UPDATE 3-Pfizer names Lorch chairman, raises dividend

* Lorch had been independent director since 2000

* Manufacturing chief to leave the company

* Raises quarterly dividend to 20 cts/share from 18 cts

* Shares edge 4 cents higher in extended trading (Adds analyst comment, head of manufacturing retirement)

By Bill Berkrot

NEW YORK, Dec 13 (Reuters) - Pfizer Inc PFE.N named board member George Lorch as nonexecutive chairman, a week after the abrupt departure of Chairman and Chief Executive Jeffrey Kindler from the world's largest drugmaker.

The announcement follows several high-profile management changes at Pfizer, although the exodus of executives may not be finished as it faces patent expirations for top-selling drugs such as cholesterol fighter Lipitor.

Pfizer also confirmed on Monday its head of manufacturing, Natale Ricciardi, is retiring after nearly 40 years with the company.

Lorch, 68, has served as an independent director since 2000 and had been chairman of the board’s compensation committee. Lorch is the former chairman and CEO of flooring manufacturer Armstrong Holdings.

The board elected former Gillette CEO James Kilts to head its compensation committee, although some industry observers had tipped Kilts as the front-runner for the chairman post.

“Lorch is as good as anyone else on the board,” said Charles Butler, an analyst at Barclays Capital. “But Pfizer has to change its culture to produce new drugs and that will depend on who is hired in R&D.”

Kindler quit suddenly last Sunday night with no warning to shareholders that such a change was in the offing, although some investors welcomed the change. He was immediately replaced by 32-year Pfizer veteran Ian Read, who had been head of global pharmaceuticals. [ID:nN05154682]

Kindler, who was in the top job for four-and-a-half years, cited a need to recharge his batteries as a reason for his sudden retirement at age 55.

Ricciardi’s replacement is expected to be named shortly, company spokesman Ray Kerins said, adding he would remain to help with the transition through the first quarter of 2011.

Pfizer’s shares had fallen about 27 percent during his tenure, which was marked by last year’s $67 billion acquisition of rival Wyeth. The stock was little changed in extended trading on Monday, rising 4 cents to $17.23.


The company said in a separate statement it was raising its quarterly dividend to 20 cents per share from 18 cents, payable March 1, 2011, to shareholders of record at the close of business on Feb. 4.

Pfizer slashed its dividend last year to help finance the Wyeth deal. In December 2008, the quarterly dividend was 32 cents, one of the highest in the industry.

Analysts have said raising the dividend was one of the many moves Pfizer could make to help get its shares moving in the right direction. Read repeated that future dividend increases were likely.

Morningstar analyst Damien Conover expects Read to eventually take over the joint roles of CEO and Chairman.

“Whenever a new CEO comes in, they tend to eventually take over the chairman’s role as well,” he said. “I would anticipate that this will happen again.”

Unlike European pharmaceuticals companies, which typically split the role of chairman and chief executive, U.S. drugmakers tend to allow the CEO to hold both posts.

“George Lorch has been a valuable, independent voice on the Pfizer board for over 10 years and he is ideally suited to lead the board as nonexecutive Chairman,” Constance Horner, the board’s lead independent director, said in a statement.

Horner relinquished her role of lead independent director, given the board’s election of an independent nonexecutive chairman. (Reporting by Bill Berkrot; additional reporting by Toni Clarke in Boston; editing by Michele Gershberg, Andre Grenon)