Most companies know how to reward executives for exemplary performance; few have demonstrated a way to hold them accountable for misconduct or poor decisions. This has new significance as companies accrue huge opioid settlements to compensate communities ravaged by prescription drug abuse, yet executives receive enormous pay packages.
Shareholders typically vote in favor of executive compensation packages at company annual meetings. But the concerning compensation practices in the throes of the opioid crisis have led the Investors for Opioid and Pharmaceutical Accountability (IOPA), which Mercy Investment Services co-founded, to encourage shareholders to vote against these compensation packages in cases where opioid settlements are not considered when calculating the compensation.
- In November, after more than 39 percent of shareholders at Cardinal Health (CAH) voted against the compensation package, the chair of their Compensation Committee met with shareholders to clearly hear their concerns.
- In March, 48 percent of all Amerisource Bergen shareholders voted against the compensation package. This represents 72 percent of independent shareholders, as Walgreens, which holds 27.7 percent of shares, voted with ABC management.
- Several media outlets have covered the issue:
IOPA shareholders have notified 11 other opioid manufacturers, distributors, and retailers that investors are increasingly scrutinizing compensation plan structures and there is evidence that the environment in which these decisions are being made has changed. Mercy Investment Services will continue its efforts to hold companies, and their leadership, accountable for their role in the opioid epidemic.