Hank McKinnell, who built Pfizer into the world’s largest drug maker, was replaced as chief executive late on Friday after disappointing shareholders and raising questions on Wall Street about his management style.
Jeffrey Kindler, the company’s general counsel, will replace Mr McKinnell, who has spent 35 years at the group.
Mr McKinnell, 63, was set to retire as chief executive and chairman in 2008. He will remain as chairman until February.
Mr Kindler, 51, takes over Pfizer as the industry faces pricing, regulatory and governmental pressures.
Mr Kindler said: “The pharmaceutical industry is undergoing unprecedented change. In response we will transform virtually every aspect of how we do business, focusing on actions that create and sustain value for our shareholders.”
Pfizer is restructuring in an effort to become more efficient. It is trying to keep its biggest drug Lipitor, for cholesterol, growing in the face of intense competition, while looking to its pipeline and acquisitions to reignite profit growth stunted by patent expiries on key drugs.
The appointment of Mr Kindler, whose experience includes stints at McDonald’s and General Electric, also reflects other groups’ selection of lawyers in chief executive roles as litigation and regulation become more complex.
Mr Kindler’s selection also raises questions about the future of two other senior Pfizer executives who competed against him to succeed Mr McKinnell. The losers – David Shedlarz, vice chairman and chief strategist, and Karen Katen, head of Pfizer’s drug business – were better known outside the company.
Stanley Ikenberry, a director at Pfizer, said: “The board is confident that Jeff will do a superb job in leading the company and representing it to our shareholders and key stakeholders. His respect for colleagues reflects one of Pfizer’s most important values. Jeff is a leading advocate of change.”
Mr McKinnell irritated investors recently as the share price neared eight-year lows and he struggled to guide Pfizer through tough times. In addition, Pfizer’s internal atmosphere became increasingly more prickly.
David Risinger, analyst at Merrill Lynch, said in a report: “Investors have been frustrated that McKinnell has run the company in somewhat of an autocratic fashion and has denied some of the company’s problems. A new CEO should be perceived positively because investors want to see positive change.”
Mr McKinnell helped lead Pfizer’s 10-year strategy of chasing size through acquisitions to diversify the company and help it weather the expiry of patents.
But since he became chief executive in 2001, he has fallen short of his promise to make Pfizer one of the most valued companies for shareholders.