Big Mylan investors try to block reelection of board members
The pension funds are angry over what they consider excessive pay for drugmaker’s execs.
Put off by what they see as exorbitant pay for Mylan executives, some big pension funds are attempting to block the reelection of a number of board members, including Chairman and former Chief Executive Robert Coury, who received $100 million last year.
They say huge paychecks were awarded to executives as backlash from consumers and the U.S. government escalated over prices Mylan charged for its EpiPen emergency allergy treatment.
Lawmakers challenged Mylan last year for its EpiPen pricing, which has climbed more than 500% since 2007. CVS is now selling a rival, generic version of EpiPen at about a sixth of the price of the brand-name version of the lifesaving allergy treatment.
A representative of the California State Teachers’ Retirement System signed a letter sent to shareholders, as did the New York City and New York state comptrollers and PGGM, a Dutch pension fund.
The institutional investment funds say they want Mylan — which is based in Britain, with U.S. headquarters just outside Pittsburgh — to be held accountable for a “costly record of compensation, risk and compliance failures.”
Mylan said in an emailed statement Wednesday that its board has overseen a consistent strategy that creates long-term value for its shareholders. It noted that the company’s market capitalization has swelled to more than $20 million from about $3 million over the last 15 years, and its stock price also has soared over the longer time frame.
“During Mr. Coury’s long tenure, Mylan has delivered strong financial performance and shareholder growth, and his new compensation structure continues to be aligned with the [company’s] stock performance while providing shareholders with the benefit of his continued leadership and guidance in setting Mylan’s strategic direction,” the company said.
Shares are up fourfold since 2002, but the harsh spotlight on sharply rising drug prices has taken a toll.
In the last 12 months, a period that includes the appearance before Congress of current CEO Heather Bresch to explain Mylan’s decision to raise prices on some drugs, shares have fallen more than 10%. Shares have fallen nearly 7% in the last three months as the company’s annual shareholders meeting, scheduled for June 22, approaches.
Shares are still up about 2% for the year, however.
The pension funds said in their letter that Bresch and company President Rajiv Malik both received annual bonuses that exceeded their base salaries for last year, but the company “suffered significant reputational and financial harm.”
The funds control about 4.3 million Mylan shares.
Mylan shares fell 1% on Wednesday to $38.98.