Some interesting developments in the life of this pharmaceutical giant that has come under a lot of criticism of late. There seems to be something lacking in the judgment department, as the following snapshot of the company reveals:
So concerned about reducing costs that it is cutting 10,000 jobs
–but not so concerned that it had any problem awarding former CEO Hank McKinnell a retirement package worth more than $213 million.
So concerned about eliminating unnecessary outlays that it is closing the Brooklyn plant that employs 600 people and dates back to the company’s beginnings in the 1800s
–but not so concerned that even though it is paying former CEO Hank McKinnell a pension of $6.6 million each year for the rest of his life, the board felt he should also be relieved of the burden of paying the cost of financial counseling and dental coverage for himself and his partner –for life.
I suppose it all comes down to the fact that the 10,000 who are on the way out didn’t have friends on the Pfizer board like Hank McKinnell did. Or, maybe if the 10,000 had done a better job in pushing up the company’s stock, they’d still be working there. Surely, it would not be fair to blame Mr. McKinnell for Pfizer’s languishing stock performance, which shrunk by 40 percent during his five year reign, since he is, after all, only one man. And it would cause serious heartburn to Mr. McKinnell, and indeed upset the entire culture of the 21st century entitlement program of the North American boardroom, if Pfizer’s former CEO (who is also past chairman of the illustrious (who-needs-Sarbanes-Oxley? Business Roundtable and therefore a member in good standing of the cozy club) did not receive his full king’s ransom for failing to do what he was being paid to do, which included advancing the interests of Pfizer’s investors. No, no, no…for that, we must look to the slacking 10,000.
Some of my friends tell me CEO pay is simply a matter of the market working its wonder and is beyond the ability of ordinary mortals to understand or interfere with. If this is the magic of the market working at Pfizer, I’d hate to see its bad side.