- The Washington Times - Friday, March 13, 2009

TRENTON, N.J. (AP) - Pfizer Inc.’s chief executive received a 2008 compensation package valued by The Associated Press at $14.79 million, up 17 percent from 2007, after a year when the drugmaker reorganized operations and set in motion a mega-acquistion.

The world’s biggest drugmaker paid Chief Executive Jeffrey Kindler, 53, a salary of $1.58 million in 2008, up nearly 8 percent from 2007. He received a performance-based bonus of $3 million.

Kindler also got stock and option awards that the company valued at $9.78 million, but more than one-quarter of that total is for stock options with a strike price of $22.55, roughly 50 percent more than the current value of Pfizer shares.

Kindler’s other compensation totaled $438,261. That included $175,210 for Kindler’s own use of a company jet, $1,922 for his wife to accompany him on the jet, $39,537 for use of a car, $10,000 for financial counseling and $1,217 for home security.

The Associated Press’ compensation formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Pfizer, the maker of impotence treatment Viagra, antidepressant Zoloft and pain relievers Celebrex and Lyrica, like most big drugmakers, is furiously cutting costs and making deals to acquire new products or smaller companies.

The strategies are needed because of huge sales losses expected when a tidal wave of generic competition hits blockbuster pills over the next several years. Pfizer’s cholesterol fighter Lipitor, the world’s top-selling drug, now provides just over one-quarter of all company revenue with nearly $13 billion in annual sales; that’s expected to plummet when Lipitor loses patent protection in November 2011.

The pending Wyeth acquisition, announced on Jan. 26, will enable Pfizer to eliminate thousands more jobs in the combined company, bring in new revenues from Wyeth blockbusters such as antidepressant Effexor and children’s vaccine Prevnar, advance Wyeth’s promising experimental drugs, and diversify Pfizer from a maker of pills to a company that also manufactures consumer and animal health products, vaccines and high-tech biologic drugs. Wyeth’s expertise and manufacturing capability in biologic drugs is particularly prized because they command high prices and so far have no generic competition.

The proxy includes four shareholder proposals Pfizer stock owners are to vote on during their annual meeting, set for April 23 in Atlanta.

One would bar the board from giving senior executives any future stock options, or renewing or repricing current stock options, stating that these options “have gotten out of hand in recent years.”

The others would allow shareholders to cast an advisory vote on executive compensation at each annual meeting; enable any holder of 10 percent of outstanding common stock to call a special shareowner meeting, and adopt what’s called “cumulative voting.” That would allow shareholders to cast a disproportionate share of their votes for a particular board candidate by withholding votes from other nominees.

Pfizer’s board opposes all four of the proposals.

Pfizer shares fell 22 percent over the course of 2008, from $22.73 a share to $17.71 at the end of the year.

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