Summary
This Form 8-K filing from Pfizer Inc. (PFE) dated February 20, 2009, announces a significant shift in its executive compensation and severance policies. Effective February 16, 2009, all existing change-in-control severance agreements with executive officers were voluntarily terminated. Concurrently, Pfizer adopted a new Executive Severance Plan. This new plan, approved by the Compensation Committee, establishes a standardized severance package for eligible US-based executive officers and other selected employees in the event of termination without cause. The termination of prior agreements suggests a move towards greater uniformity and potentially reduced liabilities associated with potential future business combinations. The adoption of the new plan aims to provide a clear, defined severance framework, though it retains flexibility for the company to amend or terminate it.
Key Highlights
- 1Termination of all existing change-in-control severance agreements with executive officers, effective February 16, 2009.
- 2Adoption of a new, standardized Executive Severance Plan by the Compensation Committee, also effective February 16, 2009.
- 3The new plan applies to US-based executive officers and selected employees, providing severance benefits upon termination without cause.
- 4Severance payments under the new plan range from one to two years of 'pay' (base salary plus target annual incentive), based on length of service.
- 5Eligible participants can elect continuation of group term life insurance and medical coverage for up to 12 months post-termination, under certain conditions.
- 6The company retains the right to amend, modify, suspend, or terminate the Executive Severance Plan at any time.
- 7Two executive officers have specific arrangements: Dr. Joseph M. Feczko is retiring in April 2009, and Frank A. D'Amelio's participation begins after his current severance agreement expires in September 2009.