santi, which was approved by the Board’s independent directors. For the other NEOs, the Committee approved recommended base pay merit increases ranging from 3.5 to 13.1 percent. These base salary increases were effective February 21, 2022.

2023 PROXY STATEMENT 35

Compensation Discussion and Analysis

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 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 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 full Board.

The Company provides annual incentive award opportunities to the NEOs through the annual Executive Incentive Plan (EIP). The Committee determined each NEO’s 2022 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 percent and 200% of his or her award target.

For 2022, the Committee approved the following performance metrics and weightings:

Messrs. Santi, O’Herlihy, Larsen, and Ms. Lawler

Mr. Zimmerman and Ms. Schlitz

Note: For Ms. Schlitz, annual sold orders was used instead of segment organic revenue growth for the segment growth metric.

The financial measures were recommended by management and approved by the Committee at the start of the performance year. While the Committee has the discretion to make adjustments in the calculation of financial performance to eliminate factors beyond the control of management and/or to eliminate possible disincentives to act in the long-term best interests of the Company, the Committee made no adjustments to the EIP payouts in 2022.

2022 EIP Financial Measures

For 2022, executive officers were eligible to earn a payment according to the performance scales below.

2022 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	116	%	200	%	9.0	%	200	%
Target	106	%	100	%	5.6	%	100	%
Threshold	85	%	50	%	3.8	%	0	%

The following table shows the actual goal achievement for the enterprise (weighted 60 percent on operating income and 40 percent on organic revenue growth):

36

Compensation Discussion and Analysis

2022 EIP Company Performance Results

Operating Income Growth vs. Prior Year(1)(2)				Organic Revenue Growth(1)(3)				Total Payout Percent 164.2%
2021	2022	Achievement Percent	Payout Percent	2021	2022	Achievement Percent	Payout Percent
$3.5B	$3.9B	113.6%	175.5%	$14.5B	$16.2B	7.4%	147.3%

(1)Calculated on a constant currency basis.

(2)Excludes operating income of $4.0 million in the prior year related to two divestitures in the fourth quarter of 2022.

(3)Organic revenue growth achievement was calculated to limit the contribution of price increases to the overall payout.

2022 EIP Total Payouts

The total 2022 payouts to the NEOs for Company performance results were 164.2% percent of the target award level.

Named Executive Officer	Award Target (as a % of Base Salary)		Year-End 2022 Salary		Total Payout Percent		Total Payout Amount(2)
E. Scott Santi	160	%		$1,400,000	164.2	%		$3,678,528
Michael M. Larsen	100	%		$879,323	164.2	%		$1,444,024
Christopher A. O’Herlihy	100	%		$888,997	164.2	%		$1,459,910
Mary K. Lawler	70	%		$604,000	164.2	%		$694,322
Michael R. Zimmerman(1)	80	%		$518,839	126.3	%		$524,152
Lei Z. Schlitz(1)	67%(3)			$576,239	149.3	%		$580,934

(1)50% of the total payout percent for Mr. Zimmerman and Ms. Schlitz is based on their respective business segment’s results and the other 50% is based on total company results.

(2)These amounts are included in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.” The award payout is calculated as a percent of base salary.

(3)Ms. Schlitz's award target was pro-rated based on her separation date.

In 2022, as part of its regular review of the Company’s annual incentive plans and performance metrics, the Committee carefully considered the incorporation of environmental, social & governance (ESG) metrics, and determined that changing the current performance metrics or otherwise altering the annual incentive plan was not aligned with our compensation objectives at this time. The current annual incentive plan for ITW’s executives is solely based on the Company’s performance of two financial performance metrics – operating income and organic revenue growth – and directly supports the Company’s stated goal to deliver consistent above-market organic revenue growth at best-in-class operating margins and returns. ITW's annual incentive plan and key performance metrics are simple, rigorous and transparent, and are closely aligned with our pay-for-performance philosophy. The Company’s ESG strategy and supporting objectives and performance measures are identified in the Company’s annual Sustainability Report and the achievement of these strategic objectives is an important long-term driver of the Company’s success.

Long-Term Incentives The value of the overall long-term incentive award for the CEO is determined by the Committee, subject to approval by the independent directors of the full Board of Directors. Awards to the other NEOs are recommended by the CEO to the 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 and ITW’s share price over time.

2023 PROXY STATEMENT 37

Compensation Discussion and Analysis

	Stock Options	PSU	Performance Cash
LTI Mix

In 2022, the value of the NEOs’ long-term incentive awards consisted of 50% in the form of stock options and 25% percent in the form of PSUs and 25% in the form of Performance Cash awards. 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 PSUs and Performance Cash awards are effective because they incent executive leaders to achieve key long-term financial goals. Stock options are combined with performance-based awards 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 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 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 gross misconduct or conduct that is against the business interests of the Company, or divulges confidential information about the Company to others.

2022 Stock Option Awards

The 2022 stock options vest in equal installments over a four-year period ending in 2026. 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.

2022-2024 Performance Share Units and Performance Cash Awards

The PSUs and Performance Cash awards vest three years from the date of grant, subject to 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 2022 PSUs and Performance Cash awards are equally weighted and based on three-year average operating margin, After-tax ROIC and EPS growth. The payout range is 50 percent 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:

	Operating Margin		After-tax ROIC		EPS Growth		Payout (as a % of Target)
Maximum	26	%	27	%	12	%	200	%
Target	24	%	25	%	9	%	100	%
Threshold	20	%	20	%	4	%	50	%

Note: Interpolation is used for measuring achievement between threshold and target and between target and maximum.

38

Compensation Discussion and Analysis

2020-2022 Performance Share Units and Performance Cash Awards Payout

In 2020, executives were awarded PSUs and Performance Cash awards with a three-year performance period from January 1, 2020 to December 31, 2022. The awards had the same financial metrics (operating margin, After-tax ROIC, and EPS growth) and weightings as the 2022-2024 performance awards noted above. Consistent with last year’s practice and ITW’s pay-for-performance philosophy, the Committee determined not to exercise its discretion to increase the payouts of those 2020-2022 awards beyond achievement of the pre-established payout targets despite the unforeseeable impact of the COVID pandemic and its impact on 2020 financial performance. The table below details the performance and associated payouts of the 2020-2022 PSU and Performance Cash awards:

Long-Term Performance Results					Performance Scale and Payout
Metrics (Weighting)	FY 2020	FY 2021	FY 2022	3 Year Average	Threshold 50% of Target	Target 100% of Target	Maximum 200% of Target	Payout % of Target
Operating Margin (1/3rd)	22.9%	24.1%	23.8%	23.6%	23.0%	25.0%	27.0%	65.0%
After-tax ROIC (1/3rd)	26.2%	29.5%	29.1%	28.3%	20.0%	25.0%	27.0%	200.0%
EPS Growth (1/3rd)	(14.3)%	28.4%	7.8%(1)	7.3%	4.0%	7.0%	10.0%	110.0%
Total Payout % of Target:								125.0%

(1)2022 EPS excludes the net impact of gains of $0.60 from two divestitures in the fourth quarter of 2022.

Timing of Long-Term Incentive Awards

The 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 at 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 award. We do not time award grant dates for the purpose of enhancing the value of executive compensation.

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. Beginning in 2022, our executive officers were offered the opportunity to participate in a comprehensive annual physical paid by the Company, which is an extension of our company wellness program that encourages healthy lifestyles and preventative medical care. The Company also offers a three-year program of 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). ITW’s perquisites are consistent with market practices and do not comprise a substantive element of our compensation programs.

Compensation Governance Practices and Policies

Stock Ownership Guidelines

We believe that stock ownership is important because it aligns the interests of our management and directors with those of our stockholders and mitigates compensation-related risk. Because of the importance of stock ownership, the Board of Directors and the Committee have adopted stock ownership guidelines for executive officers and directors. The guidelines for stock ownership as a multiple of executive officers’ base salaries and of directors’ annual cash retainers are as follows:

Title	Guideline
Chief Executive Officer	6 times salary
Vice Chairman, Executive Vice Presidents, and Chief Financial Officer	3 times salary
Senior Vice Presidents	2 times salary
Non-employee Directors	5 times annual cash retainer

2023 PROXY STATEMENT 39

Compensation Discussion and Analysis

If the applicable ownership guideline is not met within the five-year time period, the covered executive officer or non-employee director must retain 100% of the net after-tax shares received from the vesting or any subsequent exercise of awards until the ownership

40

Compensation Discussion and Analysis

guidelines are met. The achievement of these guidelines is reviewed annually. The Board of Directors believes that its stock ownership guidelines are appropriate, reasonable and attainable given the responsibilities and compensation levels of our executive officers and directors.

All executive officers and directors who have been in their positions for five or more years have met or exceeded the applicable stock ownership guidelines.

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 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

We maintain a Compensation Recovery Policy (clawback policy) applicable to all executive officers of the Company subject to Section 16 of the Securities Exchange Act of 1934. Under the policy, the Committee will seek reimbursement of incentives paid to executive officers in the prior three years where the payment was predicated upon the achievement of certain financial results with respect to the applicable performance period that was subsequently the subject of a material restatement due to non-compliance of the Company with any financial reporting requirement under the U.S. securities laws. The reimbursement requirement would be imposed whether or not the restatement is based on misconduct. The amount recovered would be measured by the excess of the gross incentive payment made over the gross payment that would have otherwise been made if the original payment had been determined based on the restated financial results. Further, following a material restatement of our financial statements, we will seek reimbursement of compensation and profits from trading in Company stock received by our CEO and CFO to the extent required under Section 304 of the Sarbanes-Oxley Act of 2002.

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 gross misconduct or conduct that is against the business interests of the Company regardless of whether a financial restatement is required.

2022 Risk Assessment

The Committee, together with management and Meridian, annually considers potential risks when reviewing our compensation programs for all employees, including our executive officers. Based on this assessment, the Committee concluded that our 2022 compensation programs do not create risks that are reasonably likely to have a material adverse effect on ITW. In making this determination, the Committee reviewed the key design elements of our compensation programs, as well as the means by which 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 cash and equity incentives, representing a mix that is not overly weighted toward short-term cash 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 primarily equity-based, and our PSUs and Performance Cash awards are subject to performance goals. These long-term incentives have three-year vesting schedules (PSUs and Performance Cash) or four-year vesting schedules (stock options), in each case to complement our annual cash-based incentives.

•Capped Incentive Awards - Annual and long-term incentive awards, PSUs and Performance Cash are all capped at 200% of target.

•Stock Ownership Guidelines - Our guidelines call for significant share ownership by executive officers and directors, which further aligns interests with the long-term interests of our stockholders, and we maintain a holding-period requirement for individuals who have not achieved their guidelines in the targeted period.

•Clawback Policy - Our Compensation Recovery Policy authorizes the Committee to recoup past incentive compensation in the event of a material restatement of the Company’s financial results, whether or not based on misconduct.

2023 PROXY STATEMENT 41

Compensation Discussion and Analysis

•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 Committee has ultimate authority to determine, and reduce if appropriate, compensation provided to our executive officers.

•Independent Compensation Consultant - The 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 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 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.

42

NEO Compensation

Summary Compensation Table

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

Name and Principal Position	Year	Salary(1)		Bonus	Stock Awards(2)			Option Awards(2)		Non-Equity Incentive Plan Compensation(1)(3)			Change in Pension Value and Nonqualified Deferred Compensation Earnings(4)			All Other Compensation(5)			Total
E. Scott Santi Chairman & Chief Executive Officer	2022	$	1,393,269	—		$	3,337,430	$	6,674,976		$	7,350,403		$	3,296,378		$	181,774	$	22,234,230
	2021	$	1,350,000	—		$	4,887,030	$	6,174,959		$	7,410,625		$	766,558		$	198,450	$	20,787,622
	2020	$	1,344,924	—		$	2,937,379	$	5,874,987		$	3,117,342		$	662,892		$	69,832	$	14,007,356
Michael M. Larsen Senior Vice President & CFO	2022	$	875,320	—		$	874,799	$	1,749,969		$	2,381,524		—			$	332,736	$	6,214,348
	2021	$	845,080	—		$	1,266,174	$	1,599,967		$	2,465,112		—			$	346,108	$	6,522,441
	2020	$	812,904	—		$	749,937	$	1,499,996		$	885,167		—			$	126,797	$	4,074,801
Christopher A. O'Herlihy Vice Chairman	2022	$	884,950	—		$	962,322	$	1,924,970		$	2,475,535		—			$	375,201	$	6,622,978
	2021	$	854,377	—		$	1,365,659	$	1,749,988		$	2,524,118		$	23,868		$	408,529	$	6,926,539
	2020	$	820,740	—		$	812,495	$	1,624,993		$	921,511		$	408,519		$	165,381	$	4,753,639
Mary K. Lawler Senior Vice President, Human Resources	2022	$	594,556	—		$	374,914	$	749,987		$	1,124,010		—			$	192,185	$	3,035,651
	2021	$	530,336	—		$	579,023	$	724,993		$	1,103,474		—			$	158,148	$	3,095,974
Michael R. Zimmerman Executive Vice President	2022	$	513,226	—		$	349,876	$	699,960		$	899,152		$	476,783		$	50,365	$	2,989,362
Lei Z. Schlitz Former Executive Vice President	2022	$	508,453	—		$	387,324	$	775,000		$	966,057		—			$	145,116	$	2,781,949

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

(1)The Salary and Non-Equity Incentive Plan Compensation columns for 2022 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.

(2)The Stock Awards column represents PSUs awarded in 2022, 2021, and 2020. The amounts shown represent the target amount that may be earned based on the grant date fair value. The Option Awards column represents stock options awarded in the relevant year, and the assumptions applicable to these valuations can be found in Note 15 of the Notes to Financial Statements—Stock-Based Compensation contained in the Company's Form 10-K for the year ended December 31, 2022.

(3)These amounts include payouts made under the EIP and 2020-2022 Long-term Performance Cash award payouts made under our Long-Term Incentive Plan. The following table shows the award payouts under each plan for 2022.

Name	EIP Award			Performance Cash			Non-Equity Incentive Plan Compensation
E. Scott Santi		$	3,678,528		$	3,671,875		$	7,350,403
Michael M. Larsen		$	1,444,024		$	937,500		$	2,381,524
Christopher A. O'Herlihy		$	1,459,910		$	1,015,625		$	2,475,535
Mary K. Lawler		$	694,322		$	429,688		$	1,124,010
Michael R. Zimmerman		$	524,152		$	375,000		$	899,152
Lei Z. Schlitz		$	580,934		$	385,123		$	966,057

2023 PROXY STATEMENT 43

NEO Compensation

(4)These amounts include an amount of interest in the applicable calendar year considered to be in excess of market rates credited to the deferred 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.

Name	Year	Accrual in ITW Retirement Accumulation Plan			Accrual in ITW Nonqualified Pension Plan			Excess Interest on Deferred Compensation			Change in Pension Value and NQDC Earnings
E. Scott Santi	2022		$	85,100		$	3,193,773		$	17,505		$	3,296,378
	2021		$	73,876		$	680,057		$	12,625		$	766,558
	2020		$	59,874		$	590,293		$	12,725		$	662,892
Michael M. Larsen*	2022		—			—			—			—
	2021		—			—			—			—
	2020		—			—			—			—
Christopher A. O’Herlihy**	2022		—			—			—			—
	2021		$	23,868		—			—			$	23,868
	2020		$	408,519		—			—			$	408,519
Mary K. Lawler*	2022		—			—			—			—
	2021		—			—			—			—
Michael R. Zimmerman	2022		$	75,080		$	401,112		$	591		$	476,783
Lei Z. Schlitz*	2022		—			—			—			—

*    Mr. Larsen, Ms. Lawler, and Ms. Schlitz joined the Company in September 2013, October 2014 and October 2008, respectively. Consequently, their ECRIP deferrals are not eligible for the 130 percent rate. They are not eligible to participate in the Company’s pension plans, which were closed to new entrants effective January 1, 2007.

**    Mr. O’Herlihy participated in the ITW Retirement Accumulation Plan from 1989 through 1999. From 1999 through August 2011, he was employed in Ireland, participated in the ITW Irish Pension Plan and ceased active participation in the U.S. plan. Upon his return to the U.S. in 2011, he was ineligible to actively participate in the U.S. plan due to the plan participation closure effective January 1, 2007. The ITW Irish Pension Plan accrual is included in the “Accrual in ITW Retirement Accumulation Plan” column above because this amount also represents a qualified pension plan present value. Mr. O’Herlihy’s actuarial present value of pension benefits declined by $611,338 in fiscal year 2022.

(5)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:

Name	Company Contributions to Retirement Plans			Perquisites*			Total All Other Compensation
E. Scott Santi		$	177,479		$	4,295		$	181,774
Michael M. Larsen		$	328,441		$	4,295		$	332,736
Christopher A. O'Herlihy		$	370,906		$	4,295		$	375,201
Mary K. Lawler		$	179,221		$	12,964		$	192,185
Michael R. Zimmerman		$	36,280		$	14,085		$	50,365
Lei Z. Schlitz		$	137,765		$	7,351		$	145,116

*    Perquisites to NEOs in 2022 were as follows: (1) financial planning and tax preparation services (Mdmes. Lawler and Schlitz, and Mr. Zimmerman), (2) executive physicals (NEOs except Ms. Schlitz). Additionally, NEOs may use tickets to sporting events that have no incremental cost to ITW.

44

NEO Compensation

Grants of Plan-Based Awards

The table below provides information regarding plan-based awards granted to our NEOs during fiscal year 2022 under the Executive Incentive Plan (EIP) and the Long-Term Incentive Plan.

			Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)(2)				Estimated Future Payouts Under Equity Incentive Plan Awards(3)			All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($)(4)	Grant Date Fair Value of Stock and Option Awards ($)(5)
Name	Approval Date	Grant Date	Plan Type	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)
E. Scott Santi			EIP		2,240,000	4,480,000
	2/11/2022	2/11/2022	Perf. Cash	1,668,750	3,337,500	6,675,000
	2/11/2022	2/11/2022	PSUs				7,665	15,329	30,658				$	3,337,430
	2/11/2022	2/11/2022	Stock Options							147,840	217.72		$	6,674,976
Michael M. Larsen			EIP		879,323	1,758,646
	2/10/2022	2/11/2022	Perf. Cash	437,500	875,000	1,750,000
	2/10/2022	2/11/2022	PSUs				2,009	4,018	8,036				$	874,799
	2/10/2022	2/11/2022	Stock Options							38,759	217.72		$	1,749,969
Christopher A. O’Herlihy			EIP		888,997	1,777,994
	2/10/2022	2/11/2022	Perf. Cash	481,250	962,500	1,925,000
	2/10/2022	2/11/2022	PSUs				2,210	4,420	8,840				$	962,322
	2/10/2022	2/11/2022	Stock Options							42,635	217.72		$	1,924,970
Mary K. Lawler			EIP		422,800	845,600
	2/10/2022	2/11/2022	Perf. Cash	187,500	375,000	750,000
	2/10/2022	2/11/2022	PSUs				861	1,722	3,444				$	374,914
	2/10/2022	2/11/2022	Stock Options							16,611	217.72		$	749,987
Michael R. Zimmerman			EIP		415,071	830,142
	2/10/2022	2/10/2022	Perf. Cash	175,000	350,000	700,000
	2/10/2022	2/10/2022	PSUs				804	1,607	3,214				$	349,876
	2/10/2022	2/10/2022	Stock Options							15,503	217.72		$	699,960
Lei Z. Schlitz			EIP		460,991	921,982
	2/10/2022	2/11/2022	Perf. Cash	193,750	387,500	775,000
	2/10/2022	2/11/2022	PSUs				890	1,779	3,558				$	387,324
	2/10/2022	2/11/2022	Stock Options							17,165	217.72		$	775,000

(1)The range of potential payouts under the EIP awards for the NEOs as determined by the Committee in February 2022 for 2022 performance is set forth in these columns. The financial performance components and corresponding payouts as a percent of target are shown under “Components of the 2022 Executive Compensation Program—Annual Executive Incentive Plan.”

(2)The range of potential payouts under the Performance Cash awards for the three-year period 2022 through 2024 is set forth in these columns.

(3)The range of potential share distributions under the 2022 PSU awards for the NEOs as set by the Committee in February 2022 for performance for the three-year period 2022 through 2024 is set forth in these columns.

(4)Exercise price is equal to the closing price on the grant date.

(5)Grant date fair values of options awarded to the NEOs on February 11, 2022 were based on an implied value of $45.15 per share as determined using a binomial valuation technique under Accounting Standards Codification Topic 718. Grant date fair value of PSUs was based on the assumption that the performance conditions will be met at target.

2023 PROXY STATEMENT 45

NEO Compensation

Outstanding Equity Awards at Fiscal Year-End 2022

The following table sets forth details, on an award-by-award basis, of the outstanding equity awards held by each NEO as of December 31, 2022.

		Option Awards				Stock Awards
Name	Grant Date(1)	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)	Option Exercise Price ($)	Option Expiration Date	Equity Incentive Plan Awards: Number of Unearned Units that Have Not Vested (#)(2)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Units That Have Not Vested ($)
E. Scott Santi	02/11/2022	—	147,840	217.72	02/11/2032	15,640.545	3,445,612
	02/12/2021	37,744	113,233	200.98	02/12/2031	25,325.867	5,579,289
	02/14/2020	82,863	82,863	187.86	02/14/2030	16,680.450	3,674,703
	02/15/2019	125,508	41,837	144.21	02/15/2029	—	—
	02/15/2018	143,453	—	163.36	02/15/2028	—	—
	02/10/2017	195,676	—	128.00	02/10/2027	—	—
	02/12/2016	199,800	—	91.88	02/12/2026	—	—
	02/13/2015	35,856	—	98.26	02/13/2025	—	—
Michael M. Larsen	02/11/2022	—	38,759	217.72	02/11/2032	4,099.667	903,157
	02/12/2021	9,779	29,340	200.98	02/12/2031	6,561.641	1,445,530
	02/14/2020	21,156	21,157	187.86	02/14/2030	4,258.653	938,181
	02/15/2019	31,104	10,368	144.21	02/15/2029	—	—
	02/15/2018	37,167	—	163.36	02/15/2028	—	—
Christopher A. O’Herlihy	02/11/2022	—	42,635	217.72	02/11/2032	4,509.828	993,515
	02/12/2021	10,696	32,091	200.98	02/12/2031	7,077.208	1,559,109
	02/14/2020	22,919	22,920	187.86	02/14/2030	4,613.902	1,016,443
	02/15/2019	32,741	10,914	144.21	02/15/2029	—	—
	02/15/2018	39,123	—	163.36	02/15/2028	—	—
	02/10/2017	48,453	—	128.00	02/10/2027	—	—
	02/12/2016	37,462	—	91.88	02/12/2026	—	—
	02/13/2015	22,675	—	98.26	02/13/2025	—	—
Mary K. Lawler	02/11/2022	—	16,611	217.72	02/11/2032	1,756.994	387,066
	02/12/2021	4,431	13,295	200.98	02/12/2031	3,000.651	661,043
	02/14/2020	9,696	9,697	187.86	02/14/2030	1,951.176	429,844
	02/15/2019	14,460	4,821	144.21	02/15/2029	—	—
	02/15/2018	17,279	—	163.36	02/15/2028	—	—
	02/10/2017	23,294	—	128.00	02/10/2027	—	—
Michael R. Zimmerman	02/11/2022	—	15,503	217.72	02/11/2032	1,639.662	361,218
	02/12/2021	3,973	11,919	200.98	02/12/2031	2,573.624	566,969
	02/14/2020	8,462	8,463	187.86	02/14/2030	1,702.605	375,084
	02/15/2019	12,004	4,002	144.21	02/15/2029	—	—
	02/15/2018	13,693	—	163.36	02/15/2028	—	—
	02/10/2017	19,567	—	128.00	02/10/2027	—	—
Lei Z. Schlitz	02/11/2022	—	4,291	217.72	02/11/2032	460.000	101,338
	02/12/2021	4,431	13,295	200.98	02/12/2031	1,701.000	374,730
	02/14/2020	9,167	9,168	187.86	02/14/2030	1,750.000	385,525
	02/15/2019	12,004	4,002	144.21	02/15/2029	—	—
	02/15/2018	13,693	—	163.36	02/15/2028	—	—
	02/10/2017	18,635	—	128.00	02/10/2027	—	—
	02/12/2016	13,736	—	91.88	02/12/2026	—	—
	02/13/2015	6,478	—	98.26	02/13/2025	—	—

(1)Stock options vest in equal installments over a four-year period starting on the anniversary of the grant date, with exceptions for termination upon death, disability, retirement and change-in-control.

(2)PSUs were granted in 2020, 2021, and 2022 and are subject to three-year vesting, as well as achievement of operating margin, After-tax ROIC and EPS performance goals. The number of PSUs included in this table assumes target performance is met.

46

NEO Compensation

Option Exercises and Stock Vested

The following table provides information regarding option exercises and stock vesting for each NEO during 2022. The value realized upon the exercise of options is calculated using the difference between the option exercise price and the market price of ITW’s common stock at the time of exercise multiplied by the number of shares underlying the option. The value realized upon the vesting of stock awards is based on the closing price of ITW’s common stock on the vesting date.

	Option Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)
E. Scott Santi	148,789	19,815,525	23,010	5,056,217
Michael M. Larsen	51,248	5,125,476	5,701	1,252,738
Christopher A. O’Herlihy	—	—	6,001	1,318,660
Mary K. Lawler	—	—	2,650	582,311
Michael R. Zimmerman	—	—	2,199	483,208
Lei Z. Schlitz	—	—	2,199	483,208

Pension Benefits

The following table provides pension benefit information through our financial statement measurement date of December 31, 2022 for each NEO serving as of that date.

Name	Plan Name	Number of Years of Credited Service	Present Value of Accumulated Benefit (1)(2)
E. Scott Santi	ITW Retirement Accumulation Plan	40.62		$	1,147,949
	ITW Nonqualified Pension Plan	40.62		$	16,565,908
Michael M. Larsen	ITW Retirement Accumulation Plan(3)	—		—
	ITW Nonqualified Pension Plan(3)	—		—
Christopher A. O’Herlihy	ITW Retirement Accumulation Plan(4)	10.46		$	84,468
	ITW Nonqualified Pension Plan(4)	—		—
	ITW Irish Pension Plan(4)	11.17		$	1,619,419
Mary K. Lawler	ITW Retirement Accumulation Plan(3)	—		—
	ITW Nonqualified Pension Plan(3)	—		—
Michael R. Zimmerman	ITW Retirement Accumulation Plan	17.00		$	733,149
	ITW Nonqualified Pension Plan	17.00		$	1,646,684
Lei Z. Schlitz	ITW Retirement Accumulation Plan(3)	—		—
	ITW Nonqualified Pension Plan(3)	—		—

(1)Assuming the individual receives a lump-sum distribution at normal retirement, present values are based on the 5.13 percent discount rate used for financial reporting purposes.

(2)In the event of a change-in-control or departure due to death, disability or retirement, the total pension payable is reflected in the total of the above amounts. The allocation between the ITW Retirement Accumulation Plan and the ITW Nonqualified Pension Plan depends on the actual lump sum and annuity values calculated using the actual applicable interest rates and Internal Revenue Service (IRS) limits.

(3)The NEO is not eligible for the Company’s pension plans, as the NEO joined the Company after the plans were closed to new hires beginning January 1, 2007.

(4)Mr. O’Herlihy participated in the ITW Retirement Accumulation Plan from 1989 through 1999. From 1999 through August 2011, he was employed in Ireland, participated in the ITW Irish Pension Plan and ceased active participation in the U.S. plan. Upon his return to the U.S. in 2011, he ceased active participation in the Irish plan and was ineligible to actively participate in the U.S. plan due to the plan participation closure effective January 1, 2007.

2023 PROXY STATEMENT 47

NEO Compensation

ITW Retirement Plans

ITW Retirement Accumulation Plan

We maintain the ITW Retirement Accumulation Plan (the Pension Plan) for the benefit of eligible employees to provide a portion of the income necessary for retirement. The Pension Plan was closed to new entrants effective January 1, 2007. The Pension Plan is structured as a “pension equity plan” under which a participant accumulates an age-based percentage for each year of plan participation. The sum of the Accumulation Percentages multiplied by final average annual pay (salary and annual incentive paid in the highest five years out of the last ten complete calendar years of service), plus the sum of the Excess Percentages multiplied by the final average annual pay above the Covered Compensation, produce an amount that can be received as a lump-sum payment or an actuarially equivalent lifetime annuity. For each year of credited service after December 31, 2000, the age-based percentages are as follows:

Age During the Year	Pay Accumulation Percentage		Excess Percentage(1)
Less than 30	2	%	2	%
30-34	3	%	2	%
35-39	4	%	2	%
40-44	5	%	2	%
45	7	%	2	%
46-49	7	%	6	%
50-54	10	%	6	%
55-59	13	%	6	%
60 or older	16	%	6	%

(1)Covered Compensation is a 35-year average of the maximum earnings recognized in calculating Social Security benefits. For 2022, the Covered Compensation amount for an individual attaining age 65 was $97,620, while for an employee age 35 or younger it was $146,604.

Prior to 2001, the Pension Plan operated under a traditional annuity formula (a normal retirement benefit equal to 1 percent of final average annual pay and 0.65 percent of such pay in excess of covered compensation for each of the first 30 years of credited service plus 0.75 percent of final average annual pay for any additional years). As part of the transition to the pension equity formula, as of December 31, 2000:

•Accrued benefits under the traditional annuity formula were converted to an initial pension equity percentage by calculating the lump-sum value of the normal retirement annuity and dividing by the average annual pay at that time.

•Participants who had 5 years of participation and whose age plus vesting service equaled at least 50 years were entitled to additional pension equity credits of 4 percent of final average annual pay per year for each year of employment from 2001 through 2015.

ITW Irish Pension Plan

The Irish Pension Plan operates under a traditional annuity formula (a normal retirement benefit equal to 1.5 percent of final average annual pay for each year of credited service). The final average annual pay is the highest consecutive pensionable base salary over any three-year period over the last ten complete years of service.

Nonqualified Pension Plan

The Nonqualified Pension Plan is maintained to make up for benefits that cannot be paid under the tax-qualified Pension Plan due to Internal Revenue Code limitations on the amount of compensation that may be considered and the amount of benefit that may be paid. The Company has not considered awarding additional years of service to executive officers under the plan and, therefore, does not currently have a policy on such awards. For the most part, the Nonqualified Pension Plan uses the same formulas and other computation elements as the Pension Plan with certain exceptions, including the following:

•The Pension Plan uses net compensation after deferrals under the Executive Contributory Retirement Income Plan (ECRIP), and the Nonqualified Pension Plan uses total eligible compensation (generally, salary and EIP award).

48

NEO Compensation

•The Nonqualified Pension Plan provides that a participant who leaves the Company, other than upon retirement, may forfeit any plan benefits based on eligible compensation above the IRS maximum amount ($305,000 in 2022) that may be recognized under a tax-qualified plan.

•In addition to the annuity and lump-sum options available under the Pension Plan, a participant in the Nonqualified Pension Plan may elect to receive fixed monthly installments over 2 to 20 years. If the executive left employment prior to death, disability or retirement, or if the plan is terminated in conjunction with a change-in-control, the benefit from the Nonqualified Pension Plan would be paid as a lump sum.

Nonqualified Deferred Compensation

The Company’s ECRIP offers designated executives an opportunity to defer a portion of their salary and earned non-equity incentive to a deferred compensation account to receive the Company contributions they would otherwise receive if such deferrals had been made under our tax-qualified Savings and Investment Plan and IRS limits did not apply. Deferred amounts receive a rate of interest based on the monthly Moody’s Long-Term Corporate Bond Yield Average (Moody’s Rate). All the NEOs are eligible for the ECRIP. An ECRIP participant may defer from 6 percent to 50 percent of his or her salary and from 6 percent to 85 percent of his or her variable cash components (EIP and Performance Cash), with the applicable Company matching contribution on the salary and EIP amounts under the Savings and Investment Plan formula (in lieu of any matching contributions under that plan). Salary and EIP deferrals under the ECRIP reduce the compensation that may be recognized under the Savings and Investment Plan and the tax-qualified Pension Plan.

For employees who are not eligible to participate in the pension plan due to the participation freeze on January 1, 2007, the Company contributes a non-elective contribution to the Savings and Investment Plan, up to the IRS Compensation Limits and continues to contribute above the IRS Compensation Limits to this plan.

This Savings and Investment Plan contribution is based on the combined age and years of service as of January 1 of each year (“points”). For each year, the points are as follows:

Points	Pay Below the Social Security Wage Base(1)		Pay in Excess of the Social Security Wage Base(1)
Less than 50	3.0	%	6.0	%
50-59	4.0	%	8.0	%
60-69	5.0	%	10.0	%
At least 70	6.0	%	11.7	%

(1)For 2022, the Social Security Wage Base was $147,000.

The ECRIP features include a maximum limit on the amount of interest under the Moody’s Rate that would be recognized (12 percent annualized, or 15.6 percent for amounts eligible to receive 130 percent of the Moody’s Rate), a return of deferral feature whereby an individual could elect to receive a return of the principal amount deferred after a period of at least five years, and options for payment following death, disability or retirement as a lump sum or in monthly installments over 2 to 20 years.

Retirement under the ECRIP is defined as having attained age 55 with at least 10 years of service, or age 65 with at least 5 years of service. If an ECRIP participant’s employment ends due to retirement, death, or disability, amounts deferred to the ECRIP prior to January 1, 2010 will receive interest crediting of 130 percent of the Moody’s Rate. Amounts deferred to the ECRIP after December 31, 2009 are only eligible to receive 100 percent of the Moody’s Rate. During 2022, the Moody’s Rate applied to ECRIP accounts ranged from 2.99 percent to 4.83 percent for amounts eligible for 100 percent of the Moody’s Rate, and 3.88 percent to 6.28 percent for amounts eligible for 130 percent of Moody’s.

If terminated in conjunction with a change-in-control, participants would receive their ECRIP as a lump-sum payment.

2023 PROXY STATEMENT 49

NEO Compensation

The following table sets forth ECRIP account information for each NEO during fiscal year 2022.

Name	Executive Contributions in 2022(1)			Registrant Contributions in 2022(2)			Aggregate Earnings in 2022			Aggregate Distributions in 2022		Aggregate Balance at December 31, 2022(3)(4)
E. Scott Santi		$	507,084		$	177,479		$	294,691		—		$	7,282,738
Michael M. Larsen		$	139,126		$	303,260		$	170,355		—		$	4,494,373
Christopher A. O’Herlihy		$	1,591,516		$	338,475		$	474,080		—		$	12,595,064
Mary K. Lawler		$	322,527		$	154,501		$	76,169		—		$	2,029,071
Michael R. Zimmerman		$	232,350		$	36,280		$	68,426		—		$	1,833,615
Lei Z. Schlitz		$	290,467		$	112,299		$	63,252		—		$	1,707,644

(1)As shown below, includes deferrals of (i) 2022 salary reflected in the Salary column of the Summary Compensation Table; (ii) 2022 executive annual incentive amounts deferred in 2023 reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2022; and (iii) 2020-2022 Performance Cash deferred in 2023 reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2022.

Name	Salary Deferral in 2022			Executive Annual Incentive Deferral in 2023 for 2022 Performance			LTI Cash Deferral in 2023 for Performance Period of 2020 - 2022			Total Executive Deferrals in 2022
E. Scott Santi		$	139,231		$	367,853		$	0		$	507,084
Michael M. Larsen		$	52,485		$	86,641		$	0		$	139,126
Christopher A. O’Herlihy		$	353,749		$	729,955		$	507,813		$	1,591,516
Mary K. Lawler		$	41,524		$	173,581		$	107,422		$	322,527
Michael R. Zimmerman		$	153,727		$	78,623		$	0		$	232,350
Lei Z. Schlitz		$	0		$	290,467		$	0		$	290,467

(2)These amounts are also included in the All Other Compensation column of the Summary Compensation Table for 2022.

(3)Footnote 4 to the Summary Compensation Table sets forth above-market interest for 2022 included in aggregate earnings in this table. Above-market interest was discontinued for amounts deferred after December 31, 2009.

(4)In addition to the Company’s contributions shown in the table above and excess interest as disclosed for 2022 in the Footnote 4 Table to the Summary Compensation Table, the following amounts of NEO and Company contributions to the ECRIP and excess interest are reported as compensation in the Summary Compensation Table for 2021 and 2020:

Name	Year Ended December 31, 2021			Year Ended December 31, 2020
E. Scott Santi		$	778,075		$	282,078
Michael M. Larsen		$	476,608		$	172,690
Christopher A. O’Herlihy		$	2,213,410		$	931,213
Mary K. Lawler*		$	215,796		—
Michael R. Zimmerman*		—			—
Lei Z. Schlitz*		—			—

*    Ms. Lawler was not an NEO in 2020 and Mr. Zimmerman and Ms. Schlitz were not NEOs in 2021 and 2020.

50

NEO Compensation

Potential Payments upon Termination

Our severance and change-in-control protections are designed to be fair and competitive. These protections are intended to retain executives in the event they need to consider actions that may impact job security, and ease an executive’s transition at retirement. Providing these benefits help us compete for talent, and we believe they are fully within the range of competitive practice at similar companies.

Further, our NEOs are not covered by employment agreements and are employed “at will.” No payments or benefits are automatically payable to NEOs upon a change-in-control, and if there is a qualifying termination following a change-in-control, there are no tax gross-up payments.

Payments and benefits received by NEOs upon termination are governed by the arrangements described below and quantified at the end of this section. For NEOs except for Ms. Schlitz, we have estimated the amounts involved assuming that the termination became effective as of December 31, 2022. The actual amounts to be paid out can only be determined at the time of the NEOs’ departure from the Company. For Ms. Schlitz, we have provided the amounts related to her separation.

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. 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 2022 are discussed in more detail above in “Compensation Discussion and Analysis—Components of the 2022 Executive Compensation Program - Annual Executive Incentive Plan.”

ITW Retirement Accumulation Plan and Nonqualified Pension Plan

NEOs who are terminated for any reason receive their benefits under the ITW Retirement Accumulation Plan and Nonqualified Pension Plan as described in the Pension Benefits tables above.

Executive Contributory Retirement Income Plan

NEOs who are terminated for any reason receive contributions and accumulated earnings as outlined in the Nonqualified Deferred Compensation section above.

Long-Term Incentive Plan Awards

Stock Options: In the event of a termination upon death or disability, all unvested options held by the NEOs would immediately vest. In the event of a termination upon retirement (defined as a combined age and service of 70, subject to a minimum age of 55 and a minimum service of 5 years), 75 percent of stock options granted within one year from the retirement date would be forfeited and the remaining would continue to vest. Additionally, stock options granted more than one year from the retirement date would continue to fully vest. Messrs. Santi and O’Herlihy meet the retirement criteria for the 2020, 2021 and 2022 awards as of December 31, 2022. In the event of a change-in-control, stock options that are not continued or replaced would fully vest and those that are continued or replaced would only vest upon involuntary termination of employment after the change-in-control.

PSUs and Performance Cash: In the event of a termination upon death or disability, the awards would vest based on the actual performance level achieved and be paid after the end of the performance period. In the event of a termination upon retirement (defined as a combined age and service of 70, subject to a minimum age of 55 and a minimum service of 5 years), the awards would vest pro-rata based on date of termination and be paid after the end of the performance period. In the event of a change-in-control, an award that is not continued or replaced will fully vest on the date of the change-in-control at the greater of target or actual achievement level and payment will be pro rata based on the number of days during the applicable performance period before the occurrence of the change-in-control. In the event of involuntary termination of employment within two years following a change-in-control, an award that has been replaced would fully vest without conditions.

For all NEOs, in the event of a termination other than upon retirement, death, disability or a change-in-control, any unvested options, PSUs, and Performance Cash held on such date by the NEOs would be forfeited.

2023 PROXY STATEMENT 51

NEO Compensation

Change-in-Control Severance Policy

The Company’s 2011 Change-in-Control Severance Compensation Policy provides that, upon an actual or constructive termination following a change-in-control of the Company, the NEOs and other elected officers would be entitled to receive: (i) two times annual cash compensation (base salary plus average annual incentive pay over the prior three years); (ii) a prorated amount of that year’s annual incentive bonus at the target level (or actual achievement level if greater); and (iii) a prorated amount of the value of Performance Cash awards at the target level (or actual achievement level if greater). Notwithstanding the foregoing, if the payments under the preceding clauses (ii) and (iii) were not replaced at the time of the change-in-control, then such awards will be deemed to be earned and immediately payable at the greater of target or actual achievement level pro rata based on the number of days during the applicable performance period before the occurrence of the change-in-control. We do not gross up any of the compensation paid in the event of termination due to a change-in-control.

Summary of Termination and Change-in-Control Provisions

The benefits for the NEOs under each termination scenario are outlined below.

Benefit or Payment	Retirement	Involuntary (w/o Cause)	Death/ Disability	Termination in Connection with a Change-in-Control
Base Salary	N/A	1 week per year of service	N/A	2 times annual salary
Benefits	N/A	Based on years of service	N/A	N/A
Executive Incentive Plan(1)(2)	Pro-rata vesting	Pro-rata payout	Pro-rata vesting	2 times the average bonus paid in the prior 3 years plus pro-rata payout for current year
Executive Contributory Retirement Income Plan(1)	Yes	Yes	Yes	Yes
Retirement Accumulation Plan and Nonqualified Pension Plan(1)	Yes	Yes	Yes	Yes
Vesting of Unvested Stock Options	If retirement is 1 year or more after award, continue vesting; if less than 1 year, 25 percent continues to vest and 75 percent is forfeited(3)	N/A	100 percent continued vesting	Subject to replacement and double trigger(5); otherwise, 100 percent vesting
Payment of Performance Cash and PSUs(2)(3)	Pro-rata vesting(4)	N/A	100 percent vesting(4)	Subject to replacement and double trigger(5); otherwise, pro-rata amount based on termination date(6)

(1)Retirement for these awards or benefits is defined as termination after age 55 and 10 years of service or 65 and 5 years of service.

(2)All vesting for these awards is subject to achievement of performance goals.

(3)Retirement is defined as a combination of age and service of 70 with a minimum age of 55 and minimum service of 5 years.

(4)Vesting is limited to the extent that the performance level for the award is achieved. If the minimum performance level is not achieved, the award is forfeited.

(5)Awards that are replaced after a change-in-control do not receive accelerated vesting. Double-trigger vesting occurs for awards that are continued or replaced if actual or constructive termination occurs within two years of a change-in-control of the Company.

(6)Pro-rata amount is at the greater of target or actual achievement level.

52

NEO Compensation

Termination and Change-in-Control Payments and Benefits

The following table shows the value of payments and benefits that the NEOs would receive pursuant to the 2011 Long-Term Incentive Plan, the 2015 Long-Term Incentive Plan and the 2011 Change-in-Control Severance Compensation Policy upon retirement, involuntary termination without cause, death, disability or a change-in-control, assuming that termination occurred as of the last business day of fiscal 2022.

The table also shows the Company’s severance benefits that would be payable to the NEOs and that are available to employees generally. For purposes of this table, Performance Cash and PSU payments are assumed at target level. The value of unvested stock options, if accelerated upon a change-in-control or termination, is determined using the excess, if any, of $220.30 (the closing price of ITW common stock on December 31, 2022) over the option exercise price.

Messrs. Santi, O’Herlihy and Zimmerman met the retirement criteria for various grants under the Long-Term Incentive Plan during 2022. In case of retirement, the 2020, 2021, and 2022 PSUs and Performance Cash awards would vest and be payable after the performance goals have been met. The unvested stock options continue to vest. In addition, 75 percent of the 2022 stock option awards would be forfeited since the assumed retirement would have occurred within one year from the grant date. The PSUs and Performance Cash awards would be pro-rated based on the retirement date.

Voluntary termination without good reason is not shown in the table because such a termination would not trigger the payment of severance benefits or accelerated vesting of long-term awards.

Stock options, PSUs and Performance Cash awards, whether vested or unvested, are subject to forfeiture if the holder competes with, or divulges confidential information about, the Company, or if the Compensation Committee determines that the holder engaged in gross misconduct or conduct that is against the business interests of the Company. Awards are also subject to forfeiture, in whole or in part, to comply with applicable law, regulation, stock exchange rules, accounting rules, or our clawback policy.

2023 PROXY STATEMENT 53

NEO Compensation

Named Executive Officer	Benefit	Retirement			Involuntary Termination (w/o Cause)			Death or Disability			Termination Upon a CIC
E. Scott Santi	Severance		$	—		$	1,103,846		$	—		$	6,737,827
	Benefits		$	—		$	13,867		$	—		$	—
	Current year EIP		$	3,678,528		$	3,678,528		$	3,678,528		$	3,678,528
	Stock Options (Value of accelerated options)		$	—		$	—		$	8,440,542		$	8,440,542
	Restricted Stock Units (Value of unvested PSUs)		$	8,542,766		$	—		$	12,699,604		$	8,542,766
	Performance Cash (Value of prorated cash)		$	6,108,333		$	—		$	9,362,500		$	6,108,333
	Total		$	18,329,627		$	4,796,241		$	34,181,174		$	33,507,996
Michael M. Larsen	Severance		$	—		$	169,101		$	—		$	3,280,222
	Benefits		$	—		$	3,155		$	—		$	—
	Current year EIP		$	—		$	1,444,024		$	1,444,024		$	1,444,024
	Stock Options (Value of accelerated options)		$	—		$	—		$	2,142,081		$	2,142,081
	Restricted Stock Units (Value of unvested PSUs)		$	—		$	—		$	3,286,867		$	2,202,920
	Performance Cash (Value of prorated cash)		$	—		$	—		$	2,425,000		$	1,575,000
	Total		$	—		$	1,616,280		$	9,297,972		$	10,644,247
Christopher A. O’Herlihy	Severance		$	—		$	581,267		$	—		$	3,314,135
	Benefits		$	—		$	11,940		$	—		$	—
	Current year EIP		$	1,459,910		$	1,459,910		$	1,459,910		$	1,459,910
	Stock Options (Value of accelerated options)		$	—		$	—		$	2,303,967		$	2,303,967
	Restricted Stock Units (Value of unvested PSUs)		$	2,387,020		$	—		$	3,569,067		$	2,387,020
	Performance Cash (Value of prorated cash)		$	1,716,667		$	—		$	2,650,000		$	1,716,667
	Total		$	5,563,597		$	2,053,117		$	9,982,944		$	11,181,699
Mary K. Lawler	Severance		$	—		$	104,538		$	—		$	1,885,991
	Benefits		$	—		$	3,155		$	—		$	—
	Current year EIP		$	—		$	694,322		$	694,322		$	694,322
	Stock Options (Value of accelerated options)		$	—		$	—		$	981,116		$	981,116
	Restricted Stock Units (Value of unvested PSUs)		$	—		$	—		$	1,477,953		$	999,562
	Performance Cash (Value of prorated cash)		$	—		$	—		$	1,081,250		$	710,417
	Total		$	—		$	802,015		$	4,234,641		$	5,271,408
Michael R. Zimmerman	Severance		$	—		$	189,576		$	—		$	1,710,156
	Benefits		$	—		$	6,633		$	—		$	—
	Current year EIP		$	524,152		$	524,152		$	524,152		$	524,152
	Stock Options (Value of accelerated options)		$	—		$	—		$	849,325		$	849,325
	Restricted Stock Units (Value of unvested PSUs)		$	873,469		$	—		$	1,303,271		$	873,469
	Performance Cash (Value of prorated cash)		$	633,333		$	—		$	975,000		$	633,333
	Total		$	2,030,954		$	720,361		$	3,651,748		$	4,590,435

Lei Z. Schlitz

Ms. Schlitz met the retirement criteria for the 2020, 2021 and 2022 LTI awards, as well as the 2022 EIP, upon her separation in 2022. Under plan rules, she received a prorated portion of her EIP in the amount of $580,934 in February 2023 following her departure. Her outstanding PSUs and Performance Cash target values were prorated to $841,452 and $629,057, respectively, and under the provisions of the plan will pay out in 2023, 2024, and 2025 subject to the achievement of the performance goals.

54

NEO Compensation

Compensation Committee Report

The Compensation Committee of the Board of Directors hereby furnishes the following report to the stockholders of the Company in accordance with rules adopted by the Securities and Exchange Commission.

We have reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on our review and discussions, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and the Company’s Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2022.

This report is submitted on behalf of the members of the Compensation Committee:

Anré D. Williams, Chairman
Susan Crown
Darrell L. Ford
James W. Griffith
Richard H. Lenny

2023 PROXY STATEMENT 55

NEO Compensation

Equity Compensation Plan Information

The following table provides information as of December 31, 2022 about the Long-Term Incentive Plan.

Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights	(b) Weighted- average exercise price of outstanding options	(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	3,832,530 1	$158.71	5,328,038

(1)Includes directors’ deferred shares, and shares subject to RSUs and PSUs.

Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the ratio of the annual total compensation of the median ITW employee to the annual total compensation of our CEO.

The pay ratio reported below, in our view, is a reasonable estimate calculated in a manner consistent with SEC rules, and is based on the methodologies and assumptions described below. SEC rules identifying the median employee and determining the pay ratio permit companies to employ a wide range of methodologies, estimates and assumptions. As a result, the pay ratio reported by other companies, which may have utilized other permitted methodologies or assumptions, and which may have a significantly different workforce structure from ours, are likely not comparable to our CEO pay ratio.

The Company has an extensive global footprint in 51 countries and approximately 46,000 employees as of December 31, 2022, of which approximately two-thirds are outside of the U.S. While compensation and benefits practices in these countries vary considerably, we commit to providing market competitive compensation and benefits, maintain fair labor practices and ensure work environments that reflect our core values and culture everywhere we operate.

To calculate the pay ratio, we identified the median employee based on our employee population as of October 31, 2020, which was approximately 43,000 employees, before excluding approximately 2,000 employees by applying the exemption noted below. As permitted by the SEC, we have maintained the same median employee we identified in 2020 to calculate the 2022 pay ratio.

In many countries, ITW has small employee populations. In 2020, we chose to apply the SEC’s de minimis exemption, and excluded countries which, in the aggregate, make up under 5% of our total workforce. The countries excluded are as follows:

Countries	Excluded Employees
Austria, Estonia, Guatemala, Indonesia, Luxembourg, Malta, Peru	Fewer than 15 employees
Chile, Colombia, Croatia, Finland, Hong Kong, Norway, Philippines, Portugal, Puerto Rico, Singapore, South Africa, Switzerland, United Arab Emirates	Fewer than 100 employees
Argentina, Bulgaria, Costa Rica, Hungary, Ireland, Slovenia, Thailand	Fewer than 300 employees

To identify the median employee, we collected employees’ regular pay (salary or hourly wages), overtime pay and shift differentials/ premiums, and pay received for paid time off. We did not include annual incentives or bonuses, sales incentives or commissions, long-term cash or equity incentives, allowances, or any benefits received as part of a company-sponsored defined benefit pension plan.

With the information collected, we identified 21 employees whose compensation we believed to be around the median of all employees, and then gathered other elements of compensation (variable pay, health and welfare, and retirement contributions) in order to determine the final median employee.

The 2022 compensation for the median employee, who we identified in 2020, is $71,962. Total compensation, as set forth in the Summary Compensation Table, plus the Company costs to provide health and welfare benefits for our CEO ($19,759) for 2022 is $22,253,989. Accordingly, the pay ratio between our CEO and median employee is 309:1.

56

Pay Versus Performance

As required by Item 402(v) of Regulation S-K, we are providing the following information on the relationship between Compensation Actually Paid (CAP) and ITW performance for our NEOs (including the Principal Executive Officer, or PEO, who is ITW's Chairman and CEO). The definition of CAP is mandated by the SEC, and it not used by the Compensation Committee in its pay-for-performance assessments. See our "Compensation Discussion and Analysis" section for our robust discussion on ITW's executive compensation philosophy, our incentive programs with rigorous performance measures, and practices and policies that align the interests of our NEOs to those of our stockholders.

Year	Summary Compensation Table Total for PEO($)		Compensation Actually Paid to PEO($)(1,2)		Average Summary Compensation Table Total for Non-PEOs ($)		Average Compensation Actually Paid to Non-PEOs ($)(1,2)		Value of Initial Fixed $100 Investment Based On:				Net Income ($) (in millions)		After-Tax ROIC(4)
									Total Shareholder Return(3)		Peer Group Total Shareholder Return(3,5)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)
2022	$	22,234,230	$	18,730,022	$	4,328,857	$	3,805,988	$	131.72	$	135.49	$	3,034	29.1	%
2021	$	20,787,622	$	41,769,292	$	5,010,034	$	9,056,648	$	143.87	$	142.88	$	2,694	29.5	%
2020	$	14,007,356	$	19,593,737	$	3,374,951	$	4,317,669	$	116.40	$	119.39	$	2,109	26.2	%

(1)The table below reconciles the PEO and average non-PEO compensation as it appears in the Summary Compensation Table (SCT) to the Compensation Actually Paid (CAP) in the Pay Versus Performance Table.

	2020				2021				2022
	PEO		Average Non-PEO NEO		PEO		Average Non-PEO NEO		PEO		Average Non-PEO NEO
	E. Scott Santi		Michael M. Larsen, Christopher A. O'Herlihy, Steven L. Martindale (Retired), and John R. Hartnett (Retired)		E. Scott Santi		Michael M. Larsen, Christopher A. O'Herlihy, John R. Hartnett (Retired), Mary K. Lawler		E. Scott Santi		Michael M. Larsen,  Christopher A. O'Herlihy,  Mary K. Lawler, Michael R. Zimmerman, Lei Z. Schlitz (Former)
SCT Total	$	14,007,356	$	3,374,951	$	20,787,622	$	5,010,034	$	22,234,230	$	4,328,857
Reported fair value of equity awards granted during fiscal year (a)	$	(8,812,366)	$	(1,734,283)	$	(11,061,989)	$	(2,155,813)	$	(10,012,406)	$	(1,769,824)
Fair value as of the end of year for equity awards granted during the year	$	10,491,548	$	2,064,756	$	21,194,538	$	4,128,643	$	14,654,738	$	2,503,857
Change in fair value from end of prior fiscal year to vesting date for awards made in prior years that vested during the covered year	$	895,809	$	149,995	$	(199,979)	$	(38,384)	$	(3,563,916)	$	(600,549)

2023 PROXY STATEMENT 57

Pay Versus Performance

	2020				2021				2022
	PEO		Average Non-PEO NEO		PEO		Average Non-PEO NEO		PEO		Average Non-PEO NEO
	E. Scott Santi		Michael M. Larsen, Christopher A. O'Herlihy, Steven L. Martindale (Retired), and John R. Hartnett (Retired)		E. Scott Santi		Michael M. Larsen, Christopher A. O'Herlihy, John R. Hartnett (Retired), Mary K. Lawler		E. Scott Santi		Michael M. Larsen,  Christopher A. O'Herlihy,  Mary K. Lawler, Michael R. Zimmerman, Lei Z. Schlitz (Former)
Change in fair value from end of prior year to end of covered year for awards made in prior fiscal years that were unvested at end of covered year	$	3,095,455	$	581,522	$	11,216,008	$	2,127,625	$	(1,952,523)	$	(317,148)
Deduction of fair value for awards forfeited during the covered year	$	—	$	—	$	—	$	—	$	—	$	(274,917)
Dividends or other earnings paid on unvested awards otherwise not reflected in total compensation	$	—	$	—	$	—	$	—	$	—	$	—
Pension values reported in SCT (b)	$	(650,167)	$	(157,604)	$	(753,933)	$	(61,431)	$	(3,278,872)	$	(95,238)
Pension values attributable to covered year's service.	$	566,103	$	38,331	$	587,025	$	45,974	$	648,771	$	30,950
Change in pension value attributable to plan amendments made in the covered year.	$	—	$	—	$	—	$	—	$	—	$	—
CAP Total	$	19,593,737	$	4,317,669	$	41,769,292	$	9,056,648	$	18,730,022	$	3,805,988

(a) Represents the total amounts reported in the "Stock Awards" and "Option Awards" columns in the SCT in the covered year.

(b) Represents the change in actuarial present value of the accumulated pension benefit reported in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column in the SCT in the covered year.

(2)In determining CAP, ITW calculated the fair value of outstanding and vested equity awards in the applicable fiscal year in accordance with SEC rules for CAP, and computed in manner consistent with the methodology used for financial reporting purposes. For performance share units (PSUs), CAP values are based on year end share price (or the price on the vesting date for vested awards), and estimates as to the number of PSUs that were likely to vest at the conclusion of the performance period. For stock options, the valuations are based on a lattice-based option pricing model that incorporate a range of assumptions for inputs to determine the fair value for CAP purposes.

(3)Total shareholder return assumes $100 invested on December 31, 2019, including reinvestment of dividends.

(4)After-tax return on average invested capital (After-tax ROIC) is a non-GAAP measure. See Appendix A for information regarding non-GAAP measures. After-tax ROIC is an important financial performance measure used by ITW to measure financial performance and link executive compensation to company performance.

(5)The table below details the peer group used in the Pay Versus Performance table above and is the same peer group used to show our performance in our Annual Report on Form 10-K for purposes of Item 201(e) of Regulation S-K. The peer group consists of the same companies for 2020, 2021 and 2022. As disclosed in our 2020 Form 10-K, in 2020, Ecolab Inc., which meets the Company's industry and size criteria, and Trane Technologies plc, which is the company resulting from the spin-off of Ingersoll-Rand plc and its combination with certain businesses of Gardner Denver, Inc., were added to the peer group, while Ingersoll-Rand plc and Raytheon Company, which merged with United Technologies Corporation and no longer meets the Company's industry and size criteria, were removed.

Peer Group

3M Company	Ecolab Inc.	Parker-Hannifin Corporation
Caterpillar Inc.	Emerson Electric Co.	PPG Industries, Inc.
Cummins Inc.	Fortive Corporation	Rockwell Automation, Inc.
Deere & Company	General Dynamics Corporation	Stanley Black & Decker, Inc.
Dover Corporation	Honeywell International Inc.	Trane Technologies plc
Eaton Corporation plc	Johnson Controls International plc

58

Pay Versus Performance

Tabular List of Performance Measures

The table below represents the most important financial performance measures used by ITW to link compensation actually paid to our NEOs to Company performance, for the most recently completed fiscal year.

After-tax ROIC

Operating Margin

EPS Growth

Organic Revenue Growth

Operating Income Growth vs. Prior Year

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 2022 Peer Group, including the reinvestment of dividends, (b) net income, and (c) After-tax ROIC.

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.

2023 PROXY STATEMENT 59

We are providing shareholders with the opportunity to cast an advisory vote regarding the frequency of the advisory vote on executive compensation, commonly known as “Say on Pay” votes. Shareholders may vote on whether the advisory vote on executive compensation should occur every one, two or three years.

We are required to hold an advisory vote regarding the frequency of “Say on Pay” votes every six years. In 2017, the Company’s stockholders voted in favor of holding “Say on Pay” votes annually and the Board adopted this standard.

After consideration of each alternative, the Board recommends that the advisory vote on executive compensation continue to be submitted to the stockholders every year. While the Company utilizes three-year performance cycles in its long-term compensation grants, compensation decisions regarding salary, incentive bonus, stock options and awards of long-term grants are made annually, and an annual vote provides feedback for our Compensation Committee that can be taken into account each year when making compensation decisions and setting our compensation philosophy, policies and practices. An annual advisory vote is also consistent with our practice of open dialogue with our stockholders.

Your vote on frequency is advisory and will not be binding on the Board or the Company. Although non-binding, the Board and the Compensation Committee value the views of the Company’s stockholders and will carefully consider the outcome of the frequency vote. Notwithstanding the Board’s recommendation and the outcome of the stockholder vote, the Board may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.

The Board of Directors recommends a vote for a ONE-YEAR frequency of the advisory vote

on executive compensation

60

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 has engaged Deloitte & Touche LLP (Deloitte) to serve as ITW’s independent registered public accounting firm for the fiscal year ending December 31, 2023. Deloitte & Touche LLP has been employed to perform this function for the Company since 2002.

Audit Fees

Deloitte, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the Deloitte Entities) will bill us approximately $10,674,000 for professional services in connection with the 2022 audit, as compared with $10,701,000 for the 2021 audit of the annual financial statements and internal controls. These fees relate to: (i) the audit of the annual financial statements included in our Form 10-K; (ii) the review of the quarterly financial statements included in our Quarterly Reports on Form 10-Q; (iii) the internal controls audit; and (iv) statutory audits.

Audit-Related Fees

During 2022 and 2021, the Deloitte Entities billed us approximately $25,000 and $30,000, respectively, for audit-related services. These fees relate to work performed with respect to technical accounting assistance and regulatory filings.

Tax Fees

These fees include work performed by the Deloitte Entities for 2022 and 2021 with respect to tax compliance services such as assistance in preparing various types of tax returns globally ($1,059,000 and $1,453,000, respectively) and tax planning services, often related to our restructurings and new tax rules ($988,000 and $896,000, respectively).

All Other Fees

There were no fees for other services rendered by the Deloitte Entities for 2022 and 2021.

Audit Committee Pre-Approval Policies

The Audit Committee has adopted policies and procedures for pre-approval of all audit and non-audit related work to be performed by ITW’s independent registered public accounting firm. As a part of those procedures, the Audit Committee performs a qualitative analysis of all audit and non-audit work to be performed by our independent registered public accounting firm. Each year, the Audit Committee receives a detailed list of the types of audit-related and non-audit related services to be performed, along with estimated fee amounts. The Audit Committee then reviews and pre-approves audit work and certain categories of tax and other non-audit services that may be performed. In conducting its analysis, the Audit Committee carefully contemplates the nature of the services to be provided and considers whether such services: (i) are prohibited under applicable rules; (ii) would result in our accountants auditing

2023 PROXY STATEMENT 61

Proposal 4 - Ratification of the Appointment of Independent Registered Public Accounting Firm

their own work; (iii) would result in our accountants performing management functions; (iv) would place our accountants in a position of acting as an advocate for the Company; or (v) would present a real risk of a conflict of interest or otherwise impair our accountants’ independence. The Audit Committee also annually pre-approves the budget for annual GAAP, statutory and benefit plan audits. Company management provides quarterly updates to the Audit Committee regarding year-to-date expenditures versus budget for audit and non-audit services. The Audit Committee also considers whether specific projects or expenditures could potentially affect the independence of ITW’s independent registered public accounting firm. Company management and the independent registered public accounting firm will monitor the fees for pre-approved services on an on-going basis to ensure that the pre-approved fees are not exceeded. Company management and the independent registered public accounting firm will seek pre-approval from the Audit Committee if fees are expected to be incurred for pre-approved services in excess of the pre-approved amounts.

Any new services and fees are presented to the Audit Committee for pre-approval at each Audit Committee meeting. If the timing of a new service or fee occurs in-between Audit Committee meetings, a description of the services and fees is provided to the Audit Committee Chair for pre-approval, and any such pre-approvals are discussed with the full Audit Committee at the next scheduled meeting.

The Audit Committee annually reviews Deloitte’s independence and performance in determining whether to retain Deloitte or engage another firm as our independent registered public accounting firm. In the course of these reviews, the Audit Committee considers, among other things:

•Deloitte’s historical and recent performance on the ITW audit;

•External data relating to audit quality and performance, including recent Public Company Accounting Oversight Board reports on Deloitte and its peer firms;

•Deloitte’s independence;

•The appropriateness of Deloitte’s fees, on both an absolute basis and as compared to its peer firms;

•Deloitte’s tenure as our independent auditor and its familiarity with our global operations and businesses, accounting policies and practices and internal control over financial reporting; and

•Deloitte’s capability and expertise in handling the breadth and complexity of our global operations.

Based on this evaluation, the Audit Committee believes that Deloitte is independent and that it is in the best interests of the Company and our stockholders to retain Deloitte to serve as our independent registered public accounting firm for 2023.

Although we are not required to do so, we believe that it is appropriate for us to request stockholder ratification of the appointment of Deloitte as our independent registered public accounting firm. If stockholders do not ratify the appointment, the Audit Committee will investigate the reasons for the stockholders’ rejection and reconsider the appointment. Representatives of Deloitte will be present at our Annual Meeting and will have the opportunity to make a statement and respond to questions.

The Board of Directors recommends a vote “FOR” ratification of the appointment of

Deloitte & Touche LLP.

62

Proposal 4 - Ratification of the Appointment of Independent Registered Public Accounting Firm

Audit Committee Report

The Audit Committee of the Board of Directors is composed of six independent directors, as defined in the listing standards of the New York Stock Exchange, and the Board of Directors has determined that all Audit Committee members are “financially literate.” In addition, the Board of Directors has determined that Messrs. Brutto and Henderson and Ms. Grier meet the Securities and Exchange Commission criteria of “audit committee financial expert.” The Audit Committee operates under a written charter adopted by the Board of Directors, which was most recently reviewed by the Audit Committee in February 2023.

The Audit Committee is responsible for providing oversight to the Company’s financial reporting process through periodic meetings with ITW’s independent registered public accountants, internal auditors and management in order to review accounting, auditing, internal control and financial reporting matters. The Audit Committee is also responsible for assisting the Board in overseeing: (a) the integrity of the Company’s financial statements; (b) the Company’s compliance with legal and regulatory requirements; (c) the independent registered public accounting firm’s qualifications, independence and performance; (d) the Company’s overall risk policies and practices; and (e) the performance of the Company’s internal audit function. Company management is responsible for the preparation and integrity of the financial reporting information and related systems of internal controls. The Audit Committee, in carrying out its role, relies on Company senior management, including senior financial management, and ITW’s independent registered public accounting firm.

The following is the report of the Audit Committee.

We have reviewed and discussed with senior management the audited financial statements of the Company. Management has confirmed to the Audit Committee that the financial statements have been prepared in conformity with generally accepted accounting principles. We have also reviewed and discussed with Deloitte & Touche LLP, ITW’s independent registered public accounting firm, its audit and opinion regarding the Company’s financial statements.

We have reviewed and discussed with senior management their assertion and opinion regarding the Company’s internal controls. Management has confirmed to the Audit Committee that internal controls over financial reporting have been appropriately designed and are operating effectively to prevent or detect any material financial statement misstatements. We have also reviewed and discussed with Deloitte & Touche LLP its audit and opinion regarding the Company’s internal controls.

We have reviewed and discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) under which Deloitte & Touche LLP must provide us with additional information regarding the scope and results of its audit of the Company’s financial statements. This information includes: (1) Deloitte & Touche LLP’s responsibility under generally accepted auditing standards; (2) significant accounting policies; (3) management judgments and estimates; (4) any significant audit adjustments or internal control matters; (5) any disagreements with management; and (6) any difficulties encountered in performing the audit.

We have received from Deloitte & Touche LLP a letter providing the disclosures required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence with respect to any relationships between Deloitte & Touche LLP and the Company that in its professional judgment may reasonably be thought to bear on independence. Deloitte & Touche LLP has discussed its independence with us, and it has confirmed in the letter that, in its professional judgment, it is in a position to serve the Company as its Independent Registered Public Accounting Firm.

The Audit Committee also discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope and plans for their respective audits. The Audit Committee meets periodically with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

Based on the reviews and discussions described above, we recommended to the Board of Directors, and the Board approved, the inclusion of the audited financial statements in the Company’s Form 10-K for the year ended December 31, 2022, for filing with the Securities and Exchange Commission.

Pamela B. Strobel, Chair

Daniel J. Brutto

Darrell L. Ford

Kelly J. Grier

Jay L. Henderson

David B. Smith, Jr.

2023 PROXY STATEMENT 63

The Company has been notified that John Chevedden, beneficial owner of at least 50 shares of the Company’s common stock, intends to present the following proposal for consideration at the Annual Meeting. The Company will provide Mr. Chevedden’s address upon oral or written request made to our Corporate Secretary. You should read carefully the description of the proposal. The Board of Directors recommends that you vote “AGAINST” this proposal.

ITW — Rule 14a-8 Proposal, October 26, 2022 I Revised November 25, 2022

Proposal 5 — Independent Board Chairman

Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO.

Whenever possible, the Chairman of the Board shall be an Independent Director.

The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an expedited basis.

It is a best practice to adopt this policy soon. However this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition. A lead director is no substitute for an independent Board Chairman. According to the Illinois Tool Works governing documents the ITW Lead Director lacks in having exclusive powers. For instance some of the limited duties only require lead director approvals after the vast majority of work is done and some of these powers are shared with others:

•Acts as a key liaison between the chairman and the independent directors. (A task that others may also have.)

•Have the authority to call meetings of the independent directors, when necessary. (A power that other directors may have.)

•Approve meeting agendas for the Board, but no input before the agenda is ready to be finalized.

•Approve information sent to the Board, but no input before the information is ready to be finalized.

•Approve meeting schedules but only to assure there is sufficient time and no input before the schedule is ready to be finalized.

•Communicate director feedback to the chairman after each Board meeting

Plus management fails to give shareholders enough information on this topic to make a more informed decision. There is no comparison of the exclusive powers of the Office of the Chairman and the exclusive powers of the lead director. The ascending complexities of a company with $60 Billion in market capitalization, like ITW, increasingly demand that 2 persons fill the 2 most important jobs at ITW on an enduring basis —Chairman and CEO.

Please vote yes:

Independent Board Chairman — Proposal 5

64

Proposal 5 - Non-Binding Stockholder Proposal for an Independent Board Chairman

Board of Directors Statement in Opposition

After careful consideration, the Board recommends a vote AGAINST this proposal for the reasons provided below:

The Board is best positioned to determine its leadership structure on a case-by-case basis taking into account the relevant circumstances.

In accordance with ITW’s Corporate Governance Guidelines, the Board examines whether the role of Chairman and CEO should be combined each time the Board elects a new CEO. The guidelines also provide the Board with discretion to separate or combine the offices of Chairman and CEO at such other times as it deems appropriate. The Board has exercised this discretion in the past – neither the current CEO nor his predecessor served as Chairman when first elected to the CEO role.

Since May 2015, given Mr. Santi’s deep knowledge and understanding of the Company’s business model, operations and culture, the Board has determined that he is best positioned to lead the Board in its ongoing oversight of the Company’s operations and strategy. ITW’s differentiated and proprietary business model is our competitive advantage and has driven outstanding operational and financial results over the last decade. The Company’s seven industry-leading segments leverage the ITW Business Model to generate best-in-class margins and develop highly innovative, customer-focused solutions, which in turn drive strong growth. A deep understanding of the ITW Business Model is critical to successful leadership of the Company and its Board.

The flexibility provided by our Corporate Governance Guidelines allows the Board of Directors to select the most effective leadership structure for the Company, considering all relevant factors and circumstances at any particular time. The Board believes that maintaining this flexibility is in the best interests of ITW and its stockholders.

ITW’s Lead Director provides robust independent leadership and oversight.

Since the roles of Chairman and CEO were combined in 2015, the Board has elected an independent director as Lead Director. The Lead Director is elected for a one-year term. The Board believes that this structure, which calls for a strong, independent and highly experienced Lead Director with well-defined responsibilities, working alongside ITW’s experienced and engaged independent directors, provides effective oversight of the Company’s management, corporate strategy and enterprise risk.

Our current Lead Director, Mr. Richard H. 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. and as a member of the Board of McDonald’s Corporation. Mr. Lenny actively engages with ITW’s Chairman and CEO on overall strategy, including sustainability strategy and goals, enterprise risk oversight and succession planning. Furthermore, Mr. Lenny regularly provides input that is incorporated into the agendas for Board and Committee meetings, contrary to the proponent’s assertion that he provides no input before the agendas are ready to be finalized.

Additional duties of the lead director, set forth in the Company’s Corporate Governance Guidelines, include:

•Acting as a key liaison between the Chairman of the Board and the independent directors;

•Presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;

•Approving meeting agendas sent to the Board;

•Approving meeting schedules to ensure there is sufficient time to discuss all agenda items;

•Approving information sent to the Board;

•Communicating Board member feedback to the Chairman after each Board meeting;

•If requested by major stockholders, participating in meetings or directly communicating with such stockholders;

•Calling meetings of the independent directors; and

•Performing such other duties as requested by the Board.

ITW’s Board leadership structure ensures effective, independent Board oversight.

Furthermore, we believe the following Board practices bolster Board effectiveness and accountability, and obviate the need for a rigid policy requiring the separation of the Chairman and CEO roles:

•Annual independent director evaluation of the Chairman and CEO;

•Experienced Board with a broad and diverse range of skills and backgrounds, and all members are elected annually by majority vote;

•All directors (except Mr. Santi) are independent under the NYSE independence standards;

•Each of our key standing committees (Audit, Compensation and Corporate Governance and Nominating) is comprised solely of independent directors;

•Independent directors meet in executive session at each regularly scheduled meeting of the Board and its committees; and

•Directors have unfettered access to senior management, other employees and outside advisors.

In addition, the Board and its committees annually conduct a thorough assessment of their performance. Specifically, the Board and the Audit, Compensation, and Corporate Governance and Nominating Committees conduct annual evaluations that assess the

2023 PROXY STATEMENT 65

Proposal 5 - Non-Binding Stockholder Proposal for an Independent Board Chairman

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 committee meetings. The Board also 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.

ITW’s strong governance practices promote effective and independent oversight.

The Board recognizes that a commitment to strong corporate governance standards is an essential element of promoting long-term stockholder value and ensuring accountability, and has continuously sought to adopt strong corporate governance practices, including:

•Annual election of all directors;

•Majority voting for directors with a director resignation policy;

•Stock ownership requirements for executives and directors;

•Stockholder right to call special meetings;

•Proxy access; and

•Simple majority vote to amend the charter and by-laws.

In sum, given the demonstrated successes of the Company’s Chairman and CEO, the robust role and responsibilities of our Lead Director and ITW’s strong Board and corporate governance practices, the Board believes it is in the best interests of the Company and its stockholders to maintain the flexibility to determine the appropriate leadership structure for the Company.

For the foregoing reasons, the Board of Directors believes that this proposal is not in

the best interests of the Company or our stockholders and unanimously recommends

that you vote “AGAINST” this proposal.

66

Beneficial Ownership of Common Stock

Ownership of ITW Stock

Directors and Executive Officers

The following table shows the number of shares of ITW common stock beneficially owned by ITW’s executive officers and Board of Directors as of December 31, 2022, except as otherwise noted. The “percent of class” calculation is based on 305,048,624 shares of ITW common stock outstanding as of December 31, 2022. In general, beneficial ownership includes any shares a director or executive officer can vote or dispose and 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.

The number of the directors’ phantom stock units disclosed in the table represents an equivalent number of shares of ITW common stock as of December 31, 2022. Because the granting of phantom stock units was discontinued in May 2012, Messrs. Ford, Henderson and Lenny and Ms. Grier, who joined the Board after that date, were not awarded phantom stock units upon joining the Board. Phantom stock units are not transferable and have no voting rights. The units are payable in cash and are not included in the “percent of class” calculation.

Beneficial Owner	Shares of Common Stock Beneficially Owned		Phantom Stock Units	Percent of Class
Directors (other than Executive Officers)
Daniel J. Brutto	20,128	(1)	1,283	*
Susan Crown	62,275	(2)	6,713	*
Darrell L. Ford	2,582	(3)	—	*
Kelly J. Grier	194	(4)	—	*
James W. Griffith	19,872	(5)	1,283	*
Jay L. Henderson	20,154		—	*
Richard H. Lenny	17,625	(6)	—	*
David B. Smith, Jr.	390,411	(7)	1,363	*
Pamela B. Strobel	38,208	(8)	1,438	*
Anré D. Williams	6,674		1,336	*
Named Executive Officers
E. Scott Santi	1,213,172	(9)	—	*
Michael M. Larsen	156,805	(10)	—	*
Christopher A. O’Herlihy	306,986	(11)	—	*
Mary K. Lawler	110,095	(12)	—	*
Lei Z. Schlitz	109,613	(13)	—	*
Michael R. Zimmerman	87,094	(14)	—	*
Directors and Executive Officers as a Group (23 individuals)	2,699,818	(15)	13,416	*

*    Less than 1%

(1)Includes 5,188 deferred shares.

(2)Includes (a) 4,000 shares owned by Ms. Crown’s spouse, which were pledged to secure bank borrowings prior to April 1, 2013 (the date of adoption of the Company’s Hedging/Anti-Pledging Policy), and as to which she disclaims beneficial ownership; (b) 4,000 shares held in trusts of which Ms. Crown’s children are beneficiaries, as to which she disclaims beneficial ownership; and (c) 16,648 deferred shares.

(3)Includes 2,582 deferred shares.

(4)Includes 194 deferred shares.

(5)Includes 12,261 deferred shares.

(6)Includes (a) 13,264 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.

2023 PROXY STATEMENT 67

Beneficial Ownership of Common Stock

(7)Includes (a) 94,000 shares owned jointly with Mr. Smith’s spouse; (b) 15, 517 shares in trusts of which Mr. Smith’s children are beneficiaries, as to which he disclaims beneficial ownership; and (c) 255,900 shares held in a trust with respect to which Mr. Smith shares voting and investment power. Mr. Smith’s holdings are reported as of March 3, 2023, by which date shares previously reported as pledged in past proxy statements were no longer pledged.

(8)Includes 29,203 deferred shares.

(9)Includes (a) 4,163 shares allocated to Mr. Santi’s account in the ITW Savings and Investment Plan; (b) 978,872 shares covered by options exercisable within 60 days; and (c) 16,599 performance share units which vest within 60 days.

(10)Includes (a) 115,945 shares covered by options exercisable within 60 days; and (b) 4,258 performance share units which vest within 60 days.

(11)Includes (a) 1,835 shares allocated to Mr. O’Herlihy’s account in the ITW Savings and Investment Plan; (b) 257,798 shares covered by options exercisable within 60 days; and (c) 4,622 performance share units which vest within 60 days.

(12)Includes (a) 392 shares allocated to Ms. Lawler’s account in the ITW Savings and Investment Plan; (b) 87,413 shares covered by options exercisable within 60 days; and (c) 1,951 performance share units which vest within 60 days.

(13)Includes (a) 95,453 shares covered by options exercisable within 60 days; and (b) 1,750 performance share units which vest within 60 days.

(14)Includes (a) 73,780 shares covered by options exercisable within 60 days; and (b) 1,702 performance share units which vest within 60 days.

(15)The total number of shares shown reflects shares owned as of December 31, 2022 for all directors and officers, except for Mr. Smith, whose shares owned as of March 3, 2023 are included in the total. The total includes (a) 1,724,101 shares covered by options exercisable within 60 days; (b) an aggregate of 42,427 restricted stock units and performance share units which vest within 60 days; and (c) 4,000 shares which were pledged as security prior to April 1, 2013 (the date of adoption of the Company’s Hedging/Anti-Pledging Policy).

Other Principal Stockholders

The following table shows, as of December 31, 2022, the only stockholders that we know to be beneficial owners of more than 5% of ITW common stock. The “percent of class” calculation is based on 305,048,624 shares of ITW common stock outstanding as of December 31, 2022.

Name and Address of Beneficial Owner	Shares of Common Stock Beneficially Owned		Percent of Class
Briar Hall Management LLC 511 Union Street, Suite 735 Nashville, TN 37219	26,352,224	(1)	8.6	%
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355	25,720,512	(2)	8.4	%
State Farm Mutual Automobile Insurance Company One State Farm Plaza Bloomington, IL 61710	21,932,001	(3)	7.1	%
BlackRock, Inc. 55 East 52nd Street New York, NY 10055	21,310,989	(4)	6.9	%

(1)Briar Hall Management LLC (Briar Hall) holds certain ITW shares of common stock owned by the Smith family, founders of ITW. Briar Hall has sole voting and investment power with respect to 25,321,124 shares and shared voting and investment power with respect to 1,031,100 shares. The information above regarding the number of shares beneficially owned was provided in a Schedule 13G/A filed with the SEC on February 9, 2023.

(2)The Vanguard Group does not have sole voting power with respect to any shares and has shared voting power with respect to 440,913 shares, sole investment power with respect to 24,497,390 shares and shared investment power with respect to 1,223,122 shares. The information above regarding number of shares beneficially owned was provided in a Schedule 13G/A filed with the SEC on February 9, 2023.

(3)State Farm Mutual Automobile Insurance Company and its affiliates have sole voting and investment power with respect to 21,029,900 shares and shared voting and investment power with respect to 902,101 shares. The information above regarding number of shares beneficially owned was provided in a Schedule 13G/A filed with the SEC on January 31, 2023.

(4)BlackRock, Inc. has sole voting power with respect to 18,850,161 shares and sole investment power with respect to 21,310,989 shares. The information above regarding number of shares beneficially owned was provided in a Schedule 13G/A filed with the SEC on February 1, 2023.

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Voting and Virtual Annual Meeting Information

What am I voting on and how does the Company’s Board recommend that I vote?

The Company’s Board solicits your vote on the following proposals:

Proposal Submitted for Vote	Board Recommendation
1.    The election of the director nominees named in this proxy statement for the upcoming year	FOR
2.    An advisory vote on executive compensation	FOR
3.    An advisory vote on the frequency of the advisory vote on executive compensation (i.e. every one, two or three years)	ONE-YEAR
4.    The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2023	FOR
5.    A non-binding stockholder proposal for an independent Chairman	AGAINST

Who may vote?

Stockholders at the close of business on March 6, 2023, the record date, may vote. On that date, there were 304,821,117 shares of ITW common stock outstanding.

How many votes do I have?

Each share of ITW common stock that you own entitles you to one vote.

How do I vote?

You may vote your shares in one of the following four ways:

1.    By telephone:	Toll-free by calling 1-800-690-6903;
2.    By Internet:	See the instructions at www.proxyvote.com;
3.    By mail:	If you received these proxy materials by mail, by signing, dating and mailing the enclosed proxy card; or
4.    At the meeting:	Virtually attend our Annual Meeting, where you can submit a vote. See "How can I vote my shares at
	the virtual Annual Meeting?" below.

If you vote by telephone or Internet, you should have your proxy card or Notice of Internet Availability of Proxy Materials in hand when you call or go to www.proxyvote.com. If you hold your shares through a bank or broker that does not offer telephone or Internet voting, please complete and return your proxy voting instruction card by mail.

When must I submit my vote by Internet or by phone?

If you vote by Internet or by phone, you must transmit your vote by 10:59 p.m., Central Time, on May 4, 2023.

If I hold shares through an ITW Savings and Investment 401(k) Plan, when must I submit my vote?

Shares held through an ITW 401(k) plan must be voted by 10:59 p.m., Central Time, on May 2, 2023, in order to be tabulated in time for the meeting.

How do I attend the Annual Meeting?

The Annual Meeting will be held in virtual format and will afford our stockholders the same rights and opportunities as an in-person meeting, allowing for active participation by all our stockholders at no cost, regardless of their geographic location. To attend the Annual Meeting, vote and submit questions during the Annual Meeting, go to www.virtualshareholdermeeting.com/ITW2023 on the date of the meeting. If you are a registered stockholder or beneficial owner of common stock holding shares at the close of business on the record date, you may attend the Annual Meeting and vote and submit questions by visiting www.virtualshareholdermeeting.com/ITW2023 and logging in by entering the 16-digit control number found on your proxy card, Notice of Internet Availability or voter instruction card, as applicable. If you lost or misplaced your 16-digit control number or are not a stockholder, you will be able to attend the meeting as a guest by visiting www.virtualshareholdermeeting.com/ITW2023 and registering as a guest. If you enter the meeting as a guest, you will not be able to vote your shares or submit questions during the meeting.

2023 PROXY STATEMENT 69

Other Information

You may log into the Annual Meeting beginning at 8:15 a.m., Central Time, on May 5, 2023 and the Annual Meeting will begin promptly at 8:30 a.m., Central Time.

How can I vote my shares at the virtual Annual Meeting?

Shares held directly in your name as the stockholder of record may be voted if you are attending the virtual Annual Meeting by entering the 16-digit control number found on your proxy card or Notice of Internet Availability when you log into the meeting at www.virtualshareholdermeeting.com/ITW2023.

Shares held in street name through a brokerage account or by a broker, bank or other nominee may be voted at the virtual Annual Meeting by entering the 16-digit control number found on your voter instruction card when you log into the meeting.

Even if you plan to virtually attend the Annual Meeting, we recommend that you vote in advance, as described above under “How do I vote?” so that your vote will be counted if you later decide not to attend the Annual Meeting.

May I ask questions at the virtual Annual Meeting?

Yes. Stockholders (other than those stockholders who enter the meeting as a guest, as described above) will have the ability to submit questions in writing during the Annual Meeting via the annual meeting portal at www.virtualshareholdermeeting.com/ITW2023. As part of the Annual Meeting, we will hold a live question and answer session, during which we intend to answer questions submitted during the meeting that are pertinent to the Company and the business of the meeting, as time permits. Rules of Conduct for the Annual Meeting, including the types of questions that the Company does not intend to address will be available on our website at https://investor.itw.com prior to the meeting, and on the meeting portal at www.virtualshareholdermeeting.com/ITW2023, on the day of the meeting. Examples of questions that are not pertinent are questions related to general economic, political or other views that are not directly related to the business of the Annual Meeting, questions related to personal grievances and derogatory references to individuals.

If there are pertinent questions that cannot be answered during the Annual Meeting due to time constraints, we will post answers to a representative set of such questions (e.g., consolidating duplicative questions) on our website at https://investor.itw.com. The questions and answers will be made available as soon as practicable after the Annual Meeting.

What if I have technical difficulties or trouble accessing the Annual Meeting?

If you experience any technical difficulties accessing the virtual Annual Meeting or during the meeting, please call the toll-free number that will be available at www.virtualshareholdermeeting.com/ITW2023 for assistance. We will have technicians ready to assist you with any technical difficulties you may have beginning 15 minutes prior to the start of the Annual Meeting, at 8:15 a.m., Central Time, on May 5, 2023.

How can I obtain an additional proxy card or voting instruction card?

If you lose, misplace or otherwise need to obtain a proxy card, Notice of Internet Availability or voting instruction card and:

•You are a stockholder of record, contact us in writing at Illinois Tool Works Inc., 155 Harlem Avenue, Glenview, Illinois 60025, Attention: Secretary; or

•You are the beneficial owner of shares held indirectly through a broker, bank or other nominee, contact your account representative at that organization.

How does discretionary voting authority apply?

Stockholders of Record. If you are a stockholder of record and you vote by proxy, the individuals named on the proxy card (your proxies) will vote your shares in the manner you indicate. If your proxy card does not indicate how you want to vote, your proxy will be voted as follows:

“FOR” the election of each director nominee;

“FOR” the advisory vote to approve ITW’s executive compensation;

For a "ONE-YEAR" frequency of the advisory vote on executive compensation;

“FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2023;

“AGAINST” the non-binding stockholder proposal for an independent Board Chairman; and

“FOR” or “AGAINST” any other properly raised matter at the discretion of Susan Crown, Richard H. Lenny and Pamela B. Strobel, or any one of them.

Beneficial Owners. If your shares are held in a brokerage account or by a nominee and you do not provide your broker or nominee with voting instructions, the broker or nominee may represent your shares at the meeting for purposes of obtaining a quorum, but it may not exercise discretion to vote your shares at the meeting unless the proposal is considered a routine matter. The only matter being proposed for stockholder vote at the 2023 Annual Meeting that is considered a routine matter is the proposal to ratify the appointment

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Other Information

of Deloitte & Touche LLP as our independent registered public accounting firm for 2023. As a result, in the absence of voting instructions from you, your broker or nominee will not have discretion to vote on any other matter to be voted on at the Annual Meeting. If you are a beneficial owner, it is important that you provide instructions to your bank, broker or other holder of record so that your vote is counted.

May I revoke my proxy?

You may revoke your proxy at any time before it is voted at our Annual Meeting in one of four ways:

1.    Notify our Secretary in writing before our Annual Meeting that you wish to revoke your proxy;

2.    Submit another proxy with a later date;

3.    Vote by telephone or Internet after you have given your proxy; or

4.     Vote at our virtual Annual Meeting. See “How can I vote my shares at the virtual Annual Meeting?” above.

Why didn’t I receive a paper copy of the proxy statement and Form 10-K?

Unless our stockholders have requested paper copies, we are furnishing proxy materials through the Internet. If you received a Notice of Internet Availability by mail or electronically, you will not receive a printed copy of the proxy materials unless you specifically request one. Instead, the Notice of Internet Availability provides instructions on how you may access and review our proxy materials online. The Notice of Internet Availability also instructs you on how you may submit your proxy via the Internet. If you received the Notice of Internet Availability and would still like to receive a printed copy of our proxy materials without charge, you should follow the instructions for requesting such materials included in the Notice of Internet Availability.

I have received paper copies - how do I receive future proxy materials electronically?

To sign up to receive stockholder communications electronically, follow the instructions on your proxy card or Notice of Internet Availability under “Vote by Internet.” You will need the 16-digit control number that is printed in the box marked by the arrow, which appears on your proxy card or Notice of Internet Availability. In order to receive the communications electronically, you must have an e-mail account and access to the Internet. If you own your shares through a broker or other nominee, you may contact them directly to request electronic access. Your consent to electronic access will be effective until you revoke it. You may revoke your consent by going to www.proxyvote.com and using the 16-digit control number that is printed in the box marked by the arrow to complete the revocation.

What does it mean if I receive more than one Notice of Internet Availability or set of proxy materials?

Your shares are likely registered differently or are in more than one account. For each notice, proxy and/or voting instruction card or e-mail notification you receive that has a 16-digit control number, you must vote each separately to ensure that all shares you own are voted.

How do I obtain a separate set of proxy materials if I share an address with other stockholders?

We have adopted a procedure approved by the SEC called “householding” whereby we are delivering one Notice of Internet Availability or one set of proxy materials to certain stockholders who share an address, unless otherwise requested. If you received your proxy materials by mail, a separate proxy card is included with the proxy materials for each stockholder sharing an address.

If you share an address with another stockholder and received only one set of proxy materials, and would like to request a separate copy of these materials, please contact Broadridge Financial Solutions, Inc. at 1-866-540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. We will promptly deliver a separate copy (free of charge) upon request. Similarly, if you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the Notice of Internet Availability or, if applicable, the proxy materials, or if you hold stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, you may also contact Broadridge Financial Solutions, Inc. If your shares are held through a brokerage account, please contact your broker directly.

Stockholders who participate in householding will continue to receive separate proxy cards to vote their shares if they receive your proxy materials by mail. Stockholders that receive the Notice of Internet Availability will receive instructions on how to vote their shares via the Internet.

What constitutes a quorum?

The presence, in person or by proxy, of the holders of a majority of ITW shares of common stock entitled to vote at our Annual Meeting constitutes a quorum. Your shares will be considered part of the quorum if you return a signed and dated proxy card or if you vote by telephone or Internet. Abstentions and broker non-votes are counted as “shares present” at the meeting for purposes of determining if a quorum exists. A broker non-vote occurs when your bank, broker or other holder of record holding shares for you as the beneficial

2023 PROXY STATEMENT 71

Other Information

owner submits a proxy that does not indicate a vote as to a non-routine proposal because that holder has not received voting instructions from you and, therefore, does not have voting authority for that proposal.

What vote is required to approve each proposal, assuming a quorum is present?

Election of Directors: The number of shares voted “FOR” a director must exceed the number of shares voted “AGAINST” that director to constitute approval by the stockholders.

Advisory (Non-Binding) Vote on ITW’s Executive Compensation: The affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote will constitute approval by the stockholders.

Advisory (Non-Binding) Vote on the Frequency of the Advisory Vote on Executive Compensation: The frequency (i.e. one, two or three years) receiving the greatest number of votes will be the frequency approved by the stockholders.

Ratification of the Appointment of our Independent Registered Public Accounting Firm: The affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote will constitute approval by the stockholders.

Approval of Non-Binding Stockholder Proposal for an Independent Board Chairman: The affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote will constitute approval by the stockholders.

What is the effect of a broker non-vote generally and on each proposal?

A broker non-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but they will not be counted for purposes of determining the number of votes present in person or represented by proxy and entitled to vote with respect to a particular proposal. Broker non-votes will not, therefore, impact our ability to obtain a quorum and will have no effect on the election of directors, ratification of the appointment of our Independent Registered Public Accounting Firm, approval of ITW’s executive compensation, or approval of the non-binding Stockholder Proposal.

What if I “abstain” from voting?

An abstention on the election of directors or the frequency of the advisory vote on executive compensation will have no effect on the outcome. An abstention on the other proposals will have the effect of a vote against those proposals.

Who pays to prepare, mail and solicit the proxies?

We will pay the cost of solicitation of proxies including preparing, printing and mailing this proxy statement and the Notice of Internet Availability. We will also authorize brokers, dealers, banks, voting trustees and other nominees and fiduciaries to forward copies of the proxy materials to the beneficial owners of ITW common stock. Upon request, we will reimburse them for their reasonable expenses. Also, for a fee of $20,000 plus approved out-of-pocket expenses, D.F. King & Co., Inc. assisted us with our shareholder engagement process and may assist us in soliciting proxies. In addition, our officers, directors and employees may solicit proxies in person, by mail, by telephone or otherwise.

Submitting Proxy Proposals and Director Nominations for the 2024 Annual Meeting

How do I submit a stockholder proposal for the 2024 Annual Meeting?

To be considered for inclusion in our proxy statement for our May 2024 Annual Meeting, a stockholder proposal must be received no later than November 25, 2023. Your proposal must be in writing and must comply with the proxy rules of the SEC. You should send your proposal to our Secretary at our address on the Notice of Annual Meeting of Stockholders immediately following the cover of this proxy statement.

You also may submit a proposal that you do not want included in the proxy statement, but that you want to raise at our 2024 Annual Meeting. We must receive your proposal in writing on or after January 6, 2024, but no later than February 5, 2024. As detailed in the advance notice procedures described in our by-laws, for a proposal other than the nomination of a director to be properly brought before an annual meeting, your notice of proposal must include: (1) your name and address, as well as the name and address of the beneficial owner of the shares, if any; (2) the number of shares of ITW stock owned beneficially and of record by you and any beneficial owner as of the date of the notice (which information must be supplemented as of the record date); (3) a description of certain agreements, arrangements or understandings entered into by you or any beneficial owner with respect to the shares (which information must be supplemented as of the record date) or the business proposed to be brought before the meeting; (4) any other information regarding you or any beneficial owner that would be required under the SEC’s proxy rules and regulations; and (5) a brief description of the business you propose to be brought before the meeting, the reasons for conducting that business at the meeting, and any material interest that you or any beneficial owner has in that business.

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Other Information

Does ITW allow stockholders to have proxy access for the nomination of directors?

Yes. The Board has adopted proxy access by-law provisions to permit stockholders to include nominees in the Company’s proxy statement and form of proxy. See “How do I use proxy access to nominate a director candidate to be included in ITW’s 2024 Proxy Statement?” below.

How do I use proxy access to nominate a director candidate to be included in ITW’s 2024 Proxy Statement?

Any stockholder or group of up to 20 stockholders meeting our continuous ownership requirement of 3% or more of our common stock for at least 3 years, who wishes to nominate a candidate or candidates for election in connection with our 2024 Annual Meeting and require us to include such nominees in our proxy statement and form of proxy, must submit such nomination and request so that it is received by our Secretary on or after January 6, 2024, but no later than February 5, 2024. The number of candidates that may be so nominated is limited to the greater of two or the largest whole number that does not exceed 25% of the Board. Recallable loaned shares count as owned for purposes of meeting the continuous ownership requirement, but each stockholder in the requesting group must have full voting and investment rights as well as economic interest in their shares at the time of nomination, record date and meeting date. Two or more investment funds that are part of the same family of funds or sponsored by the same employer will count as one stockholder for purposes of determining the size of the group. All proxy access nominations must be accompanied by information about the nominating stockholders as well as the nominees and meet the requirements as specified in Article II, Section 12 of our by-laws, which include but are not limited to the information specified under “How do I nominate a director candidate who would not be included in ITW’s Proxy Statement?” below.

How do I nominate a director candidate who would not be included in ITW’s Proxy Statement?

If you wish to nominate an individual for election as a director at our 2024 Annual Meeting, our Secretary must receive your written nomination on or after January 6, 2024, but no later than February 5, 2024. As detailed in the advance notice procedures described in our by-laws, for a nomination to be properly brought before an annual meeting, your notice of nomination must include: (1) your name and address, as well as the name and address of the beneficial owner of the shares, if any; (2) the number of shares of ITW stock owned beneficially and of record by you and any beneficial owner as of the date of the notice (which information must be supplemented as of the record date); (3) a description of certain agreements, arrangements or understandings entered into by you or any beneficial owner with respect to the shares (which information must be supplemented as of the record date); (4) the name, age and home and business addresses of the nominee; (5) the principal occupation or employment of the nominee; (6) the number of shares of ITW stock that the nominee beneficially owns; (7) a statement that the nominee is willing to be nominated and serve as a director; (8) a statement as to whether the nominee, if elected, intends to tender his or her resignation to address majority voting in accordance with our Corporate Governance Guidelines; (9) an undertaking to provide any other information required to determine the eligibility of the nominee to serve as an independent director or that could be material to stockholders’ understanding of the nominee’s independence; and (10) any other information regarding you, any beneficial owner or the nominee that would be required under the SEC’s proxy rules and regulations had our Board of Directors nominated the individual. Any nomination that you make must be approved by our Corporate Governance and Nominating Committee, as well as by our Board of Directors. The process for the selection of director candidates is described under “Proposal 1—Election of Directors—Corporate Governance Policies and Practices—Director Candidate Selection Process.”

In addition to satisfying the foregoing requirements under our by-laws, including the timelines, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees for the Company's 2024 Annual Meeting must provide in their notice the information required by Rule 14a-19 of the Securities Exchange Act of 1934, as amended.

2023 PROXY STATEMENT 73

Appendix A

SEGMENT PEER GROUP

Automotive OEM:	Enerpac Tool Group, Allison Transmission Holdings Inc., WESCO International, Inc. and BorgWarner Inc.
Food Equipment:	Middleby Corporation
Test & Measurement and Electronics:	Ametek Inc, Fortive Corp, Keysight Technologies, Inc., Mettler-Toledo International Inc., Renishaw PLC, Spectris PLC and Thermo Fisher Scientific Inc.
Welding:	Kennametal Inc., Lincoln Electric Holdings, Inc. and ESAB Corporation
Polymers & Fluids:	3M Company, Dupont De Nemours, Inc. and Huntsman Corporation
Construction Products:	Carlisle, Crane Co., Ingersoll-Rand plc, Masco Corporation and Stanley Black & Decker, Inc.
Specialty Products:	Ball Corporation, Berry Global Group Inc and Amcor plc

GAAP TO NON-GAAP RECONCILIATIONS

After-tax Return on Average Invested Capital (Unaudited)

The Company uses after-tax return on average invested capital ("After-tax ROIC") to measure the effectiveness of its operations' use of invested capital to generate profits. After-tax ROIC is not defined under U.S. generally accepted accounting principles ("GAAP"). After-tax ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company's ability to generate returns from cash invested in its operations and may be different than the method used by other companies to calculate After-tax ROIC. The Company defines After-tax ROIC as operating income after taxes divided by average invested capital, which is annualized when presented in interim periods. Operating income after taxes is a non-GAAP measure consisting of net income before interest expense and other income (expense), on an after-tax basis, which are excluded as they do not represent returns generated by the Company's operations. For comparability, the Company also excluded the discrete tax benefits of $32 million in the fourth quarter of 2022 and $51 million in the second quarter of 2022 from net income and the effective tax rate for the year ended December 31, 2022. Additionally, for comparability, the Company excluded the discrete tax benefits of $21 million in the third quarter of 2021 and $112 million in the second quarter of 2021 from net income and the effective tax rate for the year ended December 31, 2021. Total invested capital represents the net assets of the Company, other than cash and equivalents and outstanding debt which do not represent capital investment in the Company's operations. The most comparable GAAP measure to operating income after taxes is net income. Net income to average invested capital and After-tax ROIC for the years ended December 31, 2022, 2021, and 2020 were as follows:

Dollars in millions	2022		2021		2020
Numerator:
Net income	$	3,034	$	2,694	$	2,109
Discrete tax benefit related to the fourth quarter 2022	(32)		—		—
Discrete tax benefit related to the second quarter 2022	(51)		—		—
Discrete tax benefit related to the third quarter 2021	—		(21)		—
Discrete tax benefit related to the second quarter 2021	—		(112)		—
Interest expense, net of tax (1)	156		157		162
Other (income) expense, net of tax (1)	(196)		(40)		(22)
Operating income after taxes	$	2,911	$	2,678	$	2,249

2023 PROXY STATEMENT A-1

Appendix A

Denominator:
Invested capital:
Cash and equivalents	$	708		$	1,527		$	2,564
Trade receivables	3,171			2,840			2,506
Inventories	2,054			1,694			1,189
Net assets held for sale	7			—			—
Net plant and equipment	1,848			1,809			1,777
Goodwill and intangible assets	5,632			5,937			5,471
Accounts payable and accrued expenses	(2,322)			(2,233)			(1,818)
Debt	(7,763)			(7,687)			(8,122)
Other, net	(246)			(261)			(385)
Total net assets (stockholders' equity)	3,089			3,626			3,182
Cash and equivalents	(708)			(1,527)			(2,564)
Debt	7,763			7,687			8,122
Total invested capital	$	10,144		$	9,786		$	8,740
Average invested capital (2)	$	10,017		$	9,087		$	8,576
Net income to average invested capital	30.3		%	29.6		%	24.6		%
After-tax return on average invested capital	29.1		%	29.5		%	26.2		%

(1)Effective tax rate used for interest expense and other (income) expense for the years ended December 31, 2022, 2021 and 2020 was 23.2%, 23.0% and 22.0%, respectively.

(2)Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within each of the periods presented.

After-tax ROIC decreased 40 basis points for the twelve month period ended December 31, 2022 compared to the prior year period as a result of a 10.2% increase in average invested capital versus an 8.7% increase in after-tax operating income.

After-tax ROIC increased 330 basis points for the twelve month period ended December 31, 2021 compared to the prior year period as a result of a 19.1% increase in after-tax operating income versus a 5.9% increase in average invested capital.

A-2

Appendix A

A reconciliation of the 2022 effective tax rate excluding the fourth quarter 2022 discrete tax benefit of $32 million related to the utilization of capital loss carryforwards and the second quarter 2022 discrete tax benefit of $51 million related to the resolution of a U.S. tax audit is as follows:

	Twelve Months Ended
	December 31, 2022
Dollars in millions	Income Taxes		Tax Rate
As reported	$	808	21.0	%
Discrete tax benefit related to the fourth quarter 2022	32		0.8	%
Discrete tax benefit related to the second quarter 2022	51		1.4	%
As adjusted	$	891	23.2	%

A reconciliation of the 2021 effective tax rate excluding the third quarter 2021 discrete tax benefit of $21 million related to the utilization of capital loss carryforwards and the second quarter 2021 discrete tax benefit of $112 million related to a change in the U.K. income tax rate is as follows:

	Twelve Months Ended
	December 31, 2021
Dollars in millions	Income Taxes		Tax Rate
As reported	$	632	19.0	%
Discrete tax benefit related to the third quarter 2021	21		0.6	%
Discrete tax benefit related to the second quarter 2021	112		3.4	%
As adjusted	$	765	23.0	%

2012 Adjusted Income Per Share from Continuing Operations - Diluted (Unaudited)

	Twelve Months Ended
	December 31, 2012
As reported in the 2013 Form 10-K	$	4.72
Decorative Surfaces net gain	1.34
Decorative Surfaces equity interest	(0.04)
Decorative Surfaces operating results	0.21
As adjusted for the Decorative Surfaces business	$	3.21

2023 PROXY STATEMENT A-3

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D96488-Z83988-P83289 For Against Abstain For Against Abstain For Against Abstain For Against Abstain ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ILLINOIS TOOL WORKS INC. 1a. Daniel J. Brutto 1e. James W. Griffith 1d. Kelly J. Grier 1c. Darrell L. Ford 1f. Jay L. Henderson 1g. Richard H. Lenny 1h. E. Scott Santi 1i. David B. Smith, Jr. 1b. Susan Crown 1. Election of Directors The Board of Directors recommends you vote FOR all nominees: 1j. Pamela B. Strobel Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign by authorized officer and give full title. 4. Ratification of the appointment of Deloitte & Touche LLP as ITW's independent registered public accounting firm for 2023; and 2. Advisory vote to approve compensation of ITW's named executive officers; 3. Advisory vote on the frequency of the advisory vote on compensation of named executive officers; The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote FOR the following proposal: The Board of Directors recommends you vote AGAINST the following proposal: 5. A non-binding stockholder proposal, if properly presented at the meeting, for an Independent Board Chairman. The Board of Directors recommends you vote 1 YEAR on the following proposal: 3 Years1 Year 2 Years Abstain ! !!! ! !! ! !! VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 10:59 p.m., Central Time, on May 4, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/ITW2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 10:59 p.m., Central Time, on May 4, 2023. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SCAN TO VIEW MATERIALS & VOTEw ILLINOIS TOOL WORKS INC. ATTN: SHAREHOLDER RELATIONS 155 HARLEM AVENUE GLENVIEW, IL 60025

D96489-Z83988-P83289 ILLINOIS TOOL WORKS INC. ANNUAL MEETING OF STOCKHOLDERS FRIDAY, MAY 5, 2023 8:30 A.M. CT Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice, Proxy Statement and Form 10-K are available at www.proxyvote.com. The Annual Meeting will be held in virtual format at www.virtualshareholdermeeting.com/ITW2023. ILLINOIS TOOL WORKS INC. ANNUAL MEETING OF STOCKHOLDERS May 5, 2023 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned stockholder of Illinois Tool Works Inc. ("ITW") hereby appoints Susan Crown, Richard H. Lenny, and Pamela B. Strobel, or any of them, with full power of substitution, to act as proxies at the Annual Meeting of Stockholders of ITW to be held virtually at www.virtualshareholdermeeting.com/ITW2023 on May 5, 2023 with authority to vote as directed by this Proxy Card at the meeting, and any adjournments of the meeting, all shares of common stock of ITW registered in the name of the undersigned. If no direction is made, this proxy will be voted FOR the election of each director nominee under Proposal 1; FOR Proposal 2; For “1 YEAR” on Proposal 3; FOR Proposal 4; AGAINST Proposal 5; and FOR or AGAINST any other properly raised matter at the discretion of the proxies. If the undersigned is a participant in the ITW Savings and Investment Plan or the ITW Bargaining Savings and Investment Plan, the undersigned is also instructing the trustee of those plans to vote the shares of ITW common stock attributable to the undersigned in such plans as instructed on the reverse side and, in the discretion of the trustee, upon such other business as may come before the meeting, and if no instructions are given, the trustee will vote the shares in the same proportion as the shares for which voting instructions have been received. IMPORTANT – THIS PROXY CARD MUST BE SIGNED AND DATED ON THE REVERSE SIDE.