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Pfizer CEO Kindler Quits, Without Fulfilling Major Goals

When Jeff Kindler took over as CEO of Pfizer (PFE) in 2006, he had two major strategic goals to meet: Find a replacement for Lipitor, the cholesterol blockbuster that loses its patent protection in 2011; and get the stock to go back up after a 50 percent decline under the previous chief, Hank McKinnell.
Kindler resigned suddenly last night with both of those goals unfulfilled. He hands over the reins to Ian Read, Pfizer's current global president. Kindler's stated reason is:

... the combination of meeting the requirements of our many stakeholders around the world and the 24/7 nature of my responsibilities, has made this period extremely demanding on me personally. ... I am excited at the opportunity to recharge my batteries, spend some rare time with my family, and prepare for the next challenge in my career.
Some aren't buying that:
"The departure is sudden but I doubt there was one event per se that caused Kindler's" retirement, said Tim Anderson, an analyst with Sanford C. Bernstein & Co. in San Francisco, in an e-mail. It is "highly likely he was pushed."
Pfizer today looks a lot like Pfizer when McKinnell was forced out by shareholders who were angry at the value he had destroyed: PFE fell by one third to $16.72 during Kindler's tenure. But there has not been the drumbeat of demands that presaged McKinnell's departure.

Kindler's plea for for a bit of peace and quiet fits in terms of his previous career path. When he was general counsel at Pfizer and before that at McDonald's (MCD), he enjoyed wealth and power but stayed out of the spotlight. As CEO of Pfizer, he's been the subject of constant, never-ending media speculation. It probably wasn't fun. He may not have been prepared for the relentlessness of it.

Like McKinnell, Kindler's major achievement came in the M&A market (Wyeth) rather than in new drug discovery. The addition of Wyeth certainly leaves Pfizer in a less-worse situation than it was without the company, but it has not turned out to be the tranformative move Kindler hoped it would be. Read (right) must now achieve what both Kindler and McKinnell failed to.

So what did Kindler achieve during the last four-and-a-bit years? He could be remembered for his role in three pieces of political theater:

The next question is, what kind of retirement package will Kindler take with him? McKinnell's was infamously outsized: $180 million. Some within the company note that Kindler hasn't worked at Pfizer long enough to qualify for the biggest golden parachute possible (he's only been at the company since 2002). Nonetheless, here are the compensation benefits that Pfizer's most recent proxy form says Kindler may have qualified for:
  • Total compensation in 2009: $15 million
  • Stock units not yet vested: 2,765,701 (at $16/share that would be worth more than $44 million)
  • Pension benefits:$3,496,004
  • Deferred compensation: $4,429,920
  • Severance and other: $4,059,472
The actual cost of Kindler's retirement package has yet to be announced by the company.


Images from Pfizer.
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