In May 2022, PMI’s shareholders approved the Philip Morris International Inc. 2022 Performance Incentive Plan (the “2022 Plan”). Under the 2022 Plan, PMI may grant to eligible employees restricted shares and restricted share units, performance-based cash incentive awards and performance-based equity awards. Up to 25 million shares of PMI’s common stock may be issued under the 2022 Plan. At June 30, 2026, shares available for grant under the 2022 Plan were 15,097,356.

In May 2017, PMI’s shareholders approved the Philip Morris International Inc. 2017 Stock Compensation Plan for Non-Employee Directors (the “2017 Non-Employee Directors Plan”). A non-employee director is defined as a member of the PMI Board of Directors who is not a full-time employee of PMI or of any corporation in which PMI owns, directly or indirectly, stock possessing at least 50% of the total combined voting power of all classes of stock entitled to vote in the election of directors in such corporation. Up to 1 million shares of PMI common stock may be awarded under the 2017 Non-Employee Directors Plan. At June 30, 2026, shares available for grant under the plan were 836,062.

PMI may grant RSU awards to eligible employees; recipients may not sell, assign, pledge or otherwise encumber such awards. Such awards are subject to forfeiture if certain employment conditions are not met. RSU awards do not carry voting rights, although they do earn dividend equivalents. RSU awards generally vest on the third anniversary of the grant date.

The fair value of the RSU awards at the date of grant is determined by using the closing market price of PMI’s stock on the date of the grant and is amortized to expense over the restriction period, typically three years after the date of the award, or upon death, disability or reaching the age of 58.

During the six months and three months ended June 30, 2026 and 2025, the recorded compensation expense related to RSU awards and the respective tax benefit (charge) were as follows:


(in millions)	For the Six Months Ended June 30,				For the Three Months Ended June 30,
	Compensation Expense Related to RSU Awards		Tax Benefit/(Charge) Related to RSU Awards		Compensation Expense Related to RSU Awards		Tax Benefit/(Charge) Related to RSU Awards
2026	$	113	$	43	$	41	$	11
2025	$	97	$	26	$	34	$	6

During the six months ended June 30, 2026 and 2025, shares granted to eligible employees and the weighted-average grant date fair value per share were as follows:

During the six months ended June 30, 2026, 1,405,563 RSU awards vested. The grant date fair value of all the vested awards was approximately $145 million. The total fair value of RSU awards that vested during the six months ended June 30, 2026, was approximately $255 million.

As of June 30, 2026, PMI had $290 million of total unrecognized compensation cost related to non-vested RSU awards, which is expected to be recognized over the performance cycle of the awards of approximately three years.

PMI may grant PSU awards to certain executives; recipients may not sell, assign, pledge or otherwise encumber such awards. Such awards are subject to forfeiture if certain employment conditions are not met. The PSU awards require the achievement of certain performance metrics, which are predetermined at the time of grant, typically over a three-year performance cycle.

The performance metrics for such PSUs granted during the six months ended June 30, 2026, consisted of PMI's Total Shareholder Return ("TSR") relative to a predetermined peer group and on an absolute basis (40% weight), PMI’s currency-neutral compound annual adjusted diluted earnings per share growth rate (30% weight), and a VALUE Index, which consists of two drivers:

•Product impact (20% weight): aggregates key performance indicators pertaining to social and environmental impacts generated by PMI's products, focused on two strategic priorities: consumers and circularity; and

•Operational impact (10% weight): aggregates key performance indicators pertaining to social and environmental impacts generated by PMI's business activities, focused on four strategic priorities: PMI’s workforce, workers in the value chain, climate, and nature.

The performance metrics, targets and relative weights for the PSUs granted during the six months ended June 30, 2026, were the same as the PSUs granted during the six months ended June 30, 2025, with the exception of changes made to certain components of the Sustainability Index, which was replaced with the VALUE Index. The VALUE Index, built on the foundation of the Sustainability Index, continues to follow the same guiding principles, structure and governance while 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.

The PSU performance metrics may be adjusted 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 aggregate of the weighted performance factors for the three metrics in each such PSU award determines the percentage of PSUs that will vest at the end of the three-year performance cycle. The minimum percentage of such PSUs that can vest is zero, with a target percentage of 100 and a maximum percentage of 200. Each such vested PSU entitles the participant to one share of common stock. An aggregate weighted PSU performance factor of 100 will result in the targeted number of PSUs being vested. At the end of the performance cycle, participants are entitled to an amount equivalent to the accumulated dividends paid on common stock during the performance cycle for the number of shares earned.

The fair value of the PSU awards at the date of grant, adjusted by performance metrics, is amortized to expense over the restriction period, typically three years after the date of the award, or upon death, disability or reaching the age of 58.

During the six months ended June 30, 2026 and 2025, the recorded compensation expense related to PSU awards, and the respective tax benefit (charge) were as follows:



(in millions)	For the Six Months Ended June 30,				For the Three Months Ended June 30,
	Compensation Expense related to PSU Awards		Tax Benefit/(Charge) Related to PSU Awards		Compensation Expense related to PSU Awards		Tax Benefit/(Charge) Related to PSU Awards
2026	$	53	$	27	$	7	$	5
2025	$	60	$	17	$	9	$	1

During the six months ended June 30, 2026 and 2025, shares granted to eligible employees and the weighted-average grant date fair value per share related to PSU awards were as follows:


	Number of Shares Granted	Weighted- Average PSU Grant Date Fair Value Subject to Other Performance Factors (Per Share)	Weighted- Average PSU Grant Date Fair Value Subject to TSR Performance Factors (Per Share)
2026	327,880	$ 182.81	$ 236.97
2025	396,400	$ 145.35	$ 213.72

The grant date fair value of the PSU awards subject to the other performance factors was determined by using the closing market price of PMI’s stock on the date of the grant. The grant date fair value of the PSU market-based awards subject to the TSR performance factor was determined by using the Monte Carlo simulation model. The following assumptions were used to determine the grant date fair value of the PSU awards subject to the TSR performance factor:

During the six months ended June 30, 2026, 816,829 PSU awards vested. The grant date fair value of all the vested awards was approximately $94 million. The total fair value of PSU awards that vested during the six months ended June 30, 2026, was approximately $149 million.

As of June 30, 2026, PMI had $62 million of total unrecognized compensation cost related to non-vested PSU awards, which is expected to be recognized over the performance cycle of the awards of approximately three years.