DEF 14A of Philip Morris International Inc.
Filed Mar 26, 2026 · FY20250001628280-26-021169
Election of Directors 17
Election of Directors 17 Process for Nominating Directors 17 Recommendations of the Board; Director Attributes, Refreshment and Tenure 18 Independence of Nominees 18 Majority Vote Standard in Uncontested Elections 19 Director Nominees 19
Compensation of Directors 30
Compensation of Directors 30
Compensation Tables 54
Compensation Tables 54 Summary Compensation Table 54 All Other Compensation 55 Grants of Plan-Based Awards During 2025 57 Outstanding Equity Awards as of December 31, 2025 58 Stock Option Exercises and Stock Vested During 2025 60 Pension Benefits 61 Employment Contracts, Termination of Employment and Change in Control Arrangements 63
Pay Ratio 65
Pay Ratio 65
Pay versus Performance 66
Pay versus Performance 66
Exhibit C: Glossary of Terms 87
| 2025 Annual Performance Targets and Results |
LISA A. HOOK
•review and approve the Company’s overall compensation philosophy and design; •review and approve, periodically, compensation and performance peer groups used to benchmark the competitiveness, design, and relative performance features of the Company's executive compensation program; •review, approve and recommend to the Board for approval corporate goals and objectives relevant to the compensation of the Group CEO PMI and senior management and evaluate their performance; •determine, approve and recommend to the non-management members of the Board for approval the compensation of the Group CEO PMI; •review and recommend to the Board for approval the compensation for executive officers, including forms of employment agreements, offers of employment, severance agreements, and other elements of compensation; •recommend to the Board incentive compensation plans and equity-based plans, and administer and make awards under such plans and review the cumulative effect of its actions; •determine and recommend to the Board for approval the Company’s stock ownership guidelines and monitor compliance therewith by executives; •review and assist with the development of executive succession plans, evaluate and make recommendations to the Board regarding potential Group CEO PMI candidates and evaluate candidates to fill other senior management positions; •oversee the management of risks related to the Company’s compensation policies and practices; •periodically discuss with management and assist the Board in its oversight of the development, implementation, and effectiveness of the Company's strategies related to its human capital management function; •oversee the management of risks related to human capital management, including the risk that the Company is unable to attract and retain the necessary talent with the right degree of experience and skills to achieve its ongoing business transformation; •annually review and assess the potential material risk to the Company from its compensation program and policies, including any incentive plans or other arrangements at and below the executive level; •oversee the implementation and administration of any clawback or recoupment policy allowing the Company to recoup compensation paid to the executive officers of the Company, if and as the Committee determines to be appropriate and in accordance with applicable law and NYSE listing standards; •review and discuss with management proposed annual disclosures regarding executive compensation matters; •recommend to the Board whether the Company’s Compensation Discussion and Analysis should be accepted for inclusion in the proxy statement; and •review the outcome of shareholder advisory votes on say-on-pay at the Company's Annual Shareholder Meetings and recommend to the Board any action that the Company should take in response to the voting results and the disclosure of such response in the proxy statement.
LISA A. HOOK
•review and report to the Board the overall research and development and innovation strategy of the Company; •review the Company’s pipeline of innovative products and services, including existing and future SFPs and products produced by the Company’s Wellness business, and associated benefits and risks, such as product superiority, product reliability, and time to market; •review the competitive landscape and future innovations in SFPs and the Wellness business; •oversee the enterprise risk management of (a) the Company’s research and development efforts, including risks related to innovation, intellectual property ("IP") and research related to SFPs and Wellness products; and (b) quality systems with respect to the products that are manufactured and commercialized by the Company, including risks related to product safety; •review the Company’s overall IP strategies and its portfolio of patents and other IP; •review management’s decisions regarding the allocation, deployment, utilization of and investment in the Company’s scientific and development assets and product offerings; and •review management’s decisions regarding acquiring or divesting scientific technology or otherwise investing in research or development programs. Board Risk Oversight Our Board of Directors (the “Board”) is responsible for overseeing risk management, while individual Board committees manage risks within their specific areas of responsibility. Our management is accountable for managing risks and for implementing Enterprise Risk Management (“ERM”) practices to support the achievement of our strategy and business objectives. As such, our ERM principles, practices, methodologies, and standards have been outlined in an ERM Program (the “Program”). All risk owners with an accountability for ensuring risks are appropriately managed are required to leverage the Program. As part of the Program, throughout the year, management regularly updates the Board and its committees on the evolution of principal risks and significant emerging risks. Principal risks are those risks that may compromise the achievement of the Company’s strategic ambitions and objectives or may have a critical impact on the Company’s operations. Management identifies and prioritizes short, intermediate and long-term risks based on four risk dimensions:
LISA A. HOOK
| Proxy Access | An eligible shareholder or group of shareholders who have owned 3% or more of PMI’s outstanding shares for at least three years may nominate director candidates to occupy up to 20% of the authorized Board seats in accordance with the procedures set forth in our by-laws and Rule 14a-19 under the Exchange Act (see page 17). | | Director Overboarding Policy | Each director is expected to ensure that other commitments do not interfere with the discharge of his or her duties as a director of PMI. The Governance Committee determines whether any additional service may impair a director’s ability to effectively continue to serve on the Board. | | | If a director nominee sits on the boards of more than five public companies, the Board shall determine whether such commitments would impair the ability of such nominee to continue to effectively serve on the Board. | | | If a member of the Audit and Risk Committee serves on the audit committees of more than three public companies, the Board shall determine whether such commitments would impair the ability of such member to effectively serve on the Audit and Risk Committee. | | | If the Chairman, a Committee Chair or Lead Independent Director sits on the boards of more than four public companies, the Board shall determine whether such commitments would impair the ability of such member to effectively serve as the Company’s Chairman, Committee Chair or as Lead Independent Director, as applicable. | | No Shareholder Rights Plan | The Company does not have a “poison pill” rights plan. | | Clawback Policy | The Compensation and Leadership Development Committee (the “Compensation Committee”) oversees the implementation and administration of the Company’s Policy for Recovery of Erroneously Awarded Incentive Compensation, if and as the Compensation Committee determines to be appropriate and in accordance with applicable law and NYSE listing standards (see page 51). | | Anti-Hedging and Anti-Pledging Policies | The Company has implemented rigorous policies prohibiting directors and executive officers from pledging, hedging or short selling Company stock (see page 51). | | Share Ownership Requirements | The Company’s share ownership guidelines require each of our named executive officers to own shares multiple times his/her base salary based upon his/her salary grade. The Compensation Committee annually reviews each named executive officer’s compliance with the requirements. Additionally, for equity awards that accelerate on separation, the resulting shares are subject to a 12-month holding period (see page 51). | | Director Share Retention Requirement | An independent director may not sell or otherwise dispose of shares received pursuant to the annual share award (other than shares withheld from the grant to pay taxes) unless he or she continues after the disposition to own shares having an aggregate value of at least five times the then-current annual cash retainer (see page 30). | | Double-Trigger Vesting Policy | The Company’s 2022 Performance Incentive Plan includes a double-trigger feature upon a change in control (see pages 63-64). | | Lobbying and Political Spending | The Governance Committee oversees the Company’s lobbying and trade association activities, political contributions and expenditures, and the Company’s policies related thereto (see page 11). | | Cybersecurity and Data Privacy Risks | The Audit and Risk Committee oversees the Company’s policies and practices with respect to the management of risks related to or arising from cybersecurity and data privacy, as well as data governance and use of artificial intelligence (see pages 9 and 14). | | Artificial Intelligence Governance | PMI has established a company-wide AI policy, applicable to all employees and any third-party workers with access to PMI systems. The policy provides a comprehensive framework for how AI is sourced, developed, deployed, used, monitored and governed across PMI. This policy codifies PMI’s AI Guiding Principles, which form the foundation for the responsible use of AI in PMI, and includes requirements related to oversight, accountability, risk management, and compliance with existing policies and regulations such as the EU AI Act. | | Business Sustainable Value Governance and Oversight | The Governance Committee oversees the Company’s policies, programs and related risks to the Company that concern certain business sustainability-related topics, strategy and performance. The Compensation Committee oversees the non-financial performance index component of executive compensation. The Audit and Risk Committee reviews any sustainability information to be included in the Company’s financial reporting framework and the internal controls and procedures related to sustainable value disclosures, including any assurance being provided by the independent auditor or other third party with respect to non-financial disclosures. | | EEO-1 Report(a) | Influenced by our engagement with shareholders, we began publishing PMI’s EEO-1 Report in 2023. Reports for 2022, 2023, and 2024 are available on the Company’s website at www.pmi.com/who-we-are/eeo-disclosures. The 2025 report will be posted once available. | | Annual Say on Pay Advisory Vote | Shareholders are asked to vote annually on the compensation program for our named executive officers. (see page 69). | | Severance Policy for Voluntary Termination | Under its Executive Officer Severance Policy for Voluntary Termination, the Company will not make certain payments, including cash severance and non-competition payments, to an executive officer who voluntarily terminates his or her employment with the Company, subject to applicable law and any existing agreements as of December 6, 2023 (see page 49). |
LISA A. HOOK
(a)U.S. Equal Employment Opportunity Commission employer information report of workforce demographic data. Election of Directors Process for Nominating Directors The Nominating and Corporate Governance Committee (the “Governance Committee”) is responsible for identifying and evaluating prospective director candidates and for recommending to the Board a slate of director nominees for election or re-election at the Annual Meeting of Shareholders.
LISA A. HOOK
| | Succession Planning The Governance Committee works with the Board of Directors to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members. The Governance Committee uses these criteria to identify potential candidates to fill vacancies in existing or new director positions. | | Identification of Candidates The Governance Committee reviews qualifications of candidates for director identified by the Governance Committee or suggested by Board members, shareholders, management or others in accordance with the director qualification criteria. | | | Decision and Nomination The Governance Committee considers (i) the qualification of candidates for nomination to the Board for appointment or election and (ii) the performance of incumbent directors in determining nomination for re-election, and recommends to the Board the slate of nominees for election to the Board at the Annual Meeting of Shareholders. | | Election All director nominees are annually elected or re-elected at the Annual Meeting of Shareholders. Any incumbent director who is not re-elected in accordance with our bylaws must offer his or her resignation on which the Board, with the recommendation of the Governance Committee, will make a determination and publicly disclose its decision. |
LISA A. HOOK
In evaluating the suitability of individuals for Board membership, the Governance Committee takes into account many factors. These include: •whether the individual meets requirements for independence; •the individual’s general understanding of the various disciplines relevant to the success of a large publicly traded company in today’s global business environment; and •the individual’s understanding of the Company’s global business and markets; the individual’s professional expertise and educational background; and other factors that evidence the views and experiences the Board considers relevant and important to its composition and structure. The Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group of directors that can best shepherd the success of the business and represent long-term shareholder interests through the exercise of sound judgment, using its breadth of knowledge and experience. In determining whether it is appropriate to nominate an individual for election or re-election, the Governance Committee will take into account the nature and extent of an individual’s other commitments, including membership on other public company boards. In determining whether to recommend a director for re-election, the Governance Committee also considers the director’s attendance at meetings and participation in and contributions to the activities of the Board. The Governance Committee has not established any specific minimum qualification standards for nominees to the Board, although from time to time the Governance Committee may identify certain skills or attributes, such as financial experience, global business experience, consumer-centricity, digital transformation and scientific expertise, as being particularly desirable to help meet specific Board needs. In identifying candidates for Board membership, the Governance Committee relies on suggestions and recommendations from the Board, shareholders, management and others. The Governance Committee does not distinguish between nominees recommended by shareholders and other nominees. From time to time, the Governance Committee also retains search firms to assist in identifying candidates for director, gathering information about their background and experience, and acting as an intermediary with such candidates. Shareholders wishing to suggest director candidates to the Governance Committee for consideration must submit a written notice to the Vice President, Associate General Counsel and Corporate Secretary, who will present it to the Governance Committee. In addition, our bylaws permit an eligible shareholder or group of shareholders who have owned 3% or more of PMI’s outstanding shares for at least three years to nominate and include in our proxy statement director candidates to occupy up to 20% of the authorized Board seats. In order to appropriately nominate a director candidate or candidates in accordance with Rule 14a-19 under the Exchange Act, the SEC’s universal proxy rule, a shareholder must comply with the procedures set forth in our by-laws and Rule 14a-19 under the Exchange Act. Our director nomination procedures are summarized in this proxy statement, under the caption “2027 Annual Meeting” (see page 76). Recommendations of the Board; Director Attributes, Refreshment and Tenure We are asking you to vote for the election of ten director nominees to hold office until the next Annual Meeting of Shareholders and until their successors have been elected. The Governance Committee has recommended to the Board, and the Board has approved, the persons named and, unless otherwise marked, a proxy will be voted for such persons. All of the nominees are current directors elected by the shareholders at the 2025 Annual Meeting of Shareholders. The Board believes that the experience, qualifications, attributes and skills of each of the nominees presented qualify them to oversee the complex global, regulatory, business, and financial issues facing the Company, and that the Board as a whole provides a breadth of knowledge, international experience, intellectual rigor and willingness to face challenging issues. The Board has experienced a significant amount of director refreshment since our spin-off in March 2008. Our two longest tenured Board members nominated for re-election joined in 2011, followed by one in 2013, one in 2015, one in 2018, one in 2020, three in 2021, and one in 2024. One director elected at the 2025 Annual Meeting of Shareholders, Ms. Temperley, a director since 2021, has decided not to stand for re-election. The average tenure of the Company’s nominees for election is 8.3 years. As new Board members gain experience, the Board rotates its various committee chairs. Our nominees for the 2026 Annual Meeting of Shareholders have the following characteristics: Although it is not anticipated that any of the persons named below will be unable or unwilling to stand for election, a proxy, in the event of such an occurrence, may be voted for a substitute designated by the Board. However, in lieu of designating a substitute, the Board may reduce its number of directors. Independence of Nominees After receiving the recommendation of the Governance Committee, the Board has determined that each of the following director nominees is independent of, and has no material relationship with, the Company: Bonin Bough, Michel Combes, Werner Geissler, Victoria Harker, Lisa A. Hook, Kalpana Morparia, Robert B. Polet, and Shlomo Yanai. The Board determined that Ms. Temperley, who will not stand for re-election at the 2026 Annual Meeting of Shareholders, was independent under NYSE listing standards during fiscal 2025. To assist it in making these determinations, the Board has adopted categorical standards of director independence that are set forth in the Corporate Governance Guidelines. The Corporate Governance Guidelines are available on the Company’s website at www.pmi.com/corporate-governance/overview. Each of the above-named nominees qualifies as independent under these standards. Majority Vote Standard in Uncontested Elections All directors are elected annually. The Company’s by-laws provide that, where the number of nominees for director does not exceed the number of directors to be elected, directors shall be elected by a majority rather than by a plurality vote. Under applicable law, a director’s term extends until his or her successor is duly elected and qualified. Thus, an incumbent director who fails to receive a majority vote would continue to serve as a holdover director. To address that possibility, our Corporate Governance Guidelines require a director who receives less than a majority of the votes cast to offer to resign. The Governance Committee would then consider, and recommend to the Board, whether to accept or reject the offer. Director Nominees
LISA A. HOOK
| | Proposal 1: Election of Directors The Board recommends that you vote FOR each of the ten director nominees. | "FOR" |
LISA A. HOOK
| Nominees | Independence | Audit & Risk | Compensation & Leadership Development | Nominating & Corporate Governance | Science & Technology | | Bonin Bough Age: 48 | Director since: 2021 | ● | ● | | | ● | | André Calantzopoulos Age: 68 | Director since: 2013 | | | | | ● | | Michel Combes Age: 63 | Director since: 2020 | ● | | | ● | | | Werner Geissler Age: 72 | Director since: 2015 | ● | ● | | ● | | | Victoria Harker Age: 61 | Director since: 2024 | ● | ● | | | | | Lisa A. Hook Age: 68 | Director since: 2018 | ● | ● | ● | ● | ● | | Kalpana Morparia Age: 76 | Director since: 2011 | ● | | ● | | ● | | Jacek Olczak Age: 61 | Director since: 2021 | | | | | ● | | Robert B. Polet Age: 70 | Director since: 2011 | ● | | ● | | ● | | Shlomo Yanai Age: 73 | Director since: 2021 | ● | | | ● | |
LISA A. HOOK
Committee Chair Director Qualifications Our Board is highly engaged and provides strong and effective oversight of our Company. Both individually and collectively, our directors have the qualifications, skills and experience needed to inform and oversee the Company’s long-term strategic growth. Each director has or has had senior executive experience, in many cases with large, complex organizations with significant global operations. Our directors have leadership experience in the global consumer products sector and bring expertise in financial, information technology, cybersecurity, and digital transformation matters. These and the other skills and attributes discussed below are key considerations in evaluating the composition of our Board and inform our Board succession planning and director selection process.
LISA A. HOOK
| Key Attributes of All Directors | | | | •High Integrity •Proven Record of Success •Leadership •Understanding of our Global Business and Markets | •Strength of Character and Judgment •Corporate Governance Experience •Talent Management/ Succession Planning | •Broad Range of Perspectives •Strategic Planning •Risk Assessment and Oversight |
LISA A. HOOK
| Key Skills of Our Board Our director nominees’ individual experiences, qualifications, attributes and skills are highlighted in the following matrix. The matrix is intended as a high-level summary and not an exhaustive list of each nominee’s skills or contributions to the Board. Further biographical information about each director standing for re-election is set forth on the following pages. | | | | | | | | | | | | | Experience | | | | | | | | | | | | | | Senior Executive and Leadership | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | | | Consumer Packaged Goods, Manufacturing, and Supply Chain | ● | ● | | ● | | | ● | ● | ● | | | | Operations, Business Continuity, and Strategic Planning | | ● | ● | ● | ● | ● | ● | ● | ● | ● | | | Information Technology and Cybersecurity | ● | ● | ● | ● | ● | ● | | ● | | ● | | | CFO, Banking, or Accounting/Financial Expertise | | ● | ● | | ● | ● | ● | ● | | ● | | | Civic Leadership or Government/Regulatory | ● | ● | ● | ● | ● | ● | ● | ● | | ● | | | Life Sciences, Technology, or Consumer Wellness | | ● | ● | ● | ● | ● | ● | ● | ● | ● | | | Marketing and Retail | ● | ● | ● | ● | | | | ● | ● | |
LISA A. HOOK
| Experience | | Definition | | | Senior Executive and Leadership | All of our directors have senior leadership or executive experience. Our directors have held senior executive positions, including but not limited to chief executive officers and chief financial officers, in publicly traded companies and contribute valuable, practical insights in managing international, complex organizations. | | | Consumer Packaged Goods, Manufacturing, and Supply Chain | Experience includes managing, understanding of, and expertise in businesses that typically manufacture and distribute large volumes of consumable products to meet high consumer demands in a competitive market. Additionally, Directors with experience in the management of upstream and downstream relationships with suppliers and customers provide important perspectives on managing supply chains and capital needs of the Company. | | | Operations, Business Continuity, and Strategic Planning | Experience includes monitoring, identifying, and planning for critical operations and solutions, as well as risk mitigation, to ensure operational resilience and continuity. Directors have also demonstrated an understanding of strategic planning, risk management, and how to drive change and growth to achieve our short-term and long-term strategic goals. | | | Information Technology and Cybersecurity | Experience includes senior leadership/executive roles or directorships in businesses enabled by or in technology, or have undergone a digital transformation, and backgrounds in information technology, data protection, artificial intelligence or cybersecurity. Directors with technology expertise contribute to the oversight and understanding of information security and risk management. | | | CFO, Banking or Accounting/Financial Expertise | Experience includes senior leadership/executive roles, overseeing internal controls and financial reporting in publicly traded companies. Directors who qualify as an “audit committee financial expert” provide additional insight in the preparation and audit of our financial statements and compliance with regulatory requirements and standards. Directors with experience in capital markets and banking transactions contribute to the oversight of capital allocation strategies, as well as important financial metrics in measuring our performance. | | | Civic Leadership or Government/Regulatory | Experience includes managing and collaborating across large, complex, diverse organizations, and fostering public engagement with communities. Directors with experience in government relations or positions, legal and regulatory compliance, and public policies provide important perspectives and insight on policy considerations, laws, rules and regulations, and other governmental actions and decisions that impact our company and the industries in which we operate. | | | Life Sciences, Technology, or Consumer Wellness | Experience includes senior leadership/executive or operational roles at public or private companies that leverage advances in biology, chemistry, and research & development. Directors also hold, or have held, governing roles or directorships at non-profit health-related organizations which contribute to understanding public policies and regulations in the consumer wellness industry. | | | Marketing and Retail | Experience includes executive or operational roles in which sales and/or marketing were a primary function, which contributes to an understanding of consumer behavior, market trends, and competition and related growth opportunities. Directors with backgrounds in retail and marketing provide valuable insights in evaluating and developing new markets and marketing strategies. |
LISA A. HOOK
| | | | | | | | Bonin Bough | | DIRECTOR SINCE 2021 | AGE 48 | | | Career Highlights | | | | | Occupation: Founder and Chief Growth Officer, Diligence, LLC (also known as Bonin Ventures) Committees: Audit and Risk (Financially Literate); Science and Technology | Diligence, LLC (also known as Bonin Ventures), an entity focused on accelerating growth of innovative start-up companies •Founder and Chief Growth Officer since 2014. Triller, a global social media company •Chief Growth Officer from 2020 to 2022. SheaMoisture •Chief Growth Officer from 2016 to 2017. | Mondelèz International, Inc. •Chief Media and E-Commerce Officer from 2015 to 2016. •Vice President, Global Media and Consumer Engagement from 2012 to 2015. The Kraft Heinz Company •Vice President, Global Media and Consumer Engagement from 2012 to 2015. PepsiCo, Inc. •Chief Digital Officer from 2008 to 2012. | | | | | Director Qualifications: With his unique executive marketing experience, Mr. Bough brings to the Board his considerable entrepreneurial expertise, particularly with respect to e-commerce, innovative technologies and acceleration of brand equity, as well as valuable insights for transforming and growing large, multinational businesses and start-ups. | Other Directorships and Associations: •SITO Mobile Ltd. (2018 to 2020) | | |
LISA A. HOOK
| | | | | | | | André Calantzopoulos | | DIRECTOR SINCE 2013 | AGE 68 | | | Career Highlights | | | | | Occupation: Chairman, Philip Morris International Inc. Committees: Science and Technology | Philip Morris International Inc. •Chairman of the Board of Directors since May 2024. •Executive Chairman of the Board of Directors from May 2021 to May 2024. •CEO from 2013 to May 2021. •Chief Operating Officer from March 2008, following the spin-off from Altria Group, Inc., to May 2013. | •President and CEO from April 2002, until the spin-off from Altria Group, Inc. in March 2008. •Various roles across Central Europe, including Managing Director of PM Poland and President of the Eastern European Region, from February 1985 to April 2002. | | | | | Director Qualifications: In his role as Chairman, Mr. Calantzopoulos’ all-encompassing knowledge of the Company and the tobacco industry serves the Company and the Board well. He has played an instrumental role in numerous key initiatives, leading the Company with his bold vision of a smoke-free future, and through its related evolution into a consumer-centric technology and science-driven business. | | | |
LISA A. HOOK
| | | | | | | | Michel Combes | | DIRECTOR SINCE 2020 | AGE 63 | | | Career Highlights | | | | | Occupation: Partner, Forgelight LLC Committees: Audit and Risk (Chair and Financial Expert); Nominating and Corporate Governance | Forgelight LLC, an investment company focused on the media and consumer technology sectors •Partner since May 2024. Claure Group LLP, a multi-billion-dollar global investment firm focused on multiple high growth sectors in Latin America •Executive Vice President from October 2022 to May 2024. SoftBank Group International, a privately held subsidiary of SoftBank Group Corp. and oversaw several SoftBank portfolio companies •CEO from January 2022 to June 2022. •President from April 2020 to January 2022. Sprint Corporation •President from 2018 to 2020, Chief Financial Officer from January 2018 to May 2018, CEO from May 2018 to 2020, and a member of the Board of Directors from 2018 to 2020. | Altice Group •CEO from 2016 to 2017, and Chief Operating Officer, from 2015 to 2016. SFR Group •Chairman and CEO from 2015 to 2017. Alcatel-Lucent •CEO from 2013 to 2015. Vodafone Europe •CEO from 2008 to 2012. TDF Group (Télédiffusion de France) •Chairman and CEO France Telecom •Executive Vice President French Government •Several roles | | | | | Director Qualifications: With his experience as a chief executive and chief financial officer in a number of large, multinational companies in the telephonic and digital communications, banking and portfolio strategy industries, Mr. Combes brings to the Board his considerable entrepreneurial business experience, extensive knowledge of international markets in highly regulated industries, and valuable insights in areas of cybersecurity, innovation, and consumer centricity. Furthermore, as a former CFO, the Board has also determined that Mr. Combes qualifies as an audit committee financial expert. | Other Directorships and Associations: •Etisalat UAE (2021 to present) •F5, Inc., formerly, F5 Networks (2023 to present) •Eutelsat Communications S.A. (February 2025 to August 2025) •MTS (Mobile TeleSystems) (2013 to 2018) •Sprint Corporation (2018 to 2020) •Altice N.V. and Altice USA, Inc. (2016 to 2017) •F5 Networks (2018 to 2021) •Assystem SA (2018 to 2023) •Contentsquare (2021 to 2023) •Several boards of SoftBank Group Corp. portfolio companies, including WeWork Inc. (2020 to 2022) and SoFi Technologies, Inc. (2021 to 2022). | | |
LISA A. HOOK
| | | | | | | | Werner Geissler | | DIRECTOR SINCE 2015 | AGE 72 | | | Career Highlights | | | | | Occupation: Operating Partner, Advent International Committees: Compensation and Leadership Development (Chair); Audit and Risk (Financial Expert); Nominating and Corporate Governance | Advent International, a private equity firm •Operating Partner since 2015. Procter & Gamble •Vice Chairman and Special Advisor to the Chairman and CEO, prior to his retirement in 2015. •Vice Chairman, Global Operations, from 2007 to 2014. | •Group President, Central and Eastern Europe, Middle East and Africa, from 2004 to 2007. •President, Northeast Asia, from 2001 to 2004. | | | | | Director Qualifications: Mr. Geissler has a keen knowledge of the global consumer products business, having served as a senior consumer products executive in many of the markets and regions most important to the Company. His deep senior executive experience serves the Company and the Board well as the Compensation and Leadership Development Committee, which he chairs. Mr. Geissler has also had substantial P&L responsibility in his roles at Procter & Gamble and has an MBA in Finance and IT, which both inform his service as a member of the Audit and Risk Committee. | Other Directorships and Associations: •The Goodyear Tire & Rubber Company (2011 to 2026). •The Eczacibasi Holding Company, a Turkish industrial group of private companies (2021 to present); member of the audit committee. •peaq Holding Ltd., a private UAE technology company (2026 to present). | | |
LISA A. HOOK
| | | | | | | | Victoria Harker | | DIRECTOR SINCE 2024 | AGE 61 | | | Career Highlights | | | | | Occupation: Former CFO, TEGNA, Inc. Committees: Audit and Risk (Financial Expert) | TEGNA, Inc. •Chief Financial Officer and Executive Vice President from 2012 to 2023. The AES Corporation •Executive Vice President, Chief Financial Officer and President, Global Business Services, from 2006 to 2015. | MCI, a telecommunications company •Acting Chief Financial Officer, Treasurer and Senior Vice President, Corporate Finance, from 2002 to 2005. •Chief Financial Officer and Senior Vice President, Operations and Information Technology, from 1998 to 2002. | | | | | Director Qualifications: Ms. Harker is an experienced former Chief Financial Officer, having served in the role with three different U.S. public companies, and she has been involved in significant corporate transformations in the consumer, industrial and utility sectors for over 25 years. Her broad finance and business experience and MBA in finance further strengthens and diversifies the capabilities of the Company, the Board and the Audit and Risk Committee. Ms. Harker also has experience outside the finance function, having led the Global Business Services organization at The AES Corporation, as well as Operations and IT. During her time at TEGNA, Inc., she went through several periods of transformation as the company moved from a traditional publishing business to separating out its online and broadcast businesses. This has given her a great deal of exposure to shareholders and familiarity with a broad range of SEC regulatory processes. The Board has also determined that Ms. Harker qualifies as an audit committee financial expert. | Other Directorships and Associations: •Huntington Ingalls Industries (2012 to present); compensation committee chair and member of the finance committee •Xylem, Inc. (2011 to present); audit committee chair, member of the nominating and governance committee, and member of the finance committee •Stride, Inc. (2020 to 2022) •Darden Restaurants, Inc. (2009 to 2014) Ms. Harker also currently serves on the boards of not-for-profit organizations: •University of Virginia Board of Visitors (2026 to present); Vice Rector, appointed by the Governor of Virginia •University of Virginia Health System Board (2012 to present); appointed by the Governor of Virginia •American University Advisory Counsel (2007 to present) Previously, she served as Vice Chair of the State Council of Higher Education for Virginia (2016 to 2026) and on the University of Virginia Board of Visitors (2012 to 2016), where she chaired the Finance Committee and served as a member of each of the Executive Committee, the Academic Affairs Committee, the Health System Board and the Presidential Search Committee. She also serves as Trustee on the Board of the Virginia Historical Society. | | |
LISA A. HOOK
| | | | | | | | Lisa A. Hook | | DIRECTOR SINCE 2018 | AGE 68 | | | Career Highlights | | | | | Occupation: Managing Partner, Two Island Partners LLC Lead Independent Director, Philip Morris International Inc. Committees: Audit and Risk (Financial Expert); Compensation and Leadership Development; Nominating and Corporate Governance; Science and Technology | Two Island Partners LLC, a private equity and consulting firm •Managing Partner since 2018. Neustar, Inc., a global information services company focused on cloud-based workflow solutions for marketing, risk and security analytics •Member of the Board from 2010 to 2019. •President & CEO from 2010 to 2018. •President & Chief Operating Officer from 2008 to 2010. Sunrocket, Inc., a cloud-based voice communications company •President & CEO from 2006 to 2007. | America Online Inc. •Several executive positions from 2001 to 2004. Brera Capital Partners, a global private equity investment firm •Partner Alpine Capital Group, LLC, an investment banking firm •Managing Director Time Warner, Inc. •Executive | | | | | Director Qualifications: Ms. Hook’s past experience as CEO of a U.S. publicly traded company, her past senior management roles and government appointments relating to telecommunications, plus her holistic understanding of digital identity, are key to deploying actionable insights that grow and guard many of the world’s largest corporations. In addition, with her extensive public board experience, Ms. Hook brings to the Board valuable insights in the areas of cybersecurity, data privacy, and digital transformation at a time when the Company is transitioning to a consumer-centric, highly digitalized business model. The Board has also determined that Ms. Hook qualifies as an audit committee financial expert. | Other Directorships and Associations: •NextNav Inc. (2026 to present) •Fidelity National Information Services, Inc. (2019 to present); member of the audit committee •Nokia Corporation (2022 to present); member of the audit committee. •Zayo Group, a U.S. private company providing communications infrastructure services (2022 to present) •RB Global, Inc., formerly known as Ritchie Bros Auctioneers Incorporated (2021 to 2023) •Ping Identity Holding Corp., a pioneer in digital identity solutions (2019 to 2022) •Partners Group Holding AG, a global asset management company (2020 to 2021) •Unisys Corporation, a global information technology company (2019 to 2021) Other Past Directorships: •RELX PLC and RELX NV, providers of information solutions •Covad Communications •Time Warner Telecom, Inc. Ms. Hook served as a legal advisor to the Chairman of the Federal Communications Commission and General Counsel of the Cable Group at Viacom International, Inc. Since her appointment by President Obama in 2012, she serves on the National Security Telecommunications Advisory Committee. | | |
LISA A. HOOK
| | | | | | | | Kalpana Morparia | | DIRECTOR SINCE 2011 | AGE 76 | | | Career Highlights | | | | | Occupation: Founder & Managing Partner, KalMor Advisors LLP Committees: Nominating and Corporate Governance (Chair); Compensation and Leadership Development; Science and Technology | KalMor Advisors LLP, a strategy and corporate advisory firm •Founder and Managing Partner since 2021. JPMorgan Chase & Co. •Chairman of South and Southeast Asia from March 2019 until her retirement in February 2021. •CEO of South and Southeast Asia from April 2016 until March 2019. •CEO of J.P. Morgan India from 2008 to 2016. | ICICI Bank, India’s second-largest bank •Vice Chair of ICICI’s insurance and asset management business from 2007 to 2008. •Joint Managing Director from 2001 to 2007. | | | | | Director Qualifications: With her strong executive leadership experience in finance, and her deep knowledge of international business, Ms. Morparia provides a keen perspective on economies in Asia, while her legal background and deep experience in highly regulated industries help her serve the Company and the Board well as Chair of the Nominating and Corporate Governance Committee. | Other Directorships and Associations: •HSBC Holdings plc (2023 to present) •The Great Eastern Shipping Co. Ltd (2024 to present) •Fashnear Technologies Private Ltd (2024 to 2025) •Dr. Reddy’s Laboratories Ltd. (2007 to 2024) •Hindustan Unilever Limited (2014 to 2024) •Delhivery Limited (2021 to 2023) Ms. Morparia also serves on the governing boards of a number of not-for-profit organizations. | | |
LISA A. HOOK
| | | | | | | | Jacek Olczak | | DIRECTOR SINCE 2021 | AGE 61 | | | Career Highlights | | | | | Occupation: Group CEO PMI, Philip Morris International, Inc. Committees: Science and Technology | Philip Morris International Inc. •Group CEO PMI since January 2026. •CEO from May 2021 to December 2025. •Chief Operating Officer from January 2018 to May 2021. •Chief Financial Officer from August 2012 to December 2017. | •Various roles in finance and general management positions across Europe, including Managing Director of PMI’s markets in Poland and Germany, and as President of the European Union Region, from 1993 until 2012. •Prior to joining PMI, Mr. Olczak worked for BDO Binder. | | | | | Director Qualifications: Mr. Olczak’s intellectual rigor and all-encompassing knowledge of the Company serve him well as its Group CEO PMI and as a member of the Board. Previously as the Chief Operating Officer, he played an instrumental role in the Company’s transformation and the superior performance of our regions and markets, particularly, in his commitment to consumer centricity, digitalized consumer engagement, and manufacturing optimization, while remaining focused on the growth of our combustible capacities brand portfolio and the seamless deployment of SFPs in over 70 markets worldwide. | | | |
LISA A. HOOK
| | | | | | | | Robert B. Polet | | DIRECTOR SINCE 2011 | AGE 70 | | | Career Highlights | | | | | Occupation: Chairman, Arica Holding B.V.; Chairman, SFMS B.V. Committees: Compensation and Leadership Development; Science and Technology | SFMS B.V., a retail consumer staples company •Chairman since 2018. Arica Holding B.V., parent holding company of SFMS B.V. •Chairman since 2018. Gucci Group, a luxury fashion house •President, CEO and Chairman of the Management Board from 2004 until 2011. | Unilever Group, a multinational consumer goods company •26 years in a variety of executive roles, including President of Unilever’s Worldwide Ice Cream and Frozen Foods division, Chairman of Unilever Malaysia, Chairman of Van den Bergh and Executive Vice President of Unilever’s European Home and Personal Care division. | | | | | Director Qualifications: As CEO of Gucci Group, Mr. Polet was responsible for managing global luxury brands such as Gucci, Bottega Veneta, Yves Saint Laurent, Boucheron, Balenciaga, Sergio Rossi, Alexander McQueen and Stella McCartney. He brings to the Board his considerable entrepreneurial business experience in the global luxury business. Furthermore, he has extensive executive experience overseeing major consumer packaged goods businesses, as well as an extensive knowledge of global markets. | Other Directorships and Associations: •Safilo Group S.p.A., an Italian publicly held eyewear company (2011 to present); Chairman (2011 to 2017) •Rituals Cosmetics Enterprise B.V., a retail cosmetics company (Chairman, 2013 to 2023) •RELX PLC and RELX NV, providers of information solutions (2007 to 2016) •William Grant & Sons Ltd., an independent, family-owned, Scottish premium spirits company (2011 to 2022) | | |
LISA A. HOOK
| | | | | | | | Shlomo Yanai | | DIRECTOR SINCE 2021 | AGE 73 | | | Career Highlights | | | | | Occupation: Chairman of the Board, Lumenis Ltd. Committees: Science and Technology (Chair); Nominating and Corporate Governance | Moelis & Company, an investment bank •Senior Advisor since 2016. Teva Pharmaceuticals Industries Ltd., a pharmaceutical company •President and CEO from 2007 to 2012. | Adama Industries, a global crop protection company •CEO from 2002 to 2006. Israeli Defense Forces •Variety of leadership roles over 32 years, retiring as a Major General. •Received Israel’s Medal of Valor in 1973. | | | | | Director Qualifications: Mr. Yanai’s extensive experience in the pharmaceuticals industry brings a unique perspective to the Company’s critical efforts to develop and commercialize SFPs, and to advocate for the development of science-based regulatory frameworks for the development and commercialization of such products. | Other Directorships and Associations: •Lumenis Ltd., a medical devices company (Chairman, 2020 to present) •Amneal Pharmaceuticals, Inc. (2020 to present); member of the compensation committee •W.R. Grace and Company (2018 to 2021) •Cambrex Corp., a global pharmaceutical contract development and manufacturing company (Chairman, 2013 to 2019) Other Past Directorships: •Protalix Biotherapeutics, Inc. •PDL BioPharm, Inc. •Perrigo plc •Sagent Pharmaceuticals, Inc. •Makhteshim Chemical Works Ltd. •Agan Chemical Manufacturers Ltd. •Milenia Agro Chemicals •Aroma Fine Chemicals Ltd. •Bank Leumi •Elisra Group, an electronic device private company | | |
LISA A. HOOK
Compensation of Directors Compensation Philosophy The Company’s philosophy is to provide competitive compensation necessary to attract and retain high-quality non-employee directors. The Board believes that a substantial portion of director compensation should consist of equity-based compensation to assist in aligning directors’ interests with the interests of shareholders. Directors who are full-time employees of the Company receive no additional compensation for services as a director.
Compensation
| Annual cash retainer | $125,000 | | Annual equity award | $175,000 | | Chairman of the Board of Directors | $525,000 | | Audit and Risk Committee Chair cash retainer | $50,000 | | Other Committee Chair cash retainer | $35,000 | | Lead Independent Director cash retainer | $50,000 | | Committee meeting fees | None | | Committee member cash retainer | None | | Stock Options | None |
2025 Director Compensation Table
2025 Director Compensation Table The following table presents the compensation received by the non-employee directors for fiscal year 2025 for their services as directors.
2025 Director Compensation Table
| Name | Fees Earned or Paid in Cash(a) ($) | Stock Awards(b) ($) | All Other Compensation(c) ($) | Total ($) | | Bonin Bough | 125,000 | 175,170 | 96 | 300,266 | | André Calantzopoulos | 525,000 | 175,170 | 44,541(d) | 744,711 | | Michel Combes | 175,000 | 175,170 | 402 | 350,572 | | Juan José Daboub(e) | 43,956 | 175,170 | 402 | 219,528 | | Werner Geissler | 160,000 | 175,170 | 1,242 | 336,412 | | Victoria Harker | 125,000 | 175,170 | 402 | 300,572 | | Lisa A. Hook | 175,000 | 175,170 | 768 | 350,938 | | Kalpana Morparia | 160,000 | 175,170 | 1,242 | 336,412 | | Robert B. Polet | 125,000 | 175,170 | 1,242 | 301,412 | | Dessi Temperley | 125,000 | 175,170 | 144 | 300,314 | | Shlomo Yanai | 160,000 | 175,170 | 1,242 | 336,412 |
2025 Director Compensation Table
(b)The amounts reported reflect the cash fees earned by each non-employee director in 2025, including any deferred compensation. In addition to the annual cash retainer of $125,000 (or a prorated portion thereof based on meeting attendance): (i) Mr. Combes received an additional $50,000 for his service as Chair of the Audit and Risk Committee; (ii) Mr. Geissler received an additional $35,000 for his service as Chair of the Compensation Committee; (iii) Ms. Morparia received an additional $35,000 for her service as Chair of the Governance Committee; and (iv) Mr. Yanai received an additional $35,000 for his service as Chair of the Science and Technology Committee. Ms. Hook also received an additional $50,000 for her service as Lead Independent Director. (c)Represents the aggregate grant date fair value of the stock awards made in fiscal 2025 as determined in accordance with FASB ASC Topic 718. In May 2025, we granted 1,002 shares of common stock to each non-employee director then in office. Non-employee directors may elect to defer the award of shares of common stock and all or part of the annual cash and committee chair retainers. Deferred fee amounts are “credited” to an unfunded account and may be “invested” in nine “investment choices,” including a PMI common stock equivalent account. These “investment choices” parallel the investment options offered to employees under the PMI Deferred Profit-Sharing Plan and determine the “earnings” that are credited for bookkeeping purposes to a non-employee director’s account. The table below shows the number of deferred shares held by each non-employee director who elected to defer receipt of their shares awarded under the Philip Morris International Inc. 2017 Stock Compensation Plan for Non-Employee Directors in 2025:
2025 Director Compensation Table
| Director Name | Deferred Shares as of December 31, 2025 | | Bonin Bough | 9,998 | | Michel Combes | 9,324 | | Lisa A. Hook | 18,570 | | Dessi Temperley | 7,886 | | Shlomo Yanai | 7,036 |
2025 Director Compensation Table
In 2024, Mr. Daboub elected to defer receipt of his shares awarded under the Philip Morris International Inc. 2017 Stock Compensation Plan for Non-Employee Directors. During the period in which he served on the Board through the 2025 Annual Meeting of Shareholders on May 7, 2025, he held a total of 1,870 deferred shares. (d)The amounts reported reflect, where applicable, in 2025, premiums for group term life insurance and travel insurance for each non-employee director. With the exception of Mr. Calantzopoulos, none of the non-employee directors received an aggregate of $10,000 or more of perquisites or other personal benefits from the Company in 2025. In addition, income is imputed to the director for income tax purposes, and the director is not provided a tax reimbursement. (e)In 2025, the Company made available to Mr. Calantzopoulos the support of an assistant, valued at $27,509 and the use of an office, valued at $16,264. (f)Mr. Daboub did not stand for re-election at the 2025 Annual Meeting. Therefore, the information reflects his service on the Board through the 2025 Annual Meeting.
Shareholder Approval on Company Say-on-Pay Proposal
| | Component | Purpose | Key Objectives | How it is determined | | | Base Salary | Fixed component of cash compensation. | Intended to provide sufficient competitive base pay to attract, develop and retain world-class leaders. | Reflects the scope of the executive’s role, his or her performance and market pay practices. | | | Incentive Compensation (IC) Awards | Annual performance-based variable cash award for meeting or exceeding performance goals pre-established by the Compensation Committee. | Intended to motivate executives to meet or exceed our performance goals and strategic objectives in a given fiscal year. | The Company’s IC performance rating is determined by a fixed formula that measures Company results against performance targets pre-established and pre-weighted by the Compensation Committee (see pages 41-43). The final award is determined by multiplying the executive’s base salary by the IC performance rating and by the IC target percentage for that salary grade and the executive’s individual performance rating. | | | Equity Awards | Long-term variable equity awards contribute to all six of the Compensation Committee’s program design objectives while minimizing share dilution and protecting against excessive risk taking. | Intended to motivate our executives to produce results that enhance sustainable shareholder value and strengthen the Company over the long term. | Amount of each award is determined by multiplying the executive’s base salary by the target percentage for that salary grade, and then by the executive’s individual performance rating for the most recently completed year, plus or minus ten percentage points. •60% of the February 2025 award was in the form of PSUs that vest at the end of the 2025-2027 performance cycle in amounts that depend on the degree to which pre-established and pre-weighted performance goals are achieved or exceeded (see pages 44-48). •40% of the February 2025 award was in the form of RSUs that cliff vest at the end of the three-year cycle (assuming continued employment). |
Shareholder Approval on Company Say-on-Pay Proposal
Target Compensation Mix and 2025 Compensation We set target compensation mix by salary grade. In 2025, all of our NEOs (except the Group CEO PMI, our principal executive officer) were in salary grades 24, 25 and 26. Our Group CEO PMI is the only employee in salary grade 28, and we do not have any employees in salary grade 27. Mr. Andolina and Ms. Kennedy's salary grades were changed to 26 and 25, respectively, during 2025. Their 2025 equity awards are based on the equity award targets applicable to their grades before their respective salary grade changes. The target compensation mix by salary grade for 2025 and for 2026 is shown in the following charts.
2025 Executive Compensation Determinations
| | 2025 Cash Incentive Target as % of Base Salary(1) | 2025 Actual Cash Incentive Payout as % of Base Salary | | Jacek Olczak | 200% | 276% | | Emmanuel Babeau | 125% | 158% | | Massimo Andolina | 125% | 173% | | Frederic de Wilde | 125% | 187% | | Stacey Kennedy | 100% | 109% |
2025 Executive Compensation Determinations
(1)Possible award range is between 0% and 225% of target. At its February 2025 meeting, the Compensation Committee reviewed the IC target percentages for each of the NEOs and determined that they remained appropriate. At its February 2026 meeting, the Compensation Committee approved the actual IC award payments based on the individual performance of our NEOs in 2025 and company performance against the IC performance targets established at the beginning of 2025. For further details on 2025 company performance refer to pages 41-43. In determining the individual component of Mr. Olczak’s 2025 IC award, the Compensation Committee assessed his performance against the CEO objectives set at the start of the year and recognized additional achievements: he advanced PMI's transformation across all five key strategic initiatives identified by the Compensation Committee (refer to page 42 for further details) and delivered strong commercial, regulatory, sustainability, and organizational results despite heightened geopolitical and regulatory complexity. He also strengthened talent development across the Company. Following a similar process, the Group CEO PMI recommended, and the Compensation Committee approved, individual performance ratings for the other NEOs based on their performance and achievements in 2025: •Mr. Babeau demonstrated strong financial leadership, driving organic growth, margin improvement, and productivity gains that enabled PMI to exceed operating cash flow targets. His disciplined capital allocation supported continued investment in ZYN, IQOS, and VEEV. •Mr. de Wilde exceeded most performance targets and advanced smoke-free products across a strategically critical region. He delivered strong IQOS momentum in key low- and middle-income countries, strengthened commercial execution and brand equity, and effectively navigated regulatory volatility. •Ms. Kennedy led strong U.S. performance, including 36% growth and a sustained nicotine pouch category value share above 60% for ZYN for the year. She secured the FDA's first-ever authorization for nicotine pouches, expanded manufacturing capacity, enhanced brand competitiveness, and advanced regulatory readiness for future ZYN and IQOS expansion. •Mr. Andolina delivered strong commercial and smoke-free results across his region. IQOS ILUMA expanded rapidly, including a notable rebound in Italy following characterizing flavor ban impacts. Under his leadership, regional HTU volumes grew nearly 10% and multicategory traction improved across IQOS, ZYN, and VEEV. The region continued to lead in operational excellence and responsible marketing. The 2026 award targets for our NEOs are unchanged versus 2025 levels. 2025 Equity Awards: The table below presents the long-term equity awards granted to our NEOs in February 2025:
2025 Executive Compensation Determinations
| | 2025-27 PSUs Target as % of Base Salary (60% of total Equity Award)(1) | 2025 RSUs Target as % of Base Salary (40% of total Equity Award)(2) | 2025-27 PSUs Actual Award as % of Base Salary (60% of total Equity Award) | 2025 RSUs Actual Award as % of Base Salary (40% of total Equity Award) | | Jacek Olczak | 360% | 240% | 504% | 336% | | Emmanuel Babeau | 165% | 110% | 182% | 121% | | Massimo Andolina | 105% | 70% | 137% | 91% | | Frederic de Wilde | 165% | 110% | 206% | 138% | | Stacey Kennedy | 96% | 64% | 125% | 83% |
2025 Executive Compensation Determinations
(1)Possible award grant range is between 0% and 150% of target; between 0% and 200% of PSUs granted may vest, depending on performance versus criteria established at the time of grant. (2)Possible award grant range is between 0% and 150% of target. In February 2025, the Compensation Committee granted PSUs for the 2025-2027 performance cycle and RSUs with a three-year cliff vesting schedule. The grants of these awards were determined in reference to the target PSU and RSU percentages applicable to the salary grade held by each NEO, as set forth in the table above. Each NEO received 60% of their total equity award in the form of PSUs and 40% in the form of RSUs. The Compensation Committee based the actual award granted after an evaluation of the individual performance of our NEOs for the most recently completed fiscal year. The Compensation Committee approved actual equity awards for each NEO, as set forth in the table above, as the Compensation Committee determined they each exceeded their individual performance ratings for the most recently completed fiscal year and recognized their individual contributions to progress in pursuing the Company’s strategic priorities with regards to financial performance, capability building, product pipeline development and commercialization, and the challenging regulatory environment. In February 2026, the Compensation Committee granted PSUs for the 2026-2028 performance cycle and RSUs with a three-year cliff vesting schedule. The grants of these awards were based on the 2025 individual performance of our NEOs. There were no changes in the award targets versus 2025, with the exception of Mr. Andolina and Ms. Kennedy, for whom the awards were based on targets corresponding to their new salary grades. Company Performance and Targets
LONG-TERM EQUITY AWARDS
LONG-TERM EQUITY AWARDS The Compensation Committee establishes the equity award target opportunity for our Group CEO PMI and each other NEO based on Company targets by salary grade and the individual’s performance rating for this award. The Compensation Committee grants the individual 60% of the award opportunity in the form of performance-based PSUs, and 40% in the form of time-based RSUs.
LONG-TERM EQUITY AWARDS
| Equity Award Target Opportunity (60% PSU & 40% RSU) | = | Base SalaryX | Individual Target % (varies by grade)X | Individual Rating (0%-150%) |
LONG-TERM EQUITY AWARDS
Use of PSUs and RSUs Versus Stock Options and Timing of Awards: We grant equity awards in the form of RSUs and PSUs, rather than stock options, because RSUs and PSUs: •establish a relationship between our cost and the value ultimately delivered to our executives that is more direct and more visible than is the case with stock options; and •require the use of substantially fewer shares than stock options to deliver eq uivalent value, resulting in an annual Company run rate in 2025 of 0.14% (the sum of all equity awards to non-employee Directors and RSUs granted to employees during the period, plus the number of all PSUs vested during the period, divided by the weighted average number of shares outstanding during the period), and a total 2025 year-end overhang of 0.37% (number of unvested RSUs plus unvested PSUs at target as a percentage of all shares outstanding at year-end). Such awards are generally granted to our NEOs in February of each year on a predetermined schedule. In certain circumstances, including the hiring of an officer, the Compensation Committee may approve grants to be effective at other times. The Compensation Committee did not take material nonpublic information into account when determining the timing and terms of equity awards in 2025, and PMI does not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Our run rate and overhang each compare favorably to those of our Peer Group. 2023 — 2025 PSU Performance Metrics Achievement: For the PSUs granted in February 2023, the Compensation Committee maintained the performance metrics approved for the PSUs granted in February 2022. The Compensation Committee set performance metrics at what it believed to be appropriately ambitious levels that also reflected the Board-approved three-year plan. The Compensation Committee determined that the TSR performance metric, currency neutral compound annual growth rate of adjusted diluted EPS, and Sustainability Index remained important measures of the Company’s performance and so it retained those metrics for the 2023 PSUs with the same weighting as the previous year’s grant. However, it adjusted the performance requirements for the currency neutral compound annual growth rate of adjusted diluted EPS metric, setting the performance factors at 0% for growth below 4.5%, 50% for growth at the threshold level of 4.5%, 100% for growth at the target level of 8%, and 200% for growth at or above 10.5%. The aggregate of the weighted performance for the three metrics determined the percentage of PSUs that vested at the end of the three-year performance cycle. Each vested PSU entitles the participant to one share of common stock. An aggregate weighted PSU performance factor of 100 would result in the targeted number of PSUs being vested. The minimum percentage of PSUs that could vest was zero, while the maximum was twice the targeted number. TSR Performance Metric (40% Weighting). The TSR performance metric was calculated based on the Company’s three-year rolling TSR versus the Company’s Peer Group (see page 50) using the average of the 20 trading days immediately before the start of the performance cycle and the last 20 trading days of the performance cycle. To reflect that several members of the Peer Group are primarily listed on foreign stock exchanges and report their financial results in different currencies, the Company measures the TSRs for those companies by using the price performance of their publicly traded American Depository Receipts. In addition to evaluating our relative TSR, if the Company’s absolute TSR for a performance cycle is less than zero, the Compensation Committee will cap the TSR performance metric at target, retaining discretion to further reduce the TSR performance metric in those circumstances. This approach would limit rewards for a performance cycle in which we performed in line with, or better than, the Peer Group, but shareholders did not realize a positive return. The TSR performance factor for the 2023-2025 performance cycle was calculated relative to the Peer Group in accordance with the following schedule:
PMI TSR as a Percentile of Peer Group
PMI TSR as a Percentile of Peer Group
PMI TSR as a Percentile of Peer Group
| | Result | Performance Factor | Actual | Rating | | Below Threshold | Below 25th percentile | 0% | 85th percentile | 200% | | Threshold | 25th percentile | 50% | | | | Target | 50th percentile | 100% | | | | Maximum | 80th percentile and above | 200% | | |
PMI TSR as a Percentile of Peer Group
Adjusted Diluted EPS Currency Neutral Growth Performance Metric (30% Weighting). The adjusted diluted EPS currency neutral growth performance metric for the 2023-2025 performance cycle was the currency neutral compound annual growth rate of adjusted diluted EPS as shown below:
Three-Year Adjusted Diluted EPS CAGR, excluding Currency*
| | Result | Performance Factor | Actual | Rating | | Below Threshold | <4.5% | 0% | 13.6% | 200% | | Threshold | 4.5% | 50% | | | | Target | 8.0% | 100% | | | | Maximum | ≥10.5% | 200% | | |
Performance Rating for 2023-2025 PSU Cycle
Performance Rating for 2023-2025 PSU Cycle The overall performance rating for the 2023-2025 PSU award cycle was 188%, which the Compensation Committee rounded to 190%. In making this determination, the Compensation Committee considered, in particular, the well-above maximum performance on the three-year adjusted diluted EPS CAGR metric. 2025-2027 PSU Performance Metrics: For the PSUs granted in February 2025, which will vest in 2028, the Compensation Committee maintained the performance metrics, targets, and relative weights that were approved for the PSUs granted in February 2024, with the exception of the annual growth rate of adjusted diluted EPS metric goals, which was increased, and for changes to certain components of the Sustainability Index. In making its determination, the Compensation Committee set performance metrics at what it believes are appropriately ambitious levels that also reflect the Board-approved three-year plan. While the Compensation Committee maintained the use of the Company’s Sustainability Index as a transformation performance metric, it adjusted certain KPIs to reflect the Company’s developing transformation strategy and reduced the number of individual KPIs both in acknowledgment of the maturity of certain programs measured by removed KPIs and to further focus management performance on the remaining Sustainability Index metrics. Removed KPIs included the proportion of markets selling SFPs in low- and middle-income markets; the proportion of shipment volume covered by cigarette anti-littering programs; cumulative repaired or refreshed devices; the proportion of women in senior decision-making roles; cumulative human rights impact assessments; child labor prevalence among contracted farmers; and volume of water optimized in our tobacco-growing areas. The Compensation Committee weighted the 2025-2027 performance metrics as follows: TSR, 40%; currency neutral compound annual growth of adjusted diluted EPS, 30%; and the Sustainability Index, 30%. In line with the Company’s sustainability materiality assessment and their relative priority level in the context of the Company’s corporate strategy, Product Sustainability is weighted at 20% and Operational Sustainability is weighted at 10%, together amounting to 30% of the total PSU award. The Compensation Committee measures performance on these metrics consistent with the way the Company communicates its results, which may include adjustments. PSU Vesting Mechanics. At the end of the three-year performance cycle, the Company’s performance factor for each of the three metrics will be calculated and then weighted, resulting in an overall PSU performance factor from 0% to 200%. This percentage will be applied to the executive’s target PSU award to determine the number of shares of common stock to be issued to the executive. The Compensation Committee may adjust the PSU performance metrics if appropriate to reflect the impact of unusual or infrequently occurring events, including, to the extent significant, corporate transactions, accounting or tax law changes, asset write-downs, litigation or claim adjustments, foreign exchange gains and losses, unbudgeted capital expenditures and other such events. The Compensation Committee also retains discretion to adjust the payout of PSU awards as it determines is appropriate. The 2025 equity awards granted for each NEO reflect their individual performance for 2024. 2026-2028 PSU Performance Metrics: For the PSUs granted in February 2026, which will vest in 2029, the Compensation Committee maintained the performance metrics, targets, and relative weights that were approved for the PSUs granted in February 2025, with the exception of changes made to the transformation performance metric. For the transformation performance metric, the Compensation Committee introduced the VALUE Index, built on the foundation of the Sustainability Index and aligned with PMI's Value Plan 2030+. While it continues to follow the same guiding principles, structure, and governance, the VALUE Index features a streamlined set of KPIs - a total of eight KPIs compared to 19 in the initial Index - reflecting a more focused approach to incentivizing progress on key transformation matters. The division and relative weight of product and operational KPIs remain the same. Product KPIs continue to include the adjusted net revenues ratio (smoke-free versus total), the number of markets where smoke-free products account for more than half of net revenues, and the percentage of total shipment volume subject to youth access prevention programs in indirect retail channels. Additionally, a new KPI has been added: the percentage of recycled content in the device portfolio. Operational KPIs continue to include the proportion of economically vulnerable farmers benefiting from interventions that measurably raise incomes, absolute reductions in scope 3 FLAG GHG emissions compared to the 2019 baseline, and the proportion of priority forest areas in PMI’s tobacco and paper and pulp supply chain achieving zero deforestation. A new KPI has been added addressing the three-year average turnover for recently hired, promoted, or upgraded senior roles.
ADDITIONAL ELEMENTS OF COMPENSATION
Factors Mitigating Against Possible Adverse Consequences of Our Compensation Program: Our Compensation Committee, with assistance from its independent compensation consultant, as needed, and with input from management, annually reviews our compensation programs, policies and practices to determine whether they encourage risk-taking that would have a material adverse effect on the Company. As part of this review, the Company evaluated the primary components of its compensation plans to identify whether those components properly balanced compensation opportunities and risk. Our Compensation Committee considered various factors, including the factors described below. Several elements of our compensation program protect against the possibility that compensation incentives might cause employees to take risks that could materially adversely affect the Company. First, our annual incentive compensation and equity awards apply to management employees worldwide, and the award pools for each of those programs are based on company-wide performance measures that cannot be unduly influenced by a particular business unit or group. Second, all employees are rated on the same scale within general guidelines set by the Compensation Committee. These ratings are based on individual performance criteria so that no particular group of employees will all receive the same rating. Third, both the Company-wide and the individual performance measures are subject to maximum levels that limit the amount of awards. Furthermore, with respect to the long-term equity component of our compensation program, RSUs generally vest only after three years from the date of grant, and PSUs generally vest to the extent pre-established targets are achieved over a three-year performance cycle. In addition, our executives are subject to share ownership requirements and comprehensive anti-hedging, anti-pledging and clawback policies described in the following four sections. Based on this review, both for our executive officers and all other employees, the Company and our Compensation Committee concluded that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. Share Ownership Requirements: The Company sets share ownership requirements for executives at levels that are among the highest for publicly traded companies. The required ownership levels are as follows:
ADDITIONAL ELEMENTS OF COMPENSATION
Unvested PSUs, which comprise 60% of our NEOs’ equity award, do not count towards the share ownership requirement. Executives are required to meet their ownership levels within five years of joining PMI or within three years of a promotion. The Compensation Committee reviews each executive officer’s compliance with the requirements on an annual basis. As of December 31, 2025, all of our NEOs complied with the share ownership requirements. Post-Termination Share Holding Period: In addition to these longstanding and rigorous share ownership requirements, the Compensation Committee has determined that if any equity award held by an executive officer under the 2022 Performance Incentive Plan vests on an accelerated basis upon such officer’s termination of employment for any reason other than death or disability, the shares acquired must be held for at least one year following such termination. Anti-Hedging and Anti-Pledging Policies: The Company’s anti-hedging policy prohibits directors, executive officers and other designated employees from purchasing any financial instrument or otherwise engaging in any transaction that is designed to hedge or offset any decrease in the market value of the Company’s shares held by them directly or indirectly, including prepaid variable forward contracts, equity swaps, collars and exchange funds, and other transactions with comparable economic consequences. The foregoing does not prohibit trading in broad-based index funds. Directors, executive officers and designated employees are also prohibited from engaging in short sales related to the Company’s shares. The Company’s anti-pledging policy prohibits directors and executive officers from pledging the Company’s shares, including holding shares in a margin account. Clawback Policy Regarding the Adjustment or Recovery of Compensation: Under our Board-approved policy and as set forth in each NEO’s equity award agreement, if the Board or an appropriate committee of the Board determines that, as a result of fraud, misconduct, a restatement of our financial statements, or a significant write-off not in the ordinary course affecting our financial statements, an executive has received more compensation than would have otherwise been paid, the Board or the assigned committee shall take action as it deems necessary or appropriate to address the events that gave rise to the fraud, misconduct, write-off or restatement, and to prevent its recurrence. Such action may include, to the extent permitted by applicable law, requiring partial or full reimbursement of any incentive compensation paid to the executive, causing the partial or full cancellation of equity awards (both time-based and performance-based), adjusting the future compensation of such executive, and dismissing or taking legal action against the executive, in each case as the Board or such committee determines to be in the best interests of the Company. The Company’s Policy for Recovery of Erroneously Awarded Incentive Compensation (the “Clawback Policy”) addresses the Dodd-Frank Act requirement, as implemented by the SEC and NYSE, that listed companies develop and adopt a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers and satisfy related disclosure obligations. The Clawback Policy is in addition to the Board-approved policy described above. The role of the Compensation Committee is to oversee the implementation and administration of the Clawback Policy allowing the Company to recoup compensation paid to the Company’s executive officers, if and as the Compensation Committee determines to be appropriate and in accordance with applicable law and NYSE listing standards. Role of the Compensation Committee in Executive Compensation: The role of the Compensation Committee is to discharge the Board’s responsibilities relating to executive compensation matters. In this regard, the Compensation Committee is responsible for the development and administration of our executive compensation and benefits program, in furtherance of which the Compensation Committee has the authority and responsibility: •to review and approve the Company’s overall compensation philosophy and design; •to review and approve, periodically, compensation and performance peer groups used to benchmark the competitiveness, design, and relative performance features of the Company’s executive compensation program; •to review, approve and recommend to the Board for approval corporate goals and objectives relevant to the compensation of the Group CEO PMI, to evaluate the performance of the Group CEO PMI in light of these goals and objectives (including an evaluation of performance against the goals and objectives related to the Company’s Sustainability Index), and to determine, approve and recommend to the Board for approval the compensation of the Group CEO PMI based on this evaluation; •to review and recommend to the Board for approval all compensation for executive officers, including forms of employment agreements, offers of employment, severance agreements, and other elements of compensation provided to the executive officers, except that any compensation decisions for the Group CEO PMI will be presented to the non-management members of the Board for approval; •to make recommendations to the Board with respect to incentive compensation plans and equity-based plans that are subject to Board approval, to administer and make awards under such plans and to review the cumulative effect of its actions; •to monitor risks relating to the Company’s compensation policies and practices; •to oversee the implementation and administration of any clawback or recoupment policy allowing the Company to recoup compensation paid to the executive officers of the Company, if and as the Compensation Committee determines to be appropriate and in accordance with applicable law and NYSE listing standards; •to determine and make recommendations to the Board with respect to the Company’s stock ownership guidelines and monitor compliance by executives with such guidelines; and •to review and assist with the development of executive succession plans, to evaluate and make recommendations to the Board regarding potential candidates to become Group CEO PMI, and to evaluate candidates to fill other senior management positions. In fulfilling these duties, the Compensation Committee is supported by our Group Chief People & Culture Officer and his department, the Compensation Committee’s executive compensation consultant and other outside legal, financial and compensation advisors, where appropriate. Role of the Group CEO PMI in Executive Compensation: Our Group CEO PMI makes recommendations to the Compensation Committee with respect to the compensation of executive officers other than himself. The Compensation Committee reviews and discusses the compensation of these officers with the Group CEO PMI, and the Compensation Committee makes the final compensation decisions with respect to these executive officers. The Group CEO PMI makes no recommendation and has no role in setting any aspect of his own compensation; he does not attend any Compensation Committee meetings when any element of his compensation is discussed. Role of Compensation Consultants: During 2025, the Compensation Committee retained the services of Frederic W. Cook & Co., an independent compensation consulting firm (“FW Cook”), to advise the Compensation Committee with respect to the compensation of the Group CEO PMI and other executives. In addition, FW Cook provided input into the design of our compensation and benefit programs and evolving regulatory and executive compensation market trends. Consistent with the requirements of its charter to assess the independence of the compensation consultant, the Compensation Committee has reviewed and considered:
ADDITIONAL ELEMENTS OF COMPENSATION
| Name and Principal Position | Year | Salary(1) ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Change in Pension Value(4) ($) | All Other Compensation(5) ($) | Total Compensation ($) | | Jacek Olczak, | 2025 | 1,809,737 | 18,033,564 | 5,217,391 | 3,984,399 | 27,080 | 29,072,171 | | Group CEO PMI | 2024 | 1,706,594 | 11,785,368 | 5,821,539 | 898,101 | 26,314 | 20,237,916 | | | 2023 | 1,649,458 | 13,225,739 | 4,530,802 | 6,055,916 | 18,599 | 25,480,514 | | Emmanuel Babeau, | 2025 | 1,517,944 | 5,456,863 | 2,510,894 | 17,385,133 | 23,149 | 26,893,983 | | Group Chief Financial Officer | 2024 | 1,426,010 | 3,961,096 | 2,490,349 | 1,371,989 | 39,630 | 9,289,074 | | | 2023 | 1,335,944 | 4,810,773 | 2,166,914 | 1,868,986 | 28,934 | 10,211,551 | | Massimo Andolina, | 2025 | 1,040,496 | 2,768,866 | 1,956,529 | 2,104,557 | 12,334 | 7,882,782 | | President, Europe Region | | | | | | | | | Frederic de Wilde, | 2025 | 1,207,773 | 4,921,681 | 2,355,091 | 2,285,019 | 18,446 | 10,788,010 | | CEO PMI International | 2024 | 1,138,937 | 3,601,159 | 2,245,983 | 732,770 | 55,464 | 7,774,313 | | | 2023 | 1,103,535 | 2,156,654 | 1,969,931 | 5,290,091 | 253,550 | 10,773,761 | | Stacey Kennedy, | 2025 | 977,868 | 2,413,046 | 1,115,217 | 854,943 | 1,260,178 | 6,621,252 | | CEO PMI U.S. | 2024 | 904,926 | 1,572,090 | 1,513,600 | 1,016,815 | 2,313,631 | 7,321,062 | | | 2023 | 836,747 | 1,227,935 | 1,181,950 | 1,752,402 | 2,407,624 | 7,406,658 |
Pension Fund of Philip Morris in Switzerland
Pension Fund of Philip Morris in Switzerland With limited exceptions, all Swiss payroll-based employees over 25 years of age become immediately covered by the Pension Fund of Philip Morris in Switzerland, a broad-based contributory-funded plan providing defined retirement, disability and death benefits up to limits prescribed under Swiss law. Retirement benefits are expressed as an annuity at normal retirement age equal to 1.8% of the participant’s five-year average pensionable salary (base salary minus two-thirds of the maximum social security benefits of CHF 30,240 in 2025) multiplied by years of credited service (to a maximum of 40 to 41 years, depending on the employee’s date of birth).
Pension Fund of Philip Morris in Switzerland
| Projected Annual Retirement Pension | = | 1.8%X | Years of Credited ServiceX | 5-Year Average Pensionable Salary |
Pension Fund of Philip Morris in Switzerland
Employees between the ages of 25 and 34 contribute 6% of their pensionable salary to the fund, and the contribution increases to 7% for employees between the ages of 35 and 54 and 8% for employees between the ages of 55 and 65. Subject to certain conditions, participants may elect to receive pension benefits entirely or partially in a lump sum. For determining lump sum values, a discount rate of 3.5% and the LPP 2020 mortality table are used. The LPP mortality table is a commonly used mortality table in Switzerland. For an employee who completes 30 years of service and retires at age 62, this translates into payments equivalent to a pension of 54% of five years’ annual average pensionable salary. For an employee with 40 years of credited service at age 65, this “replacement ratio” is approximately 72% of average salary. Participants may retire and commence benefits as early as age 58; however, for each year that retirement precedes age 62, the 1.8% multiplier used to calculate the amount of the retirement pension is reduced by 0.06% (at age 58 the multiplier is 1.56%). Swiss law permits participants in a pension plan to make additional voluntary contributions to the pension plan to compensate for missing years of credited service. If an employee terminates employment with us before age 58, the lump sum value of the pension calculated using the termination lump sum factors is transferred either to a new pension fund or to a blocked bank account until early retirement age is reached. An employee who is age 50 or over upon termination of employment can elect, under certain conditions, to remain in the plan as an external member. In this case, neither the employee nor the employer can contribute any further funds. At the age of 58, the former employee must then elect to take retirement in the form of an annuity, a lump sum or a mix of both.
Involuntary Separation Without Cause
| PAY RATIO |
OUR PAY RATIO
OUR PAY RATIO Given our global footprint, and in accordance with regulatory guidance, we have determined that the cost-of-living adjusted ratio based on the purchasing power parity index (or “PPP”) reflects the differences in the living and economic conditions of approximately 90 countries where our employees reside.2 The PPP conversion factor represents the number of units of local currency that can buy a basket of goods that 1 CHF would buy in Switzerland, where our Group CEO PMI resides. The total PPP- adjusted compensation for our median employee residing in Poland is approximately CHF 67,111.3 Comparing this employee’s total PPP-adjusted compensation to the 2025 total compensation of our Group CEO PMI in CHF, our adjusted pay ratio is 375:1.4 Had we not used the PPP adjustment, our median employee’s total 2025 compensation would have been approximately $43,2445. Comparing this employee’s total compensation to the total compensation of our Group CEO PMI as set forth in the Summary Compensation Table on page 54, the ratio would be 672:1. The ratio of our Group CEO PMI’s total compensation to the average total compensation of our other NEOs for 2025, was 2.2:1. Because the SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies — including companies in our Peer Group — may not be comparable to the pay ratio reported above. Other companies may have different employment & compensation practices, different geographic breadth, perform different types of work, and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. This information is being provided for compliance purposes. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions.
RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND COMPANY FINANCIAL PERFORMANCE REPRESENTED BY THE MEASURES DETAILED IN THE ABOVE TABLE
RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND COMPANY FINANCIAL PERFORMANCE REPRESENTED BY THE MEASURES DETAILED IN THE ABOVE TABLE The below graphical illustrations of compensation actually paid and the change in the performance measures selected demonstrates the alignment between the compensation actually paid to our CEO and other NEOs and company performance. The increase in the 2022 compensation for Mr. Olczak is partially driven by his 2022 equity awards that were based on increased targets in connection with his appointment as CEO for the portion of 2021 in which he served in this role. The increase in the 2024 compensation for Mr. Olczak is mainly driven by the increased value of his outstanding equity awards following the increase of PMI’s share price in 2024 versus 2023. The last graph illustrates the relationship between compensation actually paid and the 3-year adjusted diluted EPS growth measure, which we believe is a more accurate representation of how the compensation actually paid relates to this measure, since this is the actual measure used in our long-term incentive program.
10. WHAT ARE THE CHOICES WHEN VOTING ON DIRECTOR NOMINEES, AND WHAT VOTE IS NEEDED TO ELECT DIRECTORS?
10. WHAT ARE THE CHOICES WHEN VOTING ON DIRECTOR NOMINEES, AND WHAT VOTE IS NEEDED TO ELECT DIRECTORS? Shareholders may: a)vote in favor of a nominee; b)vote against a nominee; or c)abstain from voting on a nominee. Directors will be elected by a majority of the votes cast, which will occur if the number of votes cast “FOR” a director nominee exceeds the number of votes “AGAINST” that nominee. See “Election of Directors—Majority Vote Standard in Uncontested Elections” on page 19. The Board recommends a vote “FOR” all ten of the nominees.