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US pension funds urge for opposition vote at Mylan over executive pay

A coalition of institutional investors is gathering support for a campaign for a vote against six directors and executive pay at the pharmaceuticals company, Mylan which has faced controversy over raising prices for its EpiPen product. Its AGM is due to take place on 22nd June.

Mylan executive pay

New York City Comptroller Scott Stringer leads campaign against governance at Mylan

Proxy voting advisers are backing the campaign launched recently by New York New York City Comptroller Scott Stringer — on behalf of the New York City Pension Funds, the New York State Comptroller Thomas DiNapoli, the California State Teachers’ Retirement System, and Dutch asset manager, PGGM. The investors stated that collectively, they have roughly $800 billion in assets under management and own about 4.3 million shares of Mylan stock currently valued at approximately $170 million.

The institutional investors have filed a letter with the US Securities and Exchange Commission over longstanding concerns with the board’s oversight, independence, and accountability.  The pension funds say that these concerns came to a head in 2016, when the company’s board awarded more than $97 million in compensation to its chairman, Robert Coury, despite an enormous, costly public and regulatory backlash for hiking EpiPen prices.

They are urging other investors to vote against the company’s remuneration report as well as the re-election of Wendy Cameron, chair of the compensation and member of the governance and nominating committees; Robert Cindrich a member of the compliance, governance and nominating and science and technology committees; Coury chair of the executive committee; Neil Dimick chair of the auditing and member of the compensation, executive and governance and nominating committees, Mark Parrish chairman of the compliance and finance and compensation committees and Randall Vanderveen, a member of the compliance and science and technology committees.

The letter stated: “While the entire Board bears some responsibility, we believe accountability and refreshment must begin with the six above‐named directors.  In addition to deeply entrenched chairman Robert Coury, the nominees we oppose are each longstanding directors (11.8 years average tenure) and members of the board’s compensation, governance & nominating, and/or compliance committees.

Stringer said: “Last year was a new low for the Mylan Board. At its core, the EpiPen price-hiking controversy was the costly consequence of a Board with a history of oversight failures. From allegedly overcharging both the government and consumers for its life-saving EpiPen to approving exorbitant pay for its deeply entrenched Chairman, Mylan’s Board has repeatedly enabled self-serving executives at shareowners’ expense. The New York City police officers, teachers, firefighters and other City employees who rely on our pension funds for their retirement security deserve better.

 “Oversight and governance responsibilities ultimately rest with the Board — it can’t be a rubber stamp. That’s why we’re urging Mylan’s shareowners to vote against Chairman Robert Coury and five other longstanding directors and to vote ‘no’ on the pay proposal. There needs to be changed.

DiNapoli added: This entrenched and unaccountable board is long overdue for an overhaul. Mylan’s bloated pay packages add insult to the injury investors have suffered as a result of its poor governance.

What do you think?