Pfizer board to meet with institutional holders
(Adds details, quotes, byline)
By Ransdell Pierson
NEW YORK, June 28 (Reuters) - Pfizer Inc. (PFE.N:
Research) said on Thursday its board will invite its largest
institutional shareholders to a meeting this fall to review the U.S.
drugmaker's governance policies, including executive compensation.
Pfizer, which is struggling with anemic
earnings and failure to launch enough important medicines to offset
declining sales of older medicines, said the institutional investors
invited to the event own about 35 percent of its shares.
"The fact that Pfizer's board is convening
with such a large group of its shareholders and intends to make it a
regular event would appear to set a precedent" among U.S. companies, said
Howard Sherman, chief executive officer of Governancemetrics Intl., a
corporate governance research and ratings agency.
"This is truly noteworthy because it is
rare for outside shareholders to have any communication with the board of
directors," Sherman said. "And on governance matters, it all comes down to
Instead, companies now communicate with
shareholders through their investor relations executive, chief executive
officer, chief financial officer, or corporate governance officer. Sherman
said the planned meetings likely were prompted by shareholder
dissatisfaction with the almost $200 million retirement package given Hank
McKinnell when he was replaced as Pfizer CEO last summer -- even though
Pfizer shares fell 40 percent under his watch.
Pfizer may also be setting the stage to
allow its shareholders to vote on executive compensation packages, a
practice that is now common among companies in the United Kingdom
following the so-called "Say to Pay" movement there, Sherman said.
In recent decades, Pfizer has spearheaded
other improvements in corporate governance, including its requirement that
board members be elected by a majority vote of shareholders and the
elimination of its poison pill, a device used to discourage unfriendly
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