NEW YORK - Investment firm Starboard Value LP, a significant shareholder of pharmaceutical giant Pfizer Inc. (NYSE: NYSE:PFE), has requested the establishment of a special committee to investigate alleged coercive actions taken by Pfizer against former executives. In a letter dated today, addressed to Pfizer's Board of Directors, Starboard expressed concerns about recent events involving former CEO Ian Read and former CFO Frank D'Amelio.
Starboard's letter claims that Pfizer, or representatives thereof, purportedly threatened legal action and financial repercussions against Read and D'Amelio unless they publicly supported current CEO Dr. Albert Bourla. The investment firm, which holds a considerable stake in Pfizer, has called these actions unethical and a potential breach of fiduciary duty.
Jeffrey C. Smith, Managing Member of Starboard, emphasized the firm's commitment to constructive engagement with Pfizer's management and board, despite the troubling allegations. The letter comes ahead of a scheduled meeting on Wednesday, October 16, 2024, where Starboard plans to present its views and discuss Pfizer's future direction.
Starboard is known for its active investment approach, often working closely with company boards and management to unlock shareholder value. The firm's recent communication underscores its role as an advocate for shareholder interests and corporate governance standards.
The letter to Pfizer's Board insists on immediate action to investigate the claims and hold responsible parties accountable, if necessary. This request for a special committee aims to clarify the extent of the alleged behavior and its authorization.
This news is based on a press release statement from Starboard Value LP. The situation is developing, and further details may emerge following the upcoming meeting between Starboard and Pfizer's representatives.
In other recent news, Pfizer Inc. has declared a Q4 cash dividend of $0.42 per share, marking their 344th consecutive quarterly payment, a fact closely watched by investors. Meanwhile, the company has seen a drop in U.S. sales of their respiratory syncytial virus (RSV) vaccine, Abrysvo, due to regulatory decisions narrowing the eligible age group for vaccination. However, CEO Albert Bourla remains optimistic about its performance in the U.S. market.
In the wake of these developments, activist investment firm Starboard Value has reportedly acquired a stake of approximately $1 billion in Pfizer and is set to meet with Pfizer's CEO to discuss potential changes to improve the company's performance. Financial research firm CFRA has revised upwards the earnings forecasts for Pfizer and upgraded the price target for Pfizer shares to $31.00.
These recent developments provide a snapshot of Pfizer's strategic decisions and financial performance. The company's commitment to shareholder returns through dividends and the potential influence of Starboard Value on the company's future direction are key points of interest for investors.
InvestingPro Insights
As Pfizer faces scrutiny from Starboard Value LP, it's crucial to consider the company's financial health and market position. According to InvestingPro data, Pfizer's market capitalization stands at $171.08 billion, reflecting its significant presence in the pharmaceutical industry. Despite recent challenges, the company maintains a strong dividend yield of 5.56%, which aligns with an InvestingPro Tip highlighting Pfizer's commitment to paying significant dividends to shareholders.
Interestingly, while Pfizer has not been profitable over the last twelve months, analysts predict the company will return to profitability this year. This forecast is supported by another InvestingPro Tip indicating that net income is expected to grow this year. These insights suggest that despite current governance concerns, Pfizer's underlying business may be poised for improvement.
It's worth noting that Pfizer has maintained dividend payments for 54 consecutive years, demonstrating a long-term commitment to shareholder returns. This consistency could be a factor in investor confidence as the company navigates the current situation with Starboard Value LP.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 11 more InvestingPro Tips available for Pfizer, which could provide valuable context for understanding the company's position amidst these governance challenges.
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