:max_bytes(150000):strip_icc()/GettyImages-1247595479-a295881d833248958d4802b4c08c9b67.jpg "Ex-Pfizer Execs Backed Its Leadership. An Activist Investor Says They Were ‘Threatened’")
Key Takeaways
- Two former Pfizer executives published a statement saying they support management as it gets pressured for changes by activist investor Starboard Value.
- The ex-Pfizer executives, Ian Read and Frank D’Amelio, said they didn’t want to get involved with Starboard’s efforts to seek change.
- Starboard on Thursday accused people inside Pfizer of threatening Read and D’Amelio if they backed Starboard’s efforts.
Pfizer (PFE) shares lost ground Thursday after two former executives released a statement supporting the company’s current management after activist investor Starboard Value this week took a $1 billion stake in the struggling drug maker and moved to make changes.
The hedge fund fired back Thursday after the executives’ affirmation of the current Pfizer board, suggesting the former leaders were threatened if they assisted Starboard.
Prizer’s stock was down more than 2% in recent trading. The shares are in the green so far this year, but by less than 3%.
Ex-CEO Ian Read and ex-CFO Frank D’Amelio wrote in a statement that they “have decided not to be involved in the efforts of Starboard Value regarding Pfizer. We are fully supportive of Pfizer Chairman & CEO Albert Bourla, senior management and the board, and we are confident that over time they will deliver shareholder value.”
A report earlier this week said that Starboard had reached out to Read and D’Amelio for help in its efforts to shake up Pfizer. In a letter to the board Thursday, Starboard responded to the executives’ Wednesday statement by saying that Read and D’Amelio were indeed approached and that they both expressed “concerns about the trajectory of the business.”
Starboard Alleges Threats Against Ex-Executives
The hedge fund said, however, that “people within Pfizer and/or their representatives have contacted Mr. Read and Mr. D’Amelio and purportedly threatened to commence costly litigation against them, claw back prior compensation, and cancel unvested performance stock units, unless they publicly release a statement supporting the current Chief Executive Officer, Dr. Albert Bourla.”
Pfizer on Thursday declined to respond to Investopedia’s request for comment on Starboard’s statement.
Starboard called on the Pfizer board to immediately set up a special board committee to investigate “the extent of this behavior” it alleges occurred against Read and D’Amelio. The hedge fund added that despite this, it still hopes for constructive dialogue when the firm meets with Bourla and other executives for discussions Oct. 16.
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