17 June 2017

Payback is a Bitch, Corporate Edition

No, I am not referring to Uber, but rather the moral reprobates who comprise Mylan NV board of directors.

You remember Mylan, don't you? They are the ones who jacked up the price of the EpiPen and defrauded Medicaid.

Now their board is facing a shareholder challenge:
An influential advisory firm, the Institutional Shareholder Services (ISS), has urged Mylan’s already mutinous shareholders to vote against the company's incumbent board of directors following the damaging EpiPen scandal and exorbitant executive salaries, Reuters and Bloomberg report.

The ostensible price gouging and greed of the incumbent board led to “significant destruction in shareholder value” and “long-term reputational damage,” ISS wrote in an e-mailed report. In an unusually aggressive move, it urged shareholders to try to oust ten Mylan director nominees, including Chief Executive Heather Bresch, President Rajiv Malik, and Chairman Robert Coury, as well as the compensation committee members.

“All incumbent directors should be considered accountable for material failures of risk oversight over a number of years, when warning signs were available to the company but no actions appear to have been taken,” the firm concluded.

In addition, ISS called executive compensation decisions “egregious,” urging shareholders to reject the company’s compensation packages. Those included paying Coury more than $160 million in compensation and payments last year.

The recommendations from ISS echo that of a campaign from a group of shareholders, who urged their fellow investors to vote against the board, which the group said “reached new lows in corporate stewardship in 2016.” It also follows a government report that Mylan overcharged taxpayers up to $1.27 billion over 10 years by misclassifying EpiPens under the Medicaid Drug Rebate Program. Mylan had previously agreed to settle the matter with the federal government for just $465 million.
Unfortunately, it requires a ⅔ super-majority to remove a member of the board, but the fact that there is a challenge, and that a well respected firm has called them irresponsible in no uncertain terms, means that the writing is on the wall.

If this gets enough ink in their official headquarter nation of the Netherlands, (particularly if the outrageous executive compensation levels) then they might see some regulatory actions on that end.


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