Former Pfizer CEO saw 2010 compensation swell

AP News
Posted: Mar 22, 2011 5:48 PM
Former Pfizer CEO saw 2010 compensation swell

Former Pfizer Inc. Chairman and CEO Jeffrey B. Kindler may have left the world's largest drugmaker abruptly last December, but he didn't leave empty-handed thanks to a compensation package valued almost $22 million.

Kindler received a 60 percent increase last year over his 2009 compensation, according to an Associated Press analysis of a Pfizer regulatory filing Tuesday.

The New York-based drugmaker gave Kindler a salary and performance-related bonus totaling $4.9 million, a $4.5 million severance payment and more than $12 million in stock and option awards. The company also will continue his health coverage for 12 months "at active employee rates," the filing said.

That compensation total does not include a retirement benefit valued at about $6.9 million that the former CEO had accumulated.

Kindler was ousted by Pfizer's board unexpectedly Dec. 6 after four years of languishing share prices and several failures of promising drugs in late testing, including a successor to cholesterol fighter Lipitor, the world's top-selling drug. Pfizer will lose U.S. patent protection in November for Lipitor.

Kindler, a Harvard Law School graduate and former McDonald's Corp. executive, joined Pfizer in 2002. He had revamped the company's sprawling pharmaceutical sales operation into five divisions that gave their leaders more control and responsibility.

He also pulled off a $68 billion acquisition of Wyeth in October 2009. But the company halved its dividend to help pay for Wyeth, which infuriated investors and drove down the stock price.

Ian Read took over as chief executive and president. Read, 57, had run Pfizer's worldwide pharmaceutical operations since 2006 and has spent his entire career at the company.

Last year, he received compensation valued at $6.4 million, which was down 9 percent from 2009. A company spokeswoman said Read and other executives received a bonus that year for the completion of the Wyeth deal.

Read's 2010 compensation included a $1.2 million salary, a $1.5 million performance-related bonus and stock and option awards adding up to $3.5 million.

Pfizer's 2010 net income fell 4 percent to $8.26 billion, or $1.02 per share. Revenue totaled $67.81 billion, up 36 percent, thanks to $18.1 billion from sales of Wyeth products.

Its stock price slipped 4 percent to close 2010 at $17.31, while the Standard & Poor's 500 index climbed 12.8 percent.

The Associated Press executive compensation formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, making the AP total different in most cases from the total reported by companies to the Securities and Exchange Commission.