Investors Rip Mylan’s Board, Calling for the Removal of Chairman & Others
We’ve addressed the skyrocketing prices of EpiPens here since October 2015. We’ve been on the frontline of #epigate for over a year and half.
A few weeks ago, in an interview on Fox Business, I was asked about the jaw dropping paycheck given to Mylan’s chairman, Robert Coury. He received total compensation of almost $160 million in 2016.
My statement? “I think investors would be smart to do what Wells Fargo did, clean out that board and start over.”
This week, four pension funds that hold about 4.3 million shares of Mylan, the maker of Epipen, shares valued at $170 million, called for just that, an overhaul of 6 board members including the chairman. They also revealed something else:
“This controversy also caused investors – including several of us – to urge the Board to strengthen its oversight of Mylan’s drug‐pricing strategy and risks, requests that have been largely ignored.”
The letter itself is jaw dropping in that it suggests that Myan’s chairman relocated the company’s headquarters overseas, structured what is known as a poison pill, with the intent to avoid being acquired by Teva Pharmaceuticals. In the letter, the shareholders suggest that this was perhaps done with the intent of keeping himself on the payroll.
It begins:
“As long‐term Mylan shareowners, collectively holding about 4.3 million shares valued at $170 million, we believe the time has come to hold Mylan’s Board accountable for its costly record of compensation, risk and compliance failures….
Mylan’s Board reached new lows in corporate stewardship in 2016, when it agreed to make extraordinary and egregious payments in 2016 and over the next five years to Chairman and former CEO Coury. His compensation totaled $97.6 million in 2016 according to the Company’s Summary Compensation Table, which in some ways understates his total pay. Including vesting and payments triggered in part by inconsistent Board determinations, Mr. Coury received more than $160 million in 2016 (see Appendix). The added payments related in part to his third new compensation arrangement since he stepped down as CEO on January 1, 2012, while still remaining Chairman and – through 2016 – a Named Executive Officer (“NEO”).”
It turns out the company has 3 named executive officers (NEOs). Out of the 20 companies in their peer group, 15 only have one. The investors go on to state:
“In a year in which Mylan suffered significant reputational and financial harm as a result of its EpiPen pricing controversy and its shareowners suffered a negative 29.4% total shareowner return (“TSR”), CEO Heather Bresch and President Rajiv Malik felt no comparable financial pain.”
In a year in which more children lost their lives to a life-threatening allergic reaction, where families could no longer afford this life-saving device, many American families felt pain beyond anything that money can measure.
Please take a minute to read and share the letter. Mylan’s annual shareholder meeting is June 22. Please post your comments below the article or contact us directly, so that these shareholders know how many millions of Americans are impacted by this egregious behavior.
The letter is in its entirety below.
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