Kindler Shakes Up Pfizer: Katen Leaves
A long fight between the three vice chairmen of Pfizer, which led to Mr. Kindler's promotion to CEO, has now ended with Ms. Katen leaving the company.
Mr. Kindler stated in a company press release that "Vice Chairman Karen Katen has reflected on both her professional and personal goals, and she will be leaving the company to pursue other opportunities."
To those who have followed this blog this development may not come as a surprise, see my post How Mr. Kindler Outmaneuvered Everyone to Become Pfizer CEO.
And to claim, like But Shaojing Tong, an analyst at Mehta Partners, that he was surprised Katen was leaving "so abruptly" is outright ridiculous.
This was a life and death fight, including an anonymous letter to the board of directors criticizing Mr. Kindler's leadership qualities, and in the end any such fight will result in the demise of the key opponent. That opponent, it turns out, was Ms. Katen.
Meanwhile, encouraged by recent events, according to Associated Press, "The AFL-CIO on Tuesday asked Pfizer Inc. to dump board chairman Henry McKinnell, who was replaced as the company's chief executive last month -- 19 months ahead of schedule. In a letter to the chair of Pfizer's Corporate Governance Committee, the union said that under McKinnell's leadership the company has lost more than $50 billion in market value and that he should be relieved of his duties and replaced with an independent board chair who hasn't previously served on the drug maker's board."
With Ms. Katen gone this leaves Mr. Kindler alone with his other opponent, Mr. Shedlarz. And true to form, the loyal loser who bows to his new emperor, is richly rewarded.
According to Pfizer, "Mr. Kindler said that David Shedlarz, vice chairman, will be assuming expanded responsibilities. Mr. Shedlarz's additional responsibilities will include Pfizer Global Manufacturing, and worldwide strategic planning, licensing and business development and technology. "To his new role as my principal deputy, [my bold letters] David brings strategic insight, years of experience inour industry and many important accomplishments achieved during hisdistinguished career at Pfizer," said Mr. Kindler."
So here we have the new team. Shedlarz and Kindler.
To their help they will have Ian Reed, who takes over Ms. Katen's old job. Mr. Read has been president of Pfizer's Europe, Canada, Africa, Middle East and Latin America division.
According to Bloomberg News, "Jeff Kindler has been on the job for 15 days and already there is a notion that he is quite decisive and perhaps to some degree is attempting to de-layer the organization,'' said Tony Butler, an analyst with Lehman Brothers in New York, in a telephone interview today."
Yesterday the Star Ledger wrote the following prophetic words (I also remember laying the ground for these thoughts when I met with this newspaper last week):
"When Jeffrey Kindler was named chief executive of Pfizer late last month, he issued a statement that included the usual niceties about working with "a wonderful group of colleagues around the world."
But he also promised to shake things up.
"The pharmaceutical industry is undergoing unprecedented change," he said in Pfizer's July 28 press release announcing Kindler would immediately replace longtime CEO Hank McKinnell. "In response, we will transform virtually every aspect of how we do business."
He said he wants to make the No.1 prescription drugmaker "more efficient and cost-effective." He wants to "reduce organizational layers to speed decision-making." And he talked about the need to "continuously review our go-to-market strategies."
When the boards of major corporations want continuity, they replace CEOs with veteran insiders. When they want change, they go with an outsider."
Mr. Kindler wasn't chosen because he was a lawyer. He was selected because the board of directors were fed up with the old guard at Pfizer. With Ms. Katen gone and Shedlarz bowing to Kindler, that spell has finally been broken.