International

Pharma company rescinds executive pay in light of opioid lawsuits

June 24, 2021
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Over the past four years, the work of shareholders and communities has resulted in a significant decrease in prescription opioid use and abuse. However, the lasting and devastating effects of the opioid epidemic have only bolstered shareholders’ efforts for pharmaceutical companies to hold executives accountable for their role in this public health crisis. Mercy Investment Services and fellow shareholders have encouraged a “vote no” on executive compensation packages at several companies that faced opioid-related lawsuits. Recently, one company responded to shareholder pressure and announced it would rescind millions in executive bonuses.

McKesson Corporation, the nation’s largest wholesale drug distributor, recently disclosed that current and former executives would forfeit nearly $7 million in bonuses. The announcement came in advance of the company’s July 23 annual meeting, as the Investors on Opioid and Pharmaceutical Accountability (IOPA) continued a “vote no” campaign to encourage fellow shareholders to vote against the company’s compensation package in light of the opioid-related litigation. The campaign has raised shareholder awareness of the issue and swayed shareholders; The Washington Post reports that shareholder support for executive compensation has drastically declined since 2017.

Mercy Investment Services hopes that McKesson is the first of several pharmaceutical companies to take concrete action to hold their executives accountable for their role in the opioid epidemic. Future engagements will continue to ask these companies to re-evaluate executive compensation policies in light of opioid-related litigation.