Pfizer's former chairman and chief executive made more than $15.5 million a year, on average, for a total of $78 million. He also has a pension package worth $83 million. During this time, shareholders lost 35% as the stock fell to $24.60 from $38.20. All of this according to the MSN article, 5 lousy CEOs who get fabulous pay.
And now when Hank McKinnell is virtually gone, perhaps it is time to look at the people who reported to him.
But first, some background.
Jeff Kindler, Pfizer's new CEO is a newcomer to the company who has not yet been able to take advantage of Pfizer's wealth accumulation program, also called a pension plan, for senior executives.
This is a very undemocratic plan. If a worker has been with the company for 30 years, and her highest average compensation is $100,000, she gets an annual pension benefit of $32,856. That's 33% of her pay.
If her highest annual average compensation, on the other hand, was one hundred times as high, $10 million, she get a pension of $4,180,944. That's 42% of her pay, a percentage about 25% higher than the $100,000 worker.
All of this according to Pfizer DEF14a statement.
So what about Ms. Katen and Mr. Shedlarz, who competed with Mr. Kindler for his CEO job?
Do they also get $83 million, like Mr. McKinnell?
Almost.
Ms. Katen is fully vested in Pfizer's pension plan and will walk away with a $28 million pension.
And Mr. Shedlarz will walk away with $23.8 million.
All of this according to Pfizer's proxy statement.
With Pfizer stock in free fall and looming employee terminations, maybe what we'll hear at Pfizer's next share holder meeting:
"Give it back Katen and Shedlarz!"
That is if Ms. Katen and Mr. Shedlarz are still there by the next shareholder meeting.
4 comments:
Hi Doc...
Like yourself, I'm an ex-Pfizer employee. Your latest blog on pensions is rather timely. I've just received a nice glossy brochure from the trustees of the Pfizer Group Pension scheme. Here in the UK, the Pensions Act 2004 means that funds have to give regular financial updates to their contributors, just to make it a little more difficult for employers to embezzle the pension contributions of their employees. I don't know if you have such restrictive anti-business practices in the US.
Anyway, the brochure starts out with the question "How safe is a Pfizer Pension?" The answer given (and I quote) was "that depends how you look at things".
Not being Hank McKinnell, I didn't find that very reassuring.
Reading on, I learned that the Pfizer pension fund for the rank and file employee now has a deficit of £118.3 million (only slightly more than Hank's personal fund), and would have to find £429 million to meet its committments were the fund to be wound up at its current valuation - a shortfall equal to a funding level of 68%. Of course, the letter went on to reassure everyone that there would only be a problem if Pfizer went belly-up and of course that isn't going to happen. So sure of that are the trustees that they mentioned that scenario four times. Apparently, the Company recognises the problem and will be paying an additional £27.5m into the scheme for the next seven years. Or £70 million. The letter mentioned both options but didn't say which applied. It also mentions that there had been no payments to Pfizer Ltd in the previous 12 months. The letter didn't say whether big cheques were written out to anyone else, nor did it give any reasons for the deficit.
Now I'm sure Pfizer will do the decent thing and look after its employee's pensions, both past and present.
After all, it's looked after Hank.
Just like I'm sure Pfizer will admit to treating you rather badly and will, in recognition of this, give you a large sum of money out of court to go away and stop bothering them.
Don't stop blogging though...
Thank you for commenting. Most interesting info.
And, I wish you were right about my personal matters, but, I think the Pfizer hubris stands in the way of doing any such thing.
The trial should be interesting to watch.
"The trial should be interesting to watch."
Is there an ETA yet??
It was supposed to happen beginning of next year. But for some reason Pfizer's lawyers do what they can to drag their feet. I figured, since they think they're so right, they should be in a rush to prove that to the world. But nope, they are in no rush to get there. Wonder why?
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