EXHIBIT 19.3 Selected Footnote Disclosure of Stock-Based Compensation Disclosures, Pfizer Inc.'s Financial Statements, December 31, 2016 NOTE 13: SHARE-BASED PAYMENTS Our compensation programs can include share-based payments, in the form of Restricted Stock Units (RSUS), stock options, Portfolio Performance Shares (PPSs), Total Shareholder Return Units (TSRUS) and Performance Share Awards (PSAs). A. Impact on Net Income The following table provides the components of share-based compensation expense and the associated tax benefit: Year Ended December 31 2016 2015 2014 $299 $306 $270 147 134 36 165 (Millions of Dollars) Restricted Stock Units Portfolio Performance Shares Total Shareholder Return Units Stock Options Performance Share Awards Directors' compensation Share-based payment expense Tax benefit for share-based compensation expense Share-based payment expense, net of tax (205) $486 (198) $471 (179) $407 B. Restricted Stock Units (RSUS) RSUs are awarded to select employees and, when vested, entitle the holder to receive a specified number of shares of Pfizer common stock, including shares resulting from dividend equivalents paid on such RSUS. For RSUS granted during the periods presented, in virtually all instances, the units vest after three years of continuous service from the grant date. We measure the value of RSU grants as of the grant date using the closing price of Pfizer common stock. The values determined through this fair value methodology generally are amortized on a straight line basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and Research and development expenses, as appropriate. The following table summarizes all RSU activity during 2016: Shares (Thousands) Weighted-Average Grant Date Fair Value Per Share Nonvested, December 31, 2015 Granted Vested Reinvested dividend equivalents Forfeited Nonvested, December 31, 2016 29,135 10,581 19,630) 1,093 (1,574) 29,605 $31.53 30.74 27.41 32.56 32.18 $32.59 The following table provides data related to all RSU activity: (Millions of Dollars) 2014 2016 $293 $262 Year Ended December 31 2015 $371 $279 $401 $255 Total fair value of shares vested Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax Weighted average period over which RSU cost is expected to be recognized lyears) 1.7 18 1.8 C. Stock Options Stock options are awarded to select employees and, when vested, entitle the holder to purchase a specified number of shares of Pfizer common stock at a price per share equal to the closing market price of Pfizer common stock on the date of grant. Beginning in 2016, only a limited set of overseas employees received stock option grants. No stock options were awarded to senior and other key management in any period presented; however, stock options were awarded to certain other employees. In virtually all instances, stock options granted since Continued 2005 vest after three years of continuous service from the grant date and have a contractual term of ten years. In most cases, stock options must be held for at least one year from the grant date before any vesting may occur. In the event of a sale of business or plant closing or restructuring, options held by employees are immediately vested and are exercisable for a period from three months to their remaining term, depending on various conditions. We measure the value of stock option grants as of the grant date using, for virtually all grants, the Black-Scholes-Merton option.pricing model. The values determined through this fair value methodology generally are amortized on a straight-line basis over the vesting term into Cost of sales, Selling. informational and administrative expenses, and Research and development expenses, as appropriate. The following table summarizes all stock option activity during 2016: Weighted- Weighted Average Aggregate Average Remaining Intrinsic Shares Exercise Price Contractual Valuelal (Thousands) Per Share Term (Years) (Millions) Outstanding, December 31, 2015 232,554 $26.41 Granted 1,371 30.59 Exercised (42,550) 24.03 Forfeited (2,949) 33.18 Expired (1,750) Outstanding, December 31, 2016 186,676 26.86 $1,138 Vested and expected to vest, 184,537 26.77 1,138 December 31, 2016 Exercisable, December 31, 2016 105,862 $21.85 4.1 $1,126 Il Market price of underlying Pfizer common stock less exercise price. The number of options expected to vest takes into account on estimate of expected forfeitures. The following table summarizes data related to all stock option activity: Year Ended December 31 2014 (Millions of Dollars, Except Per Stock Option Amounts) Weighted average grant date fair value per stock option Aggregate intrinsic value on exercise Cash received upon exercise Tax benefits realized related to exercise Total compensation cost related to nonvested stock options not yet recognized, pre-tax Weighted average period over which stock option compensation cost is expected to be recognized (years) 2016 $ 3.89 $ 389 $1,019 $ 112 $ 58 2015 $ 4.30 $ 666 $1,263 $ 187 $ 159 $ 4.40 $ 458 $1,002 1.1 1.8 1.8 Source: Selected Footnote Disclosures from Pfizer Inc.'s 2016 Financial Statements. http://www.pfizer.com/ investors/sec_filings Financial Statement Analysis Case 2: Analysis of Stock-Based Compensation Disclosures Pfizer Inc., a global pharmaceutical company, offers several different types of stock-based compensation to its employees. Pfizer reports under U.S. GAAP. Use the disclosures provided in Exhibit 19.3 to answer the following questions. Required >> a. What types of stock compensation plans does Pfizer offer? b. What was the total expense related to these plans in 2016, 2015 and 2014? What is the expense related to stock-based compensation as a percentage of net income? Pfizer's net income was $7,125, $6,960, and $9,135 million in 2016, 2015, and 2014, respectively c. How many shares of restricted stock units were granted in 2016? What is the vesting period? What is amount of compensation expense that will be recognized over the vesting period? If the restricted stock units were granted on January 1, 2016, what is the deferred compensation expense related to restricted stock units in 2016? How many shares were forfeited? d. Are the stock options awards equity or liability classified? How many options were granted in 2016? What is the entry when the grant is made? What is the vesting period? How many options were forfeited and expired? If Pfizer's average stock price during the year was $32.82 per share, can you give a reason why the options expired? What is the compensation expense related to stock options at the end of 2016 Ignore forfeitures. EXHIBIT 19.3 Selected Footnote Disclosure of Stock-Based Compensation Disclosures, Pfizer Inc.'s Financial Statements, December 31, 2016 NOTE 13: SHARE-BASED PAYMENTS Our compensation programs can include share-based payments, in the form of Restricted Stock Units (RSUS), stock options, Portfolio Performance Shares (PPSs), Total Shareholder Return Units (TSRUS) and Performance Share Awards (PSAs). A. Impact on Net Income The following table provides the components of share-based compensation expense and the associated tax benefit: Year Ended December 31 2016 2015 2014 $299 $306 $270 147 134 36 165 (Millions of Dollars) Restricted Stock Units Portfolio Performance Shares Total Shareholder Return Units Stock Options Performance Share Awards Directors' compensation Share-based payment expense Tax benefit for share-based compensation expense Share-based payment expense, net of tax (205) $486 (198) $471 (179) $407 B. Restricted Stock Units (RSUS) RSUs are awarded to select employees and, when vested, entitle the holder to receive a specified number of shares of Pfizer common stock, including shares resulting from dividend equivalents paid on such RSUS. For RSUS granted during the periods presented, in virtually all instances, the units vest after three years of continuous service from the grant date. We measure the value of RSU grants as of the grant date using the closing price of Pfizer common stock. The values determined through this fair value methodology generally are amortized on a straight line basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and Research and development expenses, as appropriate. The following table summarizes all RSU activity during 2016: Shares (Thousands) Weighted-Average Grant Date Fair Value Per Share Nonvested, December 31, 2015 Granted Vested Reinvested dividend equivalents Forfeited Nonvested, December 31, 2016 29,135 10,581 19,630) 1,093 (1,574) 29,605 $31.53 30.74 27.41 32.56 32.18 $32.59 The following table provides data related to all RSU activity: (Millions of Dollars) 2014 2016 $293 $262 Year Ended December 31 2015 $371 $279 $401 $255 Total fair value of shares vested Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax Weighted average period over which RSU cost is expected to be recognized lyears) 1.7 18 1.8 C. Stock Options Stock options are awarded to select employees and, when vested, entitle the holder to purchase a specified number of shares of Pfizer common stock at a price per share equal to the closing market price of Pfizer common stock on the date of grant. Beginning in 2016, only a limited set of overseas employees received stock option grants. No stock options were awarded to senior and other key management in any period presented; however, stock options were awarded to certain other employees. In virtually all instances, stock options granted since Continued 2005 vest after three years of continuous service from the grant date and have a contractual term of ten years. In most cases, stock options must be held for at least one year from the grant date before any vesting may occur. In the event of a sale of business or plant closing or restructuring, options held by employees are immediately vested and are exercisable for a period from three months to their remaining term, depending on various conditions. We measure the value of stock option grants as of the grant date using, for virtually all grants, the Black-Scholes-Merton option.pricing model. The values determined through this fair value methodology generally are amortized on a straight-line basis over the vesting term into Cost of sales, Selling. informational and administrative expenses, and Research and development expenses, as appropriate. The following table summarizes all stock option activity during 2016: Weighted- Weighted Average Aggregate Average Remaining Intrinsic Shares Exercise Price Contractual Valuelal (Thousands) Per Share Term (Years) (Millions) Outstanding, December 31, 2015 232,554 $26.41 Granted 1,371 30.59 Exercised (42,550) 24.03 Forfeited (2,949) 33.18 Expired (1,750) Outstanding, December 31, 2016 186,676 26.86 $1,138 Vested and expected to vest, 184,537 26.77 1,138 December 31, 2016 Exercisable, December 31, 2016 105,862 $21.85 4.1 $1,126 Il Market price of underlying Pfizer common stock less exercise price. The number of options expected to vest takes into account on estimate of expected forfeitures. The following table summarizes data related to all stock option activity: Year Ended December 31 2014 (Millions of Dollars, Except Per Stock Option Amounts) Weighted average grant date fair value per stock option Aggregate intrinsic value on exercise Cash received upon exercise Tax benefits realized related to exercise Total compensation cost related to nonvested stock options not yet recognized, pre-tax Weighted average period over which stock option compensation cost is expected to be recognized (years) 2016 $ 3.89 $ 389 $1,019 $ 112 $ 58 2015 $ 4.30 $ 666 $1,263 $ 187 $ 159 $ 4.40 $ 458 $1,002 1.1 1.8 1.8 Source: Selected Footnote Disclosures from Pfizer Inc.'s 2016 Financial Statements. http://www.pfizer.com/ investors/sec_filings Financial Statement Analysis Case 2: Analysis of Stock-Based Compensation Disclosures Pfizer Inc., a global pharmaceutical company, offers several different types of stock-based compensation to its employees. Pfizer reports under U.S. GAAP. Use the disclosures provided in Exhibit 19.3 to answer the following questions. Required >> a. What types of stock compensation plans does Pfizer offer? b. What was the total expense related to these plans in 2016, 2015 and 2014? What is the expense related to stock-based compensation as a percentage of net income? Pfizer's net income was $7,125, $6,960, and $9,135 million in 2016, 2015, and 2014, respectively c. How many shares of restricted stock units were granted in 2016? What is the vesting period? What is amount of compensation expense that will be recognized over the vesting period? If the restricted stock units were granted on January 1, 2016, what is the deferred compensation expense related to restricted stock units in 2016? How many shares were forfeited? d. Are the stock options awards equity or liability classified? How many options were granted in 2016? What is the entry when the grant is made? What is the vesting period? How many options were forfeited and expired? If Pfizer's average stock price during the year was $32.82 per share, can you give a reason why the options expired? What is the compensation expense related to stock options at the end of 2016 Ignore forfeitures