Altria Group, Inc. (MO) May 2026 Annual General Meeting Transcript

Good day, and welcome to the Altria Group 2026 Annual Meeting of Shareholders. Today's virtual meeting is scheduled to last less than one hour. In the unlikely event we experience technical issues today, we ask you to stand by while we try to resolve the issue and resume the meeting or otherwise provide an update on the status of the meeting. I would now like to turn the meeting over to Catherine McQuaid, Chair of Altria's Board, Please go ahead.

Thank you. Good morning, everyone, and welcome. I call to order Altria's 2026 Annual Meeting of Shareholders. I am Catherine McQuaid, Chair of Altria's Board. With me today are Billy Gifford, Altria's CEO, and Mary Bigelow, Altria's Corporate Secretary. Thank you all for joining us. Let's start with the meeting agenda and the rules of conduct. which are located at the bottom right of the virtual meeting site. The rules of conduct explain how we will conduct the meeting, including voting and our question-and-answer session. We will begin by presenting our meeting documents, move to electing directors, and then vote to ratify the selection of PricewaterhouseCoopers as Altria's independent registered public accounting firm. Next, we will move to the advisory vote on the compensation of Altria's named executive officers. Then we will close the polls and Mary will announce the preliminary voting results. Billy will then share brief remarks and answer your questions. Only shareholders as of the close of business on March 25, 2026, are entitled to vote during the meeting. Shareholders may vote through the virtual meeting site until the polls are closed. You will need a valid 16-digit control number to vote. If you voted before the meeting, there is no need to vote again unless you wish to change your vote. If you are voting at the meeting, we suggest you vote on each matter as it is presented. The window for shareholders to submit questions will remain open throughout the meeting. Again, I direct the shareholders to our rules of conduct for instructions on how to submit questions and for additional information about the question and answer session, you must have a valid 16-digit control number to submit a question. Only questions relating to the meeting will be answered during the question and answer portion subject to a 30-minute time limit prescribed by the Rules of Conduct. So with that introduction, Mary, please present our meeting documents.

Thanks, Katherine. I present, together with the affidavits of mailing, a copy of the notice of meeting, form of proxy, proxy statement, and annual report, which includes Altria's financial statements for the year ended December 31, 2025. 81.62% of Altria's common stock is represented here today, so a forum is present. Thank you, Mary.

Please file the documents with our meeting records.

Altria has appointed Broadridge Financial Services to act as the inspector of election. Jim Alden and Peter Scheiblin have each taken the oath of inspector of election and will be tabulating the vote for this morning's meeting. The inspector's responsibility is to determine the number of shares represented at the meeting and to certify the vote. All proxies are confidential unless shareholders have commented on them. Now, let's turn to the election of directors. Please welcome our board of directors, all of whom are here in attendance today. It is an extraordinary and committed group that provides strong leadership and thoughtful oversight to Altria. We value the skills, experiences, and perspectives they bring to the boardroom. Mary, please announce the names of the nominees for election as directors.

The nominees are Ian Clark, Marjorie Connolly, Matt Davis, Deborah Kelly Ennis, Sal Mancuso, Catherine McQuaid, Virginia Shanks, Richard Stoddart, Ellen Strallman, and Max Izaguiri, each to hold office until the next annual meeting of shareholders and until his or successor has been duly elected and qualified.

Thank you. Under our bylaws, the nominations are closed. Our board recommends that shareholders vote in favor of each nominee for director. We will pause momentarily to allow votes to be cast. Our next item is the ratification of the selection of PricewaterhouseCoopers LLP as Altria's independent registered public accounting firm for 2026. We welcome Kevin Kelly from PwC, who has also joined us today. Mary, please present the matter.

I move for the adoption of the following resolution. Resolved that shareholders of Altria Group, Inc. ratify the selection of PricewaterhouseCoopers, LLP, as Altria's independent registered public accounting firm for the year ending December 31st, 2026.

Thank you. Our board recommends that shareholders vote in favor of this matter. We will pause momentarily to allow votes to be cast. Let's now move to the advisory vote to approve the compensation of our named executive officers. While this vote is non-binding, the Compensation and Talent Development Committee of our board will consider its outcome when making future decisions. Our board recommends that shareholders vote in favor of this proposal. Mary, please present the matter.

I move for the adoption of the following resolution. Resolved that shareholders of Altria Group, Inc. approve on an advisory basis the compensation of Altria's named executive officers as described in the compensation discussion and analysis section of the proxy statement.

Thank you. Our board recommends that shareholders vote in favor of this matter.

We will pause momentarily to allow votes to be cast.

We voted on have now been presented. If you wish to vote, please do so at this time. We will pause momentarily to allow final votes to be cast.

All shareholders have had the opportunity to vote.

The polls are now closed. We now move to the preliminary voting results. Mary, please summarize the inspector's report.

The inspectors have completed the preliminary count of the votes. The preliminary voting results are as follows. Shareholders have elected each of the nominees for director with more than 97% of the shares voting for their election. The selection of PricewaterhouseCoopers LLP as Altria's independent registered public accounting firm for the year ending December 31, 2026 has been ratified with more than 96% of the shares voting voting in favor. Shareholders have approved on an advisory basis the compensation of Altria's named executive officers with more than 96% of the shares voting voting in favor. That concludes the report.

Thank you, Mary. Please file the report and the proxies with our meeting records. We will post the final voting results on Altria's website and file them with the SEC on a Form 8K in the next few days. This concludes the business portion of the meeting, and that portion of the meeting is now adjourned. Before I turn the meeting over to Billy, the board would like to take a moment to thank him and congratulate him on his well-earned retirement following a distinguished career of over 30 years with the Altria family of companies. Billy has guided Altria through a period of significant change, reinforced our financial strength, sharpened our strategic focus, and advanced our vision. The board sincerely thanks Billy for his leadership, integrity, and unwavering commitment to Altria, and wish you and your family the very best in your retirement. With that, I will turn the meeting over to Billy for his brief remarks following the question and answer session. Billy?

Thanks, Catherine, and good morning, everyone. I hope you've had the chance to review the business, financial, and corporate responsibility resources on Altria.com, including our full year 2025 and first quarter 2026 business results, and our latest corporate responsibility reports. Our corporate responsibility reporting demonstrates the continued progress we are making toward our vision of moving beyond smoking. by responsibly transitioning adult smokers to a smoke-free future, competing vigorously for existing smoke-free adult nicotine consumers, and exploring new growth opportunities beyond the U.S. and beyond nicotine. I'd also like to say a few words about our leadership team as I conclude my long and fulfilling career with the Altria family of companies. Through its ongoing discussion planning process, the board has appointed Sal Mancuso to serve as Altria's next Chief Executive Officer. I've had the privilege of working closely with Sal over the course of our careers, and he brings deep experience, sound judgment, and a strong commitment to our people and to our vision. The board also elected Heather Newman to serve as Altria's next Chief Financial Officer. Heather brings extraordinary experience, having served in numerous leadership positions over her 27 years with the Altria family of companies. As I prepare to step away, I do so with great confidence that Altria is in very capable hands. It has been a tremendous honor to serve this great company and a privilege to work alongside incredibly talented and dedicated colleagues and friends. I want to express my sincere thanks to our shareholders for your continued trust and support. I'm proud of what we've accomplished together and confident in what lies ahead. Now proceed to our question and answer session. Karen Knuckles, our Director of Communications, will present the questions you have submitted through the meeting site. Let's begin.

Thanks, Billy. As we describe in our Rules of Conduct, we will take questions in the order in which they are received, subject to the 30-minute time limit. To permit as many questions as possible, we may group questions submitted by multiple shareholders on the same topic. The rules of conduct explain how we will handle questions if we run out of time. Your first shareholder question comes from Ashita Mizra, and it reads, As a young person involved in tobacco and vape waste prevention advocacy, I want to ask, how does Altria justify continued investment in nicotine products that contribute to both youth addiction and large-scale environmental waste, especially disposable vape pollution?

Yeah, thanks for joining the meeting. And you bring up two topics that we take very seriously at Altrio. The first is underage use. And let me clearly state our position on that, is kids should not use nicotine products. And we go to great efforts to prevent both access and marketing reaching underage users. As far as environmental waste, we understand the effects our companies and products could have on the climate, and we set long-term environmental targets and regularly share updates via our website through our disclosures there. One of our corporate responsibility focus areas is reduce environmental impact, and we've made investments for many years to prevent product and packaging from becoming litter. And one of those, just for an example, is our investment with Keep America Beautiful, which we've invested with for over 20 years. So I appreciate your interest in this. And I would invite you to go to Altria.com, where we clearly disclose the progress we're making in preventing our products from becoming litter. Thanks for your question.

Your next question is from Guy Grenard. And it reads, as of May 2026, 24 states in Washington, D.C. have legalized recreational marijuana for adults 21 plus, including major markets like California, Colorado, New York, and Michigan. Medical use is legal in over 40 states. Do you see a time when Altria will be making and selling marijuana products?

Yeah, thanks for your question related to cannabis. I think it's important to remember while you're in the process of seeing states making it legal at the state level, it's still illegal at the federal level. And so we've been advocating for legalization, but that we believe it needs to have comprehensive regulation that's based on science and evidence that joins that legalization. And some of those things that we think need to be part of that regulatory framework are preventing underage use, promoting responsible consumption by adult consumers, and then ensuring quality standards across the industry and with a focus on advancing the science and innovation. I think it's important to remind you, based on your question, that we do have an investment in a Canadian cannabis company called Kronos, where in Canada it is legal at the countrywide level. And so we'll continue to monitor the progress on legalization and the regulatory framework, continue to advocate for that, and we'll keep you informed. Thanks for your question.

Your next question comes from Seth Meja. I just want to thank Billy for his resilient leadership and the board for their commitment to the dividend. I am a proud shareholder, and I trust and look forward to the journey ahead. My question is, what opportunities excite you the most here at Altria for shareholders?

Thank you very much for your kind words. There's a lot to be excited about. I think when you step back and think about where Altria is positioned, we have leading core tobacco businesses with iconic brands, just to walk through them. We're number one in cigarettes with our leading brand, Marlboro. We're number one in the most profitable segment of machine-made large cigars with our brand Black and Mild. We're number one in traditional moist, smokeless tobacco with their brand Copenhagen. The opportunity in front of us is tobacco harm reduction. It's still in its early stages in the U.S. And in those categories, we have a very fast-growing brand with On and On Plus. We've entered into a joint venture with Japan Tobacco to be able to market their plume device coupled with Marlboro heated tobacco sticks in the U.S. With that, we filed a joint application, meaning a pre-market tobacco application and a modified risk tobacco product application with the FDA. And we're excited to hear from the FDA as they continue to review that. We have the brand Enjoy, and we've made great progress in working around the issues we had with the ITC on some patent infringements, and we look forward to keeping the investors informed of the progress we make there. But what has me most excited is the talent of the colleagues here at Altria. They have a deep knowledge and experience in the industry, and I know they will seize on every opportunity as we move forward. Thanks for your question.

Your next question is from Jim Merrick, and it reads, what can shareholders expect from Altria dividend increases in the future?

Yes, certainly I will remind you that all dividend declarations are at the discretion of the board. But know that to both management and the board, we know that top priority to our investor is the dividend, and it's top priority for us. And we'll continue to look to strive to grow that as we move through time.

Thanks for your question.

Your next question is from Jonathan Shafee, and it reads, On page 5 of the 2026 proxy statement, under our responsibility focus areas, protecting the environment is listed. The farming, manufacturing, and producing nicotine for our products is detrimental to our environment at every step from start to finish. Cigarette butts are still the most littered item in the world, and now we produce e-cigarettes and nicotine pouches that add more chemicals and microplastics into our environment. My question is, what does Altria, as an industry leader with the number one cigarette and smokeless tobacco brand, plan to do beyond funding Keep America Beautiful, as it does not seem to be making a difference?

Yeah, I appreciate your question, and hopefully you were able to hear the answer earlier. We certainly understand the effect our companies and products have on the climate, and we have made investments, and obviously you're aware of that with Keep America Beautiful. I think some of the other things to point out that we do is we support litter laws across the country on a state level. We try to raise awareness with our consumers about how they should have properly disposed of, whether it's cans, packaging, or cigarette butt litter. We invest to put cigarette receptacles in key locations. We actually distribute portable ashtrays to our consumers and try to encourage and incentivize them through websites and mailings to make the pledge to use those portable ashtrays. And we actually invest in organized community litter cleanups. Now, where I'll disagree with you is that no progress has been made. We feel like with these efforts and with ongoing cigarette volume decline, if you'll look up Keep America Beautiful, their latest study on cigarette butt litter, it dated from 2009 to 2020. So it's a bit old, but it actually showed cigarette butt litter was down 70% during that period. So, again, there's always work to be done. We'll continue to invest in the things I mentioned. But I would encourage you to look up Keep America Beautiful and look at that study with the significant progress that's been made.

Your next question is from Shrestha Shakalam, and it reads, Altria's homepage promotes moving beyond smoking as a public health mission. But for young people, the move from cigarettes to vapes hasn't been progress. It's been a new entry point into nicotine addiction. Altria owns Enjoy, lobbied for years to keep flavored e-cigarettes on the market, and held a 35% stake in Juul during the height of the teen vaping epidemic. Why should youth advocates believe Altria is genuinely committed to a smoke-free future when every smoke-free product your company has invested in has ended up addicting a new generation?

Yeah, I appreciate your question, and hopefully, and I think it's worth repeating our position, is that kids should not use any nicotine product, and that includes flavored or not. We believe the most effective way from preventing youth access is keeping, we lobbied to raise the minimum age to purchase cigarettes across the country, and it's now federal law to 21. And that really reduced youth access to nicotine products. I would also encourage you to look at some of the government data. It would show you that youth usage is trending down. There's always work to be done, and we'll continue to do that. But youth usage of nicotine products, especially cigarettes, which are at generational lows. Now, you mentioned flavors, and I think it's worth pointing out that flavors do play a role in helping adults convert from combustible products to smoke-free products. So we believe policymakers should support harm reduction, and it's really an approach that prevents underage use, but at the same time provides adult smokers with the support, the information, and can present them with the choice to either quit or move to less harmful smoke-free alternatives. Thanks for your question.

Your next question is from Jim Merrick, and it reads, With a lot of negative news on the economy, how does that affect Altria and line of products? Do people trade down to cheaper alternatives or stop vaping and smoking?

Yeah, I appreciate the question. I think if you look back through history, we've made great strides in investing in data analytics. And we use a process with machine learning to be able to make investments across the U.S. On a store-by-store level, we're looking to move to a consumer-by-consumer level, and we're making great strides there. It certainly impacts the way the consumer shops the category, but we feel like we have the tools necessary to really be there for our consumers because we know that the economic and the compounding of inflation on their total market basket has had an impact. But we feel like we have the tools, and I would encourage you to look up first quarter because certainly the consumer has been under economic strain for quite a while, and you can see the results we were able to achieve with our various opcodes really deploying this data analytics and putting retail buy-downs in the marketplace. Thanks for your question.

Your next question comes from Mark Zashin, and it reads, does the company see tuck-in acquisition opportunities in 2026 and beyond?

Yeah, I would be careful not to talk about future mergers and acquisitions or anything of that niche. I can share with you how we think about it. Certainly, we're very, very pleased with our portfolio products, and we're really focused on execution and our pipeline of products behind that and being able to get those through the FDA and bring those products to the marketplace. But we never take our eye off of around the globe what is present in the nicotine space. So we have a group that keeps an eye on that and presents opportunities if they should arise. But right now, we're really focused on execution in the marketplace.

Your next question comes from David Parts, and it reads, we see that a significant portion of the NEO's pension benefits are from the Altria Retirement Plan. What provisions have been made, and what is the history of cost of living adjustments for these pension payments to retired NEOs?

Yeah, I appreciate your question. We regularly evaluate all of our benefits, including retiree benefits. And then we have an independent committee on the board, our talent and comp development committee, of all independent directors, and they see the benchmarking that takes place, and they look at it as a total compensation package and make adjustments accordingly. And so it's a very comprehensive benefit plan. Certainly, if a COLA adjustment is necessary, it would be brought to the COMP committee and presented in a nature of whether they thought – and they would make decisions on whether they thought it was necessary or not. But they have a total compensation, including benefits, look at all of our NEOs. Thanks very much for your question.

Your next question comes from Dana Mitchell, and it reads, Youth use of nicotine products and subsequent addiction continues to rise. What we have done so far has been insufficient. What else can the company do?

Yeah, I appreciate your question, but while I disagree with it, and I would encourage you to go look at some of the latest government data that shows youth usage is trending down across all of the categories, and in fact, cigarettes are at generational lows. So we do make significant investments across our business to prevent both youth access and youth usage of our products. For instance, I mentioned some earlier, but I think they're worth re-bringing up. We make investments at retail. 96% of our retailers are obligated per contract to have a WeCard program where they actually have to be presented with a government ID to be able to purchase any nicotine product. Our field sales force engages in store clerk training regarding that. We've made investments at retail, both in age and identity verification technology, so that there's no longer the store clerk actually has to scan the ID, so there's no subjectivity to it. I mentioned earlier, we supported and lobbied for Tobacco 21, which raised the minimum age to 21 across the U.S. and is a federal law now. I would remind you that the FDA also does retail inspections regarding underage purchasing. And again, we're at the lowest recorded underage use. Thanks for your question.

Your final question comes from Mark Zashen. And it reads, is there opportunities going forward for the company to cut costs versus a possible increase in research and development CapEx? and how sorry sorry let me it's a two-parter how does Altria view the federal regulatory landscape under the Trump administration a headwind or a tailwind yeah I appreciate your question know that being efficient and effective is part of the DNA of all of our colleagues here at Altria and so we always are looking to do things in a very effective way but most efficiently you may have heard on some of our earnings calls, we talked about Optimize and Accelerate.

It's a program where we're looking at processes end-to-end, regardless of where they reside in Altria, and looking to include technology where appropriate to make it more efficient. Those efficiencies, we are reinvesting in the business, but it's not all about efficiency. For instance, we're looking at technology in some of our marketing executions, and we've been able to reduce times up to 50% of execution from idea to execution in the marketplace. As far as the FDA, we have a great working relationship with the FDA, and that's true across multiple administrations going back in time. So certainly we're always advocating for the regulatory process to work effectively, and we've had issues with that, and we'll continue to have issues and advocate for that to work effectively, both in enforcement for all of the illicit products that are in the marketplace, as well as authorization so that our consumers can have science-based products in the marketplace that have been reviewed by a third party as appropriate for public health. Here's the question and answer session. Thank you for all your questions and for your continued interest in NALTRIA.

The meeting is now adjourned.

The meeting has now concluded. Thank you for joining and have a pleasant day.