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Corporate Governance FAQs
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How do I contact members of the Pfizer Board of Directors?
You may communicate with any of our directors, including the Lead Independent Director and the Audit Committee Chair, by writing to them c/o Margaret M. Madden, Vice President and Corporate Secretary, Chief Governance Counsel at Pfizer Inc., 235 East 42nd Street, New York, New York 10017.
Alternatively, you may communicate via email with any of our directors through our Lead Independent Director or members of our Audit Committee through our Audit Committee Chair, (both of whom are independent, non-employee directors of the Company).
What does the Corporate Governance Committee look for when reviewing
candidates recommended by shareholders?
The Corporate Governance committee looks at the level of qualifications and expertise in various disciplines represented by the current board to determine if there is a need to further enhance the composition of the board to fulfill a specific need. In reviewing candidates recommended by shareholders, the board has established guidelines in the Criteria for Board Membership
Learn more about Criteria for Board Membership.
How do I nominate someone for the Pfizer Board or submit a shareholder proposal?
Under SEC rules, if a shareholder wants us to include a proposal in our Proxy Statement and form of proxy for presentation at our 2017 Annual Meeting of Shareholders, the proposal must be received by us at our principal executive offices at 235 East 42nd Street, New York, New York 10017-5755 by November 15, 2016. The proposal should be sent to the attention of the Corporate Secretary of the Company.
Under our by-laws, a shareholder must follow certain procedures to nominate a person for election as a Director or to introduce an item of business at an Annual Meeting of Shareholders (other than a shareholder proposal submitted under SEC rules). These procedures provide that a nomination or the introduction of an item of business at an Annual Meeting of Shareholders must be submitted in writing to the Corporate Secretary of the Company at our principal executive offices. We must receive written notice of your intention to nominate a Director or to propose an item of business at our 2017 Annual Meeting:
- If the 2017 Annual Meeting is to be held within 25 days before or after the anniversary of the date of this year’s Annual Meeting (April 28, 2016), not less than 90 days nor more than 120 days in advance of the anniversary of the 2016 Annual Meeting
- If the 2017 Annual Meeting is to be held on a date not within 25 days before or after such anniversary, no later than 10 days following the first to occur of the date on which notice of the date of the 2017 Annual Meeting is mailed or the public disclosure of the date of the 2017 Annual Meeting is made
For any other meeting, the nomination or item of business must be received by the tenth day following the date that public disclosure of the date of the meeting is made.
Our Annual Meeting of Shareholders is generally held on the fourth Thursday of April. Assuming that our 2017 Annual Meeting is held on schedule, to be “timely” within the meaning of Rule 14a-4(c) under the Securities Exchange Act of 1934, we must receive written notice of your intention to introduce a nomination or other item of business at that meeting between December 29, 2016, and January 28, 2017. If we do not receive written notice during that time period, or if we meet certain other requirements of the SEC rules, the persons named as proxies in the proxy materials relating to that meeting will use their discretion in voting the proxies if any such matters are raised at the meeting.
The nomination must contain the following information about the nominee (among other information, as specified in the by-laws):
- Business and residence addresses
- Principal occupation or employment
- The class and number of shares of Pfizer stock owned (beneficially and of record) by the nominee
- The information that would be required under SEC rules in a proxy statement or other filing required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder
- A signed consent of the nominee to serve as a Director of the Company, if elected
Notice of a proposed item of business must include (among other information, as specified in the by-laws)
- A brief description of the substance of (including the text of any resolutions proposed and, if such business includes a proposal to amend the by-laws, the text of the proposed amendment) and the reasons for conducting such business at such meeting
As to the shareholder proponent and the beneficial owner, if any, on whose behalf the proposal is being made:
- The name and address of each such person and of any holder of record of the shareholder proponent’s shares as they appear on our records
- The class and number of all shares of Pfizer stock owned by each such person (beneficially and of record) with supporting documentation where appropriate
- Any material interest of each such person, or any affiliates or associates of each such person, in such business
- Any other information relating to each such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by each such person with respect to the proposed business to be brought by each such person before the annual meeting pursuant to Section 14 of the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.
Any person considering introducing a nomination or other item of business should carefully review our by-laws.
Where can I find the voting results for Pfizer's most recent annual meeting?
Yes, Pfizer maintains a comprehensive compliance program that is designed to detect and respond to policy violations and support legal and ethical conduct throughout the Company. The compliance program is structured in accordance with "Compliance Program Guidance for Pharmaceutical Manufacturers" developed by the United States Department of Health and Human Services, Office of Inspector General and includes the following elements:
- Written Policies and Procedures
- Compliance Officer and Compliance Committees
- Effective Training and Education
- Effective Lines of Communication
- Internal Monitoring and Auditing
- Enforcement Through Discipline Pursuant to Published Guidelines
- Prompt Response and Corrective Action for Detected Problems
Who oversees Pfizer's compliance program?
The compliance program is overseen and managed by the Compliance Division, which is responsible for helping to develop and implement policies, procedures, and practices to ensure compliance with laws, regulations, and government agreements, as well as investigating violations of law or Pfizer policy. The Compliance Division is led by the Chief Compliance and Risk Officer who reports directly to Pfizer's Chief Executive Officer.
Pfizer's tiered compliance committee structure promotes leadership oversight of the compliance program through the Executive Compliance Committee, the North America Compliance Committee, and various business unit and divisional committees.
Additional compliance support is provided by groups and individuals throughout the Company in areas such as legal, safety and monitoring, corporate audit, Human Resources, finance, corporate governance, policy, and other functions.
Executive Compensation Program & Policies
How is the CEO's compensation linked to performance?
The CEO's compensation is set by the Compensation Committee and approved by the Board. His actual levels of compensation are adjusted up or down depending on Company and individual performance.
- Annual bonus opportunity ranges from 0% to 200% based on the achievement of pre-set financial goals for the Company for revenue, adjusted diluted earnings per share, and cash flow from operations, as well as his individual goals which support his imperatives for building value, ie, being a leader in science and innovation; continuing to use our financial and commercial strength to enhance competitiveness; earning respect from society; and creating a culture of confidence and trust
- 75% of his long-term equity awards are earned based on relative and absolute total shareholder return. Performance Share Awards (representing 25% of his long-term incentive value) are earned based on Pfizer's relative total shareholder return vs its pharmaceutical peers over a 3-year performance period. Total Shareholder Return Units (representing 50% of his long-term incentive value) are earned based on Pfizer's absolute total shareholder return over 5- and 7-year performance periods
How is Pfizer's executive compensation program linked to long-term performance?
Pfizer's compensation philosophy, which is set by the Compensation Committee, is to align each executive's compensation with Pfizer's short-term and long-term performance and to provide the compensation and incentives needed to attract, motivate, and retain key executives who are crucial to Pfizer's long-term success.
The Global Performance Plan ("GPP"), our annual incentive program, is funded based on Pfizer's performance on 3 financial metrics: total revenue, adjusted diluted earnings per share, and cash flow from operations. The GPP pool is not funded unless performance exceeds a threshold level of performance. Individual awards are earned based on the available earned pool, Business Unit/Function performance, and the achievement of annual performance objectives for the individual.
Our annual long-term incentive awards are aligned with the interests of our shareholders because they deliver value based on absolute and relative shareholder return, encourage stock ownership, and promote retention of key talent.
A significant portion of the total compensation opportunity for each of our executives (including the Named Executive Officers, or "NEOs") is directly related to Pfizer's stock price performance and to other performance factors that measure our progress against the goals of our strategic and operating plans, as well as our performance against that of our pharmaceutical peer group.
What are the elements of short-term and long-term compensation?
|Salary (Cash)||—||The fixed amount of compensation for performing dayto-day responsibilities. Set based on market data, job scope, responsibilities and experience. Generally reviewed annually for potential increase based on a number of factors including market levels, performance and internal equity||Provides competitive level of fixed compensation|
|Annual Short-Term Incentive/Global Performance Plan (GPP) (Cash)||
Company, Business Unit and Individual Performance
Plan funded based on Pfizer performance and weighted as follows:
|Aggregate pool is funded based on performance against Pfizer's short-term financial goals (revenue, adjusted diluted earnings per share (EPS) and cash flow from operations). Individual awards based on business unit and individual performance measured over the current year||Provides short-term incentives tied to corporate performance against three operational metrics and links individual awards to both company and individual performance based on achievement of financial and strategic goals|
Long-Term Absolute TSR Incentive Compensation (100% Performance Based Equity)
5- and 7-Year Total Shareholder Return Units(TSRUs)Each represents 25% of total annual grant value (50%)
5- and 7-Year TSRUs generally vest three years from the grant date and are settled on the fifth or seventh anniversary of the grant date, respectively
The value earned for each TSRU is equal to the difference between the settlement price (the 20-day average of the closing prices of Pfizer common stock ending on the settlement date) and the grant price (the closing price of Pfizer common stock on the date of grant), plus the value of dividend equivalents accumulated over the term. This value, if any, is converted into shares by dividing it by the settlement price; no value is received if the TSR is negative
|Provides direct alignment with shareholders as awards are tied to absolute TSR|
Performance Operating Income* and relative TSR Share Awards (PSAs)
|Operating Income* and relative TSR||
PSAs have a three-year performance period starting on January 1st of the year of grant and generally vest on the third anniversary of the grant based on performance
Beginning in 2015, PSAs are paid based on the company’s performance against a combination of operating income over three one-year periods and relative TSR over a three-year period as compared to the DRG Index
Dividend equivalents are applied to the number of shares actually earned under the award, if any, at the end of the performance period
Earned PSAs and dividend equivalents are paid in hares of Pfizer common stock
|Aligns the interests of management/key executives with those of shareholders by aligning compensation to operational goals and relative TSR over a three-year performance period|
* Operating income as the PSA performance measure is based on Pfizer’s Non-GAAP Adjusted Operating Income stated at budgeted foreign exchange rates and is further refined to exclude other unbudgeted or non-recurring items.
|Retirement||Pension Plan||Provides retirement income for eligible participants based on years of service and Provides retirement income average earnings up to tax code limitations. (Plan ceased accepting new participants effective 1/1/11 and is being frozen 12/31/17)||Provides retirement income|
|Supplemental Pension Plan||Provides retirement income relating to compensation in excess of tax code Provides additional retirement Pension Plan limitations under the same formula as the qualified pension plan noted above. income (Plan ceased accepting new participants effective 1/1/11 and is being frozen 12/31/17)||
Provides additional retirement Pension Plan limitations under the same formula as the qualified pension plan noted above. income
Attracts, retains and motivates key executives
|Savings Plan||A qualified 401(k) savings plan that provides participants with the opportunity to Provides employees with a 401(k) defer a portion of their eligible compensation, up to tax code limitations, and plan savings feature receive a company matching contribution (up to 4.5%)||Provides employees with a 401(k) defer a portion of their eligible compensation, up to tax code limitations, and plan savings feature|
|Retirement Savings (RSC)||An age- and service-weighted company contribution (5%-9%) to the savings plans Provides retirement savings in a Contribution (RSC) for those not participating in the Pension Plan||Provides retirement savings in a Contribution (RSC) for those not participating in the Pension Plan defined contribution format consistent with market trends|
|Supplemental Savings Plan||Extends the Savings Plan for deferral of eligible compensation in excess of the tax Allows for additional deferrals Savings Plan code limitations under the same terms as the qualified savings plan||Allows for additional deferrals|
|Other||Perquisites||Certain other benefits provided to executives by the company consisting of limited Provides CEO and other NEOs the reimbursement for personal financial planning services and certain personal travel ability to focus on company business benefits for the CEO and other NEOs||Provides CEO and other NEOs the reimbursement for personal financial planning services and certain personal travel ability to focus on company business|
Lobbying and Political Contributions
What is Pfizer's policy on corporate political contributions?
Federal law prohibits corporations from contributing directly to candidates running for federal office. The federal contribution ban applies not only to monetary support, but also covers use of corporate resources, such as stationary, fax machines, etc. For this reason, Pfizer's corporate policy prohibits Colleagues from using any vcorporate resources, including Pfizer corporate funds, to support or oppose a candidate seeking federal office.
Pfizer's policy allows for the use of corporate funds in state and local jurisdictions that permit corporate contributions directly to candidates.
What is Pfizer's approval process for Pfizer's corporate political contributions?
Pfizer has a Steering Committee comprised of 8 colleagues, who represent different divisions within the Pfizer organization that review and approve all Political Action Committee (PAC) and corporate political contributions on a monthly basis. The PAC Steering Committee evaluates candidates on a basis of their views on issues that impact Pfizer and its colleagues. It also takes note of whether Pfizer facilities or colleagues reside in a candidate's district or state. The Political Contributions Policy Committee (PCPC) is responsible for governing the Pfizer PAC. All PAC and corporate contributions are shared with the PCPC for review. Representatives serving on the PCPC amongst others include the EVP Policy, External Affairs & Communications, EVP, Chief Compliance Officer, and SVP, Policy & Public Affairs.
Our PAC and Corporate Political Contributions Report (published on our website) includes the recipient and amount of all Pfizer PAC and Pfizer Inc. contributions to political committees, corporate contributions made in state and local elections, ballot initiatives, and certain contributions to trade associations.
We also ask trade associations to which we pay more than $100,000 to report to us how much of Pfizer dues/payments are used for political expenditures/contributions, and we provide this voluntarily in our report and disclose it on our corporate website. Click here to review.
Where can I find Pfizer's lobbying disclosure?
Pfizer actively lobbies the US Congress and state legislatures on a number of important public policy issues such as intellectual property, trade, taxes, and public health issues. A complete list of federal issues lobbied by Pfizer in the US can be found in the public disclosure sections of the US House and Senate websites. We fully comply with regulations by reporting all federal lobbying in quarterly disclosure reports to Congress.
Where can I find more information on Pfizer's public policy engagement?
Effective policies help create an environment in which innovation is encouraged, engaging in public policy debates is part of our responsibility. Please click here for more information.
What is Pfizer's approach to investor engagement?
The Company's relationships with its shareholders and other stakeholders are a critical part of our corporate governance profile, and we recognize the value of taking our investor's views into account. Among other things, engagement helps us to understand the larger context and impact of our operations and learn about expectations for our performance, assess emerging issues that may affect our business or other aspects of our operations, and shape corporate and governance policies. Over the years, this collaborative approach has helped us to identify mutual perspectives and goals and has resulted in, amongst other things, strengthening our executive compensation program and disclosures.
Corporate Social Responsibility
What is Pfizer's corporate responsibility approach?
Corporate responsibility at Pfizer is the "how" of how we do business and encompasses all that we do to ensure that we act ethically and meet evolving healthcare needs.
Pfizer is striving to adapt to the evolving needs of global communities and to use our business scope and scale to improve global health. To ensure our success, we are building partnerships in communities worldwide to strengthen health systems, increase access to our medicines, and find sustainable solutions to health challenges. In addition, we remain focused on conducting our business responsibly, by upholding the highest ethical standards in all our activities, from research and development to sales and marketing, and reducing our impact on the environment.
How can I find more detailed information on corporate responsibility at Pfizer?
Our integrated annual review details Pfizer's impact on patients and health, science, and the world. Our commitments and achievements demonstrate that our corporate responsibility activities are integral to our business success and future growth. Click here to read our review.