How Pfizer Rewards Its Bosses for Eliminating Jobs
Top executives get extra money for doing their jobs.
Editor's note: This article was written by Michelle Leder, who combs through SEC filings for nuggets of interesting details for her blog, Footnoted.org.
Now that the merger between Pfizer (PFE) and Wyeth is complete, Pfizer's compensation committee has agreed to reward two Pfizer executives for their "extraordinary efforts and … extraordinary contributions in addressing critical components of the transaction."
In an 8-K filed yesterday, the company identified the two executives as CFO Frank D'Amelio and Senior VP and Group President Ian Read. Wonder what those efforts were? Pfizer spells it out in the filing:
These included obtaining permanent debt financing during an unprecedented global financial crisis and making organizational, leadership, and staffing decisions that have positioned Pfizer to integrate the two companies promptly and begin realizing the substantial projected benefits of the combination following the closing of the transaction.
CFO D'Amelio will get $1.2 million and Read will get $1 million. But they only get to collect 50% -- the cash component -- right away. That money was paid to the two men on Monday. The rest will be paid in stock -- both restricted shares and Total Shareholder Return units that vest after three years. The exhibit attached to the filing also notes that if either man leaves before the end of next October, they have to repay the cash portion of the award.
Still, given all the layoff news surrounding the deal, you have to wonder how news of the bonuses for extraordinary efforts is playing in the trenches. No doubt that some of D'Amelio and Read's "extraordinary efforts" have been focused on figuring out which jobs to pare. When the deal was announced, the company said it planned to eliminate about 19,500 jobs and during the third-quarter call last week, the company said it had eliminated 11,200 jobs since the beginning of 2008. During the call, Pfizer said it had just over 75,000 employees, but provided no similar numbers for Wyeth.
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