by Peter Elkind and Jennifer Reingold
For Jeff Kindler, it was a humiliating moment. The CEO of Pfizer, the world's largest pharmaceutical company, had been summoned to the airport in Fort Myers, Fla., on Saturday, Dec. 4, 2010, for a highly unusual purpose: to plead for his job.
Three stone-faced directors, representing the company's board, sat inside a drab airport conference room as the CEO, trained as a trial lawyer, struggled to argue his most important case. Alerted to this meeting less than 24 hours earlier, Kindler detailed his accomplishments, speaking nonstop for the better part of an hour. He touted his bold reorganizations, praised his administration's sweeping cost reductions, and rhapsodized about his reinvention of Pfizer's crucial research-and-development operations.
But the three board members, Constance Horner, a former deputy secretary at the U.S. Department of Health and Human Services; George Lorch, an ex-CEO of Armstrong World Holdings; and Bill Gray, a former Philadelphia congressman, weren't there to debate the direction of the company. The board had spent a frantic week in an urgent investigation: A revolt had erupted against Kindler among a handful of senior managers, and the directors were trying to figure out what was going on. One possibility: an internal power grab. Another: a CEO who was unraveling.
As the meeting continued -- it lasted more than two hours -- it became clear that Kindler had little chance of saving his job. Perhaps, he finally said, it was time for him to resign. The directors, who seemed ready for this suggestion, told Kindler they were prepared to give him a far more generous settlement package if he didn't take the fight to the full board. Kindler agreed to think it over and flew home.
A day later, in an unusual Sunday night announcement, the 55-year-old CEO retired, effective immediately. Pfizer's press release offered a surprisingly candid explanation, which was inserted by Kindler himself: "The combination of meeting the requirements of our many shareholders around the world and the 24/7 nature of my responsibilities has made this period extremely demanding on me personally."
As revealing as it was, that statement only hinted at the turmoil inside Pfizer (PFE). Indeed, what has occurred at the company -- whose $68 billion in annual sales are built on blockbuster drugs such as Lipitor and Viagra -- is extraordinary. Once a Wall Street darling and corporate icon, Pfizer has tumbled into disarray. In the decade that ended with Kindler's departure, its stock price sagged from a high of $49 down to $17 and its drug pipeline dried up (problems the company continues to grapple with today). Pfizer lost its way, stumbling through a frantic series of zigzags in the hopes of finding new blockbusters to sustain its prodigious profits in the future.
Meanwhile, its managers descended into behavior that would do Shakespeare -- or Machiavelli -- proud. There was the ex-CEO who couldn't relinquish his power and quietly maneuvered to undercut two successors he had helped install. Then there was the human resources chief who divided the staff rather than uniting it. Most of all, there was Kindler himself, a bright man with some fresh ideas for reforming Pfizer but a person who agonized over decisions even as he second-guessed everybody else's actions. The story of Jeff Kindler's tumultuous tenure at Pfizer is a saga of ambition, intrigue, backstabbing, and betrayal -- all of it exacerbated by a board that allowed the problems to fester for years.
The full story of Kindler's downfall has never before been told. Fortune reported this article for four months, interviewing 102 people, including executives and directors who worked closely with him at Pfizer and at previous stages of his career. For their parts, both Kindler and the company say that they are bound by a confidentiality agreement they signed as part of Kindler's departure.
Kindler declined to speak about Pfizer, but a representative provided a written statement: "Pfizer is a great company I was privileged to serve for nine years. I am proud of what our team accomplished and delighted to see [new CEO Ian Read], together with the business and scientific leaders we brought together, continue to build on these achievements." In its own statement, the drug company told Fortune: "We thank Jeff Kindler for his many years of service to Pfizer," noting that "Jeff came into the industry at a tumultuous time and faced significant challenges such as patent expirations of some of our major products .… We wish Jeff well in all of his future endeavors."
In the end, the story of Jeff Kindler's time at Pfizer provides a window into the challenges facing a mammoth company in an essential industry -- and the people who aspire to govern it. Pfizer is an enterprise with the noble calling of easing pain and curing disease. Yet its leaders spent much of their time in the tawdry business of turf wars and political scheming.
Read more:
Three stone-faced directors, representing the company's board, sat inside a drab airport conference room as the CEO, trained as a trial lawyer, struggled to argue his most important case. Alerted to this meeting less than 24 hours earlier, Kindler detailed his accomplishments, speaking nonstop for the better part of an hour. He touted his bold reorganizations, praised his administration's sweeping cost reductions, and rhapsodized about his reinvention of Pfizer's crucial research-and-development operations.
But the three board members, Constance Horner, a former deputy secretary at the U.S. Department of Health and Human Services; George Lorch, an ex-CEO of Armstrong World Holdings; and Bill Gray, a former Philadelphia congressman, weren't there to debate the direction of the company. The board had spent a frantic week in an urgent investigation: A revolt had erupted against Kindler among a handful of senior managers, and the directors were trying to figure out what was going on. One possibility: an internal power grab. Another: a CEO who was unraveling.
As the meeting continued -- it lasted more than two hours -- it became clear that Kindler had little chance of saving his job. Perhaps, he finally said, it was time for him to resign. The directors, who seemed ready for this suggestion, told Kindler they were prepared to give him a far more generous settlement package if he didn't take the fight to the full board. Kindler agreed to think it over and flew home.
A day later, in an unusual Sunday night announcement, the 55-year-old CEO retired, effective immediately. Pfizer's press release offered a surprisingly candid explanation, which was inserted by Kindler himself: "The combination of meeting the requirements of our many shareholders around the world and the 24/7 nature of my responsibilities has made this period extremely demanding on me personally."
As revealing as it was, that statement only hinted at the turmoil inside Pfizer (PFE). Indeed, what has occurred at the company -- whose $68 billion in annual sales are built on blockbuster drugs such as Lipitor and Viagra -- is extraordinary. Once a Wall Street darling and corporate icon, Pfizer has tumbled into disarray. In the decade that ended with Kindler's departure, its stock price sagged from a high of $49 down to $17 and its drug pipeline dried up (problems the company continues to grapple with today). Pfizer lost its way, stumbling through a frantic series of zigzags in the hopes of finding new blockbusters to sustain its prodigious profits in the future.
Meanwhile, its managers descended into behavior that would do Shakespeare -- or Machiavelli -- proud. There was the ex-CEO who couldn't relinquish his power and quietly maneuvered to undercut two successors he had helped install. Then there was the human resources chief who divided the staff rather than uniting it. Most of all, there was Kindler himself, a bright man with some fresh ideas for reforming Pfizer but a person who agonized over decisions even as he second-guessed everybody else's actions. The story of Jeff Kindler's tumultuous tenure at Pfizer is a saga of ambition, intrigue, backstabbing, and betrayal -- all of it exacerbated by a board that allowed the problems to fester for years.
The full story of Kindler's downfall has never before been told. Fortune reported this article for four months, interviewing 102 people, including executives and directors who worked closely with him at Pfizer and at previous stages of his career. For their parts, both Kindler and the company say that they are bound by a confidentiality agreement they signed as part of Kindler's departure.
Kindler declined to speak about Pfizer, but a representative provided a written statement: "Pfizer is a great company I was privileged to serve for nine years. I am proud of what our team accomplished and delighted to see [new CEO Ian Read], together with the business and scientific leaders we brought together, continue to build on these achievements." In its own statement, the drug company told Fortune: "We thank Jeff Kindler for his many years of service to Pfizer," noting that "Jeff came into the industry at a tumultuous time and faced significant challenges such as patent expirations of some of our major products .… We wish Jeff well in all of his future endeavors."
In the end, the story of Jeff Kindler's time at Pfizer provides a window into the challenges facing a mammoth company in an essential industry -- and the people who aspire to govern it. Pfizer is an enterprise with the noble calling of easing pain and curing disease. Yet its leaders spent much of their time in the tawdry business of turf wars and political scheming.
Read more:
