In May 2004, our stockholders approved and we adopted the Gilead Sciences, Inc. 2004 Equity Incentive Plan (as amended, the “2004 Plan”). As part of the Forty Seven, Inc. acquisition in 2020, we assumed the Forty Seven, Inc. 2018 Equity Incentive Plan, which we subsequently amended and restated as the Gilead Sciences, Inc. 2018 Equity Incentive Plan (as amended and restated, the “2018 Plan”). As part of the Immunomedics acquisition in 2020, we assumed the Immunomedics Amended and Restated 2014 Long-Term Incentive Plan, which we subsequently merged into the 2004 Plan.

In May 2022, our stockholders approved and we adopted the Gilead Sciences, Inc. 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan authorized the issuance of a total of 132 million shares of common stock. No awards may be granted under the 2004 Plan or the 2018 Plan since the approval of the 2022 Plan.

These are broad-based incentive plans that provide for the grant of equity-based awards, including RSUs, PSUs, stock options and other restricted stock and performance awards, to employees, directors and consultants. As of December 31, 2023, a total of 82 million shares remain available for future grant under the 2022 Plan.

We grant time-based RSUs to certain employees as part of our annual employee equity compensation review program as well as to new hire employees and to non-employee members of our Board. RSUs are share-based awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. RSUs generally vest over three or four years from the date of grant. RSUs have dividend equivalent rights entitling holders to dividend equivalents to be paid upon vesting for each share of the underlying unit.

We grant PSUs that vest upon the achievement of specified market or performance goals, which could include achieving a total shareholder return compared to a pre-determined peer group or achieving revenue targets. The actual number of common shares ultimately issued is calculated by multiplying the number of PSUs by a payout percentage ranging from 0% to 200%, and these awards generally vest only when a committee (or subcommittee) of our Board has determined that the specified market and performance goals have been achieved. PSUs have dividend equivalent rights entitling holders to dividend equivalents to be paid upon vesting for each share of the underlying unit.

Option grants are designated as either non-statutory or incentive stock options. The exercise price of stock options may not be less than the fair market value of our common stock on the grant date and no stock option may have a term in excess of 10 years. Employee stock options generally vest over three or four years. Stock options may be settled in cash or in shares of our common stock, including a net issuance using shares otherwise purchasable under the option to pay the exercise price.

Under our ESPP, employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits. The purchase price per share is equal to the lower of 85% of the fair market value of our common stock on the offering date or the purchase date. The ESPP offers a six-month look-back feature. ESPP purchases are settled with common stock from the ESPP’s previously authorized and available pool of shares. A total of 104 million shares of common stock have been authorized for issuance under the ESPP, and there were 26 million shares available for issuance under the ESPP as of December 31, 2023.

The following tables summarize total stock-based compensation expense included on our Consolidated Statements of Income, classified by award type and expense type:


	Year Ended December 31,
(in millions)	2023		2022		2021
RSUs	$	666	$	557	$	558
PSUs	32		25		17
Stock options	30		28		29
ESPP	37		26		31
Acquisition-related expense(1)	29		8		—
Stock-based compensation expense included in total costs and expenses	$	796	$	645	$	635

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(1) Accelerated post-acquisition stock-based compensation expenses of $19 million and $10 million related to the 2023 XinThera and Tmunity acquisitions, respectively, and $8 million related to the 2022 MiroBio acquisition.


	Year Ended December 31,
(in millions)	2023		2022		2021
Cost of goods sold	$	57	$	46	$	40
Research and development expenses	377		285		287
Selling, general and administrative expenses	361		313		308
Stock-based compensation expense included in total costs and expenses	796		645		635
Income tax effect	(165)		(91)		(100)
Stock-based compensation expense, net of tax	$	630	$	553	$	535


	RSUs
(in millions, except per share amounts)	Shares	Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022	23.6	$	63.62
Granted	11.5	$	79.66
Vested	(10.7)	$	63.78
Forfeited	(1.6)	$	69.31
Outstanding as of December 31, 2023	22.7	$	71.24


	Year Ended December 31,
(in millions, except per share amounts)	2023		2022		2021
Weighted-average grant date fair value of RSUs granted	$	79.66	$	60.36	$	65.42
Total fair value of RSUs as of the respective vesting dates	$	849	$	554	$	463

As of December 31, 2023, there was $1 billion of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.2 years.


	PSUs
(in millions, except per share amounts)	Shares	Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2022	1.0	$	64.28
Granted	0.5	$	81.39
Vested	(0.4)	$	79.62
Forfeited	(0.1)	$	59.95
Outstanding as of December 31, 2023	1.0	$	67.48


	Year Ended December 31,
(in millions, except per share amounts)	2023		2022		2021
Weighted-average grant date fair value of PSUs granted	$	81.39	$	60.04	$	71.31
Total fair value of PSUs as of the respective vesting dates	$	35	$	14	$	8

As of December 31, 2023, there was $27 million of unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted-average period of 1.2 years.


	Shares (in millions)	Weighted- Average Exercise Price (in dollars)		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)(1)
Outstanding as of December 31, 2022	14.4	$	67.69
Granted	2.1	$	79.53
Exercised	(1.5)	$	64.72
Forfeited	(0.5)	$	66.91
Expired	(0.2)	$	92.76
Outstanding as of December 31, 2023	14.3	$	69.38	6.10	$	177
Exercisable as of December 31, 2023	9.2	$	70.00	4.97	$	112
Expected to vest, net of estimated forfeitures as of December 31, 2023	4.8	$	68.19	8.16	$	61

(1) Aggregate intrinsic value represents the value of our closing stock price on the last trading day of the year in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable.


	Year Ended December 31,
(in millions, except per share amounts)	2023		2022		2021
Weighted-average grant date fair value of stock options granted	$	16.11	$	9.08	$	10.05
Total intrinsic value of options exercised	$	25	$	59	$	48

We used the following weighted-average assumptions in the Black-Scholes model to calculate the estimated fair value of the stock option awards:


	Year Ended December 31,
	2023		2022		2021
Expected volatility	26	%	27	%	29	%
Expected terms in years	5		5		5
Risk-free interest rate	4.1	%	1.9	%	0.8	%
Expected dividend yield	3.5	%	4.3	%	4.4	%

As of December 31, 2023, there was $46 million of unrecognized compensation cost related to stock options, which is expected to be recognized over an estimated weighted-average period of 2.2 years.


	Year Ended December 31,
(in millions, except per share amounts)	2023		2022		2021
Shares issued	2		2		2
Amount paid by employees for shares	$	129	$	103	$	111
Weighted-average grant date fair value of ESPP shares granted	$	17.31	$	13.40	$	14.58
Total fair value of ESPP shares as of the respective vesting dates	$	45	$	21	$	23

We used the following weighted-average assumptions in the Black-Scholes model to calculate the estimated fair value of the ESPP awards:


	Year Ended December 31,
	2023		2022		2021
Expected volatility	24	%	23	%	25	%
Expected terms in years	0.5		0.5		0.5
Risk-free interest rate	5.1	%	1.8	%	0.1	%
Expected dividend yield	3.7	%	4.5	%	4.4	%

We maintain a retirement saving plan under which eligible U.S. employees may defer compensation for income tax purposes under Section 401(k) of the Internal Revenue Code (the “Gilead Sciences 401k Plan”). In certain foreign subsidiaries, we maintain defined benefit plans as required by local regulatory requirements. Our total matching contribution expense under the Gilead Sciences 401k Plan and other defined benefit plans was $208 million, $176 million and $166 million for the years ended December 31, 2023, 2022 and 2021, respectively.