How Pfizer CEO Jeffrey Kindler earned his $14.9 million

I think one of the more curious parts of Pfizer CEO Jeffrey Kindler's $14.9 million 2009 pay package, the subject of much chatter this week on the Pharma blogs, is the $10,000 he got for financial consulting services, presumably to help figure out the best way to sock away all that money.

In fact, as salary voyeurism goes, Kindler's is prime meat.

Not only does he get personal use of a company jet, for instance, but the company "requires" that he use the company aircraft for personal travel, because of security issues. He also gets a car and driver for personal use, again so shareholders can rest assured he's safe.

It takes pages and pages of a company securities filing to explain and justify all the bells and whistles of Kindler's "annual incentive award," a complicated stew of stock options and deferred payments and plain old salary.

From all of this, Timothy P. Carney of the Washington Examiner found one juicy tidbit, which especially titillated industry bloggers.

It turns out Kindler's salary increase, from $1.57 million to $1.6 million, was based in part, the compensation committee suggested, on his success in making a deal with President Obama that protected the drug industry from some of the more onerous proposals of health care reform.

Praising Kindler as an effective lobbyist in, among other things, heading off legislation that would allow the importing of cheaper prescription drugs, the committee said: "These efforts included constructive participation in the U.S. legislative process to advance Pfizer's goals of achieving a more rational operating environment."

Or, he kept a finger in the dike against health care reform.

Indeed, a recent report by the Sunlight Foundation, a private nonprofit dedicated to more transparency in government, indicates Kindler's extensive role in negotiating a deal for the drug companies with the Obama administration and Senate Finance Committee Chairman Max Baucus.

It turns out Kindler's name turns up four times on last year's White House visitor logs.

The final deal Kindler helped craft promised $80 billion in cost cutting by the drug companies but blocked much more onerous reform measures for the industry, like lowering prescription drug prices through Medicare negotiations, re-importation of drugs from other countries with lower prices and quicker release of generics onto the market.

The cost-saving of such measures, if allowed to occur, could have been in the hundreds of billions of dollars, according to government analysis.

Kindler, as the pay committee says, did good.

The Sunlight Foundation reports Kindler and other drug company CEOs worked hand-in-hand in negotiating health care reform with Billy Tauzin, a former chairman of the House Committee on Energy & Commerce, who ended up with a lucrative job leading a pharmacy industry trade group after crafting a bill while in Congress that protected drug companies from Medicare drug price negotiations.

The foundation report slaps Obama especially hard for hypocrisy by including a video clip from an Obama campaign ad in which he criticizes Tauzin for playing cozy with the drug companies.

"The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies. And you know what, the chairman of that committee, who pushed the law through, went to work for the pharmaceutical industry making $2 million a year," candidate Obama says in the ad. "I want to put an end to the game-playing."

But of course President Obama went right on playing the game, with Tauzin and Kindler and all the other drug barons.

Kindler's salary definitely increased in 2009, although his overall compensation appeared to generally decline, depending on who does the calculating.

The Associated Press, using a formula it has devised for analyzing executive pay packages, reported that Kindler's overall compensation was actually down 7.6 percent from 2008.

In addition to the small salary increase, his performance bonus increased from $3 million to $3.5 million. But his long-term awards of stock options and restricted shares declined from 2008, AP reported.

Things are looking better for the Pfizer chief in 2010, though, with a new $1.8 million salary, as of April 1, a larger bonus and 50 percent more in long-term stock awards in the pay pipeline.

It's a lot of money, and it's very complicated.

So who can begrudge him $10,000 worth of personal financial planning advice?

This is the opinion of David Collins.