Pfizer's Kindler Said to Leave After Jilting Read
Jeffrey Kindler’s refusal to name an operations chief in response to a push from senior managers cost him his job as chief executive officer of Pfizer Inc., according to a person familiar with the process.
Kindler, 55, resigned yesterday hours before a special board meeting, the person said. Ian C. Read was named to replace him. Executives, including Kindler, met in September to discuss a succession plan and decided Read would become chief operating officer, taking over some CEO responsibilities, said the person, who declined to be named because deliberations were private.
Kindler in recent months lost the support of executives frustrated with his management style, the person said. At a time when New York-based Pfizer faces complex policy decisions, Kindler was too focused on smaller matters, and micromanaging his executives, according to the person.
In the last year, the company has been dealing with a U.S. health-care overhaul, lawsuits from shareholders alleging that senior executives failed to stop illegal marketing of drugs, and a stock that underperformed its peers. The stock has dropped 35 percent since Kindler, formerly Pfizer’s general counsel, was named CEO on July 28, 2006.
“Investors have not been happy about the stock price,” said Les Funtleyder, a portfolio manager at Miller Tabak & Co. in New York, in a telephone interview. “Could he have done better? Yeah. He could have focused on buying more innovative, smaller companies.”
Pfizer shares rose 24 cents, or 1.5 percent, to $16.96 at 10:19 a.m. in New York Stock exchange composite trading.
Read, 57, a 32-year veteran of the company, has been head of Pfizer’s global pharmaceutical operations since 2006, controlling 85 percent of revenue. Pfizer will announce in the next week what will become of Read’s former position, according to the person. There may be a successor, or Read’s former responsibilities may be divided among other executives, the person said.
Read’s management style is well-known to Pfizer director and former CEO William C. Steere. Read ran operations in Latin America and Europe while Steere headed the company from 1991 to 2000. Steere didn’t return calls for comment. Pfizer spokesman Ray Kerins declined to comment on the board deliberations.
“Ian’s extensive knowledge of global markets, such as Europe, Latin America and middle east, coupled with his vast experience from overseeing our largest businesses makes him uniquely position to lead Pfizer,” Kerins said today. Constance J. Horner, an independent director, cited Read’s experience in emerging markets in announcing the change.
Read “has brought to product development a focus and commitment to advance only medicines that have clear value to our customers,” Horner said in the statement. “Today’s business leaders need to understand global markets, drive change and innovation, and move quickly to adapt to competitive pressures. Ian’s track record throughout his career has demonstrated these exact strengths.”
The board called the Dec. 5 special meeting sometime in the last week or two, the person said.
Pfizer has underperformed its rivals over the 4 1/2 years of Kindler’s tenure. Pfizer’s price-earnings ratio for the past year is lower than 91 percent of pharmaceutical industry peers and below 97 percent of companies in the Standard & Poor’s 500 index, according to data compiled by Bloomberg.
Kindler finishes at a low point. Pfizer’s 2010 price- earnings ratio was 7.3 as of Dec. 3, the last day of trading before Kindler stepped down, lower than the annual average for each year he’s been in charge.
Read takes over the CEO’s job as the company prepares to face generic competition to its top-selling cholesterol treatment Lipitor, which had $11.4 billion in sales last year.
While the drugmaker moved to make up for the expected losses under Kindler by paying $68 billion in 2009 to acquire Wyeth, it also has had four setbacks this year in developing its
Kindler served as both CEO and chairman. The board will elect a new chairman, separating the two roles, at a meeting within two weeks, the company said in its Dec. 3 statement.
To contact the editor responsible for this story: Reg Gale in New York at Rgale5@bloomberg.net