Rhode Island General Treasurer Seth Magaziner and Connecticut State Treasurer Shawn T. Wooden have filed a letter with the U.S. Securities and Exchange Commission, urging fellow Cardinal Health shareholders to vote "no" on a proposed $2.5 million bonus for CEO Michael Kaufmann.
"Cardinal Health recently agreed to pay $5.6 billion to settle legal claims related to its role in the opioid epidemic, which includes flooding communities with highly addictive painkillers," said Treasurer Magaziner. "Tragically, 50,000 Americans died of opioid-related deaths just last year, and that number is rising. Now, Cardinal is actively insulating its executives from taking any financial responsibility for the company's opioid practices and is proposing a multi-million-dollar bonus for our CEO. We are concerned with the lack of accountability at Cardinal and will be voting against this proposed bonus for Mr. Kaufmann."
Opioids have been distributed across the U.S. at a level that under no reasonable estimation could have been construed to represent legitimate demand. Cardinal Health, alone, distributed 11 billion opioid pills in the United States between 2006 and 2012.
"Cardinal Health has offered up a pay plan for its senior executives that completely ignores the billions paid out in connection with its distribution of opioids," said Connecticut State Treasurer Shawn Wooden. "After the worst write-off in the company's history, Cardinal's executives are expecting to be paid as if nothing ever happened and as if no one should be accountable. The grim reality is that the opioid crisis has devastated a generation of American families, and shareholders simply cannot ignore the toll this crisis has taken on our country, our economy and our long-term shareholder interest. I have joined Rhode Island General Treasurer, Seth Magaziner, in signing this letter to urge fellow investors to vote no on Cardinal Health's "Say-on-Pay" proposal, due to my deep concern that the company's actions risk shareholder value and could have profound implications for our economy and our society at large."
The $5.6 billion charge, which Cardinal agreed to in principle as part of "global settlement" regarding its role in the opioid crisis, has resulted triggered the company's largest-ever loss and erased five years of earnings. Cardinal's board of directors chose to ignore the loss for the purpose of calculating Mr. Kaufmann's proposed $2.5 million annual bonus.
We are concerned that the company's actions risk long-term shareholder value and have profound long-term implications for our economy and society. We urge fellow shareholders to join us in voting Against Cardinal's Say-on-Pay proposal at the company's November 4th shareholder meeting.
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A link to the exempt solicitation letter, which was filed with the SEC, is below
The Office of Rhode Island General Treasurer Seth Magaziner and the Office of Connecticut State Treasurer Shawn T. Wooden are each members of the Investors for Opioid and Pharmaceutical Accountability coalition (IOPA), a coalition of 61 investors representing more than $4.2 trillion in assets.
Randy Rice, Deputy Director Communications & Shareholder Engagement Office of Rhode Island General Treasurer Seth Magaziner (401) 487-3258 | email@example.com
Gabrielle Farrell, Director of Communications Office of Connecticut State Treasurer Shawn T. Wooden (860) 539-0397 | firstname.lastname@example.org