2022

Annual Meeting of
Shareholders andProxy Statement

Wednesday, May 4, 2022

DEAR FELLOWSHAREHOLDER:ANDRÉCALANTZOPOULOSEXECUTIVE
CHAIRMAN OF THE
BOARD

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 andour shareholders time and travel expenses, and, importantly, reducing our environmental
impact.
2021 YEAR IN REVIEWPMI 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 thelaunch of IQOS ILUMA, the surpassing of 20 million IQOS users, and meaningful firststeps 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.

JACEK OLCZAKDIRECTOR AND
CHIEF EXECUTIVEOFFICER

These achievements would not have been possible without the invaluable efforts of theentire 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 thesechallenges by demonstrating solidarity, agility, resilience and learning ability. Our people
spared no effort to deliver excellent business results despite the ongoing volatility in theoperating environment.
LOOKING TO THE FUTURE
This is an exciting time for PMI. We continue to see significant opportunity in ourbusiness transformation away from combustible tobacco products, through ourleadership in smoke-free products, as well as our expansion into promising opportunities
in wellness and healthcare. Propelled by science, innovation, and ambition, we are wellpositioned to accelerate our journey towards a smoke-free future.

Your vote is important. We encourage you to sign and return your proxy card, or use telephone or Internet voting prior tothe meeting, so that your shares of common stock will be represented and voted at the meeting even if you do not attend.
Sincerely,

Sincerely,

André Calantzopoulos

Jacek Olczak

Notice of 2022 Virtual Annual Meetingof Shareholders
Meeting Date & TimeMay 4, 2022, 9:00 a.m. EDT

Record Date
Each shareholder of record as ofclose of business on March 11,2022 is entitled to one vote foreach share of common stock held.
As of the record date, there were1,550,082,073 shares ofcommon stock issued andoutstanding.

Voting Deadline
Proxies submitted by telephone orInternet 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 Reportis enclosed.

Important NoticeRegarding the Availabilityof Proxy Materials for the

There is no physical location for the shareholders to attend the 2022 Annual
Shareholder Meeting. Shareholders may instead participate online atwww.virtualshareholdermeeting.com/PMI2022. To participate, you will need to enter the
16-digit control number included on your proxy card, notice of Internet availability ofproxy materials, or on the voting instruction form accompanying your proxy materials.

Meeting Agenda

Recommendationelect the fourteen directors named in this proxy
1. To
Statement to our Board of Directors.
vote on an advisory resolution
2. To
approving executive compensation.

FOR eachdirector nominee

FOR

To approve the Philip Morris International Inc. 2022

3. Performance Incentive Plan.

FOR

4.

To ratify the selection of PricewaterhouseCoopers
SA as independent auditors for the Company for the
fiscal year ending December 31, 2022.

FOR

5.

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 themeeting.

AGAINST

6. To transact other business properly coming before the meeting.
Your vote is important. We urge each shareholder to promptly sign and return theenclosed proxy card or to use telephone or internet voting. See the questions andanswer 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 the2022 Virtual Annual Meeting of Shareholders, please follow the instructions set forth on
page 81 in response to question 4.
By Internet

By Phone

By MailAt the Meeting

Annual Meeting of
Shareholders to be heldon May 4, 2022: The
Company’s Proxy
Statement and 2021
Annual Report are

Visit proxyvote.com with
Call 1-800-690-6903 withyour proxy card in hand
your proxy card in handand follow the instructions and follow the instructions
to obtain your records and to cast your vote.
create an electronic voting
instruction form.

Mark, sign and date your During the meeting, visit
proxy card and return it in virtualshareholder
the postage-paid envelope meeting.com/PMI2022
provided or return it to:with your 16-digit control
Vote Processing,number found on yourc/o Broadridge,
proxy card or other proxy
51 Mercedes Way,
materials.
Edgewood, NY 11717.

available atwww.pmi.com/investors..
Darlene Quashie Henry
Vice President, Associate General Counsel and Corporate Secretary
March 24, 2022

Letter from the Board of Directors
DEAR FELLOW SHAREHOLDER:
While Philip Morris International Inc. (“PMI” or the “Company”) is widely known as a cigarette company, in 2016 it announced
its new purpose: to deliver a smoke-free future by focusing its resources on developing, scientifically substantiating, andresponsibly commercializing smoke-free products that are less harmful than smoking, with the aim of completely replacing
cigarettes as soon as possible. These innovative alternative products do not burn tobacco or create smoke, and therefore
emit significantly lower levels of carcinogens and other toxic substances than cigarettes.
Building on the Board’s Letter to Shareholders and the Statement of Purpose in PMI’s 2017 and 2020 Proxy Statements
respectively, we reaffirm PMI’s purpose and acknowledge that, as the Company continues to transform its business andorganization, its core effort to provide smoke-free alternatives that appeal to today’s adult smokers — and to work hard toconvince them to switch — will not be enough. The Company needs to continue earning the trust and active cooperationof a host of stakeholders, from supply chain partners to regulators and public health authorities.
A smoke-free future is attainable, and the benefits it can bring to the people who would otherwise continue to smoke, andhence to global public health, are enormous. However, the Company cannot succeed alone. Together with governments andcivil society, we can maximize this opportunity by achieving a consensus that smoke-free alternatives, when subject toproper government oversight and regulation, are part of a sound tobacco policy.
Smoking causes serious disease, and the best way to avoid the harms of smoking is never to start or, for those who
smoke, to quit. For decades, tobacco control has focused on strict fiscal, marketing, and other measures to deter initiationand to encourage cessation. These must be continued. Nevertheless, while smoking prevalence rates continue to slowly
decline, the World Health Organization projects that, due to population growth, the estimated number of 1.1 billion
people who smoke tobacco products today will remain largely unchanged by 2025.
Nicotine, while addictive and not risk-free, is not the primary cause of smoking-related disease. The primary cause is theharmful chemicals emitted while burning tobacco and contained in the smoke. Eliminating combustion from nicotinecontaining products is the way to significantly reduce their toxicity. Thanks to rapid advances in science and technology, anda strong PMI commitment, these products are now a reality.
In 2016, with the full support of the Board of Directors, the Company announced its new purpose of delivering a smokefree future. Since then, the Company has fully aligned its employees with this purpose and swiftly shifted its organizational
focus and resources to smoke-free alternatives. The Company is essentially disrupting its traditional business from theinside out and is leading the industry in this unprecedented transformation.
PMI’s smoke-free product portfolio currently includes heat-not-burn products, nicotine-containing vapor products, and oral
nicotine products, all without combustion. Their development and manufacturing follow high standards of quality andconsistency.
The Company is committed to scientifically substantiating the harm reduction potential of its smoke-free alternatives
compared to cigarette smoking, including through rigorous preclinical and clinical assessments and sophisticated systems
toxicology. Our scientific findings are publicly available and peer-reviewed, and we have submitted many of our findings
to regulatory authorities, including the U.S. Food and Drug Administration. The totality of the scientific evidence makes theCompany confident that switching completely to smoke-free products is likely to present less risk of harm than continuing
to smoke. Post-market surveillance is necessary to continue building this confidence and, over time, quantify the reduction in
morbidity and mortality through epidemiology.
To be clear, these smoke-free alternatives are not risk-free and should not be used by youth or adults who would nototherwise continue to smoke or use other nicotine products. The Company must market its smoke-free alternatives
responsibly to minimize any unintended use while maximizing the switching of adult smokers who would otherwise continue
smoking.
While cigarette sales today remain the largest part of PMI’s business in most countries, this is changing rapidly. The
Company is actively accelerating the decline of cigarette smoking beyond what traditional tobacco control measures canachieve alone. To make its progress both measurable and verifiable, the Company developed a set of bespoke key
performance indicators called Business Transformation Metrics. This set of metrics and related goals, which PMI reportson periodically, allow stakeholders to assess both the pace and the scale of its transformation and showcase how it isallocating resources away from its traditional cigarette business, aiming to base success on a future where it no longer
makes or sells cigarettes.

Although the Company’s transformation journey started with a vision centered on the critical mission of phasing out
cigarettes, this is not its sole or ultimate end goal. Researching and developing noncombustible alternatives that are
scientifically substantiated to be less harmful than cigarettes is the first step. Broadening access for adult smokers while
simultaneously and deliberately working to phase out cigarette smoking completed the equation of its smoke-free purpose.
In the process, the Company has expanded its social, human, intellectual, and manufactured capital in ways that allow it
to go a step further, moving from a value proposition centered on doing less harm toward one where it can seek to have a
net positive impact on society.
PMI is now actively working to expand its purpose and evolve into a broader lifestyle, consumer wellness and healthcarecompany, extending its value proposition and innovative capability to commercialize products that go beyond tobacco andnicotine. This is built on two key growth areas: (1) wellness products, where the Company is developing and looking tocommercialize scientifically substantiated consumer health products and solutions with the aim to improve people’s lives(2) healthcare products, where it has already committed resources to its development pipeline of over-the-counter andprescription products.
This is part of a larger transformation that puts science, technology, and sustainability at the heart of PMI’s future bybuilding on the Company’s expertise and investment in aerosol chemistry and physics, device technology, clinical research,and best-in-class preclinical safety and inhalation models.
PMI’s key stakeholder constituencies, which are fundamental to both the achieving of its purpose and to the pace of its
progress, will be affected in different ways by PMI’s transformation. The Company will continue to engage and collaborate
with relevant stakeholders to speed the transformation while mitigating negative consequences.

Consumers
Adult smokers and adult nicotine users are at the core of PMI’s business transformation. The public health benefit of smokefree products depends not only on their potential to reduce the risk of smoking-related disease compared to continued
smoking but also on how many adult smokers use smoke-free products as alternatives to cigarettes by as many adultsmokers as possible. For smokers to switch to them, these alternatives must be accessible. Increasing accessibility means
improving consumer awareness, acceptability, as well as the availability and affordability of our smoke-free products.
Acceptability means delivering experiences that satisfy the needs of adult smokers while significantly reducing the exposure
to the harmful and potentially harmful constituents of cigarette smoke. It is vital that we engage with adult smokers toraise awareness of smoke-free products and their benefits compared with cigarettes.
While PMI will continue to responsibly sell cigarettes as long as there is a significant legitimate demand, it will leverage its
leading position to accelerate switching to better alternatives, continuing to focus its commercial efforts toward raisingawareness of, and informing adult smokers in appropriate ways about, scientifically substantiated smoke-free products
and the benefits of switching versus continued smoking. The Company carefully monitors the results of its marketing tominimize any unintended use of its smoke-free products by nonsmokers, especially youth.
In addition, PMI’s new businesses will leverage its know-how and capabilities in areas such as inhalation and aerosolization
to create better products to target unmet medical and consumer needs and deliver a better experience and enhanced
products for consumers and patients.

Employees
PMI’s ability to accomplish its purpose depends on the skills, dedication, and relentless efforts of its employees. The
Company’s focus on a smoke-free future and long-term opportunities in wellness and healthcare has enhanced its ability
to attract the new talent needed to support its transformation. The Company compensates its employees fairly and provides
important benefits. It supports them with enriching job experiences, training, and education to help them develop new
skills and maximize their employability in a rapidly changing world. The Company treats employees with respect, dignity,
care, and fairness. It fosters diversity, inclusion, equal opportunity, and equal salary policies to ensure PMI’s workforce
reflects modern society.

Regulators
Regulators can decisively accelerate the industry’s transformation toward, and the speed at which adult smokers switch to,smoke-free products by implementing risk-proportionate regulations and taxation for all nicotine-containing products andby providing smokers with accurate information. PMI is committed to engaging transparently with regulators, sharing its
scientific research and post-market data. The Company is ready to support an industry-wide gradual phaseout of cigarettes
as soon as a majority of smokers in a country have switched to scientifically substantiated smoke-free products. PMI

believes that with the right regulatory encouragement and support from civil society, cigarette sales can end within 10 to
15 years in many countries.

Public Health Community
The public health community is, unfortunately, polarized on the issue of smoke-free products. Without question, their work
to discourage youth and nonsmokers from starting to use any tobacco or nicotine product and to encourage cessation
should continue. At the same time, when better alternatives to cigarettes exist, the discussion should not be whether theyshould be made available to the more than one billion people who smoke today, but how fast and within what regulatory
framework to maximize their adoption while minimizing unintended use. The Company is urging this important stakeholder
group to seize the immense opportunity that smoke-free products present for advancing public health within the current
generation of smokers. PMI asks the public health community to scrutinize its smoke-free products, to provide feedbackfor improvement, and to be open to considering that PMI’s purpose aligns with the societal goal to change the healthtrajectories of the people who smoke.

Supply Chain
People working in the Company’s supply chain around the world, including tobacco farmers, rely on PMI for a substantial
portion of their income. PMI deals fairly and ethically with its suppliers and is dedicated to acting as a good partner to othercompanies, large and small, that help us meet PMI’s mission. PMI recognizes that smoke-free products differ fromcigarettes and entail change for some of its supply chain partners, and PMI is ready to help them in this transition.

Civil Society
Continued engagement and partnerships with civil society remain essential to the Company’s success. PMI respects themany communities and the environment around the world where it operates. PMI works hard to protect the environment
through sustainable practices across its businesses, and to both address and prevent future social and environmental
challenges, including reducing post-consumer waste (focusing on eco-design and circularity), tackling climate change,
preserving nature, improving the quality of life of people in our supply chain, and fostering an empowered and inclusive
workplace. The scope, metrics, and progress of these practices are outlined in PMI’s annual Integrated Report, publishedon PMI’s website.

Shareholders
The Company is confident in the core business growth prospects of smoke-free products and the significant additional
long-term opportunity from innovating in wellness and healthcare. It is leading the new, highly promising category of smokefree products and leveraging its unique capabilities to capture further areas of growth. PMI is dedicated to ensuring its
shareholders continue to receive strong and sustainable financial returns over time. We are aware of the growing tendency
among some investors toward exclusion and negative screening but do not believe these Strategics effectively drive
positive change, especially with regard to convincing people who smoke to quit smoking or improve their lives. On thecontrary, by investing in PMI and holding the Company accountable to its purpose and targets, investors can combine positive
societal impact with long-term financial returns. The Company welcomes suggestions, pressure, and support throughengagement with both current and potential investors.
The Company understands the need to continue to build legitimacy and trust by being honest, respectful, fair, and transparent
and by aligning actions with words across all areas of its business. To assess the impact of PMI’s current and future
value chains on society and the environment, the Company regularly conducts sustainability materiality analyses andmeasures and reports its performance through financial, environmental, and social metrics that are key to a sustainablecorporate strategy.
It is management’s responsibility to ensure that the Company’s purpose is achieved through the appropriate structures,
systems, processes, and people. The Board oversees management’s efforts to enhance shareholder value responsibly andsustainably over the long term in ways that are consistent with the Company’s purpose. Transparency and engagement
between the Board and management are paramount, and we are all working toward PMI’s successful transformation.
To better align with shareholder and other stakeholder interests in achieving its purpose, the introduction of the Sustainability
Index has allowed the Compensation and Leadership Development Committee of the Board to enhance the Company’scompensation practices, explicitly linking it to ESG performance and further ensuring a strong link between executive
compensation and both short- and long-term performance.

In conclusion, PMI remains committed to accelerating the end of smoking and laying the foundations of a strong businessin areas of wellness and healthcare as we strive to develop commercially successful products that have a net positive
impact on society. This means not only transforming the Company to deliver on its purpose but also inspiring the industry
to follow its lead.
Jacek Olczak
André Calantzopoulos
Bonin Bough
Lucio A. Noto
Dessislava (“Dessi”) Temperley

Michel Combes
Dr. Juan José Daboub
Werner Geissler
Frederik Paulsen
Shlomo Yanai

Lisa A. Hook
Jun Makihara
Kalpana Morparia
Robert B. PoletTABLE OF CONTENTS
Proxy Summary2

Summary Compensation Table

53

Board Operations and Governance5

All Other Compensation

55

Board Responsibility and Meetings

5

Grants of Plan-Based Awards During 2021

57

Governance Guidelines, Policies and Codes

6

Outstanding Equity Awards as of December 31, 2021

59

Leadership Structure

6

Stock Option Exercises and Stock Vested During 2021

61

Committees of the Board

8

Pension Benefits

62

Board Risk Oversight14

Non-Qualified Deferred Compensation

65

Communications with the Board

15

Deferred Profit-Sharing and Benefit Equalization Plan

65

Strong Governance Practices

15

Employment Contracts, Termination of Employment andChange in Control Arrangements

65

Election of Directors
Process for Nominating Directors

17
17

Pay Ratio

68

Advisory Vote Approving Executive Compensation

69

Recommendations of the Board; Director Attributes,
Diversity, Refreshment and Tenure

18

Approval of the 2022 Performance Incentive Plan

70

Independence of Nominees

19

Audit Committee Matters

74

Majority Vote Standard in Uncontested Elections

19

Ratification of the Selection of Independent Auditors

76

Director Nominees

20

Shareholder Proposal

77

Compensation of Directors

34

Related Person Transactions and Code of Conduct

79

Stock Ownership Information

36

Availability of Reports, Other Matters and 2023 Annual
Meeting

80

Exhibit A: Questions & Answers

81

Exhibit B: 2022 Performance Incentive Plan

86

Exhibit C: Reconciliations

94

Exhibit D: Glossary of Terms

96

Ownership of Equity Securities

36

Delinquent Section 16(a) Reports

37

Compensation Discussion and Analysis

38

Executive Summary38

Additional Compensation Policies and Processes

49

Compensation and Leadership Development Committee
Report52

PMI 2022 Proxy Statement

1

PROXY SUMMARYPROXY SUMMARY
This proxy statement contains proposals to be voted on at our Annual Meeting and other information about our
Company and our corporate governance practices. Below is a brief summary of certain information contained inthis proxy statement. The summary does not contain all of the information you should consider. Please read theentire proxy statement carefully before voting.

Who We Are
PMI
at a Glance
Philip Morris International (“PMI”), one of the world’s
leading international tobacco companies, is working todeliver a smoke-free future and evolving its portfolio for the
long-term to include products outside of the tobacco andnicotine sector. PMI’s principal executive offices are locatedat 120 Park Avenue, New York, New York 10017-5579 and
it is listed on the New York Stock Exchange (NYSE: PM).

≈ 69,600
employees around the world≈ 980
R&D scientists, engineers,technicians and support staff
working on
smoke-free products≈ 180
markets where our products
are sold

29.1%
of PMI total adjusted net
revenues attributable tosmoke-free products in
2021(a)39
production facilities
worldwide(a)

Reflects PMI Reduced-risk product and Other net revenues of$9.2 billion as a percentage of PMI total adjusted net
revenues of $31.7 billion (See Exhibit C regarding non-GAAP
financial measures)

2

Delivering a Smoke-Free Future2021 Annual Performance
Targets and Results
PMI met or out-performed all but one of the annual
performance-based targets pre-established by theCompensation and Leadership Development Committee(“Committee”) for annual cash incentive compensation
awards. Against an overall target of 100, the Committee
certified a performance rating of 120. See below forachievements against individual performance targets andtheir relative weights. More information is available on
pages 44-46.
Achieved
Performance
Result Weight
RatingGrowthMeasure(a)TargetShare of Top
30 OI
Markets(b)

16

14

15%

90

Smoke-Free(“HTU”)
Shipment
Volume93.0-96.0

95.0

20%

100

Adjusted Net
Revenues(c)4.4-5.2%

7.6%

15%

142

Adjusted OI(c) 8.5-10.0%

13.0%

15%

136

OperatingCash Flow

4.5%

13.8%

20%

150

Strategic
Priorities andEnablers

100

115%

15%

115

(a) See Exhibit C for a reconciliation of non-GAAP to themost directly comparable U.S. GAAP financial
numbers(b) Number of top 30 OI markets (reflecting thedeconsolidation of RBH) in which total share ofheated tobacco units and cigarettes was growing or
stable(c) Organic growth

PROXY SUMMARY

Investor OutreachThroughout the year, the Company engages in an extensive shareholder outreach program during which it seeks input ona range of matters, including business performance, executive compensation, as well as environmental, social andgovernance (“ESG”) programs.

Who we engaged

How we engaged

What we learned

While the COVID-19 pandemic
continued to impact our investor
engagement schedule, in 2021, we
met with

In addition to these regular Investor
Relations engagements, we invited•

90 of our largest shareholders

Engagements provided us witha better understanding of ourshareholders’ priorities,
perspectives and positions.

43 of our top 100(including their governance and
ESG decision makers),•

The substance of theseengagements was reported to
our Compensation andLeadership Development
Committee, our Nominating
and Corporate GovernanceCommittee, and our entire
Board of Directors.

institutional investors, either inperson or virtually, representing

64%
of our available global shareholder
base (which excludes index andpension funds that typically do notmeet with management).

60%

holding approximatelyof
our outstanding shares toparticipate in individual conference
calls.

In 2021, the Company also commissioned an investor perception study to understand the attitudes of our key sell-side andbuy-side analysts toward the Company so that we can better address investor expectations in future communications.
Those surveyed have expressed confidence in the overall effectiveness of our smoke-free strategy, including the earnings
growth potential, the deployment of capital and the sustainability of our business. The results of this survey were
presented to our senior management and to our Board of Directors.

PMI 2022 Proxy Statement

3

PROXY SUMMARY

Human Capital
Our Workforce

Our Internal
Transformation

Inclusion &Diversity

Response to
COVID-19

133 Nationalities

Smoke-Free Future

Chief Diversity Officer

Adaptability

At December 31, 2021, we
employed approximately
69,600 people worldwide of
133 different nationalities,
including full-time,
temporary and part-time
staff.

To be successful, we must
continue transforming ourculture and ways ofworking, align our talent
with our business needs
and innovate to become atruly consumer-centricbusiness.

As part of our commitment
to workplace diversity in
2020, our Board appointed
a Chief Diversity Officer.

We have focused on
business continuity, healthand safety of ouremployees, and have
rapidly adapted our ways ofworking to a newenvironment.

Global Company

TalentGender Balance

SafetyWe are subject to numerous
different laws andregulations relating to ourrelationship with our
employees. We engage withlegally recognizedemployee representative
bodies and we havecollective bargaining
agreements in many of thecountries in which we
operate.

We attract, retain andmotivate the best global
talent with the right degreeof diversity, experience,competencies and skills.
We seek expertise in areasthat are new to us such as
digital and technicalsolutions while also
developing our existing
talent in those areas.

We launched a Women in
Leadership program tosupport our female talents,
we set a target of 40%
female representation in
management by the end of2022 and were the firstmultinational company toreceive a global EQUALSALARY certification fromthe EQUAL-SALARY
Foundation.

We have implemented
additional safety measuresfor essential employees in
our facilities and offices andcontinue to pay salaries tothose employees who areunable to work due togovernment restrictions.

European Works Council

Compensation“ERGs”

Remote WorkIn accordance with
European Union
requirements, we haveestablished a European
Works Council composed ofmanagement and elected
members of our workforce.

We set the levels of ourcompensation and benefit
programs that we believe
are necessary to achievethese goals and remaincompetitive with otherconsumer productcompanies.

Employee resource groups
enhance our sense of
belonging, visibility, andgreater understanding ofdifferent experiences anddimensions of diversity in
our company.

We have enhanced remote
work arrangements as well
as digital collaboration andrelated risk management.

Oversight and Management
Our Board of Directors (the “Board”) provides oversight of various matters pertaining to our workforce,and the Compensation and Leadership Development Committee of the Board is responsible for
executive compensation matters and oversight of the risks and programs related to talentmanagement. Our Code of Conduct, also known at PMI as the Guidebook for Success, highlights ourcommitment to ethical business conduct and honesty, respect, and fairness in our ways of working.

4

Delivering a Smoke-Free Future

BOARD OPERATIONS AND GOVERNANCE

BOARD OPERATIONS AND
GOVERNANCE
Board of Directors
Responsibilities:•

Fosters the long-term success of the Company,
consistent with its statutory duty to shareholders.

•Establishes broad corporate policies, setting strategic
direction, and oversees management, which is
responsible for the day-to-day operations of theCompany.

•

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 goodfaith business judgment in the best interests of theCompany.

•

The Board approves the Company’s annual budget
each year and receives updates of the Company’s
performance against the budget throughout the year.

•

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.

Meetings:•

The Board holds regular meetings, typically during
the months of February, March, May, June,
September and December, and additional meetings
when necessary. The organizational meeting follows
immediately after the Annual Meeting of
Shareholders.

•

The Board held eight regular meetings in 2021. The
Lead Independent Director presides over regular
executive sessions of the Board with no members ofmanagement present.

•

Directors are expected to attend Board meetings, theAnnual Meeting of Shareholders and meetings of theCommittees on which they serve, with theunderstanding that on occasion a director may beunable to attend.

•

During 2021, all nominees for director then in officeattended 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 officeattended the 2021 Annual Meeting of Shareholders.

PMI 2022 Proxy Statement

5BOARD OPERATIONS AND GOVERNANCE

Governance Guidelines, Policies and
Codes
Other Governance
Guidelines:

The Guidebook for Success:•

The Board has adopted a code of conduct known at
PMI as the Guidebook for Success.

•

The Board has also adopted a Code of BusinessConduct and Ethics that applies to directors.

•

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 iscritical to do so.

•

In addition, the Board has adopted a Policy on
Related Person Transactions for the review of certaintransactions 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.

••

The Guidebook applies to all employees, including
the Company’s principal executive officer, chief
operating officer, principal financial officer, andprincipal accounting officer or controller.

All of these documents are available free of charge
on the Company’s website, www.pmi.com/our-viewsand-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.

The information on the Company’s websites, including the Company’s 2020 Integrated Report as referenced in this proxystatement, is not, and shall not be deemed to be, a part of this proxy statement or incorporated into any other filings theCompany makes with the U.S. Securities and Exchange Commission.

Leadership Structure
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.
Effective immediately before the 2021 Annual Meeting of Shareholders, André Calantzopoulos, who was our former Chief
Executive Officer, became our Executive Chairman; he remains an employee of the Company. Mr. Lucio A. Noto became
the Lead Independent Director.
In December 2020, the Board approved the appointment of Jacek Olczak, the Company’s then Chief Operating Officer, as
the Chief Executive Officer, effective immediately following the 2021 Annual Meeting of Shareholders on May 5, 2021.
The Board believes that it is in the Company’s best interest for Mr. Calantzopoulos to continue as Executive Chairman toensure a seamless transition of leadership. As the Chief Executive Officer, all day-to-day management responsibility for theCompany transferred to Mr. Olczak immediately after the 2021 Annual Meeting of Shareholders, and he reports to the full
Board of Directors.

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BOARD OPERATIONS AND GOVERNANCE

Executive
ChairmanLead Independent
Director

ANDRÉ CALANTZOPOULOS

LUCIO A. NOTOAs Executive Chairman, Mr. Calantzopoulos:

The non-management directors elect at the annualorganizational meeting one independent director as theLead Independent Director. As Lead Independent
Director, Mr. Noto’s responsibilities are to:•facilitates communication between the Board andmanagement;•

assists the Chief Executive Officer with long-term
strategy and serves as his sounding board;•presides at all meetings of shareholders and of theBoard; and•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 totopics they wish to review. Because Mr. Calantzopoulos is
an Executive Chairman and not independent, the Board
will continue to have a Lead Independent Director.

•

preside over executive sessions of the nonmanagement directors and at all meetings at which
the Executive Chairman is not present;•

call meetings of the non-management directors as
he or she deems necessary;•serve as liaison between the Chief Executive
Officer and the non-management directors;•

approve agendas and schedules for Board
meetings;•

advise the Executive Chairman and the Chief
Executive Officer of the Board’s informational
needs and approve information sent to the Board;•

together with the Executive Chairman of theCompensation and Leadership Development
Committee, communicate goals and objectives to
the Chief Executive Officer and the results of theevaluation of his performance; and•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.

PMI 2022 Proxy Statement

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BOARD OPERATIONS AND GOVERNANCE

Committees of the Board
The Board has established various standing Committees to assist with the performance of its responsibilities. These
Committees and their current members are listed below. The Board designates the members of these Committees andthe Committee Chairs at its organizational meeting following the Annual Meeting of Shareholders, based on therecommendations of the Nominating and Corporate Governance Committee. The Board has adopted written charters foreach of these Committees, and these charters are available on the Company’s website at www.pmi.com/who-we-are/corporate-governance/board-committees. The Chair of each Committee develops the agenda for that Committee anddetermines the frequency and length of committee meetings. Each Committee meets as often as it deems appropriate,
and each has sole authority to retain its own legal counsel, experts and consultants.
The Audit Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate
Governance Committee each consists entirely of non-management directors, all of whom the Board has determined are
independent within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has
determined that all members of the Audit Committee are financially literate, and that each of Lucio A. Noto, Michel
Combes, Lisa A. Hook, and Dessi Temperley is an “audit committee financial expert” within the meaning set forth in theregulations of the Securities and Exchange Commission. The Board has determined that Ms. Temperley’s ability to effectively
serve on the Company’s Audit Committee is not impaired by simultaneously serving on the audit committees of four
public companies, including PMI’s. No member of the Audit Committee, the Compensation and Leadership Development
Committee or the Nominating and Corporate Governance Committee received any payments or other compensation in 2021
from Philip Morris International Inc. or its subsidiaries, other than compensation received as a director.

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BOARD OPERATIONS AND GOVERNANCE

AUDIT COMMITTEE SUMMARY

Meetings in 2021: 10
COMMITTEE PURPOSE:

Lucio A. Noto
(Chair)Jun Makihara

Michel Combes

Werner Geissler

Lisa A. Hook•oversee the integrity of the financial
statements and monitor financial reporting
processes and systems of internal control;•

monitor the qualifications, independence
and performance of the independent
auditors;•monitor the internal audit function; and•monitor the Company’s compliance withlegal and regulatory requirements.

Dessi
Temperley

KEY RESPONSIBILITIES:•

recommend to the Board whether the Company’s financial statements should be included in the Company’s annual
and quarterly filings with the U.S. Securities and Exchange Commission (the “SEC”);•

sole authority for recommending to the Board the appointment, and, compensating, retaining and overseeing thework, of the independent auditors;•

evaluate the internal audit function, including the oversight of internal audit’s assurance and advisory services
designed to assess the adequacy and effectiveness of the Company’s internal control systems, use of resources, andmaturity of governance processes over the Company’s strategies;•

evaluate the compliance function;•

review financial risk assessment and management thereof;•

oversee the Company’s policies and practices with respect to cybersecurity and data privacy risks, as well as data
governance;•oversee the risk management of excessive or discriminatory taxation;•

oversee the risk management of illicit trade;•oversee the risk management of manufacturing and supply chain disruption and device reliability;•

oversee the risk management of climate change, pandemics and natural disasters;•

oversee the risk management of the dilution of the rule of law;•

approve the Company’s Code of Conduct, also known at PMI as the Guidebook for Success, and review the
implementation and effectiveness of the Company’s compliance program;•establish “whistleblower” procedures and review claims of improper conduct; and•produce a report for inclusion in the proxy statement.

PMI 2022 Proxy Statement

9

BOARD OPERATIONS AND GOVERNANCECOMPENSATION AND LEADERSHIP DEVELOPMENTCOMMITTEE SUMMARY

Meetings in 2021: 5
COMMITTEE PURPOSE:

WernerGeissler (Chair)

Dr. Juan José
Daboub

Lucio A. Noto

Robert B. Polet

Lisa A. Hook•discharge the Board’s responsibilities
relating to executive compensation;•

produce a report for inclusion in the proxystatement; and•review talent management succession
plans for the CEO and other senior
executives.

Jun Makihara

KEY RESPONSIBILITIES:•

review and approve the Company’s overall compensation philosophy and design;•

review and approve corporate goals and objectives relevant to the compensation of the CEO and Executive Chairman,
and evaluate their performance;•

determine and approve the compensation of the CEO;•determine the compensation of the Executive Chairman for recommendation to the Board for approval;•

review and approve the compensation of all executive officers;•

recommend to the Board compensation plans, and administer and make awards under such plans and review the
cumulative effect of its actions;•monitor compliance by executives with our share ownership requirements;•

review and assist with the development of executive succession plans, evaluate and make recommendations to theBoard regarding potential CEO candidates and evaluate and approve candidates to fill other senior executive positions;•oversee the management of risks related to compensation design and payout;•

oversee the management of risks related to talent management, including the risk that the Company is unable toattract and retain the necessary talent with the right degree of diversity, experience and skills to achieve its ongoing
business transformation;•

review and discuss with management proposed annual disclosures regarding executive compensation matters;•

oversee human capital management, including leadership and talent development programs; and•recommend to the Board whether the Compensation Discussion and Analysis should be accepted for inclusion in theproxy statement.

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BOARD OPERATIONS AND GOVERNANCE

CONSUMER RELATIONSHIPS AND REGULATIONCOMMITTEE SUMMARY

Meetings in 2021: 4
COMMITTEE PURPOSE:

Lisa A. Hook
(Chair)Jun Makihara

Bonin Bough

Kalpana
Morparia

AndréCalantzopoulos

Lucio A. Noto•

oversee the Company’s RRP and
combustible cigarette commercialization;•

oversee the consumer-centricity strategy
for the RRP business, including theestablishment and maintenance of digitalchannels and digital consumer
engagement, and enabling data-driven
decision-making;•monitor key legislative, regulatory, andpublic policy issues and trends related tothe post-market regulatory environmentthat may limit access to RRPs; and•oversee risk associated with changes in
consumer preferences regarding RRPs.

Werner Geissler

Jacek Olczak

Robert B. PoletKEY RESPONSIBILITIES:•

oversee adult consumer acquisition and retention strategies, consumer journey programs and customer careinfrastructure;•oversee the RRP and combustible cigarette competitive environment;•

oversee the geographic expansion of the Company’s RRPs;•

oversee post-market regulatory developments relating to the commercialization of RRPs at the market level, including
the risk that regulation may not differentiate between combustible products and RRPs or will discriminate against
RRPs;

•

oversee the Company’s RRP product innovation calendar post-Gate 3 (i.e. the transition from concept to commercial
development);•

oversee the management of the risk that certain new market entrants may alienate consumers from the Company’s
RRPs through marketing campaigns and messaging, and inferior product satisfaction, while not relying on substantiatedscience and appropriate R&D protocols and standards; and•oversee the management of the risk that credibility and reputational issues may stand in the way of promoting thebenefits of RRPs as a necessary pillar of tobacco control and impair their commercial success.

PMI 2022 Proxy Statement

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BOARD OPERATIONS AND GOVERNANCE

FINANCE COMMITTEE SUMMARY

Meetings in 2021: 5
COMMITTEE PURPOSE:

Jun Makihara(Chair)Bonin Bough

André
Calantzopoulos

Michel Combes

Dr. Juan José
DaboubWerner Geissler

Lisa A. Hook

Kalpana Morparia

Lucio A. Noto

Jacek Olczak

Frederik Paulsen

Robert B. Polet

Dessi Temperley

Shlomo Yanai•

monitor the Company’s financial
performance and condition, including
financial policies, capital structure,and budgets; and•review with management all material
matters relating to capital structure,
financial policies, capital investments,
and business and financial plans.

KEY RESPONSIBILITIES:•

review the annual operating and capital expenditure budgets;•

review long-range financial objectives at least annually;•

review financing plans, including share repurchases, dividend payments, and changes to equity and debt structure;•review tax strategy, pension plans, and insurance policies;•

review and approve capital expenditures over $100 million per annum;•

oversee financial risk management policies;•

oversee risk management of the Company’s pricing strategies, business development strategies, and currency
volatility; and•oversee risk management of the Company’s competitive position, including risks arising from global macro-economic
uncertainty and geopolitical instability

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BOARD OPERATIONS AND GOVERNANCENOMINATING AND CORPORATE GOVERNANCE
COMMITTEE SUMMARY

Meetings in 2021: 5
COMMITTEE PURPOSE:

Kalpana
Morparia(Chair)Michel Combes

Lucio A. Noto•

identify qualified candidates for Board
membership;•

recommend nominees for election at theannual meeting and as necessary to fillvacancies and new directorships; and•advise the Board on corporate governanceand sustainability matters; and oversee
self-evaluation of the Board and eachCommittee.

Robert B. Polet

Shlomo Yanai

KEY RESPONSIBILITIES:•

review qualifications of prospective candidates for director;•

consider performance of incumbent directors and other relevant factors in determining whether to nominate them for reelections;•oversee the Company’s ESG and sustainability strategies and performance, and advise the Board on ESG andsustainability matters;•

make recommendations to the Board regarding director independence and the function, composition and structure of
the Board and its Committees;•

oversee the Company’s lobbying and trade association activities and expenditures;•

review and recommend to the Board for approval the corporate governance guidelines;•

recommend the process for the annual self-evaluation of the Board and its Committees for the Board’s approval; and•review director compensation.

PMI 2022 Proxy Statement

13

BOARD OPERATIONS AND GOVERNANCE

PRODUCT INNOVATION AND REGULATORY AFFAIRSCOMMITTEE SUMMARY

Meetings in 2021: 4
COMMITTEE PURPOSE:

Frederik Paulsen(Chair)Lisa A. Hook

André
Calantzopoulos

Lucio A. Noto

Michel Combes

Jacek Olczak•

oversee the long-term product portfolio
strategy of the Company, focusing on
research and development of new products
and services, and improvements to existingproducts and services, with a particularfocus on RRPs and the Company’s new
Wellness and Healthcare business; and•monitor and review key legislative,
regulatory and public policy issues andtrends related to the research anddevelopment of RRPs.

Dr. Juan José
DaboubShlomo Yanai

KEY RESPONSIBILITIES:•

monitor the Company’s internal scientific research, including the Company’s efforts to substantiate the risk-reduction
potential of its RRPs through rigorous scientific methodologies, as well as the external body of scientific research
relevant to the Company’s present and future RRPs;•

monitor the Company’s pipeline of innovative products and services, including future RRPs and associated risks,such as product superiority, product reliability, and time to market;•

monitor the development of the Company’s consumer wellness and healthcare business and related products;•

oversee the risk management of the Company’s research and development efforts;•monitor the Company’s management of its intellectual property; and•make recommendations to the Board regarding significant R&D projects and budgets.

Board Risk Oversight
Risk oversight is conducted both by the Committees of the Board with respect to their areas of responsibility as well as by
the full Board.
Management has identified and prioritized key enterprise risks based on four risk dimensions:the impact a risk could

the likelihood a risk will

1 have on the organization if 2 occur,
it occurs,

the velocity with which a

3 risk would affect theand the interconnectivity

4 of a risk with other risks.

organization if it occurs,

As part of its risk management practices, the Company has established a Corporate Risk Governance Committee(“CRGC”) made up of senior executive officers, including the Chief Financial Officer, Senior Vice President and GeneralCounsel, Chief Digital & Information Officer, Vice President & PMI Controller, Global Head of Risk & Controls, Chief
Information Security Officer, Vice President and Chief Ethics & Compliance Officer, and Vice President, Corporate Audit. In
addition, the Chief Executive Officer and Vice President & Corporate Secretary are informed of the risk management
observations and insights shared with the CRGC. Ownership of each of the prioritized risks is assigned to a member ofsenior management, and oversight of the management of each risk is assigned to a particular Board Committee or to thefull Board. Management reports on these risks to the appropriate Committee and to the full Board throughout the year.
In addition, the internal audit function provides an assessment of governance processes pertaining to the Company’s
strategic risk management and periodically reports the results of this assessment to the Audit Committee.
The Board has been receiving regular updates from the Company’s management regarding the impact and evolution ofrisks of the ongoing COVID-19 pandemic and other geopolitical events on our employees, our business and communities
where we operate, as well as any relevant mitigation measures. The risk management oversight by each Committee is
14

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BOARD OPERATIONS AND GOVERNANCE
included in the committee summaries found on pages 9-14. The full Board oversees the management of risks relating to
the Company’s business plan and litigation, and it receives reports on risk management by each Committee. The roles of thevarious components of risk assessment, management and oversight are shown below.
Board of Directors• Responsible for oversight of risk management processes• Allocates oversight of management of specific risks to the appropriate Board Committee

Audit Committee• Provides oversight by reviewing CRGC process and results• Assesses cybersecurity risks• Assesses risk appetite generally

Other Board Committees• Provide oversight of management of specific risks falling within each Committee’s
sphere of expertise

Senior Management Team (SMT)• Aligns on key strategic enterprise risks annually• Assigns ownership of strategic enterprise risks to individual SMT members• Integrates risk assessment and management into long-range plan and budget
review process

Corporate Risk Governance Committee (CRGC)• Drives desired risk management culture through standard measurement
and terminology• Coordinates SMT strategic enterprise risk assessment• Coordinates integrated risk assessment for Risk and Controls,
Ethics and Compliance, Corporate Audit, Information Security
and other functions• Integrates key risks into Internal Controls Chart of Controls process

Market Leadership Teams and Global Functions• Own risk assessment and management for affiliate or function• Drive sustainability through integration of risk management
into existing business processes

Communications with the Board
Shareholders and other interested parties who wish to communicate with the Board may do so by writing to
the Lead Independent Director, Board of Directors of Philip Morris International Inc., 120 Park Avenue, New
York, New York 10017-5579. The non-management directors have established the following procedures for thehandling of communications from shareholders and other interested parties, and has directed the Vice
President, Associate General Counsel and Corporate Secretary to act as their agent in processing any
communications received. All communications that relate to matters that are within the scope of the
responsibilities of the Board and its Committees are to be forwarded the Lead Independent Director.
Communications that relate to matters that are within the responsibility of one of the Board Committees arealso to be forwarded to the Chair of the appropriate Committee. Communications that relate to ordinary businessmatters that are not within the scope of the Board’s responsibilities, such as customer complaints, are to besent to the appropriate subsidiary. Solicitations, junk mail and obviously frivolous or inappropriate
communications are not to be forwarded, but will be made available to any non-management director who
wishes to review them.

Strong Governance Practices
The Nominating and Corporate Governance Committee of the Board reviews our corporate governancepractices regularly and proposes modifications to our principles and other key governance practices as
warranted for adoption by the Board. In 2020, the Board of Directors formed the Consumer Relationships andRegulation Committee, and reassigned responsibilities among the six Committees to further align the
responsibilities of the Board and its Committees with the Company’s strategies. In light of the increasing
PMI 2022 Proxy Statement

15

BOARD OPERATIONS AND GOVERNANCE

importance of talent in our transformation, the Board also added the responsibility for the oversight of risks
and programs related to talent management to the Compensation and Leadership Development Committee.
The responsibilities of these Committees are described in pages 9-14. The following summarizes our key
principles and practices and refers you to the pages of this proxy statement where you will find a more detailed
discussion of various items:•

Majority voting standard for uncontested election of
directors (page 19)•

Proxy access by-laws (page 18)•

Non-management directors elect Lead Independent
Director annually (page 7)•

Directors may be removed with or without cause•

Non-management directors meet regularly without
management being present•

No “poison pill” rights plan•

Board-adopted “clawback” policy (page 50)

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Delivering a Smoke-Free Future•

Rigorous share ownership requirements andanti-hedging and anti-pledging policies(pages 49-50)•

Post-termination share holding requirement(page 50)•

No tax gross-up on limited perquisites•

Double-trigger vesting policy on change in control(pages 65-67)•

Board committee oversight of political spending andlobbying (page 13)•

Board committee oversight of sustainability strategy
and performance (page 13)

ELECTION OF DIRECTORSELECTION OF DIRECTORS
Process for Nominating Directors
The Nominating and Corporate Governance Committee (the “Governance Committee”) is responsible for identifying andevaluating candidates for director and for recommending to the Board a slate of nominees for election at the Annual Meetingof Shareholders.

1

SUCCESSION PLANNING

2

IDENTIFICATION OF CANDIDATES3DECISION AND NOMINATION

4ELECTIONThe 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.

The Governance Committee reviews qualifications of candidates for director identified by the GovernanceCommittee or suggested by Board members, stockholders, management or others in accordance with the director
qualification criteria.

The Governance Committee considers (i) the qualification of candidates for nomination to the Board forappointment 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.

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.

In evaluating the suitability of individuals for Board membership, the Governance Committee takes into account manyfactors. These include:•

whether the individual meets requirements for independence;•

the individual’s general understanding of the various disciplines relevant to the success of a large publicly traded
company in today’s global business environment; and•the individual’s understanding of the Company’s global business and markets; the individual’s professional expertiseand educational background, and other factors, including nationality and gender, that promote diversity of views andexperience.

The Governance Committee evaluates each individual in the context of the Board as a whole, with the objective ofrecommending a group of directors that can best shepherd the success of the business and represent long-term shareholderinterests through the exercise of sound judgment, using its breadth of knowledge and experience. In determining whether
to nominate an individual for election or re-election, the Governance Committee will take into account the nature andextent of an individual’s other commitments, including membership on other public company boards, when determining
whether it is appropriate to nominate such individual. In determining whether to recommend a director for re-election, theGovernance Committee also considers the director’s attendance at meetings and participation in and contributions to theactivities of the Board. The Governance Committee has not established any specific minimum qualification standards fornominees to the Board, although from time to time the Governance Committee may identify certain skills or attributes, suchas financial experience, global business experience, consumer-centricity, digital transformation and scientific expertise, as
being particularly desirable to help meet specific Board needs.
PMI 2022 Proxy Statement

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ELECTION OF DIRECTORS
In identifying candidates for Board membership, the Governance Committee relies on suggestions and recommendations
from the Board, shareholders, management and others. The Governance Committee does not distinguish between nominees
recommended by shareholders and other nominees. From time to time, the Governance Committee also retains searchfirms to assist in identifying candidates for director, gathering information about their background and experience, and acting
as an intermediary with such candidates. Most recently, the Committee recommended to the Board Dessi Temperley after
an initial introduction by a search firm.
Shareholders wishing to suggest candidates to the Governance Committee for consideration as directors must submit awritten notice to the Vice President, Associate General Counsel and Corporate Secretary, who will provide it to theGovernance Committee. Our by-laws set forth the procedures a shareholder must follow to nominate directors. These
procedures are summarized in this proxy statement, under the caption “2023 Annual Meeting.”
In addition, our by-laws permit an eligible shareholder or group of shareholders who have owned 3% or more of PMI’s
outstanding shares for at least three years to nominate and include in our proxy statement director candidates to occupy
up to 20% of the authorized Board seats.

Recommendations of the Board;
Director Attributes, Diversity,
Refreshment and Tenure
It is proposed that fourteen directors be elected to hold office until the next Annual Meeting of Shareholders and until theirsuccessors have been elected. The Governance Committee has recommended to the Board, and the Board has approved,
the persons named and, unless otherwise marked, a proxy will be voted for such persons. Each of the nominees, except for
Ms. Temperley, was elected by the shareholders at the 2021 Annual Meeting. The Board believes that the experience,
qualifications, attributes and skills of each of the nominees presented qualify them to oversee the complex global, regulatory,
business, and financial issues facing the Company, and that the Board as a whole provides a breadth of knowledge,
international experience, intellectual rigor and willingness to face challenging issues.
Our Board comprises a diverse group of individuals. Three nominees are women, and four are persons of color. Elevendifferent nationalities are represented, underscoring the global perspective of the Board taken as a whole.
The Board has experienced a significant amount of director refreshment since our spin-off in March 2008. Mr. Noto is the
only original director since our spin-off that serves on the Board. Of the remaining members of the Board, two joined in 2011,
one in 2013, two in 2014, one in 2015, one in 2018, one in 2020 and four in 2021. The average tenure of the Company’s
nominees is 5.57 years. As new Board members gain experience, the Board rotates its various committee chairs.

INDEPENDENCE

DIVERSITYNOTINDEPENDENTAGESLESS THAN
FIVE YEARSGENDER

3

TENURE
MORE THAN
FIVE YEARS

3

79%

63

43 %
8

INDEPENDENT11DIVERSE

4

ETHNIC/RACIAL

6

AVG. YEARS
OLD

5.57
AVG. YEARS

814INDEPENDENTDIRECTOR ADDITIONS

18

2011

2013

2014

2015

2018

2020

2021

+2

+1

+2

+1

+1

+1

+4

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ELECTION OF DIRECTORS
Although it is not anticipated that any of the persons named below will be unable or unwilling to stand for election, a proxy,in the event of such an occurrence, may be voted for a substitute designated by the Board. However, in lieu of designatinga substitute, the Board may reduce its number of directors.

Independence of Nominees
After receiving the recommendation of the Governance Committee, the Board has determined that each of the following
director nominees is independent of, and has no material relationship with, the Company: Michel Combes, Juan José
Daboub, Werner Geissler, Lisa A. Hook, Jun Makihara, Kalpana Morparia, Lucio A. Noto, Frederik Paulsen, Robert B. Polet,
Dessi Temperley, and Shlomo Yanai. To assist it in making these determinations, the Board has adopted categoricalstandards of director independence that are set forth in the Corporate Governance Guidelines. The Corporate Governance
Guidelines are available on the Company’s website at www.pmi.com/who-we-are/corporate-governance/overview. Eachof the above-named nominees qualifies as independent under these standards.
In making a determination that Mr. Bough is not independent, the Board considered a consulting agreement between the
Company and Digilence, LLC (also known as Bonin Ventures), an entity owned by Mr. Bough. The Company paid
approximately $1.27 million under this agreement in 2019. In 2020, the Company also paid to Digilence, LLC a de minimis
amount.

Majority Vote Standard in Uncontested
ElectionsAll directors are elected annually. The Company’s by-laws provide that, where the number of nominees for director does
not exceed the number of directors to be elected, directors shall be elected by a majority rather than by a plurality vote. Underapplicable law, a director’s term extends until his or her successor is duly elected and qualified. Thus, an incumbent
director who fails to receive a majority vote would continue to serve as a holdover director. To address that possibility, ourCorporate Governance Guidelines require a director who receives less than a majority of the votes cast to offer to resign. The
Governance Committee would then consider, and recommend to the Board, whether to accept or reject the offer.

PMI 2022 Proxy Statement

19

ELECTION OF DIRECTORS

Director Nominees

1

PROPOSAL 1: ELECTION OF DIRECTORS“FOR”

The Board of Directors recommends that you vote FOR each director
nominee. These individuals bring a range of relevant experiences andoverall diversity of perspectives that is essential to good governanceand leadership of our company.

Committees

Nominees

Citizenship

BONIN BOUGH
Age: 44
Director Since: 2021
ANDRÉ
CALANTZOPOULOS
Age: 64
Director Since: 2013
MICHEL COMBES
Age: 59
Director Since: 2020
JUAN JOSÉ DABOUB
Age: 58
Director Since: 2021
WERNER GEISSLER
Age: 68
Director Since: 2015
LISA A. HOOK
Age: 64
Director Since: 2018
JUN MAKIHARA
Age: 64
Director Since: 2014
KALPANA MORPARIA
Age: 72
Director Since: 2011
LUCIO A. NOTO
Age: 83
Director Since: 2008
JACEK OLCZAK
Age: 57
Director Since: 2021
FREDERIK PAULSEN
Age: 71
Director Since: 2014
ROBERT B. POLET
Age: 66
Director Since: 2011
DESSI TEMPERLEY
Age: 49
Director Since: 2021
SHLOMO YANAI
Age: 69
Director Since: 2021

USA

M

M

Greece/Switzerland

M

M

C = Committee Chair

20

Independence

Audit

Compensation
Consumer& Leadership Relationships
Development & Regulation

Finance

Product
Innovation
Nominating&& Corporate Regulatory
GovernanceAffairs

M

France●El Salvador●

Germany

●

M

C

M

M

USA

●

M

M

C

M

Japan

●

M

M

M

C

India

●

M

M

C

USA

●

M

M

M

M

M

M

M

C

M

M

M

C

M

PolandSweden●Netherlands●

Bulgaria/UK●

Israel●M

M

M = Committee Member

Delivering a Smoke-Free Future

M

M

M

M

M

M

M

M

M

M

M

M

M

ELECTION OF DIRECTORS

Director Qualifications
Our Board is a diverse, highly engaged group that provides strong and effective oversight of our Company. Both individuallyand collectively, our directors have the qualifications, skills and experience needed to inform and oversee the Company’s
long-term strategic growth. Each director has or has had senior executive experience, in many cases with large, complex
organizations with significant global operations. Several directors have leadership experience in the global consumer products
sector, and others bring expertise in financial information technology, cybersecurity, digital transformation, sustainability,
and ESG matters. These and the other skills and attributes discussed below are key considerations in evaluating thecomposition of our Board, and inform our Board succession planning and director selection process.

KEY ATTRIBUTES OF ALL DIRECTORS•High Integrity•

Proven Record of Success•

Leadership•

Understanding our Global
Business and Markets•

Strength of Character andJudgment•

Corporate GovernanceExperience•

Talent Management/ Succession
Planning•

Diversity of Perspectives•

Intellectual/ Analytical Skills•

Strategic Planning•

Risk Assessment andOversight

GLOBAL PERSPECTIVE
Our board is representative of the multicultural and diverse society we find ourselves in.
GERMANYSWITZERLAND**SWEDENNETHERLANDSPOLAND
UNITED KINGDOM***
BULGARIA***FRANCEUSA*
GREECE**JAPANISRAELINDIA
EL SALVADOR*

3 Directors are citizens of the United States**

André Calantzopoulos is a citizen of both Greece and Switzerland***

Dessi Temperley is a citizen of both Bulgaria and the United Kingdom

PMI 2022 Proxy Statement

21

ELECTION OF DIRECTORSKEY SKILLS OF OUR BOARD

CombesDaboubGeissler

Hook

Makihara

Morparia

Noto

OlczakPaulsen

Polet

Temperley

Yanai

SeniorExecutive

Calantzopoulos

EXPERIENCE

Bough

Our director nominees’ individual experiences, qualifications, attributes and skills are highlighted in the following matrix.
The matrix is intended as a high-level summary and not an exhaustive list of each nominee’s skills or contributions to theBoard. Further biographical information about each director standing for re-election is set forth on the following pages.

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TobaccoIndustry
GlobalConsumer-Centric
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Technology andPrivacy

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Civic Leadership

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Delivering a Smoke-Free Future

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GlobalPharmaceuticalMarketing andRetail

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ELECTION OF DIRECTORSBONIN BOUGH

Director Since:
2021

Age: 44

CAREER HIGHLIGHTS

Occupation:
Founder and Chief
Growth Officer, Diligence
LLC (also known as
Bonin Ventures)

Diligence, LLC (also known as Bonin
Ventures), an entity focused on
accelerating growth of innovative start-up
companies•

Founder and Chief Growth Officer,
since 2014.

Triller, a global social media company•

Chief Growth Officer, since 2020.

Committees:
Consumer Relationships
and Regulation, andFinance

Mondelèz International, Inc.
•

Chief Media and E-Commerce Officer, from2015 to 2016.

•

Vice President, Global Media andConsumer Engagement, from 2012 to2015.

The Kraft Heinz Company•

SheaMoisture•

Chief Growth Officer, from 2016 to2017.

CNBC’s “Cleveland Hustles”•

Vice President, Global Media andConsumer Engagement, from 2012 to2015.

PepsiCo, Inc.
•

Chief Digital Officer, from 2008 to 2012.

Television show host in 2016.

Director Qualifications:With his unique executive marketing experience, Mr. Bough brings to the Board his
considerable entrepreneurial expertise, particularly with respect to e-commerce, innovativetechnologies and acceleration of brand equity, as well as valuable insights for transforming andgrowing large, multinational businesses and start-ups.

ANDRÉ
CALANTZOPOULOS

Director Since:
2013

Age: 64

CAREER HIGHLIGHTS
Philip Morris International Inc.
•

Executive Chairman of the Board of
Directors, since May 2021.

•

President and Chief Executive Officer, from
April 2002 until the spin-off in March 2008.

Occupation:••

Executive Chairman,
Philip MorrisInternational Inc.

Chief Executive Officer (“CEO”),
from 2013 until May 5, 2021.

•

Chief Operating Officer fromMarch 2008, following the spin-off
from Altria, until becoming CEO in
May 2013.

Various roles across Central Europe,
including Managing Director of PM Poland
and President of the EE Region, fromFebruary 1985 to April 2002.

Committees:

Director Qualifications:
Consumer Relationships
and Regulation, Financeand Product Innovation
and Regulatory Affairs

Mr. Calantzopoulos’s intellect and all-encompassing knowledge of the Company will serve theCompany 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 asmoke-free future, and through its related evolution into a consumer-centric technology andscience-driven business.

PMI 2022 Proxy Statement

23

ELECTION OF DIRECTORSMICHEL COMBES

Director Since:
2020

Age: 59

CAREER HIGHLIGHTS

Occupation:
Chief Executive Officer,
SoftBank GroupInternational

Alcatel-Lucent•

Chief Executive Officer and Director,
since January 2021••

President and Director, from April 2020
to January 2021.

Committees:
Audit (Financial
Expert), Finance,
Nominating andCorporate Governanceand ProductInnovation, andRegulatory Affairs

SFR Group

SoftBank Group International, a privately
held subsidiary of SoftBank Group Corp
and oversees several SoftBank portfolio
companies

Sprint Corporation•

President from January 2018, Chief
Financial Officer from January 2018 to
May 2018 and CEO from May 2018 to2020 and a member of the Board of
Directors, from 2018 to 2020.

Altice USA, Inc.
••

Chairman and CEO, from 2015 to 2017.

CEO, from 2013 to 2015.

Vodafone Europe•

CEO

TDF Group (Télédiffusion de France)•

Chairman and CEOFrance Telecom•

Executive

French Government•

Several roles

CEO and Chief Operating Officer, from2015 to 2017.

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 businessexperience, extensive knowledge of international markets in highly regulated industries, andvaluable 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.

24

Delivering a Smoke-Free Future

ELECTION OF DIRECTORSJUAN JOSÉ DABOUB

Director Since:
2021

Age: 58

CAREER HIGHLIGHTSThe Daboub Partnership of Arcis, LLC, abusiness consulting company

World Economic Forum’s Global Agenda
Council on Climate Change••

Occupation:

Chairman, President and CEO, since2010.

Chairman, President
and CEO, The Daboub
Partnership of Arcis,
LLC

Dorado Partners LLC, a private investmentcompany

Committees:

Global Adaptation Institute, a foundation
dedicated to the understanding of climatechangeCompensation andLeadership
Development, Finance,
and Product Innovation
and Regulatory Affairs•

Vice Chairman, since 2014.

•

CEO, from 2010 to 2013.

•

Director since 2010.

Co-Chair, from 2012 to 2014.

World Bank Group•Managing Director, from 2006 to 2010.

Government of El Salvador•

Several senior positions, including
Minister of Finance and Chief-of-Staff to
the President, from 1992 to 2004.

Director Qualifications:Dr. Daboub’s substantial business leadership experience, deep governance expertise, andoutstanding 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 forthe 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 anaudit committee financial expert.
Other Directorships and Associations:Dr. Daboub is currently serving as a board member of TortoiseEcofin Acquisition Corp. III, aspecial purpose acquisition company and Grupo Financiero Ficohsa, S.A., a Central Americanbanking 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 thesustainable energy sector.

PMI 2022 Proxy Statement

25

ELECTION OF DIRECTORSWERNER GEISSLER

Director Since:
2015

Age: 68

CAREER HIGHLIGHTS
Advent International, a private equity firm•
Occupation:
Operating Partner,
Advent International

Compensation andLeadership
Development
Committee (Chair)
Audit, Consumer
Relationships andRegulation, andFinance

Group President, Central and Eastern
Europe, Middle East and Africa, from2004 to 2007.

•

President, Northeast Asia, from 2001 to
2004.

Operating Partner, since 2015.

Procter & Gamble, a consumer goods
corporation•

Vice Chairman and Special Advisor to
the Chairman and CEO, prior to hisretirement in 2015.

•

Vice Chairman, Global Operations,from 2007 to 2014.

Committees:•

Director Qualifications:
Mr. Geissler has a keen knowledge of the global consumer products business, having served asa senior consumer products executive in many of the Company’s most important markets andregions. His deep senior executive experience serves the Company and the Board well as Chairof 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 Financewhich 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.

26

Delivering a Smoke-Free Future

ELECTION OF DIRECTORSLISA A. HOOK

Director Since:
2018

Age: 64

CAREER HIGHLIGHTS

Occupation:
Managing Partner, Two
Island Partners LLC

Committees:
Consumer
Relationships andRegulation Committee(Chair), Audit (Financial
Expert), Compensationand Leadership
Development, Finance,
and Product Innovation
and Regulatory Affairs

Two Island Partners LLC, a private equity
and consulting firm

America Online Inc., a web portal and online
service provider••

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.

Several executive positions, from 2001 to
2004.

Brera Capital Partners, a global private equity
investment firm•Partner

Alpine Capital Group, LLC, an investmentbanking firm•

Managing Director

Time Warner, Inc., a media company•

Executive

Sunrocket, Inc., a cloud-based voicecommunications company•

President & Chief Executive Officer,
from 2006 to 2007.

Director Qualifications:Ms. Hook’s past experience as CEO of a company, her past senior management roles andgovernment appointments relating to telecommunications, plus her holistic understanding ofdigital 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 businessmodel.
Other Directorships and Associations:Ms. Hook serves on the board of Fidelity National Information Services, Inc., a global leader inbanking 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 hasannounced 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 forelection 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 managementcompany, 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 andRELX NV, providers of information solutions, from 2006 to 2016. Previously, she served as adirector 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.

PMI 2022 Proxy Statement

27

ELECTION OF DIRECTORSJUN MAKIHARA

Director Since:
2014

Age: 64

CAREER HIGHLIGHTS
Neoteny Co. Ltd., a Japanese venture
incubator•

Chairman, from 2000 until 2015.

Goldman, Sachs & Co., a multinational
investment bank and financial services
company, from 1981 to 2000

Occupation:•

General Partner, from 1992 to 1998.

Retired Businessman•

Co-Head Japanese Equities Group and
Co-Branch Manager, from 1995 to 1998.

•

Co-Head Japanese Investment Banking
Group, from 1992 to 1995.

Committees:
Finance (Chair), Audit,
Compensation andLeadership
Development, andConsumer
Relationships andRegulation

Director Qualifications:
Mr. Makihara brings his deep experience in finance to his position as Chair of the FinanceCommittee. The Board also benefits from his entrepreneurial spirit and a thorough knowledge ofbusiness in Asia, which is of great importance to the Company’s business as we continue tolaunch 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 waspreviously a board member at Shinsei Bank, Ltd., a Japanese based commercial, leasing andconsumer 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 to2022. He is a trustee of the Protestant Episcopal Cathedral Foundation in Washington, D.C. anda 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.

28

Delivering a Smoke-Free Future

ELECTION OF DIRECTORSKALPANA MORPARIA

Director Since:
2011

Age: 72

CAREER HIGHLIGHTS
KalMor Advisors LLP, a strategy andcorporate advisory firm•
Occupation:
Founder & Managing
Partner, KalMor
Advisors LLP

ICICI Bank, India’s second-largest bank•Vice Chair of ICICI’s insurance and asset
management business, from 2007 to
2008.

•

Joint Managing Director, from 2001 to
2007.

Founder and Managing Partner, since2021.

JPMorgan Chase & Co., a multinational
investment bank and financial services
holding company

Committees:•

Nominating andCorporate Governance(Chair), Consumer
Relationships, andRegulation and
Finance

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.

Director Qualifications:With her strong executive leadership experience in finance, and her deep knowledge ofinternational 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 theCompany and the Board well as Chair of the Nominating and Corporate GovernanceCommittee.
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, theFoundation for Audit Quality and the Generation India Foundation, each of which is a not-forprofit company.

PMI 2022 Proxy Statement

29

ELECTION OF DIRECTORSLUCIO A. NOTO

Director Since:
2008

Age: 83

CAREER HIGHLIGHTS
Midstream Partners, LLC, a company thatinvests in liquid natural gas projects
Occupation:
Managing Partner,
Midstream Partners,
LLC•

Audit (Chair and
Financial Expert),
Compensation andLeadership
Development,
Consumer
Relationships andRegulation, Finance,
Nominating andCorporate Governance,
and Product Innovation
and Regulatory Affairs•

Managing Partner, since March 2001.

ExxonMobil Corporation, a multinational oil
and gas corporation•

Lead Independent
Director, Philip MorrisInternational Inc.

Committees:

Mobil Corporation
Chairman and Chief Executive Officer,
Chief Financial Officer, and various otherpositions, from 1962 until the merger of
Exxon and Mobil Corporation in 1999.

Vice Chairman, from November 1999
to January 2001, following the mergerof Exxon and Mobil Corporation.

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 RHJInternational S.A., a financial services company, from 2011 to 2015.

JACEK OLCZAK

Director Since:
2021

Age: 57

CAREER HIGHLIGHTS
Philip Morris International Inc.

Occupation:
Chief Executive Officer,
Philip MorrisInternational, Inc.

•

Chief Executive Officer, since
May 2021.

•

Chief Operating Officer, fromJanuary 2018 until May 2021.

Committees:
Consumer
Relationships andRegulation, Finance,
and Product Innovation
and Regulatory Affairs

30•

Chief Financial Officer, from August 2012
until December 2017.

•

Various roles in finance and generalmanagement 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.

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 transformationand the superior performance of our Regions and markets. Mr. Olczak has demonstrated astrong commitment to consumer centricity, digitalized consumer engagement, and manufacturing
optimization, while remaining focused on the growth of our cigarette brand portfolio and theseamless 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 VecturaGroup Plc, which will advance our further transformation into a healthcare business.

Delivering a Smoke-Free Future

ELECTION OF DIRECTORSFREDERIK PAULSEN

Director Since:
2014

Age: 71

CAREER HIGHLIGHTS
Ferring Group, a research-driven, specialty
biopharmaceutical group•
Occupation:
Chairman, Ferring
Group

Committees:
Product Innovation andRegulatory Affairs(Chair) and Finance

Chairman, since 1988, having joined
the company in 1976

Director Qualifications:Dr. Paulsen’s substantial experience as head of a successful multinational biopharmaceuticalgroup, together with his knowledge of scientific research, bring a unique perspective to theCompany’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.

ROBERT B. POLET

Director Since:
2011

Age: 66

CAREER HIGHLIGHTS
Rituals Cosmetics Enterprise B.V., a retailcosmetics company•
Occupation:
Chairman, Rituals
Cosmetics Enterprise
B.V.
Chairman, Arica
Holding B.V.
Chairman, SFMS B.V.

Committees:
Compensation andLeadership
Development,
Consumer
Relationships andRegulation, Finance,and Nominating andCorporate Governance

Chairman

SFMS B.V., a retail consumer staples
company•

Safilo Group S.p.A., an eyewear company•

Chairman, from 2011 to 2017.

Gucci Group, a luxury fashion house•

ChairmanPresident, Chief Executive Officer andChairman of the Management Board,
from 2004 until 2011.

Arica Holding B.V., parent holding company
of SFMS B.V.

Unilever Group, a multinational consumer
goods company••

Chairman

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 andExecutive Vice President of Unilever’s
European Home and Personal Caredivision.

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

PMI 2022 Proxy Statement

31

ELECTION OF DIRECTORSDESSI TEMPERLEY

Director Since:
2021

Age: 49

CAREER HIGHLIGHTS

Occupation:
Former Group CFO
and Executive Board
Member, Beiersdorf AG

Committees:
Audit (Financial Expert)
and FinanceBeiersdorf AG, a manufacturer and retailerof personal-care products and pressuresensitive adhesives

Cable & Wireless plc / Cable & WirelessRussia, former telecommunications services
company••

Group Chief Financial Officer andExecutive Board Member, from 2018
until her retirement in April 2021.

Finance Manager—Global Capital
Investments and Finance Director—
Russia & CIS, from 1999 until 2004.

Nestle S.A., a food & beverage company•

Head of Investor Relations, CFO of
Nestle Purina Petcare EMENA, Headof Global Planning and Performance
Analysis, CFO of Nestle South East
Europe Zone, Controller for CEE, andSupply Chain Controller NPPE, from
April 2004 to June 2018.

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, apublicly 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 thatinvests 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

Delivering a Smoke-Free Future

ELECTION OF DIRECTORSSHLOMO YANAI

Director Since:
2021

Age: 69

CAREER HIGHLIGHTS
Lumenis Ltd., a medical devices company
Occupation:•

Chairman of the Board, since 2020.

Chairman of the Board,
Lumenis Ltd.

Moelis & Company, an investment bankCommittees:

Teva Pharmaceuticals Industries Ltd., apharmaceutical company

Finance, Nominating
and Corporate
Governance, andProduct Innovation andRegulatory Affairs••

Adama Industries, a global crop protection
company•

Chief Executive Officer, from 2002 to
2006.

Senior Advisor, since 2016.

President and Chief Executive Officer,
from 2007 to 2012.

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 thedevelopment of science-based regulatory frameworks for the development andcommercialization 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 wasalso 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 pharmaceuticalcompanies: Cambrex Corp., Protalix Biotherapeutics, Inc., PDL BioPharm, Inc., Perrigo plc, andSagent Pharmaceuticals, Inc. Mr. Yanai was also a member of the Board of Elisra Group, anelectronic 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.

PMI 2022 Proxy Statement

33

COMPENSATION OF DIRECTORSCOMPENSATION OF DIRECTORS
Compensation Philosophy
Directors who are full-time employees of the Company receive no additional compensation for services as a director. The
Company’s philosophy is to provide competitive compensation necessary to attract and retain high-quality non-employee
directors. The Board believes that a substantial portion of director compensation should consist of equity-based
compensation to assist in aligning directors’ interests with the interests of shareholders.

COMPENSATION
At his request, Dr. Paulsen serves as a director without compensation. The compensation of all other non-employee
directors is set forth in the accompanying chart.
PMI’s non-employee directors’ compensation for 2021 was set at the following levels and continues in effect for 2022:
Annual cash retainer$125,000

Annual equity award$175,000Interim Chairman’s cash retainer*$100,000

Lead Independent Director cash retainer$35,000

Committee Chair cash retainer$35,000

Committee member cash retainernoneCommittee meeting feesnone

Stock Options

none* Through May 5, 2021

SHARE RETENTION REQUIREMENT
A non-employee director may not sell or otherwise dispose of PMI shares received pursuant to the annual share award(other than shares withheld from the grant to pay taxes) unless he or she continues after the disposition to own PMI shares
having an aggregate value of at least five times the then-current annual cash retainer. The Company’s anti-hedging and antipledging policies also apply to non-employee directors (see page 50).

34

Delivering a Smoke-Free Future

COMPENSATION OF DIRECTORSThe following table presents the compensation received by the non-employee directors for fiscal year 2021.
Fees Earned orPaid in Cash
($)

Name

Bonin Bough

113,195

StockAwards($)

218,750(a)All Other
Compensation
($)

0

Total
($)

331,945(b)Juan José Daboub

82,292

175,000

34,167

291,459

Michel Combes

125,000

175,0000

300,000

Werner Geissler

160,000

175,000

0

335,000

Lisa A. Hook

160,000

175,000

0

335,000(c)

55,5560055,556

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

0431,118

0

0

0

0

Jennifer Li

Frederik Paulsen
Dessi Temperley

9,028

0

0

9,028

Robert B. Polet

125,000

175,0000

300,000

Shlomo Yanai

82,292

175,000

0257,292(a) Mr. Bough joined the Board in February 2021 and received a pro-rated stock award through May 5, 2021 in addition to his full
2021 annual award.
(b) The amount in the “All Other Compensation” column for Mr. Daboub represents the imputed income to him for expenses related
to an event sponsored by the Company.
(c) Ms. Li did not stand for re-election at PMI’s Annual Meeting of Shareholders. As such, her last day of service on the Board was
May 4, 2021.

Non-employee directors may also elect to defer the award of shares of common stock and all or part of the annual andCommittee retainers. Deferred fee amounts are “credited” to an unfunded account and may be “invested” in nine “investment
choices,” including a PMI common stock equivalent account. These “investment choices” parallel the investment options
offered to employees under the PMI Deferred Profit-Sharing Plan and determine the “earnings” that are credited forbookkeeping purposes to a non-employee director’s account.
The Company reimburses non-employee directors (other than Dr. Paulsen) for their reasonable expenses incurred inattending Board of Directors, Committee and shareholder meetings, and other corporate functions, including travel, meals
and lodging. Non-employee directors (other than Dr. Paulsen) also are covered by business travel and accident insurance,
which the Company maintains for their benefit when they travel on Company business, as well as group life insurance.

PMI 2022 Proxy Statement

35

STOCK OWNERSHIP INFORMATIONSTOCK OWNERSHIP INFORMATION
Ownership of Equity Securities
The following table shows the number of shares of common stock beneficially owned as of March 11, 2022, by eachdirector, nominee for director and named executive officer, and the directors, nominees for director and executive officersof the Company as a group. At March 11, 2022, the number of shares of the Company’s common stock outstanding was
1,550,082,073. Unless otherwise indicated, each of the named individuals has sole voting and investment power with respect
to the shares shown. The beneficial ownership of each director, nominee for director and executive officer, and of thedirectors, nominees for director and executive officers as a group, is less than 1% of the outstanding shares.

Name

Drago Azinovic

122,597

Emmanuel Babeau

41,740Bonin Bough2,472

André Calantzopoulos

2,943

Juan José Daboub

1,908

Werner Geissler

76,263

Lisa A. Hook

9,662

Jorge Insuasty

24,690Jun Makihara

22,355

Kalpana Morparia

20,755

Martin G. King

128,463

Lucio A. Noto

123,688

Jacek Olczak

251,807
0

Robert B. Polet

22,284

Dessi Temperley0

Stefano Volpetti

0Frederic de Wilde
Shlomo Yanai
Group (27 persons)36

800,300

Michel Combes

Frederik Paulsen(1)

Amount and Nature of
Beneficial Ownership(1)153,0101,839
2,068,528

Includes shares of deferred stock as follows: Mr. Bough, 2,471; Mr. Combes 1,909; Ms. Hook, 9,622; Mr. Makihara, 18,995;
Mr. Noto, 84,110. Also includes 39,281 shares held in trust for Mr. Noto as to which he has not disclaimed beneficial ownership.
Also includes 1,360 shares indirectly beneficially owned by Mr. Makihara (shares held by spouse).

Delivering a Smoke-Free FutureSTOCK OWNERSHIP INFORMATION
In addition to the shares shown in the table above, as of March 11, 2022, those directors who participate in the Company’s
director deferred fee program had the following PMI share equivalents allocated to their accounts: Mr. Makihara, 16,025
and Mr. Noto, 123,876. See “Compensation of Directors” on page 34 for a description of the deferred fee program fordirectors.
The following table sets forth information regarding persons or groups known to the Company to be beneficial owners ofmore than 5% of the outstanding common stock as of December 31, 2021.

Name and Address of Beneficial Owner

Number of Shares
Beneficially Owned

Percent of Class

126,627,443(1)8.1%

94,109,468(2)6.0%80,459,730(3)5.2%

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
Capital World Investors
333 South Hope Street
Los Angeles, CA 90071(1)

According to a Schedule 13G/A, dated February 9, 2021, filed with the U.S. Securities and Exchange Commission on
February 10, 2022, by The Vanguard Group presenting the number of shares as of December 31, 2021.

(2)

According to a Schedule 13G/A, dated February 2, 2022, filed with the U.S. Securities and Exchange Commission on February 3,
2022, by BlackRock, Inc., presenting the number of shares as of December 31, 2021.

(3)

According to a Schedule 13G/A, filed with the U.S. Securities and Exchange Commission on February 11, 2022, by Capital
World Investors, presenting the number of shares as of December 31, 2021.

Delinquent Section 16(a) Reports
The Company believes that during 2021 all reports for the Company’s executive officers and directors that were required
to be filed under Section 16 of the Exchange Act were filed on a timely basis, except that one report on Form 4 reporting anaward of 9,785 RSUs and another award of 9,785 RSUs to Mr. Insuasty was inadvertently reported by the Company on
Form 3, resulting in the Form 4 being filed late.

PMI 2022 Proxy Statement

37

COMPENSATION DISCUSSION AND ANALYSISCOMPENSATION DISCUSSION AND
ANALYSIS
Executive Summary
Our Compensation Discussion and Analysis outlines:
1. The design of our executive compensation program, and the objectives and principles upon which they arebased. (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)

CD&A TABLE OF CONTENTS
Compensation and Leadership Development
Committee

39

All Other Compensation

55

Program Design, Philosophy and Objectives

39

Grants of Plan-Based Awards During 2021

57

Target Compensation Mix

42

Outstanding Equity Awards as ofDecember 31, 2021

59

2021 Company Performance and Targets

44

Stock Option Exercises and Stock Vested
During 2021

61

Additional Compensation Policies and Processes

49

Pension Benefits

62Compensation and Leadership Development
Committee Report

52

Non-Qualified Deferred Compensation

65

Summary Compensation Table

53

Deferred Profit-Sharing and Benefit
Equalization Plan

65

Employment Contracts, Termination of
Employment and Change in Control Arrangements

65

38

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS

Compensation and Leadership
Development Committee
The Compensation and Leadership Development Committee consists entirely of non-management directors, all of whom
our Board has determined are independent within the rules and regulations of the SEC, the meaning of independence under
the listing standards of the New York Stock Exchange and our Corporate Governance Guidelines. Its responsibilities aredescribed on page 10 above and set forth in the Compensation and Leadership Development Committee Charter, which isavailable on the Company’s website at www.pmi.com/who-we-are/corporategovernance/board-committees.
The members of the Committee are: Werner Geissler (Chair), Juan José Daboub, Lisa A. Hook, Jun Makihara, Lucio A.
Noto, and Robert B. Polet. The Committee met five times in 2021. The Chair of the Committee, in consultation with the othermembers, sets meeting agendas. The Committee reports its actions and recommendations to the Board.

Program Design, Philosophy andObjectives
Our compensation and benefits program supports our business, financial, and strategic objectives. Each component ofour program is designed to achieve one or more of the following objectives:support ouralign therewardsupportpromotealign1 toability
2 tointerests
3 toperformance
4 tolong-term
5 tointernal
6 toexecutive
to attract,ofbusinessdevelop andretain world-classleaders in acontroversial
industry;

executives
andshareholders;againstpreestablishedobjectives;

growth, superior
financial results,
sustainability
efforts, societalalignment andintegrity of
conduct;

fairness anda disciplined
assessmentof
performance;andincentives
with our risk
management
objectives.

These objectives provide the framework for the various components of compensation and benefits to our executives andtake into account the specific nature of our business. Together, these elements form an aggregate package that is intended
to be appropriately competitive.

PMI 2022 Proxy Statement

39

COMPENSATION DISCUSSION AND ANALYSIS
The design of the overall compensation package for our executive officers encompasses the following features:

1

A MIX OF FIXED AND “AT-RISK” COMPENSATION2A MIX OF ANNUAL AND LONG-TERM COMPENSATION AND BENEFITS

3A MIX OF CASH AND DEFERRED EQUITY COMPENSATION

4AN OPTIMAL BALANCE OF EQUITY COMPENSATION

The higher the organizational level of the executive, the lower the fixed component of the overall compensation
and benefits package.

To appropriately reward the achievement of both annual and long-term goals and objectives.

That seeks to discourage actions that are solely driven by the Company’s share price at any given time to thedetriment of PMI’s long-term strategic goals.

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 ofthe 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, ourshareholders 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 ofits corporate strategy by introducing a sustainability index as one of ourperformance 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 andretain talented executives in a controversial industry, and remaincompetitive with other consumer product companies.

40

Delivering a Smoke-Free Future

Historical “Say on Pay” Results

95.93%

94.30%

91.11%

2019

2020

2021

COMPENSATION DISCUSSION AND ANALYSISThe three components of total direct compensation for our executive officers are: (i) base salary; (ii) annual performancebased variable cash awards; and (iii) variable equity awards. We also provide our executives retirement benefits and limited
perquisites. Our total direct compensation program emphasizes pay-for-performance, and the one component that isfixed for a given year, base salary, constitutes the smallest portion of executive compensation for salary grades 26 andabove. See page 42 for the target compensation mix of our NEOs in 2021. The key characteristics and key objectives ofeach component of our compensation program as it applies to our NEOs are as follows:
Component

INCENTIVE
COMPENSATION(IC) AWARDSAT-RISK AND PERFORMANCE-BASED COMPENSATIONLONG-TERMSHORT-TERM

BASE
SALARY

PurposeFixed component of cash
compensation.

Annual performance-based
variable cash award formeeting or exceeding
performance goals preestablished by theCommittee.

Key Objectives

How it is determined

Intended to provide
sufficient competitive
base pay to attract,develop and retain
world-class leaders.

Reflects the scope of theexecutive’s role, his or her
performance and market pay
practices.

Intended to motivate
executives to meet or
exceed our performancegoals and strategic
objectives in a given
fiscal year.

The Company’s incentive
compensation (“IC”)
performance rating isdetermined by a fixed formulathat measures the Company’s
results against performancetargets pre-established andpre-weighted by the Committee(see pages 44-46). The final
award is determined bymultiplying the executive’s basesalary by the IC performance
rating and by the executive’s IC
target and individual
performance rating.
Amount of each award isdetermined by multiplying theexecutive’s base salary by thetarget percentage for thatsalary grade, and then by the
executive’s individual
performance rating for the mostrecently completed year, plus orminus ten percentage points.

EQUITY
AWARDS

Long-term variable equity
awards contribute to all sixof 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 enhancesustainable shareholder
value and strengthen the
Company over the longterm.

• 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 inamounts that depend on the
degree to which preestablished and pre-weighted
performance goals areachieved or exceeded (seepages 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).

PMI 2022 Proxy Statement

41

COMPENSATION DISCUSSION AND ANALYSIS

Target Compensation Mix
We set target compensation mix by salary grade. Other than the CEO, in 2021 all of our NEOs were in salary grades 22,
25 and 26. Our CEO is the only employee in salary grade 28, and we do not have any employees in salary grade 27. The
target compensation mix for 2021 and for 2022 is shown in the following charts. Mr. Insuasty will be promoted to salary
grade 23 effective April 1, 2022.

GRADE 28

GRADE 26SALARY11%

GRADE 25

SALARY20%

SALARY
27%

IC
22%

EQUITY46%
EQUITY55%

EQUITY
67%

IC
25%
IC
27%

GRADE 23

GRADE 22SALARY30%
EQUITY42%

SALARY32%
EQUITY
39%

IC
28%

IC
29%

Mr. Calantzopoulos was removed from the company’s salary grade structure following his appointment as Executive
Chairman. In that role he is not eligible for an annual cash incentive award and the Committee has set his equity award
target at 300% of his base salary, split 60% PSUs and 40% RSUs.

42

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS
Incentive and Equity Awards: In February 2022, the Committee granted PSUs for the 2022-2024 performance cycle and
RSUs with a three-year vesting schedule. It also established performance targets for the 2022 annual incentive
compensation awards that are payable in February 2023. Award targets as a percentage of base salary for our named
executive officers are as follows:

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)0%360% / 180%

240% / 120%

Jacek Olczak COO / CEO

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%

André Calantzopoulos
CEO / Executive Chairman(4)
(4)

(1)
(2)
(3)
(4)

Possible award range is between 0% and 225% of target.
Possible award grant range is between 0% and 150% of target; between 0% and 200% of PSUs granted may vest, dependingon performance versus criteria established at the time of grant.
Possible award grant range is between 0% and 150% of target.
2022 PSUs and RSUs granted to Messrs. Calantzopoulos and Olczak were pro-rated to reflect the different positions theyeach held during 2021.

The portion of the equity award attributable to the Executive Chairman role is fixed at target. The Committee may
propose to adjust this award based on the evaluation of the Executive Chairman’s performance for further approvalby the Board.
Use of PSUs and RSUs Versus Stock Options: We grant equity awards in the form of RSUs and PSUs, rather than stock
options, because these forms of awards:•

establish a relationship between our cost and the value ultimately delivered to our executives that is more direct
and more visible than is the case with stock options; and•require the use of substantially fewer shares than stock options to deliver equivalent value, resulting in an annual
Company run rate in 2021 of 0.14% (the sum of all equity awards to non-employee Directors and RSUs granted
to employees during the period, plus the number of all PSUs vested during the period, divided by the weighted
average number of shares outstanding during the period), and a total 2021 year-end overhang of 0.40% (numberof unvested RSUs plus unvested PSUs at target as a percentage of all shares outstanding at year-end).

Our run rate and overhang each compares favorably to those of our Peer Group.

PMI 2022 Proxy Statement

43

COMPENSATION DISCUSSION AND ANALYSIS

2021 Company Performance andTargets
INCENTIVE COMPENSATION AWARDS
Quantitative Performance Targets: The Committee determined the 2021 IC Award performance rating based on 2021
results versus performance metrics pre-established by the Committee. For terms not otherwise defined in this section, see
the Glossary of Terms in Exhibit D.
2021 Results: We exceeded our targets for organic growth of adjusted OI and adjusted net revenues, as well as thecurrency-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 ourtarget of 4.5%.
* For a reconciliation of non-GAAP to the most directly comparable U.S. GAAP financial measures, see Exhibit C to this proxystatement.

2021 Quantitative Performance Target Achievement: The Committee employed the following pre-established matrix thatassigned a rating of 100 correlating to attaining the targeted performance. Ratings for each factor could range from 0 to 150.
The percentages indicated for adjusted net revenues, adjusted OI, and operating cash flow represent growth versus 2020
results. Actual results are shown in the blue boxes.

2021 IC Performance Versus Target
TargetRating:

0…

30

40

50

60

70

80

90

100

105

115

125

136

140

142

150

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% 5.4%
5.2%

5.6%

6.2%

7.0%

7.4%

7.6%

8.4%

<2.6%

2.6%

4.35

5.1%

5.7%

6.3%

7.0% 8.2%

8.5% 10.2% 10.8% 11.6% 13.0% 13.7% 14.1% 15.6%
10.0%

GrowthMeasure(a)Adjusted OI(c)Operating Cash<(4.7)% (4.7)% (3.7)% (2.7)% (1.7)% (0.6)% 0.4% 2.4%
Flow(d)Strategic
Priorities andEnablers

44

Key Initiatives missed
0 - 79

4.5%

5.0%

6.0%

7.5%

Mostly/ all accomplished
80 - 120

9.8% 10.6% 11.0% 12.6% 13.8%

Majority/ all exceeded
121 - 150(a)

For a reconciliation of non-GAAP to the most directly comparable U.S. GAAP financial measures, see Exhibit C to this proxystatement.

(b)Number of Top 30 OI markets (reflecting the deconsolidation of RBH) in which total share of the heated tobacco units andcigarettes was growing or stable.

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS(c)

Organic growth.

(d)

Net cash provided by operating activities, excluding currency.

Qualitative Performance Target and Analysis: The Committee also rated our performance on the following six key
strategic priorities and four enablers that the Committee pre-set in February 2021, based on a ratings range of 0-79 if they
were missed, 80-120 if they were mostly or all accomplished, and 121-150 if the majority or all of them were exceeded:

Strategic Priorities

Strategic Enablers•

Grow current RRP platforms to scale by building a
superior portfolio across segments, IQOS brandequity, a quality consumer experience across digitaland physical touchpoints at scale, and geographic
expansion;•

Consumer centricity: Roll out a consumer-centricorganization, consumer journey framework,measurement of consumer satisfaction and rapid
feedback loops into product and service
development;•

Maintain leadership in our conventional businessthrough continued brand development and selective
innovation;•

Digitalized business model: Roll out a digital platform
across markets to rapidly scale awareness,engagement, conversion and customer care;•

Develop our long-term product and ecosystem
portfolio for future growth, and drive material andmeasurable progress for our key sustainability
strategies, ensuring transparent and clear
sustainability reporting and disclosure**;••Build global societal support for RRPs throughadvocacy and obtain regulatory and fiscal measuresthat allow adult smokers to learn about, and convert
to, our RRPs faster;People, culture, ways of working and organization:
Evolve the organization and ways of working to
attract, retain, manage and reward top talent, andincrease agility by adopting a project-basedorganization, agile working methods and zero-basedorganization principles; and•Real-time communication: Develop a real-timecommunication engine to engage with adultconsumers, key opinion leaders and regulators toshape the dialogue in real time.

•Achieve cost and cash leadership by improving
productivity to reinvest in RRP expansion; and•Deliver launch and service agility.

** The term “materiality,” “material,” and similar terms, whenused 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.

As a result of this evaluation, the Committee concluded that the Company had mostly accomplished its strategic objectives
and assigned a strategic priorities and enablers rating of 115.
2021 IC Award Certification: Our performance rating for each quantitative and qualitative factor was weighted inaccordance with the pre-established formula shown below to produce an overall IC performance rating of 122, which theCommittee used its discretion to round down to 120 due to the loss of market share in a key market. As explained on page 49,
this rating applies to our management employees worldwide.

PMI 2022 Proxy Statement

45

COMPENSATION DISCUSSION AND ANALYSIS

2021 IC Performance Rating
Performance
RatingWeightWeighted Performance
RatingMarket Share (Top 30 OI Markets)

90

15%

14

Smoke-Free (“HTU”) Shipment Volume

100

20%

20

MeasureNet Revenues

142

15%

21

Adjusted OI

136

15%

20

Operating Cash Flow

150

20%

30

Strategic Priorities and Enablers

115

15%

17
122

The Committee approved an IC performance rating for 2021 of:

2021
120

2020

vs.

90

2019

vs.

135

In addition to certifying the IC performance rating, the Committee rated each executive officer’s individual performance
during 2021. Individual ratings can range from 0% to 150%. To assure a disciplined, fair and equitable assessment, individual
performance ratings were calibrated to reflect each executive’s contribution to the overall results of the Company.
Application of the following formula then determined the cash incentive award for each named executive officer in 2021:

IC
Award

Base
Salary=X

Individual
Target %(varies bygrade)X

IC
Performance
Rating(0%-150%)

X

Individual
Rating(0%-150%)2022 IC Awards: For 2022, the Committee determined that the performance metrics used in 2021 continued to reflect theCompany’s strategic priorities. The Committee also set performance targets for those metrics. Each of the 2022 financial
performance targets reflects the Company’s 2022 budget approved by the Board, with a performance factor of 100 equating
to achieving budgeted results in a pre-determined range. To measure the Company’s 2022 performance, the Committee
has also established five key strategic levers, which are at the core of the Company’s corporate strategy. The full range ofpotential results is reflected in a pre-established matrix that will generate an overall IC performance rating for 2022. In
addition to pre-establishing a formula for grading our results against the performance factors, the Committee preestablished the weights for each factor.

LONG-TERM EQUITY AWARDSThe Committee establishes the equity award target opportunity for our CEO and each other NEO, with the exception of
the Executive Chairman, based on Company targets by salary grade, which are unchanged from the levels established in2014, and the individual’s performance rating for this award. The Committee grants the individual between 55% and 60% of
the award opportunity in the form of performance-based PSUs, and between 40% and 45% in the form of time-based
RSUs.

EquityAward
TargetOpportunity=

Base
Salary(60% PSU &40% RSU)X

Individual
Target %(varies bygrade)

X

Individual
Rating(0%-150%)

PSU Performance Metric Achievement for 2021: In February 2019, the Committee established three metrics fordetermining the number of PSUs that would vest at the end of the 2019-2021 performance cycle. The first metric, weighted
50%, was the Company’s Total Shareholder Return (“TSR”) during the three-year cycle relative to the Peer Group andcapped at target where negative on an absolute basis. The second measure, weighted 30%, was the Company’s organic
46

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS
compound annual adjusted operating income growth rate over the cycle. The final measure, weighted 20%, was theCompany’s performance against its transformation metric, defined as RRP shipment volume target during the last year of
the performance cycle.
The aggregate of the weighted performance metrics for the three metrics determined the percentage of PSUs that vested
at the end of the three-year performance cycle. Each vested PSU entitles the participant to one share of common stock.
An aggregate weighted PSU performance factor of 100 would result in the targeted number of PSUs being vested. The
minimum percentage of PSUs that could vest was zero, while the maximum was twice the targeted number.
TSR Performance Metric. The TSR performance metric, which determined 50% of the PSU performance factor, wascalculated based on the Company’s three-year rolling TSR versus the Company’s Peer Group (see page 49). To adjust formarket volatility, the TSR calculations are based on the average of the 20 trading days immediately before the start ofthe performance cycle and the last 20 trading days of the performance cycle. To reflect that several members of the Peer
Group are primarily listed on foreign stock exchanges and report their financial results in different currencies, the Company
measures the TSRs for those companies by using the price performance of their publicly traded American Depository
Receipts (“U.S. ADRs”). The use of U.S. ADRs avoids the need to adjust the TSRs of non-U.S. Peers to reflect currencychanges, and increases transparency by enabling shareholders to directly observe such TSRs. In addition to evaluating our
relative TSR, if the Company’s absolute TSR for a performance cycle is zero or less, the Committee will cap the TSR
performance metric at target or less. This approach would limit rewards for a performance cycle in which we performed inline with, or better than, the Peer Group, but shareholders did not realize a positive return. The TSR performance factor forthe 2019-2021 performance cycle was calculated relative to the Peer Group in accordance with the following schedule:
PMI TSR as a Percentile ofPeer Group
Performance Factor

ResultBelow Threshold
ThresholdTargetMaximum

th

0%

th

25 percentile

50%

th

50 percentile

100%

85th percentile and above

200%

Below 25 percentile

ActualRating65th
percentile

143%

Adjusted Operating Income Organic Growth Performance Metric. The adjusted operating income organic growth
performance metric for the 2019-2021 performance cycle, which determined 30% of the PSU performance factor, was thecompound annual organic growth rate of the Company’s adjusted operating income as shown below:
ResultThree-Year Adjusted OI CAGR*
Performance Factor

Below Threshold

<4.0%

0%

Threshold

4.0%

50%

Target7.5%

100%

Maximum≥10.0%

200%

ActualRating9.6%

184%* On an organic basis. For a reconciliation of non-GAAP to the most directly comparable U.S. GAAP financial measures, see Exhibit C ofthis proxy statement.

Transformation Performance Metric. The transformation performance metric for the 2019-2021 performance cycle, which
determined 20% of the PSU performance factor, was defined as RRP unit shipment volume in 2021, as shown below:
ResultThree-Year Adjusted OI CAGR*
Performance Factor

Below Threshold

<75.0

0%

Threshold

75.0

50%

Target

100.0

100%

Maximum≥120.0200%

ActualRating95.2

95%* Includes heated tobacco units, e-vapor products, nicotine pouches and snus (in equivalent units).

Performance Rating for 2019-2021 PSU Cycle. The overall performance rating for the 2019-2021 PSU award cycle was
146%. Taking into account strong results achieved in RRP shipment volumes despite COVID disruptions in 2020 and 2021,
the Committee rounded the result to 150%.
2022-2024 PSU Performance Cycle: In order to more closely align the performance metrics with the Company’stransformation goals, for the PSUs granted in 2022 that will vest in 2025, the Committee established the following
PMI 2022 Proxy Statement

47

COMPENSATION DISCUSSION AND ANALYSIS
performance metrics at what it believes are appropriately ambitious levels that reflect the Board-approved three-year plan.
It retained the TSR performance metric defined in the same way as shown on the previous page for the 2019-2021 PSU
Performance Cycle, except that the maximum performance factor of 200% would be achieved at the 80th percentile relative
to the Peer Group. The second metric is the Company’s currently neutral adjusted compound annual diluted EPS growthrate over the 2022-2024 PSU Performance Cycle, with 0% for growth below 5%, 50% for growth at the threshold level of 5%,
100% for growth at the target level of 8%, and 200% for growth at or above 11%. The final metric is the Company’s
Sustainability Index, which consists of two drivers:•

Product Sustainability: is defined as an aggregation of key performance indicators pertaining to social andenvironmental impacts generated by the Company’s products; measuring progress on the Company’s efforts tomaximize the benefits of smoke-free products, purposefully phase out cigarettes, seek net positive impact inwellness and healthcare, and reduce post-consumer waste; and•Operational Sustainability:is defined as an aggregation of key performance indicators pertaining to social andenvironmental impacts generated by the Company’s business activities; it measures progress on the Company’sefforts to tackle climate change, preserve nature, improve the quality of life of people in its supply chain, andfoster an empowered, and inclusive workplace.

The Company’s 2021 Integrated Report, which we expect to publish on or about May 17, 2022, will include more granular
information about the Company’s Sustainability Index and its product and operational sustainability components.
The Committee weighted the 2022-2024 performance metrics as follows: TSR, 40%; currency neutral adjusted compound
annual diluted EPS growth, 30%; and the Sustainability Index, 30%. In line with the Company’s sustainability materiality
assessment and their relative priority level in the context of the Company’s corporate strategy, Product Sustainability isweighted at 20% and Operational Sustainability is weighted at 10%, together amounting to 30% of the total PSU award. The
Committee measures performance on these metrics consistent with the way the Company communicates its results,
which may include adjustments.
The Committee preserved its discretion to use the following modifier in its certification of the TSR performance metric:•

The Company’s Total Shareholder Return during the three-year cycle relative to the share performance of
certain other tobacco companies may have positive or negative 15 percentage-point impact on TSR performancefactor.

PSU Vesting Mechanics. At the end of the three-year performance cycle, the Company’s performance factor for each of
the three metrics will be calculated and then weighted, resulting in an overall PSU performance factor from 0% to 200%.
This percentage will be applied to the executive’s target PSU award to determine the number of shares of common stock to
be issued to the executive.
The Committee may adjust the PSU performance metrics if appropriate to reflect significant unplanned acquisitions or
dispositions. The Committee may also adjust the PSU performance metrics in appropriate situations for unusual, impactful
events, such as the COVID-19 pandemic or disruptions to operations caused by significant geopolitical events.
The awards granted for each named executive officer reflect our 2021 performance and their individual performance for
2021.

48

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COMPENSATION DISCUSSION AND ANALYSIS

Additional Compensation Policies andProcesses
Peer Group: The Committee uses a single customized peer group both to benchmark its compensation programs and tocompare the Company’s TSR when calculating the Company’s PSU performance factor. The following 19 companies,
selected in 2015 on the basis of their global presence, focus on consumer products, and similarity to the Company interms of net revenues and market capitalization, constitute our Peer Group:•

Altria Group, Inc.

•

Kimberly-Clark Corporation•

Anheuser-Busch InBev SA/NV•

The Kraft Heinz Company•

British American Tobacco p.l.c.

•

McDonald’s Corp.

•

The Coca-Cola Company•

Mondelēz International, Inc.

•

Colgate-Palmolive Co.

•

Nestlé S.A.

•

Diageo plc•

PepsiCo, Inc.

•

Heineken N.V.

•

The Procter & Gamble Company•

Imperial Brands PLC•

Roche Holding AG•

Japan Tobacco Inc.

•

Unilever NV and PLC•

Johnson & Johnson

Factors Mitigating Against Possible Adverse Consequences of Our Compensation Program: Several elements ofour compensation program protect against the possibility that compensation incentives might cause employees to take risks
that could materially adversely affect the Company. First, our annual incentive compensation and equity awards apply to
management employees worldwide, and the award pools for each of those programs are based on company-wide
performance measures that cannot be unduly influenced by a particular business unit or group. Second, all employees are
rated on the same scale within general guidelines set by the Committee. These ratings are based on individual performance
criteria so that no particular group of employees will all receive the same rating. Third, both the company-wide and theindividual performance measures are subject to maximum levels that limit the amount of awards.
Furthermore, with respect to the long-term equity component of our compensation program, RSUs generally vest only
after three years from the date of grant, and PSUs generally vest to the extent pre-established targets are achieved over athree-year performance cycle. In addition, our executives are subject to share ownership requirements and comprehensive
anti-hedging, anti-pledging and clawback policies described in the following four sections.
Share Ownership Requirements: The Company sets share ownership requirements for executives at levels that areamong the highest for publicly traded companies. The required ownership levels are as follows:
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

Unvested PSUs, which comprise between 55% and 60% of our named executive officers’ equity award, do not counttowards the share ownership requirement. Executives are required to meet their ownership levels within five years of joining
PMI or within three years of a promotion. As described above, although Mr. Calantzopoulos was removed from the
PMI 2022 Proxy Statement

49

COMPENSATION DISCUSSION AND ANALYSIS
Company’s salary grade structure as of May 5, 2021, his share ownership requirement continues to be at 10 times hisbase salary. The Committee reviews each executive officer’s compliance with the requirements on an annual basis. As of
December 31, 2021, all of our named executive officers complied with the share ownership requirements.
Post-Termination Share Holding Period: In addition to these longstanding and rigorous share ownership requirements,
the Committee has determined that if any equity award held by an executive officer under the 2017 Performance Incentive
Plan vests on an accelerated basis upon such officer’s termination of employment for any reason other than death or
disability, the shares acquired must be held for at least one year following such termination.
Anti-Hedging and Anti-Pledging Policies: The Company’s anti-hedging policy prohibits directors, executive officers andother designated employees from purchasing any financial instrument or otherwise engaging in any transaction that isdesigned to hedge or offset any decrease in the market value of the Company’s shares held by them directly or indirectly,
including prepaid variable forward contracts, equity swaps, collars and exchange funds, and other transactions withcomparable economic consequences. The foregoing does not prohibit trading in broad-based index funds.
Directors, executive officers and designated employees are also prohibited from engaging in short sales related to theCompany’s shares.
The Company’s anti-pledging policy prohibits directors and executive officers from pledging the Company’s shares,
including holding shares in a margin account.
Clawback Policy Regarding the Adjustment or Recovery of Compensation: Under our Board-approved policy and as
set forth in each named executive officer’s equity award agreement, if the Board or an appropriate Committee of theBoard determines that, as a result of fraud, misconduct, a restatement of our financial statements, or a significant write-off
not in the ordinary course affecting our financial statements, an executive has received more compensation than would
have otherwise been paid, the Board or the assigned Committee shall take action as it deems necessary or appropriate toaddress the events that gave rise to the fraud, misconduct, write-off or restatement, and to prevent its recurrence. Suchaction may include, to the extent permitted by applicable law, requiring partial or full reimbursement of any incentive
compensation paid to the executive, causing the partial or full cancellation of equity awards, adjusting the future compensationof such executive, and dismissing or taking legal action against the executive, in each case as the Board or such Committee
determines to be in the best interests of the Company.
Role of the Committee in Executive Compensation:The role of the Committee is to discharge the Board’s responsibilities
relating to executive compensation matters. In this regard, the Committee is responsible for the development andadministration of our executive compensation and benefits program, in furtherance of which the Committee has theauthority and responsibility to:•review and approve corporate goals and objectives relevant to the compensation of the CEO and Executive
Chairman, to evaluate the performance of the CEO and Executive Chairman in light of these goals and objectives,and determine and approve the compensation of the CEO based on this evaluation, and recommend to theBoard for approval the compensation of the Executive Chairman, based on this evaluation;•

set senior executive compensation and make recommendations to the Board with respect to incentive
compensation plans and equity-based plans, administer and make awards under such plans and review the
cumulative effect of its actions;•review and approve compensation of all executive officers;•

oversee the management of risks related to compensation design and payout;•

monitor compliance by executives with the Company’s share ownership requirements; and•review and assist the Board with the development of executive succession plans.

In fulfilling these duties, the Committee is supported by our Global Head of People & Culture and his department, theCommittee’s executive compensation consultant and other outside legal, financial and compensation advisors, whereappropriate.
Role of the CEO in Executive Compensation: Our CEO makes recommendations to the Committee with respect to thecompensation of executive officers other than himself. The Committee reviews and discusses the compensation of theseofficers with the CEO, and the Committee makes the final compensation decisions with respect to these executive officers.
The CEO makes no recommendation and has no role in setting any aspect of his own compensation; he does not attend any
Committee meetings when any element of his compensation is discussed.
Role of the Executive Chairman in Executive Compensation: The Committee reviews and discusses the compensationof the CEO with the Executive Chairman, and the Committee makes the final compensation decision with respect to theCEO. In addition, the Executive Chairman makes no recommendation and has no role in setting any aspect of his own
compensation; he does not attend any Committee meetings when any element of his compensation is being discussed.
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COMPENSATION DISCUSSION AND ANALYSIS
Role of Compensation Consultants: During 2021, the Committee retained the services of Frederic W. Cook & Co., an
independent compensation consulting firm (“Cook”), to advise the Committee with respect to the compensation of the CEO
and other executives. In addition, Cook provided input into the design of our compensation and benefit programs andevolving regulatory and executive compensation market trends.
Consistent with the requirements of its charter to assess the independence of the compensation consultant, the Committee
has reviewed and considered:•

the services the senior advisor of the Cook consulting team performed for the Committee during 2021;•

the fees paid by the Company as a percentage of Cook’s total revenue;•

the senior advisor’s ownership of the Company’s stock, of which he has none;•

the conflicts of interest policies and procedures of Cook;•the relationships among the Company, its executive officers and the Committee members, and Cook; and•the quality and objectivity of the services provided to the Committee.

Other than obtaining advice on executive and director compensation, the Company has no relationship with the senioradvisor from Cook or his firm, and the Committee regards them as independent.
Compensation and Leadership Development Committee Interlocks and Insider Participation: No member of theCommittee at any time during 2021 had any relationship with the Company that would be required to be disclosed as arelated person transaction or as a compensation committee interlock.

PMI 2022 Proxy Statement

51

COMPENSATION DISCUSSION AND ANALYSIS

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 withmanagement, 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 tothe extent specifically incorporated by reference therein.

52

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COMPENSATION DISCUSSION AND ANALYSIS

Summary Compensation Table
The following table sets forth information concerning the cash and non-cash compensation awarded by PMI to our named executive
officers: the Chief Executive Officer, the Chief Financial Officer, our former Chief Executive Officer serving now as Executive Chairman,
the three most highly compensated officers serving as executive officers on December 31, 2021, and two additional officers who wereamong the most highly compensated officers during 2021, but who were not executive officers on December 31, 2021. These amounts are
based on the compensation earned by these officers while employed by PMI for each year. The compensation for Messrs. Babeau, deWilde, and Volpetti for 2019 and for Messrs. Azinovic, and Insuasty for 2020 and 2019 is not shown because they were not named
executive officers for those years.

Salary
($)

(1)

Bonus
($)

Non-Equity
Change in
StockIncentive Plan
PensionAll Other
Total
(2)
(3)
AwardsCompensation
Value (4) Compensation (5) Compensation
($)
($)
($)
($)
($)

Name and Principal Position

Year

André Calantzopoulos,
Executive Chairman

2021 1,311,589
2020 1,665,1412019 1,525,542

12,331,239
12,024,210
9,752,500

1,683,415
3,367,745
5,491,500—
4,857,081
5,303,609

22,867
22,621
51,90915,349,110
21,936,798
22,125,060

Jacek Olczak,
Chief Executive Officer (6)2021 1,427,758
2020 1,281,619
2019 1,168,771

4,713,468
4,371,767
3,156,689

3,617,484
1,838,611
2,617,361

781,194
3,456,211
5,097,025

17,664
14,341
15,55810,557,568
10,962,549
12,055,404

Emmanuel Babeau,
Chief Financial Officer
Drago Azinovic,
President, Middle East & Africa
Region and PMI Duty Free
Frederic de Wilde,
President, European Union Region
Stefano Volpetti,
President Smoke-Free Products
Category & Chief Consumer
Officer (7)Jorge Insuasty,
Chief Life Sciences Officer (8)Martin G. King,
Retired CEO, PMI America

2021 1,312,514
2020
852,1552021
926,193

4,320,696
8,814,207
2,104,727

2,169,871
1,129,213
1,222,356

1,141,868
1,015,118—

49,41369,74831,555

8,994,362
11,880,441
4,284,831

2021
2020
2021
2020

927,586
903,477984,604
958,843 213,038

2,418,278
2,216,885
2,249,550
2,003,297

1,277,918
992,600
1,301,922
1,057,201—
2,479,770—
2,233,857

16,78727,511
31,87724,0024,640,569
6,620,243
4,567,953
6,490,238

2021

765,541 656,168

2,586,416

911,358

279,982

117,5315,316,996

2021
2020
2019

622,747
903,481853,388

1,584,371
1,489,468
1,362,354

740,825
776,813
1,120,587—
2,944,363
3,086,363

1,847,956
164,730
191,964

4,795,899
6,278,855
6,614,656(1)

The 2021 base salaries are converted to U.S. dollars using an average conversion rate for 2021 of $1.00 = 0.9144 CHF. Average conversion
rates for 2020 and 2019 were $1.00 = 0.9388 CHF and 0.9939 CHF, respectively. Year-to-year variations in the salaries and other amounts
reported for our officers result in part from year-to-year variations in exchange rates. For Mr. King, the salary reflects amounts paid throughhis early retirement on August 31, 2021.

PMI 2022 Proxy Statement

53

COMPENSATION DISCUSSION AND ANALYSIS(2)

The amounts shown in this column represent the aggregate grant date fair value of stock awards computed in accordancewith FASB ASC Topic 718. The number of shares awarded in 2021, together with the grant date fair values of each award, isdisclosed in the Grants of Plan-Based Awards During 2021 table on page 57.
The assumptions used in the calculation of the grant date fair value of PSUs awarded in 2021 under the 2017 Performance
Incentive Plan are described in Item 8, Note 9. Stock Plans, to the consolidated financial statements contained in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021. The table below provides the grant date fair value of PSUs
awarded in 2021 that are subject to maximum performance conditions for each of our NEOs, assuming the maximum level
performance is achieved.

Name

54

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 Wilde2,539,701

Stefano Volpetti

2,822,707

Jorge Insuasty

1,150,400

Martin G. King1,988,391(3)

The 2021, 2020 and 2019 annual incentive compensation awards are converted to U.S. dollars using year-end conversion
rates of $1.00 = 0.9125 CHF, 0.8811 CHF and 0.9671 CHF, respectively. Mr. King’s award is pro-rated through his early retirement
date of August 31, 2021.

(4)

The amounts shown reflect the change in the present value of benefits under the pension plans listed in the Pension Benefits
table. The amounts for all of our named executive officers with the exception of Messrs. Olczak, Babeau, and Insuasty are shownas $0 due to a decrease in present value of pension benefits in 2021. The decrease was significantly driven by the mandated
use of higher interest rates to discount projected future benefits and the impact of exchange rates between USD and CHF. Suchdecreases would reverse in the event lower interest rates are used in future periods. The aggregated amount of decrease is
as follows: Mr. Calantzopoulos, ($1,085,761); Mr. Azinovic, ($900,134); Mr. de Wilde, ($722,477); Mr. Volpetti, ($751,760); andMr. King ($265,773). The increase in the present value of pension benefits for Mr. Olczak is attributable to his salary increase
following his appointment as Chief Executive Officer on May 5, 2021. The increase in the present value of pension benefits
for Mr. Babeau is attributable to his purchase of additional service credit of 1.08 years in the amount of $178,811, funded fully
by him with no Company contribution; as described on page 64, the Swiss law permits participants in a pension plan tomake additional voluntary contributions to the pension plan to compensate for missing years of credited service.

(5)

Details of All Other Compensation for each of the named executive officers appear on the following page.

(6)

Mr. Olczak’s base salary for 2022 has been increased 3.7% by the Committee to CHF 1,400,000 (or $1,517,204).

(7)

Mr. Volpetti, who commenced employment with us in 2019, received the third and fourth installments of his cash sign-on
bonus during 2020. The amounts are converted to U.S. dollars using average conversion rate for 2020 of $1.00 = 0.9388 CHF.

(8)

Mr. Insuasty, who commenced employment with us in 2021, received his cash sign-on bonus in two installments during theyear. The amounts are converted to U.S. dollars using average conversion rate for 2021 of $1.00 = 0.9144 CHF. Mr. Insuasty
was not deemed an executive officer at December 31, 2021 due to the Board’s reassessment of whom at the company it deems
to be executive officers in accordance with the defined term “executive officer” under Rule 3b-7 of the Securities Exchange
Act of 1934, as amended.

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSISAll Other Compensation
Name and Principal Position

International
Assignments (a)
Year
($)

Personal Use of
Early
CompanyCar
Tax Preparation Retirement
Aircraft (b)Expenses (c)Services (d)Payments (e)
($)
($)
($)
($)

Totals($)

André Calantzopoulos,
Executive Chairman

2021
2020
2019

—
—
—

—
—
30,11021,22721,023
20,290

1,640
1,598
1,509

—
—
—

22,867
22,621
51,909

Jacek Olczak,
Chief Executive Officer

2021
2020
2019
2021
2020

—
—
—
14,88350,88917,664
14,341
15,55834,53018,859

—
—
—
—
—

—
—
—
—
—

17,664
14,341
15,55849,41369,748

2021

—

—
—
—
—
—
—
—

27,727

3,828—

31,555

2021
2020
2021
2020

—
—
—
—

—
—
—
—

15,14725,91330,23722,404

1,640
1,598
1,640
1,598

—
—
—

16,78727,511
31,87724,0022021

103,603—

13,928——

117,531

2021
2020
2019

174,932
129,561
159,328———

16,69624,783
18,550—10,386
14,086

Emmanuel Babeau,
Chief Financial Officer
Drago Azinovic,
President, Middle East & Africa
Region and PMI Duty Free
Frederic de Wilde,
President, European Union Region
Stefano Volpetti,
President Smoke-Free Products
Category & Chief Consumer Officer
Jorge Insuasty,
Chief Life Sciences Officer
Martin G. King,
Retired CEO, PMI America

1,656,328 1,847,956—
164,730—
191,964(a)

The amounts shown for Mr. King include payments or reimbursements made pursuant to PMI’s Long-Term Assignment Guidelines, which aredesigned to facilitate the relocation of employees to positions in other countries by covering expenses over and above those that theemployees would have incurred had they remained in their home countries. International assignments and relocations provide a key means
for the Company to meet its global employee development and resource needs, and the Long-Term Assignment Guidelines ensure that
employees have the necessary financial support to help meet cost differences associated with these assignments. The Long-Term Assignment
Guidelines cover housing, home leave, relocation, education expenses and tax and social security equalization, as well as other program
allowances. Currently, there are approximately 485 participants in the program. The amounts shown for Messrs. Babeau and Insuasty include
payments and reimbursements made pursuant to PMI’s New Hire from Abroad Guidelines, which are designed to facilitate the relocation of
our new hires, when they are hired from a different country than their work location. In addition, for Mr. Insuasty the amounts include additional
temporary relocation benefits, provided as part of his contractual arrangements, in order to facilitate his transition when joining us.

(b)

The amounts shown are the incremental cost of personal use of Company aircraft to PMI, and include the cost of trip-related crew hotels andmeals, in-flight food and beverages, landing and ground handling fees, hourly maintenance contract costs, hangar or aircraft parking costs,
fuel costs based on the average annual cost of fuel per hour flown, and other smaller variable costs. Fixed costs that would be incurred in any
event to operate Company aircraft (e.g., aircraft purchase costs, depreciation, maintenance not related to personal trips, and flight crewsalaries) are not included. For 2021, Mr. Calantzopoulos reimbursed the Company for his personal usage of Company aircraft; he is responsible
for his own taxes on any imputed taxable income resulting from personal use of Company aircraft.

(c)

Amounts shown for Messrs. Calantzopoulos and Olczak include the incremental cost of personal use of driver services that PMI provided forreasons of security and personal safety. With respect to Messrs. Calantzopoulos, Olczak, Babeau, Azinovic, de Wilde, Volpetti, Insuasty,
and King amounts include the cost, amortized over a five-year period in 2021, and a six-year period in 2020 and 2019, respectively, of a vehicle,
including insurance, maintenance, repairs and taxes. Executives are responsible for their own taxes on any imputed taxable income resulting
from car expenses. The 2021 amounts for Mr. King include the car allowance benefits. Amounts that were paid or incurred in currency other than
U.S. dollars are converted to U.S. dollars using an average conversion rate for 2021 of $1.00 = 0.9144 CHF.

(d)

The tax preparation services are pursuant to PMI policies that apply to all Swiss payroll-based management employees. The amounts shown
are converted to U.S. dollars using an average conversion rate for 2021 of $1.00 = 0.9144 CHF.

(e)

The payments in connection with Mr. King’s early retirement include the payment of a severance lump sum of $1,386,161. Mr. King elected totransfer part of his severance payment of $429,813 to the FTR Foundation, a welfare institution providing disability and death lump sum
insurance and supplemental benefits to retirees from the Swiss Pension Funds in relation to early retirements. Mr. King is provided with atransitory benefit from FTR until he reaches age 58. The retirement benefits from the Swiss Pension Funds will commence on June 1, 2022.
During the transitory period, Mr. King will continue to contribute to the Swiss Pension Funds. The amount reported also includes holiday
equivalent payment of $228,374, cash payment in lieu of outplacement services of $38,276, and tax preparation services related to early

PMI 2022 Proxy Statement

55

COMPENSATION DISCUSSION AND ANALYSIS
retirement. The amounts shown are converted to U.S. dollars using an average conversion rate for 2021 of $1.00 = 0.9144 CHF. Any variationsin the amounts reported previously result from the impact of the exchange rate between USD and CHF. The early retirement agreement for
Mr. King is described on page 67.

The following are the specific amounts paid by the Company under the International Assignments:

Name and Principal Position

Tax and Social
Security
Other Program
Relocation Equalization (a) Allowances (b)
Year
($)
($)
($)

Totals($)

Emmanuel Babeau,
Chief Financial Officer

2021
2020

648
43,0494,529—

14,88350,889Jorge Insuasty,
Chief Life Sciences Officer
Martin G. King,
Retired CEO, PMI America

2021

84,51819,085— 103,603

2021
2020
2019

47,36784,725
4,322

110,639
40,743
151,310

16,926 174,932
4,093 129,561
3,696 159,328

9,706
7,840

Amounts that were paid or incurred in currency other than U.S. dollars are converted to U.S. dollars using an average conversion rate for2021 of $1.00 = 0.9144 CHF.
(a)

The tax and social security equalization payments made pursuant to PMI’s Long-Term Assignment Guidelines are to ensure that an assignee’s
income tax and social security liability is approximately the same as if he or she had not accepted a long-term international assignment. The
payments made pursuant to PMI’s New Hire from Abroad Guidelines aim to offset the incremental tax and social security liability resulting from
temporary relocation benefits. Payments for tax equalization often occur in years following the actual tax year. The Company has covered theexcess taxes and social security on behalf of Messrs. Babeau, Insuasty, and King pursuant to our assignment tax principle.

(b)

Other Program Allowances include tax preparation services paid by the Company under the PMI’s Long-Term Assignment and New Hire from
Abroad Guidelines.

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Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS

Grants of Plan-Based Awards During 2021
All Other
Stock
Grant Date
Awards:Number of Shares Fair Value ofMaximum Threshold Target Maximum of Stock or Units (5) Stock Awards
($)
(#)
(#)
(#)
(#)
($)

Estimated Possible Payouts
Under Non-Equity
Annual Incentive Plan (1)Name and Principal
Position

Grant Date

André
Calantzopoulos,
Executive Chairman

2021
2/4/2021
2/4/2021— 1,169,037 2,630,333

Jacek Olczak,
Chief Executive Officer

2021
2/4/2021
2/4/2021
2021
2/4/2021
2/4/2021
2021
2/4/2021
2/4/2021
2/4/2021(3)2021
2/4/2021
2/4/2021
2/4/2021(3)2021
2/4/2021
2/4/2021— 2,512,141 5,652,317

2021
2/4/2021
2/4/2021
1/4/2021(4)2021
2/4/2021
2/4/2021—

Emmanuel Babeau,
Chief Financial Officer
Drago Azinovic,
President, Middle
East & Africa Region
and PMI Duty Free
Frederic de Wilde,
President, European
Union Region
Stefano Volpetti,
President, Smoke-Free
Products Category & Chief
Consumer Officer
Jorge Insuasty,
Chief Life Sciences
Officer
Martin G. King,
Retired CEO, PMI
AmericaThreshold($)

Target($)

Estimated Future
Payouts Under Equity
Incentive Plan (2)42,100 84,200

16,090 32,180

168,400
56,1307,736,717
4,594,522

21,4602,956,859
1,756,609

19,6702,710,608
1,610,088

8,010
4,210

1,104,458
655,659
344,610

9,220
4,810

1,269,851
754,704
393,723

10,2401,411,354
838,196

5,120
19,570575,200
419,098
1,592,118

7,210

994,196590,175

64,360— 1,643,841 3,698,642
14,750 29,500—

926,027 2,083,561
6,010 12,020—

27,640986,305 2,219,186
7,680 15,360

30,720690,422 1,553,450
3,130

—

24,040926,027 2,083,561
6,910 13,820—

59,0006,260

12,520926,032 2,083,572
5,410 10,820

21,640(1)

The estimated possible payouts for Messrs. Calantzopoulos and Olczak are prorated to reflect the different roles during 2021. The estimatedpossible payouts are converted to U.S. dollars using the conversion rate on December 31, 2021, of $1.00 = 0.9125 CHF. The numbers in thesecolumns represent the range of potential cash awards as of the time of the grant. Actual awards paid under these plans for 2021 are foundin the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

(2)

On February 4, 2021, each of our named executive officers, received 60% of his targeted equity award in the form of PSUs, except for
Mr. Insuasty, who received 55% of his targeted equity award in the form of PSUs. The target number of PSUs awarded was based on the
grant date fair market value, determined by using the average of the high and the low trading prices of PMI stock on that date of $81.855. The
closing price of PMI stock on that date was $83.63. These equity awards are scheduled to vest on February 21, 2024, to the extent performancegoals pre-established and pre-weighted by the Committee are achieved. For the 2021-2023 performance cycle the performance goals are
based on TSR, currency neutral adjusted compound annual diluted EPS growth rate and net revenues from our smoke-free products measure,
subject to modifiers (quality of the net revenue achievement and ESG criteria). Dividend equivalents will be payable at vesting only on theearned shares.
The numbers in these columns represent the potential number of PSUs that can vest at three different levels of performance. Thresholdassumes achievement of a threshold performance level for each of the three pre-established performance goals and no adjustment for modifiers
resulting in the vesting of 50% of the target number of PSUs. The vesting percentage can be zero if none of the threshold levels is achieved.

(3)

On February 4, 2021, Messrs. Azinovic and de Wilde received a special RSU award of 4,210 RSUs and 4,810 RSUs respectively scheduled
to vest on February 16, 2022.

(4)

Mr. Insuasty commenced employment with us on January 1, 2021 and received a hiring RSU award on January 4, 2021. The number of
RSUs awarded was based on the grant date fair market value of $81.355. Half of this award vested on January 3, 2022 and the other half isscheduled to vest on January 2, 2023. Dividend equivalents are payable on a quarterly basis throughout the vesting restriction period.

PMI 2022 Proxy Statement

57

COMPENSATION DISCUSSION AND ANALYSIS(5)

On February 4, 2021, each of our named executive officers received 40% of his targeted equity award in the form of RSUs, except Mr. Insuasty,
who received 45% of his targeted equity award in the form of RSUs. The number of RSUs awarded was based on the grant date fair market
value, determined by using the average of the high and the low trading prices of PMI stock on that date of $81.855. The closing price of PMI
stock on that date was $83.63. These equity awards are scheduled to vest on February 21, 2024. Dividend equivalents are payable on aquarterly basis throughout the vesting restriction period.

On February 10, 2022, the following named executive officers received equity awards that will vest (subject to the conditions of the awards) on
February 19, 2025, as follows: Mr. Calantzopoulos, 25,220 RSUs, 37,830 PSUs; Mr. Olczak, 34,100 RSUs, 51,140 PSUs; Mr. Babeau, 16,000 RSUs,
24,000 PSUs; Mr. Azinovic, 6,860 RSUs, 10,290 PSUs; Mr. de Wilde, 7,170 RSUs, 10,760 PSUs; Mr. Volpetti, 7,970 RSUs, 11,960 PSUs; andMr. Insuasty, 4,790 RSUs, 5,850 PSUs. The amount of these awards was determined based on 2021 individual performance and targeted award
levels by salary grade and then split between PSUs (60%) and RSUs (40%), except for Mr. Insuasty, whose award was split between PSUs (55%) and
RSUs (45%).

58

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS

Outstanding Equity Awards as ofDecember 31, 2021
Stock Awards
RSUs

Name and Principal Position
André Calantzopoulos,
Executive Chairman

Jacek Olczak,
Chief Executive Officer

Emmanuel Babeau,
Chief Financial Officer

Drago Azinovic,
President, Middle East & Africa Region
and PMI Duty Free

Frederic de Wilde,
President, European Union
RegionStefano Volpetti,
President, Smoke-Free Products
Category & Chief Consumer Officer

Jorge Insuasty,
Chief Life Sciences Officer
Martin G. King,
Retired CEO, PMI America

PSUs

Number ofUnearned
Number of Market Value
Units that
Units that of Units thatHave notHave notHave not
Vested (3)Vested (1)(2)(4)
Stock Award Vested (1)(2)
(1)
(#)
($)
(#)
Grant Date
2/4/2021
2/4/2021
2/6/2020
2/6/2020
2/7/2019
2/7/2019
2/4/2021
2/4/2021
2/6/2020
2/6/2020
2/7/2019
2/7/2019
2/4/2021
2/4/2021
5/1/2020
5/1/2020
5/1/2020(5)2/4/2021
2/4/2021
2/4/2021(6)2/6/2020
2/6/2020
2/7/2019
2/7/2019
2/4/2021
2/4/2021
2/4/2021(6)2/6/2020
2/6/2020
2/7/2019
2/7/2019
2/4/2021
2/4/2021
2/6/2020
2/6/2020
6/3/2019(7)2/4/2021
2/4/2021
1/4/2021(8)2/4/2021
2/6/2020
2/7/2019

Market or
PayoutValue ofUnearned
Units thatHave not
Vested (3)($)

84,200 7,999,000
56,1305,332,350

53,7305,104,350

49,3104,684,450

21,4602,038,700

19,5401,856,300

15,9601,516,200

19,6701,868,650

18,39034,8201,747,050
3,307,900

8,010
4,210

760,950
399,950

7,360

699,200

8,420

799,900

9,220
4,810

875,900
456,950

8,760

832,200

6,890

654,550

10,240972,800

8,950
9,310

850,250
884,450

5,120
19,570486,400
1,859,150

80,600 7,657,000
73,960 7,026,200
32,180 3,057,100
29,300 2,783,500
23,940 2,274,300
29,500 2,802,500
27,580 2,620,100

12,020 1,141,900

11,030 1,047,850
12,620 1,198,900
13,820 1,312,900

13,130 1,247,350
10,330981,350

15,360 1,459,200
13,430 1,275,850

6,260

594,700

10,820 1,027,900
9,980
948,100
10,330981,350

PMI 2022 Proxy Statement

59

COMPENSATION DISCUSSION AND ANALYSIS(1)

These awards vest according to the following schedule with the exception of hiring grants for Messrs. Babeau, Volpetti, and Insuasty, described infootnotes (5), (7), and (8) respectively, and special RSU grant for Messrs. Azinovic and de Wilde described in footnote (6):Grant Date

Grant
Type

2/4/2021

PSU

Award vests between 0-200% on 2/21/2024 uponcertification 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 uponcertification 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 uponcertification 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 uponcertification of the achievement of performance goals
pre-established by the Committee.

2/7/2019

RSU

100% of award vested on 2/16/2022.

Vesting ScheduleUpon normal retirement or upon separation from employment by mutual agreement after reaching age 58, outstanding RSUs will vest immediately,while outstanding PSUs will vest at the end of the relevant three-year performance cycle to the extent performance goals are met. Upon death or
disability, all outstanding RSUs will vest and all outstanding PSUs will vest at 100% of target. In all other cases, the extent of vesting or forfeiture will
be subject to the Committee’s discretion.
(2)

Dividend equivalents paid in 2021 on outstanding RSUs for each of our named executive officers were as follows: Mr. Calantzopoulos, $758,952;
Mr. Olczak, $266,763; Mr. Babeau, $371,634; Mr. Azinovic, $128,293; Mr. de Wilde, $133,603; Mr. Volpetti, $126,456; Mr. Insuasty, $91,076; andMr. King, $74,449. Dividend equivalents paid in 2021 on vested PSUs for our named executive officers were as follows: Mr. Calantzopoulos, $492,940;
Mr. Olczak, $145,482; Mr. Azinovic, $62,904; Mr. de Wilde, $55,898; and Mr. King, $80,344. Any variations in the amounts reported previously
result from the impact of the exchange rate between USD and CHF.

(3)

Based on the closing market price of PMI common stock on December 31, 2021, of $95.00.

(4)Amount assumes target performance goals are achieved. The actual number of units that vest will range between 0% and 200%, depending on
actual performance during the performance cycle.

(5)

The second installment of hiring RSU grant for Mr. Babeau that vested on February 16, 2022. The first installment vested on February 17, 2021.

(6)

The special RSU grant for Messrs. Azinovic and de Wilde, that vested on February 16, 2022.

(7)

The hiring RSU grant for Mr. Volpetti scheduled to vest on June 1, 2022.

(8)

The hiring RSU grant for Mr. Insuasty. Half of this award vested on January 3, 2022, the other half is scheduled to vest on January 2, 2023.

60

Delivering a Smoke-Free Future

COMPENSATION DISCUSSION AND ANALYSIS

Stock Option Exercises and Stock Vested
During 2021
Stock Awards

Name and Principal Position

Number of
SharesValue
Acquired on Realized on
Vesting
Vesting(#)($)

André Calantzopoulos,
Executive Chairman

80,477

6,948,787

Jacek Olczak,
Chief Executive Officer

23,7462,050,348

Emmanuel Babeau,
Chief Financial Officer
Drago Azinovic,
President, Middle East & Africa Region and PMI Duty Free
Frederic de Wilde,
President, European Union Region
Stefano Volpetti,
President, Smoke-Free Products Category & Chief Consumer Officer

34,8203,006,533

10,272886,9369,125

787,898——

Jorge Insuasty,
Chief Life Sciences Officer——

Martin G. King,
Retired CEO, PMI America

33,879 (1)3,274,362(1)

Includes 20,760 shares that vested as part of early retirement agreement.

On January 3, 2022, vesting restrictions lapsed for the first installment of 2021 hiring RSU grant for Mr. Insuasty, 9,785 shares.
On February 16, 2022, vesting restrictions lapsed for the following RSUs granted in 2019: Mr. Calantzopoulos, 49,310 shares; Mr. Olczak,
15,960 shares; Mr. Azinovic, 8,420 shares; Mr. de Wilde, 6,890 shares; the second installment of 2020 hiring RSU grant for Mr. Babeau,
34,820 shares, and the following RSUs granted in 2021: Mr. Azinovic, 4,210 shares, and Mr. de Wilde, 4,810 shares.
On February 16, 2022, the PSUs granted in 2019 vested at an overall performance factor of 150% (as certified by the Committee) as
follows: Mr. Calantzopoulos, 110,940 shares; Mr. Olczak, 35,910 shares; Mr. Azinovic, 18,930 shares; Mr. de Wilde, 15,495 shares, andMr. King, 15,495 shares.
Dividend equivalents paid in 2022 on vested PSUs for our named executive officers were as follows: Mr. Calantzopoulos, $1,582,004;
Mr. Olczak, $512,077; Mr. Azinovic, $269,942; Mr. de Wilde, $220,959; and Mr. King, $220,959.

PMI 2022 Proxy Statement

61

COMPENSATION DISCUSSION AND ANALYSIS

Pension Benefits
The Pension Benefits table and the Non-Qualified Deferred Compensation table below generally reflect amounts accumulated as aresult of the NEOs’ service over their full careers with us, our prior parent company and affiliates. The increments related to 2021 arereflected in the Change in Pension Value column of the Summary Compensation Table on page 53. Our plans providing pension benefits
are described below in the Pension Benefits table, and our defined contribution plans are described in the Non-Qualified Deferred
Compensation table on page 65.

Name and Principal
Position
André Calantzopoulos,
Executive Chairman
Jacek Olczak,
Chief Executive Officer

Plan Name

Number of
Present Value
Payments
Years of
Credited of Accumulated During Last
Benefits (2)(3)
Fiscal Year (4)Service (1)
(#)
($)
($)

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland

40.00
16.92

21,661,561
3,976,093——

Supplemental Plan of Philip Morris in Switzerland

16.00

11,815,556—

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland

32.00
15.92

14,261,426
1,125,944——

Supplemental Plan of Philip Morris in Switzerland

13.00

7,583,748—

Emmanuel Babeau,
Chief Financial Officer

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland
Supplemental Plan of Philip Morris in Switzerland

3.83
0.92
1.67

1,657,814
48,053451,119———

Drago Azinovic,
President, Middle East &Africa Region and PMI Duty
Free

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland
Supplemental Plan of Philip Morris in Switzerland

35.00
11.92
10.00

15,444,939
1,423,379
1,015,350———

Frederic de Wilde,
President, European Union Region

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland
Supplemental Plan of Philip Morris in Switzerland

30.00
16.92
13.00

12,210,654
1,682,565
1,752,115———

Stefano Volpetti,
President, Smoke-Free
Products Category & Chief
Consumer Officer

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland
Supplemental Plan of Philip Morris in Switzerland

26.00
1.92
2.58

11,349,802
113,340
354,780———

Jorge Insuasty,
Chief Life Sciences Officer
Martin G. King,
Retired CEO, PMI America

Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland
Pension Fund of Philip Morris in Switzerland
IC Pension Plan of Philip Morris in Switzerland
Supplemental Plan of Philip Morris in Switzerland
Retirement Plan for Salaried Employees
Benefit Equalization Plan (BEP)

1.00
—
16.25
15.58
12.67
14.00
14.00

279,982—
6,747,666
1,093,100
1,760,842
1,193,922
7,242,637

—
—
—
—
—
9,278
—

(1)

62

As of December 31, 2021, each named executive officer’s total years of service with PMI or its affiliates were as follows: Mr. Calantzopoulos,
36.92 years; Mr. Olczak, 28.79 years; Mr. Babeau, 1.67 years; Mr. Azinovic 12.83 years; Mr. de Wilde, 29.41 years; Mr. Volpetti, 2.58 years;
Mr. Insuasty 1.00 year; and Mr. King 30.24 years. The years shown in this column are the years credited under the named plan for purposesof benefit accrual. Additional years may count for purposes of vesting or early retirement eligibility. Differences between each named executive
officer’s total service and the credited service shown for each plan result from transfers between entities sponsoring various plans and fromvoluntary contributions to such plans. Mr. King’s credited service under the U.S. plans reflects his prior service as a U.S. payroll-based employee.
While such credited service was frozen, he continued to earn eligibility and vesting service and increases in his benefit due to increases in
his compensation as a result of his continued service with PMI. The Pension Fund of Philip Morris in Switzerland allows employees to purchaseadditional service credit with contributions from their own funds, and Messrs. Calantzopoulos, Olczak, Babeau, Azinovic, de Wilde, andVolpetti have purchased 3.08, 15.67, 2.17, 22.17, 11.75, and 23.42 years, respectively, without any Company contribution. Mr. de Wilde’s
credited service includes his service at our Belgian affiliate. Mr. Volpetti’s service credit includes 4.25 years transferred from his previous pension
plan.

Delivering a Smoke-Free Future(2)The amounts shown in this column for pension plans in Switzerland are based on a 60% joint and survivor annuity commencing
at age 62 (the earliest date on which, assuming continued employment, the individual would be eligible for benefits that are
not reduced for early commencement) with the exception of Messrs. Calantzopoulos and Insuasty, for whom the benefits arepresented assuming they retire immediately as they are above age 62, and the following actuarial assumptions: discount rate
0.30%, mortality table LPP 2020 (fully generational) for expected improvements in mortality and interest rate on accountbalances of 3.2%. Present value amounts in Swiss francs are converted to U.S. dollars using the conversion rate on
December 31, 2021, of $1.00 = 0.9125 CHF.
The amounts shown in this column for Mr. King’s U.S. pension benefits are based on a 100% joint and survivor annuity,reflecting his actual payment election (or, for the BEP, a lump sum payment) using the same assumptions applied for year-end
2021 financial disclosure under FASB ASC Topic 715 (discount rate 2.84% and mortality table fully generational Pri-2012
with MP2021 projection) and for the BEP benefit the actual lump sum basis under the BEP as of the determination date ofOctober 1, 2021. Benefits are assumed to commence at his actual retirement date of August 31, 2021.
Like all present value amounts, the amounts shown in this column change as the interest rate used to discount projected
future benefits is adjusted, with lower interest rates producing higher present values and higher interest rates producing lower
present values.

(3)

In addition to the benefits reflected in this column, we generally provide a survivor income benefit allowance, or SIB allowance,
to the surviving spouse and children of U.S. payroll-based employees who die while covered by our Retirement Plan for
Salaried Employees. Following the death of a retiree who was married at the time of retirement and whose retirement benefits
are being paid as a single life annuity, the surviving spouse becomes entitled to a SIB allowance commencing four years
after the retiree’s death, in an amount equal to the amount the spouse would have received if the participant had elected toreceive monthly payments under the Retirement Plan in the form of a 50% joint and survivor annuity. Mr. King elected to receive
his Retirement Plan benefit in the form of a 100% joint and survivor annuity, therefore, the SIB benefit is not applicable. Thereis no SIB allowance under the BEP because the BEP benefit is only available as a lump sum.

(4)

The amounts in this column reflect the actual payments as of the retirement date for Mr. King. Mr. King is receiving monthly
payments from the Retirement Plan of $4,639 in the form of a 100% joint and survivor annuity that commenced on October 1,
2021. The lump sum from the BEP is estimated at $7,276,520 to be paid in March 2022. The benefits from Mr. King’s Swisspension plans will commence on June 1, 2022.

Retirement Plans for U.S. Payroll-Based Employees
Pensions for our U.S. payroll-based employees are payable from the tax-qualified Retirement Plan and non-qualified
supplemental plans. These plans recognize the employees’ prior service with companies with which we were previously
affiliated.
Mr. King, who is a former U.S. payroll-based employee, has accrued benefits under the tax-qualified Retirement Plan andthe non-qualified supplemental Benefit Equalization Plan (BEP). The provisions of these two plans are described below.
The BEP provides both supplemental pension benefits and supplemental deferred profit-sharing benefits. The provisions of
the BEP relating to deferred profit-sharing benefits are described following the Non-Qualified Deferred Compensationtable.

Retirement Plan for Salaried Employees
The tax-qualified Retirement Plan is a non-contributory plan maintained for the benefit of our U.S. payroll-based salaried
employees hired before January 1, 2009. Subject to tax law limits, the pension formula generally applicable under the
Retirement Plan provides for lifetime benefits following termination of employment equal to (a) 1.75% of the employee’s
average compensation (the sum of annual salary and annual incentive compensation award in the 60 consecutive months
during the employee’s last 120 months of service that, when divided by five, produces the highest average), minus (b) 0.30%
of such compensation up to the applicable Social Security-covered compensation amount, times (c) years of credited
service (up to a maximum of 35). Social Security-covered compensation is generally an amount equal to the average of
the Social Security taxable wage bases for the 35-year period that ends in the year the participant reaches age 65. The
resulting benefit is expressed as a single life annuity payable commencing at normal retirement age.
Employees who terminate employment before age 55 with vested benefits may commence receiving payment of theiraccrued pensions after attaining age 55, with reductions for early commencement of 6% for each year by which
commencement precedes age 65. For an employee who terminates employment after age 55, the reduction for earlycommencement is generally 6% for each year by which commencement precedes age 60. If an employee has 30 years ofservice and is age 55 or older, or is 60 or older with 5 years of service, the annuity immediately payable on early retirement
is 100% of that payable at normal retirement age.

Benefit Equalization Plan (BEP)
The tax law applicable to the funded tax-qualified Retirement Plan limits the annual compensation that can be taken into
account in determining the five-year average compensation under the Plan. As a result of this and certain other tax limits,
PMI 2022 Proxy Statement

63

only a portion of the benefits calculated under the Retirement Plan formula can be paid to affected employees from theRetirement Plan. To compensate for the loss of these benefits under the funded tax-qualified plan, eligible employees accrue
supplemental benefits under non-qualified plans. Generally, the supplemental pension benefits accrued under the BEP
equal the difference between (a) the pension benefits determined under the Retirement Plan provisions described above,
disregarding the tax law limits, and (b) the benefits that can be provided from the Retirement Plan after taking the tax law
limits into account.

Retirement Plans for Swiss Payroll-Based Employees
Pensions for our Swiss payroll-based employees are payable from a funded defined benefit pension plan and incentive
compensation (IC) pension plan qualifying for favorable treatment under Swiss law. To the extent that Swiss tax or otherlimitations do not allow paying the full pension under the qualified plans, the balance is expected to be payable under a
supplemental pension plan.

Pension Fund of Philip Morris in Switzerland
With limited exceptions, all Swiss payroll-based employees over 25 years of age become immediately covered by thePension Fund of Philip Morris in Switzerland, a broad-based contributory-funded plan providing defined retirement, disability
and death benefits up to limits prescribed under Swiss law. Retirement benefits are expressed as an annuity at normal
retirement age equal to 1.8% of the participant’s five-year average pensionable salary (base salary minus two-thirds of the
maximum social security benefits of CHF 28,680 in 2021) multiplied by years of credited service (to a maximum of 40 to
41 years, depending on the employee’s date of birth). Effective April 1, 2015, employees between the ages of 25 and 34
contribute 6% of their pensionable salary to the Fund, and the contribution increases to 7% for employees between the agesof 35 and 54 and 8% for employees between the ages of 55 and 65. Subject to certain conditions, participants may electto receive pension benefits entirely or partially in a lump sum. For determining lump sum values, a discount rate of 3.5% and
the LPP 2020 mortality table are used. The LPP mortality table is a commonly used mortality table in Switzerland. For an
employee who completes 30 years of service and retires at age 62, this translates into payments equivalent to a pension of
54% of five years’ annual average pensionable salary. For an employee with 40 years of credited service at age 65, this“replacement ratio” is approximately 72% of average salary. Participants may retire and commence benefits as early as age
58; however, for each year that retirement precedes age 62, the 1.8% multiplier used to calculate the amount of theretirement pension is reduced by 0.06% (at age 58 the multiplier is 1.56%). Swiss law permits participants in a pension
plan to make additional voluntary contributions to the pension plan to compensate for missing years of credited service.
If an employee terminates employment with us before age 58, the lump sum value of the pension calculated using thetermination lump sum factors is transferred either to a new pension fund or to a blocked bank account until early retirement
age is reached. An employee who is age 50 or over upon termination of employment can elect, under certain conditions,
to remain in the plan as an external member. In this case, neither the employee nor the employer can contribute any further
funds. At the age of 58, the former employee must then elect to take retirement in the form of an annuity, a lump sum ora mix of both.

IC Pension Plan of Philip Morris in Switzerland
Swiss payroll-based employees in salary grades 14 and above who are eligible to participate in the annual incentive
compensation award program described above are also eligible to participate in the IC Pension Plan of Philip Morris in
Switzerland, a funded plan which, for the named executive officers, provides for participant contributions of up to 1.5% of
pensionable salary (as defined above), subject to maximum Swiss pension law limits, and an equal matching contribution
from the employer. As with the pension plan, participants may make additional voluntary contributions subject to certain
terms and conditions.
Benefits ultimately received depend on interest rates set by the Pension Board of the plan (which consists of members
appointed by the employer and an equal number selected by participants in the plan) and are payable in a lump sum or as
an annuity. The plan guarantees that there is no loss of principal on either the employee contributions or the Company
match. In 2021, the assets of the funds had a positive performance of 12.8%, and 9.0% was credited on plan balances.
If an employee terminates employment with the Company before age 58, the employee’s account value is transferred toeither a new pension fund or to a blocked bank account until early retirement age is reached. An employee who is age 50 orover upon termination of employment can elect under certain conditions to remain in the plan as an external member. In
this case, neither the employee nor the employer can contribute any further funds to the plan although interest does accrue
on the account balance. At the age of 58, the former employee must then elect to take retirement in the form of anannuity, a lump sum payment or a mix of both.
64

Delivering a Smoke-Free FutureSupplemental Plan of Philip Morris in Switzerland
For some Swiss payroll-based employees, including majority of our NEOs, the laws and regulations applicable to thePension Fund of Philip Morris in Switzerland and the IC Pension Plan of Philip Morris in Switzerland limit the benefits thatcan be provided under those plans. For these employees, we maintain a Supplemental Plan under which an amount iscalculated and deposited annually in a Swiss foundation to make up for the difference between the full pension an
employee would have received had these plans not been subject to such limitations (assuming the employee becomes
entitled to benefits from the Supplemental Plan). However, the annual deposits do not serve to increase the amount thatan individual would have received absent such limits. In determining the amount of the annual deposit, the actuarial
assumptions used are the same as those described above for the Pension Fund of Philip Morris in Switzerland.
In the event of a Supplemental Plan participant’s termination of employment from the Company, if the Foundation Board
determines in its sole discretion that he or she is entitled to a benefit, the Supplemental Plan benefit is paid in a lump sum
at the time that benefits first become payable to the participant under the Pension Fund of Philip Morris in Switzerland
and the IC Pension Plan of Philip Morris in Switzerland. As the Supplemental Plan is not a tax-qualified plan, the benefits
from this plan, when paid, are adjusted for the loss of favorable tax-qualified plan treatment.

NON-QUALIFIED DEFERRED COMPENSATIONName andPrincipal
Position
Martin G. King,
Retired CEO,PMI America

Plan Name
Benefit Equalization Plan (BEP),
Deferred Profit-Sharing Plan

Executive
Contributionsin 2021($)

Registrant
Contributionsin 2021($)

Aggregate
Earnings
in 2021(1)($)

Aggregate
Withdrawals/
Distribution($)

Aggregate
Balance as ofDecember 31,
2021(2)
($)

—

—

233

—

21,731(1)

The amount in this column consists of amounts credited as earnings for 2021 on account balances attributable to the priorparticipation under the defined contribution portion of the BEP. This amount does not constitute above-market earnings and,accordingly, is not included in amounts reported in the Summary Compensation Table on page 53.

(2)

The amount reflects the balance as of August 31, 2021, Mr. King’s early retirement date. The distribution will commence inMarch 2022.

DEFERRED PROFIT-SHARING AND BENEFIT EQUALIZATION PLAN
For U.S. payroll-based employees, we provide non-qualified defined contribution benefits supplementing the benefits
provided under our tax-qualified Deferred Profit-Sharing Plan for Salaried Employees, or DPS. Under the DPS, contributions
are made on behalf of each participant for each year. Currently, none of our named executive officers is eligible for DPS
contributions.
As is the case for the Retirement Plan, the applicable U.S. tax law limits the amount of compensation ($290,000 for 2021)
that can be taken into account under the tax-qualified DPS for any year and imposes other limits on the amounts that can beallocated to individuals under the DPS. A DPS participant whose salary was more than the compensation limit or who
was otherwise affected by tax law limits is entitled to a supplemental profit-sharing benefit in an amount generally equal tothe additional benefits the participant would have received under the DPS but for the application of the tax law limits.
The funds accumulated in the DPS portion of BEP for Mr. King reflect the contributions while he was a U.S. payroll-based
employee.
The DPS fund used as an earnings measure under this portion of the BEP is invested in a variety of high-quality fixedincome instruments with strong credit ratings and, for 2021, produced earnings at a rate of approximately 1.6%. Participants
typically receive their supplemental profit-sharing benefits upon termination of employment in a lump sum or, if elected inadvance, as a deferred lump sum payment or in installments over a number of years not to exceed their life expectancy.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROLARRANGEMENTS
Our Swiss payroll-based executive officers are covered by contracts, which do not include change in control provisions.
Messrs. Calantzopoulos, Olczak, and de Wilde do not have special employment contracts. The employment contract with
Mr. Babeau, our Chief Financial Officer, provides for severance if his employment is terminated without cause. Depending on
the timing of such termination, Mr. Babeau would be entitled to a lump sum cash payment of up to two times his basesalary and incentive compensation award (which could be pro-rated). His RSUs will vest fully and PSUs will vest on a
PMI 2022 Proxy Statement65

pro-rated basis as scheduled and certified by the Committee. Any severance under the contract is conditioned on a 24month non-compete obligation. The employment contract with Mr. Insuasty, our Chief Life Sciences Officer, provides forseverance if his employment is terminated without cause before January 1, 2023. If the employment is terminated within thefirst year of employment, Mr. Insuasty would be entitled to a lump sum severance payment, covering the base salary fromthe end of the employment date until December 31, 2021, and an amount in lieu of the pro-rated incentive compensation that
he would have received through December 31, 2021, conditioned on a non-compete obligation for the period until
December 31, 2021. The provisions are similar in case the employment would be terminated within the second year of
employment. The severance provisions in the employment contract of Mr. Volpetti were valid for two years uponcommencement of the employment and are no longer applicable.
The amounts in the accompanying table are estimates of the severance benefits that would be payable to Messrs. Babeau
and Insuasty in case of involuntary separation without cause assuming end of employment date of December 31, 2021.

Severance(1)
($)

Name
Emmanuel Babeau
Jorge Insuasty

Estimated Value ofIncentive
Stock Awards(2) Compensation Award(3)($)($)

2,630,146

9,367,855—

2,940,250

Total
($)

3,287,682 15,285,683
690,4223,630,672(1)

The amount for Mr. Babeau assumes a severance payment equivalent to two times his annual base salary. Amount is converted
to U.S. dollars using the conversion rate on December 31, 2021, of $1.00 = 0.9125 CHF.

(2)

Assumes the value of the stock awards that would vest as a result of termination assuming the closing price of PMI common
stock on December 31, 2021, of $95.00. The value of unvested PSUs granted under the 2017 Performance Incentive Planassumes target number of shares would vest, pro-rated for Mr. Babeau to reflect the period between the grant date andDecember 31, 2021. The value of unvested PSUs for Mr. Insuasty assumes target number of shares would vest. The vestingof the stock awards for Mr. Insuasty is provided in line with applicable stock agreements assuming separation by mutual
agreement after reaching age 58.

(3)

Amounts are converted to U.S. dollars using the conversion rate on December 31, 2021, of $1.00 = 0.9125 CHF.

Additionally, Mr. Azinovic’s initial employment contract from 2008 provided that in the event his employment is terminatedby the Company he will receive a severance package with a value of at least EUR 1.32 million (or $1.49 million using theconversion rate on December 31, 2021 of $1 = 0.883 EUR) net of taxes.
Our 2019, 2020 and 2021 equity compensation awards were granted under the 2017 Performance Incentive Plan. That
plan includes a double-trigger feature. Under the plan, outstanding equity awards will not accelerate or vest if the entity
acquiring PMI agrees to replace the award with a time-based equity award of equivalent value. For this purpose, the valueof outstanding PSUs would be determined based on actual performance through the date of the change in control if
more than one-half of the performance cycle has elapsed and such performance is determinable. Otherwise, the value ofthe outstanding PSUs will be based on the assumption that target performance had been achieved. If outstanding equity
awards are not replaced, the outstanding RSUs would fully vest, and the value of outstanding PSUs would be determined
as set forth above and both would be payable immediately in cash. Fully earned but unpaid annual incentive compensation
awards would become payable.
If outstanding equity awards are replaced as described above, but within two years after the change in control, theemployee’s employment is terminated involuntarily and other than for cause or the employee terminates employment forgood reason, the replacement awards would fully vest.
Under PMI’s 2017 Performance Incentive Plan, a change in control occurs: (i) upon an acquisition of 20% or more ofeither PMI’s common stock or the voting power of PMI’s voting securities, excluding certain acquisitions involving PMI or
its affiliates or where PMI’s beneficial owners continue to meet certain ownership thresholds; (ii) when members of the PMI
Board as of the effective date of PMI’s 2017 Performance Incentive Plan, or thereafter nominated or elected by suchmembers, cease to constitute a majority of the PMI Board; (iii) upon certain reorganizations, mergers, share exchanges
and consolidations involving PMI; or (iv) upon the liquidation or dissolution, or sale of substantially all of the assets of PMI,with limited exceptions.
The amounts in the accompanying table are estimates of the amounts that would have become payable on a change incontrol of PMI, calculated as if a change in control occurred on December 31, 2021, applying certain assumptions. For
outstanding equity awards granted under the 2017 Performance Incentive Plan and annual cash incentive awards, we haveassumed that the outstanding awards became vested and payable as of December 31, 2021, because they were notreplaced by the acquirer or employment was involuntarily terminated.

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Delivering a Smoke-Free Future

Unvested
RSUs(1)($)

Completed
2021
AnnualIncentive
Compensation
Award
Cycle (2)
($)

Name

Unvested
PSUs(1)($)

André Calantzopoulos

22,682,200 15,121,150

1,169,037 38,972,387

Jacek Olczak
Emmanuel Babeau

8,114,900
5,422,600

5,411,200
6,923,600

2,512,141 16,038,241
1,643,841 13,990,041

Drago Azinovic

3,388,650

2,660,000

926,027

6,974,677

Frederic de Wilde
Stefano Volpetti

3,541,600
2,735,050

2,819,600
2,707,500

926,027
986,305

7,287,227
6,428,855

Jorge Insuasty

594,700

2,345,550

690,4223,630,672

Total
($)

(1)

Assumes the change in control price is equal to the closing market price of PMI on December 31, 2021, of $95.00. The valueof unvested PSUs granted under the 2017 Performance Incentive Plan assumes target number of shares awarded (because lessthan half of the performance cycle had lapsed or actual performance was not determinable).

(2)

Assumes target award payable under our annual incentive compensation award program for a full year. Amounts are converted
to U.S. dollars using the conversion rate on December 31, 2021, of $1.00 = 0.9125 CHF.

Benefits payable under PMI’s qualified pension and profit-sharing plans and supplemental plans are discussed above.
None of those plans provides PMI’s executive officers with an additional enhancement, early vesting or other benefit in theevent of a change in control or termination of employment, except for certain plan provisions applicable to all plan
participants that ensure vesting and continuation of profit-sharing contributions for the year of a change in control and thefollowing two years. Similarly, no enhanced provisions apply to the above-named executive officers with respect to continued
medical, life insurance or other insurance coverage following termination of employment, whether or not in connection
with a change in control.

Involuntary Separation Without Cause
In the event of involuntary separation without cause, a severance payment is typically determined as a multiple of monthly
base salary. The amount of severance paid varies based on a number of factors, including the circumstances of thetermination and the executive’s years of service. Conditions to accelerated vesting of equity awards are set out in theapplicable award agreements and summarized on page 60.

Severance Agreements
Martin King retired from his position as CEO, PMI America effective August 31, 2021. In connection with Mr. King’s
retirement, he and Philip Morris Services S.A., a subsidiary of the Company, entered into a Separation Agreement andRelease with the following terms:•

Mr. King received a lump sum cash payment of CHF 1,267,506 (or $1,387,374 using the exchange rate on
August 16, 2021 of CHF to USD), which is determined based on his years of service;•

Mr. King’s 2021 incentive compensation award was based on actual individual and Company performance
ratings, pro-rated through August 31, 2021, and paid at the end of February 2022;•

Mr. King’s restricted share units vested fully, and his performance share units would vest as scheduled andcertified by the Committee; and•Mr. King will receive a cash payment of CHF 1,267,506 (or $1,387,374) subject to compliance with a 24-month noncompete obligation, payable in two equal installments in September 2022 and September 2023, if non-compete
obligations are met.

Mr. King provided the Company with a general release.

PMI 2022 Proxy Statement

67

PAY RATIOPAY RATIOABOUT OUR WORKFORCEAt December 31, 2021, we employed approximately 69,600 people worldwide. As our manufacturing and sales activities
are outside of the U.S., 99.8% of our employees (or approximately 69,450) are located outside of the U.S. Over 60% of ouremployees are located in non-OECD countries, which tend to be lesser developed countries with lower wages thanOECD countries. Over 30% of our workforce is in Indonesia. The national average annual net salary is approximately$2,300 in that country.1 Over 60% of our overall workforce is covered by collective labor agreements, and nearly 70% of
our workforce in non-OECD countries is covered by collective labor agreements.

OUR PAY RATIOOn May 5, 2021, Mr. Olczak succeeded Mr. Calantzopoulos as the Chief Executive Officer. As the company had two CEOs
in 2021, for purposes of calculating the pay ratio, we combined the compensation that each Messrs. Calantzopoulos andOlczak earned during their time served as CEO (124 days for Mr. Calantzopoulos and 241 days for Mr. Olczak). Specifically,
we prorated the respective amounts of 2021 salary, annual bonus and all other compensation by the portion of the year
in which they served as CEO. Mr. Calantzopoulos’ 2021 equity award was included in full, as he was in the role of CEO on
the annual grant date. Based upon this calculation method, the CEO’s 2021 total compensation was $19,190,191.
Given our global footprint, and in accordance with regulatory guidance, we have determined that the cost-of-living adjusted
ratio based on the purchasing power parity index (or “PPP”) reflects the differences in the living and economic conditionsof approximately 90 countries where our employees reside.2 The PPP conversion factor represents the number of units oflocal currency that can buy a basket of goods that 1 CHF would buy in Switzerland, where our CEO resides. The total PPPadjusted compensation for our median employee residing in Turkey is approximately CHF 59,452.3 Comparing this
employee’s total PPP-adjusted compensation to the 2021 total compensation of our CEO in CHF, our adjusted pay ratio is304:1.4
Had we not used the PPP adjustment, our median employee’s total 2021 compensation would have been approximately$18,196. Comparing this employee’s total compensation to the total compensation of our CEO as set forth above, the ratio
would be 1,055:1. For reference, the ratio of the CEO’s total compensation to that of our median employee in Switzerlandis 89:1. At December 31, 2021, we employed approximately 3,050 people in Switzerland, including approximately 300 in ourfactory and 810 in our R&D facility in Neuchâtel. In addition, the ratio of our CEO’s total compensation to the average
total compensation of our other NEOs for 2021, was 3.5:1.

PMI AS AN EMPLOYER
We are the first multinational company to receive a global EQUAL-SALARY certification from the EQUAL-SALARY
Foundation.
This year, the Top Employer Institute recognized us as a Global Top Employer for the sixth consecutive year. The Top
Employer Institute also granted us a Top Employer certification in a number of countries worldwide, including Indonesia
and Turkey.

1

https://www.bi.go.id/id/statistik/sdds/Default.aspx#real-sector-section.

2

The PPP conversion factor is described at https://data.worldbank.org. The PPP indices are publicly available in the jurisdictions
where our employees reside, with limited exceptions.

3This represents the median of the total compensation of all employees. As there was no significant change in our employee
population, or compensation arrangements, this median employee (selected in October 2020) is the same as the one described inour 2021 proxy statement, filed with the U.S. Securities and Exchange Commission on March 25, 2021.

4

To identify a median employee in the above calculations, we analyzed base salary information because that is the only pay element
applied consistently throughout our global workforce.

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Delivering a Smoke-Free Future

ADVISORY VOTE APPROVING EXECUTIVE COMPENSATIONADVISORY VOTE APPROVINGEXECUTIVE COMPENSATIONThe Compensation Discussion and Analysis section discusses in detail how our compensation programs support ourbusiness and financial objectives, how they work and are administered under the direction of our independent Compensationand Leadership Development Committee, and how the Committee’s decisions concerning the 2021 compensation of our
executive officers were directly tied to our performance.
Pursuant to Section 14A of the Exchange Act, we are asking our shareholders to indicate their support for our named
executive officer compensation as described in this proxy statement. This annual say-on-pay vote gives our shareholders
the opportunity to express their views on the compensation of our named executive officers at each Annual Meeting of
Shareholders. This vote is not intended to address any specific item of compensation, but rather the overall compensationof our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we
will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named
executive officers, as disclosed in the Company’s Proxy Statement for the 2022 Annual Meeting of Shareholders
pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation
Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.
This say-on-pay vote is advisory and, therefore, not binding on the Company, the Compensation and Leadership
Development Committee or the Board of Directors. The Board and the Committee value the opinions of our shareholders
and will review the voting results when making future decisions regarding executive compensation.

2

PROPOSAL 2: ADVISORY VOTE APPROVING EXECUTIVECOMPENSATIONThe Board recommends a vote FOR the resolution approving thecompensation of our named executive officers.

“FOR”

PMI 2022 Proxy Statement

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

APPROVAL OF THE 2022
PERFORMANCE INCENTIVE PLAN
The Board of Directors has adopted the Philip Morris International Inc. 2022 Performance Incentive Plan (the “2022 Plan”)
to replace the 2017 Performance Incentive Plan, which was approved by our shareholders in 2017 (the “2017 Plan”). The
2022 Plan, like the 2017 Plan, permits the Company to compensate management and other eligible employees with equity
and cash incentive awards. New awards will not be made under the 2022 Plan until shareholder approval is obtained for
the Plan. The Company has no plans to grant additional awards under the 2017 Plan after the date of this proxy statement,
and no additional awards under the 2017 Plan are permitted after May 3, 2022.
The 2022 Plan provides the Compensation and Leadership Development Committee (the “Committee”) with the flexibility
to compensate executives through various awards. These awards may be tied to the financial or operational performance of
the Company as well as to the performance of the Company’s stock. Because of the key role the 2022 Plan will play inthe compensation of executives, the Board urges you to vote for its approval.
The terms of the 2022 Plan are summarized below. In addition, the full text of the 2022 Plan is set forth in Exhibit B to this
Proxy Statement. The following summary is qualified in its entirety by reference to the text of the 2022 Plan.

Comparison of the 2022 Plan and the 2017 Plan
The following compares the key provisions of the two plans:•

The term of each of the plans is five years;•

The 2017 Plan authorized 25 million shares of common stock, representing 1.6% of the shares outstanding as ofMarch 10, 2017, and the 2022 Plan will likewise authorize 25 million shares, representing 1.6% of shares
outstanding as of March 11, 2022;•

Both plans prohibit the recycling of shares available for issuance with shares that are forfeited or withheld to pay
taxes;•

Each of the plans authorizes restricted shares, restricted share units, performance-based cash incentive awards
and performance-based equity awards;•

Neither plan authorizes stock options or stock appreciation rights;•

Each plan features a double-trigger change in control provision as further described on page 72;•

The Board has adopted a clawback policy applicable to each plan providing for the recovery of incentive
compensation in appropriate circumstances as described on page 50, and the 2022 Plan requires that all awards
thereunder are subject to this policy; and•Each plan supports the rigorous stock ownership requirements the Board has adopted, while the Company’s antihedging and anti-pledging policies for executives further align their interests with those of our shareholders andprotect against inappropriate risk taking as described on page 50.

Run Rates and Dilution. The following table sets forth information regarding equity awards granted, the run rate for eachof the last three fiscal years and the average run rate over the last three years. The Company’s regular annual long-term
equity awards are granted in February of each year. The last column reflects awards issued through March 11, 2022.
RUN RATE (shares in millions)

RSUs granted
Director Stock Awards granted(2)

PSUs vested
Weighted average number of shares outstanding
Run rate (1)(1)

70

FY 2019

FY 2020

FY 2021

3-Year Average

YTD 2022

1.73

1.73

2.02

1.83

1.55

0.02

0.02

0.02

0.02

—

0.33

0.34

0.19

0.29

0.67

1,555.67

1,557.07

1,557.45

1,556.73

1,550.24

0.13%

0.13%

0.14%

0.13%

0.14%

Run rate includes the sum of all director stock awards and RSUs granted during the period, plus the number of all PSUs vested
during the period, divided by the weighted average number of shares outstanding during the period. The Company does not issue
stock options.

Delivering a Smoke-Free Future

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(2)

Director awards are covered separately under the 2017 Stock Compensation Plan for Non-Employee Directors. Directors are noteligible to receive awards under the 2022 Plan.

The Company’s run rates as shown above and its 2021 year-end overhang (number of unvested RSUs plus unvested
PSUs (at target) as a percentage of all shares outstanding at year-end) of 0.40% each compares favorably to those of its
Peer Group.
Eligibility. Employees of the Company, its subsidiaries and affiliates, who are responsible for or contribute to the
management, growth and profitability of the Company, its subsidiaries and affiliates, or any other employee of the Company,
its subsidiaries and affiliates, who the Committee determines should be eligible to participate, are eligible to receive
awards under the 2022 Plan. There are currently approximately 69,600 employees of the Company, its subsidiaries andits affiliates although we anticipate only a portion of these employees, approximately 11,200 in 2021, will participate in the
Plan.
Business Criteria for Performance Goals. The Committee selects the criteria for performance goals that may becontained in an award, which may include financial performance metrics, product innovation, operational milestones,sustainability goals, diversity and inclusion goals, or any other criteria or measurement approved by the Committee. The
Committee establishes these criteria independently from award recipients. In the case of the CEO, the Committee reviews
and discusses the compensation of the CEO with the Executive Chairman, and the Committee makes the final
compensation decision with respect to the CEO. In addition, the Executive Chairman makes no recommendation and has
no role in setting any aspect of his own compensation; he does not attend any Committee meetings when any element of hiscompensation is discussed.
Discretion. Notwithstanding the achievement of any performance goal established under the 2022 Plan, the Committee
has the discretion to adjust some or all of a performance-based award that would otherwise be paid to a participant.
Incentive Awards. Incentive awards expressed in cash, common stock, or both may be granted under the 2022 Plan.
These awards will be earned only if corporate, business unit or individual performance objectives over performance cycles
established by or under the direction of the Committee, are met.
Restricted Shares and Restricted Share Units. Restricted shares and RSUs may also be awarded. Restricted shares
are shares of common stock issued to a recipient while RSUs represent the right to receive shares, in each case that vest
and become transferable upon the satisfaction of conditions described in the applicable award agreement. Restricted
shares and RSUs may be forfeited if, for example, the recipient’s employment terminates before the award vests. Except
as specified in the applicable award agreement, the holder of a restricted share award will have all the rights of a holder ofcommon stock on his or her restricted shares, including the right to receive dividends. The holder of RSUs will have noneof the rights of a holder of common stock unless and until shares of common stock are actually delivered in satisfaction ofsuch units. The Committee may provide for the payment of dividend equivalents with respect to any shares of common
stock subject to unvested RSUs.
Performance Share Units. PSUs are performance-based awards denominated in shares of common stock and based on
the achievement of pre-established performance goals during a performance cycle, with the vesting percentage
determined by formula. The recipient of PSUs will have none of the rights of a holder of common stock until shares areearned and delivered in satisfaction of such units. The Committee may provide for the payment of dividend equivalents withrespect to shares that are actually earned at the end of a performance cycle.
U.S. Federal Income Tax Consequences. The following summary is intended only as a general discussion of certain
U.S. federal income tax consequences associated with an award under the 2022 Plan. It does not attempt to describe all
possible federal or other tax consequences, or tax consequences based on particular circumstances. In addition,
awards under the 2022 Plan will in many instances be made to employees who are subject to tax in jurisdictions other thanthe United States and may result in tax consequences differing from those described below. In addition, U.S. state tax
consequences may in some cases differ from those described below.
Restricted Shares. The recognition of income from an award of restricted shares for U.S. federal income tax purposes
depends on the restrictions imposed on the shares. Generally, taxation will be deferred until the first taxable year the sharesare no longer subject to substantial risk of forfeiture. At the time the restrictions lapse, the employee will recognize
ordinary income equal to the then fair market value of the shares. The employee may, however, make an election to
include the value of the shares in gross income in the year of award despite such restrictions. Generally, PMI will be entitledto deduct the fair market value of the shares issued to the employee as a business expense in the year the employee
includes the compensation in income.
RSUs and PSUs. Generally, an employee will not recognize ordinary income until the shares become payable, even if theaward vests in an earlier year. PMI will generally be entitled to deduct the amount the employee includes in income as abusiness expense in the year of payment.
PMI 2022 Proxy Statement

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
Cash Incentive Awards. Any cash payment an employee receives under an incentive award will generally be included in
the employee’s income, as ordinary income, in the year paid. PMI will generally be entitled to deduct the amount theemployee includes in income as a business expense in the year of payment.
Deductibility of Awards. U.S. Internal Revenue Code section 162(m) places a $1.0 million annual limit on the compensation
deductible, for U.S. tax purposes, by PMI paid to its “covered employees.” A “covered employee” includes each individual
who served as PMI”s Chief Executive Officer or Chief Financial Officer at any time during the taxable year, each of the threeother most highly compensated officers of PMI for the taxable year, and any other individual who was a covered employeeof PMI for any tax year beginning after December 31, 2016. Because most of our employees’ compensation is not
subject to tax deduction in the U.S., these limits generally will not be relevant to awards under the 2022 Plan.
Change in Control. The 2022 Plan includes a double-trigger feature under which outstanding equity awards will not
accelerate or vest if the entity acquiring PMI agrees to replace the award with a time-based equity award of equivalentvalue. For this purpose, the value of outstanding PSUs would be determined based on actual performance through the dateof the change in control if more than one-half of the performance cycle has elapsed and such performance is determinable.
Otherwise, the value of outstanding PSUs would be based on the assumption that target performance had been achieved.
If outstanding equity awards are not replaced, outstanding RSUs would fully vest and the value of outstanding PSUs would
be determined as set forth above and be payable immediately in cash.
If outstanding equity awards are replaced as described above but, within two years after the change in control, theemployee’s employment is terminated involuntarily and other than for cause or the employee terminates employment forgood reason, the replacement award would fully vest. The definition of change in control in the 2022 Plan is similar to thatin the 2017 Plan, in that no change in control is deemed to occur in certain business combination transactions if beneficial
owners prior to such transaction beneficially own more than 50% in an entity resulting from such transaction.
Future Awards. Future awards under the 2022 Plan cannot be determined at this time because grants are at the discretionof the Committee. However, we believe that incentive and equity awards granted under the 2017 Plan in 2021 would nothave been any different had they been awarded under the 2022 Plan.
Shares Remaining Under the Company’s Equity Compensation Plans. The number of shares to be issued upon
exercise or vesting and the number of shares remaining available for future issuance under the 2017 Plan and the Philip
Morris International Inc. 2017 Stock Compensation Plan for Non-Employee Directors at March 11, 2022, were as follows:

Equity compensation plansapproved by shareholders(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 FutureIssuance Under
Equity Compensation Plans(Excluding Securities
Reflected in Column A)

7,740,779(1)—13,559,614(2)(1)

Represents 4,700,359 shares of common stock that may be issued upon vesting of RSUs granted under the 2017 Plan and
3,040,420 shares that may be issued upon vesting of PSUs granted under the 2017 Plan if maximum performance targets areachieved for each performance cycle. PMI has not granted options since the spin-off in March 2008 and the 2022 Plan does
not authorize stock options or stock appreciation rights.

(2)

Following shareholder approval of the 2022 Plan, no further awards will be made under the 2017 Plan, although prior awards
will continue to be valid. The Company has no plans to grant additional awards under the 2017 Plan after the date of this proxystatement.

Administration of the Plan. The 2022 Plan will be administered by the Committee, which has the power to interpret the2022 Plan and to adopt such rules and guidelines for carrying out the 2022 Plan as it may deem appropriate. Subject to theterms of the 2022 Plan, the Committee has the authority to determine those employees eligible to receive awards andthe amount, type and terms of each award and to establish and administer any performance goals applicable to suchawards. The Committee may delegate its authority and power under the 2022 Plan to one or more officers of the Company,
subject to guidelines prescribed by the Committee, but only with respect to participants who are not subject to Section 16of the Exchange Act. The Committee may, in its discretion, amend or modify any award granted under the 2022 Plan in any
manner that either is not materially adverse to the recipient holding the award or is consented to by the recipient.
Other Information. The 2022 Plan provides that an award may not be transferred except in the event of the employee’s
death or unless otherwise required by law or provided in an award agreement. Other terms and conditions of each award,
except an annual cash-based incentive award, will be set forth in award agreements, which can be amended by theCommittee.
72

Delivering a Smoke-Free Future

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
It is presently intended that the 2022 Plan constitute an “unfunded” plan for incentive and deferred compensation. The
2022 Plan authorizes the creation of trusts and other arrangements to facilitate or ensure payment of our obligations.
The 2022 Plan was adopted by the Board on March 9, 2022, subject to shareholder approval, and no awards will be madeunder the 2022 Plan after May 3, 2027. However, any awards granted before May 3, 2027, may extend beyond suchdate. The Board may amend the 2022 Plan at any time, provided that no such amendment will be made without shareholder
approval if such approval is required under applicable law, regulation, or stock exchange rule, or if such amendment
would increase the number of shares of common stock that may be distributed under the 2022 Plan.
On March 11, 2022, the closing price of PMI common stock reported on the New York Stock Exchange was $88.87.

3

PROPOSAL 3: APPROVAL OF THE 2022 PERFORMANCEINCENTIVE PLAN

“FOR”

The Board of Directors recommends that you vote FOR the approval of
the 2022 Performance Incentive Plan.

PMI 2022 Proxy Statement73

AUDIT COMMITTEE MATTERS

AUDIT COMMITTEE MATTERS
Audit Committee Report for the Year
Ended
December 31, 2021
To Our Shareholders:Management has the primary responsibility for the financial statements and the reporting process, including the systems
of internal accounting control. The Audit Committee monitors the Company’s financial reporting processes and systems ofinternal accounting control, the independence and the performance of the independent auditors, and the performance of
the internal auditors. The Audit Committee has the sole authority for appointing, compensating and overseeing the work of
the independent auditors. The Audit Committee also receives, among other things, regular updates from management on
cybersecurity trends, risks, policies, and practices, including the results of risk advisories, reviews and other assurance
activities as deployed by the Company’s information security and risk control functions.
The Audit Committee has received representations from management that the Company’s consolidated financial statements
were prepared in accordance with accounting principles generally accepted in the United States of America, and the
Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent
auditors. The Audit Committee has discussed with the independent auditors, including in executive sessions without thepresence of management, the independent auditors’ evaluation of the accounting principles, practices and judgments
applied by management, the adequacy of the Company’s financial reporting processes, controls and procedures, and the
Audit Committee has discussed any items required to be communicated to it by the independent auditors in accordancewith regulations promulgated by the U.S. Securities and Exchange Commission, the Public Company Accounting Oversight
Board and the Independence Standards Board.
The Audit Committee has received from the independent auditors written disclosures and a letter required by applicablerequirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications
with the Audit Committee concerning their independence, and has discussed with the independent auditors the auditors’
independence from the Company and its management. The Audit Committee has pre-approved all audit and permissible
non-audit services provided by the independent auditors and the fees for those services. As part of this process, the Audit
Committee has reviewed the audit fees of the independent auditors. It has also reviewed non-audit services and fees toassure compliance with regulations prohibiting the independent auditors from performing specified services that might impair
their independence, as well as compliance with the Company’s and the Audit Committee’s policies.
The Audit Committee discussed with the Company’s internal auditors and independent auditors the overall scope of andplans for their respective audits. The Audit Committee has met with the internal auditors and the independent auditors,
separately and together, with and without management present, to discuss the Company’s financial reporting processes andinternal control over financial reporting and overall control environment. The Audit Committee has reviewed significant
audit findings prepared by the independent auditors and those prepared by the internal auditors, together with management’s
responses.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors
the inclusion of the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021.
Audit Committee:
Lucio A. Noto, Chair
Michel Combes
Werner Geissler
Lisa A. Hook
Jun Makihara
Dessi Temperley
74

Delivering a Smoke-Free FutureAUDIT COMMITTEE MATTERS
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.

Independent Auditors’ Fees
Aggregate fees, including out-of-pocket expenses, paid to our independent auditors, PricewaterhouseCoopers SA,
consisted of the following (in millions):

Audit Fees

(1)

2021

2020

$20.60$20.50

Audit-Related Fees (2)

1.44

0.67

(3)

2.49

3.76

1.28

0.94

$25.81$25.87

Tax Fees

All Other Fees

(4)

TOTAL

(1) Fees and expenses associated with professional services in connection with (i) the audit of the Company’s consolidated
financial statements and internal control over financial reporting, including statutory audits of the financial statements of theCompany’s affiliates; (ii) reviews of the Company’s unaudited condensed consolidated interim financial statements; (iii) reviewsof documents filed with the Securities and Exchange Commission; and (iv) audit procedures in connection with transactions,financings and system implementations.
(2) Fees and expenses for professional services for audit-related services, which include due diligence related to acquisitions anddivestitures, employee benefit plan audits, and procedures relating to various other audit and special reports.
(3) Fees and expenses for professional services in connection with U.S. and foreign tax compliance assistance, consultation andadvice on various foreign tax matters, transfer pricing documentation for compliance purposes and advice relating to customs andduties compliance matters.
(4) Fees and expenses for professional services relating to certain human resources matters, market analysis and other professional
services including in connection with sustainability reporting and equal salary certification.

Pre-Approval Policy
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent
auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approvalis detailed as to the particular service or category of service and is subject to a specific budget. The Audit Committee
requires the independent auditors to report on the actual fees charged for each category of service at Audit Committee
meetings throughout the year.
During the year, circumstances may arise when it may become necessary to engage the independent auditors for additional
services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specificpre-approval before engaging the independent auditors.
In 2021, the Committee adopted and approved a revised pre-approval policy, titled the Philip Morris International Inc.
Policy for Pre-Approval of Audit and Non-Audit Services Provided by Independent Audit Firm (the “Revised Policy”). Under
the Revised Policy, any fees and services that arise that were not included in the annual budget presented to the Committee
at the beginning of the fiscal year will receive pre-approval by the Audit Committee chair if they meet the following
criteria:•

Individual services up to $250,000; and•Adjustments to any estimated pre-approval fee for any individual service up to $100,000.

The Audit Chair must report on such approvals at the next scheduled meeting of the Committee. Any services that are
greater than $250,000 or for which no specific approval was provided when the independent auditors’ annual budget wasapproved by the Committee will require pre-approval by the full Committee.

PMI 2022 Proxy Statement

75

RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORSRATIFICATION OF THE SELECTION
OF INDEPENDENT AUDITORSThe Audit Committee has selected PricewaterhouseCoopers SA (“PwC”) as the Company’s independent auditors for the
fiscal year ending December 31, 2022, and has directed that management submit the selection of independent auditors toshareholders for ratification at the Annual Meeting. Representatives of PwC are expected to attend the Virtual Annual
Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriatequestions.
In determining to reappoint PwC, the Audit Committee considered a number of factors, including the following:•

PwC has served as the Company’s independent auditors since we became an independent company in 2008;•

The results of the Audit Committee’s evaluation of PwC’s qualifications, performance, independence and quality
control procedures;•

The Audit Committee’s belief that PwC’s deep knowledge of the Company and the Company’s information
technology and systems platforms better equips it to focus the audit work where it is most needed, enhances thequality of risk-based reviews, and enables it to design and implement a superior audit plan and to effectively
test for control weaknesses;•

The Audit Committee’s belief that PwC has the capability and expertise and professionals in the many countries
that are necessary to conduct a quality audit of our worldwide business;•

External data relating to audit quality and performance, including the Public Company Accounting Oversight
Board’s reports on PwC and its peer firms; and•The appropriateness of PwC’s fees.

Shareholder ratification of the selection of PwC as the Company’s independent auditors is not required by the Company’s
by-laws or otherwise. However, we are submitting the selection of PwC to the shareholders for ratification as a matter ofgood corporate practice. If the shareholders fail to ratify the selection, the Audit Committee will reconsider whether or not
to retain PwC. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different
independent audit firm at any time during the year if it is determined that such a change would be in the best interests of
the Company and its shareholders.

4

76

PROPOSAL 4: RATIFICATION OF APPOINTMENT OF
PRICEWATERHOUSECOOPERS SA AS OUR INDEPENDENTREGISTERED 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 isin our best interest to continue that relationship.

Delivering a Smoke-Free Future“FOR”

SHAREHOLDER PROPOSALSHAREHOLDER PROPOSAL
Trinity Health, together with co-filers Common Spirit Health, Sisters of St. Dominic of Caldwell, Sisters of Charity of Saint
Elizabeth, Sisters of Saint Joseph of Carondelet, The Sisters of St. Francis of Philadelphia, each claiming beneficial
ownership of at least $2,000 worth of shares, submitted the proposal set forth below. The address and shareholdings ofthe proponents will be furnished upon request made to the Corporate Secretary. The Company is not responsible for thecontent of the shareholder proposal, which is printed below exactly as it was submitted.
WHEREAS: In 2016, Philip Morris International (“PMI”) stated a commitment ‘to deliver a smoke-free future’, and that it is“actively accelerating the decline of cigarette smoking beyond what can be achieved by traditional tobacco control measuresalone.”1
PMI states on its website that “smoking is harmful. Cigarette smoking causes diseases and is addictive.”2
PMI sells the world’s best-selling cigarette brand in Marlboro and sold over 620 billion cigarettes worldwide in 2020—manyin low- and middle-income countries where 80 percent of the world’s smokers live. In July 2021, PMI said that it will stop
selling cigarettes in the United Kingdom within the next decade.3
In August 2021 PMI CEO Jacek Olzcak told the London Daily Mail that he had discussed selling PMI’s Marlboro business“but decided to keep the business to help finance its growth in ‘wellness’ products.”4
In September 2021, PMI acquired Vectura Group Plc at a cost of $1.9 billion. Vectura Group is a U.K.-based manufacturerof respiratory therapy devises such as inhalers and nebulizers that help people with asthma and lung diseases to breathe.
When PMI announced in July 2021 its intention to acquire Vectura, the presidents of the American Lung Association andAmerican Thoracic Association issued a joint statement which said in part:“We are deeply concerned that PMI will use the inhalation services technologies developed by Vectura to make their
tobacco products more addictive. We are also deeply troubled that this company could further profit from the disease theirproducts have caused by now selling therapies to the same people who were sickened by smoking PMI cigarettes. We
also note, the proposed acquisition of Vectura by PMI creates a complex entanglement of conflicts of interest throughout
the respiratory medicine supply chain that could undermine public confidence in essential medical products. It is clear thisacquisition is not in the best interest of the public and lung disease patients, or even the medical drug and device industry.”5After Vectura shareholders approved the acquisition Cancer Research UK’s chief executive Michelle Mitchell said, “It’s ironicthat a tobacco company wants to invest in the lung health industry when their products are the biggest preventable causeof cancer, including lung cancer. If PMI really wanted to help, they could stop aggressively promoting and selling theirproducts altogether.”6
RESOLVED: Shareholders request the Board of Directors initiate steps to phase out all production of PMI’s healthhazardous and addictive products by 2025.
SUPPORTING STATEMENT: The Company states on its website that it is “focused on our mission to one day stop sellingcigarettes.” Yet it lists as risk factors in its 2020 10-K actions to reduce smoking rates, such as restrictions on package designand smoking in public places. We believe PMI needs to decide what kind of company it wants to be, and set a timeline toend the production, promotion and sale of all its tobacco products.
1

https://www.pmi.com/statement-of-purpose2

https://www.pmi.com/faq-section/faq/is-smoking-harmful

3

https://www.cnbc.com/2021/07/26/philip-morris-says-it-could-stop-selling-cigarettes-in-britain.html

4https://tobaccoreporter.com/2021/08/30/daily-mail-pmi-considered-selling-marlboro-business/

5

https://www.lung.org/media/press-releases/american-lung-association-and-american-thoracic

6

https://tobaccoreporter.com/2021/07/11/critics-astonished-by-pmi-takeover-of-pharma-business/

PMI 2022 Proxy Statement77

SHAREHOLDER PROPOSALFOR THE REASONS EXPLAINED BELOW, THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THISPROPOSAL.
We are committed to accelerating the end of smoking and purposefully replacing cigarettes. We have been prudently andtransparently transforming our purpose to deliver a smoke-free future. The implementation of this transformation is complex.
It involves developing a new set of organizational capabilities. It involves marshaling resources to develop, scientifically
substantiate, and responsibly commercialize reduced-risk products (“RRPs”) that are less harmful than smoking. It
involves industry-wide advocacy and leadership in establishing proper government oversight and regulation. And, it involves
continuing to earn the trust and active cooperation of a host of stakeholders, from supply chain partners to customers toregulators and public health authorities.
Our management is best suited to address the myriad issues associated with implementing this transformation. Our
management has extensive regulatory, product development, scientific, commercialization, distribution, financial andaccounting, and other professional experiences that inform the manner in which we pursue our vision for the benefit of ourshareholders.
The transformation from cigarettes to RRPs will take time and the speed of the transformation depends in part upon
several factors outside our control. Governments, in particular, can significantly help accelerate the end of smoking by
ensuring that adult smokers have accurate information about smoke-free products, that only scientifically substantiatedproducts are commercialized, and that risk-proportionate regulation and taxation provide appropriate incentives to encourage
smokers who would otherwise continue to smoke and manufacturers to switch from cigarettes to better, scientifically
substantiated alternatives. The timeline for these standards remains difficult to predict, and their details should significantly
inform the manner in which we execute against our vision for a smoke-free future.
We have a range of RRPs in various stages of development, scientific assessment and commercialization, and the paceof this process should reflect appropriate care in light of our objectives. Our RRPs are novel products in a new category,
and the pace at which adult smokers adopt them may vary depending on numerous factors. If our management were
externally restricted by undefined standards and artificial deadlines as it makes complex decisions relating to development,scientific assessment and commercialization of RRPs, then we may be unable to continue to be a leader in accelerating
the end of smoking and purposefully replacing cigarettes.
Unilaterally stopping selling cigarettes without coordinated regulatory frameworks that apply to all industry participants will
just force adult consumers of our cigarettes to move to competitive products and/or to illicit trade. This is neither serves
the interests of our shareholders nor public health.
It is management’s responsibility to ensure that our company’s purpose is achieved through the appropriate structures,
systems, processes, and people—and that our progress is communicated effectively to our stakeholders. We will continue
to be transparent on our progress towards our smoke-free future, and will continue to align our words with our actions
across all areas of our business to enable us to reach this goal.
For the reasons discussed above, we believe that this proposal is neither necessary nor in the best interest of shareholders.
Therefore, the Board recommends a vote AGAINST the proposal.

5

78

PROPOSAL 5: SHAREHOLDER PROPOSAL

Delivering a Smoke-Free Future“AGAINST”

RELATED PERSON TRANSACTIONS AND CODE OF CONDUCTRELATED PERSON TRANSACTIONSAND CODE OF CONDUCTThe Board has adopted a policy, which is available on the Company’s website, at www.pmi.com/who-we-are/corporategovernance/overview, that requires our executive officers, directors and nominees for director to promptly notify the Vice
President, Associate General Counsel and Corporate Secretary in writing of any transaction in which (i) the amount exceeds$120,000; (ii) the Company is, was or is proposed to be a participant; and (iii) such person or such person’s immediatefamily members (“Related Persons”) has, had or may have a direct or indirect material interest (a “Related Person
Transaction”). The Vice President, Associate General Counsel and Corporate Secretary, in consultation with outside
counsel, to the extent appropriate, shall determine whether a potential transaction with a Related Person constitutes a
Related Person Transaction requiring review under the policy (including whether the Company or the Related Person has
a material interest, based on a review of all facts and circumstances). If the Vice President, Associate General Counsel andCorporate Secretary determines that the proposed transaction constitutes a Related Person Transaction or it would be
beneficial to further review the transaction, then, in either case, the transaction will be referred to the CEO or the Nominating
and Corporate Governance Committee of the Board. In practice, we expect the Nominating and Corporate GovernanceCommittee to conduct a reasonable prior review and oversight of all Related Person Transactions for potential conflicts ofinterest. The Nominating and Corporate Governance Committee may ratify Related Person Transactions in limited situations.
In deciding whether to approve, ratify or prohibit the Related Person Transaction, the Nominating and Corporate
Governance Committee is required to consider all relevant facts and circumstances. The Nominating and Corporate
Governance Committee will approve or ratify a Related Person Transaction only if it determines that the transaction is not
opposed to the best interests of the Company, and the Nominating and Corporate Governance Committee must prohibit thetransaction if it determines the transaction is inconsistent with the Company and its shareholders. All determinations by
the CEO and the Vice President, Associate General Counsel and Corporate Secretary must be reported to the Nominating
and Corporate Governance Committee at its next meeting.
The Company’s Formula 1 sponsorship agreement and its renewals have been negotiated on an arms-length basis withexecutives of Ferrari prior to the time our former Chairman, Mr. Camilleri, became CEO of Ferrari. At the time of the lastrenewal, in early 2018, the Nominating and Corporate Governance Committee reviewed the sponsorship as a Related
Person Transaction and determined it to be in the best interests of the Company.
In addition, the wife of PMI’s Vice President & Controller, Reginaldo Dobrowolski, is a longstanding employee of PMI, andher total compensation for the fiscal year ended December 31, 2021 was approximately $495,000. This Related Person
Transaction has been ratified by the CEO and the Nominating and Corporate Governance Committee.
The Board has also adopted the Code of Business Conduct and Ethics for Directors (the “Director Code”), which isavailable on our website, at www.pmi.com/who-we-are/corporate-governance/overview, has specific provisions addressing
actual and potential conflicts of interest. The Director Code specifies: “Our directors have an obligation to act in the bestinterest of the Company. All directors should endeavor to avoid situations that present a potential or actual conflict between
their interest and the interest of the Company.” The Director Code defines conflict of interest to include any instance inwhich (i) a person’s private interest interferes in any way, or even appears to interfere, with the interest of the Company,
including its subsidiaries and affiliates; (ii) a director or a director’s family member takes an action or has an interest that may
make it difficult for that director to perform his or her work objectively and effectively; and (iii) a director (or his or her
family member) receives improper personal benefits as a result of the director’s position in the Company.
Similarly, our policies require all officers and employees of the Company to avoid situations where the officer’s or employee’s
personal, financial or political activities have the potential of interfering with his or her loyalty and objectivity to the Company.

PMI 2022 Proxy Statement79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

AVAILABILITY OF REPORTS, OTHER
MATTERS AND 2023 ANNUAL
MEETINGAVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO SHAREHOLDERS
We are required to provide an Annual Report to shareholders who receive this proxy statement. We will also provide
copies of the Annual Report to brokers, dealers, banks, voting trustees and their nominees for the benefit of their beneficial
owners of record. Additional copies of the Annual Report, along with copies of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2021, are available without charge to shareholders upon written request to the Company’s
Corporate Secretary at Avenue de Rhodanie 50, 1007 Lausanne, Switzerland. You may review the Company’s filings with
the U.S. Securities and Exchange Commission by visiting our website at www.pmi.com/investor-relations/overview. The
information on our websites, including our 2020 Integrated Report as referenced in this proxy statement, is not, and shallnot be deemed to be, a part of this report or incorporated into any other filings we make with the SEC.

OTHER MATTERSManagement knows of no other business that will be presented to the meeting for a vote. If other matters properly comebefore the meeting, the persons named as proxies will vote on them in accordance with their best judgment.
The cost of this solicitation of proxies will be paid by us. In addition to the use of the mail, some of the officers and regular
employees of the Company may solicit proxies by telephone and will request brokerage houses, banks and othercustodians, nominees and fiduciaries to forward soliciting material to the beneficial owners of common stock held ofrecord by such persons. We will reimburse such persons for expenses incurred in forwarding such soliciting material. It iscontemplated that additional solicitation of proxies will be made in the same manner under the engagement and direction of
D.F. King & Co., Inc., 48 Wall Street, New York, NY 10005, at an anticipated cost of $24,000, plus reimbursement ofout-of-pocket expenses.

2023 ANNUAL MEETING
Shareholders wishing to suggest candidates to the Nominating and Corporate Governance Committee for consideration
as directors must submit a written notice to the Vice President, Associate General Counsel and Corporate Secretary of theCompany. Our by-laws set forth the procedures a shareholder must follow to nominate directors or to bring other businessbefore shareholder meetings. For a shareholder to nominate a candidate for director at the 2023 Annual Meeting, presently
anticipated to be held on May 3, 2023, notice of the nomination must be received by the Company between October 25 andNovember 24, 2022. The notice must describe various matters regarding the nominee, including name, address, occupationand shares held. The Nominating and Corporate Governance Committee will consider any nominee properly presented
by a shareholder and will make a recommendation to the Board. After full consideration by the Board, the shareholder
presenting the nomination will be notified of the Board’s conclusion. For a shareholder to bring other matters before the 2023
Annual Meeting and to include a matter in the Company’s proxy statement and proxy for that meeting, notice must be
received by the Company between October 25 and November 24, 2022. The notice must include a description of the
proposed business, the reasons therefor and other specified matters. In each case, the notice must be timely given to theVice President, Associate General Counsel and Corporate Secretary of the Company, whose address is Avenue de Rhodanie
50, 1007 Lausanne, Switzerland. Any shareholder desiring a copy of the Company’s by-laws (which are posted on our
website at www.pmi.com/who-we-are/corporate-governance/overview) will be furnished one without charge upon written
request to the Vice President, Associate General Counsel and Corporate Secretary.
Darlene Quashie Henry
Vice President,
Associate General Counsel and Corporate Secretary
March 24, 2022

80

Delivering a Smoke-Free Future

EXHIBIT A: QUESTIONS & ANSWERS

EXHIBIT A: QUESTIONS & ANSWERS
1. WHAT IS A PROXY?
It is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate
someone as your proxy in a written document, that document also is called a proxy or a proxy card. André Calantzopoulos
and Darlene Quashie Henry have each been designated as proxies for the 2022 Annual Meeting of Shareholders.

2. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?
The Record Date for the 2022 Annual Meeting of Shareholders is March 11, 2022. The Record Date is established by the
Board of Directors as required by Virginia law. Shareholders of record (registered shareholders and street name holders) at
the close of business on the Record Date are entitled to:a)receive notice of the meeting; andb)vote at the meeting and any adjournments or postponements of the meeting.

3. WHAT IS THE DIFFERENCE BETWEEN A REGISTERED SHAREHOLDER AND A
SHAREHOLDER WHO HOLDS STOCK IN STREET NAME?
If your shares of stock are registered in your name on the books and records of our transfer agent, Computershare Trust
Company, N.A., you are a registered shareholder.
If your shares of stock are held for you in the name of a broker or bank, then your shares are held in street name. The
organization holding your shares of stock is considered the shareholder of record for purposes of voting at the Annual
Meeting. The answer to Question 19 describes brokers’ discretionary voting authority, and when your broker or bank ispermitted to vote your shares of stock without instruction from you.

4. HOW CAN I PARTICIPATE IN THE VIRTUAL ANNUAL MEETING?
The virtual Annual Meeting will be held online via a live webcast at 9:00 a.m. EDT, on Wednesday, May 4, 2022. There will
be no physical location for shareholders to attend. Instead, shareholders may participate online atwww.virtualshareholdermeeting.com/PMI2022. We encourage you to access the virtual Annual Meeting prior to the start
time. Online access will be available starting at 8:30 a.m. EDT, on May 4, 2022.
To participate in the Virtual Annual Meeting, including to vote your shares electronically and ask questions live
during the Meeting, 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. If you wish
to ask questions during the Q&A session, you must follow instructions set forth in response to Question 5.
The virtual meeting platform is fully supported across browsers (Microsoft Edge, Firefox, Chrome and Safari) and devices(desktops, laptops, tablets and cell phones), if running the most updated version of applicable software and plugins.
Participants should ensure that they have a strong Internet connection wherever they intend to participate in the Annual
Meeting.
We will have technicians ready to assist you with any technical difficulties you may have accessing and participating in thevirtual meeting. If you encounter any difficulties during the check-in or throughout the course of the meeting, please call
1-844-976-0738 toll-free (from within the United States or Canada), or 1-303-562-9301 (from outside the United States or
Canada). Technical support will be available starting at 8:30 a.m. EDT, on May 4, 2022.
For further information about the Virtual Annual Meeting, please call toll-free 1-866-713-8075.

5. MAY SHAREHOLDERS ASK QUESTIONS AT THE MEETING?
Yes. In fact, we encourage questions from our shareholders. For full transparency, during the Q&A session, which will be
publicly webcast, our shareholders will be able to ask questions live, on a first-come, first-served basis.
PMI 2022 Proxy Statement81

EXHIBIT A: QUESTIONS & ANSWERS
The Q&A session will follow the conclusion of the formal meeting.
Shareholders of record who have accessed the virtual annual meeting as described in the instructions set forth in response
to Question 4, may ask questions live during the Q&A session of the meeting by calling the number posted on the virtual
annual meeting webpage under the section “Questions.” In order to ask a question, you will be required to provide your16-digit control number to the operator. Because this is a meeting of shareholders, only shareholders of record as of theRecord Date with a valid control number will be allowed to ask questions at our virtual annual meeting.
In order to provide an opportunity for everyone who wishes to speak, shareholders will be limited to two minutes.
Shareholders may speak a second time only after all others who wish to speak have had their turn. When speaking,shareholders must direct questions and comments to the Executive Chairman and confine their remarks to matters that
relate directly to the business of the meeting.
We reserve the right to reject redundant questions or questions that we deem profane or otherwise inappropriate. The
meeting is not to be used as a forum to discuss personal grievances, business disputes or to present general political, social
or economic views that are not directly related to the business of the meeting.
A full webcast replay will be posted to our Investor Relations website at www.pmi.com/investors for one year following themeeting.

6. WHAT ARE THE BENEFITS OF THE VIRTUAL ANNUAL MEETING?
Meaningful shareholder engagement is important to us, and our 2022 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 ourenvironmental impact.
Shareholders will have the same rights and opportunities to participate in our virtual annual meeting as they would at an
in-person meeting. For full transparency, during the Q&A session, which will be publicly webcast, shareholders with a valid
control number will be able to ask questions live, on a first-come, first-served basis. In addition, a full webcast replay will
be posted to our Investor Relations website at www.pmi.com/investors for one year following the meeting.
If you plan to participate in our 2022 Virtual Annual Meeting of Shareholders, you must follow the instructions set forth inresponse to Question 4.
If you wish to ask questions during the Q&A session, you must follow the instructions set forth in response to Question 5.

7. WHAT ARE THE DIFFERENT METHODS THAT I CAN USE TO VOTE MY SHARES OFCOMMON STOCK?

82a)

In Writing: All shareholders of record can vote by mailing their completed and signed proxy card (in the case ofregistered shareholders) or their completed and signed voting instruction form (in the case of street name holders).

b)

By Telephone and Internet Proxy: All shareholders of record also can vote their shares of common stock by touchtone telephone using the telephone number on the proxy card, or by Internet, using the procedures andinstructions described on the proxy card and other enclosures. Street name holders of record may vote by
telephone or Internet if their brokers or banks make those methods available. If that is the case, each broker orbank will enclose instructions with the proxy statement. The telephone and Internet voting procedures, including
the use of control numbers, are designed to authenticate shareholders’ identities, to allow shareholders to votetheir shares, and to confirm that their instructions have been properly recorded. Proxies submitted by Internet or
telephone must be received by 11:59 p.m. EDT, on May 3, 2022.

c)

In Person at the Virtual Annual Meeting: All shareholders of record may vote at the virtual meeting online atwww.virtualshareholdermeeting.com/PMI2022. If you wish to vote at our virtual annual meeting of shareholders,
you must follow the instructions set forth in response to Question 4. You may vote until the Executive Chairman
declares the polls closed. Shareholders participating in the virtual annual meeting are considered to be attending
the meeting “in person.”

Delivering a Smoke-Free Future

EXHIBIT A: QUESTIONS & ANSWERS

8. HOW CAN I REVOKE A PROXY?
You can revoke a proxy prior to the completion of voting at the meeting by:a)giving written notice to the Vice President, Associate General Counsel and Corporate Secretary of the Company;b)delivering a later-dated proxy; orc)voting at the virtual meeting.

9. ARE VOTES CONFIDENTIAL? WHO COUNTS THE VOTES?
We have established and will maintain a practice of holding the votes of individual shareholders in confidence except:(a) as necessary to meet applicable legal requirements and to assert or defend claims for or against the Company; (b) incase of a contested proxy solicitation; (c) if a shareholder makes a written comment on the proxy card or otherwise
communicates their vote to management; or (d) to allow the independent inspectors of election to certify the results ofthe vote. We will retain an independent tabulator to receive and tabulate the proxies and independent inspectors of election
to certify the results.

10. WHAT ARE THE CHOICES WHEN VOTING ON DIRECTOR NOMINEES, AND WHAT VOTE
IS NEEDED TO ELECT DIRECTORS?
Shareholders may:a)vote in favor of a nominee;b)vote against a nominee; orc)abstain from voting on a nominee.

Directors will be elected by a majority of the votes cast, which will occur if the number of votes cast “FOR” a director
nominee exceeds the number of votes “AGAINST” that nominee. See “Election of Directors—Majority Vote Standard in
Uncontested Elections” on page 19.
The Board recommends a vote “FOR” all of the nominees.

11. WHAT ARE THE CHOICES WHEN VOTING ON THE ADVISORY SAY-ON-PAY RESOLUTIONAPPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS?
Shareholders may:a)vote in favor of the resolution;b)vote against the resolution; orc)abstain from voting on the resolution.

The resolution will be approved if the votes cast “FOR” exceed the votes cast “AGAINST.”The Board recommends a vote “FOR” this resolution.
The advisory vote on this matter is non-binding. However, the Board and the Compensation and Leadership Development
Committee value the opinions of our shareholders and will consider the outcome of the vote when making future executive
compensation decisions.

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12. WHAT ARE THE CHOICES WHEN VOTING ON THE 2022 PERFORMANCE INCENTIVE
PLAN?
Shareholders may:a)vote in favor of the 2022 Plan;b)vote against the 2022 Plan; orc)abstain from voting on the 2022 Plan.

The 2022 Performance incentive Plan will be approved if the votes cast “FOR” exceed the votes cast “AGAINST.”The Board recommends a vote “FOR” this proposal.

13. WHAT ARE THE CHOICES WHEN VOTING ON THE RATIFICATION OF THE SELECTION
OF PRICEWATERHOUSECOOPERS SA AS THE COMPANY’S INDEPENDENT AUDITORS,AND WHAT VOTE IS NEEDED TO RATIFY THEIR SELECTION?
Shareholders may:a)vote in favor of the ratification;b)vote against the ratification; orc)abstain from voting on the ratification.

The selection of the independent auditors will be ratified if the votes cast “FOR” exceed the votes cast “AGAINST.”The Board recommends a vote “FOR” this proposal.

14. WHAT ARE THE CHOICES WHEN VOTING ON THE SHAREHOLDER PROPOSAL?
Shareholders may:a)vote in favor of the Shareholder Proposal;b)vote against the Shareholder Proposal; orc)abstain from voting on the Shareholder Proposal.

The Shareholder Proposal will be approved if the votes cast “FOR” exceed the votes cast “AGAINST.”The Board recommends a vote “AGAINST” this proposal.

15. WHAT IF A SHAREHOLDER DOES NOT SPECIFY A CHOICE FOR A MATTER WHEN
RETURNING A PROXY?
Shareholders should specify their choice for each matter on the enclosed proxy. If no specific instructions are given,
proxies that are signed and returned will be voted “FOR” the election of all director nominees, “FOR” the advisory say-on-pay
resolution approving the compensation of our named executive officers, "FOR" the 2022 Plan, “FOR” the proposal toratify the selection of PricewaterhouseCoopers SA as the Company’s independent auditors, and “AGAINST” the shareholder
proposal to phase out all production of PMI’s health-hazardous and addictive products by 2025, if properly presented at
the meeting.

16. WHO IS ENTITLED TO VOTE?
You may vote if you owned stock as of the close of business on March 11, 2022. Each share of common stock is entitledto one vote. As of March 11, 2022, the Company had 1,550,082,073 shares of common stock outstanding.
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17. HOW DO I VOTE IF I PARTICIPATE IN THE DIVIDEND REINVESTMENT PLAN?
The proxy card you have received includes your dividend reinvestment plan shares. You may vote your shares through theInternet, by telephone or by mail, all as described on the enclosed proxy card.

18. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We
recommend that you contact your broker and/or our transfer agent to consolidate as many accounts as possible under thesame name and address. Our transfer agent is Computershare Trust Company, N.A., P.O. Box 505005, Louisville,
KY 40233-5005 or you can reach Computershare at 1-877-745-9350 (from within the United States or Canada) or
1-781-575-4310 (from outside the United States or Canada), or via e-mail at pmi@computershare.com.

19. WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?
If you are a street name holder of shares, you should have received a voting instruction form with the proxy statement
sent from your broker or bank. Your shares held in street name may be voted only on certain “routine” matters when you
do not provide your broker or bank with voting instructions. For example, the ratification of the selection ofPricewaterhouseCoopers SA as independent auditors of the Company is considered a “routine” matter for which brokers
or banks may vote uninstructed shares. When a proposal is not a “routine” matter (such as the election of director nominees
and say-on-pay advisory votes) and the broker or bank has not received voting instructions from the street name holder
with respect to that proposal, that broker or bank cannot vote the shares on that proposal. This is called a broker non-vote.
Therefore, it is important that you provide instructions to your broker or bank with respect to your vote on these “nonroutine” matters.

20. ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?
Abstentions will not be included in the vote totals for any matter. Broker non-votes will not be included in vote totals and will
not affect the outcome of the vote.

21. HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
Your shares are counted as present at the meeting if you attend the virtual meeting and vote in person during the virtual
annual meeting, or if you properly return a proxy by Internet, telephone or mail. In order for us to conduct our meeting, amajority of our outstanding shares of common stock as of March 11, 2022, must be present in person at the virtual annual
meeting or by proxy. This is referred to as a quorum. Abstentions and shares of record held by a broker, bank or otheragent (“Broker Shares”) that are voted on any matter are included in determining the number of votes present. Broker Sharesthat are not voted on any matter will not be included in determining whether a quorum is present.

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EXHIBIT B: 2022 PERFORMANCEINCENTIVE PLAN
Section 1. Purpose; Definitions.
The purpose of the Plan is to: (i) support the Company’s ongoing efforts to develop and retain world-class leaders who willseek to drive the Company’s sustained growth and performance; and (ii) enable the Company to provide incentives
directly linked to the performance of the Company’s business and increases in shareholder value.
For purposes of the Plan, the following terms are defined as set forth below:(a)“Affiliate” means an entity that, directly or indirectly, controls, is controlled by, or is under common control with theCompany, within the meaning of Rule 12b-2 of the Exchange Act.

(b)

“Award” means the grant under the Plan of Incentive Awards (including Performance Share Units), Restricted Sharesor Restricted Share Units.

(c)“Award Agreement” means the written or electronic agreement issued by the Company to the Participant that sets
forth the terms and provisions of the Award granted under the Plan.

(d)“Board” means the Board of Directors of the Company.

(e)“Cause,” with respect to any Participant, means termination because of:(i)continued failure to substantially perform the Participant’s job duties (other than resulting from incapacity due todisability) within ten (10) days after a written demand by the Company (or any of its Subsidiaries or Affiliates,as the case may be) that identifies the manner in which the Company (or any of its Subsidiaries or Affiliates, as
the case may be) has reasonably determined that the Participant has not performed his or her duties;(ii)

gross negligence in the performance of the Participant’s job duties, willful misconduct, or a material violation ofCompany policy (including, without limitation, the code of conduct of the Company), that the Company hasreasonably determined has resulted in, or is likely to result in, a material and demonstrable detriment to theCompany’s business, operations, properties, financial condition or reputation; or(iii) the Participant’s conviction of a felony or a plea of nolo contendere by the Participant with respect to a felony.
A termination for Cause must be communicated to the Participant by written notice that specifies the event or events
claimed to provide a basis for termination for Cause.
(f)“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

(g)“Commission” means the Securities and Exchange Commission or any successor agency.

(h)“Committee” means the Compensation and Leadership Development Committee of the Board or a subcommittee
thereof, any successor thereto or such other committee or subcommittee as may be designated by the Board toadminister the Plan, which shall (a) consist of two or more individuals each of whom shall be, to the extent requiredby Rule 16b-3 of the Exchange Act, a “non-employee director” as defined in Rule 16b-3; and (b) satisfy the applicablerequirements of any stock exchange or national market system on which the Common Stock may then be listed.

(i)“Common Stock” or “Stock” means the common stock of the Company, without par value.

(j)“Company” means Philip Morris International Inc., a corporation organized under the laws of the Commonwealth of
Virginia, or any successor thereto.

(k)“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor
thereto.

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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(l)“Good Reason,” with respect to any Participant, means, unless pursuant to the Participant’s prior written consent,
termination following a Change in Control because of:(i)a material adverse change in the Participant’s job responsibilities, authority or duties (including reporting level)with the Company (or any of its Subsidiaries or Affiliates, as the case may be) as in effect immediately prior to the
Change in Control;(ii)

any material reduction in the aggregate of the Participant’s base salary, benefits, cash incentive award opportunityand equity award opportunity, as in effect immediately prior to the Change in Control; or(iii) a requirement by the Company (or any of its Subsidiaries or Affiliates, as the case may be) for the Participant tochange his or her regular workplace that increases the Participant’s commute by more than 50 miles from thecommute in effect immediately prior to the Change in Control.
A termination for Good Reason must be communicated to the Company by written notice that specifies the event or events
claimed to provide a basis for termination for Good Reason; provided that the Participant’s written notice must be tenderedwithin ninety (90) days of the occurrence of such event or events and, provided further, that the Company shall have failed to
remedy such act or omission within thirty (30) days following its receipt of such notice.
(m) “Incentive Award” means an Award made pursuant to Section 5(a)(iii).
(n)“Participant” means any eligible individual as set forth in Section 3 to whom an Award is granted and any authorizedtransferee of such individual.

(o)“Performance-Based Award” means any Award granted pursuant to the Plan through the application of Performance
Goals and Performance Cycles.

(p)“Performance Cycle” means the period selected by the Committee during which the performance of the Company or
any Subsidiary, Affiliate or unit thereof or any individual is measured for the purpose of determining the extent to whichan Award subject to Performance Goals has been earned.

(q)“Performance Goals” mean the objectives for the Company or any Subsidiary or Affiliate or any unit thereof or any
individual that may be established in the sole discretion of the Committee for a Performance Cycle with respect to any
Performance-Based Awards contingently awarded under the Plan. The Performance Goals for Awards may bebased on one or more criteria selected by the Committee including, without limitation, the following: earnings per
share; total shareholder return; net revenues, excluding excise taxes; operating income; operating companies income;net income; earnings before or after deduction for all or any portion of interest, taxes, depreciation and/or amortization
expense; free cash flow; operating cash flow; free/operating cash flow productivity; return on equity; return on
capital; economic value added; change in the overall cost base; operating margins; product volume or market share;product innovation; attainment of product commercialization targets; share price appreciation; gross profit; gross profit
margins; achievement of research and development milestones; other strategic initiatives, including sustainability
goals which the Company may establish as part of its strategic initiatives from time to time; achievement of regulatory
milestones; portfolio transformation; or achievement of diversity and inclusion goals; and any other criteria ormeasurement approved by the Committee. Any Performance Goals that are financial metrics may be determined inaccordance with United States Generally Accepted Accounting Principles (“GAAP”), in accordance with accounting
principles established by the International Accounting Standards Board (“IASB Principles”), or may be adjusted toinclude or exclude any items otherwise includable or excludable under GAAP or under IASB Principles.

(r)“Performance Share Unit” has the meaning set forth in Section 5(a)(iii).

(s)“Plan” means this Philip Morris International Inc. 2022 Performance Incentive Plan, as may be amended from time to
time.

(t)

“Restricted Period” means the period during which an Award is forfeitable under certain conditions and may not besold, assigned, transferred, pledged or otherwise encumbered.

(u)“Restricted Share” means an Award of shares of Common Stock pursuant to Section 5(a)(i).

(v)“Restricted Share Unit” means an Award described in Section 5(a)(ii).

(w) “Subsidiary” means has the meaning given to it under Rule 12b-2 of the Exchange Act.
In addition, the terms “Affiliated Group,” “Business Combination,” “Change in Control,” “Incumbent Board,” “Outstanding
Company Stock,” “Outstanding Company Voting Securities” and “Person” have the meanings set forth in Section 6.
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Section 2. Administration.
The Plan shall be administered by the Committee, which shall have the power to interpret the Plan and to adopt such rules
and guidelines for carrying out the Plan as it may deem appropriate. The Committee shall have the authority to adopt
such modifications, procedures and subplans as may be necessary or desirable to comply with the laws, regulations,compensation practices and tax and accounting principles of the countries in which the Company, a Subsidiary or an Affiliate
may operate to assure the viability of the benefits of Awards made to individuals employed in such countries and to meetthe objectives of the Plan.
Subject to the terms of the Plan, the Committee shall have the authority to determine those employees eligible to receiveAwards, and the amount, type and terms of each Award, and to establish and administer any Performance Goals applicableto such Awards. The Committee may delegate its authority and power under the Plan to one or more officers of theCompany, subject to guidelines prescribed by the Committee, but only with respect to Participants who are not subject toSection 16 of the Exchange Act.
Any determination made by the Committee or by one or more officers pursuant to delegated authority in accordance withthe provisions of the Plan with respect to any Award shall be made in the sole discretion of the Committee or such delegate,
and all decisions made by the Committee or any appropriately designated officer pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and Plan Participants.
Section 3. Eligibility.
Employees of the Company, its Subsidiaries and Affiliates, who are responsible for or contribute to the management,
growth and profitability of the business of the Company, its Subsidiaries or its Affiliates, or any other employee of theCompany, its Subsidiaries and Affiliates, who the Committee determines should be eligible to participate, are eligible to be
granted Awards under the Plan.
Section 4. Common Stock Subject to the Plan.
(a)Common Stock Available. The total number of shares of Common Stock reserved and available for distribution
pursuant to the Plan shall be 25,000,000. To the extent any Restricted Share or Restricted Share Unit is cashed out
or terminates or expires or is forfeited without a payment being made to the Participant in the form of Common Stock,
the shares subject to such Award that were not so paid, if any, shall not again be available for distribution in connection
with Awards under the Plan. Shares of Common Stock that are potentially issuable pursuant to a Performance Share
Unit or other Performance-Based Award but that are not so issued due to the Participant’s termination or to thefailure to achieve Performance Goals, shall again be available for distribution in connection with Awards under thePlan. Any shares of Common Stock that are used by a Participant as full or partial payment of withholding or other taxes
shall not again be available for distribution in connection with Awards under the Plan.

(b)

Adjustments for Certain Corporate Transactions. Subject to the provisions of Section 6:

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(i)

In the event of any merger, share exchange, reorganization, consolidation, recapitalization, reclassification,
distribution (excluding regular cash dividends), stock dividend, stock split, reverse stock split, split-up, spin-off,issuance of rights or warrants or other similar transaction or event affecting the Common Stock, the Committee
shall make such adjustments or substitutions with respect to the Plan and to Awards granted thereunder as it
deems appropriate to reflect the occurrence of such event, including, but not limited to, adjustments (A) to theaggregate number and kind of securities reserved for issuance under the Plan, (B) to the Performance Goals or
Performance Cycles of any outstanding Performance-Based Awards, and (C) to the number and kind of
securities subject to outstanding Awards. In addition, the Committee may make an Award in substitution for
incentive awards, stock awards, stock options or other equity-based awards held by an individual who becomesan employee of the Company, a Subsidiary or an Affiliate in connection with a transaction described in thisSection 4(b)(i), and, to the extent permitted by law and regulation, shares of Common Stock subject to such
substituted Awards shall not reduce the number of shares of Common Stock reserved and available for distribution
under the Plan. Notwithstanding any provision of the Plan, the terms of such substituted Awards shall be as
the Committee, in its discretion, determines is appropriate.

(ii)

In connection with any of the events described in Section 4(b)(i), and consistent with Section 409A of the Code,the Committee shall also have authority with respect to the Plan and to Awards, except as may otherwise berequired under an applicable Award Agreement, to cancel or adjust the terms of an outstanding Award as
appropriate to reflect the substitution for the outstanding Award of an award of equivalent value granted by anotherentity. In the event of a substitution under Section 4(b)(i), references in this Plan and in the applicable Award
Agreements thereunder to “Common Stock” or “Stock” shall be deemed (except for purposes of Section 6(b)hereunder and for any similar provisions of applicable Award Agreements) to also refer to the securities of theother entity where appropriate.
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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(iii) In connection with any of the events described in Section 4(b)(i), with respect to the Plan and to Awards granted
thereunder, the Committee is also authorized to provide for the payment of any outstanding Awards in cash.
(iv) In the event of any conflict between this Section 4(b) and other provisions of the Plan, the provisions of thissection shall control. Receipt of an Award under the Plan shall constitute an acknowledgement by the Participant
receiving such Award of the ability of the Committee to adjust any award for which an Award under the Plan issubstituted.
Section 5. Awards.
(a)General. The types of Awards that may be granted under the Plan are set forth below. Awards may be granted singly,
in combination or in tandem with other Awards.
(i)

Restricted Shares. Restricted Shares are shares of Common Stock that are awarded to a Participant and thatduring the Restricted Period may be forfeitable to the Company upon such conditions as may be set forth in theapplicable Award Agreement. Except as provided in the applicable Award Agreement, Restricted Shares may not
be sold, assigned, transferred, pledged or otherwise encumbered during the Restricted Period. Except asprovided in the applicable Award Agreement, a Participant shall have with respect to such Restricted Shares all
the rights of a holder of Common Stock during the Restricted Period.

(ii)

Restricted Share Units. Restricted Share Units represent the right to receive shares of Common Stock, cash, orboth (as determined by the Committee) upon satisfaction of such conditions as may be set forth in the applicableAward Agreement. Except as provided in the applicable Award Agreement, Restricted Share Units may not besold, assigned, transferred, pledged or otherwise encumbered during the Restricted Period. Except as provided
in the applicable Award Agreement, a Participant shall have with respect to such Restricted Share Units none of
the rights of a holder of Common Stock unless and until shares of Common Stock are actually delivered insatisfaction of such Restricted Share Units.

(iii) Incentive Awards.
(1)

Incentive Awards are Performance-Based Awards that are expressed in U.S. or any other jurisdiction’s
currency or Common Stock or any combination thereof.

(2)

Incentive Awards may be in the form of Performance Share Units, which are Performance-Based Awards
denominated in shares of Common Stock and based on the achievement of Performance Goals during a
Performance Cycle. Except as provided in the applicable Award Agreement, Performance Share Units may
not be sold, assigned, transferred, pledged or otherwise encumbered during the relevant Performance
Cycle. Except as provided in the applicable Award Agreement, a Participant shall have with respect to such
Performance Share Units none of the rights of a holder of Common Stock unless and until shares ofCommon Stock are actually earned and delivered to the Participant. No dividend equivalents will be paidwith respect to unearned Performance Share Units; dividend equivalents may be accrued and paid at the endof a Performance Cycle with respect to shares that are earned.

(3)

Any Award granted under the Plan may include Performance Goals and Performance Cycles.

(b)

Discretion. Notwithstanding the achievement or failure to achieve any Performance Goal established under the Plan,
the Committee has the discretion to adjust the pay-out pursuant to a Performance-Based Award as it determines isappropriate.

(c)Extraordinary Events. At, or at any time after, the time an Award is granted, the Committee, in its sole discretion, may
provide for the manner in which performance will be measured against the Performance Goals (or may adjust the
Performance Goals) to reflect the impact of specific events, including, to the extent significant, corporate transactions,accounting or tax law changes, asset write-downs, litigation or claim adjustments, foreign exchange gains andlosses, unbudgeted capital expenditures and other unusual or infrequently occurring events.

Section 6. Change in Control Provisions.
(a)

Impact of Event. Unless provided otherwise by the Committee (as constituted prior to a Change in Control) in anAward Agreement, or as provided in an employment agreement or similar agreement between the Company or any
Subsidiary or Affiliate and the Participant, in the event of a Change in Control:(i)

If and to the extent share-based Performance-Based Awards outstanding as of the date the Change in Control
is determined to have occurred are converted into, as applicable, time-based restricted shares or restricted
share units of the successor (or its parent company), then such converted awards shall remain outstanding
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and shall be governed by their respective terms; provided that if, during the 24-month period following theChange in Control date, the Participant’s employment is terminated by such successor (or an Affiliate) without
Cause or by the Participant for Good Reason, such awards, to the extent then outstanding, shall fully vest. With
respect to share-based Performance-Based Awards that are outstanding as of the Change in Control date and are
not so converted, such Awards shall be settled in cash as promptly as is practicable (unless otherwise requiredby Section 409A of the Code as set forth in the applicable terms of the Awards). In either case, the value of any
awards under this Section 6(a)(i) as of the Change in Control date shall be determined in the manner theCommittee, as constituted immediately before the Change in Control, deems appropriate either (1) based on
actual performance as of such date if (A) more than half of the Performance Cycle has elapsed as of such dateand (B) actual performance is determinable as of such date; or (2) assuming target performance had beenachieved in all other circumstances.
(ii)

If and to the extent any other Awards outstanding as of the Change in Control date is determined to haveoccurred are assumed by the successor (or its parent company) or cancelled in exchange for comparable awards
issued by the successor (or its parent company), and, if, during the 24-month period following the Change inControl date, the Participant’s employment is terminated by such successor (or an Affiliate) without Cause or by
the Participant for Good Reason, such awards, to the extent then outstanding, shall become free of all
restrictions and fully vest. With respect to such Awards that are outstanding as of the Change in Control date
and are not assumed, converted or substituted, any deferral or other restriction shall lapse and such Awards shallbe settled in cash as promptly as is practicable (unless otherwise required by Section 409A of the Code as set
forth in the applicable terms of the Awards).

(iii) For an Award to be validly assumed, converted or substituted by a successor for purpose of this Section 6, it
must (A) provide such Participant with rights, terms and conditions substantially equivalent or superior to the rights,
terms and conditions applicable under such Award, including, but not limited to, identical vesting schedules;(B) have substantially equivalent value to such Award (determined at the time of the Change in Control); and(C) for share-based Awards, be based on stock that is listed and traded on an established U.S. securities market
or an established securities market outside the United States upon which the Participant could readily trade thestock without administrative burdens or complexities. The determination of whether the conditions of thisSection 6(a)(iii) are satisfied shall be made by the Committee, as constituted immediately before the Change inControl, in its sole discretion.
(iv) Notwithstanding any other provision of this Section 6 or the Plan to the contrary, any Incentive Awards, including
cash-based Performance-Based Awards, relating to Performance Cycles that have been completed prior to the
Change in Control date, will be deemed earned and become immediately payable in cash.
(b)Definition of Change in Control. A “Change in Control” means the happening of any of the following events:(i)

Consummation of the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act (a “Person”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgatedunder the Exchange Act) of 20% or more of either (A) the then-outstanding shares of Common Stock (the“Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (1) any
acquisition directly from the Company or any corporation or other entity controlled by the Company (the “AffiliatedGroup”), (2) any acquisition by a member of the Affiliated Group, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by a member of the Affiliated Group or (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of paragraph (iii) of thisSection 6(b); or(ii)

Individuals who, as of the effective date of the Plan, constitute the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director
subsequent to such effective date whose election, or nomination for election by the shareholders of the Company,
was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall beconsidered as though such individual were a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of proxies orconsents by or on behalf of a Person other than the Board; or(iii) Consummation of a reorganization, merger, share exchange or consolidation (a “Business Combination”), ineach case, unless, immediately following such Business Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock andOutstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly
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or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as thecase may be, of the corporation resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns such shares and voting power through one or more
Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as thecase may be, (B) no Person (excluding any employee benefit plan (or related trust) of any member of the AffiliatedGroup or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from suchBusiness Combination or the combined voting power of the then-outstanding voting securities of suchcorporation except to the extent that such ownership existed prior to the Business Combination and (C) at leasta majority of the members of the board of directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the initial agreement or at the time of
the action of the Board providing for such Business Combination or were elected, appointed or nominated by
the Board; or(iv) Consummation of a (A) complete liquidation or dissolution of the Company or (B) sale or other disposition of allor substantially all of the assets of the Company, other than to a corporation, with respect to which immediately
following such sale or other disposition, (1) more than 50% of, respectively, the then-outstanding shares of common
stock of such corporation and the combined voting power of the then-outstanding voting securities of suchcorporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale orother disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (2) less than 20% of, respectively, the then-outstanding shares of common stock of suchcorporation and the combined voting power of the then-outstanding voting securities of such corporation entitledto vote generally in the election of directors is then beneficially owned, directly or indirectly, by any Person(excluding any employee benefit plan (or related trust) of any member of the Affiliated Group or such corporation),
except to the extent that such Person owned 20% or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities prior to the sale or disposition and (3) at least a majority of the membersof the board of directors of such corporation were members of the Incumbent Board at the time of the executionof the initial agreement or at the time of the action of the Board providing for such sale or other disposition ofassets of the Company or were elected, appointed or nominated by the Board.
(c)Timing of Payment. Except as provided in Section 13(i), any amount required to be paid pursuant to this Section 6
shall be paid as soon as practicable after the date such amount becomes payable (but not later than 60 days after suchdate, and the Participant may not determine the time of payment).

Section 7. Plan Amendment and Termination.
The Board may amend or terminate the Plan at any time, provided that no such amendment shall be made without
shareholder approval if such approval is required under applicable law, regulation, or stock exchange rule, or if such
amendment would increase the total number of shares of Common Stock that may be distributed under the Plan (otherthan under the provisions of Section 4(b)). Except as set forth in any Award Agreement or as necessary to comply withapplicable law or avoid adverse tax consequences to some or all Participants, no amendment or termination of the Plan may
materially and adversely affect any outstanding Award under the Plan without the Award recipient’s consent.
Section 8. Payments and Payment Deferrals.
Payment of Awards may be in the form of cash, Common Stock, other Awards or combinations thereof as the Committee
shall determine, and with such restrictions as it may impose. The Committee, either at the time of grant or by subsequent
amendment, may require or permit deferral of the payment of Awards, under such rules and procedures as it may establish.
The Committee may also provide that deferred settlements include the payment or crediting of interest or other earnings
on the deferred amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominatedin Common Stock equivalents. Any deferral and related terms and conditions shall comply with Section 409A of the Codeand any regulations and other guidance thereunder to the extent Section 409A is applicable to the Award or the deferral of
the Award.
Section 9. Dividends and Dividend Equivalents.
Subject to the provisions of Section 5(a)(iii), the Committee may provide that any Awards under the Plan earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid currently or may be credited to a Participant’s
PMI 2022 Proxy Statement91

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
Plan account. Any crediting of dividends or dividend equivalents may be subject to such restrictions and conditions as theCommittee may establish, including reinvestment in additional shares of Common Stock or Common Stock equivalents.
Section 10. Transferability.
Except as provided in the applicable Award Agreement or otherwise required by law, Awards shall not be transferable orassignable other than by will or the laws of descent and distribution. Notwithstanding anything to the contrary, in no event
may an Award be transferred by a Participant to a third party for monetary value.
Section 11. Award Agreements.
Each Award under the Plan, other than an annual, cash-based Incentive Award, shall be evidenced by a written or
electronic agreement (which need not be signed by the recipient unless otherwise specified by the Committee) that sets
forth the terms, conditions and limitations for each Award. Such terms may include, but are not limited to, the term of theAward, vesting and forfeiture provisions, and the provisions applicable in the event the Participant’s employment terminates.
The Committee may, in its discretion, amend an Award Agreement or accelerate the vesting of any Award, provided that,except as set forth in any Award Agreement or as necessary to comply with applicable law or avoid adverse tax consequences
to some or all Plan Participants, no such amendment may materially and adversely affect an Award without the Participant’sconsent.
Section 12. Unfunded Status of Plan.
It is presently intended that the Plan constitute an “unfunded” plan for incentive and deferred compensation. The Committee
may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments; provided, however, that, unless the Committee otherwise determines, the existence ofsuch trusts or other arrangements is consistent with the “unfunded” status of the Plan.
Section 13. General Provisions.
(a)

The Committee may require each person acquiring shares of Common Stock pursuant to an Award to represent toand agree with the Company in writing that such person is acquiring the shares without a view to the distribution thereof.
The certificates for such shares may include any legend that the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for shares of Common Stock or other securities delivered under the Plan shallbe subject to such stock transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Commission, any stock exchange upon which the Common Stock is thenlisted, and any applicable Federal, state or foreign securities law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such restrictions.

(b)

Nothing contained in the Plan shall prevent the Company, a Subsidiary or an Affiliate from adopting other or additional
compensation arrangements for their respective employees.

(c)Neither the adoption of the Plan nor the granting of Awards under the Plan shall confer upon any employee any rightto continued employment nor shall they interfere in any way with any right of the Company, a Subsidiary or an
Affiliate in relation to the employment of any employee at any time.

(d)

No later than the date as of which an amount first becomes includable in the gross income of the Participant forincome tax purposes with respect to any Award under the Plan, the Participant shall pay to the Company, or makearrangements satisfactory to the Company regarding the payment of, any Federal, state, local or foreign taxes of any
kind that are required by law or applicable regulation to be withheld with respect to such amount. Unless otherwise
determined by the Committee, withholding obligations arising from an Award may be settled with Common Stock,
including Common Stock that is part of, or is received upon exercise or conversion of, the Award that gives rise to thewithholding requirement. The value of any shares of Common Stock allowed to be withheld or tendered for tax
withholding may not exceed the amount allowed consistent with fixed plan accounting in accordance with U.S. Generally
Accepted Accounting Principles, to the extent applicable, and relevant tax compliance requirements. The obligationsof the Company under the Plan shall be conditional on such payment or arrangements, and the Company, its
Subsidiaries and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Participant. The Committee may establish such procedures as it deems appropriate,including the making of irrevocable elections, for the settling of withholding obligations with Common Stock.

(e)

The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance withthe laws of the Commonwealth of Virginia excluding any conflicts or choice of law rule or principle that mightotherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Unless otherwise
provided in an Award, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction andvenue of the Federal or state courts of the Commonwealth of Virginia, to resolve any and all issues that may arise outof or relate to the Plan or any related Award.

92

Delivering a Smoke-Free Future

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(f)

If any provision of the Plan is held invalid or unenforceable, the invalidity or unenforceability shall not affect theremaining parts of the Plan, and the Plan shall be enforced and construed as if such provision had not been included.

(g)

All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any
successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(h)Notwithstanding anything in this Plan to the contrary, the Plan shall be construed to reflect the intent of theCompany that all Awards under the Plan and any elections to defer, distributions, and other aspects of the Plan shall,to the extent subject to Section 409A of the Code, comply with Section 409A and any regulations and other guidance
thereunder. If a payment obligation under this Plan arises on account of the Participant’s termination of employment
and such payment obligation constitutes “deferred compensation” (as defined under Treasury Regulation§1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation §1.409A-1(b)(3) through (b)(12)), it shallbe payable only after the Participant’s separation from service (as defined in Section 409A of the Code), provided,
however, that if the Participant is a Specified Employee (as defined in Section 409A of the Code), any payment that isscheduled to be paid within six months after such separation from service shall accrue without interest and shall be
paid on the first day of the seventh month beginning after the date of the Participant’s separation from service or, if
earlier, within fifteen days after the appointment of the personal representative or executor of the Participant’s estate
following the Participant’s death. With respect to any award under the Plan that constitutes “deferred compensation”
subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments
or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur
only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in theownership of a substantial portion of the assets” of the Company as those terms are defined under Treasury Regulation§1.409A-3(i)(5), but only to the extent necessary to establish a time or form of payment that complies with
Section 409A of the Code, without altering the definition of Change in Control for purposes of determining whether aParticipant’s rights to such Award become vested or otherwise unconditional upon the Change in Control.
Notwithstanding anything to the contrary, each Participant shall be solely responsible for the tax consequences ofAwards, and in no event shall the Company have any responsibility or liability if an Award does not meet any applicablerequirements of Section 409A of the Code. The Company does not represent or warrant that the Plan or any Award
complies with Section 409A or any other provision of federal, state, local or other tax law.

(i)

All Awards granted under the Plan will be subject to clawback, recovery, or recoupment, as determined by theCommittee in its sole discretion, including but not limited to a reacquisition right with respect to previously granted
Restricted Stock or other cash or property, (a) as provided in the Company’s Compensation Reimbursement Policy,
which is applicable to all officers of the Company on the same terms and conditions, including without limitation, anysuch policy adopted to comply with the requirements of applicable law or the rules and regulations of any stock exchange
applicable to the Company, (b) as is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act,or other applicable law, (c) as provided in the applicable Award Agreement, and/or (d) to the extent that the Committee
determines that the Participant has been involved in the altering, inflating, and/or inappropriate manipulation of
performance/financial results or any other infraction of recognized ethical business standards, or that the Participant
has willfully engaged in any activity injurious to the Company, or the Participant’s separation from service with theCompany and/or its Affiliates or Subsidiaries is for Cause. No recovery of compensation under this Section will bean event giving rise to a right to resign for “Good Reason” or “constructive termination” (or similar term) under any
agreement with the Company or any of its Subsidiaries or Affiliates.

(j)

No fractional shares of Common Stock or units of any securities shall be issued pursuant to this Plan or any Award,
and the Committee shall determine whether cash, other securities or property shall be paid or transferred in lieu of such
fractional shares or any rights thereto shall be eliminated.

(k)

The Plan is effective as of May 4, 2022, provided it is approved by shareholders of the Company. Except as otherwise
provided by the Board, no Awards shall be made under the Plan after May 3, 2027, provided that any Awards prior
to that date may extend beyond it.

PMI 2022 Proxy Statement93

E X H I B I T C: R E C O N C I L I A T I O N SEXHIBIT C: RECONCILIATIONSPHILIP MORRIS INTERNATIONAL INC. and Subsidiaries
Reconciliation of Non-GAAP Measures
Adjustments to Net Revenues, excluding Currency and Acquisitions
For the Years Ended December 31,($ in millions) (Unaudited)

Net Revenues
Less: Saudi Arabia customs assessments
Adjusted Net Revenues
Less: Currency

2020% Change$31,405$28,694

9.4%

28,694

10.3%$28,694

7.6%(1)(246)
31,651
678

Less: Acquisitions
Adjusted Net Revenues, ex. currency and acquisitions
(1)

2021

109
$30,864

On an organic basis

Reconciliation of Operating Cash Flow to Operating Cash Flow, excluding Currency
For the Years Ended December 31,($ in millions) (Unaudited)

Net cash provided by operating activities (1)Less: Currency
Net cash provided by operating activities, excluding currency(1)

94

Operating cash flow

Delivering a Smoke-Free Future

2021

2020

% Change$11,967$9,81222.0%$9,812

13.8%

799$11,168

E X H I B I T C: R E C O N C I L I A T I O N S
Calculation of Three-Year Adjusted Operating Income Organic Compound Annual Growth Rate (CAGR)
For the Years Ended December 31,($ in millions) (Unaudited)

Operating Income
Less:
Asset impairment and exit costs
Canadian tobacco litigation-related expense
Loss on deconsolidation of RBH
Russia excise and VAT audit charge
Adjusted Operating Income
Operating Income attributable to RBH
Adjusted Operating Income
Less: Currency
Adjusted Operating Income, excluding Currency
Less: Acquisitions
Adjusted Operating Income, excluding Currency and Acquisitions

Operating Income
Less:
Asset impairment and exit costs
Canadian tobacco litigation-related expense
Loss on deconsolidation of RBH
Russia excise and VAT audit charge
Brazil indirect tax credit
Adjusted Operating Income
Operating Income attributable to RBH
Adjusted Operating Income
Less: Currency
Adjusted Operating Income, excluding Currency
Less: Acquisitions
Adjusted Operating Income, excluding Currency and Acquisitions

2019

2018

$10,531$11,377

(422)
(194)
(239)
(374)
$11,760$11,760(293)$12,053—$12,053————$11,377(542)(1)$10,835(2)8.5%$10,835(2)11.2%$10,835(2)11.2%(4)

2020

2019

$11,668$10,531

(149)
—
—
—
119
$11,698

(422)
(194)
(239)
(374)
—
$11,760(126)(3)$11,634(2)$11,698(474)$12,172—$12,172

Operating Income
Less:
Asset impairment and exit costs
Saudi Arabia customs assessments
Asset acquisition costs
Brazil indirect tax credit
Adjusted Operating Income
Less: Currency
Adjusted Operating Income, excluding Currency
Less: Acquisitions
Adjusted Operating Income, excluding Currency and Acquisitions
Three-Year Adjusted Operating Income Organic CAGR

(216)
(246)
(51)

(149)

Pro forma(3)

Represents the impact attributable to RBH from January 1, 2019 through March 21, 2019(4)

On an organic basis

10.8%(0.5)%
0.6%

4.6%(4)$11,668

Represents the impact attributable to RBH from March 22, 2018 through December 31, 2018

% Change$11,634(2)$12,975

(2)

3.4%

4.6%

2020

(1)

(7.4)%$11,634(2)2021$13,488268$13,2201$13,219% Change% Change

11.2%

119
$11,698

15.3%$11,698

13.0%$11,698

13.0%(4)9.6%

Note: Financials attributable to RBH include Duty Free sales in Canada
PMI 2022 Proxy Statement95

EXHIBIT D: GLOSSARY OF TERMSEXHIBIT D: GLOSSARY OF TERMS
Financial
•
•

•
•
•

•
•

•
•

•

•

96

Net revenues exclude excise taxes.
Net revenues from smoke-free products aredefined as operating revenues generated from thesales of PMI’s heated tobacco units, Platform 1
devices and related accessories, other nicotinecontaining 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 currencyneutral underlying results.
Pro forma 2019 results have been adjusted for thedeconsolidation 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, Deconsolidationof 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.

Delivering a Smoke-Free Future

Other
•

•
•
•
•
•

•

•

•

•

Reduced-risk products (“RRPs”) is the term we
use to refer to products that present, are likely topresent, or have the potential to present less risk ofharm to smokers who switch to these products
versus continued smoking. We have a range of RRPs
in various stages of development, scientificassessment and commercialization. Our RRPs aresmoke-free products that do not burn tobacco; they
contain and/or generate far lower quantities ofharmful and potentially harmful constituents thanfound 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 proxystatement 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 andproprietary tobacco unit is inserted and heated togenerate 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, andgovernance, which are key factors used by investors
to measure corporate social responsibility.
EU means the European Union.

2022 PROXY STATEMENT
And Notice of Annual Meeting of Shareholders
To be held on Wednesday, May 4, 2022

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