A shareholder proposal calling for AbbVie Inc. to report on how rising public concern over drug pricing is integrated into its incentive compensation practices for senior executives was supported by more than 21% of investors at the pharmaceutical company's annual shareholder meeting Friday, said a spokeswoman for the Interfaith Center on Corporate Responsibility, whose members filed the proposal.
Large pension funds that supported the proposal included the $222.5 billion California State Teachers' Retirement System, West Sacramento; $204.9 billion Florida State Board of Administration, Tallahassee; $151 billion Texas Teacher Retirement System, Austin; and the C$189.5 billion ($147.6 billion) Ontario Teachers' Pension Plan,Florida State Board of Administrationillion Florida State Board of AdminTexas Teacher Retirement Systemllion Texas Teacher Retirement System, Austin; and the C$189.5 billion ($147.6 billion) Ontario Teachers' Pension Plan, Toronto.
The C$337.1 billion Canada Pension Plan Investment Board, Toronto, voted against the proposal.
AbbVie was one of five U.S. pharmaceutical companies at which members of the ICCR filed shareholder proposals this year on executive compensation and drug pricing.
A similar proposal at Bristol Myers-Squibb Co. was supported by nearly 23% of shareholders on Tuesday.
The other companies receiving the resolutions for the 2018 proxy season are Amgen Inc., Biogen Inc., and Eli Lilly & Co. While the coalition has filed shareholder proposals on drug pricing before, it the first time it is filing on executive compensation related to drug pricing, the spokeswoman previously told Pensions & Investments.
According to the ICCR, the AbbVie proposal was supported by proxy-voting advisory firm Institutional Shareholder Services and withstood AbbVie's challenge to have the proposal dismissed from the proxy ballot by the Securities and Exchange Commission.
"The pharma industry is facing mounting scrutiny from legislators, doctors, payers and the public as a result of price increases on key drugs," said Judy Byron, director of the Northwest Coalition For Responsible Investment, an ICCR member, in the release. "We are gratified that other investors share our concern that AbbVie's incentive pay arrangements, which are based on revenue and earnings per share targets, may overlook the risks this increased scrutiny represents for the company."
The ICCR is a coalition of 300 faith-based pension funds, universities and other asset owners as well as secular foundations, investment management firms, investment consulting firms and unions, representing more than $400 billion in combined assets.