AbbVie Inc.ABBV
AbbVie Inc. Stock Compensation Disclosure
Equity
Stock-Based Compensation
In 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (Amended Plan), which amends and restates the AbbVie 2013 Incentive Stock Program (2013 ISP). AbbVie grants stock-based awards to eligible employees pursuant to the Amended Plan, which provides for several different forms of benefits, including non-qualified stock options, RSUs and various performance-based awards. Under the Amended Plan, a total of 144 million shares of AbbVie common stock have been reserved for issuance as awards to AbbVie employees.
AbbVie measures compensation expense for stock-based awards based on the grant date fair value of the awards and the estimated number of awards that are expected to vest. Forfeitures are estimated based on historical experience at the time of grant and are revised in subsequent periods if actual forfeitures differ from those estimates. Compensation cost for stock-based awards is amortized over the service period, which could be shorter than the vesting period if an employee is retirement eligible. Retirement eligible employees generally are those who are age 55 or older and have at least 10 years of service.
Stock-based compensation expense is principally related to awards issued pursuant to the 2013 ISP and the Amended Plan and is summarized as follows:
| years ended December 31 (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cost of products sold | $ | 52 | $ | 55 | $ | 46 | |||||||||||
| Research and development | 386 | 341 | 278 | ||||||||||||||
| Selling, general and administrative | 517 | 515 | 423 | ||||||||||||||
| Pre-tax compensation expense | 955 | 911 | 747 | ||||||||||||||
| Tax benefit | (170) | (159) | (136) | ||||||||||||||
| After-tax compensation expense | $ | 785 | $ | 752 | $ | 611 | |||||||||||
Realized excess tax benefits associated with stock-based compensation totaled $58 million in 2025, $84 million in 2024 and $90 million in 2023.
In addition to stock-based compensation expense included in the table above, in connection with the 2025 acquisition of Capstan and the 2024 acquisitions of ImmunoGen and Cerevel Therapeutics, AbbVie incurred cash-settled, post-closing expense for employee incentive awards, which is summarized in the table below:
| years ended December 31 (in millions) | 2025 | 2024 | ||||||||||||
| Cost of products sold | $ | — | $ | 36 | ||||||||||
Research and development | 28 | 184 | ||||||||||||
| Selling, general and administrative | 67 | 290 | ||||||||||||
Total post-closing cash settled expense | $ | 95 | $ | 510 | ||||||||||
Stock Options
Stock options awarded to employees typically have a contractual term of 10 years and generally vest in one-third increments over a 3-year period. The exercise price is equal to at least 100% of the market value on the date of grant. The fair value is determined using the Black-Scholes model. The weighted-average grant-date fair values of stock options granted were $38.39 in 2025, $31.53 in 2024 and $29.89 in 2023.
The following table summarizes AbbVie stock option activity in 2025:
| (options in thousands, aggregate intrinsic value in millions) | Options | Weighted- average exercise price | Weighted-average remaining life (in years) | Aggregate intrinsic value | |||||||||||||||||||
| Outstanding at December 31, 2024 | 5,613 | $ | 117.48 | 5.6 | $ | 338 | |||||||||||||||||
| Granted | 561 | 192.86 | |||||||||||||||||||||
| Exercised | (1,684) | 102.87 | |||||||||||||||||||||
| Lapsed and forfeited | (119) | 128.13 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 4,371 | $ | 132.49 | 5.9 | $ | 420 | |||||||||||||||||
| Exercisable at December 31, 2025 | 3,175 | $ | 114.97 | 4.9 | $ | 360 | |||||||||||||||||
The total intrinsic value of options exercised was $177 million in 2025, $202 million in 2024 and $189 million in 2023. The total fair value of options vested during 2025 was $19 million. As of December 31, 2025, $7 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years.
RSUs and Performance Shares
RSUs awarded to employees other than senior executives and other key employees generally vest in ratable increments over a -year period. Recipients of these RSUs are entitled to receive dividend equivalents as dividends are declared and paid during the RSU vesting period.
The majority of the equity awards AbbVie grants to its senior executives and other key employees are performance-based. Equity awards granted to senior executives and other key employees consist of a combination of performance-vested RSUs and performance shares as well as non-qualified stock options described above. The performance-vested RSUs have the potential to vest in one-third increments during a three-year performance period and may be earned based on AbbVie’s return on invested capital (ROIC) performance relative to a defined peer group of pharmaceutical, biotech and life science companies. The recipient may receive one share of AbbVie common stock for each vested award. The performance shares have the potential to vest over a three-year performance period and may be earned based on AbbVie’s EPS achievement and AbbVie’s total stockholder return (TSR) (a market condition) relative to a defined peer group of pharmaceutical, biotech and life sciences companies. Dividend equivalents on performance-vested RSUs and performance shares accrue during the performance period and are payable at vesting only to the extent that shares are earned.
The weighted-average grant-date fair value of RSUs and performance shares generally is determined based on the number of shares/units granted and the quoted price of AbbVie’s common stock on the date of grant. The weighted-average grant-date fair values of performance shares with a TSR market condition are determined using the Monte Carlo simulation model.
The following table summarizes AbbVie RSU and performance share activity for 2025:
| (share units in thousands) | Share units | Weighted-average grant date fair value | |||||||||
| Outstanding at December 31, 2024 | 10,387 | $ | 159.52 | ||||||||
| Granted | 4,885 | 191.21 | |||||||||
| Vested | (5,244) | 154.24 | |||||||||
| Forfeited | (460) | 176.81 | |||||||||
| Outstanding at December 31, 2025 | 9,568 | $ | 177.76 | ||||||||
The fair market value of RSUs and performance shares (as applicable) vested was $1.0 billion in 2025, $1.1 billion in 2024 and $1.0 billion in 2023.
In connection with the ImmunoGen and Cerevel Therapeutics acquisitions, AbbVie issued 0.6 million RSUs to holders of ImmunoGen and Cerevel Therapeutics equity awards based on a conversion factor described in each of the transaction agreements. See Note 5 for additional information regarding the ImmunoGen and Cerevel Therapeutics acquisitions.
As of December 31, 2025, $615 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years.
Cash Dividends
Cash dividends declared per common share totaled $6.65 in 2025, $6.29 in 2024 and $5.99 in 2023. The following table summarizes quarterly cash dividends declared during 2025, 2024 and 2023:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Date Declared | Payment Date | Dividend Per Share | Date Declared | Payment Date | Dividend Per Share | Date Declared | Payment Date | Dividend Per Share | ||||||||||||||||||||||||||||||||||||||||||
| 10/31/25 | 02/17/26 | $1.73 | 10/30/24 | 02/14/25 | $1.64 | 10/26/23 | 02/15/24 | $1.55 | ||||||||||||||||||||||||||||||||||||||||||
| 09/05/25 | 11/14/25 | $1.64 | 09/06/24 | 11/15/24 | $1.55 | 09/08/23 | 11/15/23 | $1.48 | ||||||||||||||||||||||||||||||||||||||||||
| 06/20/25 | 08/15/25 | $1.64 | 06/21/24 | 08/15/24 | $1.55 | 06/22/23 | 08/15/23 | $1.48 | ||||||||||||||||||||||||||||||||||||||||||
| 02/13/25 | 05/15/25 | $1.64 | 02/15/24 | 05/15/24 | $1.55 | 02/16/23 | 05/15/23 | $1.48 | ||||||||||||||||||||||||||||||||||||||||||
Stock Repurchase Program
The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management’s discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under this program are recorded at acquisition cost, including related expenses and are available for general corporate purposes.
AbbVie repurchased 3 million shares for $606 million in 2025, 7 million shares for $1.3 billion in 2024 and 10 million shares for $1.6 billion in 2023. AbbVie's remaining stock repurchase authorization was $2.9 billion as of December 31, 2025. On February 16, 2023, AbbVie's board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization.
Accumulated Other Comprehensive Loss
The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for 2025, 2024 and 2023:
| (in millions) (brackets denote losses) | Foreign currency translation adjustments | Net investment hedging activities | Pension and post-employment benefits | Cash flow hedging activities | Total | ||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | (1,513) | $ | 464 | $ | (1,458) | $ | 308 | $ | (2,199) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 407 | (311) | (23) | (10) | 63 | ||||||||||||||||||||||||
| Net gains reclassified from accumulated other comprehensive loss | — | (88) | (7) | (74) | (169) | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | 407 | (399) | (30) | (84) | (106) | ||||||||||||||||||||||||
| Balance as of December 31, 2023 | (1,106) | 65 | (1,488) | 224 | (2,305) | ||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (1,008) | 580 | 799 | 155 | 526 | ||||||||||||||||||||||||
| Net losses (gains) reclassified from accumulated other comprehensive loss | — | (96) | 25 | (75) | (146) | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | (1,008) | 484 | 824 | 80 | 380 | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | (2,114) | 549 | (664) | 304 | (1,925) | ||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 1,481 | (857) | 419 | (83) | 960 | ||||||||||||||||||||||||
| Net losses (gains) reclassified from accumulated other comprehensive loss | — | (114) | 2 | (67) | (179) | ||||||||||||||||||||||||
| Net current-period other comprehensive income (loss) | 1,481 | (971) | 421 | (150) | 781 | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | (633) | $ | (422) | $ | (243) | $ | 154 | $ | (1,144) | |||||||||||||||||||
Other comprehensive income (loss) for 2025 included pension and post-employment benefit plan gains of $421 million primarily due to gains on plan assets and higher discount rates partially offset by experience losses. Other comprehensive income (loss) also included foreign currency translation adjustments totaling gains of $1.5 billion principally due to the impact of the strengthening of the Euro on the translation of the company's Euro-denominated assets and the offsetting impact of net investment hedging activities totaling losses of $971 million. Other comprehensive income (loss) for 2024 included pension and post-employment benefit plan gains of $824 million primarily due to actuarial gains driven by higher discount rates. Other comprehensive income (loss) for 2024 also included foreign currency translation adjustments totaling losses of $1.0 billion principally due to the impact of the weakening of the Euro on the translation of the company's Euro-denominated assets and the offsetting impact of net investment hedging activities totaling gains of $484 million. Other comprehensive income (loss) for 2023 included foreign currency translation adjustments totaling gains of $407 million principally due to the impact of the strengthening of the Euro on the translation of the company's Euro-denominated assets and the offsetting impact of net investment hedging activities totaling losses of $399 million.
The table below presents the impact on AbbVie's consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss:
| years ended December 31 (in millions) (brackets denote gains) | 2025 | 2024 | 2023 | ||||||||||||||
| Net investment hedging activities | |||||||||||||||||
Gains on derivative amount excluded from effectiveness testing(a) | $ | (145) | $ | (123) | $ | (112) | |||||||||||
| Tax expense | 31 | 27 | 24 | ||||||||||||||
| Total reclassifications, net of tax | $ | (114) | $ | (96) | $ | (88) | |||||||||||
| Pension and post-employment benefits | |||||||||||||||||
Amortization of actuarial losses (gains) and other(b) | $ | 5 | $ | 33 | $ | (7) | |||||||||||
| Tax benefit | (3) | (8) | — | ||||||||||||||
| Total reclassifications, net of tax | $ | 2 | $ | 25 | $ | (7) | |||||||||||
| Cash flow hedging activities | |||||||||||||||||
Gains on foreign currency forward exchange contracts(c) | $ | (66) | $ | (73) | $ | (77) | |||||||||||
Other(d) | (21) | (23) | (18) | ||||||||||||||
| Tax expense | 20 | 21 | 21 | ||||||||||||||
| Total reclassifications, net of tax | $ | (67) | $ | (75) | $ | (74) | |||||||||||
(a)Amounts are included in interest expense, net (see Note 11).
(b)Amounts are included in the computation of net periodic benefit cost (see Note 12).
(c)Amounts are included in cost of products sold (see Note 11).
(d)Amounts are included in net foreign exchange loss and interest expense, net (see Note 11).
Other
In addition to common stock, AbbVie's authorized capital includes 200 million shares of preferred stock, par value $0.01. As of December 31, 2025, no shares of preferred stock were issued or outstanding.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.