Activist hedge fund Starboard met with Pfizer last week. Here's what went down.

Pfizer CEO Albert Bourla
AP Photo/Pablo Martinez Monsivais

Activist hedge fund Starboard has taken a stake in drug giant Pfizer.
Starboard execs met with company officials last week to outline their complaints.
See highlights from the 74-page slideshow Starboard presented to Pfizer at the meeting.

Activist hedge fund manager Jeff Smith outlined his concerns about drugmaker Pfizer on Tuesday but stopped short of offering a solution — saying that's a job for the board of directors.

Speaking at the 13D Monitor conference on activist investing in Manhattan, Smith, known for changing companies from within by winning board seats, said Pfizer needed to "amp up the accountability." He also shared a version of the presentation his hedge fund Starboard presented to Pfizer officials at a meeting last week.

"It's not often that investors and shareholders are able to see what we present to companies," Smith told the crowd gathered at the Pierre Hotel overlooking Central Park, adding, "But in this case, we thought it was important to make sure that we shared it."

The 74-page slideshow, which Smith said was "roughly" the same as the one shared with the company, called for improvements to Pfizer's drug research and development, spending on acquisitions, and forecasting of its financial results. Tying these themes together, Smith said, was a poor report card when it comes to return on investments.

Pfizer declined to comment.

"We all get measured by our track record," Smith told the crowd. "I get measured by my track record. I'm sure most of you in the world get measured by your track record. The track record is not great during this period of time in the pharma industry."

Smith said Pfizer needs to improve "discipline around their spend and getting the appropriate return on that spend," adding, "But this is a black eye on their diligence as well. They have some of the greatest scientists in the world."

He stopped short of providing a solution, saying he wanted to leave that up to the board.

"I could define what that is, I'm not going to define what that is, but they need to do something different to make sure that they're changing the way they're allocating capital internally in order to get the right return on that investment," he told the crowd.

Smith added: "They can't follow Einstein's definition of insanity and continue to do the same thing over and over again and expect a different result."

Smith hasn't yet said whether he wants board seats at Pfizer, but the 52-year-old Starboard cofounder has served on the board of companies his hedge fund has targeted before, including pizza chain Papa John's and the owner of Olive Garden and Red Lobster.

Here's a peek at the company's presentation to Pfizer.

Starboard see 4 key areas for improvement