Backed by proxy firms Glass Lewis and Institutional Shareholder Services (ISS), New York City Pension Funds and a group of institutional investors told EpiPen maker Mylan’s shareholders Monday to air their grievances —in paper form— about the allergy treatment company’s board of directors and its chairman’s pay at Mylan’s June 22 shareholder meeting.
“Along with the allegations of overcharging the government and now the reputational harmed of the EpiPen debacle, we thought it was a prudent to focus a “vote no” campaign on them,” the Office of the New York City Comptroller told CIO.
Along with other high-profile investors such as the California State Teachers’ Retirement System (CalSTRS), the entities are tag-teaming against Management Proposal 5, which will ratify 2016 executive compensation (“Say-on-Pay”). In addition to Mylan’s infamous price-hiking fiasco—where the life-saving device’s 500% price hike over a seven-year period caused public outrage leading to a congressional hearing—the reasons given for this dispute are Mylan’s dwindling performance against competition as well as falling share prices (down 18.39% year-to-date as of this writing).
“There are real concerns about the stock performance as well compared to their peers,” the Office of the Comptroller told CIO. “It all comes back to creating sustainable value for shareowners.”
The institutional investors are specifically opposing director nominees Wendy Cameron, Robert Cindrich, Neil Dimick, Mark Parrish, Randall Vanderveen, four other incumbent directors, and chairman Robert Coury. Regulatory filings show Coury’s 2016 compensation package is worth at least $97 million.
“Mylan’s a company we’ve had attempted engagement with for the last few years. We’ve had a few shareowner proposals there go back through 2012 or 2013. In 2015, we had a proxy access proposal there. Then they reincorporated and the proposal didn’t go to a vote because they went over to the Netherlands,” the Office of the New York City Comptroller told CIO.
“The Company has been deficient in linking executive pay to corporate performance, as indicated by the “F” grade,” Glass Lewis said in their June 9 report. “We find the compensation arrangements made with Mr. Coury pursuant to his transition to be egregious.”