PFIZER INC, DEF 14A, 1998-03-19

PFIZER INC
DEF 14A, 1998-03-19
PHARMACEUTICAL PREPARATIONS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securites Exchange Act of 1934
(Amendment No. )

Filed by the Registrant /x/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/ / Confidential, for the use of the Commission only (as permitted by
Rule 14a-6(e)(2)

/x/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

PFIZER INC.
- --------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/x/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:* ____________________________________________________

4) Proposed maximum aggregate value of transaction:_____________________________

5) Total fee paid: ____________________________________________________________

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

1) Amount previously paid: _____________________________________________________

2) Form, Schedule or Registration Statement No._________________________________

3) Filing party: _______________________________________________________________

4) Date filed:__________________________________________________________________

- -----------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.

<PAGE>

[Pfizer Logo]

PROXY STATEMENT
MARCH 19, 1998

[GRAPHIC OMITTED - Photograph of Four Employees]

SETTING THE PACE

<PAGE>

YOUR VOTE IS IMPORTANT

Shareholders of record can vote any one of three ways:

o By Telephone: Call the toll-free telephone number on your proxy card to
vote by phone.

o Via Internet: Visit the web site on your proxy card to vote via the
Internet.

o By Mail: Mark, sign, date and mail your proxy card to our Transfer
Agent, First Chicago Trust Company of New York, in the enclosed
postage-paid envelope.

If your shares are held in the name of a bank, broker or other holder of
record, you will receive instructions from the holder of record that you must
follow in order for your shares to be voted. Telephone and Internet voting also
will be offered to shareholders owning stock through certain banks and brokers.

ELIMINATE DUPLICATE MAILINGS

Securities and Exchange Commission ("SEC") rules require us to provide an
Annual Report to shareholders who receive this proxy statement. If you are a
shareholder of record and have more than one account in your name or at the same
address as other shareholders of record, you may authorize us to discontinue
mailings of multiple Annual Reports. To discontinue mailings of multiple Annual
Reports, mark the designated box on the appropriate proxy card(s), or follow the
prompts when you vote if you are a shareholder of record voting by telephone or
Internet.

<PAGE>

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PFIZER INC.
235 EAST 42ND STREET
NEW YORK, NY 10017

--------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------------------------------

TIME .................. 10:00 a.m. on Thursday, April 23, 1998

PLACE .................. Grand Hyatt Hotel
Empire State Ballroom
42nd Street and Lexington Avenue
New York, NY

ITEMS OF BUSINESS ...... (1) To elect five members of the Board of
Directors for three year terms.
(2) To approve KPMG Peat Marwick LLP as
our independent auditors for the 1998
fiscal year.
(3) To transact such other business as may
properly come before the Meeting and any
adjournment or postponement.

RECORD DATE ............ You can vote if you are a shareholder of record
on February 27, 1998.

ANNUAL REPORT ......... Our 1997 Annual Report, which is not a part of
the proxy soliciting material, is enclosed.

PROXY VOTING ............ It is important that your shares be represented
and voted at the Meeting. Please vote in one of
these ways:
(1) USE THE TOLL-FREE TELEPHONE NUMBER shown on
the proxy card (this call is free in the
U.S.);
(2) VISIT THE WEB SITE on your proxy card to vote
via the Internet; OR
(3) MARK, SIGN, DATE AND PROMPTLY RETURN the
enclosed proxy card in the postage-paid
envelope.

Any proxy may be revoked at any time prior to its
exercise at the Meeting.

C. L. Clemente
Secretary

March 19, 1998

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<PAGE>

TABLE OF CONTENTS
--------------------------------------------------------------------------
PAGE
PROXY STATEMENT ................................................... 1
Annual Meeting Admission .......................................... 1
Shareholders Entitled to Vote .................................... 1
Proxies ............................................................ 1
Vote by Telephone ................................................ 2
Vote by Internet ................................................... 2
Vote by Mail ...................................................... 2
Voting at the Annual Meeting ....................................... 2
Voting of Other Matters .......................................... 2
Consolidation of Your Vote ....................................... 2
List of Shareholders ............................................. 3
Required Vote ...................................................... 3
Multiple Copies of Annual Report to Shareholders .................. 3
Cost of Proxy Solicitation ....................................... 4
Shareholder Account Maintenance .................................... 4
Section 16(a) Beneficial Ownership Reporting Compliance ............ 4

GOVERNANCE OF THE COMPANY .......................................... 4
Our Corporate Governance Principles .............................. 4
Board and Committee Membership .................................... 7
The Audit Committee ................................................ 7
The Corporate Governance Committee ................................. 7
The Executive Compensation Committee .............................. 8
The Executive Committee .......................................... 8
Compensation of Directors .......................................... 9
Fees and Benefit Plans for Non-Employee Directors .................. 9
Related Transactions ............................................. 10
Indemnification ................................................... 10

ITEM 1--ELECTION OF DIRECTORS ...................................... 11
Security Ownership of Directors and Officers ..................... 11
Nominees for Directors Whose Terms Expire in 2001 .................. 12
Directors Whose Terms Expire in 1999 .............................. 14
Directors Whose Terms Expire in 2000 .............................. 16
Named Executive Officers Who Are Not Directors ..................... 19

ITEM 2--APPROVAL OF AUDITORS ...................................... 20

EXECUTIVE COMPENSATION ............................................. 21
Summary Compensation Table ....................................... 21
Total Options Exercised in 1997 and Year-End Values ............... 22
Option Grants in 1997 ............................................. 22
Long-Term Incentive Plans--Awards in 1997 .......................... 23
Executive Compensation Committee Report ........................... 24
Performance Graph ................................................ 29
Employee Benefit and Long-Term Compensation Plans .................. 30

REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS ...... 33

<PAGE>

PFIZER INC.
235 EAST 42ND STREET
NEW YORK, NEW YORK 10017

PROXY STATEMENT
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These proxy materials are delivered in connection with the solicitation
by the Board of Directors of Pfizer Inc. ("Pfizer," the "Company," "we," or
"us"), a Delaware corporation, of proxies to be voted at our 1998 Annual Meeting
of Shareholders and at any adjournment or postponement.

You are invited to attend our Annual Meeting of Shareholders on April 23,
1998, beginning at 10:00 a.m. The Meeting will be held at the Grand Hyatt Hotel,
Empire State Ballroom, at 42nd Street and Lexington Avenue, New York, New York.
Shareholders will be admitted beginning at 8:30 a.m.

The Empire State Ballroom is accessible to disabled persons and, upon
request, we will provide wireless headsets for hearing amplification. Sign
interpretation will also be offered upon request. Please call us in advance at
212-573-2265 if you require either of these services or other special
accommodations.

This Proxy Statement, form of proxy and voting instructions are being
mailed starting March 19, 1998.

ANNUAL MEETING ADMISSION

An admission ticket, which is required for entry into the Annual Meeting,
is attached to your proxy card. If you plan to attend the Annual Meeting, please
vote your proxy but keep the admission ticket and bring it to the Annual
Meeting.

If your shares are held in the name of a bank, broker or other holder of
record and you plan to attend the Meeting, you can obtain an admission ticket in
advance by providing proof of ownership, such as a bank or brokerage account
statement, to Pfizer Inc., c/o First Chicago Trust Company of New York, P.O. Box
8923, Edison, New Jersey 08818-8923, or by calling 212-573-2265. If you do not
have an admission ticket, you must show ownership of Pfizer common stock at the
door.

SHAREHOLDERS ENTITLED TO VOTE

Holders of record of Pfizer common shares at the close of business on
February 27, 1998 are entitled to receive this notice and to vote their shares
at the Annual Meeting. As of that date, there were 1,298,734,466 common shares
outstanding. Each common share is entitled to one vote on each matter properly
brought before the Meeting.

PROXIES

Your vote is important. Shareholders of record may vote their proxies by
telephone, Internet or mail. A toll-free telephone number and web site address
are included on your proxy card. If you choose to vote by mail, a postage-paid
envelope is provided.

<PAGE>

Proxies may be revoked at any time before they are exercised by (1)
written notice to the Secretary of the Company, (2) timely delivery of a valid,
later-dated proxy or (3) voting by ballot at the Annual Meeting.

YOU MAY SAVE US THE EXPENSE OF A SECOND MAILING BY VOTING PROMPTLY.
Choose ONE of the following voting methods to cast your vote.

VOTE BY TELEPHONE

You can vote your shares by telephone by calling the toll-free telephone
number (at no cost to you) on your proxy card. Telephone voting is available 24
hours a day. Easy-to-follow voice prompts allow you to vote your shares and
confirm that your instructions have been properly recorded. Our telephone voting
procedures are designed to authenticate shareholders by using individual control
numbers. If you vote by telephone you can also give instructions for us to
discontinue future duplicate Annual Reports. IF YOU VOTE BY TELEPHONE YOU DO NOT
NEED TO RETURN YOUR PROXY CARD. IF YOU ARE LOCATED OUTSIDE THE U.S. AND CANADA,
SEE YOUR PROXY CARD FOR ADDITIONAL INSTRUCTIONS.

VOTE BY INTERNET

You can also choose to vote via the Internet. The web site for Internet
voting is on your proxy card. Internet voting is available 24 hours a day. As
with telephone voting, you will be given the opportunity to confirm that your
instructions have been properly recorded, and you can give us instructions to
discontinue future duplicate Annual Reports. IF YOU VOTE VIA THE INTERNET YOU DO
NOT NEED TO RETURN YOUR PROXY CARD.

VOTE BY MAIL

If you choose to vote by mail, simply mark your proxy, date and sign it,
and return it to First Chicago in the postage-paid envelope provided. If you
wish to discontinue future duplicate Annual Reports, check the box provided on
the card.

VOTING AT THE ANNUAL MEETING

The method by which you vote now will in no way limit your right to vote
at the Annual Meeting if you later decide to attend in person. If your shares
are held in the name of a bank, broker or other holder of record, you must
obtain a proxy, executed in your favor, from the holder of record to be able to
vote at the Meeting.

All shares that have been properly voted--whether by telephone, Internet
or mail--and not revoked will be voted at the Annual Meeting in accordance with
your instructions. If you sign your proxy card but do not give voting
instructions, the shares represented by that proxy will be voted as recommended
by the Board of Directors.

VOTING OF OTHER MATTERS

If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed form of proxy will have the
discretion to vote on those matters for you. At the date this proxy statement
went to press, we do not know of any other matter to be raised at the Annual
Meeting.

CONSOLIDATION OF YOUR VOTE

This year, the shares you vote will be consolidated into one proxy card.
You will receive only one proxy card for all your shares, if they are held:

o In your own name,

o In the Pfizer Inc. Shareholder Investment Program (the "Program"),

or, if you are a Pfizer employee,

o In the Pfizer Inc. Savings and Investment Plan (the "Plan").

<PAGE>

Pfizer employees who are entitled to give voting instructions to the
trustee of the Pfizer Inc. Grantor Trust ("Trust") will not need to complete a
separate instruction card this year. Each vote of the shares consolidated into
the employee's proxy card will be furnished to the trustee of the Trust, as well
as the administrator of the Plan, as the employee's voting instructions for the
Plan shares and the Trust shares.

If you own, or are entitled to give voting instructions for, shares in
the Plan or the Trust and do not vote your shares or give voting instructions,
the Plan administrator will vote your Plan shares in the same proportion as the
shares for which voting instructions have been received, and the trustee of the
Trust will vote the Trust shares as if they were divided equally among the
employees from whom voting instructions are received. To allow sufficient time
for voting by the trustee of the Trust and the administrator of the Plan, your
voting instructions must be received by April 20, 1998.

If you hold Pfizer shares through any other of our plans, you will
receive voting instructions from that plan's administrator.

Please note that if you own shares in joint name, and other shares in
your own name, you will receive a separate proxy card for the joint ownership.
We can only consolidate identically named accounts.

LIST OF SHAREHOLDERS

A list of shareholders entitled to vote at the Annual Meeting will be
available at the Annual Meeting and for ten days prior to the Meeting, between
the hours of 8:45 a.m. and 4:30 p.m., at our offices at 235 East 42nd Street,
New York, New York 10017, by contacting the Secretary of the Company.

REQUIRED VOTE

The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the shareholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.

A plurality of the votes cast is required for the election of Directors.
Abstentions and broker "non-votes" are not counted for purposes of the election
of Directors.

The affirmative vote of a majority of the votes cast is required to
approve the appointment of KPMG Peat Marwick LLP. Abstentions and broker
"non-votes" are not counted for purposes of approving this matter.

MULTIPLE COPIES OF ANNUAL REPORT TO
SHAREHOLDERS

Our 1997 Annual Report to Shareholders has been mailed to shareholders.
If more than one copy of the Annual Report is sent to your address, we will
discontinue the mailing of reports on the accounts you select if you mark the
designated box on the appropriate proxy card(s), or follow the prompts when you
vote if you are a shareholder of record voting by telephone or Internet.

At least one account must continue to receive the Annual Report. Mailing
of dividends, Shareholder Investment statements, proxy materials and special
notices will not be affected by your election to discontinue future duplicate
mailings of the Annual Report. To discontinue or resume the mailing of an Annual
Report to an account, call the Pfizer Shareholder Services toll free number,
1-800-733-9393.

If you own common shares through a bank, broker or other nominee and
receive more than one Pfizer Annual Report, contact the holder of record to
eliminate duplicate mailings.

<PAGE>

COST OF PROXY SOLICITATION

We will pay the expenses of soliciting proxies. Proxies may be solicited
on our behalf by Directors, officers or employees in person or by telephone,
electronic transmission, facsimile transmission or by telegram. We have hired
Morrow & Co. to assist us in the distribution and solicitation of proxies. We
will pay Morrow & Co. a fee of $25,000 plus expenses for these services.

SHAREHOLDER ACCOUNT MAINTENANCE

Our Transfer Agent is First Chicago Trust Company of New York. All
communications concerning accounts of shareholders of record, including address
changes, name changes, inquiries as to requirements to transfer common shares
and similar issues can be handled by calling the Pfizer Shareholder Services
toll-free number 1-800-733-9393 or contacting First Chicago's web site at
www.fctc.com. For other information about Pfizer, shareholders can visit our web
site at www.pfizer.com.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our
Directors and executive officers to file reports of holdings and transactions in
Pfizer shares with the SEC and the New York Stock Exchange. Based on our records
and other information, we believe that in 1997 our Directors and executive
officers met all applicable SEC filing requirements.

GOVERNANCE OF THE COMPANY
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OUR CORPORATE GOVERNANCE PRINCIPLES

ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS

1. The Board of Directors, which is elected by the shareholders, is the
ultimate decision-making body of the Company except with respect to those
matters reserved to the shareholders. It selects the senior management team,
which is charged with the conduct of the Company's business. Having selected
the senior management team, the Board acts as an advisor and counselor to
senior management and ultimately monitors its performance.

2. The Board also plans for succession to the position of Chairman of the
Board and Chief Executive Officer as well as certain other senior management
positions. To assist the Board, the Chairman and CEO annually provides the
Board with an assessment of senior managers and their potential to succeed
him/her. He/she also provides the Board with an assessment of persons
considered potential successors to certain senior management positions.

3. It is the policy of the Company that the Board consist of a majority of
outside directors and that the number of directors not exceed a number that
can function efficiently as a body. The Corporate Governance Committee, in
consultation with the Chairman and CEO, considers and makes recommendations to
the Board concerning the appropriate size and needs of the Board. The
Corporate Governance Committee considers candidates to fill new positions
created by expansion and vacancies that occur by resignation, by retirement,
or for any other reason. Candidates are selected for their character,
judgment, business experience, and acumen. Scientific expertise, prior
government service, and familiarity with national and international issues
affecting business are among the relevant criteria. Final approval of a
candidate is determined by the full Board. The Corporate Governance Committee
annually reviews the compensation of directors. All directors are expected to
own stock in the Company in an amount that is appropriate for them.
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<PAGE>

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4. It is the general policy of the Company that all major decisions be
considered by the Board as a whole. As a consequence, the committee structure
of the Board is limited to those committees considered to be basic to or
required for the operation of a publicly owned company. Currently these
committees are the Executive Committee, Audit Committee, Executive Compensation
Committee, and Corporate Governance Committee. The members and chairs of these
committees are recommended to the Board by the Corporate Governance Committee
in consultation with the Chairman and CEO. The Audit Committee, Executive
Compensation Committee, and Corporate Governance Committee are made up of only
outside directors. The membership of these three committees is rotated from
time to time.

5. In furtherance of its policy of having major decisions made by the Board
as a whole, the Company has a full indoctrination process for new Board members
that includes extensive materials, meetings with key management, and visits to
Company facilities.

6. It is the policy of the Company that the chairs of the Audit, Executive
Compensation, and Corporate Governance committees of the Board each act as the
chair at meetings or executive sessions of the outside directors at which the
principal items to be considered are within the scope of the authority of his
or her committee. Experience has indicated that this practice, which has been
in place on an informal basis, provides for leadership at all of the meetings
or executive sessions of outside directors without the need to designate a lead
director.

7. The Executive Compensation Committee is responsible for setting annual
and long-term performance goals for the Chairman and CEO and for evaluating
his/her performance against such goals. The Committee meets annually with the
Chairman and CEO to receive his or her recommendations concerning such goals.
Both the goals and the evaluation are then submitted for consideration by the
outside directors of the Board at a meeting or executive session of that group.
The Committee then meets with the Chairman and CEO to evaluate his or her
performance against such goals. The Executive Compensation Committee is also
responsible for setting annual and long-term performance goals and compensation
for the direct reports to the Chairman and CEO. These decisions are approved or
ratified by action of the outside directors of the Board at a meeting or
executive session of that group.

8. It is the policy of the Company that the positions of Chairman of the
Board and Chief Executive Officer be held by the same person, except in unusual
circumstances. This combination has served the Company well over a great many
years. The function of the Board in monitoring the performance of the senior
management of the Company is fulfilled by the presence of outside directors of
stature who have a substantive knowledge of the business.

9. The Chairman and CEO is responsible for establishing effective
communications with the Company's stakeholder groups, i.e., shareholders,
customers, company associates, communities, suppliers, creditors, governments,
and corporate partners. It is the policy of the Company that management speaks
for the Company. This policy does not preclude outside directors from meeting
with shareholders, but it is suggested that any such meetings be with
management present.

FUNCTIONING OF THE BOARD

1. The Chairman of the Board and Chief Executive Officer sets the agenda
for Board meetings with the understanding that certain items pertinent to the
advisory and monitoring functions of the Board be brought to it periodically
by the Chairman and CEO for review and/or decision. For example, the annual
corporate budget is reviewed by the
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<PAGE>

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Board. Agenda items that fall within the scope of responsibilities of a Board
committee are reviewed with the chair of that committee. Any member of the
Board may request that an item be included on the agenda.

2. Decisions made by the Corporate Management Committee, which is the
Company's senior management committee, are reported to the Board at each
meeting with the understanding that such decisions are subject to change by
the Board.

3. Board materials related to agenda items are provided to Board members
sufficiently in advance of Board meetings where necessary to allow the
directors to prepare for discussion of the items at the meeting.

4. At the invitation of the Board, members of senior management recommended
by the Chairman and CEO attend Board meetings or portions thereof for the
purpose of participating in discussions. Generally, presentations of matters
to be considered by the Board are made by the manager responsible for that
area of the Company's operations. In addition, Board members have free access
to all other members of management and employees of the Company.

5. Executive sessions or meetings of outside directors without management
present are held at least once each year to review the report of the outside
auditors, the criteria upon which the performance of the Chairman and CEO and
other senior managers is based, the performance of the Chairman and CEO
against such criteria, and the compensation of the Chairman and CEO and other
senior managers. Additional executive sessions or meetings of outside
directors may be held from time to time as required. Executive sessions or
meetings are held from time to time with the Chairman and CEO for a general
discussion of relevant subjects.

FUNCTIONING OF COMMITTEES

1. The Audit, Executive Compensation, and Corporate Governance committees
consist of only outside directors.

2. The frequency, length, and agenda of meetings of each of the committees
are determined by the chair of the committee. Sufficient time to consider the
agenda items is provided. Materials related to agenda items are provided to
the committee members sufficiently in advance of the meeting where necessary
to allow the members to prepare for discussion of the items at the meeting.

3. The responsibilities of each of the committees are determined by the
Board from time to time.

PERIODIC REVIEW

These principles are reviewed by the Board from time to time.

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<PAGE>

BOARD AND COMMITTEE MEMBERSHIP

During 1997, the Board of Directors met ten times and had four ongoing
committees. Those committees consisted of: an Audit Committee, a Corporate
Governance Committee, an Executive Compensation Committee, and an Executive
Committee. All of our Directors attended eighty-eight percent or more of the
meetings of the Board and Board committees on which they served in 1997.

<TABLE>
<CAPTION>
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CORPORATE EXECUTIVE
NAME BOARD AUDIT GOVERNANCE COMPENSATION EXECUTIVE
- ---- ----- ------ ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Dr. Brown ............... X X
Mr. Burns ............... X X* X
Mr. Cornwell ............ X X
Mr. Harvey ............... X X
Ms. Horner ............... X X*
Dr. Ikenberry ............ X X* X
Mr. Kamen ............... X X
Mr. Labrecque ............ X X
Dr. McKinnell ............ X
Mr. Mead .................. X X
Dr. Niblack ............... X
Dr. Simmons ............... X X
Mr. Steere ............... X* X*
Dr. Valles ............... X X
1997 Meetings ............ 10 6 5 12 0
-------------
* Chair
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</TABLE>

THE AUDIT COMMITTEE

The Audit Committee is responsible for recommending the annual
appointment of the public accounting firm to be our outside auditors, subject to
approval by the Board and the shareholders. The Committee:

o reviews with the outside auditors the scope of the audit, the auditors' fees
and related matters;

o receives copies of the annual comments from the outside auditors on
accounting procedures and systems of control;

o reviews with the outside auditors any questions, comments or suggestions
they may have relating to our internal controls, accounting practices or
procedures or those of our subsidiaries;

o reviews with management and the outside auditors our annual and quarterly
financial statements and any material changes in accounting principles or
practices used in preparing the statements;

o reviews the programs of our Internal Audit Department, including procedures
for assuring implementation of accepted recommendations made by the outside
auditors, and receives summaries of all audit reports issued by the Internal
Audit Department; and

o reviews compliance with laws, regulations, and internal procedures,
contingent liabilities and risks that may be material to us.

THE CORPORATE GOVERNANCE COMMITTEE

The Corporate Governance Committee is responsible for considering and
making

<PAGE>

recommendations to the Board concerning the appropriate size, function, and
needs of the Board. This responsibility includes:

o considering and recommending candidates to fill new positions on the Board;

o reviewing candidates recommended by shareholders;

o conducting inquiries into the backgrounds and qualifications of possible
candidates; and

o recommending the Director nominees for approval by the Board and the
shareholders.

The Committee's additional functions are:

o to consider questions of possible conflicts of interest of Board members and
of our senior executives;

o to monitor and recommend the functions of the various committees of the
Board;

o to recommend members of the committees;

o to advise on changes in Board compensation;

o to make recommendations on the structure of Board meetings; and

o to recommend matters for consideration by the Board.

In addition, the Committee:

o considers and reviews our Corporate Governance Principles;

o establishes Director retirement policies;

o reviews the functions of the senior officers and makes recommendations on
changes;

o reviews the job performance of officers and other senior executives with the
Chairman and CEO;

o reviews the outside activities of senior executives; and

o reviews with the Chairman and CEO the succession plans relating to officer
positions.

THE EXECUTIVE COMPENSATION COMMITTEE

The Executive Compensation Committee is responsible for establishing
annual and long-term performance goals for our elected officers. This
responsibility includes establishing the compensation and evaluating the
performance of the Chairman and CEO and other elected officers. The Committee's
additional functions include:

o to determine and certify the shares awarded under the Performance- Contingent
Share Award Program;

o to grant options and awards under the Stock and Incentive Plan;

o to advise on the setting of compensation for senior executives whose
compensation is not otherwise set by the Committee;

o to monitor compliance by officers with our program of required stock
ownership; and

o to publish an annual Executive Compensation Committee Report for the
shareholders.

THE EXECUTIVE COMMITTEE

The Executive Committee performs such duties and exercises the powers
delegated to them by the Board of Directors.

<PAGE>

<TABLE>
<CAPTION>
COMPENSATION OF DIRECTORS
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CASH RETAINER AND MEETING FEES
------------------------------

ANNUAL BOARD AND
BOARD/COMMITTEE BUSINESS COMMITTEE
DIRECTOR RETAINER MEETING FEES MEETING FEES TOTAL
- -------- ---------------- -------------- -------------- --------
<S> <C> <C> <C> <C>
Dr. Brown ......... $30,000 $15,000 $ 6,000 $51,000
Mr. Burns ......... 32,000 13,500 16,500 62,000
Mr. Cornwell ...... 25,167 14,250 6,750 46,167
Mr. Harvey ......... 30,000 16,500 15,000 61,500
Ms. Horner ......... 31,833 16,500 7,500 55,833
Dr. Ikenberry ...... 32,000 13,500 6,000 51,500
Mr. Kamen ......... 30,000 16,500 7,500 54,000
Mr. Labrecque ...... 30,000 15,000 18,000 63,000
Dr. Simmons ......... 29,667 16,500 7,500 53,667
Dr. Valles ......... 29,667 16,500 9,000 55,167
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</TABLE>

FEES AND BENEFIT PLANS FOR NON-EMPLOYEE DIRECTORS

ANNUAL CASH RETAINER FEES. Non-employee Directors receive an annual cash
retainer fee of $26,000 per year. Non-employee Directors who serve on one Board
committee or more (other than the Executive Committee) receive an additional
annual fee of $4,000. In addition, the Chair of a Board committee receives an
additional $2,000 per year, per committee.

MEETING FEES. Non-employee Directors also receive a fee of $1,500 for
attending each Board meeting, committee meeting, the Annual Meeting of
Shareholders, for each day of a visit to a plant or office of ours or our
subsidiaries, and for attending any other business meeting to which the Director
is invited by the Board or the Executive Committee.

UNIT AWARDS. On the day of the 1997 Annual Meeting of Shareholders, all
of our non-employee Directors who continued as Directors were awarded 600 units
under the Pfizer Inc. Nonfunded Deferred Compensation and Unit Award Plan for
Non-Employee Directors (the "Unit Award Plan"). Each of these 600 unit awards
was subsequently adjusted to 1,200 units to reflect last year's stock split.
Upon joining the Board on January 1, 1998, Mr. Mead received an initial award of
1,200 units under the Unit Award Plan.

Under the Unit Award Plan, Directors who are not our employees may defer
all or a part of their annual cash retainers and meeting fees until they cease
to be Directors. At the Director's election, the fees held in the Director's
account may be credited either with interest at the rate of return of the Fixed
Income Fund (Fund A) of the Pfizer Inc. Savings and Investment Plan, or with
units. The units are calculated by dividing the amount of the fee by the closing
price of our common stock on the last business day before the date that the fee
would be paid. The units in a Director's account are increased by the value of
any distributions on the common stock. When a Director ceases to be a Director,
the amount held in the Director's account is paid in cash. The amount paid is
determined by multiplying the number of units in the account by the closing
price of the common stock on the last business day before the payment date.

Also under the Unit Award Plan, non-employee Directors are granted an
initial award of 1,200 units when they become a Director. Afterwards, each
non-employee Director is granted an annual award of 1,200 units ("Annual Unit
Award") on the day of our Annual Meeting, provided the Director continues to
serve as a Director following the meeting. The awards under the Unit Award Plan
are made in addition to the Directors' annual cash retainers and meeting
attendance fees. Such units are not payable until the recipients cease to be
Directors.

<PAGE>

RETAINER UNIT AWARDS. On the day of the 1997 Annual Meeting of
Shareholders, all non-employee Directors who continued as Directors were also
awarded 303 units (later adjusted to 606 units) under the Pfizer Inc. Annual
Retainer Unit Award Plan. Under this Plan, Directors receive the share
equivalent of their annual retainer fee in similarly restricted units. These
awards are in addition to the Annual Unit Awards, the Directors' annual cash
retainers and meeting attendance fees, and are made annually on the day of our
Annual Meeting. The number of units awarded to the non-employee Directors is
based upon the five-day average of the closing trading price of our common stock
on the New York Stock Exchange for the first five trading days after April 1 of
each year (rounded up to the nearest unit).

RETIREMENT BENEFITS. In 1995, our Retirement Plan for Non-Employee
Directors was terminated. Mr Harvey, Ms. Horner, Mr. Labrecque and Dr. Valles
received the following one-time payments in 1997 in lieu of pension benefits:
$27,491; $67,047; $67,047 and $70,829.

TRUSTS. In certain circumstances, we are obligated to fund trusts
established to secure our obligations to make payments to our Directors under
the above benefit plans, programs or agreements in advance of the time payment
is due.

RELATED TRANSACTIONS

From time to time in 1997, we asked Dr. Brown to provide consulting
services in connection with our business. He received a total of $64,000 for
those services. We anticipate that Dr. Brown will continue to provide similar
services to us in the future as he and we may agree from time to time.

We have business arrangements with organizations with which certain of
our Directors are affiliated. However, none of those arrangements are material
to either us or any of those organizations.

We incurred expenses for the personal use of Company transportation of
$11,518 by Dr. Brown, $7,388 by Mr. Cornwell and $3,581 by Dr. Ikenberry.

INDEMNIFICATION

We indemnify our Directors and officers to the fullest extent permitted
by law so that they will serve free from undue concern that they will not be
indemnified. This is required under our By-laws, and we have also signed
agreements with each of those individuals contractually obligating us to provide
this indemnification to them.

<PAGE>

ITEM 1--ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------

The Board of Directors is divided into three classes, currently
consisting of two classes of five and one class of four Directors each, whose
terms expire at successive annual meetings. Five Directors will be elected at
the Annual Meeting to serve for a three-year term expiring at our Annual Meeting
in the year 2001.

The persons named in the enclosed proxy intend to vote the proxy for the
election of each of the five nominees, unless you indicate on the proxy card
that your vote should be withheld from any or all of such nominees. If you are
voting by telephone or Internet, you will be instructed how to withhold your
vote from some or all of such nominees. Each nominee elected as a Director will
continue in office until his or her successor has been elected, or until his or
her death, resignation or retirement.

The Board of Directors has proposed the following nominees for election
as Directors with terms expiring in 2001 at the Annual Meeting: W. Don
Cornwell; Henry A. McKinnell; Dana G. Mead; Ruth J. Simmons and William C.
Steere, Jr.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES FOR ELECTION AS DIRECTORS.

We expect each nominee for election as a Director to be able to serve if
elected. If any nominee is not able to serve, proxies will be voted in favor of
the remainder of those nominated and may be voted for substitute nominees,
unless the Board chooses to reduce the number of Directors serving on the Board.

The principal occupation and certain other information about the nominees
and other Directors whose terms of office continue after the Annual Meeting are
set forth on the following pages.

SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS

As of February 27, 1998, the nominees, other Directors, and the named
executive officers of the Company:

o owned beneficially, directly or indirectly, the number of shares of common
stock indicated;

o held options, exercisable within 60 days after that date, to purchase the
number of shares of common stock indicated pursuant to the Company's Stock
and Incentive Plan;

o held the number of units indicated pursuant to the Company's Nonfunded
Deferred Compensation and Unit Award Plan for Non-Employee Directors and the
Company's Annual Retainer Unit Award Plan; and

o held the number of units indicated pursuant to the Company's Supplemental
Savings Plan.

As of that date, no such person beneficially owned more than .05 percent
of the outstanding common stock; all Directors and executive officers as a group
owned 2,424,403 shares of common stock and options, exercisable within 60 days
after that date, to purchase 3,167,918 shares of common stock, which together
amounted to less than one percent of the outstanding common stock.

<PAGE>

NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

- --------------------------------------------------------------------------------
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 2001
- --------------------------------------------------------------------------------

W. DON CORNWELL 50 Shares: 100 Units: 3,475(2)
[PHOTO OMITTED]

Chairman of the Board and Chief Executive Officer since 1988 of Granite
Broadcasting Corporation, a group broadcasting company. Director of CVS
Corporation. Also, a Director of the National Association of Broadcasters,
Hershey Trust Company and Milton Hershey School. Trustee of Occidental College,
the Jacob Javits Foundation and Big Brothers/Sisters of New York. Our Director
since February 1997. Member of our Audit Committee.
- --------------------------------------------------------------------------------

HENRY A. MCKINNELL 55 Shares: 116,708 Options: 442,244 Units: 12,587(3)
[PHOTO OMITTED]

One of our Executive Vice Presidents since 1992 and President - Pfizer
Pharmaceuticals Group since January, 1997. Responsible for our Consumer Health
Care and Corporate Strategic Planning and Policy Groups since 1995, and for our
Medical Technology Group from 1992 to 1995. Our Chief Financial Officer from
1990 through 1996. Director of Aviall, Inc., Dun & Bradstreet Corp. and John
Wiley & Sons, Inc. Also a Director of the Healthcare Leadership Council, the
Committee for Economic Development and the National Association of
Manufacturers. Member of the Board of Trustees of the New York Public Library
and the New York City Police Foundation. Our Director since June 1997.
- --------------------------------------------------------------------------------

12
<PAGE>

NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

- --------------------------------------------------------------------------------
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 2001
(CONTINUED)
- --------------------------------------------------------------------------------

DANA G. MEAD 62 Shares: 1,000 Units: 1,202(2)
[PHOTO OMITTED]

Chairman of the Board and Chief Executive Officer since 1994 of Tenneco Inc., a
global manufacturing company with operations in automotive parts and packaging.
Chief Operating Officer, President and member of the Board of Tenneco since
1992. Director of Textron Inc., Zurich Insurance, Zurich Life Insurance
companies and Unisource World- wide, Inc. Also a Director of Newport News
Shipbuilding, a former Tenneco subsidiary. Member of the Business Roundtable.
Our Director since January 1998. Member of our Executive Compensation Committee.
- --------------------------------------------------------------------------------

RUTH J. SIMMONS 52 Shares: 100 Units: 3,044(2)
[PHOTO OMITTED]

President since 1995 of Smith College, a private liberal arts college for women
located in Northampton, Massachusetts. Vice Provost of Princeton University from
1992 to 1995. Provost of Spelman College from 1990 to 1991. Director of
Metropolitan Life Insurance Company. Trustee of the Institute for Advanced Study
and Member of The Conference Board. Fellow of the American Academy of Arts and
Sciences and Member of the Council on Foreign Relations. Our Director since
January 1997. Member of our Audit Committee.
- --------------------------------------------------------------------------------

13
<PAGE>

NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

WILLIAM C. STEERE, JR. 61 Shares: 540,143 Options: 635,200 Units: 43,236(3)
[PHOTO OMITTED]

Chairman of our Board since 1992. Our Chief Executive Officer since April 1991.
Our President from 1991 to 1992. One of our Senior Vice Presidents from 1989 to
1991. Director of Dow Jones Inc., Texaco Inc., Minerals Technologies Inc. and
Metropolitan Life Insurance Company. Also a Director of the New York University
Medical Center and the New York Botanical Garden. Member of the Board of
Directors and Executive Committee of the Pharmaceutical Research and
Manufacturers of America and member of the board of overseers of Memorial
Sloan-Kettering Cancer Center. Member of the Business Roundtable. Our Director
since 1987. Chair of our Executive Committee.
- --------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1999
- --------------------------------------------------------------------------------

MICHAEL S. BROWN 57 Shares: 200 Units: 3,053(2)
[PHOTO OMITTED]

Distinguished Chair in Biomedical Sciences from 1989 and Regental Professor from
1985 at the University of Texas Southwestern Medical Center at Dallas.
Co-recipient of the Nobel Prize in Physiology or Medicine in 1985 and the
National Medal of Science in 1988. Member of the National Academy of Sciences.
Director of Regeneron Pharmaceuticals, Inc. Our Director since 1996. Member of
our Corporate Governance Committee.
- --------------------------------------------------------------------------------

<PAGE>

NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

- --------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1999
(CONTINUED)
- --------------------------------------------------------------------------------

CONSTANCE J. HORNER 56 Shares: 6,153 Units: 5,070(2)
[PHOTO OMITTED]

Guest Scholar since 1993 at The Brookings Institution, an organization devoted
to nonpartisan research, education and publication in economics, government and
foreign policy and the social sciences. Commissioner of the U.S. Commission on
Civil Rights since 1993. Served at the White House as Assistant to the President
and as Director of Presidential Personnel from August 1991 to January 1993.
Deputy Secretary, U. S. Department of Health and Human Services from 1989 to
1991. Director of the U. S. Office of Personnel Management from 1985 to 1989.
Director of Foster Wheeler Corporation, Ingersoll-Rand Company and The
Prudential Insurance Co. of America. Our Director since 1993. Chair of our
Corporate Governance Committee.
- --------------------------------------------------------------------------------

THOMAS G. LABRECQUE 59 Shares: 6,800 Units: 5,070(2)
[PHOTO OMITTED]

President and a Director of The Chase Manhattan Corporation, a bank holding
company, and The Chase Manhattan Bank, since April 1996. Chairman and Chief
Executive Officer of The Chase Manhattan Corporation and The Chase Manhattan
Bank, N.A. from 1990 through 1996. Member of the Business Council, the Council
on Foreign Relations, the Council on Competitiveness and the Trilateral
Commission. Member and Past President of The Bankers Roundtable and the
International Monetary Conference. Our Director since 1993. Member of our
Executive Compensation Committee.
- --------------------------------------------------------------------------------

<PAGE>
NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

JEAN-PAUL VALLES 61 Shares: 263,060(4) Options: 66,000 Units: 17,181(2)
[PHOTO OMITTED]

Chairman of Minerals Technologies Inc. ("MTI"), a resource and technology-based
company that develops, produces and markets specialty mineral, mineral-based and
synthetic mineral products, since 1989. Chief Executive Officer of MTI since
1992. Formerly our Vice Chairman from March to October 1992. Responsible for
several of our business groups since 1989, and served in a number of executive
positions, including Executive Vice President from 1991 to 1992. Our Director
since 1980. Director of the National Association of Manufacturers. Member of our
Audit Committee.
- --------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 2000
- --------------------------------------------------------------------------------

M. ANTHONY BURNS 55 Shares: 6,800 Units: 5,070(2)
[PHOTO OMITTED]

Chairman of the Board since 1985, Chief Executive Officer since 1983, President
and Director since 1979, of Ryder System, Inc., a provider of transportation and
logistics services. Director of The Chase Manhattan Bank, The Chase Manhattan
Corporation and J. C. Penney Company, Inc. Trustee of the University of Miami.
Member of the Business Council, the Business Roundtable and the Business
Roundtable's Policy Committee and Chairman of its Health and Retirement Task
Force. Our Director since 1988. Chair of our Executive Compensation Committee
and Member of our Executive Committee.
- --------------------------------------------------------------------------------

<PAGE>
NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

- --------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 2000
(CONTINUED)
- --------------------------------------------------------------------------------

GEORGE B. HARVEY 67 Shares: 6,336 Units: 13,001(2)
[PHOTO OMITTED]

Former Chairman, President, and Chief Executive Officer (from 1983 through 1996)
and Director (from 1980 through 1996) of Pitney Bowes Inc., a provider of
mailing and office systems and management and financial services. Director of
McGraw-Hill, Inc., Merrill Lynch & Co., Inc., and Massachusetts Mutual Life
Insurance Company. Our Director since 1994. Member of our Executive Compensation
Committee.
- --------------------------------------------------------------------------------

STANLEY O. IKENBERRY 63 Shares: 13,190(4) Units: 34,658(2)
[PHOTO OMITTED]

President since 1996 of the American Council on Education, an independent
nonprofit association dedicated to ensuring high quality education at colleges
and universities throughout the United States. President, from 1979 through July
1995, of the University of Illinois. Director of Utilicorp United Inc. Chairman
of the Board of Trustees of the Carnegie Foundation for the Advancement of
Teaching. Our Director since 1982. Chair of our Audit Committee and Member of
our Executive Committee.
- --------------------------------------------------------------------------------

<PAGE>

NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

HARRY P. KAMEN 64 Shares: 840 Units: 5,072(2)
[PHOTO OMITTED]

Chairman of the Board and Chief Executive Officer since 1993, and President from
1995 through November 1997, of Metropolitan Life Insurance Company, a
multi-service insurance provider. Director of Bethlehem Steel Corporation, The
New England Life Insurance Company, the New England Investment Companies Inc.
and Banco Santander (Spain). Vice Chairman of the Conference Board and Treasurer
of the New York City Partnership. Member of The Business Council of New York
State and The Business Roundtable, the New York Investment Fund and the Board of
Governors of the National Association of Securities Dealers. Our Director since
1996. Member of our Corporate Governance Committee.
- --------------------------------------------------------------------------------

JOHN F. NIBLACK 59 Shares: 134,671 Options: 220,876 Units: 8,378(3)
[PHOTO OMITTED]

One of our Executive Vice Presidents since 1993. Responsible for our Central
Research, Animal Health, Licensing and Development, Corporate Quality Assurance
and Medical Affairs Divisions. Dr. Niblack was elected our Vice
President-Central Research in 1990. Our Director since June 1997.
- --------------------------------------------------------------------------------

<PAGE>

NAME AND AGE AS OF THE APRIL 23, 1998 MEETING DATE

AMOUNT OF BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK,(1) OPTIONS AND UNITS

POSITION, PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTORSHIPS

- --------------------------------------------------------------------------------
NAMED EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
- --------------------------------------------------------------------------------

PAUL S. MILLER 59 Shares: 123,832 Options: 135,300 Units: 9,579(3)

Our Senior Vice President; General Counsel since 1992. Mr. Miller was elected
our Vice President; General Counsel in 1986.
- --------------------------------------------------------------------------------

C.L. CLEMENTE 60 Shares: 160,902(4) Options: 249,910 Units: 30,185(3)

Our Senior Vice President-Corporate Affairs; Secretary and Corporate Counsel
since 1992. Mr. Clemente was elected our Vice President; General Counsel and
Secretary in 1986.

- ----------
(1) As of February 27, 1998, this number includes shares credited under the
Savings and Investment Plan, or deferred under the Performance-Contingent
Share Award Program. The Plan and the Program are further described in this
Proxy Statement under the heading "Employee Benefit and Long-Term
Compensation Plans."

(2) As of February 27, 1998, these units are held under the Pfizer Inc.
Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee
Directors and the Pfizer Inc. Annual Retainer Unit Award Plan. The value
of a director's unit account is measured by the price of the common stock.
The Plans are further described in this Proxy Statement under the heading
"Fees and Benefit Plans for Non-Employee Directors."

(3) As of February 27, 1998, these units are held under the Supplemental Savings
Plan. The value of these units is measured by the price of the common stock.
This Plan is further described in this Proxy Statement under the sub-heading
"Savings and Investment Plan."

(4) These shares do not include the following number of shares held in the
names of family members, as to which beneficial ownership is disclaimed:
Mr. Clemente - 8,712 shares; Dr. Ikenberry - 6,000 shares; and Dr. Valles
- 47,440 shares.

<PAGE>

ITEM 2--APPROVAL OF AUDITORS
- --------------------------------------------------------------------------------

The Board of Directors, upon the recommendation of its Audit Committee,
has appointed KPMG Peat Marwick LLP to serve as our independent auditors for
1998, subject to the approval of our shareholders.

Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting to answer questions. They will also have the opportunity to make a
statement if they desire to do so.

Total audit fees incurred by us for all independent auditors for 1997
were approximately $4,790,000, of which approximately $4,631,000 was
attributable to KPMG Peat Marwick LLP.

The affirmative vote of a majority of votes cast on this proposal is
required for the approval of this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF KPMG PEAT
MARWICK LLP AS OUR INDEPENDENT AUDITORS FOR THE YEAR 1998.

<PAGE>

EXECUTIVE COMPENSATION
- -----------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
--------------------------

ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------ ---------------------------
AWARDS PAYMENTS
------------- -------------
OTHER SECURITIES
ANNUAL UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS (1) COMPENSATION (2) OPTIONS (3) PAYOUTS (4) COMPENSATION (5)
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($) ($)
- ---------------------- ------ ----------- ----------- ------------------ ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mr. Steere ......... 1997 1,316,500 2,545,300 17,968 300,000 8,837,500 144,688
Chairman/CEO
" " " ............... 1996 1,190,000 2,300,700 20,747 300,000 3,815,000 131,053
" " " ............... 1995 1,030,000 2,060,000 24,560 300,000 2,036,250 119,015
- -----------------------------------------------------------------------------------------------------------------------
Dr. McKinnell ...... 1997 787,000 971,900 37,300 130,000 3,535,000 63,584
Executive V.P.
" " " ............... 1996 704,000 802,600 24,144 120,000 1,430,625 57,294
" " " ............... 1995 608,000 720,000 17,350 120,000 733,050 45,373
- -----------------------------------------------------------------------------------------------------------------------
Dr. Niblack ......... 1997 712,600 783,900 4,845 120,000 2,969,400 54,324
Executive V.P.
" " " ............... 1996 640,000 645,500 4,935 100,000 1,201,725 50,457
Dr. Niblack ......... 1995 569,833 615,000 4,123 100,000 610,875 40,204
Executive V.P.-
Research and
Development
- -----------------------------------------------------------------------------------------------------------------------
Mr. Miller ......... 1997 619,400 588,400 17,279 90,000 2,121,000 43,340
Senior V.P.;
General Counsel
" " " ............... 1996 540,000 464,100 17,912 80,000 858,375 35,834
" " " ............... 1995 456,250 350,000 12,821 70,000 407,250 30,427
- -----------------------------------------------------------------------------------------------------------------------
Mr. Clemente ...... 1997 573,600 473,200 20,373 70,000 1,908,900 38,508
Senior V.P.-
Corporate Affairs;
Secretary and
Corporate Counsel

" " " ............... 1996 507,500 389,100 17,117 60,000 801,150 39,108
" " " ............... 1995 451,250 310,000 13,257 50,000 407,250 28,353
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The amounts shown in this column for 1997 constitute the Annual Incentive
Awards made to each officer based on the Board's evaluation of each
officer's performance. These awards are discussed in further detail in the
Executive Compensation Committee Report.

(2) The amounts shown in this column represent tax payments made by us on behalf
of each officer relating to his use of Company transportation and for
personal financial counseling.

(3) Adjusted for our June 1997 two-for-one stock split.

(4) Represents the dollar market value of shares of our common stock on February
25, 1998 (the payment date) earned under the Company's
Performance-Contingent Share Award Program using the closing sales price of
our common stock ($88.375) on the New York Stock Exchange on that date. The
number of Performance-Contingent Shares awarded to each Named Executive
Officer was as follows: Mr. Steere, 100,000 shares; Dr. McKinnell, 40,000
shares; Dr. Niblack, 33,600 shares; Mr. Miller, 24,000 shares; Mr. Clemente,
21,600 shares; and all executive officers and Directors as a group, 388,400
shares. These numbers are subject to adjustment, which is not expected to be
significant, when the final diluted earnings per share amounts of our Peer
Group companies are available. Our Peer Group companies are listed in the
footnote to our Performance Graph.

(5) The amounts shown in this column represent Company matching funds under our
Savings and Investment Plan (a retirement savings plan) and related
supplemental plan which are discussed under the heading "Employee Benefit
and Long-Term Compensation Plans."

<PAGE>

TOTAL OPTIONS EXERCISED IN 1997 AND YEAR-END VALUES

This table gives information for options exercised by each of the Named
Executive Officers in 1997, and the value (stock price less exercise price) of
the remaining options held by those executive officers at year-end, using the
mean of the high and the low trading price ($75.1875) of our common stock on
December 31, 1997.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS HELD AT 12/31/97 AT 12/31/97
----------------------------- ----------------------------
SHARES VALUE
ACQUIRED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME ON EXERCISE(#) ($) (#) (#) ($) ($)
- ----------------------- ---------------- ------------ ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Steere ......... 411,872 15,402,984 735,200 840,000 39,504,378 31,239,900
Dr. McKinnell ...... 110,972 4,256,296 442,244 338,000 24,693,073 12,232,975
Dr. Niblack ......... 38,312 1,642,817 260,876 292,000 14,137,504 10,351,790
Mr. Miller ......... 103,564 4,419,251 166,036 228,000 8,820,251 8,169,030
Mr. Clemente ...... 67,462 3,070,596 249,910 157,500 14,162,501 5,303,496
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

OPTION GRANTS IN 1997

This table shows all options to purchase our common stock granted to each
of our Named Executive Officers in 1997 and the potential value of such grants
at stock price appreciation rates of 0%, 5% and 10%, compounded annually over
the maximum ten-year term of the options. Also shown is the potential gain of
all outstanding shares of common stock held by our shareholders as of December
31, 1997 using the same base price and appreciation rates and compounded over
the same ten-year period. The 5% and 10% rates of appreciation are required to
be disclosed by SEC rules and are not intended to forecast possible future
appreciation, if any, in our stock price.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED
INDIVIDUAL ANNUAL RATES OF STOCK PRICE
GRANTS APPRECIATION FOR OPTION TERM ($)
--------------------------------------------------------- --------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) (1) FISCAL YEAR ($/SH) (2) DATE 0% 5% 10%
- ---------------------- ----------------- -------------- ------------ ----------- ---- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mr. Steere ......... 300,000 2.10 55.04 8/27/07 0 10,384,308 26,315,876
Dr. McKinnell ...... 130,000 0.91 55.04 8/27/07 0 4,499,867 11,403,546
Dr. Niblack ......... 120,000 0.84 55.04 8/27/07 0 4,153,723 10,526,350
Mr. Miller ......... 90,000 0.63 55.04 8/27/07 0 3,115,292 7,894,763
Mr. Clemente ...... 70,000 0.49 55.04 8/27/07 0 2,423,005 6,140,371
Potential Gain for all shareholders at Assumed Appreciation Rates ......... 0 44,941,423,764 113,890,391,522
- ----------

(1) Option grants for Named Executive Officers who received grants in 1997
consisted of Key-Employee Grants that are exercisable one-fifth on each
anniversary date beginning on 8/28/98.

(2) The exercise price for all stock option grants shown in this column is the
average of the high and low market price of our common stock on the date of
the grant.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

LONG-TERM INCENTIVE PLAN-AWARDS IN 1997

This table gives information concerning the participation of the Named
Executive Officers in a long-term compensation plan called the
Performance-Contingent Share Award Program. Under this plan, they were awarded
the right to earn shares of our common stock ("Performance-Contingent Shares").
Actual payouts of these Performance-Contingent Shares, if any, will be
determined by a non-discretionary formula which measures our performance over a
five-year period using certain performance goals that were determined by our
Executive Compensation Committee and approved by the Board. The formula is
comprised of two performance criteria, total shareholder return (including
reinvestment of dividends) and growth in diluted earnings per share, over the
performance period relative to the industry Peer Group. If our performance
exceeds the low end of the range of the Peer Group's performance for either or
both of the performance criteria, a varying amount of shares up to the maximum
will be earned. These awards are also discussed in the Executive Compensation
Committee Report.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
---------------------------------------------
PERFORMANCE PERIOD (OR
OTHER PERIOD UNTIL
NAME NUMBER OF SHARES (1) MATURATION OR PAYOUT) THRESHOLD (2) (#) TARGET (#) MAXIMUM (#)
- ----------------------- ---------------------- ----------------------- ------------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Mr. Steere. ......... * 1/1/98-12/31/02 10,000 60,000 100,000
Dr. McKinnell. ...... * 1/1/98-12/31/02 4,700 28,200 47,000
Dr. Niblack ......... * 1/1/98-12/31/02 4,200 25,200 42,000
Mr. Miller ......... * 1/1/98-12/31/02 3,000 18,000 30,000
Mr. Clemente ......... * 1/1/98-12/31/02 2,500 15,000 25,000
- ----------

(1) The actual number of Performance-Contingent Shares that will be paid out at
the end of the applicable period, if any, cannot be determined because the
shares earned by the Named Executive Officers will be based upon our future
performance compared to the future performance of the Peer Group.

(2) If our minimum performance in both performance measures is at the low end
of the range relative to the Peer Group, then no Performance-Contingent
Shares will be earned by the Named Executive Officers. To the extent that
our performance exceeds the low end of the range of Peer Group performance,
the minimum shares that will be awarded is shown in the "Threshold" column.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

EXECUTIVE COMPENSATION COMMITTEE REPORT

Please see the glossary at the end of this report for definitions of the
capitalized terms used in this report which have not already been defined in
this Proxy Statement.

OVERVIEW OF COMPENSATION PHILOSOPHY AND PROGRAM

The Committee establishes the salaries and other compensation of the
executive officers of the Company, including its Chairman and CEO and other
Named Executive Officers. The Committee consists entirely of independent
Directors who are not officers or employees of the Company.

The Company's executive compensation program is designed to:

o retain executive officers by paying them competitively, motivate them to
contribute to the Company's success, and reward them for their performance;

o link a substantial part of each executive officer's compensation to the
performance of both the Company and the individual executive officer; and

o encourage ownership of Company common stock by executive officers.

As discussed below, the program consists of, and is intended to balance,
three elements:

o SALARIES. Salaries are based on the Committee's evaluation of individual job
performance and an assessment of the salaries and total compensation mix
paid by the Company's Peer Group to executive officers holding equivalent
positions.

o EXECUTIVE ANNUAL INCENTIVE AWARDS. Executive Annual Incentive Awards are
based on an evaluation of both individual and Company performance against
qualitative and quantitative measures.

o LONG-TERM INCENTIVE COMPENSATION. Long-term incentive awards, which consist
of stock options and Performance-Contingent Share Awards, are designed to
insure that incentive compensation is linked to the long-term performance of
the Company and its common stock.

In addition, the Named Executive Officers and other members of senior
management are expected to own a minimum amount of common stock under the
Company's stock ownership program. The program is intended to further tie the
interests of management to the interests of shareholders.

EVALUATION OF EXECUTIVE PERFORMANCE

The Committee does not usually rely solely on predetermined formulae or a
limited set of criteria when it evaluates the performance of the Chairman and
CEO and the Company's other executive officers. Instead, the Committee
considers:

o management's overall accomplishments;

o the accomplishments of the individual executives;

o the Company's financial performance; and

o other criteria discussed below.

In 1997, management continued to effectively implement its long-term
strategies, which included:

o improving operating margins;

o continuing the implementation of reengineering projects and restructuring
programs;

o divesting non-core businesses;

o maintaining the flow of new product candidates in the Company's research
pipeline; and

o augmenting the Company's research and marketing abilities with key external
collaborations.

The Committee believes that the success of these strategies is evidenced
by:

o the Company's strong financial performance in 1997;

o the Company's operating margins;

o the breadth of the Company's current product portfolio which resulted in

<PAGE>

considerable sales growth in 1997;

o the acceptance of the Company's products in the current marketplace; and

o the number of promising product candidates under development by the Company.

The Committee also considered management's responses to the changes
occurring within the U. S. marketplace for health care products and services.
The impact of the evolution to managed care in the health care market continues
to be of particular importance to the Company and its shareholders. It is the
Committee's opinion that, in this uncertain environment, management continues to
effectively develop and implement strategies that position the Company to remain
a leader in the health care industry. In addition, Mr. Steere and his senior
management team are undertaking significant actions to communicate the Company's
position on health care issues to its shareholders, the public and the
government. The success of these efforts and their benefits to the Company
cannot, of course, be quantifiably measured, but the Committee believes they are
vital to the Company's continuing success.

TOTAL COMPENSATION

Target total compensation levels of Company executives are established
with consideration given to an analysis of competitive market total
compensation. The total compensation package for each executive is then broken
down into the three basic components indicated above and discussed in more
detail below. In recent years, the Committee has been directing a shift in the
mix of the Company's executive compensation towards incentive compensation, with
proportionately lesser emphasis on salaries. This strategy is intended to
increase the performance orientation of the Company's executive compensation,
and the Committee intends to continue this emphasis in 1998. Based on available
public data and the analysis of its outside compensation advisors, the total
compensation of Mr. Steere and the other Named Executive Officers generally fell
in the upper quartile of total compensation paid by the Peer Group to their
executives holding equivalent positions, but the Committee believes that
position was consistent with the outstanding performance of the Company compared
to the Peer Group.

SALARIES

In setting salaries, the first element of the executive compensation
program, the Committee did not use a predetermined formula. Instead, the 1997
salaries of the Chairman and CEO and the other executive officers were based on:

o the Committee's evaluation of each officer's individual job performance;

o an assessment of the Company's performance; and

o a consideration of salaries paid by the Peer Group to executive officers
holding equivalent positions.

CHAIRMAN AND CEO. Mr. Steere's salary in 1997 totaled $1,316,500. For
1998, it has been set at $1,379,700 which represents a 4.8% increase from his
1997 salary.

OTHER NAMED EXECUTIVE OFFICERS. The 1997 salaries of the other Named
Executive Officers are shown in the "Salary" column of the Summary Compensation
Table.

Due to the retirement of the Company's Executive Vice President and
President-International Pharmaceuticals Group at the end of 1996, the management
responsibilities of that position were redistributed, and other responsibilities
were realigned, among certain other Named Executive Officers. As a result,
approximately one-half of the increase in aggregate salary from 1996 to 1997 for
the Named Executive Officers represented promotional adjustments in recognition
of those additional responsibilities, with the remainder of the increase in
salary representing merit adjustments based on performance.

EXECUTIVE ANNUAL INCENTIVE AWARDS

The second element of the executive compensation program is the Executive
Annual Incentive Award.

<PAGE>

In 1997, the Board of Directors adopted and the shareholders approved the
Pfizer Inc. Executive Annual Incentive Plan. Under the terms of this plan a
maximum award of 0.3% of Adjusted Net Income as defined in the plan was
established for each employee participating in the plan. This maximum exceeds
the current level of Annual Incentive Awards made by the Committee and the
Committee will continue to base the awards on Company and individual performance
criteria within the established maximum. With the adoption of this plan the
Executive Annual Incentive Awards paid to the Eligible Employees will be
deductible by the Company for tax purposes.

For 1997, an Annual Incentive Award of $2,545,300 for Mr. Steere was
approved by the Committee and confirmed by the Board. The Annual Incentive
Awards for 1997 paid to each of the Named Executive Officers are shown in the
"Bonus" column of the Summary Compensation Table.

LONG-TERM INCENTIVE COMPENSATION

In 1997, Mr. Steere and the other executive officers participated in the
Company's long-term incentive compensation program, the third element of
executive compensation. As discussed below, the program consisted of:

o stock option grants made under the Company's Stock and Incentive Plan; and

o awards made under the Company's Performance-Contingent Share Award Program.

(a) STOCK OPTIONS

The Committee granted Key-Employee Stock Options to each executive
officer in 1997 under the Company's Stock and Incentive Plan. In selecting the
size of the Key-Employee Stock Option grants, the Committee reviewed:

o competitive data relating to similar grants made by the Peer Group to
executive officers holding comparable positions;

o the individual stock ownership of the Company's executive officers; and

o the interrelationship with the 1997 Performance-Contingent Share Awards made
to such officers.

CHAIRMAN AND CEO. Based upon this data, Mr. Steere was awarded
Key-Employee Stock Options for 300,000 shares of common stock.

OTHER NAMED EXECUTIVE OFFICERS. The other Named Executive Officers were
awarded the number of Key-Employee Stock Options shown in the table headed
"Option Grants in 1997." The Key-Employee Stock Options of the Named Executive
Officers and all other executive officers will vest over a five-year period,
with 20 percent of the options vesting each year.

Key-Employee Stock Options granted to Mr. Steere and the other Named
Executive Officers, when combined with the value of the Performance-Contingent
Shares that these officers may potentially earn, are targeted by the Committee
to fall at the median range of the value of long-term incentives granted by the
Peer Group to executive officers holding comparable positions.

o This targeting assumes that the Company's performance also falls at the
median of the Peer Group's performance.

o If the Company's actual performance exceeds the median performance of the
Peer Group, however, the total value of long-term incentive awards (which
would include Performance-Contingent Share awards discussed below) will be
higher than the median awards made by the Peer Group.

o Similarly, if the Company's performance falls below the median performance
of the Peer Group, the total value of the long-term incentive awards would
fall below the median awards of the Peer Group.

(b) PERFORMANCE-CONTINGENT SHARE AWARDS

The Committee also made awards to Mr. Steere and other executive officers
in 1997, including the Named Executive Officers, under the Company's
Performance-

<PAGE>

Contingent Share Award Program (the "Program"). The potential size of each
award, including the maximum number of shares of common stock that may be earned
by each executive officer, was established by the Committee after examining
similar awards made by the Peer Group to executive officers holding comparable
positions. Payments pursuant to the awards are determined by using a
non-discretionary formula comprised of the following two performance criteria
measured over the applicable performance period relative to the performance of
the Peer Group:

o total shareholder return; and

o earnings per share growth.

The performance formula weighs each criterion equally. To the extent that
the Company's performance exceeds the low end of the range of the performance of
the Peer Group in either or both of the performance criteria, a varying amount
of shares of common stock up to the maximum will be earned.

Except for the 1993 Program awards, which provided for shorter
performance periods, the performance period for all awards made under the
Program is five years. Based on the Company's performance during the 1993-97
performance period, Mr. Steere and the other Named Executive Officers earned
219,200 Performance-Contingent Shares under the 1993 Program award formula
previously approved by the Committee.

CHAIRMAN AND CEO. The total number of such shares earned by Mr. Steere
under the 1993 Program was 100,000. Under the 1997 Program award for Mr. Steere,
the number of Performance-Contingent Shares that he may earn at the end of the
five-year performance period (1/1/98-12/31/2002) will range from 0 to 100,000.

OTHER NAMED EXECUTIVE OFFICERS. The total number of shares earned by each
of the Named Executive Officers under the 1993 Program is shown in footnote 4 to
the "LTIP Payouts" column of the Summary Compensation Table. Under the 1997
Program, the number of Performance-Contingent Shares that Dr. McKinnell may earn
at the end of the five-year performance period (1/1/98-12/31/2002) will range
from 0 to 47,000, the number of such shares that Dr. Niblack may earn will range
from 0 to 42,000, the number of shares that Mr. Miller may earn will range from
0 to 30,000 and the number of shares Mr.Clemente may earn will range from 0 to
25,000.

The maximum number of Performance- Contingent Shares that may be earned
by Mr. Steere and the other Named Executive Officers under the Program is shown
in the table headed "Long-Term Incentive Plan-Awards in 1997."

TAX POLICY

Section 162(m) of the Internal Revenue Code limits the tax deduction
available to the Company to $1 million for compensation paid to the Company's
five most highly compensated officers, unless certain requirements are met. One
requirement is that the Committee consist entirely of outside directors. The
Committee meets this requirement. Another requirement is that compensation over
$1 million must be based upon Company attainment of performance goals approved
by the shareholders. The Executive Annual Incentive Plan and
Performance-Contingent Share Award Program meet these requirements. In addition,
the Company's Stock and Incentive Plan is "performance-based" so awards under
that plan are eligible for exceptions to the deduction limitation.

STOCK OWNERSHIP PROGRAM

A stock ownership program was adopted by the Board upon this Committee's
recommendation in August 1993. Under the guidelines of this program, which were
increased in 1997, employee Directors (currently Mr. Steere, Dr. McKinnell and
Dr. Niblack) were expected to own by the end of a five-year period Company
common stock equal in value to at least five times their annual salaries. The
program also extends to

<PAGE>

the other Named Executive Officers and other members of the Corporate Management
Committee who, as of the same time, were expected to own Company common stock
equal in value to at least four times their annual salaries. All other executive
officers were expected to own stock with a value equivalent to three times their
annual salaries. All other participants in the Performance-Contingent Share
Award Program are expected to own an amount equal in value to their annual
salary. The Committee has determined that, as of the end of 1997, all officers
met the guidelines established by the Committee.

Under the program, "stock ownership" is defined as stock owned by the
executive officer directly or through the Company's Savings and Investment Plan
or awarded pursuant to the Performance-Contingent Share Award Program and
subsequently deferred. While the Named Executive Officers and other participants
in this program have been given five years to achieve compliance with this
program, the Committee monitors the participation of the executive officers and
expects that incremental progress will be made each year by each officer during
the five-year phase-in period. In 1997, a schedule of progress was adopted by
the Committee.

GLOSSARY

COMMITTEE. The Executive Compensation Committee of the Board of
Directors.

EXECUTIVE ANNUAL INCENTIVE AWARDS. These awards are annual cash payments
which may be awarded by the Committee pursuant to the Executive Annual Incentive
Award Plan which sets a maximum award of 0.3% of Adjusted Net Income, as
defined, to each executive officer on the basis of both Company performance and
individual performance over the prior year. Qualitative and quantitative
performance indicators used to serve as the basis for an assessment of the
performance of the executive officers are established by the Committee (and
approved by the Board in the case of the CEO) at the beginning of the
performance period.

KEY-EMPLOYEE STOCK OPTIONS. Stock options granted under the Company's
Stock and Incentive Plan to a select group of management employees in the U. S.
and overseas who are considered to have a substantial impact on the Company's
operations.

NAMED EXECUTIVE OFFICERS. This refers to the five most highly
compensated executive officers of the Company--Mr. Steere, Drs. McKinnell and
Niblack, and Messrs. Miller and Clemente.

PEER GROUP. This group consists of the eleven health care companies
referred to in the Performance Graph that follows this report.

PERFORMANCE-CONTINGENT SHARES. These are shares of Pfizer Inc. common
stock that may be awarded by the Committee to the Named Executive Officers and
certain other employees of the Company under the Performance-Contingent Share
Award Program. For shares to be issued to any such officer or employee, however,
certain preestablished Company performance criteria must be met over a
preestablished performance period. This program is described in further detail
under the caption "Performance-Contingent Share Award Program."

STOCK AND INCENTIVE PLAN. This refers to the Pfizer Inc. Stock and
Incentive Plan which is described in further detail under the caption "Stock
and Incentive Plan."

THE EXECUTIVE COMPENSATION COMMITTEE:

Mr. Burns (Chair)
Mr. Harvey
Mr. Labrecque
Mr. Mead

<PAGE>

PERFORMANCE GRAPH

This graph compares our total shareholder returns (assuming reinvestment of
dividends), the Standard & Poor's ("S&P") 500 Composite Stock Index ("S&P 500"),
and an industry peer index compiled by us that consists of several companies
(the "Peer Group")(1). The graph assumes $100 invested at the per share closing
price of the common stock on the New York Stock Exchange Composite Tape on
December 31, 1992 in Pfizer and each of the other indices.

[GRAPHIC OMITTED-LINE GRAPH]

1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
Pfizer 100 97.7 112.7 187.7 251.6 457.8

Peer Group 100 93.6 105.9 166.6 207.9 310.2

S&P 500 100 110.1 111.5 153.4 188.6 251.6

- ----------
(1) The following companies comprise the Peer Group: Abbott Laboratories,
American Home Products Corp., Baxter International Inc., Bristol-Myers
Squibb Company, Colgate-Palmolive Co., Johnson & Johnson, Eli Lilly and
Company, Merck and Co., Inc., Pharmacia & Upjohn Inc., Schering-Plough
Corp., and Warner-Lambert Company. The Peer Group consolidation was done on
a weighted average basis (market capitalization basis, adjusted at the
beginning of each year).

<PAGE>

EMPLOYEE BENEFIT AND LONG-TERM COMPENSATION PLANS

RETIREMENT ANNUITY PLAN

The Retirement Annuity Plan (the "Retirement Plan") is a funded, tax
qualified, noncontributory defined benefit pension plan that covers certain
employees, including the Named Executive Officers. Benefits under the Retirement
Plan are based upon the employee's years of service and final average earnings
with us and/or our "Associate Companies" and are payable after retirement in the
form of an annuity. Earnings covered by the Retirement Plan are base pay, bonus,
and long-term incentive compensation excluding gains on stock option exercises.
The amount of annual earnings that may be considered in calculating benefits
under the Retirement Plan is limited by law. For 1998, the annual limitation is
$160,000.

Benefits under our Retirement Plan are calculated as an annuity equal to
the greater of:

o 1.4 percent of the average earnings for the five highest consecutive
calendar years multiplied by years of service, or

o 1.75 percent of such earnings less 1.5 percent of Primary Social Security
benefits multiplied by years of service.

Years of service under these formulas cannot exceed 35. Contributions to
the Retirement Plan are made entirely by us and are paid into a trust fund from
which the benefits of participants will be paid.

The Retirement Plan currently limits pensions paid under the Plan to an
annual maximum of $130,000, payable at age 65. We also have an unfunded
supplemental plan that provides out of our general assets an amount
substantially equal to the difference between the amount that would have been
payable under the Retirement Plan, in the absence of legislation limiting
pension benefits and earnings that may be considered in calculating pension
benefits, and the amount actually payable under the Retirement Plan. In certain
circumstances, we are obligated to fund trusts established to secure obligations
to make payments under the supplemental plan.

PENSION PLAN TABLE

The following table shows, for the final compensation and years of
service indicated, the annual pension benefit, payable commencing upon
retirement at age 65 under the present benefit formula of the Retirement Plan
and its related supplemental plan. The estimated retirement benefits have been
computed on the assumptions that:

o payments will be made in the form of a 50 percent joint and survivor annuity
(and both the Plan member and spouse are age 65),

o during the period of employment the employee received annual compensation
increases of six percent, and

o the employee retired as of December 31, 1997.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
YEARS OF SERVICE
----------------
REMUNERATION 15 20 25 30 35
- -------------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 17,744 $ 23,659 $ 29,574 $ 35,489 $ 41,404
500,000 100,738 134,317 167,896 201,476 235,055
1,000,000 204,479 272,639 340,799 408,959 477,119
2,000,000 411,963 549,284 686,605 823,926 961,247
3,000,000 619,446 825,928 1,032,410 1,238,893 1,445,375
4,000,000 826,930 1,102,573 1,378,216 1,653,859 1,929,503
5,000,000 1,034,413 1,379,217 1,724,022 2,068,826 2,413,631
7,000,000 1,449,380 1,932,507 2,415,633 2,898,760 3,381,887
9,500,000 1,968,088 2,624,118 3,280,147 3,936,177 4,592,206
12,500,000 2,590,539 3,454,052 4,317,565 5,181,077 6,044,590
15,500,000 3,212,989 4,283,985 5,354,982 6,425,978 7,496,974
- ----------------------------------------------------------------------------------------
</TABLE>

<PAGE>

As of December 31, 1997, Mr. Steere had 35 years; Dr. McKinnell had 27
years; Dr. Niblack had 30 years; Mr. Miller had 27 years; and Mr. Clemente had
34 years under the Retirement Plan and the supplemental plan. Compensation
covered by the Retirement Plan and its related supplemental plan for the Named
Executive Officers equals the amounts set forth in the 1997 "Salary," "Bonus"
and "LTIP Payouts" columns of the Summary Compensation Table.

PERFORMANCE-CONTINGENT SHARE AWARD PROGRAM

Under the Performance-Contingent Share Award Program, participating
employees may be granted an opportunity by our Executive Compensation Committee
to earn shares of common stock, provided certain performance criteria are met.
The performance formula is nondiscretionary and is comprised of two performance
criteria:

o total shareholder return (including reinvestment of dividends), and

o growth in diluted earnings per share (as reported),

measured point-to-point over the applicable performance period relative to the
performance of the Peer Group. Our 200 most highly compensated employees are
eligible to participate. Except for awards made in 1993, all awards granted
under the Program are based upon a five-year performance period. Awards earned
by the Named Executive Officers under this Program for the performance period
ended December 31, 1997 are shown in the "LTIP Payouts" column of the Summary
Compensation Table. Receipt of shares awarded under this Program may be
deferred.

EXECUTIVE ANNUAL INCENTIVE PLAN

The Named Executive Officers, as well as the other members of our
Corporate Management Committee, are eligible to participate in the Executive
Annual Incentive Plan. The purpose of the Plan is to ensure the tax
deductibility of the bonus for the Company. The maximum individual annual bonus
under this plan is 0.3% (three tenths of one percent) of Adjusted Net Income.
The Plan defines "Adjusted Net Income" to mean income before cumulative effect
of accounting changes as shown on the audited Consolidated Statement of Income
of the Company. If income before cumulative effect of accounting changes is not
shown on the Statement, then Adjusted Net Income will mean net income as shown
on the Statement. Receipt of bonuses paid from this Plan can be deferred until a
later date or retirement. Deferred bonuses may be invested in either a Pfizer
unit fund or a short-term investment fund.

SAVINGS AND INVESTMENT PLAN

Under the Savings and Investment Plan (the "Savings Plan"), participating
employees may contribute up to 15 percent of regular earnings into their Savings
Plan accounts. A participating employee may elect to make after-tax
contributions, before-tax contributions, or both after-tax and before-tax
contributions. In addition, under the Savings Plan, we contribute an amount
equal to one dollar for each dollar contributed by participating employees up to
the first two percent of their regular earnings and fifty cents for each
additional dollar contributed by employees on the next four percent of their
regular earnings. Our matching contributions are invested solely in our common
stock.

The Savings Plan currently limits the additions that can be made to a
participating employee's account to $30,000 per year. The term "additions"
includes our matching contributions, before-tax contributions made by us at the
request of the participating employee under Section 401(k) of the Code, and
employee after-tax contributions.

Of those additions, the current maximum before-tax contribution is
limited to $10,000 per year. In addition, no more than $160,000 of annual
compensation may be taken into account in computing benefits under the Savings
Plan. We have a supplemental plan to pay out of general assets an amount
substantially equal to the difference between

<PAGE>

the amount that, in the absence of legislation limiting such additions and the
$160,000 limitation on earnings, would have been allocated to a participating
employee's account as employee before-tax contributions, our matching
contributions and the amount actually allocated under the Savings Plan.
Employees affected by these limitations who make deferrals of income under this
supplemental plan receive credit for such deferrals towards their retirement
benefit under our retirement plans. In certain circumstances, we are obligated
to fund trusts established to secure obligations to make payments under the
supplemental plan.

Amounts deferred, if any, under the Savings Plan and the related
supplemental plan by the Named Executive Officers are included in the "Salary"
and "Bonus" columns of the Summary Compensation Table. Our matching
contributions allocated to the Named Executive Officers under the Savings Plan
and the related supplemental plan are shown in the "All Other Compensation"
column of the Summary Compensation Table.

STOCK AND INCENTIVE PLAN

Under the Stock and Incentive Plan, our employees may be granted stock
options, stock appreciation rights, stock awards (including restricted stock
awards and performance-based stock awards), or performance unit awards, either
as a result of a general grant or as a result of an award based on having met
certain performance criteria. Where an employee is also an officer, the
performance criteria are determined by the Executive Compensation Committee. Our
non-employee Directors are not eligible to participate in this Plan.

SEVERANCE AGREEMENTS

We have entered into severance agreements with our executive officers,
including each of the Named Executive Officers. The agreements continue through
September 30, 1998 and provide that they are to be automatically extended in
one-year increments unless we give prior notice of termination.

These agreements are intended to provide for continuity of management in
the event of a change in control. The agreements provide that covered executive
officers could be entitled to certain severance benefits following a change in
control of the Company. If, following such a change in control, the executive
officer is terminated for any reason, other than for disability or for cause, or
if such executive officer terminates his or her employment for good reason (as
defined in the agreements), then the executive officer is entitled to a
severance payment that will be 2.99 times the greater of (i) the executive
officer's base amount, as defined in the agreements or (ii) the sum of the
executive officer's (a) base salary in effect at the time of termination and (b)
the higher of the (x) last full-year annual incentive payment or (y) target
annual incentive payment for the year in which termination occurs. The severance
payment generally would be made in the form of a lump sum.

In addition, in the event of such a termination following a change in
control, under the agreements each executive officer would receive a payout of
all outstanding Performance-Contingent Share Awards that had been granted prior
to the date of termination at the maximum amounts that could have been earned
pursuant to the awards, along with all shares earned but deferred in accordance
with the deferral feature of the Performance-Contingent Share Award Program. The
executive officer would also receive a benefit payable from our general funds
calculated using the benefit calculation provisions of our Retirement Annuity
Plan and our unfunded Supplemental Retirement Plan with the following additional
features:

o the executive officer would receive credit for an additional three years of
service and compensation for purposes of calculating such benefit;

o the benefit would commence at age 55 (or upon the date of termination, if
the executive officer is then over age 55) and for this purpose, three years
would be added to the executive officer's age;

<PAGE>

o such benefit would be further determined without any reduction on account of
its receipt prior to age 65; and

o such benefit would be offset by any amounts otherwise payable under our
Retirement Annuity Plan and unfunded Supplemental Retirement Plan.

The executive officer would also become vested in all other benefits
available to our retirees including retiree medical coverage. All restrictions
on restricted stock awarded to such executive officer would lapse and all
unvested options granted to such executive officer would vest and become
exercisable for the remainder of the term of the option.

If a change in control occurs, the agreements are effective for a period
of four years from the end of the then existing term. Under the severance
agreements, a change in control would include any of the following events:

o any "person", as defined in the Securities Exchange Act of 1934, as amended,
acquires 20 percent or more of our voting securities;

o a majority of our Directors are replaced during a two-year period; or

o shareholders approve certain mergers, or a liquidation or sale of our
assets.

In the event that any payments made in connection with a change in
control would be subjected to the excise tax imposed by Section 4999 of the
Code, we will "gross-up" the executive officer's compensation for all federal,
state and local income and excise taxes and any penalties and interest.

In certain circumstances, we are obligated to fund trusts established to
secure our obligations to make payments under the severance agreements in
advance of the time payment is due.

REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS
- --------------------------------------------------------------------------------

Under our By-laws, certain procedures are provided which a shareholder
must follow to nominate persons for election as Directors or to introduce an
item of business at an annual meeting of shareholders. These procedures provide
that nominations for Director nominees and/or an item of business to be
introduced at an annual meeting of shareholders must be submitted in writing to
the Secretary of the Company at 235 East 42nd Street, New York, NY 10017-5755.
The nomination or proposed item of business must be received no later than:

o 60 days in advance of an annual meeting if it is being held within 30 days
preceding the anniversary date of the previous year's meeting; or

o 90 days in advance of such meeting if it is being held on or after the
anniversary date of the previous year's meeting.

For any other annual or special meeting, the nomination or item of
business must be received by the tenth day following the date of public
disclosure of the date of meeting.

The nomination must contain the following information about the nominee:

o name;

o age;

o business and residence addresses;

o principal occupation or employment;

o the number of shares of common stock held by the nominee;

o the information that would be required under the rules of the SEC in a proxy
statement soliciting proxies for the election of such nominee as a Director;
and

o a signed consent of the nominee to serve as a Director of the Company, if
elected.

Notice of a proposed item of business must include:

o a brief description of the substance of, and the reasons for, conducting
such business at

<PAGE>

the annual meeting;

o the shareholder's name and address;

o the number of shares of common stock held by the shareholder (with
supporting documentation where appropriate); and

o any material interest of the shareholder in such business.

The Board is not aware of any matters that are expected to come before
the Annual Meeting other than those referred to in this Proxy Statement. If any
other matter should come before the Annual Meeting, the persons named in the
accompanying proxy intend to vote the proxies in accordance with their best
judgment.

The chairman of the meeting may refuse to allow the transaction of any
business not presented beforehand, or to acknowledge the nomination of any
person not made, in compliance with the foregoing procedures.

Under the rules of the SEC, shareholder proposals intended to be
presented at the Company's 1999 Annual Meeting of Shareholders must be received
by us, attention: Mr. C. L. Clemente, Secretary, at our principal executive
offices by November 20, 1998 for inclusion in the proxy statement and form of
proxy relating to that meeting.

- --------------------------------------------------------------------------------

Whether or not you plan to attend the Meeting, please vote by telephone
or Internet or mark, sign, date and promptly return the enclosed proxy in the
enclosed envelope. The toll free number to vote by telephone is at no cost to
you. No postage is required for mailing in the United States.

By order of the Board of Directors,

C. L. Clemente
Secretary

March 19, 1998

<PAGE>

[Recycle Logo OMITTED] [Printed with Soy Ink Logo OMITTED]

This Proxy Statement is printed entirely on recycled and recyclable paper. Soy
ink, rather than petroleum-based ink, is used throughout.

<PAGE>

P
R
O
X
Y
PFIZER INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS

The undersigned hereby appoints William C. Steere, Jr., Henry A. McKinnell, and
C. L. Clemente, and each of them, as proxies, each with full power of
substitution, and hereby authorizes them to represent and to vote, as designated
on the reverse side of this form, all the shares of Common Stock of Pfizer Inc.
held of record by the undersigned on February 27, 1998, and all of the shares as
to which the undersigned then had the right to give voting instructions to the
record holder under the Pfizer Inc. Shareholder Investment Program, the Pfizer
Inc. Savings and Investment Plan and the Pfizer Inc. Grantor Trust, at the
Annual Meeting of Shareholders to be held on April 23, 1998 at 10:00 a.m. at the
Grand Hyatt Hotel, Empire State Ballroom, 42nd Street and Lexington Avenue, New
York, New York, or any adjournment or postponement.

IF NO OTHER INDICATION IS MADE ON THE REVERSE SIDE OF THIS FORM, THE PROXIES
SHALL VOTE (AND ANY VOTING INSTRUCTIONS TO RECORD HOLDERS SHALL BE GIVEN) FOR
ITEMS 1 AND 2 AND, IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.

SEE REVERSE SIDE
- --------------------------------------------------------------------------------
PLEASE FOLD AND DETACH HERE IF YOU ARE NOT VOTING BY INTERNET OR TELEPHONE

IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE BRING THIS ADMISSION TICKET
WITH YOU.

ADMISSION TICKET

PFIZER INC.

ANNUAL MEETING OF SHAREHOLDERS

THURSDAY, APRIL 23, 1998
10:00 A.M.
GRAND HYATT HOTEL
EMPIRE STATE BALLROOM
42ND STREET AND LEXINGTON AVENUE
NEW YORK, NEW YORK
<PAGE>

PLEASE MARK YOUR 2649
/x/ VOTES AS IN THIS
EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.

FOR WITHHELD Vote
1. Election of Directors. WITHHELD
(Mark ONE box only.) / / / / from all
nominees

Nominees: 1. W. Don Cornwell,
2. Henry A. McKinnell,
3. Dana G. Mead, 4. Ruth J. Simmons,
and 5. William C. Steere, Jr.

FOR all nominees, except vote withheld from the following nominees (if any):

- ----------------------------------------------------------------------------

2. A proposal to approve the appointment of KPMG Peat Marwick LLP as independent
auditors for 1998. (Mark ONE box only.)

FOR AGAINST ABSTAIN
/ / / / / /

SPECIAL ACTION

Discontinue Annual Report Mailing for this Account / /

Change of / /
Address

IF ACTING AS ATTORNEY, EXECUTOR, TRUSTEE, OR IN OTHER REPRESENTATIVE CAPACITY,
PLEASE SIGN NAME AND TITLE.

--------------------------------------
(SIGNATURE OF SHAREHOLDER) DATE

---------------------------------------
(SIGNATURE, IF HELD JOINTLY) DATE

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE IF YOU ARE NOT VOTING BY INTERNET OR TELEPHONE

PFIZER INC.

Dear Shareholder:

Pfizer Inc. encourages you to take advantage of new and convenient ways to vote
your shares. You can vote your shares electronically through the Internet or the
telephone 24 hours a day, 7 days a week. This eliminates the need to return the
proxy card.

To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system.

1. To vote over the Internet:
o Log on the Internet and go to the web site http://www.vote-by-net.com

2. To vote over the telephone:
o On a touch-tone telephone call 1-800-OK2-VOTE (1-800-652-8683)
o Outside of the U.S. and Canada call 201-324-0377.

Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.

If you choose to vote your shares electronically, there is no need for you to
mail back your proxy card.

YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.