Having seen its share price take a hammering following the termination of torcetrapib, the cholesterol tablet feted as a potential blockbuster, Pfizer is looking to appease its stockholders with a hike in its quarterly dividend.
The New York-based firm has raised its first-quarter 2007 dividend to $0.24 to $0.29, which is seen as a bid to appease shareholders after the declines the stock has suffered of late. The share price fell over 10% when the news about torcetrapib broke.
Kindler assumes chairman role as well
Pfizer also announced that chief executive Jeffrey Kindler would assume the additional duties of chairman with immediate effect, replacing Hank McKinnell, some two months ahead of schedule. Mr Kindler replaced Mr McKinnell as CEO in July, at a time when the latter was being heavily criticised for the firm’s relatively poor performance over the five years of his tenure.
"Substantially raising our dividend is an important step in meeting one of our key objectives: enhancing the total return for our shareholders while we transform our operations for long-term growth," Mr Kindler claimed.
However Mr Kindler's enthusiasm does not seem to be shared by Moody's Investors Service at the present, as the credit broker downgraded Pfizer’s long-term debt rating from the top level of AAa to Aa1, citing the decision to abandon torcetrapib and possible late-stage pipeline issues that could lead to increased financial risk.