Shareholder advisory firm ISS issued a report today urging its clients to vote against 10 of Mylan‘s (NSDQ:MYL) board members and executive pay packages, including chief executive Heather Bresch and chairman Robert Coury.
The recommendation comes after a group of influential investors, including the New York City and State pension funds, encouraged other shareholders to vote against 6 board members and Coury.
ISS echoed the pension funds’ concerns, writing that the board mismanaged the widespread criticism around Mylan’s pricey EpiPen allergy auto-injector. The company is now the subject of numerous investigations into whether or not it overcharged Medicaid for years by misclassifying its device as a generic.
Despite its recommendation, ISS said it’s not likely the vote at Mylan’s shareholder meeting on June 22nd will require the company to alter its pay structure or change its board. Unseating a director requires 2/3 of votes cast, according to the firm, and no candidates have been named as potential replacements.
“We are confident that our shareholders recognize that this board has overseen a period of strong and sustainable long-term growth, and that the recommendation and rationale to remove the board and leave the company without any leadership is simply irrational and not in shareholders’ best interests,” Mylan spokeswoman Nina Devlin told Reuters.
Another proxy advisory group, Glass Lewis, also recommended that shareholders vote against the chairman’s pay, describing it as excessive.
“With ISS backing our recommendations and Glass Lewis largely validating our concerns, the stage is set for shareowners to deliver real change at Mylan,” New York City comptroller Scott Stringer told the newswire on behalf of the city’s pension fund.
ISS called Coury’s compensation package “outsized” – in 2016, the chairman received a pay package worth at least $97 million, according to regulatory filings.
Mylan has defended Coury’s pay, writing that “the Board focused on structuring his compensation in this new role to ensure long-term retention for at least a 5-year period and to ensure that his compensation was significantly weighted toward equity-based compensation to further align his interests with those of our shareholders.”
Material from Reuters was used in this report.
