Mylan Shareholders Issue Stinging Rebuke to Board, Management at Annual Meeting
The Ticker previously reported on Dutch pharmaceutical company Mylan’s response to a campaign mounted by four pension funds to convince fellow Mylan shareholders to vote no on executive pay plans and on re-election of six directors. While all of Mylan’s directors managed to retain their seats at the annual meeting on June 22, shareholders voted overwhelmingly against the “say-on-pay” proposal and further registered their displeasure with unusually low votes for several directors.
The campaign, spearheaded by New York City Comptroller Scott Stringer, focused on high executive pay and on the controversy surrounding the pricing of the company’s key product, the EpiPen®. "This company massively hiked prices on life-saving drugs, allegedly overcharged the government for its products, allowed excessive executive pay to go unchecked—all ultimately fundamental failures of board oversight," Stringer said.
The vote totals reported in Mylan’s Form 8-K following the annual meeting are staggering. The “say-on-pay” proposal was supported by only 16.4 percent of the shares voted. The compensation committee chair was supported by only 43.8 percent of shares voted, and the other five directors targeted by the pension funds received ‘for’ votes ranging from 49.8 percent to 70.3 percent. Still, none of the directors have submitted resignations since Mylan’s governance rules require a two-thirds supermajority vote to remove directors. In a letter to the company’s independent directors, the pension funds called for the immediate resignation of the compensation committee chair, the adoption of a majority voting policy for uncontested director elections and certain “additional steps necessary to restore investor confidence in the Board and its ability to provide effective, independent oversight on behalf of Mylan shareowners.”