{ "docId": "019dd923-622b-71dc-a6da-7792191b0575", "docSlug": "ca94acfa263b", "documentTitle": "Pfizer Inc. (PFE)", "authorId": "03_Starboard_Value", "authorName": "Starboard Value", "documentKindSlug": "conference-presentation", "documentKindLabel": "Conference presentation", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2024-10-01 00:00:00", "orientation": "landscape", "aspectRatio": 1.7777778, "pageNumber": 71, "pageCount": 74, "prevPage": 70, "nextPage": 72, "slideType": "thesis_headline", "function": "diagnose_problem", "density": "overcrowded", "nDataPoints": 4, "notes": "Uses a causal link diagram to show the impact of achieving the 38% return target on 2030 financial outcomes.", "elementsJson": [ "headline_text", "bullet_list", "process_diagram", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6da-7792191b0575/71", "deckHref": "/decks/019dd923-622b-71dc-a6da-7792191b0575", "deckJsonHref": "/decks/019dd923-622b-71dc-a6da-7792191b0575.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6da-7792191b0575#slide-71", "components": [ { "bbox": null, "kind": "callout", "text": "The Board is responsible for holding management accountable on improving its expected revenue return to at least 38%", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2b66-7100-896c-9fdb93fb069f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.64, "x": 0.18, "y": 0.7 }, "kind": "diagram", "text": "Achieving at least 38% expected 2030 revenue return... ... Would result in 2030 Sales of $79bn and Adj. EPS of >$4.25", "attrs": null, "subkind": "process", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7936bd45-77a9-4dd4-96da-eb26600eeb0b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.5, "w": 0.9, "x": 0.05, "y": 0.15 }, "kind": "list", "text": "We agree with management: “the operational measurement of success will be [Pfizer’s] ability to have a constant flow of breakthrough innovation”\nUnderlying Pfizer’s ability to produce consistent innovation is its ability to generate attractive revenue returns on its R&D and M&A investments\nManagement is allocating a substantial amount of shareholder capital\nTo-date, the Company has not achieved sufficient revenue returns on R&D and M&A\nThe Company is expected to generate revenue returns of just 15% compared to the peer median of 38%\nPfizer ranks worst-in-class among its peer group on expected gross revenue growth from 2023 to 2030 based on its cumulative R&D and M&A from 2019 to 2023\nCapital allocation and M&A is critically important to pharma companies – Pfizer has been worst-in-class\nThe Board is responsible for holding management accountable on improving its expected revenue return to at least 38%", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a39c5991-e1f0-441e-a605-ab65d2592cff", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "revenue returns: 38%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-2b66-7100-896c-a76fc90bc0bb", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"the operational measurement of success will be [Pfizer's] ability to have a constant flow of breakthrough innovation\" — Management", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2b66-7100-896c-a2cf6076e566", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.4, "x": 0.05, "y": 0.97 }, "kind": "source-note", "text": "Source: Public company filings, Wall Street Research, and Starboard estimates. (1) Excluding COVID.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "47caf760-a730-47a3-8047-2fd8fa36535d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.9 }, "kind": "title", "text": "The Board needs to hold management accountable for improving performance.", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9502884a-a496-432b-bfd5-026c01420f19", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.05 }, "kind": "title", "text": "The Board Needs to Hold Management Accountable For Achieving Sufficient Revenue Returns on R&D and M&A", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d1abb17c-cb69-4e28-b5f0-3fa9d98893cd", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "causal-chain", "slug": null, "matchId": "db4c5133-faa8-456e-a108-d798d59c49e0", "evidence": "The diagram at the bottom links the 38% return target to specific 2030 financial outcomes.", "confidence": 0.9 } ], "arcBeats": [ { "to": 74, "from": 61, "beatId": "2f655379-f0eb-4ab4-834d-dbd332abba28", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution (Provide relief)", "beatSlug": "problem-agitate-solution-solution-provide-relief", "evidence": "The document urges the board to take action to improve Pfizer's performance, including holding management accountable for improving returns on capital.", "position": 2, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [ { "to": 73, "from": 10, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "54ce6058-bed8-43c5-8780-84fb43f33c5e", "evidence": "The document highlights the significant losses in value that Pfizer has experienced due to its poor performance, and urges the board to take action to improve this.", "position": 0, "objective": "What are the consequences of not improving Pfizer's performance?", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" }, { "to": 73, "from": 3, "name": "Quick Win Big Bet", "slug": "47-quick-win-big-bet", "bestFor": "Transformation planning, 100-day plans, resource allocation", "matchId": "f6f940a6-6451-4a43-940f-82e2afbdbeb8", "evidence": "The document presents several potential solutions to improve Pfizer's performance, including improving its return on R&D investments and holding management accountable for improving performance.", "position": 1, "objective": "Can Pfizer achieve higher returns on capital?", "structure": "The Full List -> Quick Wins (Low effort, High impact) -> Big Bets (High effort, High impact) -> Sequenced Roadmap", "confidence": 0.6, "description": "Separate initiatives into immediate wins and longer-term strategic bets" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }