Ian Read, former CEO of Pfizer Inc., gestures during his speech during a panel discussion at the World Economic Forum in Davos, Switzerland, January 17, 2017.
Simon Dawson | Bloomberg | Getty Images
Activist Starboard Value charged Pfizer threatened legal action against the company's former CEO and CFO in an attempt to get them to distance themselves from the investor's nascent turnaround campaign at the pharmaceutical giant.
Starboard managing member Jeff Smith said in a letter to Pfizer's board on Thursday that the company or its advisers had also “threatened” to claw back the past compensation of former chief executive Ian Read and former chief financial officer Frank D'Amelio to cancel their unvested shares.
Smith called on the board to establish a special committee to investigate the matter, describing it as “highly inappropriate, patently unethical and a significant breach of fiduciary duties.”
The risk of legal liability was a driving factor in Read and D'Amelio's public support of Pfizer CEO Albert Bourla late Wednesday night, said a person familiar with interactions between the company and the two former executives.
Pfizer shares fell overnight on news of the two executives' split, opening down around 2.5% in Thursday morning trading.
Starboard's Smith said that when the activist reached out to the two executives, both expressed “concern” about Pfizer's direction under Bourla and offered to help Starboard with its turnaround campaign.
Starboard did not respond to CNBC's request for comment. A Pfizer spokesman declined to comment.
Smith and Bourla are scheduled to meet in person next week, Smith said, confirming earlier reports. The agenda for the discussion could not be learned, but people familiar with Starboard's thinking previously said Pfizer's focus on disciplined cost structure and mergers and acquisitions had suffered under Bourla's leadership.
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