A shareholder campaign demanding change at Mylan has come up short as investors re-elected the company’s directors Thursday, Reuters reports, signaling confidence in the drugmaker’s direction and management.
But shareholders showed their distaste for the company’s penchant for giving Chairman Bob Coury huge pay packages by voting against the proposed compensation plan.
The votes come even as Mylan faces backlash over pricing, delays with key generics and sizable liabilities from a Medicaid misclassification for EpiPen.
All of the board nominees were elected and the vote on compensation does not have to be followed by the compensation committee, so it is unknown what impact that will have. It is the third time since 2010 that a majority of shareholders have voted against executive compensation proposals, Bloomberg pointed out.
“The compensation committee and board of directors will carefully consider these results, as well as future shareholder input, as we continue our investor outreach and in designing our compensation programs going forward,” Coury said, according to the news service.
The vote followed a brief but fierce effort by proxy advisors ISS and others. In a 35-page analysis on the situation published on June 12, ISS urged investors to toss all but one of Mylan’s board members, saying the company suffered significantly “as a result of the EpiPen pricing and classification controversies.” Along the way, several other advisers and pension groups joined the campaign.
ISS further contended that a proposed payout to chairman and former CEO Robert Coury was “egregious.” Early last month, Mylan disclosed in its proxy it planned to pay Coury $97 million, which would make him pharma's highest paid exec for the year.
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In fighting against the campaign, Mylan CEO Heather Bresch championed her board at a recent healthcare conference, and a Mylan spokesperson said the current board “has overseen a period of strong and sustainable long-term growth.”
“[T]he recommendation and rationale to remove the board and leave the company without any leadership is simply irrational and not in the best interests of the company, its shareholders and other stakeholders,” Mylan’s spokesperson said this month.
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The shareholder vote comes after a tough year for Mylan, as EpiPen price hikes started to make national headlines last August. Since then, Mylan has suffered a rash of negative publicity and new competition that will hurt its key brand going forward.
Meanwhile, Mylan’s anticipated generic launches for GlaxoSmithKline’s Advair and Teva’s Copaxone have run into setbacks, and the company faces mounting scrutiny for EpiPen misclassifications on Medicaid that cost taxpayers more than $1 billion.
The company agreed to settle with U.S. authorities for $465 million on the misclassification issue in October, but now lawmakers are saying the company should repay the full harm to taxpayers. The proposed settlement has yet to be finalized.