Pfizer appointed a former chief executive officer at Vanguard, the drug giant's biggest investor, to its board on Tuesday as it faces pressure from activist hedge fund Starboard Value.

Starboard’s stake comes amid a time of struggle at the drugmaker, which has begun to cut costs aggressively as demand for its Covid-19 medicines recedes.

Activist investor Starboard Value accused Pfizer of pressuring its former CEO Ian Read and ex-CFO Frank D’Amelio to halt support for Starboard’s turnaround campaign. Starboard’s Jeff Smith revealed the company allegedly threatened to claw back compensation and cancel unvested shares.

On Oct. 6, The Wall Street Journal reported that activist investor group Starboard Value owns a stake in Pfizer ( PFE -0.61%) that's worth approximately $1 billion. Now, Starboard will aim to work with the company's management as well as consult with former executives -- all with the aim of turning around Pfizer's sagging fortunes.

Activist investor Starboard Value has taken a stake of about $1 billion in Pfizer and wants the U.S. drug giant to make changes to turn its performance around, sources familiar with the matter said on Sunday.

Starboard's Jeff Smith called on the company to assemble a special committee to investigate the matter, describing it as "flagrantly unethical."

Activist investor Starboard Value claims the pharma giant’s former CEO and CFO were “threatened” into backing current management.

The drugmaker’s shares have slumped as demand for Covid-19 vaccines and treatments had slowed.

The corporate clash between Pfizer and Starboard Value heated up on Thursday when the activist investment firm pressed the U.S. drugmaker to investigate actions by its board, after two former executives backed out of its campaign against the company.

Starboard has accused Pfizer of “coercive conduct” after executives who initially backed the hedge fund retracted their support.