Ian Read, former CEO of Pfizer Inc., gestures as he speaks during a panel session at the World Economic Forum in Davos, Switzerland, on January 17, 2017.
Simon Dawson | Bloomberg | fake images
Starboard Value activist charged Pfizer of threatening litigation against the company's former CEO and CFO to get them to break ranks with the investor's nascent turnaround campaign in the pharmaceutical giant.
Starboard managing member Jeff Smith said in a letter Thursday to Pfizer's board that the company or its advisers also “threatened” to claw back past compensation from former CEO Ian Read and former CFO Frank D' Amelio and cancel his unpurchased shares.
Smith called for the board to convene a special committee to investigate the matter, describing it as “highly inappropriate, flagrantly unethical and a significant breach of fiduciary duties.”
The risk of legal liability was a driving factor in Read and D'Amelio's public endorsement of Pfizer CEO Albert Bourla on Wednesday night, said a person familiar with interactions between the company and the two former executives.
Pfizer shares fell overnight as news of the two executives' split emerged, opening down about 2.5% in Thursday morning trading.
Starboard's Smith said that when the activist approached the two executives, both expressed “concerns” about Pfizer's direction under Bourla and offered to help Starboard in its turnaround campaign.
Starboard did not respond to CNBC's requests for comment. A Pfizer spokesman declined to comment.
Smith and Bourla are scheduled to meet in person next week, Smith said, confirming previous reports. The agenda for the discussion was not available, but people familiar with Starboard's thinking previously said Pfizer's focus on a disciplined cost structure and mergers and acquisitions had suffered under Bourla's leadership.
