Summary
This 8-K filing from Pfizer Inc. on December 21, 2006, details the departure of its former CEO and Chairman, Henry A. McKinnell. The report outlines the terms of his separation agreement, which includes specific severance payments, bonuses, and benefits. This transition follows the earlier appointment of Jeffrey B. Kindler as CEO in July 2006, with Dr. McKinnell agreeing to stay on until February 28, 2007, to ensure an orderly handover. The agreement specifies cash payments for severance, a pro-rata bonus for 2006, and unused vacation time, totaling approximately $14.4 million. Additionally, Dr. McKinnell will receive full vesting of his restricted stock, restricted stock units, and stock options, valued at approximately $5.8 million. The filing also details significant deferred compensation and pension benefits amounting to approximately $78 million and $82 million respectively. Investors should note that the terms of Dr. McKinnell's departure appear to be consistent with or less than what would have been due under his original employment agreement had his termination been without cause.
Key Highlights
- 1Henry A. McKinnell, former CEO and Chairman, has formally resigned as Chairman of the Board and will retire on February 28, 2007.
- 2Pfizer has entered into a separation agreement with Dr. McKinnell detailing his departure terms.
- 3The agreement includes a severance payment of $11,941,000, a pro-rata 2006 bonus of $2,158,300, and $305,644 for accrued vacation.
- 4Dr. McKinnell will receive full vesting of all unvested restricted stock, restricted stock units, and stock options, with a value of approximately $5.8 million.
- 5Significant deferred compensation totaling approximately $78 million, including $67 million elected by Dr. McKinnell, will be paid out.
- 6Estimated pension benefits are valued at approximately $82 million in lump sum.
- 7The terms of Dr. McKinnell's departure are structured to be consistent with or less than obligations under his original employment agreement.