GILEAD SCIENCES, INC.GILD
GILEAD SCIENCES, INC. Stock Compensation Disclosure
EMPLOYEE BENEFITS
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Stock-Based Compensation
Equity Incentive Plan and ESPP Summary
In May 2022, our stockholders approved and we adopted the Gilead Sciences, Inc. 2022 Equity Incentive Plan (the “2022 Plan”), a broad-based incentive plan that authorized the issuance of a total of 132 million shares of common stock and provides for the grant of equity-based awards, including RSUs, PSUs, stock options and other restricted stock and performance awards, to employees, directors and consultants. No awards may be granted under previous plans since the approval of the 2022 Plan. As of December 31, 2025, a total of 62 million shares remain available for future grant under the 2022 Plan.
A total of 104 million shares of common stock have been authorized for issuance under our ESPP, with 22 million shares still available for issuance as of December 31, 2025.
Stock-Based Compensation Expense
The following tables summarize total stock-based compensation expense included on our Consolidated Statements of Operations, classified by award type and expense type:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| RSUs | $ | 790 | $ | 732 | $ | 666 | ||||||||||||||
| PSUs | 33 | 37 | 32 | |||||||||||||||||
| Stock options | 30 | 30 | 30 | |||||||||||||||||
| ESPP | 41 | 36 | 37 | |||||||||||||||||
Acquisition-related expense(1) | — | 133 | 29 | |||||||||||||||||
| Stock-based compensation expense included in total costs and expenses | $ | 894 | $ | 969 | $ | 796 | ||||||||||||||
(1) Represents accelerated post-acquisition stock-based compensation expenses, primarily related to CymaBay in 2024.
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cost of goods sold | $ | 60 | $ | 61 | $ | 57 | ||||||||||||||
| Research and development expenses | 433 | 458 | 377 | |||||||||||||||||
| Selling, general and administrative expenses | 401 | 450 | 361 | |||||||||||||||||
| Stock-based compensation expense included in total costs and expenses | 894 | 969 | 796 | |||||||||||||||||
| Income tax effect | (254) | (192) | (165) | |||||||||||||||||
| Stock-based compensation expense, net of tax | $ | 640 | $ | 777 | $ | 630 | ||||||||||||||
RSUs
We grant time-based RSUs to certain employees as part of our annual employee equity compensation review program as well as to new hire employees and to non-employee members of our Board. RSUs are share-based awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. RSUs generally vest over or four years from the date of grant. RSUs have dividend equivalent rights entitling holders to dividend equivalents to be paid upon vesting for each share of the underlying unit.
The following tables summarize our RSU activity:
| RSUs | ||||||||||||||
| (in millions, except per share amounts) | Shares | Weighted- Average Grant Date Fair Value Per Share | ||||||||||||
| Outstanding as of December 31, 2024 | 21.8 | $ | 73.52 | |||||||||||
| Granted | 8.9 | $ | 116.62 | |||||||||||
| Vested | (10.5) | $ | 71.80 | |||||||||||
| Forfeited | (2.4) | $ | 85.42 | |||||||||||
| Outstanding as of December 31, 2025 | 17.8 | $ | 94.39 | |||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| (in millions, except per share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Weighted-average grant date fair value of RSUs granted | $ | 116.62 | $ | 74.82 | $ | 79.66 | ||||||||||||||
Total fair value of RSUs vested | $ | 1,216 | $ | 847 | $ | 849 | ||||||||||||||
As of December 31, 2025, there was $1.1 billion of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.1 years.
PSUs
We grant PSUs that generally vest over a three-year performance period upon the achievement of specified market or performance goals, which include achieving a total shareholder return compared to a pre-determined peer group or achieving revenue or adjusted earnings per share growth targets. The actual number of common shares ultimately issued is calculated by multiplying the number of PSUs by a payout percentage ranging from 0% to 200%, and these awards generally vest only when a committee (or subcommittee) of our Board has determined that the specified market and performance goals have been achieved. PSUs have dividend equivalent rights entitling holders to dividend equivalents to be paid upon vesting for each share of the underlying unit.
The following tables summarize our PSU activity:
| PSUs | ||||||||||||||
| (in millions, except per share amounts) | Shares | Weighted- Average Grant Date Fair Value Per Share | ||||||||||||
| Outstanding as of December 31, 2024 | 1.1 | $ | 72.24 | |||||||||||
| Granted | 0.5 | $ | 91.33 | |||||||||||
| Vested | (0.7) | $ | 63.86 | |||||||||||
| Forfeited | (0.2) | $ | 93.86 | |||||||||||
| Outstanding as of December 31, 2025 | 0.7 | $ | 100.00 | |||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| (in millions, except per share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Weighted-average grant date fair value of PSUs granted | $ | 91.33 | $ | 72.24 | $ | 81.39 | ||||||||||||||
| Total fair value of PSUs vested | $ | 73 | $ | 43 | $ | 35 | ||||||||||||||
As of December 31, 2025, there was $31 million of unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted-average period of 1.0 years.
Stock Options
Option grants are designated as either non-statutory or incentive stock options. The exercise price of stock options may not be less than the fair market value of our common stock on the grant date and no stock option may have a term in excess of 10 years. Employee stock options generally vest over or four years. Stock options may be settled in cash or in shares of our common stock, including a net issuance using shares otherwise purchasable under the option to pay the exercise price.
The following tables summarize activity and other information related to our stock options:
| Shares (in millions) | Weighted- Average Exercise Price (in dollars) | Weighted-Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions)(1) | |||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 11.8 | $ | 69.85 | |||||||||||||||||||||||
| Granted | 1.5 | $ | 116.55 | |||||||||||||||||||||||
| Exercised | (3.8) | $ | 70.38 | |||||||||||||||||||||||
| Forfeited | (0.7) | $ | 83.85 | |||||||||||||||||||||||
| Expired | (0.1) | $ | 102.24 | |||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 8.7 | $ | 76.08 | 6.21 | $ | 407 | ||||||||||||||||||||
| Exercisable as of December 31, 2025 | 5.8 | $ | 67.54 | 5.23 | $ | 321 | ||||||||||||||||||||
| Expected to vest, net of estimated forfeitures as of December 31, 2025 | 2.8 | $ | 92.88 | 8.14 | $ | 82 | ||||||||||||||||||||
_______________________________
(1) Aggregate intrinsic value represents the value of our closing stock price on the last trading day of the year in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable.
| Year Ended December 31, | ||||||||||||||||||||
| (in millions, except per share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Weighted-average grant date fair value of stock options granted | $ | 22.96 | $ | 13.70 | $ | 16.11 | ||||||||||||||
| Total intrinsic value of options exercised | $ | 142 | $ | 77 | $ | 25 | ||||||||||||||
We used the following weighted-average assumptions in the Black-Scholes model to calculate the estimated fair value of the stock option awards:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Expected volatility | 24 | % | 25 | % | 26 | % | ||||||||||||||
| Expected terms in years | 5 | 5 | 5 | |||||||||||||||||
| Risk-free interest rate | 3.9 | % | 4.1 | % | 4.1 | % | ||||||||||||||
| Expected dividend yield | 3.2 | % | 3.9 | % | 3.5 | % | ||||||||||||||
As of December 31, 2025, there was $40 million of unrecognized compensation cost related to stock options, which is expected to be recognized over an estimated weighted-average period of 1.9 years.
ESPP
Under our ESPP, employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits. The purchase price per share is equal to the lower of 85% of the fair market value of our common stock on the offering date or the purchase date. The ESPP offers a six-month look-back feature. ESPP purchases are settled with common stock from the ESPP’s previously authorized and available pool of shares.
The following table summarizes our ESPP activity:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions, except per share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares issued | 2 | 2 | 2 | |||||||||||||||||
| Amount paid by employees for shares | $ | 143 | $ | 139 | $ | 129 | ||||||||||||||
| Weighted-average grant date fair value of ESPP shares granted | $ | 25.32 | $ | 15.76 | $ | 17.31 | ||||||||||||||
Total fair value of ESPP shares vested | $ | 75 | $ | 27 | $ | 45 | ||||||||||||||
We used the following weighted-average assumptions in the Black-Scholes model to calculate the estimated fair value of the ESPP awards:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Expected volatility | 28 | % | 25 | % | 24 | % | ||||||||||||||
| Expected terms in years | 0.5 | 0.5 | 0.5 | |||||||||||||||||
| Risk-free interest rate | 4.2 | % | 5.2 | % | 5.1 | % | ||||||||||||||
| Expected dividend yield | 3.2 | % | 4.3 | % | 3.7 | % | ||||||||||||||
Deferred Compensation
We maintain a retirement saving plan under which eligible U.S. employees may defer compensation for income tax purposes under Section 401(k) of the Internal Revenue Code (the “Gilead Sciences 401k Plan”). In certain foreign subsidiaries, we maintain defined benefit plans as required by local regulatory requirements. Our total matching contribution expense under the Gilead Sciences 401k Plan and other defined benefit plans was $200 million, $204 million and $208 million for the years ended December 31, 2025, 2024 and 2023, respectively.
We maintain a deferred compensation plan under which our directors and key employees may defer compensation. Amounts deferred by participants are deposited into a rabbi trust. The total assets and liabilities associated with the deferred compensation plan were both approximately $406 million and $343 million as of December 31, 2025 and 2024, respectively.
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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.