Four large pension funds have asked shareholders of the drug company Mylan NV to vote against six directors, including the company's chairman, who have been nominated for re-election at the company's annual meeting June 22.
“We believe the time has come to hold Mylan's board accountable for its costly record of compensation, risk and compliance failures,” said the letter to shareholders, a copy of which was filed with the Securities and Exchange Commission on Tuesday.
The letter was signed by Scott Stringer, the New York City comptroller, on behalf of the $170.6 billion New York City Retirement Systems for which he is fiduciary to the five funds within the system; Thomas DiNapoli, the New York state comptroller and sole trustee of the $192 billion New York State Common Retirement Fund, Albany; Anne Sheehan, director of corporate governance for the $206.5 billion California State Teachers' Retirement System, West Sacramento; and Margriet Stavast-Groothuis, adviser, responsible investment, for the €205.8 billion ($230 billion) Dutch pension provider PGGM, which manages the assets of the €185 billion Pensioenfonds Zorg en Welzijn, Zeist, Netherlands.
Collectively, the pension funds own approximately 4.3 million shares of Mylan stock, worth about $170 million, said the letter to shareholders.
“In addition to the deeply entrenched Chairman Robert Coury, the nominees we oppose are each long-standing directors,” the letter said. They are members of the board of directors' compensation, governance and nominating committee and/or the compliance committee. Mr. Coury, a former CEO, is non-executive chairman.
The pension funds oppose six of 11 nominees for director. They also have asked shareholders to oppose a proposal ratifying, on an advisory basis, the compensation of top executives.
“Oversight and governance responsibilities ultimately rest with the board,” Mr. Stringer said in a joint news release issued Wednesday. “It can't be a rubber stamp … There needs to be change.”
Mr. DiNapoli, in the news release, criticized Mylan for having an “entrenched and unaccountable board” as well as “bloated pay packages.”
Also, in the news release, Ms. Sheehan assailed Mylan for its “appalling” practice of dramatically raising the price of EpiPen, an injector that contains a drug to treat dangerous allergy attacks. “Problematic pay and poor governance practices have plagued Mylan for a number of years,” she added.
The annual meeting will be held in Amsterdam. In 2015, Mylan employed a tax inversion strategy and reincorporated in The Netherlands.