Pfizer Solutions

Topics: Stock, Rate of return, Weighted average cost of capital Pages: 11 (3058 words) Published: March 7, 2013
Pfizer Inc and Sanofi S.A.




This report pertains to the analysis of the companies Pfizer Inc and Sanofi S.A. Pfizer Inc is a major player in the global pharmaceutical industry and is driven by the vision of improving the life and health of the consumers through innovative discoveries and solutions. The company is diversified geographically and the global healthcare portfolio comprises of human as well as animal biologic & vaccines and small molecule medicines along with a broad range of nutritional products. It also markets several of the globe’s best−known products related to consumer healthcare.

On the other hand, Sanofi S.A. is a major pharmaceutical company headquartered in France and is also the world’s fourth largest company in terms of prescription sales. The company is a well diversified global healthcare company which is engaged in the activities of research, development as well as manufacturing and marketing of various healthcare products. It deals in pharmaceuticals which comprises of prescription drugs, vaccines and animal health as well as consumer healthcare and generics.

I. Corporate Governance

A. The Chief Executive Officer

i) The CEO of the company Pfizer Inc is Mr. Ian Read. He has been the CEO of the company since 2011. Mr. Chris Viehbacher is the CEO of Sanofi and he has been in office since December 1, 2008 ii) Pfizer is not a family run company. Mr. Read has been associated with Pfizer since 1978. He joined Pfizer as an operational auditor. Since then, he worked in Latin America through the year 1995 and held various positions in several of Pfizer's largest and most rapidly growing operations, such as the Chief Financial Officer of the unit Pfizer Mexico, and the Country Manager of the unit Pfizer Brazil. He was then appointed as the President of Pfizer's International Pharmaceuticals Group in 1996 and was given the responsibility for managing the operations in Canada and Latin America. In 2000, he was appointed as the Executive Vice President, Europe, while the subsequent year, he was named as the Corporate Vice President and was entrusted with the responsibility of Canadian and European operations. Prior to becoming CEO, he was serving as the Senior Vice President and was also the Group President of the global Biopharmaceutical Businesses of the company during the period 2006 to 2010.

Sanofi is also not a family run business. The CEO was inducted from external sources with the intention of introducing new talent and energy in the company.

iii) Since his appointment as CEO, the base salary of Mr. Read was set at $1.7 million while his annual incentive target award was set at the levels of $2.6 million. The value of his annual long term incentive award was increased to $10 million. This implies that his compensation was roughly $14 million with 88% of the same being tied to Company’s performance at large. The aim behind this is to achieve strategic linkage between the corporate goals and Mr. Read’s individual goals.

The compensation of Mr. Viehbacher comprises of an annual fixed compensation of €1,200,000. His compensation also includes a component of variable compensation which has been tentatively fixed at levels of 150% to 200% of his fixed compensation and this would be subject to performance criteria which would be decided by the Board of Directors of the company. This tentative percentage may also be revised in case of exceptional performance of the company.

B. The Board of Directors

i) The Board of Directors of Pfizer Inc comprises of 14 directors and they have been serving as directors since various periods. As an example, M. Anthony Burns has been the director of the company since 1988 while Mr. Marc Tessier Lavigne and Ms. Helen H. Hobbs have been serving as directors since 2011.

On the other hand, the Board of Sanofi comprises of 15 directors and each of the members is appointed for a maximum term of four...
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