By Peter Loftus
Pfizer Inc. (>> Pfizer Inc.) Chief Executive Ian Read received compensation valued at $25 million for 2011, up 44% from 2010, largely reflecting his promotion to the drug maker's top executive post in December 2010.
Read's compensation also was based partly on Pfizer exceeding targets set by the board's compensation committee for 2011 revenue, adjusted earnings and cash flow from operations, according to a proxy statement filed Thursday with the U.S. Securities and Exchange Commission.
The compensation committee cited Read's role in pursuing divestitures of noncore businesses and in returning cash to shareholders through dividends and share repurchases. Pfizer shares rose 23.6% for 2011.
Read, 58 years old, took over as Pfizer CEO in December 2010 when Jeffrey Kindler unexpectedly left the company. Read added the title of chairman of the board in December 2011.
For 2011, several elements of Read's compensation increased considerably. Stock awards rose to $5.7 million from $2.7 million, while the value of option awards surged to $6.9 million from less than $1 million, according to the proxy.
Read's salary was $1.7 million and his non-equity incentive plan compensation was $3.5 million. Other elements of his compensation: $6.9 million change in pension value and non-qualified deferred compensation earnings, and $319,000 in all other compensation.
For 2012, Read's salary will increase to $1.75 million, Pfizer said in the proxy.
Read, who joined Pfizer in 1978, has accumulated pension benefits with a total present value of about $27.4 million. In addition, the aggregate balance of Read's non-qualified deferred compensation is $8.2 million.
Pfizer Chief Financial Officer Frank D'Amelio received total compensation valued at $7.7 million for 2011, versus $6.5 million in 2010. Mikael Dolsten, president of worldwide research and development, received 2011 compensation valued at $7 million, up from $5.9 million for 2010.
Pfizer also disclosed in its proxy that its board compensation committee has made certain changes in executive pay in response to a disappointing shareholder advisory vote on executive compensation at last year's annual meeting.
The company has modified the terms of performance share awards so that they'll align more closely with performance, and has provided more a detailed explanation of its performance metrics, according to the proxy.
The compensation committee attributed the disappointing advisory vote at last year's annual shareholder meeting to dissatisfaction with the separation agreement with Kindler in late 2010. That agreement included a cash severance payment of $4.5 million and other compensation.
-By Peter Loftus, Dow Jones Newswires; 215-982-5581; [email protected]