Share-Based Payments (Tables)

A summary of the awards and valuation details:


Awarded to	Terms	Valuation	Recognition and Presentation
Total Shareholder Return Units (TSRUs)(a), (b)
Senior and other key management and select employees	•Entitle the holder to receive shares of our common stock with a value equal to the difference between the defined settlement price and the grant price, plus the dividends accumulated during the five or seven-year term, if and to the extent the total value is positive. •Settlement price is the average closing price of our common stock during the 20 trading days ending on the fifth or seventh anniversary of the grant, as applicable; the grant price is the closing price of our common stock on the date of the grant. •Automatically settled on the fifth or seventh anniversary of the grant but vest on the third anniversary of the grant, after which time there is no longer a substantial likelihood of forfeiture.	As of the grant date using a Monte Carlo simulation model	Amortized on a straight-line basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate.
Restricted Stock Units (RSUs)
Select employees	•Entitle the holder to receive a specified number of shares of our common stock, including shares resulting from dividend equivalents paid on such RSUs. •For RSUs granted during the periods presented, in virtually all instances, the units vest after three years of continuous service from the grant date.	As of the grant date using the closing price of our common stock	Amortized on a straight-line basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate.


Awarded to	Terms	Valuation	Recognition and Presentation
Portfolio Performance Shares (PPSs)
Select employees	•Entitle the holder to receive, at the end of the performance period, shares of our common stock, if any, including shares resulting from dividend equivalents paid on such shares. •For PPSs granted during the period presented, the awards vest after three years of continuous service from the grant date and the number of shares paid, if any, depends on the achievement of predetermined goals related to Pfizer’s long-term product portfolio during a five-year performance period from the year of the grant date. •The number of shares that may be earned ranges from 0% to 200% of the initial award depending on goal achievement over the performance period.	As of the grant date using the intrinsic value method using the closing price of our common stock	Amortized on a straight-line basis over the probable vesting term into Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses, as appropriate, and adjusted each reporting period, as necessary, to reflect changes in the price of our common stock, changes in the number of shares that are probable of being earned and changes in management’s assessment of the probability that the specified performance criteria will be achieved and/or changes in management’s assessment of the probable vesting term.
Performance Share Awards (PSAs)
Senior and other key management	•Entitle the holder to receive, at the end of the performance period, shares of our common stock, if any, including shares resulting from dividend equivalents, dependent upon the achievement of predetermined goals related to two measures: a.Adjusted operating income (for performance years through 2018) or adjusted net income (for 2019 and later years, except for the 2017 PSAs) over three one-year periods; and b.TSR as compared to the NYSE ARCA Pharmaceutical Index (DRG Index) over the three-year performance period. •PSAs vest after three years of continuous service from the grant date. •The number of shares that may be earned ranges from 0% to 200% of the initial award depending on goal achievement over the performance period.	As of the grant date using the intrinsic value method using the closing price of our common stock	Amortized on a straight-line basis over the probable vesting term into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate, and adjusted each reporting period, as necessary, to reflect changes in the price of our common stock, changes in the number of shares that are probable of being earned and changes in management’s assessment of the probability that the specified performance criteria will be achieved.
Stock Options
Select employees	•Entitle the holder to purchase a specified number of our common stock at a price per share equal to the closing market price of our common stock on the date of grant, when vested. •Beginning in 2016, only a limited set of non-U.S. employees received stock option grants. No stock options were awarded to senior and other key management in any period presented. •Stock options vest after three years of continuous service from the grant date and have a contractual term of 10 years.	As of the grant date using the Black-Scholes-Merton option-pricing model	Amortized on a straight-line basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate.

(a)Retirement-eligible holders, as defined in the grant terms, can convert their TSRUs, when vested, into Profit Units (PTUs) with a conversion ratio based on a calculation used to determine the shares at TSRU settlement. The PTUs are entitled to earn Dividend Equivalent Units (DEUs), and the PTUs and DEUs will be settled in our common stock on the TSRUs’ original settlement date and will be subject to the terms and conditions of the original grant including forfeiture provisions.

(b) In 2017, Performance Total Shareholder Return Units (PTSRUs) were awarded to the Former Chairman and Chief Executive Officer (1,444,395 PTSRUs) and 361,099 PTSRUs were awarded to the Group President, Chief Business Officer (former role Group President Pfizer Innovative Health) at a grant price of $30.31 and at a GDFV of $5.54 per PTSRU. All these amounts have been adjusted for the Upjohn spin-off discussed in Note 2B. In addition to having the same characteristics and valuation methodology of TSRUs, PTSRU grants require special service and performance conditions.


The following provides data related to all TSRU, RSU, PPS, PSA and stock option activity:
(MILLIONS OF DOLLARS, EXCEPT FAIR VALUE OF SHARES VESTED PER TSRU AND STOCK OPTION)	TSRUs			RSUs			PPSs			PSAs			Stock Options
Year Ended December 31,	2020	2019	2018	2020	2019	2018	2020	2019	2018	2020	2019	2018	2020	2019	2018
Total fair value of shares vested(a)	$6.22	$8.52	$7.42	$334	$454	$146	$119	$136	$169	$25	$64	$4	$3.56	$5.98	$5.06
Total intrinsic value of options exercised or share units converted	$84	$175	$151				$224	$245	$194				$293	$261	$625
Cash received upon exercise													$425	$394	$1,259
Tax benefits realized from exercise													$55	$47	$115
Compensation cost recognized, pre-tax(b)	$287	$294	$302	$272	$275	$286	$180	$114	$276	$31	$28	$62	$6	$7	$12
Total compensation cost related to nonvested awards not yet recognized, pre-tax	$224	$229	$246	$228	$241	$256	$104	$87	$102	$32	$34	$41	$4	$5	$5
Weighted-average period over which cost is expected to be recognized (years)	1.6	1.6	1.6	1.7	1.7	1.7	1.8	1.8	1.8	1.9	1.8	1.8	1.7	1.6	1.7

(a)Weighted-average GDFV per TSRUs and stock options.

(b)TSRU includes expense for PTSRUs, which is not significant for all years presented.


Summary of all TSRU, RSU, PPS and PSA activity during 2020 (with the shares granted representing the maximum award that could be achieved for PPSs and PSAs):
	TSRUs					RSUs			PPSs(a)			PSAs
	TSRUs	Per TSRU, Weighted Average				Shares	Weighted Avg. GDFV per share		Shares	Weighted Avg. Intrinsic Value per share		Shares	Weighted Avg. Intrinsic Value per share

	(Thousands)	GDFV		Grant Price		(Thousands)			(Thousands)			(Thousands)
Nonvested, December 31, 2019(b)	122,654	$	7.53	$	38.01	23,407	$	37.54	17,694	$	39.18	5,061	$	39.18
Granted(b)	51,158	6.22		34.12		8,423	34.22		8,150	34.10		1,713	34.10
Vested(b)	(45,757)	6.40		34.11		(9,321)	34.70		(6,393)	34.73		(728)	34.65
Reinvested dividend equivalents(b)						955	37.32
Forfeited(b)	(4,782)	7.27		37.20		(999)	37.91		(713)	36.78		(1,052)	35.00
Upjohn spin-off adjustment(c)	6,571	6.88		32.94		1,228	35.55		1,338	36.69		270	36.69
Nonvested, December 31, 2020	129,844	$	6.90	$	32.94	23,692	$	35.50	20,077	$	36.81	5,264	$	36.81

(a)Vested and non-vested shares outstanding, but not paid as of December 31, 2020 were 33.9 million.

(b)Activity prior to the Upjohn Business spin-off has not been adjusted.

(c)In connection with the Upjohn Business spin-off, the Company made adjustments to preserve the intrinsic value of the awards immediately before and after the spin-off. The terms of the outstanding awards remain the same and continue to vest over the original vesting periods. Certain outstanding awards at the time of the spin-off held by employees of Upjohn were prorated for services performed and the remaining portion forfeited at the time of the separation. The share-based awards held as of November 16, 2020 were adjusted as follows:

•The number of outstanding TSRUs was increased and the grant price was decreased.

•The number of shares of common stock subject to each outstanding RSUs, PPSs, and PSAs was increased.

The adjustments to the stock-based compensation awards did not result in additional compensation cost.


Summary of TSRU and PTU information as of December 31, 2020(a), (b):
	TSRUs (Thousands)	PTUs (Thousands)	Weighted-Average Grant Price Per TSRU		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Millions)
TSRUs Outstanding	230,539	—	$	29.57	2.3	$	1,737
TSRUs Vested	100,696	—	25.22		0.8	1,168
TSRUs Expected to vest(c)	124,594	—	32.94		3.3	547
TSRUs exercised and converted to PTUs	—	1,467	$	—	0.3	$	54

(a)In 2020, we settled 5,478,547 TSRUs with a weighted-average grant price of $30.93 per unit.

(b)In 2020, 2,217,044 TSRUs with a weighted-average grant price of $29.26 per unit were converted into 757,285 PTUs.

(c)The number of TSRUs expected to vest takes into account an estimate of expected forfeitures.

Expected dividend yield (based on a constant dividend yield during the expected term)

Risk-free interest rate (based on interpolated yield on U.S. Treasury zero-coupon issues)

Expected stock price volatility (based on implied volatility, after consideration of historical volatility)

TSRUs contractual/stock options expected term, years (based on historical exercise and post-vesting termination patterns for stock options)


Summary of all stock option activity during 2020:
	Shares (Thousands)	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value(a) (Millions)
Outstanding, December 31, 2019(b)	88,600	$	28.39
Granted(b)	1,755	34.10
Exercised(b)	(18,492)	23.05
Forfeited(b)	(160)	35.49
Expired(b)	(326)	24.91
Upjohn spin-off adjustment(c)	4,024	28.08
Outstanding, December 31, 2020	75,402	28.31		3.1	$	645
Vested and expected to vest, December 31, 2020(d)	75,226	28.30		3.0	645
Exercisable, December 31, 2020	71,732	$	27.97	2.8	$	635

(a)Market price of our underlying common stock less exercise price.

(b)Activity prior to the Upjohn Business spin-off has not been adjusted.

(c)In connection with the Upjohn business spin-off discussed above, the number of shares of common stock subject to each outstanding stock option was increased and the exercise price was decreased. These adjustments did not result in additional compensation cost.

(d)The number of options expected to vest takes into account an estimate of expected forfeitures.