We believe that executive compensation policies should reflect the reality that shareholder funds are at stake and must be used wisely. Therefore, we view compensation as something that should yield a "net positive" for our shareholders—an investment offering them a reasonable chance for future growth in the company's overall value by attracting, retaining and incentivizing executives in alignment with shareholder interests. To this end, we regularly consult with shareholders to refine our executive compensation philosophy and program. For a detailed explanation of the company's compensation philosophy, which is set by the Compensation Committee, please see the Compensation Discussion and Analysis section of Pfizer's 2011 Proxy Statement or visit the Investor Relations section of Pfizer's Web site http://www.pfizer.com/investors/.
"Say on Pay"
In 2010 Pfizer acted to give shareholders a "say on pay"—a nonbinding, advisory vote on executive compensation. Following discussions with shareholders, the Board determined that holding an advisory vote every two years would give shareholders a voice in providing feedback on compensation policies and practices. At the same time, holding the vote every two years will foster a more long-term approach to evaluating our executive compensation policies and practices. In 2011 shareholders will be able to express their preference on the frequency of future "say on pay" votes by indicating whether they want to have those votes every one, two or three years and provide for Board accountability.
Aligning with Shareholders' Interests
The compensation of our Executive Leadership Team—the CEO and the executive officers reporting directly to the CEO—is determined by the Compensation Committee of Pfizer's Board of Directors. This Committee, composed exclusively of independent directors, assures that our compensation program is aligned with our pay-for-performance philosophy and our shareholders' interests, and remains an effective tool to attract, motivate and retain our executive leaders.
In support of our philosophy to align the interests of our executive officers with those of our shareholders, Pfizer executives are required to own Pfizer common stock equal in value to a multiple of salary, ranging from at least six times salary for our CEO, to at least four times salary for the other members of our Executive Leadership Team. Ownership must be achieved over a five-year period.
We continue to implement and maintain state-of-the-art practices in our compensation program and related areas. Our executive compensation program includes a number of controls that mitigate risk, including the executive stock ownership requirements mentioned above, and, under certain circumstances, our ability to recover compensation paid to executives. The Committee has engaged an independent compensation consultant that has no other ties to the company or its management and that meets stringent selection criteria. We maintain a robust investor outreach program that enables us to obtain ongoing feedback concerning our compensation program, as well as how we disclose that program. In 2010, as has been the case for many years, we not only listened to our investors' views; we actively sought out those views and implemented a number of their suggestions.