Enter multiple symbols separated by commas

Pfizer's Outgoing CEO to Receive $199 Million Severance Package

Former Pfizer Chief Executive Hank McKinnell -- who was replaced amid a sharp decline in the company's market value -- will receive about $199 million in total compensation after he leaves
the board in February.

McKinnell will receive a $12 million severance payment, $2 million pro-rated bonus for 2006, $6 million in restricted shares and $18 million in other share payments through his contract with the company, Pfizer said in a regulatory filing.

McKinnell was forced into an early retirement in part because of investor anger about his rich retirement benefits.

Pfizer said McKinnell's departure "contractually obligated" it under his employment agreement to provide McKinnell with certain severance payments and benefits.

He will also receive about $78 million in compensation that McKinnell has deferred and earned interest on during his roughly 35-year Pfizer career. Those payments come in addition to an already disclosed $82 million lump sum pension payment.

The world's largest drug maker abruptly replaced McKinnell in July with Jeffrey Kindler, formerly a Pfizer vice chairman and its top lawyer. McKinnell was originally expected to stay on as head of Pfizer until February 2008.


The company, which has pledged to cut $4 billion in costs by 2008, is expected to undergo a radical shakeup. Pfizer said in late November that it would look for even deeper cuts. Then it suddenly halted development of cholesterol drug torcetrapib because of safety concerns. The company had spent $800 million developing torcetrapib and hoped it would be a blockbuster.

Earlier this week, Pfizer also named Kindler as its chairman, replacing McKinnell. Pfizer shares had fallen 40% under McKinnell's tenure between May 2001, when he became chairman, and July this year, when he was replaced as CEO.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.