Share-Based Payments

Our compensation programs can include share-based payment awards with their value determined by reference to the fair value of our shares and can consist of the grant of shares or options to acquire shares or similar arrangements. The level of our share-based awards are based on competitive survey data and/or industry peer groups used for compensation purposes, and is allocated between different long-term incentive award vehicles, generally in the form of Total Shareholder Return Units (TSRUs), Restricted Stock Units (RSUs), Portfolio Performance Shares (PPSs), Performance Share Awards (PSAs) and stock options, as determined by the Compensation Committee of our BOD.

The Amended and Restated 2019 Stock Plan (2019 Plan) replaced and superseded the original 2019 Stock Plan (Original Plan). The 2019 Plan provides for 320 million shares to be authorized for grants plus any shares remaining available for grant under the Original Plan as of April 25, 2024 (the carryforward shares). Awards granted under the 2019 Plan reduce the shares available for future grants as follows: RSUs count as three shares, and PPSs and PSAs count as six shares (three shares times 2 (the maximum potential payout)), while TSRUs and stock options count as one share. As of December 31, 2025, 313 million shares were available for future award. Although not required to do so, we have used authorized and unissued shares and, to a lesser extent, treasury stock to satisfy our obligations under these programs.

A summary of the awards and valuation details:


Awarded to	Terms	Valuation	Recognition and Presentation
Total Shareholder Return Units (TSRUs)
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 dividend equivalents 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 settle on the fifth or seventh anniversary of the grant but vest on the third anniversary of the grant. Certain 2022 and 2023 five-year grants were modified during 2024 (for active colleagues) to vest on the fifth anniversary and settle on the seventh anniversary of the grant. •Eligible holders 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.	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 upon vesting. Dividend equivalents earned over the vesting period are reinvested into additional RSUs. •RSUs generally vest and distribute one-third per year for three years on each of the three annual anniversaries from the date of grant assuming continuous service from the grant date.	As of the grant date using the closing price of our common stock	Amortized on an accelerated attribution method over the vesting term into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate.
Portfolio Performance Shares (PPSs)
Select employees	•Entitle the holder to receive, at the end of the performance period, shares of our common stock based on performance during the performance period. Dividend equivalents earned during the performance period are accumulated and applied to the shares earned and are delivered in shares with the underlying award. •For PPSs granted, the awards vest on the third anniversary of the grant assuming 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 three-year performance period from the year of the grant date, as applicable. •The number of shares that may be earned, excluding those from dividend equivalents, ranges from 0% to 200% of the initial award depending on goal achievement over the performance period. Irrespective of performance, the payout is capped at target if the Total Shareholder Return (TSR) for the performance period is negative.	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 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, the number of shares that are probable of being earned, and management’s assessment of the probability that the specified performance criteria will be achieved.
Performance Share Awards (PSAs)
Senior and other key management	•Entitle the holder to receive, at the end of the three-year performance period, shares of our common stock (retirees and former colleagues) earned, if any, or an equal value in cash (active colleagues), including dividend equivalents on shares earned, dependent upon the achievement of predetermined goals related to two measures: a.Adjusted diluted EPS goals, set annually; b.Modified by relative TSR as compared to the NYSE ARCA Pharmaceutical Index (DRG Index or DRG) over a three-year period. •PSAs vest on the third anniversary of the grant assuming continuous service from the grant date. PSA awards granted in 2022 and 2023 were modified during 2024 (for active colleagues) to vest on the fifth anniversary of the grant and to have a three-year performance period ending on December 31 prior to vesting. •The range of payout is 0% to 200% of target shares, excluding those earned from dividend equivalents, based on financial performance and modified by relative TSR. The payout is capped at target if the TSR for the performance period is negative.	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 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, the number of shares that are probable of being earned and management’s assessment of the probability that the specified performance criteria will be achieved.


Awarded to	Terms	Valuation	Recognition and Presentation
Stock Options
Select employees	•Entitle the holder to purchase a specified number of shares of our common stock at a price per share equal to the closing market price of our common stock on the date of grant, for a period of time after vesting. •Since 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 on the third anniversary of the grant assuming 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.


The following provides data related to all TSRU, RSU, PPS, PSA and stock option activity:
(MILLIONS, EXCEPT FAIR VALUE OF SHARES VESTED PER TSRU AND STOCK OPTION AND YEARS)	TSRUs			RSUs			PPSs			PSAs					Stock Options
Year Ended December 31,	2025	2024	2023	2025	2024	2023	2025	2024	2023	2025		2024		2023	2025		2024		2023
Total fair value of shares vested(a)	$6.05	$7.05	$10.71	$313	$469	$505	$118	$176	$116	$	—	$	—	$58	$2.86		$4.08		$7.88
Total intrinsic value of options exercised or share units converted	$93	$29	$755				$349	$123	$250						$	—	$	—	$102
Cash received upon exercise															$	—	$	—	$181
Tax benefits realized from exercise															$	—	$	—	$20
Compensation cost recognized/(reduced), pre-tax	$234	$246	$244	$393	$394	$437	$131	$252	$(138)	$32		$(21)		$(5)	$5		$4		$4
Total compensation cost related to nonvested awards not yet recognized, pre-tax	$245	$270	$192	$224	$214	$212	$119	$107	$81	$34		$40		$22	$4		$4		$4
Weighted-average period over which cost is expected to be recognized (years)	1.7	2.1	1.7	1.8	1.8	1.8	1.8	1.9	1.8	1.9		1.7		1.8	1.7		1.7		1.7

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

Total share-based payment expense was $799 million, $877 million and $525 million in 2025, 2024 and 2023, respectively. Tax benefit for

share-based compensation expense was $140 million, $165 million and $93 million in 2025, 2024 and 2023, respectively.

The table above excludes total expense due to the modification for share-based awards in connection with our cost reduction/productivity initiatives, which was zero for 2025 and not significant for prior years presented and is recorded in Restructuring charges and certain acquisition-related costs (see Note 3). Amounts capitalized as part of inventory cost were not significant for any period presented.


Summary of the weighted-average assumptions used in the valuation of TSRUs and stock options:
	TSRUs						Stock Options
Year Ended December 31,	2025		2024		2023		2025		2024		2023
Expected dividend yield (based on a constant dividend yield during the expected term)	6.47	%	6.06	%	3.80	%	6.47	%	6.06	%	3.80	%
Risk-free interest rate (based on interpolated yield on U.S. Treasury zero-coupon issues)	4.06	%	4.31	%	4.08	%	4.12	%	4.32	%	4.03	%
Expected stock price volatility (based on implied volatility, after consideration of historical volatility)	22.39	%	26.56	%	23.23	%	22.38	%	26.56	%	23.23	%
TSRUs contractual/stock options expected term, years (based on historical exercise and post-vesting termination patterns for stock options)	5.00		5.15		5.15		6.25		6.50		6.50


Summary of all TSRU, RSU, PPS and PSA activity during 2025 (with the shares granted representing the maximum award that could be achieved for PPSs and PSAs):
	TSRUs					RSUs			PPSs			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, 2024	84,902	$	9.63	$	35.87	25,561	$	32.67	26,156	$	26.53	5,521	$	26.53
Granted	51,148	6.05		25.74		18,295	25.68		14,538	25.73		2,749	25.75
Vested	(6,818)	11.89		45.82		(11,930)	34.95		(4,479)	26.41		—	—
Reinvested dividend equivalents						2,132	24.23
Forfeited	(8,227)	7.33		29.05		(2,496)	27.26		(4,322)	25.31		(429)	25.66
Nonvested, December 31, 2025	121,004	$	8.14	$	31.46	31,562	$	27.61	31,893	$	24.90	7,840	$	24.90


Summary of TSRU and PTU information as of December 31, 2025(a), (b):
	TSRUs (Thousands)	PTUs (Thousands)	Weighted-Average Grant Price Per TSRU		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Millions)(c)
TSRUs Outstanding	164,736		$	32.62	2.5	$	80
TSRUs Vested	43,732		35.84		0.6	6
TSRUs Expected to vest(d)	115,666		$	31.53	3.2	71
Outstanding PTUs converted from TSRUs exercised		42			0.2	$	1

(a)In 2025, we settled 46,110,528 TSRUs with a weighted-average grant price of $31.29 per unit.

(b)In 2025, 20,968 TSRUs with a weighted-average grant price of $31.31 per unit were converted into 1,620 PTUs.

(c)Market price of our underlying common stock less grant price plus dividend equivalents to date.

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


Summary of all stock option activity during 2025:
	Shares (Thousands)	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value(a) (Millions)
Outstanding, December 31, 2024	19,621	$	33.24
Granted	2,038	25.75
Exercised
Forfeited	(178)	26.75
Expired	(13,666)	32.87
Outstanding, December 31, 2025	7,815	32.09		5.9	$	—
Vested and expected to vest, December 31, 2025(b)	7,624	32.24		5.8	—
Exercisable, December 31, 2025	4,196	$	35.05	3.6	$	—

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

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