Pfizer CEO Jeffrey Kindler Resigns Even Sooner Than We Predicted
Pfizer CEO Jeffrey Kindler has unexpectedly announced his resignation. NLPC recently filed a shareholder proposal with Pfizer critical of the company's deal with the White House to support ObamaCare. We foresaw Kindler's retirement in the resolution's supporting statement:
If ObamaCare fails to control health care costs, as several studies now suggest, the government will seek savings through price controls. Shareholders ultimately will lose. Perhaps Kindler plans to retire before Pfizer is required to sell its products for less than the cost of production.
We were more prescient than we realized.
Kindler, who is only 55, cited the "extremely demanding" requirements of the job. Kindler received a multi-million dollar bonus for his lobbying for ObamaCare. Kindler will have no trouble affording, and getting access to, quality health care for the rest of his life. The rest of us will not be so lucky. Unless ObamaCare is repealed, Kindler's hit and run will keep middle-class Americans working well past retirement age in order to afford skyrocketing health care premiums.
Here is our supporting statement in its entirety:
Pfizer played a key role in the passage of ObamaCare, even though a majority of Americans were opposed. CEO Jeffrey Kindler organized pharmaceutical CEOs in support of the bill, promoted a massive advertising campaign, and partnered with Left-wing groups normally hostile to Pfizer's interests. For these actions, he received a multi-million dollar bonus.
According to media reports, Pfizer and other companies in 2009 made an $80 billion deal with the Obama administration. In return for support of ObamaCare, the companies received promises of a guarantee of customers and insulation from certain kinds of competition. This kind of back room dealing corrupts the political process, generates public outrage, and is inappropriate for an institution like Pfizer that pledges itself to responsible corporate citizenship.
Kindler even jointly authored an opinion article in support ObamaCare in the Huffington Post with Andrew Stern, then-president of the Service Employees International Union. Stern abruptly resigned in spring 2010 amid reports that he was the subject of federal investigations into two unrelated, and possibly illegal, financial arrangements.
Kindler might argue that the deal is good for Pfizer, but he is shortsighted to ignore the history of government intervention in the marketplace. If ObamaCare fails to control health care costs, as several studies now suggest, the government will seek savings through price controls. Shareholders ultimately will lose. Perhaps Kindler plans to retire before Pfizer is required to sell its products for less than the cost of production.
This short-sightedness also hurt Pfizer's relationship with Congress, with the House of Representatives now in Republican hands, and its standing with the American people.
Absent a system of reporting on how Pfizer develops and prioritizes its lobbying priorities, shareholders will be unable to evaluate the potential for future miscalculation and damage to the Pfizer brand name.
Here is our resolution asking for a report on Pfizer's lobbying priorities:
Pfizer's primary responsibility is to create shareholder value. The Company should pursue legal and ethical means to achieve that goal, including identifying and advocating legislative and regulatory public policies that would advance Company interests and shareholder value in a transparent and lawful manner.
Resolved: The shareholders request the Board of Directors, at reasonable cost and excluding confidential information, report to shareholders annually on the Company's process for identifying and prioritizing legislative and regulatory public policy advocacy activities. The report should:
1. Describe the process by which the Company identifies, evaluates and prioritizes public policy issues of interest to the Company;
2. Identify and describe public policy issues of interest to the Company;
3. Prioritize the issues by importance to creating shareholder value; and
4. Explain the business rationale for prioritization.
Kindler is to be replaced by Ian Read, who must steer the company back to the interests of the American people, not to mention his shareholders.