The board of directors at Mylan have rewarded former CEO Robert Coury with a $98m bonus as he steps into the executive chairman’s role, having overseen a price-gouging scandal over the Epipens used by people prone to life-threatening allergic reactions.
Epipen pricing started to skyrocket in 2004, under the leadership of Heather Bresch, daughter of Democratic Senator Joe Manchin, resulting in a $1.27B overcharge to the US government and prompting competitors to create generic alternatives.
The company paid hundreds of millions in fines, but made billions from gouging, and its share price is up, which led the board to give Coury such a lavish happy ending after his tenure in office.
Multiple shareholder advocacy groups have condemned the handout, including Institutional Shareholder Services and Glass Lewis (who gave Mylan an “F” for compensation decisions).
ISS and Glass Lewis also recommended ousting Mylan directors Wendy Cameron, Neil Dimick and Mark Parish, all of whom sit on the compensation committee that approves executive pay.
ISS is going a step further by saying all 10 of Mylan’s existing directors should be voted out, including CEO Heather Bresch. The Mylan boss caught flak last summer by trying to pin the blame for the EpiPen sticker shock on a shadowy health care supply chain rather than accept responsibility.
In particular, ISS chastised Mylan’s board for failing to “head off the negative scrutiny” over the company’s risky price strategy “despite significant warning signs over a number of years.”
For instance, two years before the EpiPen scandal there was Congressional inquiry linked to generic drug price increases.
The EpiPen controversy “has laid bare a record of poor stewardship and responsiveness” by Mylan’s board,” ISS said.
EpiPen maker faces revolt over exec’s $98 million pay package
[Matt Egan/CNN Money]
(Image: Philip Taylor, CC-BY-SA)