Mylan's 2016 executive pay program was rejected by a majority of shareholders at the company's annual meeting Thursday.
The non-binding vote marks the second time that a majority of investors have rejected the company's pay program since Mylan first held advisory votes on executive compensation in 2011. Shareholders also voted Thursday to approve all board nominees, despite opposition from several large pension funds. Exact vote tallies were not immediately available.
"We believe the time has come to hold Mylan's board accountable for its costly record of compensation, risk and compliance failures," officials for the $170.6 billion New York City Retirement Systems; $192 billion New York State Common Retirement Fund, Albany; $206.5 billion California State Teachers' Retirement System, West Sacramento; and Dutch pension provider PGGM, which manages the assets of the €205.8 billion ($230.4 billion) Pensioenfonds Zorg en Welzijn, Zeist, Netherlands, wrote in a letter to shareholders last month.
Also, in a joint news release issued the day after the letter, Anne Sheehan, director of corporate governance for CalSTRS, criticized Mylan for its "appalling" practice of dramatically raising the price of EpiPen, "Problematic pay and poor governance practices have plagued Mylan for a number of years," she added. CalSTRS and the three other pension funds opposed six of 11 nominees for director, including chairman Robert J. Coury. They also opposed the executives' compensation.
In May, Mylan disclosed a $97.6 million pay package for Mr. Coury consisting of new money and payouts of previous awards and benefits, triggered by his transition to non-executive chairman. The compensation raised eyebrows among investors and proxy-advisory firm Institutional Shareholder Services, which took issue with the company's governance on a broad scale and said the board had made "egregious" decisions on pay. ISS and fellow proxy-advisory firm Glass Lewis & Co. had recommended that shareholders vote against the executives' compensation.
The $323.9 billion California Public Employees' Retirement System, Sacramento, and the $189.4 billion Florida State Board of Administration, Tallahassee, also opposed the executives' compensation and five or more of the nominees for director, including Mr. Coury, according to their proxy-voting disclosures.
"The compensation committee and board of directors will carefully consider these results, as well as future shareholder input, as we continue our investor outreach and in designing our compensation programs going forward," Mr. Coury said.
Mylan's executive pay plan has drawn at least 30% shareholder opposition annually since 2010 — the worst record by far among large U.S. drugmakers. Such sustained opposition is unusual, as boards often tweak compensation if enough investors dissent. Last year's dissidents included BlackRock and the $960 billion Norwegian Government Pension Fund Global, Olso.
Bloomberg contributed to this story.
