M. Anthony Burns has been a director of Pfizer (NYSE: PFE) since 1988 when the company went through several disastrous M&A events. Since then he’s sat through the ouster of two CEOs.  The former CEO of Ryder System Inc. (NYSE:R) currently serves the Audit,  Corporate Governance Committee and Executive committees.

Fresh blood is desperately needed to lift Pfizer out of its slump.  In a mind-boggling move,  the board named Ian Read, Pfizer’s head of global pharmaceutical operations, as the replacement for CEO Jeffrey Kindler, who was ousted last month. The board did not even pretend to go through a CEO search and instead settled on an executive who had been with the company through some of its most troubled times. The board sure thought well of Kindler in 2009. It awarded him with compensation of $14.9 million. He made $15.5 million in 2008 and $13.1 million in 2007.

Pfizer’s board includes William C. Steel, Pfizer’s CEO until 2000. Steel has helped select his own successors. Other board members including Burns have encouraged those actions by keeping Steel on the board although he is its oldest member at 73.

Pfizer paid $2.3 billion to settle a Justice Department probe into accusations of off-label marketing of painkiller Bextra, which is now off the market, the psychiatric drug Geodon, antibiotic Zyvox and anti-epileptic drug Lyrica. It was the largest health care fraud settlement and the largest criminal fine of any kind ever. The board made no major changes in management after the incident.

Pfizer’s signature transaction during Burn’s tenure was the buyout of Wyeth, a $68 billion deal which saddled Pfizer with $22.5 billion in debt. Pfizer cut its dividend once the deal closed.  Many observers viewed the merger as a way for Pfizer to cut costs. John Jannarone wrote in The Wall Street Journal’s Heard on the Street column that buying Wyeth didn’t “solve the drug giant’s underlining problem: It still is struggling to develop new blockbuster drugs in-house.” Pfizer did fire several thousand workers and estimated that it saved more than $2 billion in costs due to the tie-up.

Burns bears a great deal of responsibility for the mismanagement of the company while he has been the senior director. He was paid $181,000 last year.

The market has punished Pfizer for its missteps. Its shares are off 25% over the last five years while the DJIA is up 10%.

Douglas A. McIntyre

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