Pfizer Inc. (PFE) Earnings Call Transcript & Summary

Hello, and welcome to Pfizer's 2020 Annual Meeting of Shareholders. Please note that today's meeting is being recorded. During the meeting, we'll have a question-and-answer session. [Operator Instructions] It is now my pleasure to turn today's meeting over to Margaret Madden, Pfizer's Corporate Secretary. Ms. Madden, the floor is yours.

Good morning. I am Maggie Madden, Pfizer's Corporate Secretary. Welcome to this year's Annual Meeting of Shareholders. Today's meeting will be held in a virtual-only format due to public health concerns related to COVID-19 and to support the health and well-being of our shareholders and other meeting participants. I am joined today via audio connection by Albert Bourla, Pfizer's Chairman and Chief Executive Officer; Pfizer's executive leadership team and the Board of Directors. We also have the inspectors of election with us today, [ John Leno ] and Donna Bent from Computershare. In order to make sure we have fair play for all shareholders, it is important that you abide by the rules of our meeting detailed in the meeting procedures available on the virtual meeting website. Finally, during this meeting, we will provide projected financial and other forward-looking information, including about our COVID-19 efforts, which is subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. For additional information on these factors, I refer you to the Item 1A, Risk Factors section in our latest annual report on Form 10-K, which is filed with the U.S. Securities and Exchange Commission and accessible via www.pfizer.com as well as our subsequent filings with the SEC. These forward-looking statements speak only as of the date of this meeting, and we undertake no obligation to update or revise any of these statements. In addition, during this meeting, we may discuss our financial measures that were not prepared in accordance with the U.S. generally accepted accounting principles, GAAP. You can find the reconciliation of those measures to the most directly comparable U.S. GAAP financial measures in our 2019 financial report, which is included as an appendix to our 2020 proxy statement, and as Exhibit 13 to our 2019 annual report on Form 10-K. Now please join me in welcoming Pfizer's Chairman of the Board and Chief Executive Officer, Albert Bourla.

Thank you, Maggie. Good morning, everyone, and welcome to this year's annual meeting. I hope you and your families are doing well and staying safe during this difficult time. As Maggie mentioned, today's meeting will be held in a virtual-only format due to public health concerns related to COVID-19 and to support the health and well-being of our shareholders and other meeting participants. I will start with a few thoughts on the COVID-19 pandemic and our company's priorities during the current crisis. It is both a great privilege and a great responsibility for our colleagues to serve patients at this moment in time. We have an opportunity to demonstrate to society the power of our science and the quality of our character. Our efforts to combat the virus have been guided by 3 priorities. Our first priority is to protect the wellness and safety of our colleagues. Those colleagues who do not need to be on-site to perform their jobs have been working from home. And our digital team has done a tremendous job keeping us all connected. In addition, our occupational health and wellness team is working 24/7 to protect the health and safety of the colleagues who do need to come to work. Our second priority is to ensure the continued supply of our medicines and vaccines to patients around the world. With the burden on hospitals happening around the globe and expected to increase, the continued supply of our medicines is now more critical than ever. And I'm pleased to say that the Pfizer global supply team has done a tremendous job keeping our manufacturing sites operational without significant supply disruptions. Our third priority is to contribute to society medical solutions to this pandemic that may save lives. And we believe we have the resources, expertise and staffing to potentially have a meaningful impact. In this regard, I'm pleased to share that we have made advances on multiple fronts. On March 13, we released a 5-point plan that was a call to action across the industry for unprecedented collaboration to combat COVID-19. The plan includes Pfizer promises to share our tools and insights on an open source platform; to marshal our medical and scientific experts to help find solutions as soon as possible; to apply our drug development expertise to support the most promising candidates the industry brings forward; and to offer our manufacturing capabilities to support others in rapidly getting potential life-saving breakthroughs to patients; and last but not least, to improve future rapid response, so we can act immediately when future epidemics surface. We recently announced that Pfizer and BioNTech have entered into a global collaboration agreement to codevelop BioNTech's potential first-in-class mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection. We plan to jointly conduct the clinical trials for the COVID-19 vaccine candidates initially in the U.S. and Europe across multiple research sites. And we intend to initiate this Phase I clinical trials within the next few days, assuming regulatory clearance. Pfizer and BioNTech will also work jointly to commercialize the vaccine worldwide, excluding China, which is already covered BioNTech's collaboration with Fosun Pharma. And we'll do that upon, of course, regulatory approval. We estimate that there is potential to supply millions of vaccine doses by the end of 2020, subject to technical successes of our development program and approval of regulatory authorities, and then to rapidly scale up the capacity to produce hundreds of millions of doses in 2021. Based on the results of initial screening assays of antiviral compounds, our researchers have confirmed a lead molecule and analogs that are potent inhibitors of the SARS-CoV-2 3C-like protease. Preliminary data also suggests the lead protease inhibitor shows antiviral activity against SARS-CoV-2. We are now performing preclinical confirmatory studies while also investing in materials that aim to accelerate the potential clinical study to third quarter 2020, subject to positive completion of the preclinical confirmatory studies. We also have several Pfizer medicines that are the subject of novel results projects being studied for the potential treatment of patients with COVID-19. I want to thank all of our R&D colleagues, who are working tirelessly and often late into the night to find potential vaccines and treatments that could bring an end to this pandemic. I also want to thank the Board for its counsel and support during this challenging time. Each of Pfizer's Directors brings a unique perspective and set of experiences to our Board. And their thoughtful insights have been invaluable in helping our company appropriately navigate this pandemic. At this time, I will be able to discuss our 2019 performance. I'm pleased to report that 2019 was a successful, purpose-driven and transformational year for Pfizer. During the year, we reached more than 0.5 billion patients with our medicines and vaccines. This included approximately 69 million people who are immunized with Pfizer vaccines, 40 million people treated with our anti-infectives, 4.3 million people who received our cancer therapies and 4 million who used our anti-inflammatory medications. Each represent an increase over the number of patients we reached in 2018. In terms of our pipeline, we received 10 regulatory approvals for either new drugs or new indications and progressed many of our key R&D pipeline candidates in clinical studies. Today, our pipeline is filled with potential breakthroughs being evaluated to treat a wide range of conditions, including breast, prostate, colorectal and other cancers, type 2 diabetes, alopecia and NASH; vaccines for RSV and C. diff; and novel gene therapies for hemophilia A and B and Duchenne muscular dystrophy. During 2019, we also took a series of actions designed to strengthen each of our businesses and transform Pfizer into a singular-focused, science-driven company. Over the course of 1 month, we announced the planned combination of our Upjohn division and Mylan to create the largest specialty generic company; completed the acquisition of Array BioPharma, a commercial stage biopharmaceutical company focused on targeted small molecule medicines to treat cancer and other diseases of high unmet need; we created the joint venture between Pfizer Consumer Healthcare and GlaxoSmithKline to form the world's largest Consumer Healthcare business; and completed the acquisition of Therachon, a clinical stage biotechnology company focused on rare diseases. We achieved all this while delivering solid financial results. Our full year 2019 performance was highlighted by 8% operational growth for our Biopharmaceutical Group, which will become the revenue engine of the new Pfizer following the expected separation of Upjohn. Once again, our Biopharmaceuticals Group outstanding growth was driven primarily by the continued strong performances of all our key growth drivers. This include IBRANCE, XTANDI, Eliquis, Xeljanz and VYNDAQEL. Biopharma also generated 14% operational growth in emerging markets in 2019. I would point out that Biopharma's 2019 growth came from volume increases, not pricing. In fact, pricing had a negative 2% impact on Biopharma's results. Full year revenues for our Upjohn business were down 16% operationally to $10.2 billion. The key headwind during the year was the advent of generic competition for Lyrica in the U.S., which was partially offset by 7% operational growth in China. As a result of all we achieved in 2019, following the expected close of the Upjohn-Mylan transaction, which we now expect to close in the second half of 2020, we believe Pfizer will be better positioned to serve patients and deliver consistent growth. We will be a science-based company with a singular focus on innovating biopharmaceuticals. We will retain our entire pipeline and all the key growth drivers currently in our product portfolio. And we expect the anticipated new wave of compounds currently in the pipeline will help support long-term growth. In fact, we expect the new Pfizer's 5-year revenue compound annual growth rate to be at least 6% on a risk-adjusted basis and for that growth to begin immediately upon the close of the transaction between Upjohn and Mylan. We expect adjusted EPS to grow even faster. Before I close, I would like to say how incredibly proud I am of my fellow Pfizer colleagues around the world. During this extraordinary challenging time, they have truly lived their commitment to our purpose, breakthroughs that change the patients' lives, which has taken on an even greater importance, given the global impact of COVID-19. And they have done so while maintaining our company-wide commitment to the highest standards of quality, compliance and integrity. Thank you for your continued confidence and support of the work we do every day. We will now move to the business of the meeting. So now it's time to proceed with the business portion of the meeting. We are scheduled to end by 10:00, and we want to maintain an informative, productive and orderly business meeting, marked by fairness to all shareholders. Therefore, we will follow the order of business available on the virtual meeting website. And we will get right to the first item of business, a declaration of quorum. Notice of this meeting was given to all shareholders of record as of February 25, 2020. Shares representing at least 84.7% of the votes entitled to be cast at this meeting are present here today, either in person or by proxy. This percentage represents a quorum. We now move to the next order of business, items requiring your vote. We have 9 voting items in all, 3 that we address at every annual meeting, 5 proposals from shareholders and a vote on the election of -- to the Board of an additional director nominee, Susan Desmond-Hellmann. Dr. Desmond-Hellman was elected to the Board subsequent to the filing of our 2020 proxy statement and is, therefore, a separate ballot item. Each item will be open for questions and discussions. To ensure fair play for all shareholders, it is important that you follow the meeting procedures available on the virtual meeting website in submitting a question or comment. Please focus your questions or comments only on the voting item being discussed. Questions will be answered in the order received, and we will identify the shareholder by name. Similar questions will be grouped and answered collectively. There will be a general question-and-answer period later in the meeting. We have a lot of business to transact today. And we will reserve the right to move on to other questions or comments if a question or comment is out of order or has been substantially answered previously. In a moment, I will officially open the polls. Please note that if you are a registered shareholder or have preregistered to vote using a legal proxy, you can still vote on all of the proposals that are included in the proxy statement and supplement to the proxy statement. If you have not yet voted or would like -- but would like to do so or you have already voted but would like to change your vote, please use the online portal to vote yourselves using your control number. I declare the polls open as of 9:18 Eastern a.m. -- Eastern Daylight Time on April 23, 2020. The polls will close today following the presentation of the items of business. So we now turn to the first voting item, the election of directors. This year, the Board has nominated 14 individuals in, all to serve 1-year terms, all ending at our next Annual Meeting of Shareholders. 13 were included in our proxy statement and will be voted on as part of Item 1. And one additional nominee was included in the supplemental proxy filing and will be voted on shortly as part of Item 9. You will find their extensive backgrounds in our proxy statements and supplement to the proxy statement. In addition to me, the director nominees in Items 1 and 9 are: Ronald Blaylock, Don Cornwell, Susan Desmond-Hellman, Joseph Echeverria, Scott Gottlieb, Helen Hobbs, Susan Hockfield, James Kilts, Dan Littman, Shantanu Narayen, Suzanne Nora Johnson, James Quincey and James Smith. The Board recommends that you vote for all director nominees. Maggie, are there any questions or comments concerning any of the nominees at this time?

We have -- there are no questions at this time.

Okay. Thank you, Maggie. Then we will now move to the next voting item, the KPMG ratification. Item 2 is to ratify the selection of KPMG LLP as the company's independent registered public accounting firm for 2020. Two representatives from KPMG are participating by audio connection with us today: Paul Knopp and Greg Brunner. The Audit Committee of the Board of Directors has done a thorough job of reviewing the performance of KPMG in 2019 and has selected the firm as Pfizer's independent registered accounting firm for the year 2020. The Board has ratified this selection and recommends that you vote for this proposal. Maggie, are there any questions or comments on this voting item?

There are no questions at this time.

Thank you, Maggie. We now move to our next item, item #3. Item #3 is a management proposal asking our shareholders to cast an advisory vote to approve the compensation of our company's named executive officers identified in the summary compensation table in the executive compensation section of the proxy statement. While this advisory vote is nonbinding, the Compensation Committee and the entire Board of Directors will review the results of the vote. And consistent with Pfizer's record of responsiveness, we will consider the feedback of shareholders and take that feedback into account in future determinations relating to our executive compensation program. Accordingly, the Board recommends a vote in favor of the resolution to approve on an advisory basis the compensation of the company's named executive officers as stated in the proxy statement. Maggie, are there any questions or comments on this voting item?

There are no questions on this item, Albert.

Thank you. We now move to our next item, voting item 4, a shareholder proposal regarding right to act by written consent. This proposal, submitted by Kenneth Steiner of Great Neck, New York, requests that our Board of Directors undertake the steps necessary to permit a written consent by shareholders. Mr. James McRitchie is connected by audio and representing Mr. Steiner. Mr. Ritchie, the floor is now yours for 3 minutes to move the proposal forward for discussion. Operator, please open the line for Mr. McRitchie.

Is the line open?

Yes, it is.

Okay. This is Jim McRitchie on behalf of Ken Steiner, proposal #4, right to act by written consent. Shareholders request our Board take such steps necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote are present and voting. Hundreds of major corporations enable shareholder action by written consent. Taking action by written consent in place of a meeting allows shareholders to raise important issues outside the normal annual meeting cycle. Hundreds of major corporations enable shareholder action by written consent. This topic won majority shareholder support at 13 large companies in a single year, including 67% at both Allstate and Sprint, 63% at Cigna. In 2019, the topic would have received even higher votes if more shareholders had access to independent proxy voting advice. The right for shareholders to act by written consent is gaining acceptance as a more important right than the right to call a special meeting. This also seems to be the conclusion of the Intel shareholders vote at the 2019 meeting. Directors at Intel apparently thought they could divert shareholder attention away from shareholder written consent by making it easier for shareholders to call a special meeting. However, Intel shareholders increased their support for written consent in 2019 compared to 2018. Written consent also won 45% at the Bank of New York Mellon in 2018. In response, the bank enacted written consent in 2019. Written consent won 44% at Capital One and 56% in 2019. Written consent also won 47% at United Rentals and 51% in 2019. Please vote yes, right to act by written consent, proposal #4. Thank you.

So the proposal has been moved. Thank you very much, Mr. McRitchie. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement. Now Maggie, are there any questions or comments on this voting item?

There are no questions on this item.

Thank you very much. So then we can move to voting item 5, enhancing proxy access. The next proposal was submitted by John Chevedden of Redondo Beach, California. The proponent requests that the Board modify its proxy access by low provisions and take the steps necessary to enable as many shareholders as needed to aggregate their shares to equal of 3%. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement. So Mr. James McRitchie is also representing Mr. Chevedden. So operator, please open once more the line of Mr. McRitchie so that he can move this proposal. Mr. McRitchie, are you -- okay. Thank you very much.

Has the line been opened?

Yes, it is. Please go ahead.

All right. Proposal #5, make shareholder proxy access more accessible. This is from John Chevedden. Shareholders request our Board take steps necessary to enable as many shareholders as may be needed to aggregate their shares to equal 3% of our stock owned continuously for 3 years in order to enable shareholder proxy access with the following provision: Nominating shareholders and groups must have owned at least 3% of the outstanding shares of common stock at the company continuously for a period of at least 3 years. Such shareholders shall be entitled to nominate a total of up to 25% of the number of authorized directors. Proxy access for shareholders enables shareholders to put competing director candidates on the company ballot to compete with the management's candidates. A competitive election is good for everyone. This proposal can help ensure that our management will nominate directors with better qualifications in order to avoid giving shareholders a reason to exercise their right to use proxy access. Under our current restricted proxy access process, if 20 shareholders combined hold $6 billion of Pfizer stock and then are $1 short of owning 3% of the company, they are totally disqualified from nominating a director by using proxy access. They cannot ask a 21st shareholder to join their ranks. The largest Pfizer shareholders can be the least likely shareholders to use shareholder proxy access to nominate directors since they may seek contracts for retirement planning and services. There is a growing awareness of this reality. Under this proposal, the number of shareholders who participate in the proxy access director nomination process would still be modest due to the administrative burden on shareholders to qualify. Additionally, the administrative burden on shareholders attempting to use the dense Pfizer rules on shareholder proxy access could lead to a number being disqualified due to minor administrative errors. Please vote yes, make shareholder proxy access more accessible. That's proposal #5. Thank you very much.

So the proposal #5 has been moved. Thank you very much, Mr. McRitchie, for your comments and also for staying on time both for the cases you move the proposals. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement. Maggie, are there any questions or comments on this voting item?

There are no questions or comments on this item.

Thank you very much. We will now move to the next voting item, voting item 6, a shareholder proposal regarding a report on lobbying activities. This proposal was submitted by Oxfam America, Inc., Washington, D.C. and other co-filers and requests that Pfizer prepare a report updated annually relating to the company's lobbying activities. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement. Mr. Nicholas Lusiani is connected by audio, representing Oxfam America. Mr. Lusiani, the floor is now yours for 3 minutes to move the proposal forward for discussion. Operator, can you please open the line for Mr. Lusiani?

Good morning, Dr. Bourla. Do you copy?

Yes, absolutely, Mr. Lusiani. Please go ahead.

Excellent. Dr. Bourla, members of the Board, fellow shareholders, good morning. My name is Niko Lusiani. And on behalf of Oxfam America and other co-filers, I'm happy to move item #6. Pfizer regularly ranks as a top lobbying spender among drugmakers in Washington and state capitals and internationally. A more comprehensive and objective lobbying disclosure regime will help shareholders to better assess the risks and the benefits associated with the company's participation in the public policy process. We are encouraged by Pfizer's recent steps to incrementally improve in this matter. Yet disclosure in our view on the direct and indirect lobby spend remains patchy, subjective and selective. The biggest risks to investors, we believe, lie in the shadows, where the company has chosen not to disclose. In particular, more comprehensive disclosure is needed around expenditure on trade associations, social welfare organizations and lobbying at state capitals and capitals abroad. This will allow investors and company officials to forecast what significant reputational and ultimately financial damage may possibly accrue. In particular, long-term value creation can be harmed from value misalignments between Pfizer's general policy positions and the actual direct and indirect lobbying efforts. Examples on 3 of the defining issues of our time. Drug pricing, reputable media outlets have highlighted Pfizer's commitment to support policies to lower the cost of medicines while simultaneously funding trade association PhRMA's opposition to initiatives toward this aim. On climate change, Pfizer professes to believe in addressing it yet remains a number -- excuse me, a member of the U.S. Chamber of Commerce, which fought to undermine the Paris climate accord, and ALEC, which downplays the science around climate change. Third, on the COVID-19 crisis, we welcome Pfizer's commitment to unprecedented collaboration to combat the disease. Yet the Chamber of Commerce lobbied the White House against the administration's use of the Defense Production Act, one key tool to enable the public to quickly accelerate collaboration in the production of necessary medical tools. Alongside these lobbying misalignment risks, Pfizer's tax lobbying also may pose its own set of risks. Pfizer and many trade associations spent millions to lobby for tax cuts in 2017, leading to an estimated $2.8 billion in U.S. tax savings in 2018. This short-term gain, we're afraid, will come at the expense of the company being seen as a prime backer of an unpopular tax reform with an unsustainably low effective tax rate. As a result, we believe the company -- we're afraid the company may face serious reputational, regulatory, audit or other financial risks in the years to come. Many peer companies, including various U.S. pharmaceutical companies, now recognize that greater lobbying transparency allows them to engage more with investors about the risks and benefits of public policy and have taken commensurate steps. Our proposal would work to create a more objective and comprehensive disclosure regime, one which would place Pfizer alongside its peers. And so we urge shareholders to support item 6. Over to you.

Thank you very much. The proposal has been moved. And thank you very much also for your comments and for staying on time, Mr. Lusiani. As I mentioned before, the Board of Directors opposes this proposal for the reasons set forth in the proxy. So let's see, Maggie, are there any questions or comments on this voting item?

There are no questions or comments on this item.

Thank you very much. So that means that we can now move to the next voting item, voting item 7, shareholder proposal again regarding independent share policy. The next proposal, submitted by the Sisters of St. Francis of Philadelphia of Aston, Philadelphia and other co-filers, request that our Board of Directors adopt as policy and amend the bylaws as necessary to require the Chair of the Board of Directors, whenever possible, to be an independent member of the Board. This policy would be phased in for the next CEO transition. The Board of Directors opposes this proposal for the reasons set in the proxy statement. Mr. Thomas McCaney is representing the Sisters of St. Francis of Philadelphia and the other co-filers and is connected by audio. Mr. McCaney, the floor is now yours for 3 minutes to move the proposal forward for discussion. Operator, please open the line for Mr. McCaney, so he can move his proposal.

Thank you. Can I be heard?

Yes, very much. You can be heard very clearly. Please go ahead.

Great. Thank you. Good morning, Mr. Chairman, members of the Board and fellow shareholders. My name is Tom McCaney, and I am one to present proxy item #7 on behalf of the Sisters of St. Francis of Philadelphia and co-filers, Miller/Howard Investments and Dignity Health. This shareholder proposal requests the company adopt the policy to require the Chair of the Board of Directors to be, whenever possible, an independent member of the Board. In its statement in opposition to the proposal, Pfizer justifies combining the roles of Chair and CEO by touting the designation of a lead independent director. While potentially adding valuable assistance to the Chair, an LID is still in a subservient position to the Chair and is not a replacement for an independent leader. Although we appreciate the company's desire for having flexibility to choose whether an independent Chair is appropriate, we believe there is a need for a robust system of checks and balances at the highest levels of the company to protect shareholder interest. The proponents believe a lead independent director is no replacement for a fully independent Chair of the Board. In fact, with a Board that utilizes an independent Chair, the role of lead independent director is redundant and only forces an unnecessary level of bureaucracy on the Board. A structure where the CEO runs the business and is accountable to a Board led by an independent Chair is in the best interest of the company's shareholders. We ask for your support of this good governance measure. Thank you very much.

Thank you very, very much for your comments and for staying on time. And Maggie -- as I said before, the Board of Directors opposes this proposal for the reasons set forth in the proxy statement. Maggie, are there any questions or comments on this voting item?

There are no questions or comments on this item.

Thank you. This means that we can move to item -- voting item 8 about gender pay gap. So this proposal was submitted by Proxy Impact, Richmond, California, acting upon the authorization of owners of Pfizer common stock. The proponent requests that Pfizer report on the company's global median gender pay gap, including associated policy, reputational, competitive and operational risks and risks related to recruiting and retaining female talent. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement. Mr. Michael Passoff is connected by audio, representing Proxy Impact. Mr. Passoff, the floor is now yours for 3 minutes to move the proposal forward for discussion. Operator, please open the line for Mr. Passoff.

Hi. Good morning, everybody. My name is Michael Passoff, and I'm the CEO of Proxy Impact. This is the second year we have filed a pay gap resolution at Pfizer. We withdrew last year's resolution when the company promised to increase its reporting on this issue, including providing unadjusted median pay gap data. I'd like to acknowledge that the company has taken several significant steps to address this issue, and we commend them on the progress they have made. Yet we refiled this resolution because the company has stated in its opposition statement that unadjusted median pay gap data, which is the most common metric that investors seek when evaluating this issue, is not an accurate measure or one they need to use. In fact, the gender pay gap is literally defined as the median pay gap between male and female full-time earnings. That definition is used by the U.S. Department of Labor, U.S. Census Bureau, Organization for Economic Cooperation and Development, International Labor Organization, and this data is also required of companies operating in the United Kingdom. While pay equity, as provided by the company, are related to the issue, the data is not a standard for pay gap disclosures. Pay gaps are comprised of 2 parts: equal pay for your current job and equal opportunity to high-paying jobs. Median pay gaps reflect the lack of equal opportunity. Median pay gap disclosures can improve performance and provide a baseline to investors for measuring progress moving forward. A 2019 study cited in the Harvard Business Review found that wage transparency in countries that mandate it narrowed the median wage gaps. Citigroup was the first U.S. company to publish its global gender and U.S. minority pay gap in January 2019 and has since shrunk those gaps 2 and 1 points, respectively, year-over-year. Starbucks and Mastercard has since adopted the same best practice disclosures for their global operations. Meanwhile, Pfizer's U.K. 2019 gender pay report shows a 16% gender pay gap, which is a 2.5% increase from 2018. And it also shows a 30% gender bonus pay gap between male and female employees, an increase of 5% from 2018. So does Pfizer's U.S. operations really disagree with all the major U.S. and international organizations already using unadjusted median pay as a key data point? Or is it just avoiding reporting unflattering data? Pay transparency has been shown to narrow pay gaps and improve the diversity of companies that disclose them, which we believe is in the long term best interest of shareholders. We strongly urge you to support proposal #8. Thank you.

Thank you, Mr. Passoff, for your thoughtful comments and for staying on time. As I said, the Board of Directors opposes this proposal for the reasons set forth in the proxy statement. And Maggie, are there any questions or comments on this voting item?

There are no questions or comments on this item.

Thank you very much. This means that we will now move to the next and last voting item. This is voting item 9, election of an additional director, Susan Desmond-Hellmann, to Pfizer's Board of Directors. This proposal is a management proposal. On April 1, 2020, the Board, acting upon the recommendation of the Governance and Sustainability Committee, elected Dr. Susan Desmond-Hellmann to the Board and nominated her for reelection at the 2020 Annual Meeting. The Board has nominated Dr. Desmond-Hellman in addition to the nominees described in item 1 of the proxy statement to serve until the next Annual Meeting of Shareholders. You will find information on her extensive background in the supplement to the proxy statement filed on April 7, 2020. The Board recommends that you vote for this director nominee. Maggie, are there any questions or comments on this voting item?

There are no questions or comments at this time.

All right. Thank you very much. So we have concluded the presentation for the items of business. And we now move to the next order of business item, which is the closing of the -- of the final voting and closing of the polls. So if you would like to vote or change your vote, please submit your vote on the virtual voting platform at this time. [Voting]

Thank you. I now declare the polls officially closed as of 9:45 a.m. Eastern Daylight Time on April 23, 2020. And we can now move to the next order of business. We will now tell you the preliminary results of the voting. I will ask our Corporate Secretary, Maggie Madden, to review the inspector's preliminary report on the voting. Maggie?

The inspector's report is preliminary and is subject to the inspector's final tabulation, which should not significantly change the preliminary results. The final results will appear in a Form 8-K filed with the U.S. Securities and Exchange Commission within 4 business days of this annual meeting. The inspector's preliminary report shows that shares representing 84.7% of the votes entitled to be cast at this meeting were presented in person or by proxy, constituting a quorum. Proposal 1. The inspector's preliminary report further shows that each of the 13 nominees for election as director named in item 1 of the proxy statement received a favorable vote of at least 83.8% of the votes cast at this meeting. Proposal 2. The proposal to ratify the selection of KPMG LLP to serve as the independent registered public accounting firm for the company for 2020 received the following votes: 96% of the votes cast voted for the proposal, 4% of the votes cast voted against the proposal. Proposal 3. The 2020 advisory vote on executive compensation received the following votes: 95% of the votes cast voted for the proposal, 5% of the votes cast voted against the proposal. Proposal 4. The shareholder proposal regarding the right to act by written consent received the following votes: 15.9% of the votes cast voted for the proposal, 84.1% of the votes cast voted against the proposal. Proposal 5. The shareholder proposal regarding enhancing proxy access received the following votes: 30% of the votes cast voted for the proposal, 70% of the votes cast voted against the proposal. Proposal 6. The shareholder proposal regarding a report on lobbying activities received the following votes: 20.6% of the votes cast voted for the proposal, 79.4% of the votes cast voted against the proposal. Proposal 7. The shareholder proposal regarding an independent chair policy received the following votes: 33.2% of the votes cast voted for the proposal, 66.8% of the votes cast voted against the proposal. Proposal 8. The shareholder proposal regarding gender pay gap received the following votes: 38% of the votes cast voted for the proposal, 62% of the votes cast voted against the proposal. Proposal 9. Dr. Susan Desmond-Hellman received at least 99.6% of the votes cast for her election. The results of this preliminary report indicate that the shareholders of the company have elected all nominees for the Board of Directors as named in the proxy statement and the supplement to the proxy statement; have approved the proposal regarding ratification of the selection of our independent registered public accounting firm the 2020 fiscal year; have approved the 2020 compensation of our named executive officers. The shareholder proposals have not been approved. This concludes the inspector's report.

Thank you, Maggie. So now we move to the next order of business, which having completed the voting items and reported and the voting, is Q&A. We welcome questions from our shareholders. We now have 15 minutes set aside for general questions and comments. We will follow the meeting procedures for the handling of these questions. We will make every effort to answer all questions in the time allowed. However, if multiple questions are submitted on the same topic, those questions will be grouped and answered collectively. If more questions are presented than time permits to be answered, unanswered questions and responses will be posted on the company's website as soon as possible following the meeting. We ask that you please focus your questions on an issue of general importance to shareholders. Also, in the interest of fair play to all shareholders, if a question has already been substantially answered, we will move on to another shareholder's question. I will now ask Maggie to read each question aloud and to also announce the name of the shareholder who is asking the question. So Maggie, please read out our first question.

Our first question comes from [ Robert Lazone ]. A question on Upjohn and Mylan combination. What are the resulting anticipated revenues, e.g., annual or quarterly, of Pfizer after the Upjohn and Mylan close?

Yes. Thank you very much for your question. The formation of Viatris, which will be the combination of Mylan's current business with Upjohn's Pfizer business, is a very, very important step to strengthen both businesses, the remaining Pfizer Biopharma business and the Upjohn business in combination with Mylan. The detailed results have been already declared and there is no different -- the expected revenues of the 2 have already been declared. Pfizer, this last year, presented the expected -- presented the final results separate for Upjohn and the Biopharmaceutical business. And this year, we gave separate guidance for the total company, post and before the Upjohn expected separation. The end of the quarter is already here, and we will also provide the results of both businesses. And we will also provide guidance for the remaining business and the total business next week. Thank you very much for your question.

Our next question comes from [ Thomas J. Klein ]. Will Pfizer's infectious disease focus on -- next on malaria? Creating humanitarian, political and financial admiration will be the outcome of a Pfizer malaria vaccine. Let's do it.

Thank you very, very much for your question. And it is absolutely certain that ourselves, we try to do whatever we can in terms of providing our scientific knowledge to resolve significant unmet medical needs. When it comes to malaria, this is not an area of expertise for us. But we are working with different institutions to make sure that whatever IP or knowledge could enable them to develop malaria, either vaccine or treatment, can be enabled. So thank you very much. We are focusing our efforts in areas that we do have significant expertise and we can make a very big difference. Thank you for your question.

Our next question comes from [ Robert Bennett ]. The company's foundation has cut back significantly on the matching gift program for retiree and has announced it will be completely eliminated at the end of this year. How much did retiree matching gift cost in 2019? And how much is the expected savings from eliminating this benefit? Thank you.

Yes. Thank you very much for your question. And it is -- it was not an easy discussion because I know how popular was this matching program among our retirees. In fact, the decision to change the policy has nothing to do with reducing the funds and creating savings in the way that Pfizer Foundation contributes to society. We do not expect that to happen at all. The reason why we did it was because by having this way of allocating our funds, the funds were allocated on a random way to different parts of communities as the different retirees were wishing. And as a result, we couldn't have concentrated amounts that we can deploy strategically to make a big impact. So the termination of this program will not produce savings. What we'll do is that now we will be able to use these funds in a more strategic way in areas that we can have a much bigger impact. I know that this is not pleasant for many of our retirees. But we felt that this is a much better way to contribute to society. Thank you very much.

We have a comment from [ Nell Bullock ]. I am very pleased with Pfizer's course of action during our current pandemic. Keep up the good work.

I can't thank you enough. Thank you very much for your comment. And you need to know that these comments mean a lot to us and mean a lot to our employees. We are monitoring very closely how our employees feeling about the way that we respond to this COVID-19 crisis. Not only the way that we support them, but the way that we support society with their needs right now. And the surveys indicate that our people feel extremely proud for the way that we are managing this situation. This gives us a lot of energy to continue doing so. Thank you for your comments.

There are no more questions at this time, Albert.

All right. So let me move to -- so thank you. We are now about to adjourn. But before we do so, I would like to thank everyone who worked on this meeting, both Pfizer colleagues and our valued business partners. It has been our pleasure to be able to conduct our Annual Meeting of Shareholders virtually to ensure everyone's safety during the COVID-19 pandemic. This has been a valuable meeting. We appreciate the opportunity to listen and learn from our shareholders. Speaking of all of us -- for all of us in executive leadership and on the Board, I'm grateful for your continued confidence in Pfizer and for your keen interest in the progress of our company. Please stay safe and healthy. And with that, the meeting is adjourned.

This concludes the meeting. You may now disconnect.