(Bloomberg) -- Pfizer Inc. boosted Chief Executive Officer Ian Read’s compensation for 2017 to $27.9 million, a 61 percent increase, to ensure he stays on the job.
Read’s pay included an $8 million special equity award that will vest if the drugmaker’s average stock return tops 25 percent for 30 consecutive trading days before the end of 2022, the company said Thursday in a filing. Read, who turns 65 in May, also must remain CEO through at least next March and not work for a competitor for a minimum of two years after that to be eligible.
The board approved the award because it’s a “compelling incentive” for him to keep running the firm, even though he’s eligible to retire, New York-based Pfizer said in the filing. He has accumulated $15.7 million under two pension plans. Shares of the company returned 16 percent last year, including reinvested dividends, trailing the 22 percent gain for the S&P 500 Health Care Index.
The drugmaker has faced pressure to make deals since its $14 billion purchase of cancer-treatment developer Medivation Inc. in 2016, with some analysts mentioning it as a potential suitor for Bristol-Myers Squibb Co. Pfizer is also weighing the future of its consumer business, which the firm could spin off or sell.
In January, the company halted research and development for new neuroscience drugs, including its work on Alzheimer’s and Parkinson’s diseases.
In addition to the retention award, Pfizer granted Read a $1.96 million salary, $2.6 million bonus and $13.1 million of equity awards that are linked to goals including stock price and adjusted operating income. He received $17.3 million for 2016.
Pfizer tweaked its compensation plan that year to let retirement-eligible executives convert certain equity grants into a different type of award that’s less affected by stock price declines than common shares.
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