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 AmerisourceBergen shareholders to vote "no" on a proposed multi-million dollar compensation package for CEO Steven H. Collis.
"The tragedy of opioid addiction, overdose and death has reached every community in Rhode Island. Now, AmerisourceBergen is actively insulating its executives from taking any financial responsibility for the company's opioid practices," said Rhode Island General Treasurer Seth Magaziner. "Amerisource Bergen recently set aside $6.6 billion to cover its exposure to legal claims related to its role in the opioid epidemic and is still proposing a multi-million-dollar payouts for their CEO. We are concerned with the lack of accountability at AmerisourceBergen and will be voting against recent incentive award payouts to Mr. Collis."
The $6.6 billion charge, which AmerisourceBergen agreed to in principle as part of a proposed global settlement related to its distribution of opioids, has resulted in the company's largest-ever loss and erased ten years of earnings. AmerisourceBergen's board of directors chose to exclude these losses from the calculation of executives' pay, including CEO Collis' proposed $14.3 million compensation package, reflecting a 26 percent increase.
"The opioid crisis has devastated our nation, bringing heartbreaking loss to millions of families and costing the U.S. economy more than $1 trillion over the last two decades," said Connecticut State Treasurer Shawn Wooden. "The companies that played a role in the unchecked proliferation of these drugs should be held accountable, and the executives of those companies shouldn't profit from their work. AmerisourceBergen's approach to paying its executives misses the mark and is disconnected from the historic charge tied to opioid-related claims. With the company and its shareholders taking a hit for the worst legal charge in the company's history, the compensation for their top executives should reflect that."
The most recent filing is the latest in a series of actions that Treasurer Magaziner has taken to strengthen board oversight and accountability at pharmaceutical companies.
Last October, Treasurer Magaziner and Treasurer Wooden filed a similar letter with the SEC in connection with a vote at Cardinal Health, another "big 3" distributor of opioids, in connection with a similar payout of bonuses after the company paid $5.6 billion to settle opioid-related claims.
In December 2020, Treasurer Magaziner co-filed a shareholder proposal with Gilead, maker of remdesivir - the only antiviral drug approved by the U.S. FDA to treat cases of COVID-19 - following Gilead's recent decision to unethically price remdesevir at more than 500 times its production cost. The proposal would strengthen oversight of the company by requiring an independent Chair of the Board of Directors.
Earlier in the year, Treasurer Magaziner also filed an "Independent Chair" shareholder proposal at pharmaceutical giant Abbvie, which continues to face legal and reputational risks related to its management of patents and unsustainable pricing of Humira.