Mylan board weathers shareholder challenge
- The board of directors of Mylan N.V. survived a shareholder challenge on Thursday, securing enough votes at an annual meeting to win re-election despite continued fall-out over the generic drugmaker's pricing of EpiPen and shareholder backlash over high executive pay packages.
- A majority of shareholders, however, rejected Mylan's 2016 compensation of its directors in a non-binding advisory vote, Bloomberg reports. The vote signals investor displeasure in the compensation of Mylan CEO Heather Bresch and Chairman Robert Coury, although its non-binding nature limits any direct impact.
- Coury received $97.6 million in total compensation last year, the majority of which came from a $20 million bonus and $50.8 million in stock awards, according to a proxy statement filed by Mylan. Bresch earned $13.8 million.
While the wave of outrage over Mylan's price increases for EpiPen seems to have crested, the damage to the drugmaker's public image persists.
Add in an expanding recall of the epinephrine autoinjector and an FDA rejection of its key generic copy of GlaxoSmithKline's Advair (fluticasone/salmeterol) asthma inhaler along with continued legislative scrutiny — investors have a lot to be grumpy about.
In the run-up to Mylan's annual meeting, frustration with Mylan's leadership led a group of shareholders including the New York City Pension Funds, California State Teachers' Retirement System and Dutch pension manager PGGM to publicly challenge the company's board.
The group, which collectively owns about 4.3 million shares valued at $170 million, issued a letter urging shareholders to oust the board and vote against Mylan's executive compensation program.
Institutional Shareholder Services (ISS), a proxy firm, also pushed for the removal of Mylan's board, noting the "long-term reputational damage" Mylan has suffered from pushback on EpiPen.
That Mylan's board secured enough votes to win re-election, however, shows the limits of investor displeasure. And Mylan's share price, while down about 10% from a year ago, is at roughly the same level as it opened the year at.
Under Mylan's rules, however, a supermajority is required to remove a director — a high threshold that could cloud the true level of support for the board absent public vote totals, Reuters reports. Mylan has so far not publicly published detailed results of the vote.
"Mylan’s silence speaks volumes," said New York City Comptroller Scott M. Stringer, in a statement on Mylan's annual meeting. "By failing to disclose the voting results during today’s shareowner meeting, Mylan’s board telegraphed that directors faced strong opposition."
- Bloomberg Mylan shareholders reject drugmaker's executive pay package
- New York City Comptroller Statement
- BioPharma Dive ISS pressures Mylan shareholders to change board
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