Share-Based Payments

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

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

The 2019 Stock Plan (2019 Plan) replaced and superseded the 2014 Plan. It provides for 400 million shares, in addition to shares remaining under the 2014 Plan, to be authorized for grants. As of December 31, 2022, no shares remain under the 2014 Plan. The 2019 Plan provides that the number of stock options, TSRUs, RSUs, or performance-based awards that may be granted to any one individual during any 36-month period is limited to 20 million shares, and that RSUs count as three shares, PPSs, PSAs and BPAs count as three shares times the maximum potential payout, while TSRUs and stock options count as one share, toward the maximum shares available under the 2019 Plan. As of December 31, 2022, 270 million shares were available for award, including 27 million shares that we assumed from the remaining shares available from the stock plans of GBT, Arena and Biohaven which can be issued to legacy employees of the acquired companies and newly hired employees after the dates of the respective acquisitions. 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)(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 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.	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 dividend equivalents that are reinvested into additional RSUs. •For RSUs granted before 2022, generally in all instances, the units vest on the third anniversary of the grant date assuming continuous service from the grant date. Beginning in 2022, generally in all instances, the units 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 a straight-line basis for RSUs granted before 2022, and on an accelerated attribution approach for RSUs granted in 2022, 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, if any, including shares resulting from dividend equivalents earned on such shares. •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 or five-year performance period from the year of the grant date, as applicable. •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 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 performance period, shares of our common stock (retirees) 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 net income 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 on the third anniversary of the grant assuming continuous service from the grant date. •The award that may be earned ranges from 0% to 200% of the target 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 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.
Breakthrough Performance Awards (BPAs)
Select employees identified as instrumental in delivering medicines to patients (excluding executive officers)	•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 earned on such shares. •For BPAs granted, the awards, if earned/vested, are settled at the end of the performance period, but no earlier than the one-year anniversary of the date of grant and dependent upon the achievement of the respective predetermined performance goals related to advancing Pfizer’s product pipeline during the performance period. •The number of shares that may be earned ranges from 0% to 600% of the target award depending on the level and timing of 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, 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 and/or management’s assessment of the probable vesting term.


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 when vested. •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.

(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. In addition to having the same characteristics and valuation methodology of TSRUs, PTSRU grants require special service and performance conditions. These awards were settled in December 2022 in accordance with the grant provisions.


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)	TSRUs			RSUs			PPSs			PSAs			Stock Options
Year Ended December 31,	2022	2021	2020	2022	2021	2020	2022	2021	2020	2022	2021	2020	2022	2021	2020
Total fair value of shares vested(a)	$11.72	$7.26	$6.22	$345	$304	$334	$145	$181	$119	$57	$33	$25	$9.44	$4.86	$3.56
Total intrinsic value of options exercised or share units converted	$1,131	$594	$84				$280	$228	$224				$247	$584	$293
Cash received upon exercise													$260	$795	$425
Tax benefits realized from exercise													$46	$106	$55
Compensation cost recognized, pre-tax(b)	$255	$259	$287	$402	$281	$272	$144	$535	$180	$73	$76	$31	$4	$5	$6
Total compensation cost related to nonvested awards not yet recognized, pre-tax	$179	$187	$224	$266	$271	$228	$135	$175	$104	$38	$54	$32	$3	$3	$4
Weighted-average period over which cost is expected to be recognized (years)	1.7	1.6	1.6	1.7	1.8	1.7	1.7	1.8	1.8	1.8	1.8	1.9	1.7	1.6	1.7

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

(b)In 2020, TSRU includes expense for PTSRUs, which is not significant.

Total share-based payment expense was $872 million, $1.2 billion and $780 million in 2022, 2021 and 2020, respectively, which includes pre-tax share-based payment expense included in Discontinued operations––net of tax of $0 million, $2 million and $25 million in 2022, 2021 and 2020, respectively. Tax benefit for share-based compensation expense was $160 million, $227 million and $141 million in 2022, 2021 and 2020, 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 not significant for all 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,	2022		2021		2020		2022		2021		2020
Expected dividend yield (based on a constant dividend yield during the expected term)	3.42	%	4.51	%	4.36	%	3.42	%	4.51	%	4.36	%
Risk-free interest rate (based on interpolated yield on U.S. Treasury zero-coupon issues)	1.87	%	0.93	%	1.15	%	1.93	%	1.27	%	1.25	%
Expected stock price volatility (based on implied volatility, after consideration of historical volatility)	29.20	%	26.53	%	20.99	%	29.21	%	26.54	%	20.97	%
TSRUs contractual/stock options expected term, years (based on historical exercise and post-vesting termination patterns for stock options)	5.17		5.15		5.12		6.50		6.75		6.75


Summary of all TSRU, RSU, PPS, PSA and BPA activity during 2022 (with the shares granted representing the maximum award that could be achieved for PPSs, PSAs and BPAs):
	TSRUs					RSUs			PPSs(a)			PSAs			BPAs
	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		Shares	Weighted Avg. Intrinsic Value per share

	(Thousands)	GDFV		Grant Price		(Thousands)			(Thousands)			(Thousands)			(Thousands)
Nonvested, December 31, 2021	114,599	$	6.90	$	34.12	25,540	$	35.52	21,480	$	59.05	5,154	$	59.05	859	$	59.05
Granted	22,479	11.72		46.02		9,617	46.73		7,089	45.96		1,506	46.38		—	—
Vested	(33,066)	8.40		38.57		(7,258)	41.10		(5,602)	46.99		(1,209)	46.98		—	—
Reinvested dividend equivalents						876	50.30
Forfeited	(2,318)	7.76		35.88		(948)	39.75		(645)	50.52		(433)	47.22		(859)	47.21
Nonvested, December 31, 2022	101,693	$	7.58	$	35.26	27,826	$	38.26	22,322	$	51.24	5,018	$	51.24	—	$	—

(a)Vested and non-vested shares outstanding, but not paid as of December 31, 2022 were 34.2 million.


Summary of TSRU and PTU information as of December 31, 2022(a), (b):
	TSRUs (Thousands)	PTUs (Thousands)	Weighted-Average Grant Price Per TSRU		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Millions)
TSRUs Outstanding	180,182		$	34.51	2.0	$	3,528
TSRUs Vested	78,488		33.54		0.7	1,637
TSRUs Expected to vest(c)	99,060		$	35.14	3.0	1,856
Outstanding PTUs converted from TSRUs exercised		2,621			0.6	$	134

(a)In 2022, we settled 42,938,701 TSRUs with a weighted-average grant price of $27.32 per unit.

(b)In 2022, 3,097,904 TSRUs with a weighted-average grant price of $28.37 per unit were converted into 1,820,027 PTUs.

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


Summary of all stock option activity during 2022:
	Shares (Thousands)	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value(a) (Millions)
Outstanding, December 31, 2021	44,874	$	30.20
Granted	429	45.96
Exercised	(9,859)	26.44
Forfeited	(26)	34.52
Expired	(138)	20.80
Outstanding, December 31, 2022	35,280	31.47		2.1	$	697
Vested and expected to vest, December 31, 2022(b)	35,209	31.46		2.1	696
Exercisable, December 31, 2022	32,460	$	31.18	1.6	$	651

(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.