Company Name: Pfizer Inc.
Public Availability Date: February 8, 2006

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

December 16, 2005

VIA HAND DELIVERY

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Re: Shareholder Proposal of the AFL-CIO Reserve Fund Securities Exchange Act of 1934Rule 14a-8

Dear Ladies and Gentlemen:

This letter is to inform you that Pfizer Inc. ("Pfizer") intends to omit from its proxy statement and form of proxy for its 2006 Annual Meeting of Shareholders (collectively, the "2006 Proxy Materials") a shareholder proposal (the "Proposal") and a statement in support thereof received from the AFL-CIO Reserve Fund (the "Proponent").

Pursuant to Rule 14a-8(j), enclosed herewith are six (6) copies of this letter and its attachments. Also, in accordance with Rule 14a-8(j), a copy of this letter and its attachments is being mailed on this date to the Proponent, informing them of Pfizer's intention to omit the Proposal from the 2006 Proxy Materials. Pursuant to Rule 14a-8(j), this letter is being filed with the Securities and Exchange Commission (the "Commission") no later than eighty (80) calendar days before Pfizer files its definitive 2006 Proxy Materials with the Commission. Pfizer hereby agrees to promptly forward to the Proponent any response from the staff of the Division of Corporation Finance (the "Staff") to this no-action request that the Staff transmits by facsimile to Pfizer only.

A copy of the Proposal and supporting statement, as well as related correspondence from the Proponent, is attached to this letter as Exhibit A. Pfizer hereby respectfully requests that the Staff concur in our view that the Proposal may be excluded from the 2006 Proxy Materials pursuant to Rule 14a-8(i)(10), because Pfizer has substantially implemented the Proposal.

THE PROPOSAL

The Proposal requests that Pfizer's "Board of Directors ... seek shareholder approval of any senior executive's annual pension benefit from Pfizer's supplemental executive retirement plans that will exceed 100 percent of the senior executive's final average salary, as calculated at the Board's discretion. This policy shall apply to senior executives' existing pension benefits only if they can be legally modified by Pfizer, and will otherwise apply to all new pension benefits to the fullest extent permitted by law."

ANALYSIS

The Proposal May Be Excluded Under Rule 14a-8(i)(10) Because Pfizer Has Substantially Implemented The Proposal.

A. Background

Rule 14a-8(i)(10) permits a company to exclude a shareholder proposal if the company has substantially implemented the proposal. The Commission stated in 1976 that the predecessor to Rule 14a-8(i)(10) "is designed to avoid the possibility of shareholders having to consider matters which have already been favorably acted upon by the management." See Release No. 34-12598 (July 7, 1976). The Commission has refined Rule 14a-8(i)(10) over the years. In the 1983 amendments to the proxy rules, the Commission indicated:

In the past, the staff has permitted the exclusion of proposals under Rule 14a-8(c)(10) only in those cases where the action requested by the proposal has been fully effected. The Commission proposed an interpretative change to permit the omission of proposals that have been "substantially implemented by the issuer." While the new interpretative position will add more subjectivity to the application of the provision, the Commission has determined the previous formalistic application of this provision defeated its purpose. Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Release No. 34-20091, at §II.E.5. (Aug. 16, 1983) (the "1983 Release").

The 1998 amendments to the proxy rules, which (among other things) implemented current Rule 14a-8(i)(10), reaffirmed this position. See Amendments to Rules on Shareholder Proposals, Exchange Act Release No. 40018 at n.30 and accompanying text (May 21, 1998). Consequently, as noted in the 1983 Release, in order to be excludable under Rule 14a-8(i)(10), a shareholder proposal need only be "substantially implemented," not "fully effected."

The Staff has stated "a determination that the company has substantially implemented the proposal depends upon whether [the company's] particular policies, practices and procedures compare favorably with the guidelines of the proposal." Texaco, Inc. (avail. Mar. 28, 1991). In other words, Rule 14a-8(i)(10) permits exclusion of a shareholder proposal when a company has implemented the essential objective of the proposal, even where the manner by which a company implements a proposal does not precisely correspond to the actions sought by a shareholder proponent. See the 1983 Release; AMR Corporation (avail. Apr. 17, 2000); Masco Corporation (avail. Mar. 29, 1999); Erie Indemnity Company (avail. Mar. 15, 1999).

B. Pfizer's Policy

On December 12, 2005, Pfizer's Board of Directors approved a policy (the "Pfizer Policy") that we believe substantially implements the Proposal, and, accordingly, pursuant to Rule 14a-8(i)(10), the Proposal may be properly omitted from the 2006 Proxy Materials. The Pfizer Policy is as follows:

Board Policy on Pension Benefits for Executives

The Board will seek shareholder approval prior to the payment to any senior executive from the Company's defined benefit pension plans if his or her benefit, computed as a single life annuity, will exceed 100% of the senior executive's final average salary, as calculated at the discretion of the Company's Compensation Committee. This policy will apply prospectively, for all benefit accruals after January 1, 2006. For purposes of this policy, "final average salary" means the highest five calendar years' earnings, where earnings includes salary earned during the year and annual cash incentives (or bonus) earned for the year.

A copy of the Pfizer Policy is attached hereto as Exhibit B.

C. Analysis

1. The Pfizer Policy "Substantially Implements" the Proposal.

When a company can demonstrate that it has already adopted policies or taken actions to address each element of a shareholder proposal, the Staff has concurred that the proposal has been "substantially implemented" and may be excluded as moot. See, e.g., Intel Corp. (avail. Mar. 11, 2003) (concurring that a proposal requesting that Intel's board submit to a shareholder vote all equity compensation plans and amendments to add shares to those plans that would result in material potential dilution was substantially implemented by a board policy that excepted certain awards from the policy); Nordstrom, Inc. (avail. Feb. 8, 1995) (concurring that a proposal requesting a report to shareholders on Nordstrom's relationship with suppliers and a commitment to regular inspections was substantially implemented by existing company guidelines and a press release, even though the guidelines did not commit the company to conduct regular or random inspections to ensure compliance).

As noted above, the Proposal requests that the Board "seek shareholder approval of any senior executive's annual pension benefit from Pfizer's supplemental executive retirement plans that will exceed 100 percent of the senior executive's final average salary, as calculated at the Board's discretion." The Pfizer Policy substantially implements the Proposal's request because in all material respects it is identical to the Proposal: both the Proposal and the Pfizer Policy provide for shareholder approval of any senior executive's annual pension benefit from the Company's supplemental executive retirement plans that will exceed 100% of the senior executive's final average salary, without regard to existing benefits, which cannot legally be reduced. In this regard, the Pfizer Policy is similar to the policy adopted by the AutoNation board of directors that the Staff concurred substantially implemented a shareholder proposal requesting that the board seek shareholder approval for future "golden parachutes" with senior executives that provide "benefits" exceeding 299 percent of the sum of the executive's base salary plus bonus. See AutoNation Inc. (avail. Feb. 16, 2005). Thus, just as in AutoNation, we believe that, as a result of adopting the Pfizer Policy, the Proposal is excludable under Rule 14a-8(i)(10) because Pfizer has substantially implemented it.

2. To the Extent that the Proposal Relates to Senior Executives' Existing Pension Benefits, Implementation of the Proposal Would Result in Pfizer Violating Federal Law.

The Proposal states that it "shall apply to senior executives' existing pension benefits only if they can be legally modified by the Company, and will otherwise apply to all new pension benefits to the fullest extent permitted by law" (emphasis added). The Pfizer Policy applies prospectively to all benefit accruals after January 1, 2006, but not to "existing pension benefits." As discussed below, it does not apply to existing pension benefits because to do so would cause Pfizer to violate federal law and implicate the contractual rights of Pfizer's Chairman and Chief Executive Officer under his employment agreement. Thus, the Pfizer Policy substantially implements the Proposal, which acknowledges that it may not be possible to legally modify existing pension benefits.

Pfizer's senior executive officers receive pension benefits pursuant to the Pfizer Inc. Nonfunded Supplemental Retirement Plan (the "Supplemental Plan"). See Exhibit C. The Supplemental Plan supplements benefits under the Pfizer Retirement Annuity Plan (a tax-qualified retirement plan) that are reduced by reason of the application of the limitations under Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended (the "Code"). The Supplemental Plan is an unfunded "top-hat" plan (i.e., a plan that covers a select group of management or highly compensated employees), and thus is exempt from most of the substantive requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

The Supplemental Plan does not give Pfizer the right to amend the Plan. The only reference to changes to the Supplemental Plan is in Section 5, which provides that the Committee "may make non-substantive administrative changes to this Plan so as to conform with or take advantage of governmental requirements, statutes or regulations." As required by ERISA and the Code, the Retirement Annuity Plan (i.e., the plan that the Supplemental Plan supplements) prohibits amendments that would reduce benefits accrued through the date of amendment. While, as noted above, top-hat plans are exempt from most of ERISA's substantive requirements, they are not exempt from ERISA's civil enforcement provisions, as well as Section 514 of ERISA, which generally preempts any state laws that " "relate to" an employee benefit plan. Thus, ERISA provides the exclusive causes of action with respect to top-hat plans, and state law breach of contract and other causes of action are unavailable.

Courts have held that participants in top-hat plans have a cause of action under ERISA to invalidate amendments that reduce previously accrued benefits. Applying a unilateral contract theory, these courts have reasoned that an employee "accepts" the employee's "offer" of benefits under the plan by providing services to the employer, and the employer has no right to take away accrued benefits absent a plan provision specifically permitting retroactive changes.¹ Because the Supplemental Plan does not specifically reserve Pfizer's right to amend the Plan to reduce previously accrued benefits (and, in fact, only allows non-substantive amendments to comply with legal changes), a participant in the Supplemental Plan could bring a lawsuit under Section 502(a)(1)(B) of ERISA (29 U.S.C. §1132(a)(1)(B)) challenging an amendment that attempted to retroactively reduce benefit accruals, and we believe that such a participant would prevail.

Application of the Pfizer Policy to "existing pension benefits" also would implicate the contractual rights of Pfizer's Chairman and Chief Executive Officer, Dr. Henry (Hank) McKinnell, under his employment agreement. Dr. McKinnell's employment agreement states that, absent his express written consent, termination by Dr. McKinnell of his employment following any action by Pfizer that "directly or indirectly materially reduce[s]" Dr. McKinnell's pension benefits shall be considered termination by Dr. McKinnell for "good reason." This could occur, for example, if Pfizer implemented the Proposal and Pfizer's shareholders failed to approve a proposal to continue Dr. McKinnell's annual pension benefit from Pfizer's supplemental executive retirement plans in amounts exceeding 100 percent of his final average salary.

Thus, the Pfizer Policy substantially implements the Proposal because it applies to all benefits accrued on or after January 1, 2006 and appropriately recognizes (as permitted by the explicit language of the Proposal) that existing pension benefits cannot be legally modified by the Company. For these reasons, we believe that the Proposal is excludable under Rule 14a-8(i)(10).

CONCLUSION

Based upon the foregoing analysis, Pfizer respectfully requests that the Staff of the Commission concur that it will take no action if Pfizer excludes the Proposal from its 2006 Proxy Materials. We would be happy to provide you with any additional information and answer any questions that you may have regarding this subject. Should you disagree with the conclusions set forth in this letter, we respectfully request the opportunity to confer with you prior to the determination of the Staff's final position. If we can be of any further assistance in this matter, please do not hesitate to call me at (212) 733-4802.

Sincerely,

/s/

Margaret M. Foran

Enclosures

cc: Brandon Rees, AFL-CIO Reserve Fund

-----FOOTNOTES-----

¹ See, e.g., Goldstein v. Johnson & Johnson, 251 F.3d 433, 442 (3d Cir. 2001); Pratt v. Petroleum Prod. Mgmt. Employee Sav. Plan, 920 F.2d 651, 661 (10th Cir. 1990); Black v. Breesee's Oneonta Department Store, Inc. Security Plan, 919 F.Supp. 597 (N.D.N.Y. 1996) (holding that the plaintiff was entitled to the benefits promised under the plan); Kemmerer v. ICI Americas Inc., 70 F.3d 281 (1995), cert. denied, 517 U.S. 1209 (1996) (holding that the employer was required to fulfill its end of the bargain by making payments consistent with employees' elections and stating that "[s]ubsequent unilateral adoption of an amendment which is then used to defeat or diminish the [employee's] fully vested rights under the governing plan document is ... ineffective"); Carr v. First Nationwide Bank, 816 F.Supp. 1476 (N.D. Cal. 1993) (holding that the policies embodied in ERISA do not prohibit top-hat plan participants from enforcing their plans as unilateral contracts that may not be amended without their consent).

[INQUIRY LETTER]

September 9, 2005

By Facsimile and UPS Next Day Air

Margaret M. Foran
Vice PresidentCorporate Governance and Secretary
Pfizer, Inc.
235 East 42nd Street
New York, NY 10017-5755

Dear Ms. Foran:

On behalf of the AFL-CIO Reserve Fund (the "Fund"), I write to give notice that pursuant to the 2005 proxy statement of Pfizer, Inc. (the "Company"), the Fund intends to present the attached proposal (the "Proposal") at the 2006 annual meeting of shareholders (the "Annual Meeting"). The Fund requests that the Company include the Proposal in the Company's proxy statement for the Annual Meeting. The Fund is the beneficial owner of 4,520 shares of voting common stock (the "Shares") of the Company, and has held the Shares for over one year. In addition, the Fund intends to hold the Shares through the date on which the Annual Meeting is held.

The Proposal is attached. I represent that the Fund or its agent intends to appear in person or by proxy at the Annual Meeting to present the Proposal. I declare that the Fund has no "material interest" other than that believed to be shared by stockholders of the Company generally. Please direct all questions or correspondence regarding the Proposal to Brandon Rees at (202) 637-3900.

Sincerely,

/s/

Richard L. Trumka

Enclosure

[APPENDIX]
Shareholder Proposal

RESOLVED: The shareholders of Pfizer Inc. (the "Company") urge the Board of Directors (the "Board") to seek shareholder approval of any senior executive's annual pension benefit from the Company's supplemental executive retirement plans that will exceed 100 percent of the senior executive's final average salary, as calculated at the Board's discretion. This policy shall apply to senior executives' existing pension benefits only if they can be legally modified by the Company, and will otherwise apply to all new pension benefits to the fullest extent permitted by law.

Supporting Statement

We believe that executives should receive retirement benefits in the same proportions that are generally offered to other employees of the Company. In our opinion, pension plans are intended to provide senior executives and other employees with retirement security, not as wealth creation vehicles for already highly compensated executives.

The New York Times reported that Pfizer Chairman and CEO Henry McKinnell will receive an estimated annual retirement benefit of $6.5 millionthe largest out of 500 CEOs studied by the Corporate Library, an independent corporate-governance research firm. ("The New Executive Bonanza: Retirement," New York Times, April 3, 2005). In contrast, Dr. McKinnell received approximately $2.2 million in salary in 2004.

Unlike many companies' executive retirement plans that are calculated only using cash compensation, Pfizer's executive pension benefit formula has also included certain equity compensation awards that were established before 2001. In 2004, Dr. McKinnell received over $5.8 million in stock awards that will be included in his pension benefit formula.

Senior executives typically receive a far greater proportion of their compensation in the form of variable pay and equity compensation. For this reason, we believe including these forms of compensation in pension calculations can disproportionately favor senior executives, and can amount to an extraordinary retirement benefit.

Although Pfizer has stopped including new stock awards in its pension calculations, we believe the pension benefits based on past awards should be rescinded if they would result in an excessive pension benefit for senior executives. To help ensure that pension benefits for senior executives are in the best interests of shareholders, we believe such benefits should be submitted for shareholder approval when they exceed 100 percent of a senior executive's salary.

A study by Harvard Law School Professor Lucian Bebchuk has estimated that Dr. McKinnell has received about $67 million in total compensation during his tenure as Pfizer's CEO. In contrast, the study estimates the actuarial present value of Dr. McKinnell's expected pension benefit to be approximately $71.5 to $83 million. ("Putting Executive Pensions on the Radar Screen," March 2005. Harvard Law and Economics Discussion Paper No. 507.)

In our opinion, extraordinary executive retirement benefits undermine the goal of linking pay to performance. According to Pfizer's 2005 proxy statement, Pfizer slightly underperformed its competitors over the previous five-year period. We believe that giving Dr. McKinnell an extraordinary pension benefit will reward this unexceptional performance.

EXECUTIVE PENSION POLICY (December 2005)

RESOLVED, that the Board hereby approves the adoption of a policy relating to the payment of pension benefits for senior executives, which shall read in its entirety as follows:

Board Policy on Pension Benefits for Executives

The Board will seek shareholder approval prior to the payment to any senior executive from the Company's defined benefit pension plans if his or her benefit, computed as a single life annuity, will exceed 100% of the senior executive's final average salary, as calculated at the discretion of the Company's Compensation Committee. This policy will apply prospectively, for all benefit accruals after January 1, 2006. For purposes of this policy, "final average salary" means the average of the highest five calendar years' earnings, where earnings includes salary earned during the year and annual cash incentives (or bonus) earned for the year.

[INQUIRY LETTER]

December 27, 2005

VIA HAND DELIVERY

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Re: Supplemental Letter Regarding Shareholder Proposal of the AFL-CIO Reserve Fund Securities Exchange Act of 1934Rule 14a-8

Dear Ladies and Gentlemen:

On December 16, 2005, Pfizer Inc. (the "Company") submitted a letter notifying the staff of the Division of Corporation Finance (the "Staff") that the Company intends to omit from its proxy statement and form of proxy for the Company's 2006 Annual Meeting of Shareholders a shareholder proposal (the "Proposal") and a statement in support thereof received from the AFL-CIO Reserve Fund. The Company's letter, a copy of which is attached hereto as Exhibit A, indicated the Company's belief that the Proposal may be excluded under Rule 14a-8(i)(10) because the Company has substantially implemented the Proposal.

The Company submits this letter to supplementally provide the Staff with a legal opinion from Gibson Dunn & Crutcher LLP, the Company's counsel. See Exhibit B. This opinion states that the Company has not retained the right to reduce previously-accrued benefits under the Pfizer Inc. Nonfunded Supplemental Retirement Plan, and a participant who brought a lawsuit challenging such an amendment under the Employee Retirement Income Security Act of 1974, as amended, would likely prevail. The Company believes that this legal opinion further supports its conclusion that the Proposal is excludable under Rule 14a-8(i)(10), because the Company has substantially implemented it. In this regard, the Proposal specifically states that the policy it requests be adopted by the Company's Board of Directors "shall apply to senior executives' existing pension benefits only if they can be legally modified...." (emphasis added).

* * *

Pursuant to Rule 14a-8(j), enclosed herewith are six (6) copies of this supplemental letter and its attachment. Also, in accordance with Rule 14a-8(j), a copy of this supplemental letter and its attachments are being mailed on this date to the Proponent. The Company hereby agrees to promptly forward to the Proponent any Staff response to this no-action request that the Staff transmits by facsimile to the Company only. If we can be of any further assistance in this matter, please do not hesitate to call me at (212) 733-4802.

Sincerely,

/s/

Margaret M. Foran

Enclosures

cc: Brandon Rees, AFL-CIO Reserve Fund

[INQUIRY LETTER]

January 13, 2006

Office of Chief Counsel
Division of Corporate Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-9303

Re: Request by Pfizer Inc. to omit shareholder proposal submitted by AFL-CIO Reserve Fund

Dear Sir/Madam:

I. Introduction

This letter is submitted in response to the claim of Pfizer Inc. ("Pfizer" or the "Company") by letters dated December 16 and December 27, 2005, that it may exclude the shareholder proposal of the AFL-CIO Reserve Fund from its 2006 proxy materials. The Proposal urges

The Board of Directors (the "Board") to seek shareholder approval of any senior executive's annual pension benefit from the Company's supplemental executive retirement plans that will exceed 100 percent of the senior executive's final average salary, as calculated at the Board's discretion. This policy shall apply to senior executives' existing pension benefits only if they can be legally modified by the Company, and will otherwise apply to all new pension benefits to the fullest extent permitted by law. (See Exhibit 1).

Pfizer argues that the Proposal is excludable under Rule 14a-8(i)(10) because the Company has substantially implemented the Proposal. On December 12, 2005, Pfizer's Board of Directors approved a policy whereby

The Board will seek shareholder approval prior to the payment to any senior executive from the Company's defined benefit pension plans if his or her benefit, computed as a single life annuity, will exceed 100 percent of the senior executive's final average salary, as calculated at the discretion of the Company's Compensation Committee. This policy will apply prospectively, for all benefit accruals after January 1, 2006. For purposes of this policy, "final average salary" means the highest calendar years' earnings, where earnings includes salary earned during the year and annual cash incentives (or bonus) earned for the year. (See Exhibit 2).

In relying on 14a-8(i)(10), the Company has both mistakenly construed and failed to substantially implement the Proposal.

II. Pfizer Has Failed to Demonstrate that the Proposal Has Been Substantially Implemented

A. The Company's Recently Adopted Policy Differs in Several Important Respects with the Proposal's Request

Under Rule 14a-8(g), "the burden is on the company to demonstrate that it is entitled to exclude a proposal." Pfizer's Executive Pension Policy (the "Policy") differs in several substantive respects with the AFL-CIO Reserve Fund shareholder proposal (the "Proposal"). Notwithstanding Pfizer's insistence that its Policy is identical to the Proposal, several notable dissimilarities distinguish the two:

The definition of salary found in the Policy represents a substantial departure from the settled definition relied on in the spirit of the Proposal. In Pfizer's Policy, final average salary is defined as "salary earned during the year and annual cash incentives (or bonus) earned for the year." (emphasis added). Salary is not an ambiguous term, and the difference between the Proposal and the Policy, which treats salary more like "compensation," is striking. Salary as defined in Schedule 14A and set out in the Company's Proxy does not include bonus or other annual cash incentives, while the American Heritage Dictionary defines salary as "fixed compensation for services, paid to a person on a regular basis." This difference in coverage and scope alone strongly distinguish the two.

The Shareholder Proposal calls for application "to all new pension benefits to the fullest extent permitted by law." (emphasis added). Pfizer's treatment of salary as compensation substantially narrows the scope of the Policy and contrasts with the Proposal's desire for robust oversight. For example, if the Policy were executed to the "fullest extent permitted by law," it would not allow new benefits to accrue until a senior executive's supplemental executive retirement plan ("SERP")did not exceed 100 percent of their final average salary.

The Company's Policy limits shareholder approval to the period of time "prior to the payment to any senior executive," while the Proposal contains no such timing clause.

B. Pfizer's Policy Lacks the Requisite Mechanical Detail Needed to Substantially Implement the Proposal

The Company relies on the AutoNation Inc. no-action decision (February 16, 2005) in arguing that the Pfizer Board substantially implemented the Proposal. Unlike Pfizer, the AutoNation Policy "was effective immediately upon adoption." See id. Even more important, AutoNation's efforts to resolve procedural and mechanical questions starkly contrast with Pfizer's one paragraph Policy. The golden parachute policy in AutoNation Inc. contained an extensive definition section and noted

The Board adopted the Policy in the good faith exercise of its fiduciary duties in accordance with applicable Delaware corporate law. The Policy, which has not been revoked or changed in any manner since adoption, is set forth in the AutoNation, Inc. Corporate Governance Guidelines, a copy of which is available on the Company's corporate website. See id.

Pfizer has made no similar effort to publish its Policy, conform to its fiduciary duty or applicable corporate law, nor incorporate the Policy into its corporate governance framework.

The Company's Policy also fails to address any of the specific issues raised by the Proposal. The mere adoption of a Policy should not be sufficient to substantially implement a request for shareholder approval of both existing (if they can be legally modified) and new pension benefits under the Company's SERP. Pfizer has not published any information regarding the Policy's implementation, and should not be permitted to use a future event that may not occur as a basis for excluding the Proposal.

Indeed, the only materials which Pfizer offers to prove substantial implementation are a brief Board Policy and legal opinion, neither of which addresses numerous procedural and mechanical questions which remain unanswered:

How will the Policy affect the future accruals of Pfizer Chairman and CEO Hank McKinnel's pension benefit? A study by Harvard Law School Professor Lucian Bebchuk estimated that Dr. McKinnel has received about $67 million in total compensation during his tenure as CEO, while his expected pension benefit was valued at between $71.5 to $83 million. Given that Dr. McKinnel is expected to remain as CEO until 2008, (See Wall Street Journal, "As Generics Pummel Its Drugs, Pfizer Faces Uncertain Future, 1/5/06) how will the Board's adoption of the Policy affect Dr. McKinnel?

Will the Company seek shareholder approval for Dr. McKinnel's benefit accruals after January 1, 2006, as set out in the Policy?

If shareholders do not approve a senior executive's pension benefit above 100 percent, including Dr. McKinnel, will that employee's existing pension benefits continue to accrue, or will they be modified or capped? Will the vote be binding on the Board, or simply represent a precatory gauge of shareholder opinion?

How will shareholders enforce their right of approval, especially given the current corporate governance environment? (See News Corporation litigation in Delaware brought after Company reneged on agreement to let shareholders vote on a takeover defense)

If, according to the Board Policy, approval will be sought "prior to the payment to any senior executive," will shareholders vote in a special meeting, or in some alternative manner?

What will the holding requirements be for shareholders who wish to vote on the extraordinary pension benefit?

What vote standard will the Board use to ascertain shareholder approval? (plurality, majority of votes cast, etc.)

A commitment to seek shareholder approval for extraordinary senior executive pension benefits represents a serious, long-term corporate governance undertaking, requiring extensive preparation and planning which goes far beyond Pfizer's attempt at implementation. The questions raised above remain unanswered and seriously undermine Pfizer's claim that the Proposal has been "substantially implemented."

C. The Company's Efforts to Rush Out a Policy Mirror the Recent Cisco Decision Fact Pattern

It is important to understand some of the events that preceded the no-action request, with particular attention to the days leading up to the request. As noted earlier, the Pfizer Board approved the Policy on December 12, 2005. Four days later, the Company submitted its no-action request to the Commission. Pfizer appears to have hastily put together an executive pension policy in the days leading up to the no-action request in order to provide some basis for an argument that the Proposal could be excluded under Rule 14a-8(i)(10). Although the Company is certainly free to adopt policies and procedures whenever they see fit, we believe that this last minute flurry of activity is not reflective of the genuine thoughtful process required.

In Cisco Systems, Inc. (August 31, 2005) the Commission staff rejected the Company's arguments that the proposal was properly excludable under 14a-8(i)(10). In maintaining that the proposal was not substantially implemented, the Proponent argued that

Although the Company would appear to have a lot of paper to present for Staff's review, it should be apparent that the Company has not had time for anything that could reasonably be considered 'implementation.' In Proponents' view, the Company did the bare minimum of activity it felt would pass muster under Rule 14a-8(i)(10). Proponents do not believe the Company has come close to carrying that burden. See id.

In acting on a shareholder proposal which calls for extensive mechanical and procedural steps in reaching implementation, Pfizer has similarly not met their burden in establishing substantial implementation.

D. Other Precedent Cited by the Company is Easily Distinguished

Several other no-action letters cited by the Company are distinguishable from the current case. In Intel Corp. (March 11, 2003), the Commission staff explicitly noted Intel's "representation that none of the exceptions set forth in the...Board Resolution shall permit Intel to adopt or amend an equity compensation plan that would result in material potential dilution unless such plan or amendment receives shareholder approval." In the current Proposal, no similar procedural prerequisite limits Pfizer's ability to seek shareholder approval.

The contrast between last year's Wal-Mart Stores, Inc. (March 17, 2005) decision and the decade old Nordstrom case relied on by Pfizer are notable. The proposal in Wal-Mart requested that the board adopt executive compensation policies and practices reflected in the "Commonsense Executive Compensation Framework," (the "Framework") set forth in the proposal. The Commission staff rejected Wal-Mart's view that the proposal had been substantially implemented. Wal-Mart's attempt mirrors Pfizer's eleventh-hour effort. Despite Wal-Mart's assertion that "its compensation processes as described in its Proxy Materials substantially achieve the objectives sought by the Proposal," serious, substantive differences existed when contrasted with the Proponent's Framework.

III. Conclusion

For the reasons set forth above, we submit that Pfizer has failed to meet its burden of demonstrating "that it is entitled" to exclude the Proposal (See Rule 14a-8 (g). In Proponents' view, the Company did the bare minimum of activity it felt would pass muster under Rule 14a-8(i)(10). We do not believe the Company has carried its burden. The request for no-action should be denied.

If you have any questions or need additional information, please do not hesitate to call me at (202) 637-5379. I have enclosed six copies of this letter for the staff, and am sending copies to counsel for the Company.

Very truly yours,

/s/

Daniel F. Pedrotty, Esq.

DFP/me

opeiu #2, afl-cio

cc: Margaret M. Foran, Pfizer Amy Goodman, Gibson, Dunn & Crutcher LLP

[INQUIRY LETTER]

January 24, 2006

VIA HAND DELIVERY

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Re: Second Supplemental Letter Regarding Shareholder Proposal of the AFL-CIO Reserve Fund Securities Exchange Act of 1934Rule 14a-8

Dear Ladies and Gentlemen:

On December 16, 2005, Pfizer Inc. (the "Company") submitted a letter notifying the staff of the Division of Corporation Finance (the "Staff") that the Company intends to omit from its proxy statement and form of proxy for the Company's 2006 Annual Meeting of Shareholders a shareholder proposal (the "Proposal") and a statement in support thereof (the "Supporting Statement") received from the AFL-CIO Reserve Fund (the "Proponent"). The Company's letter, a copy of which is attached hereto as Exhibit A (the "Company Letter"), indicated the Company's belief that the Proposal may be excluded under Rule 14a-8(i)(10) because the Company has substantially implemented the Proposal. The Company subsequently submitted a supplemental letter, a copy of which is attached hereto as Exhibit B, that included a legal opinion from Gibson Dunn & Crutcher LLP, the Company's counsel, indicating that the Company has not retained the right to reduce previously-accrued benefits under the Pfizer Inc. Nonfunded Supplemental Retirement Plan (the "Supplemental Plan"). We write supplementally to respond to correspondence dated January 13, 2006 from the Proponent regarding the Proposal (the "Response").

The Proposal requires shareholder approval of supplemental retirement benefits "that will exceed 100 percent of the senior executive's final average salary, as calculated at the Board's discretion." In Paragraph II(A) of the Response, the Proponent alleges that the Company's recently-adopted policy regarding retirement benefits (the "Policy") differs in several important respects from the Proposal. First, the Proponent asserts that the Proposal' formulation refers only to base salary. In this regard, the attached letter to the Company from Gibson, Dunn & Crutcher LLP (Exhibit C) states that "final average salary" as defined in most retirement plans typically includes bonus and other amounts in addition to base salary, and that it is unusual for tax-qualified retirement plans and plans that supplement benefits under those plans to take into account only base salary. Specifically, the Company's retirement plans have always taken bonuses into account in determining benefits thereunder. Since at least July 1, 1943, the Pfizer Retirement Annuity Plan (the plan that the Supplemental Plan supplements) has treated bonuses as compensation. See Exhibit D (Section 8). In addition, since its implementation in 1965, the Pfizer Savings Plan has continued this approach and has taken into account bonuses as well as base pay and other items. See Exhibit E (Section II(H), which defines "Regular Earnings" to include base pay and bonuses). Thus, in this regard, the Policy is consistent with industry practice as well as the longstanding terms of the Company's retirement plans. In fact, it is consistent with the AFL-CIO's own description of supplemental retirement plans:

Supplemental Executive Retirement Plans (SERPs) give executives an employer-provided retirement benefit, often by using a traditional defined-benefit pension formula. Usually these plans provide a certain percentage of an executive's highest average compensation, payable annually for life.

http://www.aflcio.org/corporatewatch/paywatch/retirementsecurity/case sprint.cfm (emphasis added).

Second, the Proponent asserts that the Policy limits shareholder approval to the period of time prior to payment while the Proposal contains no such timing clause. We do not understand the Proponent's concern. Under the Policy, when shareholder approval is required, no payments can be made until such approval is obtained. The Policy is actually more favorable to shareholders than the Proposal, because if shareholder approval were not obtained before payments were made, the Company might have to try to obtain repayment of benefits when the executive may no longer have the money.

Further, in Paragraph II(B) of the Response, the Proponent alleges that the Policy lacks the requisite mechanical detail needed to substantially implement the Proposal. In doing so, the Proponent introduces a number of issues and requests in the Response that were not included in the Proposal or the Supporting Statement. First, the Proponent asserts that the Company has not published the Policy. Though the Proponent did not request in the Proposal or Supporting Statement that the Company publish the Proposal, the Company has made the Policy available on the Corporate Governance subsection of its corporate website and may be found at http://www.pfizer.com/pfizer/are/mn investors corporate pension.jsp. Second, the Proponent asserts that the Company, unlike the company in the Autonation Inc. (avail. Feb. 16, 2005) precedent that it cites, has not stated that the Board adopted the Policy as a "good faith exercise of its fiduciary duties." Such a statement is not necessary, as the fiduciary duties of directors under Delaware law apply to the Board of Directors regardless of whether such duties are stated in the Policy. Third, the Proponent raises issues relating to voting thresholds, requirements and venue with respect to the shareholder vote required under the Policy. Neither the Proposal nor the Supporting Statement requested that the Board follow specific guidelines when it seeks shareholder approval under the Policy. Requirements for shareholder approval are set forth in the Company's by-laws.

In addition, the Proponent asserts that certain items requested by the Proposal were not adequately addressed in the Policy adopted by the Board of Directors. Specifically, the Proponent asserts that the Policy does not address how the Policy will address future accruals of Dr. Henry McKinnell's pension benefits and whether the Company will seek shareholder approval for Dr. McKinnell's benefit accruals after January 1, 2006. This is not the case. The Policy, on its face and as published on the Company's website, obligates the Board of Directors to seek shareholder approval for all benefit accruals after January 1, 2006 in excess of 100 percent of final average salary made with respect to a senior executive officer, which includes Dr. McKinnell. Moreover, the Proponent asserts that the Policy does not provide guidance in the event that shareholders do not approve a benefit accrual for Dr. McKinnell. As discussed above, under the Policy, no payments of pension benefits in excess of 100 percent of his final average salary can be made to Dr. McKinnell, or any senior executive officer, until shareholder approval is obtained.

In Paragraphs II(C) and II(D) of the Response, the Proponent cites to precedent that the Company believes is inapplicable to the Proposal. The Proponent's reliance on the no-action letters issued to Cisco Systems, Inc. (avail. Aug. 31, 2005), Intel Corp. (avail. Mar. 11, 2003) and Wal-Mart Stores, Inc. (avail. Mar. 17, 2005) is inappropriate because the situations underlying these no-action letters differ significantly from the situation at hand. In each instance, the company argued that it had substantially implemented a proposal that it had adopted either incompletely (Cisco Systems and Wal-Mart) or with exceptions (Intel). As set forth in more detail in the Company Letter, the Policy adopted by the Board compares favorably to the Proposal and does not contain any exceptions to the matters requested in the Proposal.

Thus, for the reasons set forth above and in Exhibit A, Pfizer believes that the Policy substantially implements the Proposal and that the Proposal may therefore be omitted from Pfizer's proxy materials under Rule 14a-8(i)(10).

***

Pursuant to Rule 14a-8(j), enclosed herewith are six (6) copies of this supplemental letter and its attachment. Also, in accordance with Rule 14a-8(j), a copy of this supplemental letter and its attachments are being mailed on this date to the Proponent. The Company hereby agrees to promptly forward to the Proponent any Staff response to this no-action request that the Staff transmits by facsimile to the Company only. If we can be of any further assistance in this matter, please do not hesitate to call me at (212) 733-4802.

Sincerely,

/s/

Margaret M. Foran

Enclosures

cc: Brandon Rees, AFL-CIO Reserve Fund

[STAFF REPLY LETTER]

February 8, 2006

Response of the Office of Chief Counsel Division of Corporation Finance

Re: Pfizer Inc. Incoming letter dated December 16, 2005

The proposal requests that the board seek shareholder approval for annual pension benefits from Pfizer's supplemental executive retirement plan for senior executives that exceed 100 percent of the senior executive's final average salary.

We are unable to concur in your view that Pfizer may exclude the proposal under rule 14a-8(i)(10). Accordingly, we do not believe that Pfizer may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(10).

Sincerely,

/s/

Timothy A. Geishecker
Attorney-Adviser