This booklet contains our Notice of 2017 Annual Meeting and
Proxy Statement. Our 2016 Financial Report is included as Appendix A and is followed by certain Corporate and Shareholder Information.
None of Appendix A, the Corporate and Shareholder Information, or the accompanying Letter to Shareholders from our Chairman and
CEO are a part of our proxy solicitation materials.
If you received a Notice of Internet Availability and would
like a printed copy of the materials, please follow the instructions provided in your notice. Alternatively, follow the instructions
included on how to vote online.
This Notice of 2017 Annual Meeting and Proxy Statement and a
proxy or voting instruction card are being mailed or made available to shareholders starting on or about March 16, 2017.
You are being asked to vote on the election of the following
12 Directors. All Directors are elected annually by the affirmative vote of a majority of votes cast. For detailed information
about each Director’s background, skill sets and areas of expertise please see
“
Director Nominees
”
later
in this Proxy Statement.
Item 1
– Election of Directors
Twelve members of our Board are standing for re-election,
to hold office until the next Annual Meeting of Shareholders. A majority of the votes cast is required for the election of Directors
in an uncontested election (which is the case for the election of Directors at the 2017 Annual Meeting). A majority of the votes
cast means that the number of votes cast “for” a Director nominee must exceed the number of votes cast “against”
that nominee. Our Corporate Governance Principles contain detailed procedures to be followed in the event that one or more Directors
do not receive a majority of the votes cast “for” his or her election at the Annual Meeting.
Each nominee elected as a Director will continue in office until
our next Annual Meeting and until his or her successor has been duly elected and qualified, or until his or her earlier death,
resignation, removal or retirement.
We expect each nominee for election as a Director to be able to
serve if elected. If any nominee is not able to serve, the persons appointed by the Board of Directors and named as proxies in
the proxy materials or, if applicable, their substitutes (the Proxy Committee) may vote their proxies for substitute nominees,
unless the Board chooses to reduce the number of Directors serving on the Board.
The Board has determined that all Director nominees (other than
Mr. Ian C. Read) are independent of the company and management and meet Pfizer’s criteria for independence (see
“
Director Independence
”
below).
Criteria for Board Membership
The Corporate Governance Committee focuses on Board succession
planning on a continuous basis. In performing this function, the Committee recruits and recommends the nominees for election as
Directors to the full Board of Directors. The goal is to achieve a Board that provides effective oversight of the company through
the appropriate balance of diversity of perspectives, experience, expertise, skills, specialized knowledge and other qualifications
and attributes of the individual Directors.
Important general criteria and considerations for Board membership
include:
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General Criteria
• Proven integrity
and independence, with a record of substantial achievement in an area of relevance to Pfizer.
• Generally should
have prior or current leadership experience with major complex organizations, including within the scientific, government
service, educational, finance, marketing, technology or not-for-profit sectors, with some members of the Board being widely
recognized as leaders in the fields of medicine or biological sciences.
• Commitment to enhancing
Pfizer’s long-term growth.
• Demonstrated ability,
with broad experience, diverse perspectives, and the ability to exercise sound judgment, and should possess a judicious
and critical temperament that will enable objective appraisal of management’s plans and programs.
• Diversity with respect
to gender, ethnicity, background and professional experience.
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The Committee also considers, on an ongoing basis, the background,
experience and skills of the incumbent Directors that are important to Pfizer’s current and future business needs, including,
among others, experience and skills in the following areas:
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ITEM 1 – ELECTION OF DIRECTORS
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The Board and each Committee conduct annual rigorous self-evaluations
to help ensure satisfaction of the criteria for Board membership (see “
The Board’s Role in Evaluating Its Effectiveness
”
below). Based on these activities and their review of the current composition of the Board, the Corporate Governance Committee
and the Board believe that the criteria for Board membership have been satisfied.
Selection of Candidates
In recruiting and selecting Board candidates, the Corporate Governance
Committee takes into account the size of the Board and considers a “skills matrix.” This skills matrix helps the Committee
determine whether a particular Board member or candidate possesses one or more of the “skill sets,” as well as whether
those skills and/or other attributes qualify him or her for service on a particular committee. The Committee also considers a wide
range of additional factors, including each Director’s and candidate’s projected retirement date, to assist in Board
succession planning; other positions the Director or candidate holds, including other boards of directors on which he or she serves;
and the independence of each Director and candidate, to ensure that a substantial majority of the Board is independent. While the
company does not have a formal policy on Board diversity, we believe the composition of the Board should be diverse in terms of
gender, ethnicity, background, professional experience and perspectives.
Potential Director Candidates
On an ongoing basis, the Corporate Governance Committee considers
potential Director candidates identified on its own initiative, as well as candidates referred or recommended to it by other Directors,
members of management, search firms, shareholders and other sources (including individuals seeking to join the Board).
Shareholders who wish to recommend candidates may contact the
Corporate Governance Committee as described in “
How to Communicate with Our Directors.
” All candidates are required
to meet the criteria outlined above, as well as those discussed under
“
Director Independence
”
below and in our
Corporate Governance Principles and other governing documents, as applicable, as determined by the Corporate Governance Committee.
Shareholder nominations must be made according to the procedures required under our By-laws (including via our proxy access by-law)
and described in this Proxy Statement under the heading “
Submitting Proxy Proposals and Director Nominations for the 2018 Annual Meeting
.
” Shareholder-recommended candidates and shareholder nominees whose nominations comply with these procedures
and who meet the criteria referred to above will be evaluated by the Corporate Governance Committee in the same manner as the Corporate
Governance Committee’s nominees.
Retirement Policy
Under Pfizer’s Corporate Governance Principles, a Director
is required to retire when he or she reaches age 73. A Director elected to the Board prior to his or her 73rd birthday may continue
to serve until the annual shareholders meeting coincident with or next following his or her 73rd birthday. On the recommendation
of the Corporate Governance Committee, the Board may waive this requirement as to any Director if it deems a waiver to be in the
best interests of the company.
Our 2017 Director Nominees
The Corporate Governance Committee and the Board believe that
each nominee for Director brings a strong and unique set of perspectives, experiences and skills to Pfizer. The combination of these nominees
creates an effective and well-functioning Board that has an optimal balance of experience, leadership, competencies, qualifications
and skills in areas of importance to Pfizer and serves the company and our shareholders well.
YOUR BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
THE ELECTION OF EACH OF THESE NOMINEES AS DIRECTOR.
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ITEM 1 – ELECTION OF DIRECTORS
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Director Nominees
Lead Independent Director
DIRECTOR SINCE:
2006
AGE:
71
BOARD COMMITTEES:
Science and Technology
KEY SKILLS:
Medicine & Science
Healthcare & Pharma
Academia
Business Leadership & Operations
OTHER CURRENT PUBLIC BOARDS:
Alnylam Pharmaceuticals, Inc.
and Seres Therapeutics, Inc.
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Dennis A. Ausiello, M.D.
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Director, Center for Assessment Technology and Continuous Health (CATCH). Physician-in-Chief, Emeritus at Massachusetts General Hospital and Chief of Medicine at Massachusetts General Hospital from 1996 until April 2013. Jackson Distinguished Professor of Clinical Medicine at Harvard Medical School.
President of the Association of American Physicians in 2006. Member of the National Academy of Medicine and a Fellow of the American Academy of Arts and Sciences. Director of Alnylam Pharmaceuticals, Inc., Seres Therapeutics, Inc. and TARIS BioMedical LLC.
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KEY SKILLS & EXPERIENCE:
Medicine & Science/Healthcare & Pharma/Academia:
Dr. Ausiello’s experience and training as a practicing physician (Board-certified in nephrology),
a scientist and a nationally recognized leader in academic medicine enable him to bring valuable insights to the Board,
including through his understanding of the scientific nature of our business and the ability to assist us in prioritizing
opportunities for drug development.
Business Leadership & Operations:
Dr. Ausiello oversaw a large research portfolio and an extensive research and education budget
at Massachusetts General Hospital, giving him a critical perspective on drug discovery and development and providing a
fundamental understanding of the potential pathways contributing to disease. Through his past experience as the Chief
of Medicine at Massachusetts General Hospital, Dr. Ausiello also brings leadership, oversight and finance experience to
the Board.
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DIRECTOR SINCE:
2017
AGE:
57
BOARD COMMITTEES:
Corporate Governance and
Science and Technology
KEY SKILLS:
Business Leadership &
Operations
Risk Management
Finance & Accounting
OTHER CURRENT PUBLIC BOARDS:
CarMax, Inc., Radio One, Inc.
and W.R. Berkley, Inc.
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Ronald E. Blaylock
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Founder, Managing Partner of GenNx360
Capital Partners, a private equity firm
focused on investing in industrial and
business services companies in the U.S.
middle market, since 2006. Prior to
launching GenNx360 Capital Partners,
Mr. Blaylock founded and managed Blaylock
& Company, an investment banking firm.
Also held senior management positions at
UBS, PaineWebber Group and Citicorp.
Director of CarMax, Inc., Radio One, Inc.
and W.R. Berkley, Inc., an insurance holding
company. Director of Syncreon U.S., a for-profit
private company. Member of the
Board of Trustees of Carnegie Hall. Member
of the Board of Overseers of New York
University Stern School of Business. Member
of the Board of Trustees of Prep for Prep, a
not-for-profit organization.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/Risk
Management:
Mr. Blaylock’s extensive experience in private
equity and investment banking brings business
leadership, financial expertise and risk
management skills to the Board. In addition,
Mr. Blaylock’s service on the nominating and
corporate governance committee of another
public company enables him to bring valuable
insights to Pfizer’s Board and Corporate
Governance Committee.
Finance & Accounting:
Mr. Blaylock’s significant financial background,
including as the founder and managing
partner of GenNx360 Capital Partners and the
founder of Blaylock & Company, brings
substantial financial expertise and a unique
perspective on issues of importance relating to
finance to the Board.
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ITEM 1 – ELECTION OF DIRECTORS
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DIRECTOR SINCE:
1997
AGE:
69
BOARD COMMITTEES:
Audit, Compensation, Regulatory and Compliance and Science and Technology
KEY SKILLS:
Business Leadership &
Operations
Talent Management
Risk Management
Finance & Accounting
OTHER CURRENT PUBLIC BOARDS:
American International
Group, Inc. and Avon
Products, Inc.
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W. Don Cornwell
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Chairman of the Board and Chief Executive Officer of Granite Broadcasting Corporation (Granite) from 1988 until his retirement in August 2009, and served as Vice Chairman of the Board until December 2009.
Director of American International Group, Inc. and Avon Products, Inc. Director of the Edna McConnell Clark Foundation. Director of the Wallace Foundation from 2002 until 2012 and previously served as a Director of CVS Caremark (including two years as Chair of its Compensation Committee) for over 10 years. Trustee of Big Brothers Big Sisters of New York City.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/Talent Management/Risk Management:
Through Mr. Cornwell’s 38-year career as an entrepreneur driving the growth of a consumer-focused media company, an executive in the investment banking industry and a director of several significant consumer product and healthcare companies, he has valuable business, leadership and management experience and brings important perspectives on the issues facing Pfizer. Mr. Cornwell founded and built Granite, a consumer-focused media company, through acquisitions and operating growth, enabling him to provide insight and guidance on strategic direction and growth.
Finance & Accounting:
Mr. Cornwell’s strong financial background, including his work at Goldman Sachs prior to co-founding Granite and his service and leadership on the audit, finance and investment committees of other companies, also provides financial expertise to the Board, including an understanding of financial statements, corporate finance, accounting and capital markets.
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DIRECTOR SINCE:
2015
AGE:
60
BOARD COMMITTEES:
Audit, Corporate Governance
and Science and Technology
KEY SKILLS:
Business Leadership &
Operations
International Business
Risk Management
Finance & Accounting
Government & Public Policy
OTHER CURRENT PUBLIC BOARDS:
The Bank of New York Mellon
Corporation, Unum Group
and Xerox Corporation
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Joseph J. Echevarria
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Chief Executive Officer of Deloitte LLP (Deloitte), a global provider of professional services, from 2011 until his retirement in 2014. During his 36-year tenure with Deloitte, served in various leadership roles, including Deputy Managing Partner, Southeast Region Audit Managing Partner and U.S. Managing Partner and Chief Operating Officer.
Director of The Bank of New York Mellon Corporation, Unum Group, a provider of financial protection benefits, and Xerox Corporation. Member of the President’s Export Council and former member of the Presidential Commission on Election Administration. Chair Emeritus of My Brother’s Keeper Alliance. Member of the Board of Trustees of the University of Miami.
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KEY SKILLS & EXPERIENCE:
Business Leadership &
Operations/International Business/Risk Management:
Mr. Echevarria’s 36-year career at Deloitte brings financial expertise and international business, leadership and risk management skills to the Board.
Finance & Accounting:
Mr. Echevarria’s financial acumen, including his significant previous audit experience, expertise in accounting issues and service on the audit committee of another public company, is an asset to Pfizer’s Board and Audit Committee.
Government & Public Policy:
Pfizer also benefits from Mr. Echevarria’s breadth and diversity of experience, which includes his public service on the President’s Export Council.
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ITEM 1 – ELECTION OF DIRECTORS
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DIRECTOR SINCE:
2009
AGE:
72
BOARD COMMITTEES:
Corporate Governance,
Regulatory and Compliance
(Chair) and Science and
Technology
KEY SKILLS:
Business Leadership &
Operations
Academia
Healthcare & Pharma
Risk Management
OTHER CURRENT PUBLIC BOARDS:
Mattel, Inc.
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Frances D. Fergusson, Ph.D.
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President Emeritus of Vassar College since 2006 and President from 1986 to 2006. Served on the Mayo Clinic Board for 14 years, the last four years as its Chairman, and as President of the Board of Overseers of Harvard University from 2007 through 2008.
Director of Wyeth from 2005 until 2009. Director of Mattel, Inc. A Trustee of the J. Paul Getty Trust (executive committee), Director of the Second Stage Theatre, and Vice Chair of the Board of The John and Mable Ringling Museum of Art Foundation, Inc.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/Academia:
Dr. Fergusson has strong leadership skills, having served as President of Vassar College for 20 years, where she developed a long-term financial plan and strengthened the College’s financial position. She has also headed strategic planning projects at Vassar College and other organizations.
Healthcare & Pharma:
Dr. Fergusson’s service on the boards of not-for-profit organizations, including the Mayo Clinic (which she chaired from 1998 to 2002), enables her to bring to the Board experience and knowledge of healthcare from various perspectives.
Risk Management:
Through Dr. Fergusson’s service as the Chair of our Regulatory and Compliance Committee, she has a strong understanding of and insight into healthcare risk management related areas.
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DIRECTOR SINCE:
2011
AGE:
64
BOARD COMMITTEES:
Corporate Governance,
Regulatory and Compliance
and Science and Technology
(Chair)
KEY SKILLS:
Academia
Medicine & Science
Healthcare & Pharma
OTHER CURRENT PUBLIC BOARDS:
None
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Helen H. Hobbs, M.D.
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Investigator, the Howard Hughes Medical Institute since 2002, Professor of Internal Medicine and Molecular Genetics and Director of the McDermott Center for Human Growth and Development at the University of Texas Southwestern Medical Center.
Member of the American Society for Clinical Investigation and the Association of American Physicians. Elected to the National Academy of Medicine in 2004, the American Academy of Arts and Sciences in 2006, and the National Academy of Sciences in 2007. Received both the Clinical Research Prize (2005) and Distinguished Scientist Award (2007) from the American Heart Association. In 2012, received the inaugural International Society of Atherosclerosis Prize and in 2015, received both the Pearl Meister Greengard Award and the Breakthrough Prize in Life Sciences. In 2016, received the Passano Award and the Gill Award.
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KEY SKILLS & EXPERIENCE:
Academia/Medicine & Science/Healthcare & Pharma:
Dr. Hobbs’ background reflects significant achievements in academia and medicine. She has served as a faculty member at the University of Texas Southwestern Medical Center for more than 20 years and is a leading geneticist in metabolism and heart disease, areas in which Pfizer has significant investments and experience. Pfizer benefits from her experience, expertise, achievements and recognition in both medicine and science.
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Proxy Statement
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ITEM 1 – ELECTION OF DIRECTORS
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DIRECTOR SINCE:
2007
AGE:
69
BOARD COMMITTEES:
Compensation and Science and Technology
KEY SKILLS:
Business Leadership &
Operations
International Business
Healthcare & Pharma
OTHER CURRENT PUBLIC BOARDS:
Conyers Park Acquisition
Corporation, MetLife, Inc.,
Nielsen Holdings PLC and
Unifi, Inc.
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James M. Kilts
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Founding Partner, Centerview Capital, a private equity firm, since 2006. Vice Chairman, The Procter & Gamble Company (Procter & Gamble), from 2005 to 2006. Chairman and Chief Executive Officer, The Gillette Company (Gillette), from 2001 to 2005 and President, Gillette, from 2003 to 2005. President and Chief Executive Officer, Nabisco Group Holdings Corporation (Nabisco), from 1998 until its acquisition in 2000.
Non-Executive Director of the Board of Nielsen Holdings PLC (Nielsen Holdings), Chairman of the Board of Nielsen Holdings (from January 2011 until December 2013) and Chairman of the Nielsen Company B.V. (from 2009 until 2014). Executive Chairman of the Board of Conyers Park Acquisition Corporation (a special purpose acquisition company and an affiliate of Centerview Capital). Director of MetLife, Inc. and Unifi, Inc. (a textile manufacturing company). Chairman of Big Heart Pet Brands until March 2015 and Director of Meadwestvaco Corporation until April 2014. Life Trustee of Knox College and Trustee of the University of Chicago, a member of the Board of Overseers of Weill Cornell Medicine, and Founder and Co-Chair, Steering Committee, of the Kilts Center for Marketing at the University of Chicago Booth School of Business.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/ International Business:
Mr. Kilts’ tenure as CEO of Gillette and Nabisco and as Vice Chairman of Procter & Gamble provides valuable business, leadership and management experience, including expertise in cost management, value creation and resource allocation. In addition, his knowledge of consumer businesses has given him insights on reaching consumers and on the importance of innovation—both important aspects of Pfizer’s business. Through his service on various compensation committees, including ours, Mr. Kilts has a strong understanding of executive compensation and related areas.
Healthcare & Pharma:
Through his service on the board of MetLife, Inc., an insurance company, Mr. Kilts offers a view of healthcare from another perspective.
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ITEM 1 – ELECTION OF DIRECTORS
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DIRECTOR SINCE:
2013
AGE:
53
BOARD COMMITTEES:
Compensation, Regulatory and Compliance and Science and Technology
KEY SKILLS:
Business Leadership & Operations
International Business
Finance & Accounting
Talent Management
Technology
Risk Management
OTHER CURRENT PUBLIC BOARDS:
Adobe Systems Incorporated
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Shantanu Narayen
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President and Chief Executive Officer and Director (Chairman since February 2017) of Adobe Systems Incorporated (Adobe), a
producer of creative and digital marketing software. Prior to his appointment as CEO in December 2007, held various leadership
roles at Adobe, including President and Chief Operating Officer, Executive Vice President of Worldwide Products, and Senior
Vice President of Worldwide Product Development.
Director of Dell Inc. from 2009 until October 2013 and Director of Metavante Technologies Inc. from 2007 until 2009. President
of the Board of Adobe Foundation, which funds philanthropic initiatives around the world.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/International Business/Finance & Accounting/Talent Management:
Mr. Narayen’s experience as President and CEO of Adobe brings strong leadership and management skills to the Board,
and his past roles in worldwide product development provide valuable global operations experience. His past experience as
a director on other public boards provides a broad perspective on issues facing public companies and governance matters.
Technology/Risk Management:
Mr. Narayen also brings a strong technology background and risk management skills to Pfizer’s Board, as well as a diversity
of experience that benefits Pfizer.
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DIRECTOR SINCE:
2007
AGE:
59
BOARD COMMITTEES:
Audit (Chair), Regulatory and Compliance and Science and Technology
KEY SKILLS:
Business Leadership & Operations
Risk Management
International Business
Finance & Accounting
Healthcare & Pharma
OTHER CURRENT PUBLIC BOARDS:
American International Group, Inc., Intuit Inc. and Visa Inc.
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Suzanne Nora Johnson
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Retired Vice Chairman, Goldman Sachs Group, Inc. (Goldman Sachs), since 2007. During her 21-year tenure with Goldman Sachs,
served in various leadership roles, including Chair of the Global Markets Institute, Head of Global Research, and Head of
Global Health Care.
Director of American International Group, Inc., Intuit Inc. and Visa Inc. Vice Chair, Board of Trustees of The Brookings Institution;
Co-Chair of the Board of Trustees of the Carnegie Institution of Washington; Co-Chair of the Board of Trustees of the University
of Southern California; and member of the Global Agenda Council on the Future of Financial and Monetary Systems for the World
Economic Forum.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/Risk Management/International Business:
Ms. Nora Johnson’s careers in law and investment banking, including serving in various leadership roles at Goldman Sachs,
provide valuable business experience and critical insights on the roles of the law, finance and strategic transactions to
our business.
Finance & Accounting:
Ms.
Nora Johnson also brings financial expertise to the Board, providing an understanding of financial statements, corporate
finance, accounting and capital markets.
Healthcare & Pharma:
Ms.
Nora Johnson’s extensive knowledge of healthcare through her role in healthcare investment banking and her involvement
with not-for-profit organizations, such as in scientific research (The Carnegie Institution) and healthcare policy (RAND
Corporation and The Brookings Institution) provides touchstones of public opinion and exposure to diverse, global points of
view.
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ITEM 1 – ELECTION OF DIRECTORS
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Chairman and Chief Executive Officer
DIRECTOR SINCE:
2010
AGE:
63
KEY SKILLS:
Business Leadership & Operations
International Business
Healthcare & Pharma
Finance & Accounting
Government & Public Policy
Talent Management
Risk Management
OTHER CURRENT PUBLIC BOARDS:
Kimberly-Clark Corporation
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Ian C. Read
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Chairman of the Board and Chief Executive Officer of Pfizer since December 2011. President and Chief Executive Officer from
December 2010. Previously, he served as Senior Vice President and Group President of the Worldwide Biopharmaceutical Businesses,
which he led from 2006 through December 2010. In that role, he oversaw five global business units—Primary Care, Specialty
Care, Oncology, Established Products and Emerging Markets. Mr. Read began his career with Pfizer in 1978 as an operational
auditor. He worked in Latin America through 1995, holding positions including Chief Financial Officer, Pfizer Mexico, and
Country Manager, Pfizer Brazil. In 1996, he was appointed President of Pfizer’s International Pharmaceuticals Group,
with responsibility for Latin America and Canada. He became Executive Vice President, Europe, in 2000, was named a Corporate
Vice President in 2001, and assumed responsibility for Canada, in addition to Europe, in 2002. Mr. Read later became accountable
for operations in both the Africa/Middle East region and Latin America as well.
Director of Kimberly-Clark Corporation. Mr. Read also serves on the Boards of Pharmaceutical Research and Manufacturers of
America (PhRMA), International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) and the Partnership of
New York City.
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KEY SKILLS & EXPERIENCE:
Business Leadership
& Operations/ International Business/Healthcare & Pharma/Finance & Accounting/Government & Public
Policy/Talent Management/Risk Management:
Mr. Read brings over 35 years of business, operating and leadership experience to the Board. His extensive knowledge of the
biopharmaceutical industry in general, including his service on PhRMA and IFPMA, and Pfizer’s worldwide biopharmaceutical
business in particular, provides crucial insight to our Board on the company’s strategic planning and operations. Mr.
Read provides an essential link between management and the Board on management’s business perspectives, and the combination
of his knowledge of the business and his leadership skills make his role as Chairman and CEO optimal at this time. Further,
his experience as a member of another public company board provides him with an enhanced perspective on issues applicable
to public companies.
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ITEM 1 – ELECTION OF DIRECTORS
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DIRECTOR SINCE:
2009
AGE:
71
BOARD COMMITTEES:
Audit, Corporate Governance (Chair) and Science and Technology
KEY SKILLS:
Business Leadership & Operations
Talent Management
Finance & Accounting
Risk Management
OTHER CURRENT PUBLIC BOARDS:
Wells Fargo & Company
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Stephen W. Sanger
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Chairman of General Mills, Inc. (General Mills), a packaged food producer and distributor, from 1995 until his retirement
in 2008 and its Chief Executive Officer from 1995 to 2007.
Former Chairman of the Grocery Manufacturers of America. Recipient of the Woodrow Wilson Award for Public Service in 2009.
Chaired the Fiscal Policy Committee of the Business Roundtable and served as a director of Catalyst. Director of Wells Fargo & Company (Chairman since October 2016). Director of Target Corporation from 1996 until 2013.
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KEY SKILLS & EXPERIENCE:
Business Leadership
& Operations/Talent Management/Finance & Accounting/Risk Management:
With more than 12 years’ experience as Chairman and CEO of General Mills, Mr. Sanger has valuable business, leadership
and management experience, including experience in acquisitions through General Mills’ purchase of Pillsbury, creating
one of the world’s largest food companies. As CEO of General Mills, Mr. Sanger improved sales and market position, developed
innovative ideas and streamlined operations, expertise which benefits Pfizer. In addition, Mr. Sanger has experience leading
a company whose products are subject to FDA regulation, lending insight into the regulated nature of our consumer healthcare
business.
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DIRECTOR SINCE:
2014
AGE:
57
BOARD COMMITTEES:
Audit, Compensation (Chair) and Science and Technology
KEY SKILLS:
Business Leadership & Operations
Finance & Accounting
Talent Management
International Business
OTHER CURRENT PUBLIC BOARDS:
Thomson Reuters Corporation
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James C. Smith
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President and Chief Executive Officer and Director of Thomson Reuters Corporation, a provider of intelligent information for
businesses and professionals, since January 2012 and its Chief Operating Officer from September 2011 to December 2011 and
Chief Executive Officer, Thomson Reuters Professional Division, from 2008 to 2011. Prior to the acquisition of Reuters Group
PLC by The Thomson Corporation (Thomson) in 2008, served as Chief Operating Officer of Thomson and as President and Chief
Executive Officer of Thomson Learning’s Academic and Reference Group.
Member of the International Business Council of the World Economic Forum, the International Advisory Boards of British American
Business and the Atlantic Council.
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KEY SKILLS & EXPERIENCE:
Business Leadership & Operations/Finance & Accounting/Talent Management/International Business:
Mr. Smith’s experience as President and CEO of Thomson Reuters Corporation brings valuable leadership, finance and management
skills. Pfizer benefits from Mr. Smith’s organizational expertise and leadership experience, honed during the merger
and subsequent integration of two of the information industry’s preeminent firms, as well as his strong operational
and international expertise from his experience as Chief Operating Officer.
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Governance
Overview
Pfizer is committed to exercising strong corporate
governance practices. We believe that good governance promotes the long-term interests of our shareholders, strengthens Board and
management accountability and improves our standing as a trusted member of society. We maintain and enhance our long record of
excellence in corporate governance by regularly refining our corporate governance policies and procedures to reflect evolving practices
and issues raised by our shareholders and other stakeholders.
Our governance structure and processes are guided by key governance
documents, including our Corporate Governance Principles and Committee Charters, which govern the operation of the Board of Directors
and its Committees in the execution of their responsibilities. The Principles are reviewed at least annually by the Corporate Governance
Committee and the full Board and are updated periodically in response to changing regulatory requirements, evolving practices,
issues raised by our shareholders and other stakeholders, and otherwise as circumstances warrant. Our Corporate Governance Principles
are included as “
Annex 1
” to this Proxy Statement.
Board Information
Board Leadership Structure
The Board recognizes that one of its key responsibilities is to
evaluate and determine its optimal leadership structure to provide independent oversight of senior management and a highly engaged
and high-functioning Board. Based on its experience, considerable engagement with shareholders, and an assessment of research on
this issue, the Board understands that numerous viewpoints concerning a board’s optimal leadership structure exist.
Given the dynamic and competitive environment in which we operate,
the Board believes that the right leadership structure may vary as circumstances warrant. Under our By-laws and Corporate Governance
Principles, the Board can and will change its leadership structure if it determines that doing so is appropriate and in the best
interest of Pfizer and its shareholders at any given time. Consistent with this understanding, the independent Directors do not
view any particular Board leadership structure as preferred and consider the Board’s leadership structure on at least an
annual basis. This consideration includes the evaluation of alternative leadership structures in light of the company’s current
operating and governance environment, a review of empirical data on the topic, and investor feedback, with the goal of achieving
the optimal model for Board leadership and effective oversight of senior leaders by the Board.
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Proxy Statement
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GOVERNANCE
BOARD INFORMATION
|
The Board recognizes that in circumstances where the positions
of Chairman and CEO are combined, investors believe it is imperative that the Board elect a strong Lead Independent Director with
a clearly defined role and responsibilities. Our Corporate Governance Principles aligns with the Board’s goal of achieving
the optimal model for Board leadership and investor preferences.
|
|
|
|
|
|
|
2016 Annual Review of Leadership Structure
|
|
|
|
|
|
Following thorough reviews by the Corporate Governance Committee, the independent Directors most recently reconsidered the Board’s leadership structure in December 2016 and determined to maintain the current leadership structure, with Mr. Read as Chairman. The independent Directors believe that this unified structure provides Pfizer with strong and consistent leadership.
|
|
|
|
|
|
These determinations were based on the independent Directors’ continued strong belief that Mr. Read:
|
|
|
|
|
|
•
|
has extensive experience in and knowledge of the research-based biopharmaceutical industry and regulatory environment;
|
|
•
|
continues to demonstrate the leadership and vision necessary to lead the Board and the company in our challenging industry and macroeconomic environments;
|
|
•
|
possesses a fundamentally investor-driven viewpoint; and
|
|
•
|
exercises leadership that has generated strong operational performance and strengthened colleague engagement in our ownership culture.
|
|
|
|
|
|
Given the regulatory and market environment in which we operate, having one clear leader in both roles, with deep industry expertise and company knowledge, provides decisive and effective leadership internally and externally.
|
|
|
|
|
OUR BOARD LEADERSHIP STRUCTURE IS FURTHER STRENGTHENED BY:
|
|
|
|
|
|
•
|
the strong, independent oversight function exercised by our Board—which consists entirely of independent Directors other than Mr. Read (see “
Director Independence
” below);
|
|
•
|
the independent leadership provided by Pfizer’s Lead Independent Director;
|
|
•
|
the independence of all members of our Board Committees—Audit, Compensation, Corporate Governance, Regulatory and Compliance and Science and Technology;
|
|
•
|
the company’s corporate governance principles, policies and practices; and
|
|
•
|
Board and committee processes and procedures that provide substantial independent oversight of our CEO’s performance, including regular executive sessions of the independent Directors, an annual evaluation of our CEO’s performance against pre-determined goals, and a separate evaluation that, among other things, assesses the CEO’s interactions with the Board in his role as Chairman.
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE SESSIONS
Executive sessions of the independent Directors generally take place at every regular Board meeting. Led by our Lead Independent Director, the independent Directors review and discuss, among other things, the criteria to evaluate the performance of the CEO and other senior management, the performance of the CEO against those criteria, and the compensation of the CEO and other senior management.
|
DIRECTOR INDEPENDENCE
|
|
|
|
|
Pfizer
2017
Proxy Statement
|
17
|
GOVERNANCE
BOARD INFORMATION
|
OUR LEAD INDEPENDENT DIRECTOR
At Pfizer, the Lead Independent Director position has a clearly
defined role and responsibilities and entails significant responsibility for independent Board leadership. Dr. Dennis A. Ausiello
has served as our Lead Independent Director since the 2015 Annual Meeting of Shareholders. Upon becoming Lead Independent Director,
Dr. Ausiello also became an ex-officio member of each of the Board’s Committees and remains a member of the Science and Technology
Committee.
During his tenure as Lead Independent Director, Dr. Ausiello has
demonstrated strong leadership skills and independent thinking, a deep understanding of the business, a high level of scientific
expertise and a willingness to meet with investors. The independent Directors are confident in Dr. Ausiello’s ability to
continue to serve as Lead Independent Director.
The Role of the Lead Independent Director
The position of Lead Independent Director at Pfizer has a clear
mandate, significant authority and well-defined responsibilities under a Board-approved Charter. These responsibilities and authority
include the following:
•
|
presiding at executive sessions
of the independent Directors and at other Board
meetings at which the Chairman and CEO is not present;
|
•
|
serving as an ex-officio member of each Committee
and attending meetings of the
various Committees regularly;
|
•
|
calling meetings of the independent Directors;
|
•
|
leading the evaluation by the independent Directors of the CEO’s effectiveness as the
Chairman and CEO,
including an annual evaluation of his interactions with the Directors and ability to provide leadership
and direction to the full Board;
|
•
|
serving as
liaison between the independent Directors and the Chairman and CEO;
|
•
|
approving information sent to the Board,
including the quality, quantity and timeliness
of such information;
|
•
|
contributing to the
development of and approving meeting agendas;
|
•
|
facilitating the Board’s approval of the number and frequency of Board meetings
and
approving meeting schedules to ensure that there is sufficient time for discussion of all agenda items;
|
•
|
authorizing the retention of outside advisors and consultants
who report directly
to the Board;
|
•
|
being regularly apprised of inquiries from shareholders
and involved in correspondence
responding to these inquiries when appropriate; and
|
•
|
if requested by shareholders or other stakeholders,
ensuring that he is available, when appropriate,
for consultation and direct communication.
|
The Charter of the Lead Independent Director can be found on our
website at
www.pfizer.com/about/corporate-governance/board-policies.
18
|
Pfizer
2017
Proxy Statement
|
GOVERNANCE
BOARD INFORMATION
|
The Board’s Role in Risk Oversight
Management is responsible for assessing and managing risk, including
through the Enterprise Risk Management (ERM) program, subject to oversight by the Board. The ERM program provides a framework for
risk identification and management. Each risk is assigned to a member or members, as appropriate, of our Executive Leadership Team
(ELT)—the heads of our principal businesses and corporate functions. The Board believes that its leadership structure and
the ERM program support the risk oversight function of the Board.
The Board executes its oversight responsibility for risk assessment
and risk management directly and through its Committees:
|
|
|
|
THE BOARD
The Board considers specific risk topics, including risks associated
with our strategic plan, our capital structure and our R&D activities. In addition, the Board receives regular reports from
members of our ELT that include discussions of the risks involved in their respective areas of responsibility. The Board is routinely
informed of developments that could affect our risk profile or other aspects of our business.
The Board is kept informed of its Committees’ risk oversight
and other activities through reports of the Committee Chairs to the full Board. These reports are presented at every regular Board
meeting.
|
|
|
|
|
|
AUDIT COMMITTEE
The Audit Committee has primary responsibility for overseeing
Pfizer’s ERM program. Pfizer’s Chief Internal Auditor, who reports to the Committee, facilitates the ERM program in
coordination with the Legal Division and Compliance Division and helps ensure that ERM is integrated into our strategic and operating
planning process. The Committee’s meeting agendas throughout the year include discussions of individual risk areas, as well
as an annual summary of the ERM process.
The Audit Committee also reviews and receives regular briefings
concerning Pfizer’s information security and technology risks (including cybersecurity), including discussions of the company’s
information security and risk management programs. Pfizer’s Chief Information Officer leads our cybersecurity risk management
program, which is fully integrated into the overall ERM program and overseen by the Committee.
|
|
REGULATORY AND COMPLIANCE COMMITTEE
The Regulatory and Compliance Committee is responsible for reviewing
and overseeing Pfizer’s compliance program, including but not limited to evaluating its effectiveness. They receive information
about current and emerging risks and regulatory and enforcement trends that may affect our business operations, performance, or
strategy. The Committee has primary responsibility for overseeing and reviewing significant risks associated with Pfizer’s
healthcare law compliance programs and the status of compliance with applicable laws, regulations and internal procedures.
From time to time, the Regulatory and Compliance Committee and
the Audit Committee hold joint sessions to discuss risks relevant to both Committees’ areas of risk oversight.
|
|
OTHER BOARD COMMITTEES:
Compensation
Corporate Governance
Science and Technology
The Board’s other Committees oversee risks associated with
their respective areas of responsibility. For example, the Compensation Committee considers the risks associated with our compensation
policies and practices for both executive compensation and compensation generally.
|
|
|
|
|
|
|
|
|
Pfizer
2017
Proxy Statement
|
19
|
GOVERNANCE
BOARD INFORMATION
|
Board Oversight of Company Strategy
The Board and its Committees are involved in overseeing our corporate
strategy, including major business and organizational initiatives, capital allocation priorities and potential business development
opportunities. The Board engages in discussions regarding our corporate strategy at nearly every Board meeting and, at least annually,
receives a formal update on the company’s short- and long-term objectives, including the company’s operating plan and
long-term corporate strategic plan. The Board’s Committees oversee elements of our strategy associated with their respective
areas of responsibility.
The Board’s Role in Succession Planning
MANAGEMENT SUCCESSION PLANNING
Succession planning for Pfizer’s senior management positions
to help ensure continuity of leadership over the long-term is critical to the company’s success. The Board is responsible
for planning for succession to the position of Chief Executive Officer, as well as certain other senior management positions. The
topic is discussed regularly in executive sessions. To assist the Board, the Chief Executive Officer annually provides the Board
with an assessment of other senior managers and their potential to succeed him. The Chief Executive Officer also provides the Board
with an assessment of persons considered potential successors to certain senior management positions.
In addition, the Corporate Governance Committee will review periodically
with the Chief Executive Officer the succession plans relating to positions held by elected corporate officers and will make recommendations
to the Board with respect to the selection of individuals to hold these positions.
BOARD SUCCESSION PLANNING
The Corporate Governance Committee focuses on Board succession
planning on a continuous basis. In performing this function, the Committee is responsible for recruiting and recommending nominees
for election as Directors to the full Board of Directors. The goal is to achieve a Board that provides effective oversight of the
company through the appropriate balance of diversity of perspectives, experience, expertise, skills, specialized knowledge and
other qualifications and attributes of the individual Directors.
The Board’s Role in Evaluating Its Effectiveness
The Board and each Committee conduct a rigorous annual self-evaluation
of their performance and effectiveness. The Corporate Governance Committee oversees the process, which is conducted in the early
part of the calendar year. During the evaluation, the Committee assesses several factors, including Director independence and qualifications
to serve on various Committees. Committee Chair assignments and membership rotations are also considered, which, in 2016, resulted
in changes to the composition of certain Board Committees (see “
Committee Refreshment
” below). The Committee
also reviews the overall evaluation process, including whether to also incorporate individual Director evaluations into the process
or conduct the evaluation through an external third-party provider and, in 2016, the Committee determined to maintain the evaluation
process in its current form.
The results of the evaluation are presented, in executive session,
at a subsequent Board meeting. The results of each Committee evaluation are presented at subsequent Committee meetings for the
relevant Committee. Any results requiring additional consideration are addressed at future Board and Committee meetings, as appropriate.
20
|
Pfizer
2017
Proxy Statement
|
GOVERNANCE
BOARD INFORMATION
|
Board and Committee Information
During 2016, the Board of Directors met nine times. Each of our
incumbent Directors attended at least 75% of the total meetings of the Board and the Board Committees on which he or she served
that were held during the time he or she was a Director in 2016. In accordance with our Corporate Governance Principles, all Directors
then in office attended our 2016 Annual Meeting.
The table below provides membership and meeting information for
each of the standing Board Committees for 2016.*
Name
|
Audit
|
Compensation
|
Corporate
Governance
|
Regulatory &
Compliance
|
Science &
Technology
|
Dennis A. Ausiello, M.D.
|
|
|
|
|
l
|
W. Don Cornwell
|
l
|
l
|
|
l
|
l
|
Joseph J. Echevarria
|
l
|
|
l
|
|
l
|
Frances D. Fergusson, Ph.D.
|
|
|
l
|
CHAIR
|
l
|
Helen H. Hobbs, M.D.
|
|
|
l
|
l
|
CHAIR
|
James M. Kilts
|
|
l
|
|
|
l
|
Shantanu Narayen
|
|
l
|
|
l
|
l
|
Suzanne Nora Johnson
|
CHAIR
|
|
|
l
|
l
|
Ian C. Read
|
|
|
|
|
|
Stephen W. Sanger
|
l
|
|
CHAIR
|
|
l
|
James C. Smith
|
l
|
CHAIR
|
|
|
l
|
Meetings
in 2016
|
14
|
9
|
5
|
4
|
3
|
*
|
In February 2017, Ronald E. Blaylock was elected to the Board and as a member of the Corporate Governance and Science and
Technology Committees.
|
COMMITTEE REFRESHMENT
The Board, upon recommendation from the Corporate Governance Committee,
reviews and determines the composition of the Committees and Committee Chairs. Through periodic committee refreshment, we aim to
balance the benefits derived from continuity and depth of experience with the benefits gained from fresh perspectives and enhancing
our Directors’ understanding of different aspects of our business.
The table above reflects, among other things, changes to the composition
of certain Board Committees, effective as of June 23, 2016, including, among other changes, the election of Ms. Nora Johnson as
the new Chair of the Audit Committee, the election of Mr. Smith as the new Chair of the Compensation Committee and the election
of Dr. Hobbs as the new Chair of the Science and Technology Committee.
Pfizer
2017
Proxy Statement
|
21
|
GOVERNANCE
BOARD INFORMATION
|
BOARD COMMITTEES
THE AUDIT COMMITTEE
Chair:
Suzanne Nora Johnson
|
|
|
Additional Committee Members:
W. Don Cornwell
Joseph J. Echevarria
Stephen W. Sanger
James C. Smith
Meetings Held in 2016:
14
•
|
All Members are Independent, Financially Literate and Qualify as “Audit Committee Financial
Experts”
|
|
|
•
|
Governed by a Board-approved Charter
|
The Audit Committee is primarily responsible for:
•
|
reviewing and discussing, with the independent registered public accounting firm, Internal Audit and
management, the adequacy and effectiveness of internal control over financial reporting;
|
•
|
reviewing and consulting with management, Internal Audit and the independent registered public accounting firm on matters
related to the annual audit, the published financial statements, earnings releases, and the accounting principles applied;
|
•
|
reviewing reports from management relating to the status of compliance with laws, regulations and internal procedures
and policies;
|
•
|
reviewing and approving, based on discussion with the Chief Financial Officer, the appointment, replacement, dismissal
and annual performance of the Chief Internal Auditor;
|
•
|
reviewing and discussing the scope and results of the internal audit program; and
|
•
|
reviewing and discussing with management the company’s policies with respect to risk assessment and risk management.
|
|
|
The Audit Committee also is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm.
|
|
|
The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent registered public accounting firm. The Audit Committee also has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints received by Pfizer regarding its accounting, internal controls and auditing matters. Further details of the role of the Audit Committee, as well as the Audit Committee Report, may be found in “
Item 2—Ratification of Selection of Independent Registered Public Accounting Firm
” on
page 40
.
|
|
|
The Audit Committee Charter is available on our website at
www.pfizer.com/about/corporate-governance/board-committees-charters.
|
THE COMPENSATION COMMITTEE
Chair:
James C. Smith
|
|
|
Additional Committee Members:
W. Don Cornwell
James M. Kilts
Shantanu Narayen
Meetings Held in 2016:
9
•
|
All Members are Independent
|
|
|
•
|
Governed by a Board-approved Charter
|
The Compensation Committee reviews and approves the company’s
overall compensation philosophy and oversees the administration of Pfizer’s executive compensation and benefit programs,
policies and practices. Its responsibilities also include:
•
|
establishing annual and long-term performance goals and objectives for the CEO and reviewing the goals
approved by the CEO for our executive officers, including the NEOs identified in the 2016 Summary Compensation Table;
|
•
|
evaluating the performance and setting compensation for the CEO;
|
•
|
annually reviewing and approving Pfizer’s peer companies and data sources for purposes of evaluating our compensation
competitiveness and mix of compensation elements;
|
•
|
reviewing and assessing annually potential risk to the company from its compensation program and policies;
|
•
|
reviewing and approving annually all compensation decisions for the company’s executive officers, including the
NEOs; and
|
•
|
overseeing the administration of the company’s cash-based and equity-based compensation plans
that are shareholder approved and/or where participants include executive officers or other members of senior management (including
reviewing and approving equity grants), including pay equality and non-discrimination by gender or against protected groups.
|
|
|
Each Committee member is a “non-employee director” as defined in Rule 16b-3 under the Securities
Exchange Act of 1934 and an “outside director” as defined in Section 162(m) of the Internal Revenue Code.
|
|
|
The Compensation Committee has the authority to delegate any of its responsibilities to another committee,
officer and/or subcommittees, as the Committee may deem appropriate in its sole discretion, subject to applicable law, rules,
regulations and New York Stock Exchange (NYSE) listing standards.
|
|
|
The Compensation Committee Charter is available on our website at
www.pfizer.com/about/corporate-governance/board-committees-charters.
|
|
|
Compensation Committee Interlocks and Insider Participation. During 2016 and as of the date of this Proxy
Statement, none of the members of the Compensation Committee was or is an officer or employee of Pfizer, and no executive
officer of the company served or serves on the compensation committee or board of any company that employed or employs any
member of Pfizer’s Compensation Committee or Board of Directors.
|
22
|
Pfizer
2017
Proxy Statement
|
GOVERNANCE
BOARD INFORMATION
|
THE CORPORATE GOVERNANCE COMMITTEE
Chair:
Stephen W. Sanger
|
|
|
Additional Committee Members:
Ronald E. Blaylock
Joseph J. Echevarria
Frances D. Fergusson
Helen
H. Hobbs
Meetings Held in 2016:
5
•
|
All Members are Independent
|
|
|
•
|
Governed by a Board-approved Charter
|
The Corporate Governance Committee oversees the practices, policies
and procedures of the Board and its committees. Responsibilities include:
•
|
developing criteria for Board membership and Board succession planning;
|
•
|
recommending and recruiting Director candidates and ensuring the appropriate balance of diversity of experience, skills,
specialized knowledge and attributes of the Directors;
|
•
|
assessing Director and candidate independence;
|
•
|
considering possible conflicts of interest of Board members and senior executives;
|
•
|
reviewing related person transactions; and
|
•
|
monitoring the functions of the various Committees of the Board.
|
|
|
The Committee advises on the structure of Board meetings, recommends matters for consideration by the Board and also reviews, advises on and recommends Director compensation, which is approved by the full Board.
|
|
|
The Committee is directly responsible for:
|
|
|
•
|
overseeing the self-evaluations of the Board and its Committees;
|
•
|
reviewing our Corporate Governance Principles and Director Qualification Standards;
|
•
|
establishing and overseeing compliance with Director retirement policies;
|
•
|
assisting management by reviewing the functions and outside activities of senior executives; and
|
•
|
overseeing the company’s lobbying priorities and activities.
|
|
|
The Committee also maintains an informed status on: (i) company issues related to public policy, including political spending policies and practices and (ii) company issues related to corporate social responsibility, sustainability and philanthropy.
|
|
|
The Corporate Governance Committee Charter is available on our website at
www.pfizer.com/about/corporate-governance/board-committees-charters.
|
THE REGULATORY AND COMPLIANCE COMMITTEE
Chair:
Frances D.
Fergusson, Ph.D.
|
|
|
Additional Committee Members:
W. Don Cornwell
Helen H. Hobbs
Shantanu Narayen
Suzanne Nora Johnson
Meetings Held in 2016:
4
•
|
All Members are Independent
|
|
|
•
|
Governed by a Board-approved Charter
|
The Regulatory and Compliance Committee’s primary responsibilities
include:
•
|
assisting the Board of Directors with overseeing and reviewing Pfizer’s significant healthcare-related
regulatory and compliance issues, including its compliance programs and the status of compliance with applicable laws, regulations
and internal procedures;
|
•
|
consulting with management and evaluating information and reports on compliance-related activities and matters;
|
•
|
overseeing the integration and implementation of the company’s compliance programs in acquired entities; and
|
•
|
receiving information about current and emerging risks and regulatory and enforcement trends in healthcare-related areas
that may affect the company’s business operations, performance or strategy.
|
|
|
The Committee, in consultation with the Compensation Committee, also makes recommendations regarding the extent
to which, if any, incentive-based compensation of any executive, senior manager, compliance personnel and/or attorney involved
in any significant misconduct resulting in certain government or regulatory action, or other person with direct supervision
over such employee, should be reduced, cancelled or recovered.
|
|
|
The Regulatory and Compliance Committee Charter is available on our website at
www.pfizer.com/about/corporate-governance/board-committees-charters.
|
Pfizer
2017
Proxy Statement
|
23
|
GOVERNANCE
BOARD INFORMATION
|
THE SCIENCE AND TECHNOLOGY COMMITTEE
Chair:
Helen H. Hobbs, M.D.
|
|
|
Additional Committee Members:
Dennis A. Ausiello
Ronald E. Blaylock
W. Don Cornwell
Joseph J. Echevarria
Frances D. Fergusson
James M. Kilts
Shantanu Narayen
Suzanne Nora Johnson
Stephen W. Sanger
James C. Smith
Meetings Held in 2016:
3
•
|
All Members are Independent
|
|
|
•
|
Governed by a Board-approved Charter
|
The Science and Technology Committee is responsible for periodically
examining management’s strategic direction of and investment in the company’s biopharmaceutical R&D and technology
initiatives.
Responsibilities include:
•
|
monitoring progress of Pfizer’s R&D pipeline;
|
•
|
evaluating the quality, direction and competitiveness of the company’s R&D programs; and
|
•
|
reviewing Pfizer’s approach to acquiring and maintaining key scientific technologies and capabilities.
|
|
|
The Committee also identifies emerging issues, assesses the performance of R&D leaders, and evaluates
the sufficiency of review by external scientific experts.
|
|
The Science and Technology Committee Charter is available on our website at
www.pfizer.com/about/corporate-governance/board-committees-charters.
|
24
|
Pfizer
2017
Proxy Statement
|
GOVERNANCE
BOARD INFORMATION
|
Corporate
Governance Committee Report
The Corporate Governance Committee seeks to maintain and enhance
Pfizer’s record of excellence in corporate governance by continually refining Pfizer’s corporate governance policies,
procedures and practices. The following are examples of how we worked to achieve these objectives in 2016.
Board and Committee Matters; Director
Evaluations:
During 2016, we assessed Director qualifications for serving on various committees and recommended changes
to the composition of certain committees, including certain committee Chairs; assessed Director independence; conducted a comprehensive
self-evaluation process for the Board and its Committees; evaluated whether to use a third-party provider to conduct all or a portion
of the evaluation process; reviewed and, where appropriate, recommended changes to our governing documents, including certain Committee
Charters; and continued to review the functioning of the Board and Committees in developing areas.
Board Leadership Structure:
We
conducted a thorough annual review of the Board’s leadership structure and recommended to the independent Directors that
they retain the current leadership structure consisting of a combined Chairman and CEO and a Lead Independent Director.
Recruitment and Assessment of
Potential New Directors:
In 2016, we continued an ongoing Board succession planning process to assess candidates for
election as Directors, based upon a “skills matrix” and other criteria. Resulting from this process, in February 2017,
the Committee recommended and the Board elected Mr. Ronald E. Blaylock as a Director and a member of the Corporate Governance and
Science and Technology Committees. Among other qualifications, Mr. Blaylock brings financial expertise, as well as risk management
and business leadership skills to the Board. The Committee considered the election of Mr. Blaylock as a Director upon recommendation
by our Chairman and CEO and evaluation by a third-party search firm. The Committee also reviewed outside requests to join the Board,
as well as suggestions presented by external advisors.
Corporate Social Responsibility:
Under our Charter, the Committee maintains an informed status on company issues related to corporate social responsibility,
sustainability and philanthropy, and monitors emerging issues potentially affecting the reputation of the pharmaceutical industry
and Pfizer specifically. The Committee received an update on Pfizer’s corporate social responsibility initiatives at year-end.
Public Policy and Corporate Political
Spending:
Under our Charter, the Committee is also responsible for maintaining an informed status on company issues
related to public policy, including political spending practices, we were informed of Pfizer’s public policy and corporate
political spending practices through periodic discussions and reviews of the company’s semi-annual Political Action Committee
and Corporate Political Contributions Report.
Lobbying Activities:
In
2016, as a result of investor feedback on the company’s lobbying activities and Pfizer’s commitment to corporate governance
excellence, the Committee further strengthened its oversight of the company’s lobbying priorities and activities and amended
the Committee’s Charter to clarify this responsibility. As a result, the Committee maintains an informed status on the company’s
lobbying priorities and activities through semi-annual reports from management.
Legislative and Regulatory Developments:
We continued to monitor and evaluate corporate governance and executive compensation developments and best practices,
including U.S. Securities and Exchange Commission (SEC) rules and NYSE listing standards.
Shareholder Engagement:
We
engaged in reviews of shareholder and stakeholder communications at each of our meetings and periodic reviews of shareholder feedback
received during Pfizer’s year-round investor outreach.
Leadership Planning:
During
2016, the Committee reviewed long-term and emergency succession scenarios for Pfizer’s management.
The Corporate Governance Committee*
|
|
Stephen W. Sanger, Chair
|
Joseph J. Echevarria
|
|
|
|
|
Frances D. Fergusson
|
Helen H. Hobbs
|
*
|
In February 2017, Ronald E. Blaylock was elected to the Corporate Governance Committee.
|
Pfizer
2017
Proxy Statement
|
25
|
GOVERNANCE
BOARD INFORMATION
|
Regulatory and Compliance Committee
Report
The Committee assists the Board of Directors with the oversight
of significant healthcare-related regulatory and compliance issues. Under the terms of its Charter, the Committee receives reports
regarding Pfizer’s compliance program, for which management has primary responsibility.
In 2016, we received reports and discussed with management, including
the Chief Compliance and Risk Officer, significant healthcare-related regulatory and compliance risks and related compliance program
initiatives and functions.
Among the matters considered were:
•
|
potential healthcare-related regulatory or compliance risks in connection with the development, manufacture
and marketing of Pfizer products, and efforts to mitigate those risks;
|
•
|
certain compliance-related government investigations and other legal proceedings involving Pfizer;
|
•
|
certain internal investigations of potential healthcare-related compliance or regulatory matters;
|
•
|
results of internal audits conducted in areas within the Committee’s oversight;
|
•
|
updates regarding FDA Warning Letters and other significant regulatory communications;
|
•
|
the integration of acquired companies into Pfizer’s compliance program;
|
•
|
Pfizer’s anti-retaliation policies and procedures, and the retaliation claims received by Pfizer;
|
•
|
Pfizer’s incentive compensation practices for sales and marketing personnel; and
|
•
|
external reviews of Pfizer policies and practices for compliance with federal healthcare laws and regulations.
|
In our activities, we considered potential risks and steps Pfizer
has taken to mitigate risk in areas within our oversight.
The Regulatory and Compliance Committee
|
|
Frances D. Fergusson, Chair
|
W. Don Cornwell
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|
|
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|
Helen H. Hobbs
|
Shantanu Narayen
|
|
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Suzanne Nora Johnson
|
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Proxy Statement
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GOVERNANCE
SHAREHOLDER OUTREACH
|
Shareholder Outreach
|
CONNECT
We view investor engagement as fundamental to good governance and
essential to maintaining our industry-leading practices.
|
|
|
|
COLLABORATE
We aim for a collaborative approach with our shareholders and value
the variety of investor perspectives we receive.
|
|
|
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COMMUNICATE
We share investor feedback directly with our full Board. Investors
can communicate their concerns to the Lead Independent Director or Audit Committee Chair by e-mail or letter.
|
|
Connect
Engaging with investors is fundamental to our commitment to good
governance and essential to maintaining our industry-leading practices. Throughout the year, we seek opportunities to connect with
our investors to gain and share valuable insights into current and emerging global governance trends.
During 2016, we engaged with over 30 global institutional investors
representing nearly 30% of shares outstanding to discuss various key corporate governance-related matters, including executive
compensation, as well as our long-term business strategy and other issues specific to our industry. We conduct these meetings in
person, via teleconference or one-on-one at conferences throughout the year. Although shareholder outreach is primarily a function
of management, members of our Board also participate when appropriate. In addition to speaking with our institutional investors,
we respond to inquiries from our retail investors and other stakeholders.
Collaborate
We strive for a collaborative approach to shareholder outreach
and value the variety of investors’ perspectives received, which helps deepen our understanding of their interests and motivations.
Items on the meeting agendas cover a range of topics, including, but not limited to, those listed below.
Summary of 2016 Shareholder Discussions
Board-related:
Many
of our discussions addressed the subject of board composition and director recruitment as investors remain focused on Director
skills, diversity and refreshment. Certain of our shareholders had a particular desire to understand how the Board considers renewal
and the evolution of its composition in connection with current and future business needs. In general, investors expressed minimal
concerns about our Board’s composition, individual Directors, our Board policies or our overall approach to shareholder engagement.
Investors provided positive feedback with respect to the addition of several new Directors in recent years and the Board’s
overall diversity.
With respect to risk oversight, investors inquired about our overall
ERM program. Several investors sought further clarity about the specific roles of the Board and the Audit and Regulatory and Compliance
Committees, as well as management, in the risk oversight process.
Action
taken:
See enhanced disclosures regarding Board composition, Board Committee refreshment, Director skills and
risk oversight throughout this Proxy Statement.
Executive Compensation:
During
our discussions, investors continued to show support for our overall executive compensation program and viewed it as well-structured
and aligned with performance. Investors were particularly interested in discussing the disclosure around setting our year-over-year
short-term incentive plan targets, as well as the long-term components of our program, including the use of operating income as
a financial metric and the DRG Index as a comparator for evaluating performance for our PSAs.
Action
taken:
See “
Compensation Discussion and Analysis
” section later in
this Proxy Statement.
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Proxy Statement
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27
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GOVERNANCE
SHAREHOLDER OUTREACH
|
Sustainability/Reporting of Non-Financial
Metrics:
Investor interest has generally increased regarding how companies view sustainability and how they are integrating
these factors into their business objectives and corporate cultures. Investors inquired about Pfizer’s practices, our views
on certain reporting methodologies and the types of non-financial Environmental, Social and Governance (ESG) issues that may impact
our business and/or create reputational risks. We measure our performance and provide data on four non-financial key performance
indicators: Access to Medicines, Colleague Safety, Environmental Sustainability Goals and Supply Chain Environmental Sustainability
Goal. See the
inside back cover
for additional information.
Action
taken:
Pfizer continues to assess appropriate next steps relating to disclosure of ESG metrics, and will continue
to engage with investors on this topic.
Lobbying Activities:
Although
it did not pass, in response to the vote received on the 2016 lobbying activities shareholder proposal and our commitment to enhancing
our governance practices, we elicited investor feedback on the company’s current practices and disclosures concerning our
lobbying activities. Most investors indicated little or no concern with our current disclosures and the general level of Board
oversight, and conveyed an understanding of the company’s need to engage in public policy issues. However, some investors
suggested that we include more specific information about the Corporate Governance Committee’s oversight role of our lobbying
activities and management’s role in the approval process.
Action taken:
In
2016, the Corporate Governance Committee further strengthened its oversight of the company’s lobbying activities and amended
the Committee’s Charter to clarify this responsibility. As a result, the Corporate Governance Committee maintains an informed
status on the company’s lobbying priorities and activities through semi-annual reports from management.
See www.pfizer.com/about/corporate-governance/board-committees-charters.
Communicate
Our goal is to communicate with our shareholders through various
platforms—via our website, in print and in person at shareholder meetings or investor presentations. In 2016, in addition
to meeting with institutional investors, we responded to more than 1,000 retail investor inquiries sent to our Board of Directors
or Corporate Secretary about governance or other company matters. We share investor and other stakeholder feedback directly with
our Corporate Governance Committee and full Board at least quarterly. We view communication between our shareholders and the Board
as a dialogue and, when appropriate, members of our Board engage directly with our shareholders.
HOW TO COMMUNICATE WITH OUR DIRECTORS
Shareholders and other interested parties may communicate with
any of our Directors, including the Lead Independent Director and the Audit Committee Chair, as follows:
By mail:
Write to the
Corporate Secretary, Pfizer Inc., 235 East 42nd Street, New York, New York 10017-5755; or
By e-mail:
Go to Pfizer’s
website at
www.pfizer.com/about/corporate-governance/contact-directors
.
Shareholder communications are distributed to the Board, or to
any individual Director or Directors, as appropriate, depending on the facts and circumstances outlined in the communication. The
Board has requested that certain items that are unrelated to the duties and responsibilities of the Board be redirected or excluded,
as appropriate.
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GOVERNANCE
CORPORATE RESPONSIBILITY AND SUSTAINABILITY
|
Corporate Responsibility and Sustainability
Corporate responsibility and sustainability are integral to Pfizer’s
business strategy and help guide our actions as a company. We have always focused on delivering strong financial results, but we
are committed to doing so in a way that respects the communities and environments in which we operate.
We are actively engaged in a dialogue with socially responsible
and mainstream investors around their growing interest in environmental, social and governance (ESG) performance and the impact
on financial results. Today, we strive to have these principles permeate Pfizer at every level – including our Board of Directors
– which maintains oversight for these issues through the Corporate Governance Committee. The Committee oversees our corporate
social responsibility, sustainability and philanthropic efforts and progress.
We continue to evolve our approach to issues relevant to our business
strategy, reputation and key stakeholders. For example, we are committed to helping achieve the 17 Sustainable Development Goals
(SDGs) established by the United Nations (UN) in January 2016. The UN has called for broad-based support of the SDGs, including
active involvement by the private sector. Pfizer is committed to helping facilitate industry engagement and aligning our corporate
objectives to advance health and development for individuals and patients across the globe.
ACCESS TO MEDICINES
As a company, we are committed to discovering, developing and
delivering vaccines and therapies that help people live healthier lives. We believe all individuals deserve access to quality healthcare
and we have an important role to play in positively impacting global health by making our therapies more accessible. We combine
creative commercial strategies with philanthropic approaches and strive to create a sustainable and meaningful impact on global
health. Pfizer is also focused on addressing the top 21 global burdens of disease, as identified by the World Health Organization,
through our products and pipeline.
ENVIRONMENT, HEALTH AND SAFETY
We believe that a sustainable future is essential to ensuring
the health and well-being of our colleagues, the people who use our products and the communities we touch. By striving for environmental
sustainability across all aspects of our organization, we aim to add additional value to society and our business by reducing our
carbon emissions in line with our public science-based goal, minimizing the environmental impact of our products and managing water
resources.
Our environmental sustainability goals focus on three areas: reducing
carbon emissions, reducing the water used in our operations and looking for innovative ways to minimize waste. While these goals
were established for our internal operations, we also recognize the need to drive sustainability performance across our extended
environmental footprint. Therefore, in 2016, we implemented an additional environmental sustainability public goal for a subset
of our suppliers meeting certain criteria.
We recognize the growing interest from governmental and hospital
procurement organizations, retailers and pharmacies, investors, advocacy groups, our colleagues and other stakeholders for Pfizer
to provide information on our sustainability programs and the environmental impacts of products. Establishing clear commitments
in these areas supports Pfizer’s ability to respond to these interests.
We leverage our OWNIT! Culture to encourage long-term success,
as well as growth and development, of colleagues worldwide and to help protect employees’ health and safety, the environment
and the communities in which we operate.
REPORTING ON OUR PROGRESS
We understand that some of our investors and other stakeholders
are interested in evaluating Pfizer’s performance on a holistic level to include financial, social and environmental perspectives.
We provide information on Pfizer’s progress on the following non-financial key performance indicators:
•
|
Access to Medicines
|
•
|
Colleague Safety
|
•
|
Environmental Sustainability Goals
|
•
|
Supply Chain Environmental Sustainability Goal
|
See the
inside back cover
for additional information.
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2017
Proxy Statement
|
29
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GOVERNANCE
PUBLIC POLICY ENGAGEMENT AND POLITICAL PARTICIPATION
|
Further, we continue to evaluate our overall approach to non-financial
reporting, including adherence to several existing, globally recognized external frameworks. These include the Global Reporting
Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC).
Please view Pfizer’s 2016 Annual Review at
www.pfizer.com/annual
for further information about the company’s corporate responsibility and sustainability efforts. Please note that our
2016 Annual Review is not a part of our proxy solicitation materials.
Public Policy Engagement and Political Participation
ENGAGING IN PUBLIC POLICY
We operate in a highly regulated and competitive industry. It
is fundamental to our business, our patients and our shareholders that we engage on public policy issues that may affect our ability
to meet patients’ needs and enhance shareholder value. These issues include advancing biomedical research; healthcare innovation;
advocating for protecting intellectual property rights; comprehensive tax reform; and patient access to care. We regularly work
with policy makers to help create and maintain an innovative environment where we can cultivate new medicines, bring them to market
and ensure that patient health and safety remain a priority.
Pfizer is also a member of several industry and trade groups,
including the Pharmaceutical Research and Manufacturers of America, the National Association of Manufacturers, the Biotechnology
Industry Association, the U.S. Chamber of Commerce and the Business Roundtable. These organizations, along with the others to which
we belong, represent both the pharmaceutical industry and the business community at large in an effort to bring about consensus
on broad policy issues that can impact our business. Our support of these organizations is evaluated annually by the company’s
Government Affairs leaders based on these organizations’ expertise in healthcare policy and advocacy and support of key issues
of importance to Pfizer. In addition to their positions on healthcare policy issues, these organizations may engage in a broad
range of other issues that extend beyond the scope of issues of primary importance to Pfizer. If concerns arise about a particular
issue, we are able to voice our concerns, as appropriate, through our colleagues who serve on the boards and committees of these
groups. Pfizer’s participation as a member of these groups comes with the understanding that we may not always agree with
the positions of the organization and/or its members.
CORPORATE POLITICAL CONTRIBUTIONS
Pfizer complies fully with all federal, state and local laws and
reporting requirements governing corporate political contributions. We also request that trade associations receiving total payments
of $100,000 or more from Pfizer annually report the portion of Pfizer dues or payments used for expenditures or contributions that,
if made directly by Pfizer, would not be deductible under section 162(e)(1)(B) of the Internal Revenue Code. All corporate political
contributions are published semi-annually in the Political Action Committee (PAC) and Corporate Political Contributions report
in compliance with Pfizer corporate policy. Bond Beebe, a certified public accounting and advisory firm, audits the report every
two years, at the end of each federal election cycle.
We regularly discuss our political contributions reporting practices
with investors and other stakeholders to ensure that our disclosures continue to meet their needs. Shareholder engagement has helped
us expand our level of disclosure and create or modify corporate policies related to political expenditures.
INDEPENDENT EXPENDITURES
Our company does not make direct independent expenditures. An
independent expenditure is the use of corporate treasury funds to pay for a television, print or social media communication that
expressly advocates the election or defeat of a clearly identified candidate. We have adopted a strict policy precluding Pfizer
from making direct independent expenditures in connection with any federal or state election.
POLICIES AND PROCEDURES FOR APPROVAL AND OVERSIGHT
OF CORPORATE AND PAC POLITICAL EXPENDITURES
The PAC is a non-partisan employee-run organization that provides
opportunities for employees to participate in the American political process. All corporate and PAC political spending decisions
undergo a rigorous review process conducted by the PAC Steering Committee. The PAC Steering Committee is comprised of colleagues
from various divisions throughout the company to ensure that each contribution we make advances our business objectives and is
not based on the political preferences or views of any individual colleague within Pfizer.
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GOVERNANCE
PFIZER POLICIES ON BUSINESS ETHICS AND CONDUCT
|
The PAC Steering Committee evaluates candidates to whom we contribute
on the basis of their views on issues that impact not only Pfizer, but our patients as well. The Committee also takes note of whether
Pfizer facilities or colleagues reside in a candidate’s district or state. All PAC and corporate contribution requests are
shared with the Pfizer Political Contributions Policy Committee (PCPC), which is chaired by the Executive Vice President, Corporate
Affairs, and composed of senior leaders from different divisions in the organization.
FEDERAL AND STATE LOBBYING ACTIVITY
The company’s U.S. Government Relations leaders are responsible
for the company’s lobbying activities, with oversight by the Corporate Governance Committee. All colleague communications
with government and regulatory officials are governed by Pfizer’s internal policies and procedures, which include guidelines
published in “Pfizer Policies on Business Conduct.”
We file quarterly reports on our federal lobbying activity in
compliance with the Honest Leadership and Open Government Act of 2007. In addition to Pfizer’s federal lobbying activity,
the amount we report also includes the amount spent on federal lobbying activity by trade associations of which Pfizer is a member.
These reports are available to the public at
https://soprweb.senate.gov/index.cfm?event=selectfield
s.
With regard to Pfizer’s state lobbying activity, Pfizer
complies with state registration and reporting requirements in all states where Pfizer is currently active.
BOARD OVERSIGHT
The Corporate Governance Committee is responsible for maintaining
an informed status on public policy and corporate political spending practices through periodic discussions and reviews of the
company’s semi-annual PAC and Corporate Political Contributions report. It is also informed of the company’s lobbying
priorities and activities through semi-annual reports from management, including a year-end report on lobbying priorities for the
coming year.
Pfizer Policies on Business Ethics and Conduct
All of our employees, including our Chief Executive Officer, Chief
Financial Officer and Controller, are required to abide by Pfizer’s policies on business conduct to help ensure that our
business is conducted in a consistently legal and ethical manner. Pfizer’s policies form the foundation of a comprehensive
process that includes compliance with corporate policies and procedures, an open relationship among colleagues to foster good business
conduct, and a high level of integrity. Our policies and procedures cover all major areas of professional conduct, including employment
practices, conflicts of interest, intellectual property and the protection of confidential information, and require strict adherence
to laws and regulations applicable to the conduct of our business. Code of Conduct training is assigned to all colleagues every
other year. In addition, the Pfizer Integrity Pledge is issued annually to all colleagues with computer access to confirm that
colleagues are familiar with the Code of Conduct and agree to uphold Pfizer’s core values and follow Pfizer’s policies.
Employees are required to report any conduct that they believe
in good faith to be an actual or apparent violation of Pfizer’s policies on business conduct. Retaliation against any employee
who in good faith seeks advice, raises a concern, reports misconduct, or provides information in an investigation is strictly prohibited.
Our Audit Committee has procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls,
or auditing matters and to allow for confidential and anonymous submissions by employees with concerns regarding questionable accounting
or auditing matters.
The full text of our Code of Conduct, including information regarding
how to report conduct, is posted on our website at
www.pfizer.com/about/compliance/code-of-conduct
. We will disclose any
future amendments to, or waivers from, provisions of these ethics policies and standards affecting our Chief Executive Officer,
Chief Financial Officer and Controller on our website as promptly as practicable, as may be required under applicable SEC and NYSE
rules.
Code of Conduct for Directors
Our Directors are required to comply with a Code of Business Conduct
and Ethics for Members of the Board of Directors (the Director Code). The Director Code is intended to focus the Board and the
individual Directors on areas of ethical risk, help Directors recognize and deal with ethical issues, provide mechanisms to report
unethical conduct, and foster a culture of honesty and accountability. The Director Code covers all areas of professional conduct
relating to service on the Pfizer Board, including conflicts of interest, unfair or unethical use of corporate opportunities, strict
protection of confidential information, compliance with applicable laws and regulations, and oversight of ethics and compliance
by employees of the company.
Pfizer
2017
Proxy Statement
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31
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GOVERNANCE
OTHER GOVERNANCE PRACTICES AND POLICIES
|
The full text of the Code of Business Conduct and Ethics for Members
of the Board of Directors is posted on our website at
www.pfizer.com/about/corporate-governance/board-policies.
Other Governance Practices and Policies
Director Independence
Our Board of Directors has adopted Director Qualification Standards
(Standards) to evaluate and determine Director independence. Our Standards meet, and in some respects exceed, the independence
requirements of the NYSE.
Director Qualification Standards.
To qualify as independent under our Standards, a non-employee Director must have no material relationship with Pfizer
other than as a Director. The Standards include strict guidelines for Directors and their immediate families regarding employment
or affiliation with Pfizer or its independent registered public accounting firm; prohibitions against Audit Committee members having
any direct or indirect financial relationship with Pfizer; considerations for evaluation of Compensation Committee member independence;
and restrictions on both commercial and not-for-profit relationships between non-employee Directors and Pfizer. Directors may not
receive personal loans or extensions of credit from Pfizer, must deal at arm’s length with Pfizer and its subsidiaries, and
must disclose any circumstance that might be perceived as a conflict of interest. Our Director Qualification Standards can be found
on our website at
www.pfizer.com/about/corporate-governance/board-policies.
Under our Standards, certain relationships and transactions are
not considered to be material transactions that would impair a Director’s independence, including the following:
•
|
the Director is an employee, or an immediate family member of the Director is an executive
officer, of another company that does business with Pfizer, and our annual sales to or purchases from the other company in each
of the last three fiscal years amounted to less than 1% of the annual revenues of the other company; and
|
•
|
the Director or an immediate family member of the Director is an executive officer
of another company, and our indebtedness to the other company or its indebtedness to Pfizer amounts to less than 1% of the total
consolidated assets of the other company.
|
In 2016, there was no indebtedness between Pfizer and any entity
of which a Director or an immediate family member of a Director was an executive officer.
Drs. Ausiello and Hobbs are employed at medical or academic institutions
with which Pfizer engages in ordinary-course business transactions. Mr. Narayen is the chief executive officer of Adobe Systems
Incorporated and Mr. Smith is the chief executive officer of Thomson Reuters Corporation, companies with which Pfizer engages in
ordinary-course business transactions. We reviewed our transactions with each of these entities and found that these transactions
were made in the ordinary course of business and were below the levels set forth in our Standards (1% of the annual revenues of
these entities in each of the last three years).
Under our Standards, contributions to not-for-profit
entities in which a Director of the company, or a Director’s spouse, serves as an executive officer, amounting to less
than 2% of that organization’s latest publicly available total revenues (or $1 million, whichever is greater), will
not serve as a bar to the Director’s independence. None of our Directors or their spouses is an executive officer of a
not-for-profit organization to which Pfizer contributed in 2016. Nonetheless, a summary of charitable contributions to
not-for-profit organizations with which our Directors or their spouses are affiliated was made available to the Committee.
None of the contributions approached the levels set forth in our Standards.
Independence Assessment.
Together
with Pfizer’s legal counsel, the Corporate Governance Committee has reviewed the applicable legal and NYSE standards for
Board and Committee member independence, as well as our Standards. A summary of the answers to annual questionnaires completed
by each of the Directors and a report of transactions with Director-affiliated entities are also made available to the Committee.
On the basis of this review, the Committee has delivered a report to the full Board of Directors, and the Board has made its independence
determinations based upon the Committee’s report and the supporting information.
The Board has determined that all of our current Directors (other
than Mr. Ian C. Read) are independent of the company and its management and meet Pfizer’s criteria for independence. The
independent Directors are Drs. Dennis A. Ausiello, Frances D. Fergusson and Helen H. Hobbs; Ms. Suzanne Nora Johnson; and Messrs.
Ronald E. Blaylock, W. Don Cornwell, Joseph J. Echevarria, James M. Kilts, Shantanu Narayen, Stephen W. Sanger and James C. Smith.
The Board has determined that Mr. Ian C. Read is not independent because of his employment as Pfizer’s CEO.
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GOVERNANCE
OTHER GOVERNANCE PRACTICES AND POLICIES
|
In making these determinations, the Board considered that, in
the ordinary course of business, relationships and transactions may occur between Pfizer and its subsidiaries on the one hand and
entities with which some of our Directors are or have been affiliated on the other.
Governance Materials Available on our Website
Our Corporate Governance Principles and the following Board policies
and other corporate governance materials are published on our website at
www.pfizer.com/about/leadership-and-structure/meet-board
and
www.pfizer.com/about/corporate-governance
:
•
|
Meet the Pfizer Board of Directors
|
•
|
Board Committees and Charters
|
•
|
By-laws
|
•
|
Restated Certificate of Incorporation
|
•
|
Charter of the Lead Independent Director
|
•
|
Director Qualification Standards
|
•
|
Pfizer Policies on Business Conduct
|
•
|
Code of Business Conduct and Ethics for Members of the Board of Directors
|
•
|
Board Policy on Pension Benefits for Executives
|
•
|
Related Person Transaction Approval Policy
|
•
|
Policy on Prohibition of Pledging of Pfizer Stock
|
•
|
Policy—Criteria for the Selection of a Compensation Committee Consultant
|
•
|
Contact Our Directors
|
•
|
Corporate Governance FAQs
|
We will provide copies of any of these items without charge upon
written request to our Corporate Secretary, Pfizer Inc., 235 East 42nd Street, New York, New York 10017-5755. The information on
our website is not a part of this Proxy Statement.
Pfizer
2017
Proxy Statement
|
33
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ITEM 5 – Shareholder Proposal
Regarding The Holy Land Principles
Holy Land Principles, Inc., Capitol Hill, P.O. Box 15128,
Washington, D.C. 20003-0849, which represents that it owns no less than 93 shares of Pfizer common stock, has notified Pfizer
that it will present the following proposal at the Annual Meeting:
The Shareholder’s Resolution
HOLY LAND PRINCIPLES PFIZER RESOLUTION
WHEREAS, PFIZER
has
operations in Palestine/Israel;
WHEREAS,
achieving
a lasting peace in the Holy Land — with security for Israel and justice for Palestinians — encourages us to
promote a means for establishing justice and equality;
WHEREAS,
fair employment
should be the hallmark of any American company at home or abroad and is a requisite for any just society;
WHEREAS,
Holy
Land Principles, Inc., a non-profit organization, has proposed a set of equal opportunity employment principles to serve as
guidelines for corporations in Israel Palestine. These are:
|
1.
|
Adhere to equal and fair employment practices in hiring, compensation, training, professional education, advancement and governance without discrimination based on national, racial, ethnic or religious identity.
|
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|
|
|
2.
|
Identify underrepresented employee groups and initiate active recruitment efforts to increase the number of underrepresented employees.
|
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|
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|
3.
|
Develop training programs that will prepare substantial numbers of current minority employees for skilled jobs, including the expansion of existing programs and the creation of new programs to train, upgrade, and improve the skills of minority employees.
|
|
|
|
|
4.
|
Maintain a work environment that is respectful of all national, racial, ethnic and religious groups.
|
|
|
|
|
5.
|
Ensure that layoff, recall and termination procedures do not favor a particular national, racial, ethnic or religious group.
|
|
|
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6.
|
Not make military service a precondition or qualification for employment for any position, other than those positions that specifically require such experience, for the fulfillment of an employee’s particular responsibilities.
|
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|
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7.
|
Not accept subsidies, tax incentives or other benefits that lead to the direct advantage of one national, racial, ethnic or religious group over another.
|
|
|
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8.
|
Appoint staff to monitor, oversee, set timetables, and publicly report on their progress in implementing the Holy Land Principles.
|
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|
RESOLVED:
Shareholders request the Board of Directors to:
|
|
|
|
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Make all possible lawful efforts to implement and/or increase activity on each of the eight Holy Land Principles.
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SHAREHOLDER PROPOSALS
ITEM 5 – SHAREHOLDER PROPOSAL REGARDING
THE HOLY LAND PRINCIPLES
|
SUPPORTING STATEMENT
The proponent believes that
PFIZER
benefits by hiring from
the widest available talent pool. An employee’s ability to do the job should be the primary consideration in hiring and promotion
decisions.
Implementation of the Holy Land Principles — which are pro-Jewish,
pro-Palestinian and pro-company — will demonstrate concern for human rights and equality of opportunity in its international
operations.
Please vote your proxy
FOR
these concerns.
Your Company’s Response
The Board of Directors believes that the actions requested by
the proponent are unnecessary and not in the best interest of the company or its shareholders and recommends a vote
AGAINST
this proposal.
PFIZER’S EXISTING EQUAL EMPLOYMENT
OPPORTUNITY POLICY ADDRESSES THE PROPOSAL
The Board considers workplace diversity as instrumental to successfully
achieving our long-term business strategy. Therefore, we demonstrate one of Pfizer’s core values, “Respect for People,”
in a number of ways to our colleagues globally. Throughout our organization, we apply our principles of fair and equitable treatment,
non-discrimination and equal employment opportunity through our global Equal Employment Opportunity (EEO) Policy. Our policy:
•
|
requires fair and equitable workplace treatment and non-discrimination toward all colleagues regardless of race, ethnicity or religious beliefs or religious affiliation; and
|
•
|
prohibits any discrimination or unfair treatment on the basis of other protected characteristics, including, among others, gender, age, sexual orientation, military service, veteran status or disability.
|
In addition to our global EEO policy, Pfizer supports its commitment
to respect its employees by its adherence to local labor and employment laws and regulations, including those regarding fair treatment,
non-discrimination and equal employment opportunity in the workplace. Furthermore, Pfizer strives to uphold human rights in all
of our business activities, details of which can be found at
www.pfizer.com/files/about/Position-Human-Rights.pdf.
This
position statement includes information on our Supplier Conduct Position Statement, details of which can be found at
www.pfizer.com/files/b2b/pfizer_supplier_conduct_position_statement.pdf.
Pfizer also demonstrates its commitment to diversity and inclusion
by its support of seven Pfizer Colleague Councils and nearly 100 Pfizer colleague resource groups around the world. These programs
engage more than 10,000 employees, and are used to attract and develop colleagues of all backgrounds and serve the diverse communities
in which we operate.
PFIZER’S OPERATIONS IN ISRAEL TREAT
ALL EMPLOYEES EQUALLY AND FAIRLY
In Israel, the only Holy Land territory in which we have colleagues
and maintain commercial operations, we follow both our global EEO policy, as well as local laws and regulations requiring fair
treatment in the workplace, including prohibitions on discrimination on the basis of race, religion or ethnicity.
SUMMARY
We are confident that our current policies and practices meet
and exceed the spirit and intent set forth in The Holy Land Principles. We believe the proposal’s request to add an additional
specialized framework for one geographic location would be inconsistent with the company’s global employment practices, as
we do not believe differential treatment is appropriate or consistent with our employment of a global workforce. Our employment
practices apply to all colleagues, and the proposal’s request would not be in the best interest of the company, our shareholders
or our colleagues worldwide.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
THIS PROPOSAL.
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SHAREHOLDER PROPOSALS
ITEM 6 – SHAREHOLDER PROPOSAL REGARDING
SPECIAL SHAREOWNER MEETINGS
|
ITEM
6 – Shareholder Proposal Regarding Special Shareowner Meetings
Mr. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach,
CA 90278, who represents that he owns no less than 300 shares of Pfizer common stock, has notified Pfizer that he will present
the following proposal at the Annual Meeting:
The Shareholder’s Resolution
Proposal 6 – Special Shareowner Meetings
Resolved,
Shareowners
ask our board to take the steps necessary (unilaterally if possible) to amend our bylaws and each appropriate governing document
to give holders in the aggregate of 10% of our outstanding common stock the power to call a special shareowner meeting. This proposal
does not impact our board’s current power to call a special meeting.
Dozens of Fortune 500 companies allow 10% of shares to call a
special meeting. Special meetings allow shareowners to vote on important matters, such as electing new directors that can arise
between annual meetings. Shareowner input on the timing of shareowner meetings is especially important when events unfold quickly
and issues may become moot by the next annual meeting. This is important because there could be 15-months or more between annual
meetings.
This proposal is particularly important because we do not have
the opportunity to act by written consent. A majority of Fortune 500 companies provide for shareholders to call special meetings
and to act by written consent. Perhaps a proxy advisory firm will recommend that companies like ours, with no written consent opportunity
for shareholders, in turn allow for 10% of shareholders to call a special meeting.
Now is a good time to adopt this proposal topic since our stock
price has been dead money for the year leading up to the submission of this proposal.
Please vote to enhance shareholder value:
Special Shareowner Meetings – Proposal 6.
Your Company’s Response
The Board of Directors believes that the actions requested by
this proponent are unnecessary and not in the best interest of the company or its shareholders. Therefore, it recommends a vote
AGAINST
this proposal.
PFIZER’S SHAREHOLDERS ALREADY HAVE
THE ABILITY TO CALL SPECIAL SHAREHOLDER MEETINGS
The Board of Directors agrees that shareholders should have the
ability to call special meetings and has given serious consideration to the issue. In 2008, the Board amended Pfizer’s By-laws
to grant holders of 25% or more of the common stock the right to call a special meeting. At the 2009 Annual Meeting of Shareholders,
a shareholder proposal requesting that our Bylaws be changed to allow 10% of the shareholders the right to call special meetings
received a favorable vote of 51.5% of the votes cast. Following the 2009 Annual Meeting, we engaged in extensive shareholder engagement
on the topic. The Board of Directors carefully considered the vote outcome, the results of our extensive engagement, and the various
ways it has afforded shareholders the ability to contact members of the Board throughout the year. In response, at the 2010 Annual
Meeting, the Board sought shareholder approval of an amendment to our By-laws to allow 20% of outstanding shares to call special
meetings. That amendment was overwhelmingly approved by almost 95% of votes cast at the meeting.
The Board continues to believe that a 20% ownership threshold
for the right to call special meetings strikes a reasonable and appropriate balance between enhancing shareholder rights and protecting
against the risk that a small minority of shareholders, including shareholders with special interests, could call special meetings.
Allowing a small minority of shareholders, including those who could borrow shares from other shareholders in order to vote on
a particular issue, to call special meetings for any reason could be detrimental to the interest of a majority of our shareholders
and other stakeholders. Shareholder meetings are serious events that require the significant attention of Pfizer’s Board,
officers and employees, thus diverting attention away from their focus on meeting our business objectives and enhancing shareholder
value.
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SHAREHOLDER PROPOSALS
ITEM 6 – SHAREHOLDER PROPOSAL REGARDING
SPECIAL SHAREOWNER MEETINGS
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PFIZER IS ATTENTIVE TO SHAREHOLDER RIGHTS
AND REMAINS COMMITTED TO STRONG GOVERNANCE PRACTICES
The Board believes that its current special meeting shareholder
right should be considered in the context of Pfizer’s overall corporate governance, including the shareholder rights available
under its By-laws and Charter, applicable law, and the Board’s demonstrated commitment to shareholder engagement and responsiveness
to shareholder concerns. In addition to the existing right of shareholders of 20% of Pfizer’s common stock to call a special
meeting, shareholder approval is required for many key corporate actions. Under Delaware law and New York Stock Exchange rules,
Pfizer must submit certain important shareholder matters to a shareholder vote, including mergers, large share issuances, the adoption
of equity compensation plans and amendments to its certificate of incorporation.
PFIZER TAKES SHAREHOLDER FEEDBACK SERIOUSLY
AND ACTS UPON IT
Additionally, the Board actively listens to shareholders and has
acted on their suggestions and implemented a number of their recommendations. In December 2015, the Board adopted a proxy access
by-law, enabling Pfizer shareholders to include their own director nominees in Pfizer’s proxy materials along with candidates
nominated by the Board, as long as they meet certain requirements, as set forth in our By-laws. This decision and other actions
such as embracing majority voting for Directors, modifying executive pay practices, and eliminating our poison pill, super-majority
vote requirements and the classified board structure demonstrate the company’s ongoing commitment to the principles of good
governance.
During 2016, company leaders engaged in discussions with over
30 institutional investors, representing approximately 30% of shares outstanding to solicit their views on Pfizer’s corporate
governance practices and other key topics of interest. For more information on these discussions, see
“
Shareholder Outreach
”
earlier in this Proxy Statement.
SUMMARY
We believe that Pfizer’s existing governance structure and
the existing right of shareholders to call special meetings at 20% strikes the appropriate balance and is consistent with our record
of Board accountability and responsiveness. Therefore, we believe the adoption of this proposal is unnecessary and not in the best
interests of the company or its shareholders.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
THIS PROPOSAL.
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SHAREHOLDER PROPOSALS
ITEM 7 – SHAREHOLDER PROPOSAL REGARDING
AN INDEPENDENT CHAIR POLICY
|
ITEM 7 – Shareholder Proposal
Regarding an Independent Chair Policy
The Sisters of St. Francis of Philadelphia, 609 South Convent
Road, Aston, PA 19014-1207, which represents that they own no less than 200 shares of Pfizer common stock, has notified Pfizer
that it will present the following proposal at the Annual Meeting:
The Shareholder’s Resolution
Pfizer – Separate Chair & CEO
RESOLVED:
The shareholders
request the Board of Directors to adopt as policy, and amend the bylaws as necessary, to require the Chair of the Board of Directors,
whenever possible, to be an independent member of the Board. This policy would be phased in for the next CEO transition.
If the Board determines that a Chair who was independent when
selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable
amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair.
SUPPORTING STATEMENT:
We believe:
•
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The role of the CEO and management is to run the company.
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The role of the Board of Directors is to provide independent oversight of management and the CEO.
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There is a potential conflict of interest for a CEO to be her/his own overseer as Chair while managing the business.
|
Pfizer’s CEO Ian Read serves both as CEO and Chair of the
Company’s Board of Directors. We believe the combination of these two roles in a single person weakens a corporation’s
governance structure.
As Andrew Grove, Intel’s former chair, stated, “The
separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the
CEO an employee? If he’s an employee, he needs a boss, and that boss is the Board. The Chairman runs the Board. How can the
CEO be his own boss?”
In our view, shareholders are best served by an independent Board
Chair who can provide a balance of power between the CEO and the Board empowering strong Board leadership. The primary duty of
a Board of Directors is to oversee the management of a company on behalf of shareholders. A combined CEO / Chair creates a potential
conflict of interest, resulting in excessive management influence on the Board and weaker oversight of management.
Numerous institutional investors recommend separation of these
two roles. For example, California’s Retirement System CalPERS’ Principles & Guidelines encourage separation, even
with a lead director in place.
According to ISS “2015 Board Practices”, (April 2015),
53% of S&P 1,500 firms separate these two positions and the number of companies separating these roles is growing.
Chairing and overseeing the Board is a time intensive responsibility.
A separate Chair also frees the CEO to manage the company and build effective business strategies.
Many companies have separate and/or independent Chairs. An independent
Chair is an increasing trend in the U.S. and prevailing practice in the United Kingdom.
Shareholder resolutions urging separation of CEO and Chair received
approximately 33% in 2015 and 31% in 2016, an indication of strong investor support.
To simplify the transition, this policy would be phased in and
implemented when the next CEO is chosen.
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SHAREHOLDER PROPOSALS
ITEM 7 – SHAREHOLDER PROPOSAL REGARDING
AN INDEPENDENT CHAIR POLICY
|
Your Company’s Response
The Board of Directors believes that the actions requested by
the proponent are not in the best interest of the company or its shareholders and recommends a vote
AGAINST
this proposal.
THE RIGHT LEADERSHIP STRUCTURE SHOULD VARY
AS CIRCUMSTANCES WARRANT
The Board of Directors values the flexibility of selecting the
structure of leadership best suited to meet the needs of Pfizer and its shareholders. Given the dynamic and competitive environment
in which we operate, the Board believes that the right leadership structure may vary as circumstances warrant.
Under our By-laws and Corporate Governance Principles, the Board
can and will change its leadership structure if it determines that doing so is appropriate and in the best interest of the company
and its shareholders at any given time. The Board believes that the decision to separate or combine the roles of Chairman and CEO
should be based on the unique circumstances and challenges confronting the company at any given time, as well as the individual
skills and experiences that may be required in an effective Chairman at that time. Eliminating the flexibility to select a structure
of leadership based on the facts and circumstances presented at a particular point in time is unnecessarily rigid.
Consistent with this understanding, the independent Directors
do not view any particular Board leadership structure as preferred and consider the Board’s leadership structure on at least
an annual basis, including as recently as December 2016. This consideration includes the evaluation of alternative leadership structures
in light of the company’s current operating and governance environment, a review of empirical data on the topic, and investor
feedback, with the goal of achieving the optimal model for Board leadership and effective oversight of senior leaders by the Board.
OUR LEAD INDEPENDENT DIRECTOR PROVIDES STRONG,
INDEPENDENT LEADERSHIP
Dr. Dennis A. Ausiello has served as our Lead Independent Director
since the 2015 Annual Meeting of Shareholders. During his tenure as Lead Independent Director, Dr. Ausiello has demonstrated strong
leadership skills and independent thinking, a deep understanding of the business, a high level of scientific expertise and a willingness
to meet with investors.
The position of Lead Independent Director at Pfizer has a clear
mandate, significant authority and well-defined responsibilities under a Board-approved Charter. These responsibilities and authority
include the following:
|
•
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presiding at executive sessions of the independent Directors and at other Board meetings at which the Chairman and CEO is not present;
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serving as an ex-officio member of each committee and attending meetings of the various committees regularly;
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•
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calling meetings of the independent Directors;
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•
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leading the evaluation by the independent Directors of the CEO’s effectiveness as the Chairman and CEO, including an annual evaluation of his interactions with the Directors and ability to provide leadership and direction to the full Board;
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serving as liaison between the independent Directors and the Chairman and CEO;
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approving information sent to the Board, including the quality, quantity and timeliness of such information;
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•
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contributing to the development of and approving meeting agendas;
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facilitating the Board’s approval of the number and frequency of Board meetings and approving meeting schedules to ensure that there is sufficient time for discussion of all agenda items;
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authorizing the retention of outside advisors and consultants who report directly to the Board;
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being regularly apprised of inquiries from shareholders and involved in correspondence responding to these inquiries when appropriate; and
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if requested by shareholders or other stakeholders, ensuring that he/she is available, when appropriate, for consultation and direct communication.
|
A FLEXIBLE LEADERSHIP STRUCTURE IS THE MOST
EFFECTIVE FOR PFIZER
Following thorough reviews by the Corporate Governance Committee,
the independent Directors reconsidered the Board’s leadership structure and determined in December 2016 to maintain the current
leadership structure, with Mr. Read as CEO and Chairman. The independent Directors believe that this unified structure provides
Pfizer with strong and consistent leadership.
These determinations were based on the independent Directors’
continued strong belief that Mr. Read:
|
•
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has extensive experience in and knowledge of the research-based biopharmaceutical industry and regulatory environment;
|
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•
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continues to demonstrate the leadership and vision necessary to lead the Board and the company in our challenging industry and macroeconomic environments;
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SHAREHOLDER PROPOSALS
ITEM 7 – SHAREHOLDER PROPOSAL REGARDING
AN INDEPENDENT CHAIR POLICY
|
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•
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possesses a fundamentally investor-driven viewpoint; and
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•
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exercises leadership that has generated strong operational performance and strengthened colleague engagement in our ownership culture.
|
Given the regulatory and market environment in which we operate,
having one clear leader in both roles, with deep industry expertise and company knowledge, provides decisive and effective leadership
internally and externally.
In considering the Board’s leadership structure, the independent
Directors have taken a number of additional factors into account. The Board—which consists entirely of independent Directors
other than Mr. Read—exercises a strong, independent oversight function. This oversight function is enhanced by the fact that
our Audit, Compensation, Corporate Governance, Regulatory and Compliance and Science and Technology Committees are comprised entirely
of independent Directors. Further, a number of Board and committee processes and procedures provide substantial independent oversight
of our CEO’s performance, including regular executive sessions of the independent Directors, an annual evaluation of our
CEO’s performance against pre-determined goals, and a separate evaluation that, among other things, assesses the CEO’s
interactions with the Board in his role as Chairman.
The Directors will continue to periodically evaluate the effectiveness
of its leadership structure and make any future decisions based upon the best interest of the company and its shareholders at that
time.
SUMMARY
We believe that the Board of Directors should have the flexibility
to select the structure of leadership best suited to meet the needs of Pfizer and its shareholders at any given time. In addition,
given Pfizer’s robust governance practices, including our strong Lead Independent Director, we believe that adoption of an
Independent Chair Policy is unnecessarily rigid and not in the best interest of the company or its shareholders.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
THIS PROPOSAL.
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Annual Meeting Information
Why did I receive these proxy materials?
We are providing these proxy materials in connection with the
solicitation by the Board of Directors of Pfizer Inc., a Delaware corporation, of proxies to be voted at our 2017 Annual Meeting
of Shareholders and at any adjournment or postponement of the Meeting.
The Notice of 2017 Annual Meeting and Proxy Statement and a proxy
or voting instruction card are being mailed or made available to shareholders starting on or about March 16, 2017.
Annual Meeting Information
When and where will the Annual Meeting be
held?
Date:
April 27, 2017
Time:
9:00 a.m., Eastern Daylight Time
Location:
Hilton Short Hills Hotel, 41 John F. Kennedy
Parkway, Short Hills, New Jersey 07078. For directions, call the hotel at +1-973-379-0100.
Shareholders will be admitted to the Annual Meeting beginning
at 8:30 a.m., Eastern Daylight Time. Seating will be limited.
The Hilton Short Hills Hotel is accessible to disabled persons,
and upon advance request we will provide wireless headsets for hearing amplification. Sign interpretation also will be provided
upon advance request. Please mail your request to the address noted below under the question “What do I need to do to attend
the Annual Meeting?”
What is a quorum for the Annual Meeting?
The presence of the holders of stock representing a majority
of the voting power of all shares of Pfizer stock issued and outstanding and entitled to vote at the Pfizer Annual Meeting, in
person or represented by proxy, is necessary to constitute a quorum. Abstentions and broker non-votes are counted as present and
entitled to vote for purposes of determining a quorum.
What do I need to do to attend the Annual
Meeting?
Admission to the Annual Meeting is limited to shareholders as
of the close of business on February 28, 2017, and one immediate family member; one individual designated as a shareholder’s
authorized proxy holder; or one representative designated in writing to present a shareholder proposal properly brought before
the Meeting. In each case, the individual must have an admission ticket or proof of
ownership of Pfizer stock, as well as a valid government-issued
photo identification, such as a valid driver’s license or passport, to be admitted to the Meeting.
ADMISSION TICKET OR PROOF OF OWNERSHIP
If you hold your shares in your name as a shareholder of record
,
you will need an admission ticket or proof of ownership of Pfizer stock. An admission ticket is attached to your proxy card or
to the Notice of Internet Availability of Proxy Materials. If you plan to attend the Meeting, please vote your shares but keep
the admission ticket and bring it with you to the Meeting.
If you misplace your admission ticket, we will verify your ownership
onsite at the Annual Meeting venue.
If your shares are held in the name of a broker, bank or other
holder of record
and you plan to attend the Annual Meeting, you must present proof of your ownership of Pfizer stock, such
as a bank or brokerage account statement, to be admitted to the Meeting.
A shareholder may appoint a representative to attend the Annual
Meeting and/or vote on his/her behalf. An admission ticket must be requested by the shareholder but will be issued in the name
of the authorized representative. Any individual holding an admission ticket not issued in his/her name will not be admitted to
the Annual Meeting. To request an admission ticket, contact Pfizer Shareholder Services, 235 East 42nd Street, New York, New York
10017-5755.
PROPONENT OF SHAREHOLDER PROPOSAL
The proponent of a shareholder proposal included in this Proxy
Statement should notify the company in writing of the individual authorized to present the proposal at the Annual Meeting; this
notice should be received at least two weeks before the Meeting.
No cameras, recording equipment, electronic devices, large
bags, briefcases, or packages will be permitted in the Annual Meeting. The use of mobile devices, photography or recording of the
event is strictly prohibited.
Will the Annual Meeting be webcast?
Our Annual Meeting will be audio webcast live on April 27, 2017.
You are invited to visit
www.pfizer.com
at 9:00 a.m., Eastern Daylight Time, on April 27, 2017, to access the webcast. Registration
for the webcast is required and will be available beginning on April 20, 2017. A replay will be available on our website through
the first week of May 2017.
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ANNUAL MEETING INFORMATION
VOTING
|
Who is entitled to vote at the Annual Meeting?
Holders of Pfizer common stock at the close of business on February
28, 2017, are entitled to receive the Notice of 2017 Annual Meeting and Proxy Statement and to vote their shares at the Meeting.
As of that date, there were 5,955,125,843 shares of the company’s common stock outstanding and entitled to vote. In addition,
shares of the company’s preferred stock having votes equivalent to 1,508,349 shares of common stock are held by two of the
company’s employee benefit plan trusts. Each share of common stock is entitled to one vote on each matter properly brought
before the Meeting. Shares of common stock and shares of preferred stock vote together as a single class on the matters covered
in this Proxy Statement.
Voting
How do I vote?
You may vote using any of the following methods:
BY MAIL
Complete, sign and date the accompanying proxy or voting instruction
card and return it in the prepaid envelope. If you are a shareholder of record and return your signed proxy card, but do not indicate
your voting preferences, the persons named in the proxy card will vote the shares represented by your proxy card as recommended
by the Board of Directors.
If you are a shareholder of record and you do not have the prepaid
envelope, please send your completed proxy card by regular mail to Pfizer Inc., c/o Proxy Services, Computershare, P.O. Box 43101,
Providence, RI 02940, or by overnight mail to Pfizer Inc., c/o Proxy Services, Computershare, 211 Quality Circle, Suite 210, College
Station, TX 77845.
BY TELEPHONE OR ELECTRONICALLY VIA THE INTERNET
Pfizer has established telephone and Internet voting procedures
for shareholders of record. These procedures are designed to authenticate your identity, to allow you to give your voting instructions
and to confirm that those instructions have been properly recorded.
You can vote by calling the toll-free telephone number on your
proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts will allow you to vote your shares and
confirm that your instructions have been properly recorded.
If you are located outside the United States, Puerto Rico and
Canada, see your proxy card for additional instructions.
The website for Internet voting is
www.investorvote.com/pfe.
Please have your proxy card handy when you go to the website. As with telephone voting, you can confirm that your instructions
have been properly recorded. If you vote on the Internet, you also can request electronic delivery of future proxy materials.
Telephone and Internet voting facilities for shareholders of
record will be available 24 hours a day until 7:30 a.m., Eastern Daylight Time, on April 27, 2017.
The availability of telephone and Internet voting for beneficial
owners will depend on the voting processes of your broker, bank or other holder of record. We therefore recommend that you follow
the voting instructions in the materials you receive.
If you vote by telephone or on the Internet, you do not have
to return your proxy or voting instruction card.
IN PERSON AT THE ANNUAL MEETING
Shareholders who attend the Annual Meeting may vote in person
at the Meeting. You may also be represented by another person at the Meeting by executing a proper proxy designating that person.
If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and present
it to the inspectors of election with your ballot to be able to vote at the Meeting.
YOUR VOTE IS IMPORTANT. YOU CAN SAVE US THE
EXPENSE OF AN ADDITIONAL MAILING BY VOTING PROMPTLY.
Is there a list of shareholders entitled to
vote at the Annual Meeting?
The names of shareholders of record entitled to vote at the Meeting
will be available at the Meeting and for 10 days prior to the Meeting for any purpose germane to the Meeting, between the hours
of 8:45 a.m. and 4:30 p.m., at our principal executive offices at 235 East 42nd Street, New York, NY 10017 by contacting our Corporate
Secretary.
What shares are included on the proxy card?
If you are a shareholder of record, you will receive only one
proxy card for all the shares you hold of record:
•
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in book-entry form; and
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in book-entry form in the Computershare Investment Plan.
|
If you are a Pfizer employee, you will receive a proxy or voting
instruction card for all the Pfizer shares you hold:
•
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in a Pfizer and/or Wyeth savings plan; and/or
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in Grantor Trusts for deferred stock received by certain Pfizer and legacy Wyeth employees.
|
Your proxy card will serve as a voting instruction card for the
applicable savings plan and/or Grantor Trust.
If you do not vote your shares or specify your voting instructions
on your proxy or voting instruction card, the administrator of the applicable savings plan, and/or the trustee of a Grantor Trust,
as the case may be, will vote your shares in accordance with the terms of your plan and/or Grantor Trust.
To allow sufficient
time for voting by the
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ANNUAL MEETING INFORMATION
VOTING
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administrator of the applicable savings plan and/or the trustee
of a Grantor Trust, your voting instructions must be received by 10:00 a.m., Eastern Daylight Time, on April 24, 2017.
If you hold Pfizer shares through any other company plan, you
will receive voting instructions from that plan’s administrator, as applicable.
If you are a beneficial owner, you will receive voting instructions
from your broker, bank or other holder of record.
What are the voting requirements to elect
the Directors and to approve each of the proposals discussed in this Proxy Statement?
Proposal
|
|
Vote Required
|
|
Broker
Discretionary
Voting Allowed
|
Election of Directors
|
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Majority of Votes Cast
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No
|
Ratification of KPMG LLP
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Majority of Votes Cast
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Yes
|
Advisory Approval of
Executive Compensation
|
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Majority of Votes Cast
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No
|
Advisory Vote on Frequency
of Future Advisory Votes on
Executive Compensation
|
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Not Applicable (Shareholder Preference Only)
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No
|
Shareholder Proposals
|
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Majority of Votes Cast
|
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No
|
If you abstain from voting or there is a broker non-vote on any
matter, your abstention or broker non-vote will not affect the outcome of such vote, because abstentions and broker non-votes are
not considered to be votes cast under our By-laws.
ELECTION OF DIRECTORS; MAJORITY VOTE POLICY
Under our By-laws and our Corporate Governance Principles, Directors
must be elected by a majority of the votes cast in uncontested elections, such as the election of Directors at the Annual Meeting.
This means that the number of votes cast “for” a Director nominee must exceed the number of votes cast “against”
that nominee. Abstentions and broker non-votes are not counted as votes “for” or “against” a Director nominee.
Any nominee who does not receive a majority of votes cast “for” his or her election would be required to tender his
or her resignation promptly following the failure to receive the required vote. Within 90 days of the certification of the shareholder
vote, the Corporate Governance Committee would then be required to make a recommendation to the Board as to whether the Board should
accept the resignation, and the Board would be required to decide whether to accept the resignation and disclose its decision-making
process. In a contested election, the required vote would be a plurality of votes cast. Full
details of this Policy are set forth in our Corporate Governance
Principles (see “
Annex 1
” to this Proxy Statement).
RATIFICATION OF THE SELECTION OF KPMG LLP
Under our By-laws, the votes cast “for” must exceed
the votes cast “against” to approve the ratification of the selection of KPMG LLP as our independent registered public
accounting firm. Abstentions are not counted as votes “for” or “against” this proposal.
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
Under our By-laws, the votes cast “for” must exceed
the votes cast “against” to approve, on an advisory basis, the compensation of our Named Executive Officers. Abstentions
and broker non-votes are not counted as votes “for” or “against” this proposal.
ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY
VOTES ON EXECUTIVE COMPENSATION
This matter is being submitted to enable shareholders to express
a preference as to whether future advisory votes on executive compensation should be held every year, every two years, or every
three years. Therefore, the provisions of our By-laws regarding the vote required to “approve” a proposal are not applicable
to this matter. Abstentions and broker non-votes will not be counted as expressing any preference.
SHAREHOLDER PROPOSALS
Under our By-laws, the votes cast “for” must exceed
the votes cast “against” to approve a shareholder proposal. Abstentions and broker non-votes are not counted as votes
“for” or “against” the shareholder proposals.
How will my shares be voted at the Annual
Meeting?
At the Meeting, the Proxy Committee appointed by the Board of
Directors will vote your shares as you instruct. If you sign your proxy card and return it without indicating how you would like
to vote your shares, your shares will be voted as the Board of Directors recommends, which is:
•
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FOR
the election of each of the Director nominees named in this Proxy Statement;
|
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FOR
the ratification of the selection of KPMG LLP as our independent registered public accounting firm for the 2017 fiscal year;
|
•
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FOR
the approval, on an advisory basis, of the compensation of our Named Executive Officers;
|
•
|
1 YEAR
for frequency of future advisory votes on executive compensation; and
|
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AGAINST
the shareholder proposals.
|
Who will count the votes?
Representatives of our transfer agent, Computershare, will tabulate
the votes and act as inspectors of election.
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ANNUAL MEETING INFORMATION
PROXY MATERIALS
|
What can I do if I change my mind after I
vote?
If you are a shareholder of record, you can revoke your proxy
before it is exercised by:
•
|
giving written notice to our Corporate Secretary;
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delivering a valid, later-dated proxy, or a later-dated vote by telephone or on the Internet, in a timely manner; or
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•
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voting by ballot at the Annual Meeting.
|
If you are a beneficial owner of shares, you may submit new voting
instructions by contacting your broker, bank or other holder of record and following their instructions for how to do so.
All shares for which proxies have been properly submitted and
not revoked will be voted at the Annual Meeting.
Proxy Materials
Why did I receive a “Notice of Internet
Availability of Proxy Materials” but no proxy materials?
We distribute our proxy materials to certain shareholders via
the Internet under the “Notice and Access” approach permitted by rules of the SEC. This approach conserves natural
resources and reduces our distribution costs, while providing a timely and convenient method of accessing the materials and voting.
On March 16, 2017, we mailed a “Notice of Internet Availability of Proxy Materials” to participating shareholders,
containing instructions on how to access the proxy materials on the Internet.
Can I access the proxy materials and the 2016
Financial Report on the Internet?
This Notice of 2017 Annual Meeting and Proxy Statement and the
2016 Financial Report are available on our website at
www.pfizer.com/annualmeeting.
Instead of receiving future proxy statements
and accompanying materials by mail, most shareholders can elect to receive an e-mail that will provide electronic links to them.
Opting to receive your proxy materials online will conserve natural resources and will save us the cost of producing documents
and mailing them to you, and will also give you an electronic link to the proxy voting site.
Shareholders of Record:
If you vote on the Internet at
www.investorvote.com/pfe,
simply follow the prompts to enroll in the electronic proxy delivery service. You also may enroll
in the electronic proxy delivery service at any time in the future by going directly to
www.computershare-na.com/green
and
following the enrollment instructions.
Beneficial Owners:
You also may be able to receive copies
of these documents electronically. Please check the information provided in the proxy materials sent to you by your broker, bank
or other holder of record regarding the availability of this service.
What is “householding” and how
does it affect me?
We have adopted a procedure, approved by the SEC, called “householding.”
Under this procedure, shareholders of record who have the same address and last name and receive hard copies of the Annual Meeting
materials will receive only one copy of this Notice of 2017 Annual Meeting and Proxy Statement and the 2016 Financial Report, unless
we are notified that one or more of these shareholders wishes to continue receiving individual copies. If you and other Pfizer
shareholders living in your household do not have the same last name, you may also request to receive only one copy of future proxy
statements and financial reports.
Householding conserves natural resources and reduces our printing
and mailing costs. Shareholders who participate in householding will continue to receive separate proxy cards. Also, householding
will not in any way affect dividend check mailings.
If you are eligible for householding, but you and other shareholders
of record with whom you share an address currently receive multiple copies of this Notice of 2017 Annual Meeting and Proxy Statement
and any accompanying documents, or if you hold Pfizer stock in more than one account, and in either case you wish to receive only
a single copy of each document for your household, please contact our transfer agent, Computershare, in writing: P.O. Box 30170,
College Station, TX 77842-3170; or by telephone: in the U.S., Puerto Rico and Canada, 1-800-733-9393, and outside the U.S., Puerto
Rico and Canada, 1-781-575-4591.
Alternatively, if you participate in householding and wish to
receive a separate copy of this Notice of 2017 Annual Meeting and Proxy Statement and any accompanying documents or prefer to discontinue
your participation in householding, please contact Computershare as indicated above, and a separate copy will be sent to you promptly.
If you are a beneficial owner, you can request information about
householding from your broker, bank or other holder of record.
How can I obtain a copy of Pfizer’s
2016 Annual Review?
The company’s Annual Review is available on our website
at
www.pfizer.com/annual.
Pfizer is working hard to be a green company; therefore, hard copies of the report are no longer
produced.
Pfizer
2017
Proxy Statement
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109
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ANNUAL MEETING INFORMATION
OTHER QUESTIONS
|
Other Questions
What is a broker non-vote?
If you are a beneficial owner whose shares are held of record
by a broker, you must instruct the broker how to vote your shares. If you do not provide voting instructions, your shares will
not be voted on any proposal on which the broker does not have discretionary authority to vote. This is called a “broker
non-vote.” In these cases, the broker can register your shares as being present at the Annual Meeting for purposes of determining
the presence of a quorum, but will not be able to vote on those matters for which specific authorization is required under NYSE
rules.
If you are a beneficial owner whose shares are held of record
by a broker, your broker has discretionary voting authority under NYSE rules to vote your shares on the ratification of KPMG LLP
as our independent registered public accounting firm, even if the broker does not receive voting instructions from you. However,
your broker does not have discretionary authority to vote on the election of Directors, the advisory approval of executive compensation,
the advisory vote on the frequency of future advisory votes on executive compensation or the shareholder proposals without instructions
from you, in which case a broker non-vote will occur and your shares will not be voted on these matters.
What is the difference between holding shares
as a shareholder of record and holding shares as a beneficial owner?
If your shares are registered in your name with Pfizer’s
transfer agent, Computershare, you are the “shareholder of record” of those shares. This Notice of 2017 Annual Meeting
and Proxy Statement and any accompanying materials have been provided directly to you by Pfizer.
If your shares are held in a stock brokerage account or by a
bank or other holder of record, you are considered the “beneficial owner” of those shares, and this Notice of 2017
Annual Meeting and Proxy Statement and any accompanying documents
have been provided to you by your broker, bank or other holder of record. As the beneficial owner, you have the right to direct
your broker, bank or other holder of record how to vote your shares by using the voting instruction card or by following their
instructions for voting by telephone or on the Internet.
Could other matters be decided at the Annual
Meeting?
The Board is not aware of any matters that are expected to come
before the 2017 Annual Meeting other than those referred to in this Proxy Statement (see
“
Other Business
”
below).
If you return your signed and completed proxy card or vote by
telephone or on the Internet and other matters are properly presented at the Annual Meeting for consideration, the Proxy Committee
appointed by the Board of Directors will have the discretion to vote for you on such matters and intends to vote the proxies in
accordance with its best judgment.
Who will pay for the cost of this proxy solicitation?
Pfizer will pay the cost of soliciting proxies. Proxies may be
solicited on our behalf by our Directors, officers or employees in person or by telephone, mail, electronic transmission and/or
facsimile transmission. We have hired Morrow Sodali LLC, 470 West Avenue, Stamford, Connecticut 06902, to distribute and solicit
proxies. We will pay Morrow Sodali LLC a fee of $35,000, plus reasonable expenses, for these services.
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ANNUAL MEETING INFORMATION
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Other Business
The Board is not aware of any matters that are expected to come
before the 2017 Annual Meeting other than those referred to in this Proxy Statement. If any other matter should properly come before
the Annual Meeting, the Proxy Committee intends to vote the proxies in accordance with its best judgment.
The Chairman of the Meeting may refuse to allow the transaction
of any business, or to acknowledge the nomination of any person, not made in compliance with our By-laws and the procedures described
below.
Submitting Proxy Proposals and Director Nominations
for the 2018 Annual Meeting
Proposals for Inclusion in Our 2018 Proxy Materials
Under SEC rules, if a shareholder wants us to include a proposal
in our 2018 proxy materials for presentation at our 2018 Annual Meeting of Shareholders, then the proposal must be received at
our principal executive offices at 235 East 42nd Street, New York, New York 10017-5755, Attention: Corporate Secretary, by November
16, 2017. All proposals must comply with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act).
Director Nominations for Inclusion in our 2018 Proxy Materials
(Proxy Access)
Any shareholder considering a proxy access nomination should
carefully review our By-laws, which are available at
www.pfizer.com/about/corporate-governance.
Under our proxy access by-law,
if a shareholder (or a group of up to 20 shareholders) who has owned at least 3% of our shares for at least three years and has
complied with the other requirements in our By-laws wants us to include director nominees (up to the greater of two nominees or
20% of the Board) in our 2018 proxy materials for election at our 2018 Annual Meeting of Shareholders, then the nominations must
be received by us at our principal executive offices at 235 East 42nd Street, New York, New York 10017-5755, Attention: Corporate
Secretary, not earlier than October 17, 2017 and not later than November 16, 2017.
Other Proposals or Nominations to Be Brought before Our 2018
Annual Meeting
Any shareholder considering introducing a nomination or other
item of business should carefully review the procedures set forth in our By-laws, which are available at
www.pfizer.com/about/corporate-governance
.
These procedures provide that, among other things, a nomination or the introduction of an item of business at an Annual Meeting
of Shareholders must be submitted in writing to our Corporate Secretary at our principal executive offices at 235 East 42nd Street,
New York, New York 10017-5755.
We must receive written notice of your intention to nominate
a Director or to propose an item of business at our 2018 Annual Meeting according to this schedule:
If the 2018 Annual Meeting is to be held within 25 days before
or after the anniversary of the date of this year’s Annual Meeting (April 27, 2017), then Pfizer must receive your notice
not less than 90 days nor more than 120 days in advance of the anniversary of the 2017 Annual Meeting.
If the 2018 Annual Meeting is to be held on a date not within
25 days before or after such anniversary, then Pfizer must receive it no later than 10 days following the first to occur of:
•
|
the date on which notice of the date of the 2018 Annual Meeting is mailed; or
|
•
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the date public disclosure of the date of the 2018 Annual Meeting is made.
|
Our Annual Meeting of Shareholders is generally held on the fourth
Thursday of April. Assuming that our 2018 Annual Meeting is held on schedule, to be “timely” within the meaning of
Rule 14a-4(c) under the Exchange Act, we must receive written notice of your intention to introduce a nomination or other item
of business at that Meeting between December 28, 2017 and January 27, 2018.
For any other meeting, the nomination or item of business must
be received by the 10th day following the date on which public disclosure of the date of the meeting is made.
Upon written request, we will provide, without charge, a copy
of our By-laws. Requests should be directed to our principal executive offices at 235 East 42nd Street, New York, New York 10017-5755,
Attention: Corporate Secretary.
Pfizer
2017
Proxy Statement
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Annex 1
Pfizer Inc. Corporate Governance Principles
Role and Composition of the Board of Directors
1. General.
The Board
of Directors (the Board), which is elected by the shareholders, is the ultimate decision-making body of Pfizer Inc. (the Company),
except with respect to those matters reserved to the shareholders. It selects the Chief Executive Officer and other members of
the senior management team, which is charged with the conduct of the Company’s business. Having selected the senior management
team, the Board acts as an advisor and counselor to senior management and ultimately monitors its performance. The function of
the Board to monitor the performance of senior management is facilitated by the presence of non-employee Directors of stature who
have substantive knowledge of the Company’s business.
2. Succession Planning.
The
Board is responsible for planning for succession to the position of Chief Executive Officer as well as certain other senior management
positions. To assist the Board, the Chief Executive Officer shall annually provide the Board with an assessment of other senior
managers and their potential to succeed him or her. He or she shall also provide the Board with an assessment of persons considered
potential successors to certain senior management positions.
3. Board Leadership.
The
independent Directors will annually elect a Chairman of the Board, who may or may not be the Chief Executive Officer of the Company,
based on the recommendation of the Corporate Governance Committee as a result of its annual review of the Company’s Board
leadership structure. If the individual elected as Chairman of the Board is the Chief Executive Officer, the independent Directors
shall also elect a Lead Independent Director. The Chairman of the Board shall preside at all meetings of the shareholders and of
the Board as a whole, as well as over executive sessions of the independent Directors, and shall perform such other duties, and
exercise such powers, as from time to time shall be prescribed in the Company’s By-laws or by the Board; provided that the
Lead Independent Director, if any, shall preside over executive sessions of the Company’s independent Directors. In addition,
the Lead Independent Director, if any, shall facilitate information flow and communication among the Directors and perform such
other duties as may be specified by the Board and outlined in the Charter of the Lead Independent Director. The Board shall consider
the rotation of the Lead Independent Director, if any, at such intervals as the Board determines on the recommendation of the Corporate
Governance Committee.
4. Director Independence.
It
is the policy of the Company that the Board consist of a majority of independent Directors. The Corporate Governance Committee
of the Board has established Director Qualification Standards to assist it in determining Director independence, which either meet
or exceed the independence requirements of the New York Stock Exchange (NYSE) corporate governance listing standards. The Board
will consider all relevant facts and circumstances in making an independence determination, and not merely from the standpoint
of the Director, but also from that of persons or organizations with which the Director has an affiliation.
5. Board Size.
It is
the policy of the Company that the number of Directors not exceed a number that can function efficiently as a body. The Corporate
Governance Committee shall periodically consider and make recommendations to the Board concerning the appropriate size and needs
of the Board. The Corporate Governance Committee considers candidates to fill new positions created by increases in the size of
the Board and vacancies that occur by resignation, by retirement or for any other reason.
6. Selection Criteria.
To
be considered for membership on the Board, candidates should be individuals of proven integrity with a record of substantial achievement
in an area of relevance to the Company. In selecting Directors, the Board will generally seek leaders of major complex organizations,
including within the scientific, government service, educational, finance, marketing, technology and the not-for-profit sectors.
In addition, the Board also will seek some Directors who are widely recognized as leaders in the fields of medicine or the biological
sciences. Candidates must have demonstrated ability and sound judgment. A candidate must also possess a judicious and critical
temperament that will enable objective appraisal of management’s plans and programs. Each Director is expected to serve the
best interests of all shareholders and must be committed to enhancing long-term Company growth. Directors should be selected so
that the Board of Directors is a diverse body, with diversity reflecting gender, ethnic background and professional experience.
Candidates considered by the Corporate Governance Committee shall also be considered by other Directors, based on the recommendation
of the Corporate Governance Committee, and final approval of a candidate shall be determined by the full Board. Recommendations
for Directors received from shareholders will be evaluated in accordance with the criteria set forth above.
Pfizer
2017
Proxy Statement
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ANNEX 1 - PFIZER INC. CORPORATE GOVERNANCE PRINCIPLES
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7. Voting for Directors.
In
accordance with the Company’s By-laws, unless the Secretary of the Company determines that the number of nominees exceeds
the number of Directors to be elected as of the record date for any meeting of the shareholders, a nominee must receive more votes
cast for than against his or her election or re-election in order to be elected or re-elected to the Board. The Board expects a
Director to tender his or her resignation if he or she fails to receive the required number of votes for re-election. The Board
shall nominate for election or re-election as Director only candidates who agree to tender, promptly following such person’s
failure to receive the required vote for election or re-election at the next shareholder meeting at which such person would face
election or re-election, an irrevocable resignation that will be effective upon Board acceptance of such resignation. In addition,
the Board shall fill Director vacancies and new directorships only with candidates who agree to tender, promptly following their
appointment to the Board, the same form of resignation tendered by other Directors in accordance with this Corporate Governance
Principle.
If an incumbent Director fails to receive the required vote for
re-election, then, within 90 days following certification of the shareholder vote, the Corporate Governance Committee will act
to determine whether to accept the Director’s resignation and will submit such recommendation for prompt consideration by
the Board, and the Board will act on the Committee’s recommendation. The Corporate Governance Committee and the Board may
consider any factors they deem relevant in deciding whether to accept a Director’s resignation.
Any Director who tenders his or her resignation pursuant to this
provision shall not participate in the Corporate Governance Committee recommendation or Board action regarding whether to accept
the resignation offer.
Thereafter, the Board will promptly disclose its decision-making
process and decision regarding whether to accept the Director’s resignation offer (or the reason(s) for rejecting the resignation
offer, if applicable) in a Current Report on Form 8-K (or any successor report) furnished to the Securities and Exchange Commission.
If each member of the Corporate Governance Committee fails to
receive the required vote in favor of his or her election in the same election, then those independent Directors who did receive
the required vote shall appoint a committee amongst themselves to consider the resignation offers and recommend to the Board whether
to accept them.
However, if the only Directors who receive the required vote in
the same election constitute three or fewer Directors, all Directors may participate in the action regarding whether to accept
the resignation offers.
8. Director Service on Other Public
Boards.
Ordinarily, Directors should not serve on more than four other boards of public companies in addition to the
Company’s Board.
9. Former Chief Executive Officer
as Director.
Upon retirement from the Company, the former Chief Executive Officer will not retain Board membership.
10. Change in Director Occupation.
When a Director’s principal occupation or business association changes substantially during his or her tenure
as a Director, that Director shall tender his or her resignation for consideration by the Corporate Governance Committee. The Corporate
Governance Committee will recommend to the Board the action, if any, to be taken with respect to the resignation.
11. Director Compensation.
The
Corporate Governance Committee shall periodically review the compensation of non-employee Directors.
12. Ownership Requirement.
Each
non-employee Director is required to hold shares of the Company’s common stock having a value of at least five (5) times
the Director’s annual base cash compensation while serving as a Director of the Company. For purposes of satisfying these
requirements, (a) a Director’s holdings of the Company’s common stock shall include, in addition to shares held outright,
units granted to the Director as compensation for Board service and shares or units held under a deferral or similar plan and (b)
each such unit shall have the same value as a share of the Company’s common stock. A Director will have five years from the
date of (a) his or her first election as a Director or (b) if later, an increase in the amount of the Company’s common stock
required to be held, to satisfy this ownership requirement.
13. Director Retirement.
Directors
are required to retire from the Board when they reach the age of 73; a Director elected to the Board prior to his or her 73rd birthday
may continue to serve until the annual shareholders meeting coincident with or next following his or her 73rd birthday. On the
recommendation of the Corporate Governance Committee, the Board may waive this requirement as to any Director if it deems such
waiver to be in the best interests of the Company.
14. Annual Board and Committee
Self-Evaluation.
The Board (under the supervision of the Corporate Governance Committee) and each Committee will conduct
a self-evaluation of their performance at least annually.
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Pfizer
2017
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ANNEX 1 – PFIZER INC. CORPORATE GOVERNANCE PRINCIPLES
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15. Term Limits.
The
Board does not endorse arbitrary term limits on Directors’ service, nor does it believe in automatic annual re-nomination
until Directors reach the mandatory retirement age. The Board self-evaluation process is an important determinant for continuing
service.
16. Committees.
It
is the general policy of the Company that all major decisions be considered by the Board as a whole. As a consequence, the Committee
structure of the Board is limited to those Committees considered to be basic to, or required or appropriate for, the operation
of the Company. Currently these Committees are the Executive Committee, Audit Committee, Compensation Committee, Corporate Governance
Committee, Regulatory and Compliance Committee and Science and Technology Committee.
The members and chairs of these Committees are recommended to
the Board by the Corporate Governance Committee. The Audit Committee, Compensation Committee and Corporate Governance Committee
are made up of only independent Directors, as defined under the NYSE listing standards and all applicable laws and regulations.
In addition to the requirement that a majority of the Board satisfy the independence standards noted above in Paragraph 4, Director
Independence, members of the Audit Committee also must satisfy an additional NYSE independence standard. Specifically, they may
not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries
other than their Director compensation. As a matter of policy, the Board also will apply a separate and heightened independence
standard to members of both the Compensation and Corporate Governance Committees. No member of either Committee may be a partner,
member or principal of a law firm, accounting firm or investment banking firm that accepts consulting or advisory fees from the
Company or any of its subsidiaries. The Board also will apply any heightened independence standards applicable to members of those
Committees pursuant to NYSE requirements.
The Board shall consider the rotation of committee assignments
and of committee Chairs at such intervals as the Board determines on the recommendation of the Corporate Governance Committee.
Consideration of rotation shall seek to balance the benefits derived from continuity and experience, on the one hand, and the benefits
derived from gaining fresh perspectives and enhancing Directors’ understanding of different aspects of the Company’s
business and enabling functions.
17. Director Orientation and Continuing
Education.
In furtherance of its policy of having major decisions made by the Board as a whole, the Company has a full
orientation and continuing education process for Board members that includes extensive materials, meetings with key management
and visits to Company facilities.
18. Chief Executive Officer Performance
Goals and Annual Evaluation.
The Compensation Committee is responsible for setting annual and long-term performance
goals for the Chief Executive Officer and for evaluating his or her performance against such goals. The Committee meets annually
with the Chief Executive Officer to receive his or her recommendations concerning such goals. Both the goals and the evaluation
are then submitted for consideration by the independent Directors at a meeting or executive session of that group. The Committee
then meets with the Chief Executive Officer to evaluate his or her performance against such goals.
19. Senior Management Performance
Goals.
The Compensation Committee also is responsible for setting annual and long-term performance goals and compensation
for the direct reports to the Chief Executive Officer. These decisions are approved or ratified by action of the independent Directors
at a meeting or executive session of that group.
20. Communication with Stakeholders.
The Chief Executive Officer is responsible for establishing effective communications with the Company’s stakeholder
groups, i.e., shareholders, customers, Company associates, communities, suppliers, creditors, governments and corporate partners.
It is the policy of the Company that management speaks for the
Company. This policy does not preclude non-employee Directors, including the Chairman of the Board (if the Chairman is a non-employee
Director) or the Lead Independent Director, from meeting with shareholders, but it is suggested that in most circumstances any
such meetings be held with management present.
21. Annual Meeting Attendance.
All Board members are expected to attend our Annual Meeting of Shareholders unless an emergency prevents them from doing
so.
Pfizer
2017
Proxy Statement
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iii
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ANNEX 1 – PFIZER INC. CORPORATE GOVERNANCE PRINCIPLES
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Board Functions
22. Agenda.
The Chief
Executive Officer, with approval from the Chairman of the Board (if the Chairman is a non-employee Director) or the Lead Independent
Director, shall set the agenda for Board meetings with the understanding that the Board is responsible for providing suggestions
for agenda items that are aligned with the advisory and monitoring functions of the Board. Agenda items that fall within the scope
of responsibilities of a Board Committee are reviewed with the chair of that Committee. Any member of the Board may request that
an item be included on the agenda.
23. Board Materials.
Board
materials related to agenda items are provided to Board members sufficiently in advance of Board meetings to allow the Directors
to prepare for discussion of the items at the meeting.
24. Board Meetings.
At
the invitation of the Board, members of senior management and other employees recommended by the Chief Executive Officer shall
attend Board meetings or portions thereof for the purpose of participating in discussions. Generally, presentations of matters
to be considered by the Board are made by the manager responsible for that area of the Company’s operations.
25. Director Access to Corporate
and Independent Advisors.
In addition, Board members have free access to all other members of management and employees
of the Company and, as necessary and appropriate, Board members may consult with independent legal, financial, accounting and other
advisors to assist in their duties to the Company and its shareholders.
26. Executive Sessions.
Executive
sessions or meetings of non-employee Directors without management present are held regularly (at least four times a year) to review
the report of the independent registered public accounting firm, the criteria upon which the performance of the Chief Executive
Officer and other senior managers is based, the performance of the Chief Executive Officer against such criteria, the compensation
of the Chief Executive Officer and other senior managers, and any other relevant matters. Meetings are held from time to time with
the Chief Executive Officer for a general discussion of relevant subjects.
Committee Functions
27. Independence.
The
Audit, Compensation and Corporate Governance Committees consist only of independent Directors. A majority of the members of the
Regulatory and Compliance Committee must be independent Directors.
28. Meeting Conduct.
The
frequency, length and agenda of meetings of each of the Committees are determined by the chair of the Committee. Sufficient time
to consider the agenda items is provided. Materials related to agenda items are provided to the Committee members sufficiently
in advance of the meeting where necessary to allow the members to prepare for discussion of the items at the meeting.
29. Committee Meetings.
At
the invitation of any of the Committees, members of senior management and other employees recommended by the Chief Executive Officer
shall attend Committee meetings or portions thereof for the purpose of participating in discussions. Generally, presentations of
matters to be considered by the Committee are made by the manager responsible for that area of the Company’s operations.
30. Scope of Responsibilities.
The responsibilities of each of the Committees are determined by the Board from time to time.
Policy on Poison Pills
31. Expiration of Rights Agreement.
The Board amended Pfizer’s Rights Agreement, or “Poison Pill,” to cause the Agreement to expire on
December 31, 2003. The term Poison Pill refers to a type of shareholder rights plan that some companies adopt to provide an opportunity
for negotiation during a hostile takeover attempt.
The Board has adopted a statement of policy that it shall seek
and obtain shareholder approval before adopting a Poison Pill; provided, however, that the Board may determine to act on its own
to adopt a Poison Pill, if, under the circumstances, the Board, including the majority of the independent members of the Board,
in its exercise of its fiduciary responsibilities, deems it to be in the best interest of Pfizer’s shareholders to adopt
a Poison Pill without the delay in adoption that would come from the time reasonably anticipated to seek shareholder approval.
If the Board were ever to adopt a Poison Pill without prior shareholder
approval, the Board would either submit the Poison Pill to shareholders for ratification, or would cause the Poison Pill to expire
within one year.
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2017
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ANNEX 1 – PFIZER INC. CORPORATE GOVERNANCE PRINCIPLES
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The Corporate Governance Committee will review this Poison Pill
policy statement on an annual basis, including the stipulation which addresses the Board’s fiduciary responsibility to act
in the best interest of the shareholders without prior shareholder approval, and report to the Board any recommendations it may
have concerning the policy.
Periodic Review of Corporate Governance Principles
32.
These principles
are reviewed by the Board at least annually.
Pfizer
2017
Proxy Statement
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v
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Non-Financial Key Performance Indicators
ACCESS TO MEDICINES
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COLLEAGUES*
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Global Programs
and Commercial
Transactions to Increase Access to
Medicines in Emerging Markets
1
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Top 21 Global Burdens of Disease
Addressed by Products and Pipeline
2
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Injuries Per 100 Colleagues
Total Injury Rate in 2016
was 20% lower than in 2015
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*Hospira injury data has been included.
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46
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programs
are active
3
for launched medicines
in markets that have a GDP per capita less than Portugal.
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15
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programs cover multiple therapies
while the rest are product specific.
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29
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countries are served
by
our active programs.
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64
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different products
in
our portfolio are covered.
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PROGRESS
ON OUR 2020 ENVIRONMENTAL SUSTAINABILITY GOALS
(4)
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Greenhouse
Gas (GHG) Emissions
Total
Scope 1 and 2 GHG Emissions
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Waste Disposed
Total Hazardous and
Non-Hazardous Waste
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Water Withdrawal
Excluding Non-Contact
Cooling Water
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(in
million metric tons CO
2
EQ)
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(in thousand metric tons)
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(in million cubic meters)
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(baseline)
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(baseline)
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(baseline)
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GHG emissions in 2016
were 3% lower than 2015
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Total waste disposed in
2016 was 14% lower than 2015
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Total
water withdrawal (excluding non-contact
cooling water) in 2016 was 12% higher than in 2015
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2020 Goals:
20%
Reduction vs. Baseline
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2020 Goals:
15%
Reduction vs. Baseline
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2020 Goals:
5%
Reduction vs. Baseline
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SUPPLY CHAIN
ENVIRONMENTAL SUSTAINABILITY GOAL
5
Key suppliers supporting Pfizer’s supplier
code of conduct:
|
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Key suppliers managing
their environmental impacts:
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2016
(baseline):
79%
/
2020
Goal:
100%
|
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2016
(baseline):
76%
/ 2020 Goal:
100%
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Key suppliers aligning with Pfizer Supply Chain Initiative
(PSCI) principles:
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Key suppliers with reduction goals for GHG, waste disposal and
water withdrawal instituted:
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2016
(baseline):
35%
/
2020
Goal:
100%
|
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2016
(baseline):
51%
/ 2020 Goal:
90%
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(1)
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Program/commercial transaction defined as a Pfizer investment
or dedicated contract of over $250,000 with a national government or procurement agency, multilateral organization, non-governmental
organization, private institution or aid agency. Represents multi-country initiatives only and does not include numerous local
initiatives to address access.
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(2)
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As defined by the World Health Organization. Burdens of illness not addressed
include road traffic accidents, prematurity and low birth weight, and self-inflicted injuries.
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(3)
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The number of patient access programs with pricing tailored to different
patient segments (for at least one product), allowing access for more patients.
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(4)
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Applies to facilities within Pfizer’s operational control as compared
with a 2012 baseline including Hospira. Data are baseline adjusted, reported absolute, using reporting boundaries per the
WRI GHG Protocol. The 2012-2015 GHG data was independently verified to the limited assurance level. The verification of 2016
GHG data will be accomplished in 2017. Water withdrawal in 2016 included an operational change from using non-contact cooling
water to city water at a site. Expanded environmental reporting will be posted on www.pfizer.com later this year.
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(5)
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Hospira key suppliers not included. Supplier code of conduct and PSCI
principle data to be confirmed with relevant key suppliers in 2017.
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Working together for a healthier world
®
Pfizer Inc.
235 East 42nd Street
New York, NY 10017-5755
(212) 733-2323
www.pfizer.com
© 2017 Pfizer Inc. All rights reserved.
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Admission Ticket
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 7:30 a.m., Eastern Daylight Time, on April 27, 2017.
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Vote by Internet
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Go to
www.investorvote.com/PFE;
or
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Scan the QR code with your smartphone.
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Follow the steps outlined on the secure website.
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Vote by telephone
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Within the USA, US territories & Canada, call toll free 1-800-652-VOTE (8683).
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Using a
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Outside the USA, US territories & Canada, call +1-781-575-2300. Standard rates will apply.
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