Jeffrey Kindler rewarded by Pfizer for his influence with governments

On July 28, 2006, Jeffrey Kindler replaced Hank McKinnell as CEO of Pfizer. That day the Pfizer stock price closed at $26.11. With the stock trading today at a little more than $17, it would seem that shareholders have lost a significant amount of their investment. Nonetheless, Kindler is doing well.

There are lots of stories about Jeffrey Kindler’s 2009 compensation package from Pfizer. Jim Edwards story is “Pfizer CEO Got Paid More for Healthcare-Reform Lobbying; Private Jet Was an Extra.” Linda Johnson of the Associated Press wrote “Pfizer CEO got $13.7 million in 2009 compensation,” and Sebastian Jones of ProPublica blogged “Pfizer CEO Gets Pay Raise for Influencing Public Policy.”

Here are a few notes about Kindle’s 2009 compensation.

In March 12, 2010 filing with the SEC (Schedule 14A), Pfizer reported on compensation issues.

In addition to the information contained in the 2009 Summary Compensation Table, the Committee believes that it is appropriate to also summarize its actions in February 2010 regarding the compensation of Mr. Kindler and the other Named Executive Officers, particularly their salaries and annual long-term incentive grants.

In February 2010, the Committee lifted the salary freeze and granted increases to the Named Executive Officers. Except for Mr. Kindler (whose compensation is discussed below), the increases ranged from 0% to 3.8% and were based upon individual performance, tenure in position, and existing salary levels in relation to comparable peer company positions. There were no changes in annual incentive target award amounts for the Named Executive Officers other than Mr. Kindler, because these amounts represent a percentage of each executive’s salary grade midpoint, and the midpoints were unchanged. Except for Mr. Kindler, the Named Executive Officers’ annual long-term incentive grant values declined by 3% to 8% as compared to the 2009 award values.

In February 2010, the Committee increased Mr. Kindler’s salary from $1.6 million to $1.8 million, effective April 1, 2010, to reflect the increased complexity of the organization and a corresponding increase in his salary grade. His 2010 annual incentive target award remained at 150% of his salary grade midpoint but increased from $2,438,100 to $2,710,500 due to a higher midpoint. In addition, the grant value of Mr. Kindler’s annual long-term incentive award was increased from $8.3 million to $12 million. These changes reflect the Company’s performance and Mr. Kindler’s personal performance, and are intended to more appropriately align his compensation with that of peer company CEOs. The increased long-term award also recognized his leadership of the Wyeth transaction. The Committee believes that Mr. Kindler’s compensation should be closely aligned with the interests of long-term shareholders and increased the portion of his expected 2010 total direct compensation to be delivered through long-term award value to 73% from 67% in 2009, with 75% of the long-term value continuing to be performance-based rather than time-based. See “2010 Compensation Actions” below for additional information.

The compensation committee was particularly happy with Kindler’s ability to advance public policies:

Jeffrey Kindler was actively involved, through both Pfizer and external organizations, in developing and advancing U.S. and global public policies that serve the overall interests of our Company and our shareholders, as well as doctors and patients. These efforts included constructive participation in the U.S. legislative process to advance Pfizer’s goals of achieving a more rational operating environment; improving Americans’ access to quality, affordable health care; preserving the doctor/patient relationship; and enhancing policies that promote innovation. Also, through both Pfizer and external organizations, he has sought to ensure the availability of safe medicines by opposing legislation that would allow for importation of prescription drugs that could jeopardize the integrity of the drug supply chain in the U.S. In addition, under Mr. Kindler’s leadership, Pfizer undertook efforts to protect its intellectual property by supporting legislative initiatives on patent review, patent challenges and patent infringement.