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For a copy of the Pfizer press release announcing its plans, and for links to related statements and other reports, see

Note: Pfizer has been represented on the Forum's Advisory Panel that proposed principles for shared management and investor interests in equity-based compensation practices.

 

 

Reuters, June 28, 2007 article

 

 

Pfizer board to meet with institutional holders

 

Thu Jun 28, 2007 2:14PM EDT

(Adds details, quotes, byline)

By Ransdell Pierson

NEW YORK, June 28 (Reuters) - Pfizer Inc. (PFE.N: Quote, Profile, 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 the board."

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 takeovers.

((Reporting by Ransdell Pierson, editing by Gerald E. McCormick; Reuters Messaging: ransdell.pierson.reuters.com@reuters.net; 646-223-6034; ransdell.pierson@reuters.com))

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