This case explores optimizing shareholder value as a goal in executive decision making. Over a span of nine years, three different Pfizer CEOs make crucial decisions meant to increase shareholder value. But the results are disappointing. To enable students to analyze these decisions, the case provides excerpts from four Chairman's letters to shareholders from the annual reports of Pfizer, followed by a description of the conditions behind each letter. In the 2000 annual report, then-CEO Bill Steere discusses Pfizer's rise to business visibility with the acquisition of Warner Lambert. In the year 2003 report, a new CEO Hank McKinnell discuss Pfizer's performance aims and its acquisition of Pharmacia, which gave it control of anti-arthritis drug Celebrex.
In the year 2005 report, McKinnell discuss his choice to keep Celebrex out there despite health dangers. In the 2006 report, new CEO Jeff Kindler barely mentions McKinnell's (controversial) early retirement and describes efforts to reform the business. Since 2000, Pfizer's great growth in assets through acquisitions hasn't translated into significant growth in net income or share price. In close, pupils are asked what Kindler should write in the letter to investors to start Pfizer's 2008 annual report.
Pfizer Letter from the Chairman (A) case study solution
PUBLICATION DATE: July 07, 2009 PRODUCT #: 110003-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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