Pfizer Execs' Golden Parachute Is Actually a Pay Cut
You probably noticed the item in the WSJ Health blog noting that Pfizer’s top executives gave themselves one year’s pay if they are laid off, even though regular employees get only 16 weeks of base pay (more if they meet certain conditions).
That’s a significant double standard. But did you know that CEO Jeff Kindler (who gets $10 million if he’s fired) et al actually took a compensation cut in this deal? The AP reports that the one-year salary deal is actually a reduction from the previous deal, which was 2.99 times one year’s salary:
Under the prior change-of-control severance plan, top executives would have gotten 2.99 times the total of their annual base pay and either their target bonus that year or the actual bonus they got the prior year. Actual bonuses are generally much larger than targets.
Of course, this all comes as cold comfort to the 19,500 employees of Pfizer and Wyeth who are about to be laid off in the merger. As this report shows, localities are just beginning to wake up to the fact that the merger — funded with TARP bailout money — may actually be damaging, not helping, their local economies.
- See previous coverage of Pfizer and Wyeth:
- Pfizer Faces $21 Billion in Fines for Pharmacia’s Crimes; 32 Other Companies on the Hook
- Pfizer Director Whose Stock Sold Ahead of Wyeth Merger: “I Sometimes Know Too Much”
- Post Merger, Pfizer-Wyeth Might Be Structured Like J&J
- Will Pfizer-Wyeth Merger Force Chief Justice Roberts Off Preemption Case?
- Pfizer Asks Media Members: How Are We Doing?
- As Layoffs Begin, Wyeth Execs Get $75 Million Severance Package
- Pfizer-Wyeth: Credit Markets Have Doubts About the Deal; Patent Cliff Problem NOT Solved
- How Pfizer Hid a $2.3 Bill. Bextra Settlement in Plain Sight
- Reaction to Pfizer-Wyeth: Employees Despair, Plot Rebellion; Analysts Shrug; PFE Stock Down 10%
- Pfizer’s Wyeth Buy Eclipses $2.3 Bill. Bextra Troubles; 19,000 Layoffs to Come
- The Pfizer-Wyeth Deal Worst-Case Scenario
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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