Friday, December 10, 2010

Pfizer - A Fiefdom for Corporate Managers?

Jeffrey B. Kindler, the now former CEO of Pfizer, had a sudden case of "retirement".  Previously I wrote that Pfizer needed to fire Kindler.  Under Kindler's so-called leadership the stock of Pfizer has been in a long term decline and the dividend was cut. The New York Times notes that "shareholders lost about 20 percent of their investment during his four-and-a-half-year tenure." So, while the stockholders suffered, Kindler was awarded bonuses for his "brilliant" leadership. Its a sad case of corporate greed when management destroys the value of a widow/orphan stock that many people depend on for their retirement income. Finally, a dim light-bulb must have been turned on resulting in the Pfizer Board becoming motivated to do something. As the Times notes "... it’s far too early to judge whether he jumped or was pushed." Either way, it is a good piece of news for the shareholders.

Regretfully, Kindler gets a paid "vacation". The Times writes "Pfizer, the world’s largest pharmaceutical company, said in a regulatory filing on Thursday that it had agreed to give Jeffrey B. Kindler a $4.5 million severance payment after his sudden retirement on Sunday as chairman and chief executive." Perhaps the most irksome aspect of his departure is that Kindler gets "... $3.2 million cash bonus for 2010 and $1.8 million under an incentive plan ..." for destroying shareholder value.

PS: We own shares of Pfizer.

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