Pfizer to hang onto CEO, after 61% pay increase
Pfizer have given its Chief Executive Officer, Ian Read, a big boost to his pay packet, taking it to $27.9 million, but only in return for a commitment to stay with the company for the next year.
In addition, Pfizer have also inserted a provision that ensures Read cannot take up a position with another pharma company for a further two years after next March.
It’s not so much a golden handshake, as golden handcuffs to the role – now 65 years old, Read is eligible to retire from the company on a $15.7 million pension deal.
Pfizer’s statement on pay decision reads: “Over the last several years, the Board has been working to ensure the successful execution of its succession plan for the CEO in anticipation of his potential retirement. Mr. Read has a strong track record of creating value for shareholders during his tenure as CEO. Accordingly, the Committee and Board believe that it is in the best interests of the company and our shareholders to ensure his continued leadership through a critical period in Pfizer’s business transformation, and to effect a smooth and seamless transition as we face both anticipated and unanticipated challenges.”
A big part of the deal is based on an $8 million special equity award, which will need to see Pfizer’s stock rise by 25% and remain at this level for 30 consecutive days. Given that Pfizer’s share price only gained 16.7% last year, this means that Read will have to find some impressive means of achieving this growth.
The company attempted to do this with its buy-in to join Merck KGaA in the development and commercialisation of Bavencio, a PD-L1 immunotherapy.
It seemed a safe bet to have a stake in the next generation of immunotherapies coming through, but even this drug has begun to struggle, with a few notable failures in the clinic.
This may put even more pressure for Pfizer to look into a big acquisition and, now that it’s repatriating offshore cash, it certainly has the balance to achieve that.
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