We previously posted about the battle over the governance of Pfizer Inc. The dispute was fueled by the contrast between the financial gains made by Pfizer's CEO and the retreat of the price of Pfizer's shares. CEO Hank McKinnell received $65 million in compensation since he was hired in 2001, and is scheduled to collect on a $83 million pension. Since 2001, Pfizer has suffered a 46% decline in market value.
This dispute was also related to charges of two types of conflicts of interest. One alleged conflict of interest affects a company that promises independent opinions about how investors should vote for members of corporate boards of directors, including Pfizer's board. Other alleged conflicts of interest affect members of the Pfizer board who are also affiliated with firms which both hold significant amounts of Pfizer stock, although often for other investors, and who simultaneously manage various aspects of Pfizer's financial affairs.
At the Pfizer annual meeting, according to the New York Times, a majority of stockholders failed to withhold their votes of approval for any single director. However, just over 20% of stockholders withheld approval from each of two directors, Dana G Mead, chairman of the board's compensation committee, and also Chair of the Massachusetts Institute of Technology (MIT) Corporation, and George A Lorch, another member of the committee and former chairman of Armstrong Holdings. Also, two proposals that would have affected corporate governance received almost 40% of stockholders' votes.
NY Times columnist Gretchen Morgenson commented, "Pfizer, after all, holds itself out as a paragon of corporate governance; that two of its directors received more than 20 percent opposition calls that stance into question."
If a substantial minority of Pfizer's shareholders (and hence owners) have doubts about the company's governance and performance of its top (hired) managers, what should patients and physicians think?
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