In this article, activist Starboard Value accused Pfizer of pressuring the company’s former CEO and chief financial officer to distance themselves from the investor’s turnaround campaign at the pharmaceutical giant by threatening litigation. Starboard managing member Jeff Smith stated in a letter to Pfizer’s board that the company or its advisors also mentioned the possibility of reclaiming past compensation and revoking unvested shares from former chief executive Ian Read and ex-CFO Frank D’Amelio.
Smith urged the board to form a special committee to investigate the situation, labeling it as “highly inappropriate, flagrantly unethical, and a significant breach of fiduciary obligations.” The fear of legal consequences played a role in Read and D’Amelio publicly supporting Pfizer CEO Albert Bourla, according to a source familiar with the interactions between the company and the two former executives.
Following the news of the executives’ departure, Pfizer shares declined overnight and were down approximately 2.5% in Thursday morning trading. When Starboard approached the two executives, Smith mentioned that both expressed worries about Pfizer’s direction under Bourla and offered assistance in the turnaround campaign.
Starboard did not provide a comment in response to CNBC’s inquiries, while a Pfizer spokesperson declined to comment. Smith confirmed earlier reports that he and Bourla are scheduled to meet in person the following week, although the meeting’s agenda remains undisclosed. Sources familiar with Starboard’s perspective previously indicated concerns that Pfizer’s focus on cost structure and mergers and acquisitions had weakened under Bourla’s leadership.
