Philip Morris International Inc DEF 14A, filed Mar 27, 2025

Philip Morris International Inc. (PM)

DEF 14A 2025-03-27 For: 2025-05-07

View Original

Added on June 12, 2026

About this DEF 14A

Philip Morris International Inc filed this DEF 14A on March 27, 2025.

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

	Sincerely,			Sincerely,
	André Calantzopoulos			Jacek Olczak

Meeting Agenda		Recommendation
1.	To elect the eleven directors named in this proxy statement to our Board of Directors.		FOR each director nominee
2.	To vote on an advisory resolution to approve the compensation of our named executive officers.		FOR
3.	To ratify the selection of PricewaterhouseCoopers SA as independent auditors for the Company for the fiscal year ending December 31, 2025.		FOR
4.	To transact other business properly coming before the meeting.

By Internet	By Phone	By Mail	At the Meeting

Visit proxyvote.com with your proxy card in hand and follow the instructions to obtain your records and create an electronic voting instruction form.	Call 1-800-690-6903 with your proxy card in hand and follow the instructions to cast your vote.	Mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to: Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.	During the meeting, visit virtualshareholder meeting.com/PM2025 with your 16-digit control number found on your proxy card or other proxy materials.

	Proxy Summary					2
	Board Operations and Governance					5
	Board Responsibilities and Meetings					5
	Governance Guidelines, Policies and Codes					6
	Leadership Structure					6
	Committees of the Board					8
	Board Risk Oversight					13
	Communications with the Board					14
	Strong Governance Practices					15
	Election of Directors					18
	Process for Nominating Directors					18
	Recommendations of the Board; Director Attributes, Refreshment and Tenure					19
	Independence of Nominees					20
	Majority Vote Standard in Uncontested Elections					20
	Director Nominees					21
	Compensation of Directors					32
	Stock Ownership Information					35
	Ownership of Equity Securities					35
	Compensation Discussion and Analysis					37
	Executive Summary					37
	Additional Compensation Policies and Processes					53
	Compensation and Leadership Development Committee Report					56

	Compensation Tables					57
	Summary Compensation Table					57
	All Other Compensation					58
	Grants of Plan-Based Awards During 2024					60
	Outstanding Equity Awards as of December 31, 2024					61
	Stock Option Exercises and Stock Vested During 2024					63
	Pension Benefits					64
	Employment Contracts, Termination of Employment and Change in Control Arrangements					66
	Pay Ratio					68
	Pay versus Performance					69
	Advisory Vote Approving Executive Compensation					72
	Audit and Risk Committee Matters					73
	Ratification of the Selection of Independent Auditors					76
	Related Person Transactions and Code of Conduct					77
	Availability of Reports, Other Matters and 2026 Annual Meeting					78
	Exhibit A: Questions & Answers					80
	Exhibit B: Reconciliations					85
	Exhibit C: Glossary of Terms					89

		Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 7, 2025: The Company’s Proxy Statement and 2024 Annual Report are available at www.pmi.com/investor-relations/overview.


PMI at a Glance
PMI, one of the world’s leading international tobacco companies, is working to deliver a smoke-free future and to evolve its portfolio for the long-term to include products outside of the tobacco and nicotine sector. PMI’s principal executive offices are located at 677 Washington Blvd., Suite 1100, Stamford, Connecticut 06901, and it is listed on the New York Stock Exchange (NYSE: PM).
(a) Reflects PMI smoke-free business net revenues of $14.7 billion as a percentage of PMI total net revenues of $37.9 billion


2024 Annual Performance Targets and Results
PMI met or exceeded all of the annual performance-based targets pre-established by the Compensation and Leadership Development Committee (“Compensation Committee”) for annual cash incentive compensation awards. Against an overall target of 100, the Compensation Committee certified a performance rating of 130. See below for achievements against individual performance targets and their relative weights. More information is available on pages 44-46.

Growth Measure(a)	Target	Achieved Result	Weight	Performance Rating
Share of Top 30 OI Markets(b)	15-17	18	15%	105
Smoke-Free Shipment Volume(c)	153.4-158.0	156.5	15%	100
Adjusted Net Revenues(d)	7.5-8.5%	9.8%	20%	147
Adjusted OI(d)	8.4-9.7%	14.9%	15%	150
Operating Cash Flow(e)	9.8-10.2	12.2	20%	150
Strategic Initiatives	100%	110%	15%	110
(a) See Exhibit B for a reconciliation of non-GAAP to the most directly comparable U.S. GAAP financial numbers (b) Number of Top 30 OI markets in which total share of market was growing or stable. For the U.S., share of market represents PMI’s nicotine pouch volume as a percentage of estimated cigarette and nicotine pouch industry volume, based on Nielsen offtake data and PMI estimates (c) Smoke-Free Shipment volume includes HTU, nicotine pouches, snus, and e-Vapor pods and disposables, with the volume for each product measured on a converted per stick basis (d) Organic growth (e) Net cash provided by operating activities, in USD billion



Who we engaged	How we engaged	What we learned
In 2024, we met with 56 of our top 100 institutional investors, either in person or virtually, representing approximately 70% of our available global shareholder base (which excludes index and pension funds that typically do not meet with management).	In addition to these regular Investor Relations engagements, we invited 90 of our largest shareholders (including their governance and sustainability decision makers), holding approximately 64% of our outstanding shares to participate in individual conference calls.	• Engagements provided us with a better understanding of our shareholders’ priorities, perspectives and positions. • The substance of these engagements was reported to our Compensation Committee, our Nominating and Corporate Governance Committee, and our entire Board of Directors.



Our Workforce	Our Internal Transformation	Collaborative Culture
More than 130 Nationalities As of December 31, 2024, we employed approximately 83,100 people worldwide of more than 130 nationalities, including full-time, temporary and part-time staff.	Smoke-Free Future To be successful, we must continue transforming our culture and ways of working, align our talent with our business needs and innovate to become a truly consumer-centric business.	Performance-Driven Approach We focus on fostering a performance-driven and collaborative culture and we recognize the value of our global workforce and their contributions. We remain committed to the performance, growth, and well-being of our employees, providing them with the right environment, support, and resources for their careers and professional development. These principles are codified in our cultural values, which we call the PMI DNA, and we embed these principles throughout our people and business guidelines, practices, and systems.
Global Company We are subject to numerous different laws and regulations relating to our relationship with our employees. We engage with legally recognized employee representative bodies and we have collective bargaining agreements in several of the countries in which we operate.	Developing Talent We aim to attract, retain and motivate the best global talent, that has the right degree of experience, competencies and skills. We seek expertise in areas that are new to us such as digital and technical solutions while also developing our existing talent.
European Works Council In accordance with European Union requirements, we have established a European Works Council composed of management and elected members of our workforce.	Compensation We set the levels of our compensation and benefit programs that we believe are necessary to achieve business goals and remain competitive with other consumer product companies.	EEO-1 Report(a) Influenced by our engagement with shareholders, we began publishing PMI’s EEO-1 Report in 2023. Reports for 2022 and 2023 are available on the Company’s website at www.pmi.com/who-we-are/eeo- disclosures. The 2024 report will be posted once available.


	Primary Responsibilities:			Meetings:
	• Fosters the long-term success of the Company, consistent with its fiduciary duty to shareholders. • Establishes broad corporate policies, setting strategic direction, and oversees management, which is responsible for the day-to-day operations of the Company. • Oversees the Company’s enterprise risk management program (as described on pages 13-14). In fulfilling this role, each director must exercise his or her good faith business judgment in the best interests of the Company. • Approves the Company’s strategy and related annual budget each year and receives updates of the Company’s performance against its strategy and the budget throughout the year. • Reviews and approves the Company’s three-year plan each year, typically in a two-day session. The Board regularly receives presentations on the Company’s longer-term objectives and plans.			• The Board holds regular meetings, typically during the months of February, March, May, June, September and December, and additional meetings when necessary. The organizational meeting follows immediately after the Annual Meeting of Shareholders. • The Board held 6 regular meetings in 2024. The Lead Independent Director presides over regular executive sessions of the Board with no members of management present. • Directors are expected to attend Board meetings, the Annual Meeting of Shareholders and meetings of the committees on which they serve, with the understanding that on occasion a director may be unable to attend. • During 2024, all nominees for director then in office attended at least 80% of the aggregate number of meetings of the Board and all committees on which they served, and all director nominees then in office attended the 2024 Annual Meeting of Shareholders.


	The Code of Conduct:			Other Governance Guidelines:
	• The Board has adopted a Code of Conduct. • The Code of Conduct is an interactive, plain language tool that describes the fundamental beliefs and attributes that unite and guide us in pursuing PMI’s goals, illustrates how to meet our commitments to these beliefs and attributes, and explains why it is critical to do so. • The Code of Conduct is our code of ethics and it applies to our Board and all employees, including the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer, and Chief Accounting Officer or Controller. • The Code of Conduct is available free of charge on the Company’s website, www.pmi.com/who-we-are/our-views-and-standards/standards/compliance-and-integrity, and will be provided free of charge to any shareholder requesting a copy by writing to the Vice President, Associate General Counsel and Corporate Secretary of Philip Morris International Inc. at 677 Washington Blvd., Suite 1100, Stamford, CT 06901.			• The Board has adopted Corporate Governance Guidelines that apply to directors to assist with the exercise of the governance responsibilities of the Board and its committees in the best interests of the Company and to foster the long-term success of PMI, consistent with its fiduciary duty to the shareholders. • The Corporate Governance Guidelines promote sound corporate governance practices for the Board to establish effective broad-based corporate policies, set strategic direction, and oversee management. • In addition, the Board has adopted a Policy on Related Person Transactions for the review of certain transactions in which the Company is a participant, and an officer or director, or nominees therefor as applicable, has, had, or may have a direct or indirect material interest. • These corporate governance documents are available free of charge on the Company’s website, www.pmi.com/corporate-governance/overview, and will be provided free of charge to any shareholder requesting a copy by writing to the Vice President, Associate General Counsel and Corporate Secretary of Philip Morris International Inc. at 677 Washington Blvd., Suite 1100, Stamford, CT 06901.


Chairman				Lead Independent Director
ANDRÉ CALANTZOPOULOS As Chairman, Mr. Calantzopoulos: • facilitates communication between the Board and management; • assists the Chief Executive Officer with long-term strategy and serves as his sounding board; • presides at all meetings of shareholders and of the Board; and • directs the preparation of agendas and materials for Board meetings, working together with the Lead Independent Director, who reviews the agendas before they are disseminated to the Board. As always, input will be sought from all directors as to topics they wish to review. Because Mr. Calantzopoulos is not independent, the Board will continue to have a Lead Independent Director. Mr. Calantzopoulos retired as an officer of the Company immediately following the 2024 Annual Meeting of Shareholders, but continues to serve on the Board as Chairman.				LISA A. HOOK The non-management directors elect at the annual organizational meeting one independent director as the Lead Independent Director. As Lead Independent Director, Ms. Hook’s responsibilities are to: • preside over executive sessions of the non- management directors and at all meetings at which the Chairman is not present; • call meetings of the non-management directors as she deems necessary; • serve as liaison between the Chief Executive Officer and the non-management directors; • review agendas and schedules for Board meetings; • advise the Chairman and the Chief Executive Officer of the Board’s informational needs; • together with the Chairman and the Chair of the Compensation Committee, communicate goals and objectives to the Chief Executive Officer and the results of the evaluation of his performance; and • be available for consultation and communication if requested by major shareholders.
				The Lead Independent Director is a member of all of the committees of the Board.

	Independence of Directors			Our Board is comprised of a substantial majority of directors that meet the independence requirements under NYSE listing standards. All directors other than our Chairman and CEO are independent. All standing Committees, other than the Science and Technology Committee, are comprised only of independent directors. The Board annually makes an affirmative determination as to the independence of each director following a recommendation by the Nominating and Corporate Governance Committee (the “Governance Committee”).
	Lead Independent Director			The independent directors annually elect the Lead Independent Director based upon the recommendation from the Governance Committee. (page 7)
	Board Membership Criteria			The Governance Committee works with the Board to determine the appropriate characteristics, skills, and experiences for the Board as a whole and its individual members. Directors may be removed with or without cause.
	Meeting Attendance			Directors are expected to attend all Board meetings, Committee meetings, and the Annual Meeting of Shareholders.
	Executive Sessions			Independent directors meet in a scheduled executive session at regularly scheduled Board meetings without any members of management being present. The Lead Independent Director presides over these executive sessions. At least annually, time is set aside for the independent directors to meet in executive session without members of management or non-independent directors present. The Lead Independent Director presides over these executive sessions.
	Board and Committee Evaluations			The Governance Committee is responsible for developing, recommending to the Board, and overseeing the annual self-evaluation process for the Board and its Committees. The Board periodically retains an external third-party consultant to conduct its self-evaluation process.
	Continuing Director Education			On a continuing basis, directors receive presentations on the Company’s strategic and business plans, financial performance, strategic and operational risks, legal and regulatory matters, sustainability, corporate governance and compliance programs, and other matters. Directors are encouraged to take advantage of continuing education opportunities that will enhance their ability to fulfill their responsibilities and the Company provides access to resources, including membership with the National Association of Corporate Directors, to further facilitate their continuing education. In addition, the Company provides an annual director education session in which all directors participate.
	Director Term and Retirement			There are no term limits or a retirement age for independent directors. Subject to the Board’s discretion, a management director must resign from the Board upon the earlier of ceasing to be an officer of the Company or reaching the age of 65.
	Annual Election of Directors			All directors are elected annually by the Company’s shareholders. (page 18)

	Who We Are

	Majority Voting Standard for Directors			The Company’s by-laws provide that, in uncontested elections, directors shall be elected by a majority rather than by a plurality vote. (page 20) An incumbent director who receives less than a majority of the votes cast must offer his or her resignation. (page 20)
	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. (page 19)
	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 more than five public company boards, 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 more than three audit committees of 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 more than four public company boards, 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. (page 54)
	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. (page 54)
	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. (page 54)
	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. (page 32)
	Double-Trigger Vesting Policy			The Company’s 2017 Performance Incentive Plan and 2022 Performance Incentive Plan include a double-trigger feature upon a change in control. (pages 66-67)
	Lobbying and Political Spending			The Governance Committee oversees the Company’s lobbying and trade association activities and expenditures. (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. (pages 9 and 14)
	Sustainability 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 Sustainability Index. 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 sustainability disclosures, including any assurance being provided by the independent auditor or other third party with respect to non-financial disclosures.
	Annual Say on Pay Advisory Vote			Shareholders are asked to vote annually on the compensation program for our named executive officers. (page 72)
	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. (page 52)

				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 or (ii) the performance of incumbent directors in determining nomination for re-election, and recommends to the Board the slate of nominees for re-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.

	Annual cash retainer			$125,000
	Annual equity award			$175,000
	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

Name	Fees Earned or Paid in Cash(a) ($)		Stock Awards(b) ($)		All Other Compensation(c) ($)		Total ($)
Bonin Bough		125,000		175,036		228		300,264
André Calantzopoulos(d)		340,385		175,036		49,009(e)		564,430
Michel Combes		168,463		175,036		228		343,727
Juan José Daboub		125,000		175,036		228		300,264
Werner Geissler		160,000		175,036		228		335,264
Victoria Harker		125,000		236,381		228		361,609
Lisa A. Hook		175,000		175,036		228		350,264
Jun Makihara(f)		31,250		175,036		228		206,514
Kalpana Morparia		160,000		175,036		228		335,264
Robert B. Polet		125,000		175,036		228		300,264
Dessi Temperley		125,000		175,036		228		300,264
Shlomo Yanai		160,000		175,036		228		335,264

	Director Name			Deferred Shares as of December 31, 2024
	Bonin Bough			8,653
	Michel Combes			8,003
	Juan José Daboub			1,832
	Lisa A. Hook			16,913
	Dessi Temperley			6,618
	Shlomo Yanai			5,799

	Name			Amount and Nature of Beneficial Ownership(1)(2)
	Emmanuel Babeau			90,085
	Bonin Bough			8,832
	André Calantzopoulos			959,761
	Michel Combes			9,201
	Juan José Daboub			8,108
	Frederic de Wilde			85,064
	Werner Geissler			93,541
	Victoria Harker			2,416
	Lisa A. Hook			17,300
	Stacey Kennedy			29,595
	Jun Makihara(3)			3,360
	Kalpana Morparia			26,115
	Jacek Olczak			401,106
	Robert B. Polet			27,644
	Dessi Temperley			6,754
	Stefano Volpetti			92,350
	Shlomo Yanai			7,757
	Group (23 persons)(4)			2,071,785

Name and Address of Beneficial Owner	Number of Shares Beneficially Owned	Percent of Class
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355	136,061,098 (1)	8.74%
Capital World Investors 333 South Hope Street Los Angeles, CA 90071	109,884,696 (2)	7.1%
Capital International Investors 333 South Hope Street Los Angeles, CA 90071	104,966,993 (3)	6.7%
BlackRock, Inc. 55 East 52nd Street New York, NY 10055	98,743,351 (4)	6.3%

	Compensation and Leadership Development Committee					37
	Program Design, Philosophy and Objectives					38
	Target Compensation Mix and 2024 Compensation					41

	Company Performance and Targets					44
	Additional Compensation Policies and Processes					53
	Compensation and Leadership Development Committee Report					56

	1			A MIX OF FIXED AND “AT-RISK” COMPENSATION The higher the organizational level of the executive, the lower the fixed component of the overall compensation and benefits package.
	2			A MIX OF ANNUAL AND LONG-TERM COMPENSATION AND BENEFITS To appropriately reward the achievement of both annual and long-term goals and objectives.
	3			A MIX OF CASH AND DEFERRED EQUITY COMPENSATION That seeks to discourage actions that are solely driven by the Company’s share price at any given time to the detriment of PMI’s long-term strategic goals.
	4			AN OPTIMAL BALANCE OF EQUITY COMPENSATION Comprising both performance-based and time-based awards, without using stock options, and with significant share ownership requirements, to align the interests of executives and shareholders, while remaining mindful of the potentially dilutive nature of equity compensation on shareholder value.

				2024 Base Salary ($)(1)
	Jacek Olczak			1,718,705
	Emmanuel Babeau			1,443,726
	Frederic de Wilde			1,145,813
	Stacey Kennedy			928,101
	Stefano Volpetti			1,088,514

	2024 Cash Incentive Target as % of Base Salary(1)	2024 Actual Cash Incentive Payout as % of Base Salary
Jacek Olczak	200%	351%
Emmanuel Babeau	125%	179%
Frederic de Wilde	125%	203%
Stacey Kennedy	100%	169%
Stefano Volpetti	100%	143%

	2024-26 PSUs Target as % of Base Salary (60% of total Equity Award)(1)	2024 RSUs Target as % of Base Salary (40% of total Equity Award)(2)	2024-26 PSUs Actual Award as % of Base Salary (60% of total Equity Award)	2024 RSUs Actual Award as % of Base Salary (40% of total Equity Award)
Jacek Olczak	360%	240%	432%	288%
Emmanuel Babeau	165%	110%	182%	121%
Frederic de Wilde	165%	110%	198%	132%
Stacey Kennedy	96%	64%	115%	77%
Stefano Volpetti	105%	70%	126%	84%

		2024 Results: We exceeded our targets for the number of stable or growing top 30 OI markets, organic growth of adjusted net revenues, organic growth of adjusted OI, and operating cash flow. Smoke-Free shipment volume was on target and no metrics were below target.
		Share of Top 30 OI Markets: We registered a growing or stable market share in 18 of our Top 30 OI markets, which was above our target of 15-17 markets.
		Smoke-Free Shipment Volume: Shipments of 156.5 billion units were on target of 153.4 to 158 billion.
		Adjusted Net Revenues*: Adjusted Net revenues of $37.9 billion grew by 9.8% compared to 2023, on an organic basis, exceeding our target of 7.5% to 8.5%.
		Adjusted OI*: Adjusted OI of $14.7 billion grew by 14.9% on an organic basis, exceeding our target of 8.4% to 9.7%.
		Operating Cash Flow: Operating cash flow of $12.2 billion exceeded our target of $9.8 to $10.2 billion. * For a reconciliation of non-GAAP to the most directly comparable U.S. GAAP financial measures, see Exhibit B to this proxy statement.

Performance Factor Rating
Measure(a)	0	30	40	50	60	70	80	90	100	105	110	115	120	130	140	147	150
Market Share Top 30 OI Markets(b)	<	6	7	8	9	10	11	13	15 - 17	18	19	20	21	23	25	26	26
Smoke-Free(c) Shipment Volume	<	137	138	141	144	147	149	151	153.4 - 158	159	160	161	162	163	164	165	166
Adjusted Net Revenues(d)	<	4.4%	4.9%	5.4%	5.9%	6.3%	6.7%	7.0%	7.5 - 8.5%	8.6%	8.7%	8.8%	8.9%	9.1%	9.4%	9.8%	9.9%
Adjusted OI(d)	<	5.4%	5.9%	6.4%	6.9%	7.4%	7.8%	8.2%	8.4 - 9.7%	9.7%	9.8%	10.0%	10.1%	10.3%	10.7%	11.1%	11.2%	14.9%
Operating Cash Flow(e)	<	9.1	9.2	9.3	9.4	9.5	9.6	9.7	9.8 - 10.2	10.3	10.3	10.4	10.4	10.5	10.6	10.7	10.7	12.2


Strategic Initiatives
• Shaping Tobacco Harm Reduction and championing Sustainability to create a positive social and environmental impact; • Accelerating conversion through scientific and superior Smoke-Free Inhalable & Oral Products; • Securing our leadership in Combustibles to build Smoke-Free Products;			• Rapidly scaling differentiated Wellness & Healthcare solutions; and • Building an engaged organization with distinctive capabilities and a winning team culture.

Measure	Performance Rating, %	Weight	Weighted Performance Rating, %
Market Share (Top 30 OI Markets)	105	15%	16
Smoke-Free Shipment Volume	100	15%	15
Adjusted Net Revenues	147	20%	29
Adjusted OI	150	15%	23
Operating Cash Flow	150	20%	30
Strategic Initiatives	110	15%	17
			129*

	Result	Performance Factor	Actual	Rating
Below Threshold	<5.0%	0%	12.2%	200%
Threshold	5.0%	50%
Target	8.0%	100%
Maximum	≥11%	200%

Product Sustainability Index Component	Index KPI	Weight	Miss	Partial	Target	Exceed	Actual Performance	Score
Purposefully phase out cigarettes(a)	Smoke-free product shipment ratio (smoke-free / total)	12%	<20.5%	20.5- 21.9%	22.0- 22.9%	>22.9%	20.4%	Miss = 0
Purposefully phase out cigarettes(a)	Smoke-free product net revenue ratio (smoke-free / total)	12%	<39.9%	39.9- 42.9%	43.0- 44.5%	>44.5%	38.7%	Miss = 0
Maximize the benefits of smoke- free products	Number of markets selling smoke-free products	12%	<89	89-92	93-96	>96	95	Target = 2
	Proportion of markets selling smoke-free products which are low- and middle-income markets	12%	<40.0%	40- 44.9%	45- 50%	>50.0%	49%	Target = 2
	Total number of users of PMI’s smoke-free products (millions)	12%	<32.0	32.0- 35.9	36.0- 38.4	≥38.5	38.6	Exceed = 3
	Proportion of shipment volume covered by markets with youth access prevention programs	12%	≤80%	81- 89%	90- 95%	>95% and external monitoring for key / high risk markets	99%(b)	Exceed = 3
Seek net positive impact in wellness and healthcare	Annual net revenue from innovation in wellness and healthcare, incl. NRT (bio USD)	12%	<0.40	0.40- 0.44	0.45- 0.55	>0.55	0.33	Miss = 0
Reduce post- consumer waste	Proportion of shipment volume covered by markets with anti-littering programs in place for combustible cigarettes	4%	<60%	60- 74%	75- 80%	>80%	92%	Exceed = 3
	Proportion of shipment volume covered by markets with take-back programs in place for smoke-free consumables	4%	≤27%	28- 43%	44- 72%	>72%	21.5%	Miss = 0
	Proportion of PMI smoke free devices with an eco-design certification(c)	4%	0%	<75%	75- 100%	>100%	100% projects(d)	Exceed = 3
	Cumulative number of devices repaired or refreshed (‘000) since 2021	4%	0	1- 599	600- 1799	≥1800	867	Target = 2
Product Sustainability Performance (20% Weighting)							76%