Company accused of price gouging, spiking executive pay and seeking improper Medicaid rebates State Treasurer Tobias Read announced that Oregon public funds will join a coalition of shareholders demanding reforms at embattled EpiPen-maker Mylan.
The company’s board allegedly mismanaged the pricing of its treatment for severe allergic reactions by gouging consumers, including the uninsured, a practice that has purportedly contributed to a decline in the company’s stock price. In addition, and according to a consultant hired by the Oregon Investment Council (OIC), Mylan executives were paid excessively while the company was under investigation for Medicaid overcharging.
“The corporate culture at Mylan needs to change,” said Treasurer Read, the custodian of state funds and an OIC member. “As a responsible investor, Oregon will hold companies accountable when executives erode shareholder value and hurt consumers.”
Oregon will vote its shares against three board members who sit on Mylan’s compensation committee, and also will cast “no” votes in an advisory “Say on Pay” referendum that lets shareholders voice opinions about the levels and form of executive compensation packages.
Through its corporate governance program, Oregon takes action to improve the long-term value and sustainability of Treasury-managed trust funds, a portfolio that includes the $73.7 billion Public Employees Retirement Fund. That action includes directly engaging with companies, casting proxy votes at annual meetings, and advocating for board diversity and shareholder rights.
As of March 31, Oregon public funds had total exposure to Mylan of $21.5 million, comprised of $9.4 million in company stock and $12.1 million in corporate bonds.
Since acquiring the EpiPen in 2007, Mylan repeatedly raised the product’s price – once $57 — to more than $600 for a two-pack.
The proxy voting agent retained by the OIC, San-Francisco-based Glass Lewis & Co., recommended the no votes: “We believe the concerns regarding the company’s pay practices and programs are severe enough to warrant voting against all members of the compensation committee at this time,” the consultant wrote.
Oregon joins other institutional investors seeking positive change at Mylan, a coalition that includes public funds in New York and California.
The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs like the Oregon 529 Savings Network and OregonSaves. Treasury oversees public investment, banking, and debt management services. State investment policies are set by the Oregon Investment Council. Treasury also promotes public outreach and education to help Oregonians learn strategies to save money and make smart financial choices.
