Starboard Value, a significant investor in Pfizer, has formally requested that the company's board conduct an investigation following the withdrawal of support from two former executives, Ian Read and Frank D'Amelio, regarding any initiatives that Starboard may pursue. In a letter directed to Pfizer's board, Starboard emphasized its role as a major shareholder, highlighting its commitment to the company's future. The firm has planned a meeting with Pfizer's Chief Executive Officer, Albert Bourla, as well as its lead independent director, Shantanu Narayen, and possibly additional board members next week.
Starboard Managing Member Jeffrey Smith stated that the purpose of the meeting is to discuss the optimal path forward for Pfizer. Both Read and D'Amelio, significant individual shareholders themselves, expressed concerns about the company's direction during recent discussions with Starboard. They indicated their willingness to assist in guiding Pfizer towards a more favorable strategic path. However, in a surprising turn of events late Wednesday, Read and D'Amelio announced their decision not to engage in Starboard's proposed efforts.
In a statement from Guggenheim Securities, they expressed their full support for Bourla, senior management, and the board, stating their confidence that these leaders will enhance shareholder value over time. In the correspondence, Smith raised alarming claims that Pfizer representatives allegedly contacted Read and D'Amelio, suggesting threats of litigation should they not publicly endorse Bourla.
Smith characterized this behavior as unacceptable, alleging it constitutes a severe breach of fiduciary duty and an ethical violation. Pfizer's response to these allegations declined comment. The company’s stock price experienced a decline of 2.8% on Thursday, reflecting the tension surrounding this situation. Given the gravity of the circumstances, Starboard is advocating for Pfizer's board to promptly establish a special committee composed of members devoid of conflicts of interest to thoroughly examine the allegations and ensure accountability for any misconduct.
Smith reiterated that this behavior is profoundly inappropriate and unacceptable. Starboard anticipates that the upcoming meeting with Pfizer's board on Wednesday will lead to constructive engagement focused on enhancing the company's governance and shareholder value..