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2022
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Annual Meeting of
Shareholders and Proxy Statement |
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ANDRÉ CALANTZOPOULOS
EXECUTIVE CHAIRMAN OF THE BOARD
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JACEK OLCZAK
DIRECTOR AND CHIEF EXECUTIVE OFFICER
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DEAR FELLOW
SHAREHOLDER:
You are cordially invited to join us at the 2022 Annual Meeting of Shareholders of Philip Morris International Inc. (“PMI” or the “Company”) to be held on Wednesday, May 4, 2022, at 9:00 a.m. Eastern Daylight Time (“EDT”). As such, we are pleased to once again host a virtual meeting this year. Meaningful shareholder engagement is important to us, and our 2021 Virtual Annual Meeting of Shareholders, conducted solely online through a live webcast, significantly improved shareholder attendance and participation. We believe that this year, this format will again facilitate participation of our shareholders worldwide, regardless of their resources, size or physical location, while saving us and our shareholders time and travel expenses, and, importantly, reducing our environmental impact.
2 0 2 1 Y E A R I N R E V I E W
PMI delivered excellent business performance in 2021, driven by the continued, consistent and increasingly profitable growth of IQOS, recovering volumes and share in combustibles, and significant cost efficiencies. This was achieved despite the lingering headwinds of the COVID-19 pandemic and a shortage of IQOS device components due to global supply-chain disruptions.
We achieved important milestones in our business transformation, notably including the launch of IQOS ILUMA, the surpassing of 20 million IQOS users, and meaningful first steps in building our capabilities for future growth in wellness and healthcare. We also made significant progress towards achieving the goals of our 2025 Sustainability Roadmap, which we will share in our upcoming 2021 Integrated Report.
These achievements would not have been possible without the invaluable efforts of the entire PMI organization, and we salute our nearly 70,000 employees across the globe who delivered again in a very challenging environment.
2021 brought continued challenges for the world and PMI. We responded well to these challenges by demonstrating solidarity, agility, resilience and learning ability. Our people spared no effort to deliver excellent business results despite the ongoing volatility in the operating environment.
L O O K I N G T O T H E F U T U R E
This is an exciting time for PMI. We continue to see significant opportunity in our business transformation away from combustible tobacco products, through our leadership in smoke-free products, as well as our expansion into promising opportunities in wellness and healthcare. Propelled by science, innovation, and ambition, we are well- positioned to accelerate our journey towards a smoke-free future.
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Sincerely,
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André Calantzopoulos
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Sincerely,
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Jacek Olczak
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Meeting Date & Time
May 4, 2022, 9:00 a.m. EDT
Record Date
Each shareholder of record as of close of business on March 11, 2022 is entitled to one vote for each share of common stock held. As of the record date, there were 1,550,082,073 shares of
common stock issued and outstanding.
Voting Deadline
Proxies submitted by telephone or Internet must be received by 11:59 p.m. EDT, on May 3, 2022.
Date of Mailing
On or about March 24, 2022
2021 Annual Report
A copy of our 2021 Annual Report
is enclosed. ![]() |
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There is no physical location for the shareholders to attend the 2022 Annual Shareholder Meeting. Shareholders may instead participate online at www.virtualshareholdermeeting.com/PMI2022. To participate, you will need to enter the 16-digit control number included on your proxy card, notice of Internet availability of proxy materials, or on the voting instruction form accompanying your proxy materials.
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| Meeting Agenda | | |
Recommendation
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1.
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To elect the fourteen directors named in this proxy Statement to our Board of Directors.
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FOR each
director nominee |
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2.
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To vote on an advisory resolution
approving executive compensation. |
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FOR
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3.
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To approve the Philip Morris International Inc. 2022 Performance Incentive Plan.
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FOR
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4.
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To ratify the selection of PricewaterhouseCoopers SA as independent auditors for the Company for the fiscal year ending December 31, 2022.
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FOR
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5.
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To vote on a shareholder proposal to phase out all production of PMI’s health-hazardous and addictive products by 2025, if properly presented at the meeting.
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AGAINST
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6.
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To transact other business properly coming before the meeting.
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| Your vote is important. We urge each shareholder to promptly sign and return the enclosed proxy card or to use telephone or internet voting. See the questions and answer section for information about voting by telephone or Internet, how to revoke a proxy, and how to vote your shares of common stock. If you plan to participate in the 2022 Virtual Annual Meeting of Shareholders, please follow the instructions set forth on page 81 in response to question 4. | | | ||||||||||||||||||||||||||
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By Internet
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By Phone
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By Mail
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At the Meeting
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Visit proxyvote.com with your proxy card in hand and follow the instructions to obtain your records and create an electronic voting instruction form.
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Call 1-800-690-6903 with your proxy card in hand and follow the instructions to cast your vote.
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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. |
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During the meeting, visit virtualshareholder
meeting.com/PMI2022 with your 16-digit control number found on your proxy card or other proxy materials. |
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Darlene Quashie Henry
Vice President, Associate General Counsel and Corporate Secretary March 24, 2022 |
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| Jacek Olczak | | | Michel Combes | | | Lisa A. Hook | |
| André Calantzopoulos | | | Dr. Juan José Daboub | | | Jun Makihara | |
| Bonin Bough | | | Werner Geissler | | | Kalpana Morparia | |
| Lucio A. Noto | | | Frederik Paulsen | | | Robert B. Polet | |
| Dessislava (“Dessi”) Temperley | | | Shlomo Yanai | | | | |
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| Proxy Summary | | | |
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2 | | |
| Board Operations and Governance | | | |
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5 | | |
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| Election of Directors | | | |
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17 | | |
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| Compensation of Directors | | | |
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34 | | |
| Stock Ownership Information | | | |
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36 | | |
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| Compensation Discussion and Analysis | | | |
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38 | | |
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| Pay Ratio | | | |
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68 | | |
| Advisory Vote Approving Executive Compensation | | | |
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69 | | |
| Approval of the 2022 Performance Incentive Plan | | | |
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70 | | |
| Audit Committee Matters | | | |
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74 | | |
| Ratification of the Selection of Independent Auditors | | | |
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| Shareholder Proposal | | | |
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77 | | |
| Related Person Transactions and Code of Conduct | | | |
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Availability of Reports, Other Matters and 2023 Annual
Meeting |
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| Exhibit A: Questions & Answers | | | |
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81 | | |
| Exhibit B: 2022 Performance Incentive Plan | | | |
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86 | | |
| Exhibit C: Reconciliations | | | |
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94 | | |
| Exhibit D: Glossary of Terms | | | |
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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1
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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Responsibilities:
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Meetings:
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Fosters the long-term success of the Company, consistent with its statutory duty to shareholders.
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Establishes broad corporate policies, setting strategic direction, and oversees management, which is responsible for the day-to-day operations of the Company.
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Oversees the Company’s enterprise risk assessment program (as described on pages 14-15. In fulfilling this role, each director must exercise his or her good faith business judgment in the best interests of the Company.
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The Board approves the Company’s annual budget each year and receives updates of the Company’s performance against the budget throughout the year.
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The Board also 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.
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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.
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The Board held eight regular meetings in 2021. The Lead Independent Director presides over regular executive sessions of the Board with no members of management present.
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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.
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During 2021, all nominees for director then in office attended at least 75% 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 2021 Annual Meeting of Shareholders.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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5
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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The Guidebook for Success:
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Other Governance
Guidelines: |
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The Board has adopted a code of conduct known at PMI as the Guidebook for Success.
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The Guidebook for Success 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.
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The Guidebook applies to all employees, including the Company’s principal executive officer, chief operating officer, principal financial officer, and principal accounting officer or controller.
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The Board has also adopted a Code of Business Conduct and Ethics that applies to directors.
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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, director or nominee for director has, had or may have a direct or indirect material interest.
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All of these documents are available free of charge on the Company’s website, www.pmi.com/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 Avenue de Rhodanie 50, 1007 Lausanne, Switzerland.
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The Board believes that no particular leadership structure is inherently superior to all others under all circumstances. It determines from time to time the structure that best serves the interests of the Company and its shareholders under the then-prevailing circumstances.
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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Executive
Chairman |
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Lead Independent
Director |
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ANDRÉ CALANTZOPOULOS
As Executive Chairman, Mr. Calantzopoulos:
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facilitates communication between the Board and management;
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assists the Chief Executive Officer with long-term strategy and serves as his sounding board;
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presides at all meetings of shareholders and of the Board; and
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assists in the preparation of agendas and materials for Board meetings, working together with the Lead Independent Director, who approves 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 an Executive Chairman and not independent, the Board will continue to have a Lead Independent Director.
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LUCIO A. NOTO
The non-management directors elect at the annual organizational meeting one independent director as the Lead Independent Director. As Lead Independent Director, Mr. Noto’s responsibilities are to:
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preside over executive sessions of the non-management directors and at all meetings at which the Executive Chairman is not present;
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call meetings of the non-management directors as he or she deems necessary;
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serve as liaison between the Chief Executive Officer and the non-management directors;
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approve agendas and schedules for Board meetings;
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advise the Executive Chairman and the Chief Executive Officer of the Board’s informational needs and approve information sent to the Board;
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together with the Executive Chairman of the Compensation and Leadership Development Committee, communicate goals and objectives to the Chief Executive Officer and the results of the evaluation of his performance; and
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be available for consultation and communication if requested by major shareholders.
The Lead Independent Director is invited to attend all meetings of Committees of the Board.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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7
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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AUDIT COMMITTEE SUMMARY
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Meetings in 2021: 10
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Lucio A. Noto
(Chair) |
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Michel Combes
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Werner Geissler
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Lisa A. Hook
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COMMITTEE PURPOSE:
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oversee the integrity of the financial statements and monitor financial reporting processes and systems of internal control;
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monitor the qualifications, independence and performance of the independent auditors;
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monitor the internal audit function; and
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monitor the Company’s compliance with legal and regulatory requirements.
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Jun Makihara
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Dessi
Temperley |
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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9
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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COMPENSATION AND LEADERSHIP DEVELOPMENT
COMMITTEE SUMMARY |
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Meetings in 2021: 5
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![]() Werner Geissler (Chair) |
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Dr. Juan José Daboub
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Lisa A. Hook
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Jun Makihara
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COMMITTEE PURPOSE:
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discharge the Board’s responsibilities relating to executive compensation;
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produce a report for inclusion in the proxy statement; and
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review talent management succession plans for the CEO and other senior executives.
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Lucio A. Noto
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Robert B. Polet
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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CONSUMER RELATIONSHIPS AND REGULATION
COMMITTEE SUMMARY |
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Meetings in 2021: 4
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Lisa A. Hook
(Chair) |
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Bonin Bough
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André
Calantzopoulos |
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COMMITTEE PURPOSE:
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oversee the Company’s RRP and combustible cigarette commercialization;
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oversee the consumer-centricity strategy for the RRP business, including the establishment and maintenance of digital channels and digital consumer engagement, and enabling data-driven decision-making;
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monitor key legislative, regulatory, and public policy issues and trends related to the post-market regulatory environment that may limit access to RRPs; and
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oversee risk associated with changes in consumer preferences regarding RRPs.
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Jun Makihara
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Kalpana
Morparia |
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Lucio A. Noto
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Jacek Olczak
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Robert B. Polet
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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11
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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FINANCE COMMITTEE SUMMARY
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Meetings in 2021: 5
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Jun Makihara
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Bonin Bough
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André
Calantzopoulos |
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Michel Combes
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COMMITTEE PURPOSE:
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monitor the Company’s financial performance and condition, including financial policies, capital structure, and budgets; and
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review with management all material matters relating to capital structure, financial policies, capital investments, and business and financial plans.
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Dr. Juan José
Daboub |
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![]() Werner Geissler |
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Lisa A. Hook
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Kalpana Morparia
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Lucio A. Noto
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Jacek Olczak
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Frederik Paulsen
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Robert B. Polet
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Dessi Temperley
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Shlomo Yanai
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE SUMMARY |
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Meetings in 2021: 5
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Kalpana
Morparia (Chair) |
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Michel Combes
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Lucio A. Noto
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Robert B. Polet
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COMMITTEE PURPOSE:
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identify qualified candidates for Board membership;
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recommend nominees for election at the annual meeting and as necessary to fill vacancies and new directorships; and
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advise the Board on corporate governance and sustainability matters; and oversee self-evaluation of the Board and each Committee.
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Shlomo Yanai
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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13
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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PRODUCT INNOVATION AND REGULATORY AFFAIRS
COMMITTEE SUMMARY |
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Meetings in 2021: 4
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Frederik Paulsen (Chair)
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André Calantzopoulos
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Michel Combes
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Dr. Juan José Daboub
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COMMITTEE PURPOSE:
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oversee the long-term product portfolio strategy of the Company, focusing on research and development of new products and services, and improvements to existing products and services, with a particular focus on RRPs and the Company’s new Wellness and Healthcare business; and
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monitor and review key legislative, regulatory and public policy issues and trends related to the research and development of RRPs.
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Lisa A. Hook
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Lucio A. Noto
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Jacek Olczak
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Shlomo Yanai
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1
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the impact a risk could have on the organization if it occurs,
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the likelihood a risk will occur,
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the velocity with which a risk would affect the organization if it occurs,
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and the interconnectivity of a risk with other risks.
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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15
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B O A R D O P E R A T I O N S A N D G O V E R N A N C E
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Majority voting standard for uncontested election of directors (page 19)
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Proxy access by-laws (page 18)
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Non-management directors elect Lead Independent Director annually (page 7)
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Directors may be removed with or without cause
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Non-management directors meet regularly without management being present
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No “poison pill” rights plan
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Board-adopted “clawback” policy (page 50)
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Rigorous share ownership requirements and anti-hedging and anti-pledging policies (pages 49-50)
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Post-termination share holding requirement (page 50)
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No tax gross-up on limited perquisites
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Double-trigger vesting policy on change in control (pages 65-67)
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Board committee oversight of political spending and lobbying (page 13)
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Board committee oversight of sustainability strategy and performance (page 13)
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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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 this criteria to identify potential candidates to fill vacancies in existing or new director positions.
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IDENTIFICATION OF CANDIDATES
The Governance Committee reviews qualifications of candidates for director identified by the Governance Committee or suggested by Board members, stockholders, management or others in accordance with the director qualification criteria.
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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 Shareholders Meeting.
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ELECTION
All director nominees are annually elected or re-elected at the Annual Shareholders Meeting. 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.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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17
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E L E C T I O N O F D I R E C T O R S
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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19
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E L E C T I O N O F D I R E C T O R S
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PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors recommends that you vote FOR each director nominee. These individuals bring a range of relevant experiences and overall diversity of perspectives that is essential to good governance and leadership of our company.
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“FOR”
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Committees
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Nominees
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Citizenship
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Independence
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Audit
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Compensation
& Leadership Development |
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Consumer
Relationships & Regulation |
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Finance
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Nominating
& Corporate Governance |
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Product
Innovation & Regulatory Affairs |
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BONIN BOUGH
Age: 44 Director Since: 2021 |
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USA
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M
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ANDRÉ CALANTZOPOULOS
Age: 64 Director Since: 2013 |
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Greece/
Switzerland |
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M
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MICHEL COMBES
Age: 59 Director Since: 2020 |
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France
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JUAN JOSÉ DABOUB
Age: 58 Director Since: 2021 |
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El Salvador
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WERNER GEISSLER
Age: 68 Director Since: 2015 |
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Germany
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LISA A. HOOK
Age: 64 Director Since: 2018 |
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USA
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JUN MAKIHARA
Age: 64 Director Since: 2014 |
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Japan
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KALPANA MORPARIA
Age: 72 Director Since: 2011 |
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India
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LUCIO A. NOTO
Age: 83 Director Since: 2008 |
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JACEK OLCZAK
Age: 57 Director Since: 2021 |
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Poland
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FREDERIK PAULSEN
Age: 71 Director Since: 2014 |
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Sweden
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ROBERT B. POLET
Age: 66 Director Since: 2011 |
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Netherlands
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DESSI TEMPERLEY
Age: 49 Director Since: 2021 |
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Bulgaria/UK
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SHLOMO YANAI
Age: 69 Director Since: 2021 |
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Israel
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D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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High Integrity
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Proven Record of Success
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Leadership
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Understanding our Global Business and Markets
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Strength of Character and Judgment
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Corporate Governance Experience
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Talent Management/ Succession Planning
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Diversity of Perspectives
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Intellectual/ Analytical Skills
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Strategic Planning
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Risk Assessment and Oversight
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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21
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E L E C T I O N O F D I R E C T O R S
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EXPERIENCE
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Bough
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Calantzopoulos
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Combes
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Daboub
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Geissler
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Hook
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Makihara
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Morparia
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Noto
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Olczak
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Paulsen
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Polet
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Temperley
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Tobacco
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Global
Consumer-Centric Engagement |
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Operations
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Information Technology and Privacy
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Sustainability/
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Risk Assessment and Oversight
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CFO or Banking
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Civic Leadership
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Global
Pharmaceutical |
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Marketing and Retail
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| 22 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Founder and Chief Growth Officer, Diligence LLC (also known as Bonin Ventures)
Committees:
Consumer Relationships and Regulation, and Finance
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BONIN BOUGH
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Director Since:
2021 |
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Age: 44
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CAREER HIGHLIGHTS
Diligence, LLC (also known as Bonin Ventures), an entity focused on accelerating growth of innovative start-up companies
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Founder and Chief Growth Officer, since 2014.
Triller, a global social media company
•
Chief Growth Officer, since 2020.
SheaMoisture
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Chief Growth Officer, from 2016 to 2017.
CNBC’s “Cleveland Hustles”
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Television show host in 2016.
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Mondelèz International, Inc.
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Chief Media and E-Commerce Officer, from 2015 to 2016.
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Vice President, Global Media and Consumer Engagement, from 2012 to 2015.
The Kraft Heinz Company
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Vice President, Global Media and Consumer Engagement, from 2012 to 2015.
PepsiCo, Inc.
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Chief Digital Officer, from 2008 to 2012.
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Director Qualifications:
With his unique executive marketing experience, Mr. Bough brings to the Board his considerable entrepreneurial expertise, particularly with respect to e-commerce, innovative technologies and acceleration of brand equity, as well as valuable insights for transforming and growing large, multinational businesses and start-ups.
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Occupation:
Executive Chairman, Philip Morris International Inc.
Committees: Consumer Relationships and Regulation, Finance and Product Innovation and Regulatory Affairs |
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ANDRÉ
CALANTZOPOULOS |
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Director Since:
2013 |
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Age: 64
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CAREER HIGHLIGHTS
Philip Morris International Inc.
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Executive Chairman of the Board of Directors, since May 2021.
•
Chief Executive Officer (“CEO”), from 2013 until May 5, 2021.
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Chief Operating Officer from March 2008, following the spin-off from Altria, until becoming CEO in May 2013.
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•
President and Chief Executive Officer, from April 2002 until the spin-off in March 2008.
•
Various roles across Central Europe, including Managing Director of PM Poland and President of the EE Region, from February 1985 to April 2002.
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Director Qualifications:
Mr. Calantzopoulos’s intellect and all-encompassing knowledge of the Company will serve the Company and the Board well as Executive Chairman of the Board. He has played an instrumental role in numerous key initiatives, leading the Company with his bold vision of a smoke-free future, and through its related evolution into a consumer-centric technology and science-driven business.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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23
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Chief Executive Officer, SoftBank Group International
Committees:
Audit (Financial Expert), Finance, Nominating and Corporate Governance and Product Innovation, and Regulatory Affairs
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MICHEL COMBES
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Director Since:
2020 |
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Age: 59
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CAREER HIGHLIGHTS
SoftBank Group International, a privately held subsidiary of SoftBank Group Corp
and oversees several SoftBank portfolio companies
•
Chief Executive Officer and Director, since January 2021
•
President and Director, from April 2020 to January 2021.
Sprint Corporation
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President from January 2018, Chief Financial Officer from January 2018 to May 2018 and CEO from May 2018 to 2020 and a member of the Board of Directors, from 2018 to 2020.
Altice USA, Inc.
•
CEO and Chief Operating Officer, from 2015 to 2017.
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SFR Group
•
Chairman and CEO, from 2015 to 2017.
Alcatel-Lucent
•
CEO, from 2013 to 2015.
Vodafone Europe
•
CEO
TDF Group (Télédiffusion de France)
•
Chairman and CEO
France Telecom
•
Executive
French Government
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Several roles
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Director Qualifications:
With his experience as a chief executive and chief financial officer in a number of large, multinational companies in the telephonic and digital communications, banking and portfolio strategy industries, Mr. Combes brings to the Board his considerable entrepreneurial business experience, extensive knowledge of international markets in highly regulated industries, and valuable insights in innovation and consumer centricity. Furthermore, as a former CFO, Mr. Combes has the financial expertise to serve as a member of the Audit Committee.
Other Directorships and Associations:
Mr. Combes is a director of SoFi Technologies, Inc., Assystem and Etisalat UAE. He previously served on the Board of MTS (Mobile TeleSystems) from 2013 to 2018, Sprint from 2018 to 2020, Altice Group from 2016 to 2017 and F5 Networks from 2018 to 2021.
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| 24 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Chairman, President and CEO, The Daboub Partnership of Arcis, LLC
Committees:
Compensation and Leadership Development, Finance, and Product Innovation and Regulatory Affairs
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JUAN JOSÉ DABOUB
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Director Since:
2021 |
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Age: 58
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CAREER HIGHLIGHTS
The Daboub Partnership of Arcis, LLC, a business consulting company
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Chairman, President and CEO, since 2010.
Dorado Partners LLC, a private investment company
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Vice Chairman, since 2014.
Global Adaptation Institute, a foundation dedicated to the understanding of climate change
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CEO, from 2010 to 2013.
•
Director since 2010.
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World Economic Forum’s Global Agenda Council on Climate Change
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Co-Chair, from 2012 to 2014.
World Bank Group
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Managing Director, from 2006 to 2010.
Government of El Salvador
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Several senior positions, including Minister of Finance and Chief-of-Staff to the President, from 1992 to 2004.
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Director Qualifications:
Dr. Daboub’s substantial business leadership experience, deep governance expertise, and outstanding government, multilateral organization and humanitarian service on a worldwide scale, bring a unique perspective to the Company’s ESG strategy, and its efforts to advocate for the development of science-based regulatory frameworks in connection with the development and commercialization of RRPs. The Board has also determined that Dr. Daboub qualifies as an audit committee financial expert.
Other Directorships and Associations:
Dr. Daboub is currently serving as a board member of TortoiseEcofin Acquisition Corp. III, a special purpose acquisition company and Grupo Financiero Ficohsa, S.A., a Central American banking and financial services company. From September 2020 to August 2021, Dr. Daboub served as a director of Tortoise Acquisition Corp.II, a special purpose acquisition company in the sustainable energy sector.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
25
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Operating Partner, Advent International
Committees:
Compensation and Leadership Development Committee (Chair) Audit, Consumer Relationships and Regulation, and Finance
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WERNER GEISSLER
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Director Since:
2015 |
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Age: 68
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CAREER HIGHLIGHTS
Advent International, a private equity firm
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Operating Partner, since 2015.
Procter & Gamble, a consumer goods corporation
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Vice Chairman and Special Advisor to the Chairman and CEO, prior to his retirement in 2015.
•
Vice Chairman, Global Operations, from 2007 to 2014.
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| |
•
Group President, Central and Eastern Europe, Middle East and Africa, from 2004 to 2007.
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President, Northeast Asia, from 2001 to 2004.
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Director Qualifications:
Mr. Geissler has a keen knowledge of the global consumer products business, having served as a senior consumer products executive in many of the Company’s most important markets and regions. His deep senior executive experience serves the Company and the Board well as Chair of the Compensation and Leadership Development Committee. Mr. Geissler has also had substantial P&L responsibility in his roles at Procter & Gamble, and has an MBA in Finance which both inform his service as a member of the Audit Committee.
Other Directorships and Associations:
Mr. Geissler is a director of the Goodyear Tire & Rubber Company.
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| 26 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Managing Partner, Two Island Partners LLC
Committees:
Consumer Relationships and Regulation Committee (Chair), Audit (Financial Expert), Compensation and Leadership Development, Finance, and Product Innovation and Regulatory Affairs
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LISA A. HOOK
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Director Since:
2018 |
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Age: 64
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CAREER HIGHLIGHTS
Two Island Partners LLC, a private equity and consulting firm
•
Managing Partner, since 2018.
Neustar, Inc., a global information services company focused on cloud-based workflow solutions for marketing, risk and security analytics
•
Member of the Board, from 2010 to 2019.
•
President & Chief Executive Officer, from 2010 to 2018.
•
President & Chief Operating Officer, from 2008 to 2010.
Sunrocket, Inc., a cloud-based voice communications company
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President & Chief Executive Officer, from 2006 to 2007.
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| |
America Online Inc., a web portal and online service provider
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Several executive positions, from 2001 to 2004.
Brera Capital Partners, a global private equity investment firm
•
Partner
Alpine Capital Group, LLC, an investment banking firm
•
Managing Director
Time Warner, Inc., a media company
•
Executive
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Director Qualifications:
Ms. Hook’s past experience as CEO of a company, her past senior management roles and government appointments relating to telecommunications, plus her holistic understanding of digital identity, are key to deploying actionable insights that grow and guard many of the world’s largest corporations. In addition, with her extensive public board experience, Ms. Hook brings to the Board valuable insights in the areas of cybersecurity, data privacy, and digital transformation at a time when the Company is transitioning to a consumer-centric, highly digitalized business model.
Other Directorships and Associations:
Ms. Hook serves on the board of Fidelity National Information Services, Inc., a global leader in banking and payment solutions, Ping Identity Holding Corp., a pioneer in digital identity solutions and Ritchie Bros Holding Ltd., a global asset management and disposition company. Ping has announced that Ms. Hook will not be standing for reelection at its annual meeting. Her term on its board will end May 3, 2022. Nokia Corporation has announced that Ms. Hook will stand for election to its Board of Directors at its April 5, 2022 annual general meeting.
Ms. Hook served as a Director of Partners Group Holding AG, a global asset management company, from 2020 to 2021, as a Director of Unisys Corporation, a global information technology company, from 2019 to 2021, and as Senior Independent Director of RELX PLC and RELX NV, providers of information solutions, from 2006 to 2016. Previously, she served as a director of Covad Communications and Time Warner Telecom, Inc. In 2012, she was appointed by President Obama to serve on the National Security Telecommunications Advisory Committee.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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| | |
27
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Retired Businessman
Committees:
Finance (Chair), Audit, Compensation and Leadership Development, and Consumer Relationships and Regulation
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JUN MAKIHARA
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Director Since:
2014 |
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Age: 64
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CAREER HIGHLIGHTS
Neoteny Co. Ltd., a Japanese venture incubator
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Chairman, from 2000 until 2015.
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| |
Goldman, Sachs & Co., a multinational investment bank and financial services company, from 1981 to 2000
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General Partner, from 1992 to 1998.
•
Co-Head Japanese Equities Group and Co-Branch Manager, from 1995 to 1998.
•
Co-Head Japanese Investment Banking Group, from 1992 to 1995.
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Director Qualifications:
Mr. Makihara brings his deep experience in finance to his position as Chair of the Finance Committee. The Board also benefits from his entrepreneurial spirit and a thorough knowledge of business in Asia, which is of great importance to the Company’s business as we continue to launch new products and execute our strategic initiatives in various Asian markets.
Other Directorships and Associations:
Mr. Makihara is a director of Monex Group, Inc., a financial services company, and TradeStation Group, Inc., an online brokerage that is a wholly-owned subsidiary of Monex Group. He was previously a board member at Shinsei Bank, Ltd., a Japanese based commercial, leasing and consumer finance bank, from 2011 to 2022 and at its wholly-owned subsidiary UDC Finance Limited (Auckland NZ), the largest non-bank finance company in New Zealand from 2020 to 2022. He is a trustee of the Protestant Episcopal Cathedral Foundation in Washington, D.C. and a board member of the Japan Society in New York. He also served on the board of RHJ International S.A., a financial services company, from 2005 to 2014.
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| 28 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Founder & Managing Partner, KalMor Advisors LLP
Committees:
Nominating and Corporate Governance (Chair), Consumer Relationships, and Regulation and Finance
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KALPANA MORPARIA
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Director Since:
2011 |
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Age: 72
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CAREER HIGHLIGHTS
KalMor Advisors LLP, a strategy and corporate advisory firm
•
Founder and Managing Partner, since 2021.
JPMorgan Chase & Co., a multinational investment bank and financial services holding company
•
Chairman of South and South East Asia, from March 2019 until her retirement in February 2021.
•
CEO of South and South East Asia from April 2016 until March 2019.
•
CEO of J.P. Morgan India, from 2008 to 2016.
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ICICI Bank, India’s second-largest bank
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Vice Chair of ICICI’s insurance and asset management business, from 2007 to 2008.
•
Joint Managing Director, from 2001 to 2007.
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Director Qualifications:
With her strong executive leadership experience in finance, and her deep knowledge of international business, Ms. Morparia provides a keen perspective on economies in Asia, while her legal background and deep experience in highly regulated industries help her serve the Company and the Board well as Chair of the Nominating and Corporate Governance Committee.
Other Directorships and Associations:
Ms. Morparia is a director of Dr. Reddy’s Laboratories Ltd., Delhivery Limited and Hindustan Unilever Limited. Ms. Morparia also serves on the Governing Board of Bharti Foundation, the Foundation for Audit Quality and the Generation India Foundation, each of which is a not-for-profit company.
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P M I 2 0 2 2 P r o x y S t a t e m e n t
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29
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Managing Partner, Midstream Partners, LLC
Lead Independent Director, Philip Morris International Inc.
Committees:
Audit (Chair and Financial Expert), Compensation and Leadership Development, Consumer Relationships and Regulation, Finance, Nominating and Corporate Governance, and Product Innovation and Regulatory Affairs
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LUCIO A. NOTO
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Director Since:
2008 |
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Age: 83
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CAREER HIGHLIGHTS
Midstream Partners, LLC, a company that invests in liquid natural gas projects
•
Managing Partner, since March 2001.
ExxonMobil Corporation, a multinational oil and gas corporation
•
Vice Chairman, from November 1999 to January 2001, following the merger of Exxon and Mobil Corporation.
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Mobil Corporation
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Chairman and Chief Executive Officer, Chief Financial Officer, and various other positions, from 1962 until the merger of Exxon and Mobil Corporation in 1999.
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Director Qualifications:
As the former chief financial officer and chief executive officer of a large, multinational oil company, together with his past governance experience serving on the boards and audit committees of a number of major international companies, Mr. Noto brings an extensive knowledge of internal controls and risk assessment to his role as Chair of the Audit Committee and a strong “hands-on” approach as Lead Independent Director.
Other Directorships and Associations:
Mr. Noto served as a director of Penske Automotive Group, Inc. from 2001 to 2020. He also served on the boards of IBM from 1995 to 2008, Altria Group, Inc. from 1998 to 2008, Shinsei Bank from 2005 to 2008, Commercial International Bank from 2006 to 2009 and RHJ International S.A., a financial services company, from 2011 to 2015.
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Occupation:
Chief Executive Officer, Philip Morris International, Inc.
Committees:
Consumer Relationships and Regulation, Finance, and Product Innovation and Regulatory Affairs
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| | |
JACEK OLCZAK
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Director Since:
2021 |
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Age: 57
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CAREER HIGHLIGHTS
Philip Morris International Inc.
•
Chief Executive Officer, since May 2021.
•
Chief Operating Officer, from January 2018 until May 2021.
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| |
•
Chief Financial Officer, from August 2012 until December 2017.
•
Various roles in finance and general management positions across Europe, including Managing Director of PMI’s markets in Poland and Germany, and as President of the European Union Region, from 1993 until January 2018.
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Director Qualifications:
Mr. Olczak’s intellect and all-encompassing knowledge of the Company will serve the Company and the Board well. As COO, he played an instrumental role in the Company’s transformation and the superior performance of our Regions and markets. Mr. Olczak has demonstrated a strong commitment to consumer centricity, digitalized consumer engagement, and manufacturing optimization, while remaining focused on the growth of our cigarette brand portfolio and the seamless deployment of RRPs in 71 markets in cities or nationwide . Mr. Olczak’s invaluable contributions also include recently completed acquisitions of Fertin Pharma A/S and Vectura Group Plc, which will advance our further transformation into a healthcare business.
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| 30 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
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E L E C T I O N O F D I R E C T O R S
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Occupation:
Chairman, Ferring Group
Committees:
Product Innovation and Regulatory Affairs (Chair) and Finance
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| | |
FREDERIK PAULSEN
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Director Since:
2014 |
| |
Age: 71
|
|
|
CAREER HIGHLIGHTS
Ferring Group, a research-driven, specialty biopharmaceutical group
•
Chairman, since 1988, having joined the company in 1976
|
| | | ||||||||
|
Director Qualifications:
Dr. Paulsen’s substantial experience as head of a successful multinational biopharmaceutical group, together with his knowledge of scientific research, bring a unique perspective to the Company’s critical efforts to develop reduced-risk products.
Other Directorships and Associations:
Dr. Paulsen is a member of the board of the Pro Universitate of the Christian Albrechts University in Kiel, Germany and a trustee of the Salk Institute of Biological Research in La Jolla, California, USA.
|
|
|
![]()
Occupation:
Chairman, Rituals Cosmetics Enterprise B.V.
Chairman, Arica Holding B.V. Chairman, SFMS B.V.
Committees:
Compensation and Leadership Development, Consumer Relationships and Regulation, Finance, and Nominating and Corporate Governance
|
| | |
ROBERT B. POLET
|
| |
Director Since:
2011 |
| |
Age: 66
|
|
|
CAREER HIGHLIGHTS
Rituals Cosmetics Enterprise B.V., a retail cosmetics company
•
Chairman
SFMS B.V., a retail consumer staples company
•
Chairman
Arica Holding B.V., parent holding company of SFMS B.V.
•
Chairman
|
| |
Safilo Group S.p.A., an eyewear company
•
Chairman, from 2011 to 2017.
Gucci Group, a luxury fashion house
•
President, Chief Executive Officer and Chairman of the Management Board, from 2004 until 2011.
Unilever Group, a multinational consumer goods company
•
26 years in a variety of executive roles, including President of Unilever’s Worldwide Ice Cream and Frozen Foods division, Chairman of Unilever Malaysia, Chairman of Van den Bergh and Executive Vice President of Unilever’s European Home and Personal Care division.
|
| |||||||
|
Director Qualifications:
As a chief executive, Mr. Polet was responsible for managing such global luxury brands as Gucci, Bottega Veneta, Yves Saint Laurent, Boucheron, Balenciaga, Sergio Rossi, Alexander McQueen and Stella McCartney. He brings to the Board his considerable entrepreneurial business experience in the global luxury business. Furthermore, he has extensive executive experience overseeing major consumer packaged goods businesses, as well as an extensive knowledge of global markets.
Other Directorships and Associations:
Mr. Polet is a director of Safilo Group S.p.A. and the senior independent director of William Grant & Sons Ltd., a premium spirits company. Mr. Polet served as senior independent director of RELX PLC and RELX NV, providers of information solutions, from 2007 to 2016
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
31
|
|
|
E L E C T I O N O F D I R E C T O R S
|
|
|
![]()
Occupation:
Former Group CFO and Executive Board Member, Beiersdorf AG
Committees:
Audit (Financial Expert) and Finance
|
| | |
DESSI TEMPERLEY
|
| |
Director Since:
2021 |
| |
Age: 49
|
|
|
CAREER HIGHLIGHTS
Beiersdorf AG, a manufacturer and retailer of personal-care products and pressure-sensitive adhesives
•
Group Chief Financial Officer and Executive Board Member, from 2018 until her retirement in April 2021.
Nestle S.A., a food & beverage company
•
Head of Investor Relations, CFO of Nestle Purina Petcare EMENA, Head of Global Planning and Performance Analysis, CFO of Nestle South East Europe Zone, Controller for CEE, and Supply Chain Controller NPPE, from April 2004 to June 2018.
|
| |
Cable & Wireless plc / Cable & Wireless Russia, former telecommunications services company
•
Finance Manager—Global Capital Investments and Finance Director—Russia & CIS, from 1999 until 2004.
|
| |||||||
|
Director Qualifications:
Ms. Temperley is a recently retired global public company Chief Financial Officer with over 25 years of experience across a variety of sectors with several blue-chip multinationals. She has a proven track record of delivering strategic change with strong operational leadership resulting in superior financial results.
Other Directorships and Associations:
In May 2020, Ms. Temperley joined the Board of Directors of Coca-Cola Europacific Partners, a publicly held bottling company, where she also serves on the Audit Committee.
In May 2021, following retirement from her executive career, Ms. Temperley joined the board of Corbion, a public food and biochemical company, where she also serves on the Audit Committee.
In September 2021, Ms. Temperley joined the board of Cimpress, a publicly held company that invests in and operates a wide variety of businesses that use mass customization to configure and produce small quantities of individually customized goods, where she also serves on the Audit Committee.
|
|
| 32 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E L E C T I O N O F D I R E C T O R S
|
|
|
![]()
Occupation:
Chairman of the Board, Lumenis Ltd.
Committees:
Finance, Nominating and Corporate Governance, and Product Innovation and Regulatory Affairs
|
| | |
SHLOMO YANAI
|
| |
Director Since:
2021 |
| |
Age: 69
|
|
|
CAREER HIGHLIGHTS
Lumenis Ltd., a medical devices company
•
Chairman of the Board, since 2020.
Moelis & Company, an investment bank
•
Senior Advisor, since 2016.
Teva Pharmaceuticals Industries Ltd., a pharmaceutical company
•
President and Chief Executive Officer, from 2007 to 2012.
|
| |
Adama Industries, a global crop protection company
•
Chief Executive Officer, from 2002 to 2006.
|
| |||||||
| | | | |
Director Qualifications:
Mr. Yanai’s extensive experience in the pharmaceuticals industry brings a unique perspective to the Company’s critical efforts to develop and commercialize RRPs, and to advocate for the development of science-based regulatory frameworks for the development and commercialization of such products.
Other Directorships and Associations:
Mr. Yanai is a Board member at Amneal Pharmaceuticals, Inc. Until October 2021, Mr. Yanai also served as a Director of W.R. Grace and Company, a specialty chemicals company. Mr. Yanai was also the Chairman of the Board of Makhteshim Chemical Works Ltd., Agan Chemical Manufacturers Ltd, Milenia Agro Chemicals and Aroma Fine Chemicals Ltd. Mr. Yanai has also served as either Chairman of the board or a board member of the following pharmaceutical companies: Cambrex Corp., Protalix Biotherapeutics, Inc., PDL BioPharm, Inc., Perrigo plc, and Sagent Pharmaceuticals, Inc. Mr. Yanai was also a member of the Board of Elisra Group, an electronic device company, from 2002 to 2005, and Bank Leumi, Israel’s second-largest bank, from 2004 to 2007. Mr. Yanai received Israel’s Medal of Valor in 1973, and served for 32 years with the Israeli Defense Forces in a variety of leadership roles, and retired with the rank of Major General.
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
33
|
|
|
C O M P E N S A T I O N O F D I R E C T O R S
|
|
| Annual cash retainer | | |
$125,000
|
|
| Annual equity award | | |
$175,000
|
|
| Interim Chairman’s cash retainer* | | |
$100,000
|
|
| Lead Independent Director cash retainer | | |
$35,000
|
|
| Committee Chair cash retainer | | |
$35,000
|
|
| Committee member cash retainer | | |
none
|
|
| Committee meeting fees | | |
none
|
|
| Stock Options | | |
none
|
|
| 34 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N O F D I R E C T O R S
|
|
|
Name
|
| |
Fees Earned or
Paid in Cash ($) |
| |
Stock
Awards ($) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| ||||||||||||
|
Bonin Bough
|
| | | | 113,195 | | | | | | 218,750(a) | | | | | | 0 | | | | | | 331,945 | | |
|
Juan José Daboub
|
| | | | 82,292 | | | | | | 175,000 | | | | | | 34,167(b) | | | | | | 291,459 | | |
|
Michel Combes
|
| | | | 125,000 | | | | | | 175,000 | | | | | | 0 | | | | | | 300,000 | | |
|
Werner Geissler
|
| | | | 160,000 | | | | | | 175,000 | | | | | | 0 | | | | | | 335,000 | | |
|
Lisa A. Hook
|
| | | | 160,000 | | | | | | 175,000 | | | | | | 0 | | | | | | 335,000 | | |
|
Jennifer Li(c)
|
| | | | 55,556 | | | | | | 0 | | | | | | 0 | | | | | | 55,556 | | |
|
Jun Makihara
|
| | | | 160,000 | | | | | | 175,000 | | | | | | 0 | | | | | | 335,000 | | |
|
Kalpana Morparia
|
| | | | 160,000 | | | | | | 175,000 | | | | | | 0 | | | | | | 335,000 | | |
|
Lucio A. Noto
|
| | | | 256,118 | | | | | | 175,000 | | | | | | 0 | | | | | | 431,118 | | |
|
Frederik Paulsen
|
| | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
|
Dessi Temperley
|
| | | | 9,028 | | | | | | 0 | | | | | | 0 | | | | | | 9,028 | | |
|
Robert B. Polet
|
| | | | 125,000 | | | | | | 175,000 | | | | | | 0 | | | | | | 300,000 | | |
|
Shlomo Yanai
|
| | | | 82,292 | | | | | | 175,000 | | | | | | 0 | | | | | | 257,292 | | |
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
35
|
|
|
STOCK OWNERSHIP INFORMATION
|
|
|
Name
|
| |
Amount and Nature of
Beneficial Ownership(1) |
|
|
Drago Azinovic
|
| |
122,597
|
|
|
Emmanuel Babeau
|
| |
41,740
|
|
|
Bonin Bough
|
| |
2,472
|
|
| André Calantzopoulos | | |
800,300
|
|
|
Michel Combes
|
| |
2,943
|
|
| Juan José Daboub | | |
1,908
|
|
|
Werner Geissler
|
| |
76,263
|
|
|
Lisa A. Hook
|
| |
9,662
|
|
|
Jorge Insuasty
|
| |
24,690
|
|
|
Jun Makihara
|
| |
22,355
|
|
|
Kalpana Morparia
|
| |
20,755
|
|
|
Martin G. King
|
| |
128,463
|
|
|
Lucio A. Noto
|
| |
123,688
|
|
|
Jacek Olczak
|
| |
251,807
|
|
|
Frederik Paulsen
|
| |
0
|
|
|
Robert B. Polet
|
| |
22,284
|
|
|
Dessi Temperley
|
| |
0
|
|
|
Stefano Volpetti
|
| |
0
|
|
|
Frederic de Wilde
|
| |
153,010
|
|
|
Shlomo Yanai
|
| |
1,839
|
|
|
Group (27 persons)
|
| |
2,068,528
|
|
| 36 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
STOCK OWNERSHIP INFORMATION
|
|
|
Name and Address of Beneficial Owner
|
| |
Number of Shares
Beneficially Owned |
| |
Percent of Class
|
|
|
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
|
| |
126,627,443(1)
|
| |
8.1%
|
|
|
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
|
| |
94,109,468(2)
|
| |
6.0%
|
|
|
Capital World Investors
333 South Hope Street
Los Angeles, CA 90071
|
| |
80,459,730(3)
|
| |
5.2%
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
37
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Our Compensation Discussion and Analysis outlines:
1.
The design of our executive compensation program, and the objectives and principles upon which they are based. (See Pages 39-43)
2.
Our 2021 performance, and the resulting decisions of the Compensation and Leadership Development Committee to reflect that performance in setting compensation for our CEO and the other named executive officers. (See Pages 44-48)
|
|
| | | | | 39 | | | |
| | | | | 39 | | | |
| | | | | 42 | | | |
| | | | | 44 | | | |
| | | | | 49 | | | |
| | | | | 52 | | | |
| | | | | 53 | | | |
| | | | | | | | |
| 38 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
1
|
| |
to support our ability to attract, develop and retain world-class leaders in a controversial industry;
|
| |
2
|
| |
to align the interests of executives and shareholders;
|
| |
3
|
| |
to reward performance against pre-established objectives;
|
| |
4
|
| |
to support long-term business growth, superior financial results, sustainability efforts, societal alignment and integrity of conduct;
|
| |
5
|
| |
to promote internal fairness and a disciplined assessment of performance; and
|
| |
6
|
| |
to align executive incentives
with our risk management objectives. |
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
39
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
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.
|
|
|
In 2015, the Committee substantially revised our executive compensation program. Our shareholders have overwhelmingly supported the new compensation program, with our say-on-pay proposal receiving more than 91% approval since 2016. In 2021, our shareholders approved our say-on-pay proposal by a vote of 91.11%. Our 2017 Performance Incentive Plan was also approved by a vote of 96.18%. Based on this support and its own satisfaction with the current compensation program, the Committee determined not to make any substantial modifications to the program in 2022, other than to further reflect the Company’s commitment to having sustainability at the core of its corporate strategy by introducing a sustainability index as one of our performance metrics under equity awards.
The Committee reviews data from the local market and our Peer Group (see page 49), but does not target total direct compensation at a specific percentile of the market. Instead, the Committee sets total direct compensation at levels that it believes necessary to attract and retain talented executives in a controversial industry, and remain competitive with other consumer product companies.
|
| |
![]() |
|
| 40 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | | |
Component
|
| |
Purpose
|
| |
Key Objectives
|
| |
How it is determined
|
|
| | | |
BASE
SALARY |
| |
Fixed component of cash compensation.
|
| |
Intended to provide sufficient competitive base pay to attract, develop and retain world-class leaders.
|
| |
Reflects the scope of the executive’s role, his or her performance and market pay practices.
|
|
![]() |
|
INCENTIVE COMPENSATION (IC) AWARDS
|
| | Annual performance-based variable cash award for meeting or exceeding performance goals pre-established by the Committee. | | | Intended to motivate executives to meet or exceed our performance goals and strategic objectives in a given fiscal year. | | | The Company’s incentive compensation (“IC”) performance rating is determined by a fixed formula that measures the Company’s results against performance targets pre-established and pre-weighted by the Committee (see pages 44-46). The final award is determined by multiplying the executive’s base salary by the IC performance rating and by the executive’s IC target and individual performance rating. | | ||
|
EQUITY
AWARDS |
| |
Long-term variable equity awards contribute to all six of the Committee’s program design objectives while minimizing share dilution and protecting against excessive risk taking.
|
| |
Intended to motivate our executives to produce results that enhance sustainable shareholder value and strengthen the Company over the long term.
|
| |
Amount of each award is determined by multiplying the executive’s base salary by the target percentage for that salary grade, and then by the executive’s individual performance rating for the most recently completed year, plus or minus ten percentage points.
•
Between 55%-60% of the February 2022 award was in the form of PSUs that vest at the end of the 2022-2024 performance cycle in amounts that depend on the degree to which pre-established and pre-weighted performance goals are achieved or exceeded (see pages 46-48).
•
Between 40%-45% of the February 2022 award was in the form of RSUs that vest at the end of the three-year cycle (assuming continued employment).
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
41
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| 42 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | | |
2022 Cash Incentive
Target as % of Base Salary(1) |
| |
2022-24 PSUs Target
as % of Base Salary (55% — 60% of total Equity Award)(2) |
| |
2022 RSUs Target
as % of Base Salary (40% — 45% of total Equity Award)(3) |
|
|
André Calantzopoulos
CEO / Executive Chairman(4) |
| |
0%
|
| |
360% / 180%
|
| |
240% / 120%
|
|
| Jacek Olczak COO / CEO(4) | | |
200%
|
| |
165% / 360%
|
| |
110% / 240%
|
|
|
Emmanuel Babeau
|
| |
125%
|
| |
165%
|
| |
110%
|
|
|
Drago Azinovic
|
| |
100%
|
| |
105%
|
| |
70%
|
|
|
Frederic de Wilde
|
| |
100%
|
| |
105%
|
| |
70%
|
|
|
Jorge Insuasty
|
| |
95%
|
| |
66%
|
| |
54%
|
|
|
Stefano Volpetti
|
| |
100%
|
| |
105%
|
| |
70%
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
43
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | 2021 Results: We exceeded our targets for organic growth of adjusted OI and adjusted net revenues, as well as the currency-neutral growth of our operating cash flow. Smoke-Free (HTU) Shipment Volume was on target. | | |
| | Share of Top 30 OI Markets: We registered a growing or stable market share in 14 of our Top 30 OI markets, which was below our target of 16 markets. | | |
| | Smoke-Free (“HTU”) Shipment Volume: Shipments of 95.0 billion units grew by 24.8% and were on target of 93.0 to 96.0 billion. | | |
| | Adjusted Net Revenues*: Adjusted Net revenues of $31.7 billion grew by 7.6% compared to 2020, on an organic basis, above our target of 4.4% to 5.2%. | | |
| | Adjusted OI*: Adjusted OI of $13.5 billion grew by 13.0% on an organic basis, above our target of 8.5% to 10.0%. | | |
| |
Operating Cash Flow*: Operating cash flow of $12.0 billion increased by 13.8% on a currency-neutral basis, above our target of 4.5%.
*
For a reconciliation of non-GAAP to the most directly comparable U.S. GAAP financial measures, see Exhibit C to this proxy statement.
|
| |
|
Target
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| Rating: | | |
0…
|
| |
30
|
| |
40
|
| |
50
|
| |
60
|
| |
70
|
| |
80
|
| |
90
|
| |
100
|
| |
105
|
| |
115
|
| |
125
|
| |
136
|
| |
140
|
| |
142
|
| |
150
|
| |
|
|
|
Growth
Measure(a) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Market Share
(Top 30 OI(b) Markets) |
| |
<7
|
| |
7
|
| |
8
|
| |
9
|
| |
10
|
| |
11
|
| |
12
|
| |
14
|
| |
16
|
| |
17
|
| |
19
|
| |
21
|
| |
23
|
| |
24
|
| |
24
|
| |
25
|
| | | |
| Smoke-Free (HTU) Shipment Volume | | |
<83.3
|
| |
83.3
|
| |
84.3
|
| |
85.3
|
| |
86.3
|
| |
87.0
|
| |
88.0
|
| |
91.0
|
| |
93.0 -
96.0 |
| |
96.3
|
| |
97.0
|
| |
98.3
|
| |
100.8
|
| |
102.0
|
| |
102.6
|
| |
105.0
|
| | | |
| Adjusted Net Revenues(c) | | |
<2.0%
|
| |
2.0%
|
| |
2.3%
|
| |
2.5%
|
| |
2.9%
|
| |
3.1%
|
| |
3.3%
|
| |
4.0%
|
| |
4.4% -
5.2% |
| |
5.4%
|
| |
5.6%
|
| |
6.2%
|
| |
7.0%
|
| |
7.4%
|
| |
7.6%
|
| |
8.4%
|
| | | |
| Adjusted OI(c) | | |
<2.6%
|
| |
2.6%
|
| |
4.35
|
| |
5.1%
|
| |
5.7%
|
| |
6.3%
|
| |
7.0%
|
| |
8.2%
|
| |
8.5% -
10.0% |
| |
10.2%
|
| |
10.8%
|
| |
11.6%
|
| |
13.0%
|
| |
13.7%
|
| |
14.1%
|
| |
15.6%
|
| | | |
| Operating Cash Flow(d) | | |
<(4.7)%
|
| |
(4.7)%
|
| |
(3.7)%
|
| |
(2.7)%
|
| |
(1.7)%
|
| |
(0.6)%
|
| |
0.4%
|
| |
2.4%
|
| |
4.5%
|
| |
5.0%
|
| |
6.0%
|
| |
7.5%
|
| |
9.8%
|
| |
10.6%
|
| |
11.0%
|
| |
12.6%
|
| |
13.8%
|
|
| | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||
|
Strategic Priorities and Enablers
|
| |
Key Initiatives missed
0 - 79 |
| |
Mostly/ all accomplished
80 - 120 |
| |
Majority/ all exceeded
121 - 150 |
|
| 44 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
| |
|
|
Strategic Priorities
|
| |
Strategic Enablers
|
|
•
Grow current RRP platforms to scale by building a superior portfolio across segments, IQOS brand equity, a quality consumer experience across digital and physical touchpoints at scale, and geographic expansion;
•
Maintain leadership in our conventional business through continued brand development and selective innovation;
•
Develop our long-term product and ecosystem portfolio for future growth, and drive material and measurable progress for our key sustainability strategies, ensuring transparent and clear sustainability reporting and disclosure**;
•
Build global societal support for RRPs through advocacy and obtain regulatory and fiscal measures that allow adult smokers to learn about, and convert to, our RRPs faster;
•
Achieve cost and cash leadership by improving productivity to reinvest in RRP expansion; and
•
Deliver launch and service agility.
|
| |
•
Consumer centricity: Roll out a consumer-centric organization, consumer journey framework, measurement of consumer satisfaction and rapid feedback loops into product and service development;
•
Digitalized business model: Roll out a digital platform across markets to rapidly scale awareness, engagement, conversion and customer care;
•
People, culture, ways of working and organization: Evolve the organization and ways of working to attract, retain, manage and reward top talent, and increase agility by adopting a project-based organization, agile working methods and zero-based organization principles; and
•
Real-time communication: Develop a real-time communication engine to engage with adult consumers, key opinion leaders and regulators to shape the dialogue in real time.
|
|
**
The term “materiality,” “material,” and similar terms, when used in the context of economic, environmental and social topics, are defined in the referenced sustainability standards, and are not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures required by the U.S. Securities and Exchange Commission.
|
| |
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
45
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Measure
|
| |
Performance
Rating |
| |
Weight
|
| |
Weighted Performance
Rating |
|
| Market Share (Top 30 OI Markets) | | |
90
|
| |
15%
|
| |
14
|
|
| Smoke-Free (“HTU”) Shipment Volume | | |
100
|
| |
20%
|
| |
20
|
|
| Net Revenues | | |
142
|
| |
15%
|
| |
21
|
|
| Adjusted OI | | |
136
|
| |
15%
|
| |
20
|
|
| Operating Cash Flow | | |
150
|
| |
20%
|
| |
30
|
|
| Strategic Priorities and Enablers | | |
115
|
| |
15%
|
| |
17
|
|
| | | | | | | | | |
122
|
|
| 46 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
PMI TSR as a Percentile of
Peer Group |
| ||||||||||||||||||
| | | |
Result
|
| |
Performance Factor
|
| | | | |
Actual
|
| | | | |
Rating
|
|
|
Below Threshold
|
| |
Below 25th percentile
|
| |
0%
|
| | | | |
65th percentile
|
| | | | |
143%
|
|
| Threshold | | |
25th percentile
|
| |
50%
|
| ||||||||||||
| Target | | |
50th percentile
|
| |
100%
|
| ||||||||||||
| Maximum | | |
85th percentile and above
|
| |
200%
|
|
|
Three-Year Adjusted OI CAGR*
|
| ||||||||||||||||||
| | | |
Result
|
| |
Performance Factor
|
| | | | |
Actual
|
| | | | |
Rating
|
|
|
Below Threshold
|
| |
<4.0%
|
| |
0%
|
| | | | |
9.6%
|
| | | | |
184%
|
|
| Threshold | | |
4.0%
|
| |
50%
|
| ||||||||||||
| Target | | |
7.5%
|
| |
100%
|
| ||||||||||||
| Maximum | | |
≥10.0%
|
| |
200%
|
|
|
Three-Year Adjusted OI CAGR*
|
| ||||||||||||||||||
| | | |
Result
|
| |
Performance Factor
|
| | | | |
Actual
|
| | | | |
Rating
|
|
|
Below Threshold
|
| |
<75.0
|
| |
0%
|
| | | | |
95.2
|
| | | | |
95%
|
|
| Threshold | | |
75.0
|
| |
50%
|
| ||||||||||||
| Target | | |
100.0
|
| |
100%
|
| ||||||||||||
| Maximum | | |
≥120.0
|
| |
200%
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
47
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| 48 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
| |
|
|
•
Altria Group, Inc.
•
Anheuser-Busch InBev SA/NV
•
British American Tobacco p.l.c.
•
The Coca-Cola Company
•
Colgate-Palmolive Co.
•
Diageo plc
•
Heineken N.V.
•
Imperial Brands PLC
•
Japan Tobacco Inc.
•
Johnson & Johnson
|
| |
•
Kimberly-Clark Corporation
•
The Kraft Heinz Company
•
McDonald’s Corp.
•
Mondelēz International, Inc.
•
Nestlé S.A.
•
PepsiCo, Inc.
•
The Procter & Gamble Company
•
Roche Holding AG
•
Unilever NV and PLC
|
|
|
NEOs
|
| |
Required Salary Multiple
|
|
|
Salary Grade 28
|
| |
10 times
|
|
|
Salary Grade 27
|
| |
6 times
|
|
|
Salary Grade 26
|
| |
5 times
|
|
|
Salary Grade 25
|
| |
3 times
|
|
|
Salary Grade 24
|
| |
3 times
|
|
|
Salary Grade 23
|
| |
2 times
|
|
|
Salary Grade 22
|
| |
2 times
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
49
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| 50 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
51
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | Compensation and Leadership Development Committee Report | | |
| | The Compensation and Leadership Development Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on its review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. | | |
| | Compensation and Leadership Development Committee: | | |
| |
Werner Geissler, Chair
Juan José Daboub
Lisa A. Hook
Jun Makihara
Lucio A. Noto
Robert B. Polet
|
| |
| | The information contained in the report above shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C or the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent specifically incorporated by reference therein. | | |
| | | |
| 52 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary (1)
($) |
| |
Bonus
($) |
| |
Stock
Awards (2) ($) |
| |
Non-Equity
Incentive Plan Compensation (3) ($) |
| |
Change in
Pension Value (4) ($) |
| |
All Other
Compensation (5) ($) |
| |
Total
Compensation ($) |
|
|
André Calantzopoulos,
|
| |
2021
|
| |
1,311,589
|
| |
|
| |
12,331,239
|
| |
1,683,415
|
| |
—
|
| |
22,867
|
| |
15,349,110
|
|
| Executive Chairman | | |
2020
|
| |
1,665,141
|
| |
|
| |
12,024,210
|
| |
3,367,745
|
| |
4,857,081
|
| |
22,621
|
| |
21,936,798
|
|
| | | |
2019
|
| |
1,525,542
|
| |
|
| |
9,752,500
|
| |
5,491,500
|
| |
5,303,609
|
| |
51,909
|
| |
22,125,060
|
|
|
Jacek Olczak,
|
| |
2021
|
| |
1,427,758
|
| | | | |
4,713,468
|
| |
3,617,484
|
| |
781,194
|
| |
17,664
|
| |
10,557,568
|
|
| Chief Executive Officer (6) | | |
2020
|
| |
1,281,619
|
| | | | |
4,371,767
|
| |
1,838,611
|
| |
3,456,211
|
| |
14,341
|
| |
10,962,549
|
|
| | | |
2019
|
| |
1,168,771
|
| | | | |
3,156,689
|
| |
2,617,361
|
| |
5,097,025
|
| |
15,558
|
| |
12,055,404
|
|
|
Emmanuel Babeau,
|
| |
2021
|
| |
1,312,514
|
| |
|
| |
4,320,696
|
| |
2,169,871
|
| |
1,141,868
|
| |
49,413
|
| |
8,994,362
|
|
| Chief Financial Officer | | |
2020
|
| |
852,155
|
| |
|
| |
8,814,207
|
| |
1,129,213
|
| |
1,015,118
|
| |
69,748
|
| |
11,880,441
|
|
|
Drago Azinovic,
|
| |
2021
|
| |
926,193
|
| | | | |
2,104,727
|
| |
1,222,356
|
| |
—
|
| |
31,555
|
| |
4,284,831
|
|
| President, Middle East & Africa Region and PMI Duty Free | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Frederic de Wilde,
|
| |
2021
|
| |
927,586
|
| |
|
| |
2,418,278
|
| |
1,277,918
|
| |
—
|
| |
16,787
|
| |
4,640,569
|
|
| President, European Union Region | | |
2020
|
| |
903,477
|
| |
|
| |
2,216,885
|
| |
992,600
|
| |
2,479,770
|
| |
27,511
|
| |
6,620,243
|
|
|
Stefano Volpetti,
|
| |
2021
|
| |
984,604
|
| | | | |
2,249,550
|
| |
1,301,922
|
| |
—
|
| |
31,877
|
| |
4,567,953
|
|
|
President Smoke-Free Products Category & Chief Consumer
Officer (7) |
| |
2020
|
| |
958,843
|
| |
213,038
|
| |
2,003,297
|
| |
1,057,201
|
| |
2,233,857
|
| |
24,002
|
| |
6,490,238
|
|
|
Jorge Insuasty,
|
| |
2021
|
| |
765,541
|
| |
656,168
|
| |
2,586,416
|
| |
911,358
|
| |
279,982
|
| |
117,531
|
| |
5,316,996
|
|
| Chief Life Sciences Officer (8) | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Martin G. King,
|
| |
2021
|
| |
622,747
|
| | | | |
1,584,371
|
| |
740,825
|
| |
—
|
| |
1,847,956
|
| |
4,795,899
|
|
| Retired CEO, PMI America | | |
2020
|
| |
903,481
|
| | | | |
1,489,468
|
| |
776,813
|
| |
2,944,363
|
| |
164,730
|
| |
6,278,855
|
|
| | | |
2019
|
| |
853,388
|
| | | | |
1,362,354
|
| |
1,120,587
|
| |
3,086,363
|
| |
191,964
|
| |
6,614,656
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
53
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Name
|
| |
2021 PSUs Maximum
Value at 200% ($) |
|
| André Calantzopoulos | | |
15,473,434
|
|
| Jacek Olczak | | |
5,913,719
|
|
| Emmanuel Babeau | | |
5,421,215
|
|
| Drago Azinovic | | |
2,208,915
|
|
| Frederic de Wilde | | |
2,539,701
|
|
| Stefano Volpetti | | |
2,822,707
|
|
| Jorge Insuasty | | |
1,150,400
|
|
| Martin G. King | | |
1,988,391
|
|
| 54 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Name and Principal Position
|
| |
Year
|
| |
International
Assignments (a) ($) |
| |
Personal Use of
Company Aircraft (b) ($) |
| |
Car
Expenses (c) ($) |
| |
Tax Preparation
Services (d) ($) |
| |
Early
Retirement Payments (e) ($) |
| |
Totals
($) |
|
|
André Calantzopoulos,
|
| |
2021
|
| |
—
|
| |
—
|
| |
21,227
|
| |
1,640
|
| |
—
|
| |
22,867
|
|
| Executive Chairman | | |
2020
|
| |
—
|
| |
—
|
| |
21,023
|
| |
1,598
|
| |
—
|
| |
22,621
|
|
| | | |
2019
|
| |
—
|
| |
30,110
|
| |
20,290
|
| |
1,509
|
| |
—
|
| |
51,909
|
|
|
Jacek Olczak,
|
| |
2021
|
| |
—
|
| |
—
|
| |
17,664
|
| |
—
|
| |
—
|
| |
17,664
|
|
| Chief Executive Officer | | |
2020
|
| |
—
|
| |
—
|
| |
14,341
|
| |
—
|
| |
—
|
| |
14,341
|
|
| | | |
2019
|
| |
—
|
| |
—
|
| |
15,558
|
| |
—
|
| |
—
|
| |
15,558
|
|
|
Emmanuel Babeau,
|
| |
2021
|
| |
14,883
|
| |
—
|
| |
34,530
|
| |
—
|
| |
—
|
| |
49,413
|
|
| Chief Financial Officer | | |
2020
|
| |
50,889
|
| |
—
|
| |
18,859
|
| |
—
|
| |
—
|
| |
69,748
|
|
| | | |
|
| |
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
|
|
Drago Azinovic,
|
| |
2021
|
| |
—
|
| |
—
|
| |
27,727
|
| |
3,828
|
| |
—
|
| |
31,555
|
|
|
President, Middle East & Africa
Region and PMI Duty Free |
| | | | | | | | | | | | | | | | | | | | | |
|
Frederic de Wilde,
|
| |
2021
|
| |
—
|
| |
—
|
| |
15,147
|
| |
1,640
|
| |
—
|
| |
16,787
|
|
| President, European Union Region | | |
2020
|
| |
—
|
| |
—
|
| |
25,913
|
| |
1,598
|
| |
—
|
| |
27,511
|
|
|
Stefano Volpetti,
|
| |
2021
|
| |
—
|
| |
—
|
| |
30,237
|
| |
1,640
|
| |
—
|
| |
31,877
|
|
|
President Smoke-Free Products
Category & Chief Consumer Officer |
| |
2020
|
| |
—
|
| |
—
|
| |
22,404
|
| |
1,598
|
| | | | |
24,002
|
|
|
Jorge Insuasty,
|
| |
2021
|
| |
103,603
|
| |
—
|
| |
13,928
|
| |
—
|
| |
—
|
| |
117,531
|
|
| Chief Life Sciences Officer | | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Martin G. King,
|
| |
2021
|
| |
174,932
|
| |
—
|
| |
16,696
|
| |
—
|
| |
1,656,328
|
| |
1,847,956
|
|
| Retired CEO, PMI America | | |
2020
|
| |
129,561
|
| |
—
|
| |
24,783
|
| |
10,386
|
| |
—
|
| |
164,730
|
|
| | | |
2019
|
| |
159,328
|
| |
—
|
| |
18,550
|
| |
14,086
|
| |
—
|
| |
191,964
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
55
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Name and Principal Position
|
| |
Year
|
| |
Relocation
($) |
| |
Tax and Social
Security Equalization (a) ($) |
| |
Other Program
Allowances (b) ($) |
| |
Totals
($) |
|
|
Emmanuel Babeau,
|
| |
2021
|
| |
648
|
| |
4,529
|
| |
9,706
|
| |
14,883
|
|
| Chief Financial Officer | | |
2020
|
| |
43,049
|
| |
—
|
| |
7,840
|
| |
50,889
|
|
|
Jorge Insuasty,
|
| |
2021
|
| |
84,518
|
| |
19,085
|
| |
—
|
| |
103,603
|
|
| Chief Life Sciences Officer | | | | | | | | | | | | | | | | |
|
Martin G. King,
|
| |
2021
|
| |
47,367
|
| |
110,639
|
| |
16,926
|
| |
174,932
|
|
| Retired CEO, PMI America | | |
2020
|
| |
84,725
|
| |
40,743
|
| |
4,093
|
| |
129,561
|
|
| | | |
2019
|
| |
4,322
|
| |
151,310
|
| |
3,696
|
| |
159,328
|
|
| 56 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | | | | | |
Estimated Possible Payouts
Under Non-Equity Annual Incentive Plan (1) |
| |
Estimated Future
Payouts Under Equity Incentive Plan (2) |
| |
All Other
Stock Awards: Number of Shares of Stock or Units (5) (#) |
| |
Grant Date
Fair Value of Stock Awards ($) |
| ||||||||||||
|
Name and Principal
Position |
| |
Grant Date
|
| |
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| ||||||
|
André
|
| |
2021
|
| |
—
|
| |
1,169,037
|
| |
2,630,333
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Calantzopoulos,
|
| |
2/4/2021
|
| |
|
| |
|
| |
|
| |
42,100
|
| |
84,200
|
| |
168,400
|
| |
|
| |
7,736,717
|
|
| Executive Chairman | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
56,130
|
| |
4,594,522
|
|
|
Jacek Olczak,
|
| |
2021
|
| |
—
|
| |
2,512,141
|
| |
5,652,317
|
| | | | | | | | | | | | | | | |
| Chief Executive Officer | | |
2/4/2021
|
| | | | | | | | | | |
16,090
|
| |
32,180
|
| |
64,360
|
| | | | |
2,956,859
|
|
| | | |
2/4/2021
|
| | | | | | | | | | | | | | | | | | | |
21,460
|
| |
1,756,609
|
|
|
Emmanuel Babeau,
|
| |
2021
|
| |
—
|
| |
1,643,841
|
| |
3,698,642
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Chief Financial Officer | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
14,750
|
| |
29,500
|
| |
59,000
|
| |
|
| |
2,710,608
|
|
| | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
19,670
|
| |
1,610,088
|
|
|
Drago Azinovic,
|
| |
2021
|
| |
—
|
| |
926,027
|
| |
2,083,561
|
| | | | | | | | | | | | | | | |
| President, Middle | | |
2/4/2021
|
| | | | | | | | | | |
6,010
|
| |
12,020
|
| |
24,040
|
| | | | |
1,104,458
|
|
| East & Africa Region | | |
2/4/2021
|
| | | | | | | | | | | | | | | | | | | |
8,010
|
| |
655,659
|
|
| and PMI Duty Free | | |
2/4/2021(3)
|
| | | | | | | | | | | | | | | | | | | |
4,210
|
| |
344,610
|
|
|
Frederic de Wilde,
|
| |
2021
|
| |
—
|
| |
926,027
|
| |
2,083,561
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| President, European | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
6,910
|
| |
13,820
|
| |
27,640
|
| |
|
| |
1,269,851
|
|
| Union Region | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
9,220
|
| |
754,704
|
|
| | | |
2/4/2021(3)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
4,810
|
| |
393,723
|
|
|
Stefano Volpetti,
|
| |
2021
|
| |
—
|
| |
986,305
|
| |
2,219,186
|
| | | | | | | | | | | | | | | |
| President, Smoke-Free | | |
2/4/2021
|
| | | | | | | | | | |
7,680
|
| |
15,360
|
| |
30,720
|
| | | | |
1,411,354
|
|
| Products Category & Chief Consumer Officer | | |
2/4/2021
|
| | | | | | | | | | | | | | | | | | | |
10,240
|
| |
838,196
|
|
|
Jorge Insuasty,
|
| |
2021
|
| |
—
|
| |
690,422
|
| |
1,553,450
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Chief Life Sciences | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
3,130
|
| |
6,260
|
| |
12,520
|
| |
|
| |
575,200
|
|
| Officer | | |
2/4/2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
5,120
|
| |
419,098
|
|
| | | |
1/4/2021(4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
19,570
|
| |
1,592,118
|
|
|
Martin G. King,
|
| |
2021
|
| |
—
|
| |
926,032
|
| |
2,083,572
|
| | | | | | | | | | | | | | | |
| Retired CEO, PMI | | |
2/4/2021
|
| | | | | | | | | | |
5,410
|
| |
10,820
|
| |
21,640
|
| | | | |
994,196
|
|
| America | | |
2/4/2021
|
| | | | | | | | | | | | | | | | | | | |
7,210
|
| |
590,175
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
57
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| 58 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | | | | | |
Stock Awards
|
| |||||||||
| | | | | | |
RSUs
|
| |
PSUs
|
| ||||||
|
Name and Principal Position
|
| |
Stock Award
Grant Date (1) |
| |
Number of
Units that Have not Vested (1)(2) (#) |
| |
Market Value
of Units that Have not Vested (3) ($) |
| |
Number of
Unearned Units that Have not Vested (1)(2)(4) (#) |
| |
Market or
Payout Value of Unearned Units that Have not Vested (3) ($) |
|
|
André Calantzopoulos,
|
| |
2/4/2021
|
| |
|
| |
|
| |
84,200
|
| |
7,999,000
|
|
| Executive Chairman | | |
2/4/2021
|
| |
56,130
|
| |
5,332,350
|
| |
|
| |
|
|
| | | |
2/6/2020
|
| |
|
| |
|
| |
80,600
|
| |
7,657,000
|
|
| | | |
2/6/2020
|
| |
53,730
|
| |
5,104,350
|
| |
|
| |
|
|
| | | |
2/7/2019
|
| |
|
| |
|
| |
73,960
|
| |
7,026,200
|
|
| | | |
2/7/2019
|
| |
49,310
|
| |
4,684,450
|
| |
|
| |
|
|
|
Jacek Olczak,
|
| |
2/4/2021
|
| | | | | | | |
32,180
|
| |
3,057,100
|
|
| Chief Executive Officer | | |
2/4/2021
|
| |
21,460
|
| |
2,038,700
|
| | | | | | |
| | | |
2/6/2020
|
| | | | | | | |
29,300
|
| |
2,783,500
|
|
| | | |
2/6/2020
|
| |
19,540
|
| |
1,856,300
|
| | | | | | |
| | | |
2/7/2019
|
| | | | | | | |
23,940
|
| |
2,274,300
|
|
| | | |
2/7/2019
|
| |
15,960
|
| |
1,516,200
|
| | | | | | |
|
Emmanuel Babeau,
|
| |
2/4/2021
|
| |
|
| |
|
| |
29,500
|
| |
2,802,500
|
|
| Chief Financial Officer | | |
2/4/2021
|
| |
19,670
|
| |
1,868,650
|
| |
|
| |
|
|
| | | |
5/1/2020
|
| |
|
| |
|
| |
27,580
|
| |
2,620,100
|
|
| | | |
5/1/2020
|
| |
18,390
|
| |
1,747,050
|
| |
|
| |
|
|
| | | |
5/1/2020(5)
|
| |
34,820
|
| |
3,307,900
|
| |
|
| |
|
|
|
Drago Azinovic,
|
| |
2/4/2021
|
| | | | | | | |
12,020
|
| |
1,141,900
|
|
| President, Middle East & Africa Region | | |
2/4/2021
|
| |
8,010
|
| |
760,950
|
| | | | | | |
| and PMI Duty Free | | |
2/4/2021(6)
|
| |
4,210
|
| |
399,950
|
| | | | | | |
| | | |
2/6/2020
|
| | | | | | | |
11,030
|
| |
1,047,850
|
|
| | | |
2/6/2020
|
| |
7,360
|
| |
699,200
|
| | | | | | |
| | | |
2/7/2019
|
| | | | | | | |
12,620
|
| |
1,198,900
|
|
| | | |
2/7/2019
|
| |
8,420
|
| |
799,900
|
| | | | | | |
|
Frederic de Wilde,
|
| |
2/4/2021
|
| |
|
| |
|
| |
13,820
|
| |
1,312,900
|
|
| President, European Union | | |
2/4/2021
|
| |
9,220
|
| |
875,900
|
| |
|
| |
|
|
| Region | | |
2/4/2021(6)
|
| |
4,810
|
| |
456,950
|
| |
|
| |
|
|
| | | |
2/6/2020
|
| |
|
| |
|
| |
13,130
|
| |
1,247,350
|
|
| | | |
2/6/2020
|
| |
8,760
|
| |
832,200
|
| |
|
| |
|
|
| | | |
2/7/2019
|
| |
|
| |
|
| |
10,330
|
| |
981,350
|
|
| | | |
2/7/2019
|
| |
6,890
|
| |
654,550
|
| |
|
| |
|
|
|
Stefano Volpetti,
|
| |
2/4/2021
|
| | | | | | | |
15,360
|
| |
1,459,200
|
|
| President, Smoke-Free Products | | |
2/4/2021
|
| |
10,240
|
| |
972,800
|
| | | | | | |
| Category & Chief Consumer Officer | | |
2/6/2020
|
| | | | | | | |
13,430
|
| |
1,275,850
|
|
| | | |
2/6/2020
|
| |
8,950
|
| |
850,250
|
| | | | | | |
| | | |
6/3/2019(7)
|
| |
9,310
|
| |
884,450
|
| | | | | | |
|
Jorge Insuasty,
|
| |
2/4/2021
|
| |
|
| |
|
| |
6,260
|
| |
594,700
|
|
| Chief Life Sciences Officer | | |
2/4/2021
|
| |
5,120
|
| |
486,400
|
| |
|
| |
|
|
| | | |
1/4/2021(8)
|
| |
19,570
|
| |
1,859,150
|
| |
|
| |
|
|
|
Martin G. King,
|
| |
2/4/2021
|
| | | | | | | |
10,820
|
| |
1,027,900
|
|
| Retired CEO, PMI America | | |
2/6/2020
|
| | | | | | | |
9,980
|
| |
948,100
|
|
| | | |
2/7/2019
|
| | | | | | | |
10,330
|
| |
981,350
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
59
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Grant Date
|
| |
Grant
Type |
| |
Vesting Schedule
|
|
| 2/4/2021 | | |
PSU
|
| |
Award vests between 0-200% on 2/21/2024 upon certification of the achievement of performance goals pre-established by the Committee.
|
|
| 2/4/2021 | | |
RSU
|
| |
100% of award vests on 2/21/2024.
|
|
| 5/1/2020 | | |
PSU
|
| |
Award vests between 0-200% on 2/15/2023 upon certification of the achievement of performance goals pre-established by the Committee.
|
|
| 5/1/2020 | | |
RSU
|
| |
100% of award vests on 2/15/2023.
|
|
| 2/6/2020 | | |
PSU
|
| |
Award vests between 0-200% on 2/15/2023 upon certification of the achievement of performance goals pre-established by the Committee.
|
|
| 2/6/2020 | | |
RSU
|
| |
100% of award vests on 2/15/2023.
|
|
| 2/7/2019 | | |
PSU
|
| |
Award vested at 150% on 2/16/2022 based upon certification of the achievement of performance goals pre-established by the Committee.
|
|
| 2/7/2019 | | |
RSU
|
| |
100% of award vested on 2/16/2022.
|
|
| 60 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
| | | |
Stock Awards
|
| |||
|
Name and Principal Position
|
| |
Number of
Shares Acquired on Vesting (#) |
| |
Value
Realized on Vesting ($) |
|
|
André Calantzopoulos,
Executive Chairman |
| |
80,477
|
| |
6,948,787
|
|
|
Jacek Olczak,
Chief Executive Officer |
| |
23,746
|
| |
2,050,348
|
|
|
Emmanuel Babeau,
Chief Financial Officer |
| |
34,820
|
| |
3,006,533
|
|
|
Drago Azinovic,
President, Middle East & Africa Region and PMI Duty Free |
| |
10,272
|
| |
886,936
|
|
|
Frederic de Wilde,
President, European Union Region |
| |
9,125
|
| |
787,898
|
|
|
Stefano Volpetti,
President, Smoke-Free Products Category & Chief Consumer Officer |
| |
—
|
| |
—
|
|
|
Jorge Insuasty,
Chief Life Sciences Officer |
| |
—
|
| |
—
|
|
|
Martin G. King,
Retired CEO, PMI America |
| |
33,879 (1)
|
| |
3,274,362
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
61
|
|
|
C O M P E N S A T I O N D I S C U S S I O N A N D A N A L Y S I S
|
|
|
Name and Principal
Position |
| |
Plan Name
|
| |
Number of
Years of Credited Service (1) (#) |
| |
Present Value
of Accumulated Benefits (2)(3) ($) |
| |
Payments
During Last Fiscal Year (4) ($) |
|
|
André Calantzopoulos,
|
| | Pension Fund of Philip Morris in Switzerland | | |
40.00
|
| |
21,661,561
|
| |
—
|
|
|
Executive Chairman
|
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
16.92
|
| |
3,976,093
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
16.00
|
| |
11,815,556
|
| |
—
|
| |||
|
Jacek Olczak,
|
| | Pension Fund of Philip Morris in Switzerland | | |
32.00
|
| |
14,261,426
|
| |
—
|
|
|
Chief Executive Officer
|
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
15.92
|
| |
1,125,944
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
13.00
|
| |
7,583,748
|
| |
—
|
| |||
|
Emmanuel Babeau,
|
| | Pension Fund of Philip Morris in Switzerland | | |
3.83
|
| |
1,657,814
|
| |
—
|
|
|
Chief Financial Officer
|
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
0.92
|
| |
48,053
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
1.67
|
| |
451,119
|
| |
—
|
| |||
|
Drago Azinovic,
|
| | Pension Fund of Philip Morris in Switzerland | | |
35.00
|
| |
15,444,939
|
| |
—
|
|
|
President, Middle East &
Africa Region and PMI Duty Free |
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
11.92
|
| |
1,423,379
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
10.00
|
| |
1,015,350
|
| |
—
|
| |||
|
Frederic de Wilde,
|
| | Pension Fund of Philip Morris in Switzerland | | |
30.00
|
| |
12,210,654
|
| |
—
|
|
|
President, European Union Region
|
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
16.92
|
| |
1,682,565
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
13.00
|
| |
1,752,115
|
| |
—
|
| |||
|
Stefano Volpetti,
|
| | Pension Fund of Philip Morris in Switzerland | | |
26.00
|
| |
11,349,802
|
| |
—
|
|
|
President, Smoke-Free
Products Category & Chief Consumer Officer |
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
1.92
|
| |
113,340
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
2.58
|
| |
354,780
|
| |
—
|
| |||
|
Jorge Insuasty,
|
| | Pension Fund of Philip Morris in Switzerland | | |
1.00
|
| |
279,982
|
| |
—
|
|
| Chief Life Sciences Officer | | | IC Pension Plan of Philip Morris in Switzerland | | |
—
|
| |
—
|
| |
—
|
|
|
Martin G. King,
|
| | Pension Fund of Philip Morris in Switzerland | | |
16.25
|
| |
6,747,666
|
| |
—
|
|
|
Retired CEO, PMI America
|
| |
IC Pension Plan of Philip Morris in Switzerland
|
| |
15.58
|
| |
1,093,100
|
| |
—
|
|
|
Supplemental Plan of Philip Morris in Switzerland
|
| |
12.67
|
| |
1,760,842
|
| |
—
|
| |||
| Retirement Plan for Salaried Employees | | |
14.00
|
| |
1,193,922
|
| |
9,278
|
| |||
| Benefit Equalization Plan (BEP) | | |
14.00
|
| |
7,242,637
|
| |
—
|
|
| 62 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
63
|
|
|
|
|
| 64 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
|
|
|
Name and
Principal Position |
| |
Plan Name
|
| |
Executive
Contributions in 2021 ($) |
| |
Registrant
Contributions in 2021 ($) |
| |
Aggregate
Earnings in 2021(1) ($) |
| |
Aggregate
Withdrawals/ Distribution ($) |
| |
Aggregate
Balance as of December 31, 2021(2) ($) |
|
| Martin G. King, Retired CEO, PMI America | | |
Benefit Equalization Plan (BEP),
Deferred Profit-Sharing Plan |
| |
—
|
| |
—
|
| |
233
|
| |
—
|
| |
21,731
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
65
|
|
|
|
|
|
Name
|
| |
Severance(1)
($) |
| |
Estimated Value of
Stock Awards(2) ($) |
| |
Incentive
Compensation Award(3) ($) |
| |
Total
($) |
|
|
Emmanuel Babeau
|
| |
2,630,146
|
| |
9,367,855
|
| |
3,287,682
|
| |
15,285,683
|
|
|
Jorge Insuasty
|
| |
—
|
| |
2,940,250
|
| |
690,422
|
| |
3,630,672
|
|
| 66 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
|
|
|
Name
|
| |
Unvested
PSUs(1) ($) |
| |
Unvested
RSUs(1) ($) |
| |
Completed
2021 Annual Incentive Compensation Award Cycle (2) ($) |
| |
Total
($) |
|
|
André Calantzopoulos
|
| |
22,682,200
|
| |
15,121,150
|
| |
1,169,037
|
| |
38,972,387
|
|
|
Jacek Olczak
|
| |
8,114,900
|
| |
5,411,200
|
| |
2,512,141
|
| |
16,038,241
|
|
|
Emmanuel Babeau
|
| |
5,422,600
|
| |
6,923,600
|
| |
1,643,841
|
| |
13,990,041
|
|
|
Drago Azinovic
|
| |
3,388,650
|
| |
2,660,000
|
| |
926,027
|
| |
6,974,677
|
|
|
Frederic de Wilde
|
| |
3,541,600
|
| |
2,819,600
|
| |
926,027
|
| |
7,287,227
|
|
|
Stefano Volpetti
|
| |
2,735,050
|
| |
2,707,500
|
| |
986,305
|
| |
6,428,855
|
|
|
Jorge Insuasty
|
| |
594,700
|
| |
2,345,550
|
| |
690,422
|
| |
3,630,672
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
67
|
|
|
PAY RATIO
|
|
| 68 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
ADVISORY VOTE APPROVING EXECUTIVE COMPENSATION
|
|
|
![]() |
| |
PROPOSAL 2: ADVISORY VOTE APPROVING EXECUTIVE COMPENSATION
The Board recommends a vote FOR the resolution approving the compensation of our named executive officers.
|
| | |
“FOR”
![]() |
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
69
|
|
|
A P P R O V A L O F T H E 2022 P E R F O R M A N C E I N C E N T IV E P L A N
|
|
|
RUN RATE (shares in millions)
|
| |
FY 2019
|
| |
FY 2020
|
| |
FY 2021
|
| |
3-Year Average
|
| |
YTD 2022
|
|
| RSUs granted | | |
1.73
|
| |
1.73
|
| |
2.02
|
| |
1.83
|
| |
1.55
|
|
| Director Stock Awards granted (2) | | |
0.02
|
| |
0.02
|
| |
0.02
|
| |
0.02
|
| |
—
|
|
| PSUs vested | | |
0.33
|
| |
0.34
|
| |
0.19
|
| |
0.29
|
| |
0.67
|
|
| Weighted average number of shares outstanding | | |
1,555.67
|
| |
1,557.07
|
| |
1,557.45
|
| |
1,556.73
|
| |
1,550.24
|
|
|
Run rate (1)
|
| |
0.13%
|
| |
0.13%
|
| |
0.14%
|
| |
0.13%
|
| |
0.14%
|
|
| 70 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
A P P R O V A L O F T H E 2022 P E R F O R M A N C E I N C E N T IV E P L A N
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
71
|
|
|
A P P R O V A L O F T H E 2022 P E R F O R M A N C E I N C E N T IV E P L A N
|
|
| | | |
(A)
Number of Shares to be Issued upon Exercise of Outstanding Options and Vesting of RSUs and PSUs |
| |
(B)
Weighted Average Exercise Price of Outstanding Options |
| |
(C)
Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) |
|
| Equity compensation plans approved by shareholders | | |
7,740,779(1)
|
| |
—
|
| |
13,559,614(2)
|
|
| 72 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
A P P R O V A L O F T H E 2022 P E R F O R M A N C E I N C E N T IV E P L A N
|
|
|
![]() |
| |
PROPOSAL 3: APPROVAL OF THE 2022 PERFORMANCE INCENTIVE PLAN
The Board of Directors recommends that you vote FOR the approval of the 2022 Performance Incentive Plan.
|
| | |
“FOR”
![]() |
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
73
|
|
|
A U D I T C O M M I T T E E M A T T E R S
|
|
| 74 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
A U D I T C O M M I T T E E M A T T E R S
|
|
| | | |
2021
|
| |
2020
|
|
| Audit Fees (1) | | |
$20.60
|
| |
$20.50
|
|
| Audit-Related Fees (2) | | |
1.44
|
| |
0.67
|
|
| Tax Fees (3) | | |
2.49
|
| |
3.76
|
|
| All Other Fees (4) | | |
1.28
|
| |
0.94
|
|
| TOTAL | | |
$25.81
|
| |
$25.87
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
75
|
|
|
R A T I F I C A T I O N O F T H E S E L E C T I O N O F I N D E P E N D E N T A U D I T O R S
|
|
|
![]() |
| |
PROPOSAL 4: RATIFICATION OF APPOINTMENT OF PRICEWATERHOUSECOOPERS SA AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors recommends that you vote in favor of this proposal. We have had a positive experience with PwC and believe it is in our best interest to continue that relationship.
|
| | |
“FOR”
![]() |
|
| 76 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
S H A R E H O L D E R P R O P O S A L
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
77
|
|
|
S H A R E H O L D E R P R O P O S A L
|
|
|
![]() |
| |
PROPOSAL 5: SHAREHOLDER PROPOSAL
|
| | |
“AGAINST”
![]() |
|
| 78 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
R E L A T E D P E R S O N T R A N S A C T I O N S A N D C O D E O F C O N D U C T
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
79
|
|
|
A V A I L A B I L I T Y O F R E P O R T S, O T H E R M A T T E R S A N D 2 0 2 3 A N N U A L M E ET I N G
|
|
| 80 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T A : Q U E S T I O N S & A N S W E R S
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
81
|
|
|
E X H I B I T A : Q U E S T I O N S & A N S W E R S
|
|
| 82 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T A : Q U E S T I O N S & A N S W E R S
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
83
|
|
|
E X H I B I T A : Q U E S T I O N S & A N S W E R S
|
|
| 84 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T A : Q U E S T I O N S & A N S W E R S
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
85
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
| 86 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
87
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
| 88 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
89
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
| 90 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
91
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
| 92 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T B: 2 0 2 2 P E R F O R M A N C E I N C E N T I V E P L A N
|
|
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
93
|
|
|
E X H I B I T C: R E C O N C I L I A T I O N S
|
|
| | | |
2021
|
| |
2020
|
| |
% Change
|
| |||||||||
| Net Revenues | | | | $ | 31,405 | | | | | $ | 28,694 | | | | | | 9.4% | | |
| Less: Saudi Arabia customs assessments | | | | | (246) | | | | | | | | | | | | | | |
| Adjusted Net Revenues | | | | | 31,651 | | | | | | 28,694 | | | | | | 10.3% | | |
| Less: Currency | | | | | 678 | | | | | | | | | | | | | | |
| Less: Acquisitions | | | | | 109 | | | | | | | | | | | | | | |
| Adjusted Net Revenues, ex. currency and acquisitions | | | | $ | 30,864 | | | | | $ | 28,694 | | | | | | 7.6%(1) | | |
| | | |
2021
|
| |
2020
|
| |
% Change
|
|
| Net cash provided by operating activities (1) | | |
$11,967
|
| |
$9,812
|
| |
22.0%
|
|
| Less: Currency | | |
799
|
| | | | | | |
| Net cash provided by operating activities, excluding currency | | |
$11,168
|
| |
$9,812
|
| |
13.8%
|
|
| 94 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
|
E X H I B I T C: R E C O N C I L I A T I O N S
|
|
| | | |
2019
|
| |
2018
|
| |
% Change
|
| |||||||||
| Operating Income | | | | $ | 10,531 | | | | | $ | 11,377 | | | | | | (7.4)% | | |
| Less: | | | | | | | | | | | | | | | | | | | |
|
Asset impairment and exit costs
|
| | | | (422) | | | | | | — | | | | | | | | |
|
Canadian tobacco litigation-related expense
|
| | | | (194) | | | | | | — | | | | | | | | |
|
Loss on deconsolidation of RBH
|
| | | | (239) | | | | | | — | | | | | | | | |
|
Russia excise and VAT audit charge
|
| | | | (374) | | | | | | — | | | | | | | | |
| Adjusted Operating Income | | | | $ | 11,760 | | | | | $ | 11,377 | | | | | | 3.4% | | |
| Operating Income attributable to RBH | | | | | | | | | | | (542)(1) | | | | | | | | |
| Adjusted Operating Income | | | | $ | 11,760 | | | | | $ | 10,835(2) | | | | | | 8.5% | | |
| Less: Currency | | | | | (293) | | | | | | | | | | | | | | |
| Adjusted Operating Income, excluding Currency | | | | $ | 12,053 | | | | | $ | 10,835(2) | | | | | | 11.2% | | |
| Less: Acquisitions | | | | | — | | | | | | | | | | | | | | |
| Adjusted Operating Income, excluding Currency and Acquisitions | | | | $ | 12,053 | | | | | $ | 10,835(2) | | | | | | 11.2%(4) | | |
| | | |
2020
|
| |
2019
|
| |
% Change
|
| |||||||||
| Operating Income | | | | $ | 11,668 | | | | | $ | 10,531 | | | | | | 10.8% | | |
| Less: | | | | | | | | | | | | | | | | | | | |
|
Asset impairment and exit costs
|
| | | | (149) | | | | | | (422) | | | | | | | | |
|
Canadian tobacco litigation-related expense
|
| | | | — | | | | | | (194) | | | | | | | | |
|
Loss on deconsolidation of RBH
|
| | | | — | | | | | | (239) | | | | | | | | |
|
Russia excise and VAT audit charge
|
| | | | — | | | | | | (374) | | | | | | | | |
|
Brazil indirect tax credit
|
| | | | 119 | | | | | | — | | | | | | | | |
| Adjusted Operating Income | | | | $ | 11,698 | | | | | $ | 11,760 | | | | | | (0.5)% | | |
| Operating Income attributable to RBH | | | | | | | | | | | (126)(3) | | | | | | | | |
| Adjusted Operating Income | | | | $ | 11,698 | | | | | $ | 11,634(2) | | | | | | 0.6% | | |
| Less: Currency | | | | | (474) | | | | | | | | | | | | | | |
| Adjusted Operating Income, excluding Currency | | | | $ | 12,172 | | | | | $ | 11,634(2) | | | | | | 4.6% | | |
| Less: Acquisitions | | | | | — | | | | | | | | | | | | | | |
| Adjusted Operating Income, excluding Currency and Acquisitions | | | | $ | 12,172 | | | | | $ | 11,634(2) | | | | | | 4.6%(4) | | |
| | | |
2021
|
| |
2020
|
| |
% Change
|
| |||||||||
| Operating Income | | | | $ | 12,975 | | | | | $ | 11,668 | | | | | | 11.2% | | |
| Less: | | | | | | | | | | | | | | | | | | | |
|
Asset impairment and exit costs
|
| | | | (216) | | | | | | (149) | | | | | | | | |
|
Saudi Arabia customs assessments
|
| | | | (246) | | | | | | | | | | | | | | |
|
Asset acquisition costs
|
| | | | (51) | | | | | | | | | | | | | | |
|
Brazil indirect tax credit
|
| | | | | | | | | | 119 | | | | | | | | |
| Adjusted Operating Income | | | | $ | 13,488 | | | | | $ | 11,698 | | | | | | 15.3% | | |
| Less: Currency | | | | | 268 | | | | | | | | | | | | | | |
| Adjusted Operating Income, excluding Currency | | | | $ | 13,220 | | | | | $ | 11,698 | | | | | | 13.0% | | |
| Less: Acquisitions | | | | | 1 | | | | | | | | | | | | | | |
| Adjusted Operating Income, excluding Currency and Acquisitions | | | | $ | 13,219 | | | | | $ | 11,698 | | | | | | 13.0%(4) | | |
| Three-Year Adjusted Operating Income Organic CAGR | | | | | | | | | | | | | | | | | 9.6% | | |
|
P M I 2 0 2 2 P r o x y S t a t e m e n t
|
| | |
95
|
|
|
E X H I B I T D : G L O S S A R Y O F T E R M S
|
|
|
| |
|
|
Financial
|
| |
Other
|
|
•
Net revenues exclude excise taxes.
•
Net revenues from smoke-free products are defined as operating revenues generated from the sales of PMI’s heated tobacco units, Platform 1 devices and related accessories, other nicotine-containing products, and any other non-combustible products.
•
Operating Income (“OI”) is defined as gross profit minus operating expenses.
•
Adjusted Net Revenues in 2021 exclude the impact related to the Saudi Arabia customs assessments.
•
Adjusted OI is defined as reported OI adjusted for asset impairment and exit costs and other special items.
•
EPS stands for Earnings Per Share.
•
Adjusted Diluted EPS is defined as reported diluted EPS adjusted for asset impairment and exit costs, tax items and other special items.
•
Operating cash flow is defined as net cash provided by operating activities, excluding currency.
•
Organic growth is defined as growth rates presented on an organic basis that reflect currency-neutral underlying results.
•
Pro forma 2019 results have been adjusted for the deconsolidation of PMI’s Canadian subsidiary, Rothmans, Benson & Hedges, Inc. (RBH), effective March 22, 2019 (the date of deconsolidation). For further details, see Item 8, Note 20, Deconsolidation of RBH, to the consolidated financial statements included in our 2021 Form 10-K.
•
Adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures are included in Exhibit C.
|
| |
•
Reduced-risk products (“RRPs”) is the term we use to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. We have a range of RRPs in various stages of development, scientific assessment and commercialization. Our RRPs are smoke-free products that do not burn tobacco; they contain and/or generate far lower quantities of harmful and potentially harmful constituents than found in cigarette smoke.
•
PSUs are Performance Share Units.
•
RSUs are Restricted Share Units and may be issued in the form of deferred share awards.
•
TSR stands for Total Shareholder Return.
•
“PMI,” the “Company,” “we,” “us,” and “our” refer to Philip Morris International Inc. and its subsidiaries.
•
Trademarks and service marks in this proxy statement are the registered property of, or licensed by, the subsidiaries of Philip Morris International Inc. and are italicized.
•
“Platform 1” is the term we use to refer to our reduced-risk product that uses a precisely controlled heating device into which a specially designed and proprietary tobacco unit is inserted and heated to generate an aerosol.
•
Unless otherwise stated, all references to IQOS are to PMI’s Platform 1 IQOS devices and heated tobacco consumables.
•
ESG stands for environmental, social, and governance, which are key factors used by investors to measure corporate social responsibility.
•
EU means the European Union.
|
|
| 96 | | | |
D e l i v e r i n g a S m o k e - F r e e F u t u r e
|
|
| | | | | | |
2022 PROXY STATEMENT
And Notice of Annual Meeting of Shareholders
To be held on Wednesday, May 4, 2022 |
|