MORGANTOWN – Union workers at Viatris’ Morgantown Mylan plant now have a severance package, but they still have concerns about their futures, and the company.
And with the days counting down to the July 31 plant closure, a national advocacy group is hoping to enlist the help of President Biden to keep the plant operating in some way.
Letter to Biden
A group called Our Revolution – founded by Sen. Bernie Sanders to push for progressive political issues – is joining with United Steelworkers Local 8-957, The Democracy Collaborative, Social Security Works and other organizations to send a letter to Biden on Wednesday urging him to intervene in the interests of national security, protecting the domestic supply chain for pharmaceuticals and preserving American jobs.
“Its a Hail Mary pass, we’re at the end game,” said Our Revolution Executive Director Joseph Geevarghese. “Our play in this moment is to try to take it up a notch in a much more aggressive way with the administration.”
Our Revolution members joined with the union in June for rallies in Morgantown and Charleston aimed at saving jobs at the plant.
Vice President Kamala Harris, Sens. Joe Manchin and Shelley Moore Capito and other federal officials will be copied on the letter. A full report on the letter will be published when it’s released.
Given the group’s connection to Sanders, The Dominion Post asked Geevarghese if they’ve sought his help in the matter.
“Its on Bernie’s radar,” Geevarghese said, but as Budget Committee chairman, most of Sanders’ attention is on the infrastructure legislation and other money matters at the moment. Also, the ball falls more properly in Manchin’s court, since the plant is his home state and he holds a pivotal position in the Senate.
At the June rally, All four walls and the speaker’s lectern with plastered with various posters, most prominently, one with a headshot of Sen. Joe Manchin above the sentence, “Manchin: Save Our Jobs!”
Union concerns
Local 8-957 President Joe Gouzd and some other members respectfully took issue with a comment USW International Vice President Fred Redmond made to MetroNews recently regarding the severance agreement.
Redmond told MetroNews, “We think that the agreement provides some sustainability. People will continue to receive pay for a specified period of time, along with medical benefits.”
A severance package is meant to bridge a gap between jobs, Gouzd said, but sustainability is entirely different. “Sustainability is an ongoing process.”
He and others in his office on the day of this conversation asked how people making $60,000 or $70,000 will sustain their lives and lifestyles making $30,000 or $45,000. What gets cut? What bills don’t get paid?
Some who choose to stay in West Virginia and take a substantial pay cut, they said, may face bankruptcy, lose their homes, sell their cars. And the businesses they frequented and supported may in turn face significant losses, even closure.
In the rapid-fire conversation in the union hall office it was nearly impassible to keep track of who said what, but one member concluded, “It’s all going to be gone.”
Union member Alan Phillips was one of several that day, and of many in the months since the plant closure was announced, who’ve opined on the change in company culture after founder Milan Puskar stepped down.
“It was no longer about quality. It was about money,” Phillips said.
He was among the many who’ve said that Mylan (now Viatris) Executive Chairman Robert Coury’s background was not in pharmaceuticals. Puskar walked the halls and floors. His successors didn’t.
He recalled a company meeting where he sat in the front row and told Coury, “You don’t have a clue what’s going on.”
Phillips suggested that leadership bring in two people from each plant department and hold roundtables or meetings to get regular employee input on plant operations. That didn’t fly. “They don’t want to hear that.”
Some history
A 2009 Mylan press release, when Coury took over as board chair, noted that Coury had been Mylan’s vice chairman and CEO since 2002 and had previously served as a consultant to the company from 1995 to 2002. Prior to joining Mylan, he was the principal of Coury Consulting L.P., a corporate strategy advisory firm he formed in 1989 in Pittsburgh.
In 2017, Mylan agreed to pay $465 million to the Department of Justice to resolve claims that it knowingly misclassified the EpiPen as a generic drug to avoid paying rebates owed to Medicaid.
That same year, Mylan NV shareholders disapproved, in a non-binding advisory vote, the executive pay packages. The then-board remained intact in the wake of a potential shareholder revolt that emerged when four pension funds owning a combined $170 million worth of Mylan NV shares wrote a letter urging stockholders to oust six of Mylan’s 11 board members and reject the proposed executive compensation packages.
Shortly after that, proxy advisory firm ISS issued a report backing those suggestions. The report said, “Mylan and its shareholders have suffered significant destruction in shareholder value as a result of the EpiPen pricing and classification controversies which emerged as public issues in 2016, and the subsequent Congressional hearings, related multiple investigations by regulators, lawsuits and mounting legal and potential settlement costs. The company has also suffered long-term reputational damage.”
Regarding executive pay, ISS said, “Executive compensation for 2016 included multiple egregious pay decisions and large payouts despite the harm to the company inflicted by the EpiPen controversies. Chairman Robert Coury received outsized compensation, including a $43.6 million front-loaded equity award for his service as non-executive chairman through 2021.”
In 2016, Coury received $97.6 million; CEO Heather Bresch received $13.8 million; President Rajiv Malik $8.7 million; new CFO Kenneth Parks $4.5 million; and Chief Commercial Officer Anthony Mauro $4.6 million.
In September 2019, Mylan finalized its $30 million settlement with the SEC regarding charges relating to accounting and disclosure failures connected to a Department of Justice probe into its overcharging Medicaid by hundreds of millions of dollars for its EpiPen.
In June 2019, The Dominion Post reported that CEO Heather Bresch’s base pay had been unchanged since 2016: $1.3 million. But her total compensation, including stock awards, incentives and other income, fluctuated: $13.33 million in 2018; $12.74 million in 2017; $13.78 million in 2016.
Mylan (and now Viatris) President Rajiv Malik’s base pay was $1 million. He made $9.5 million in 2018; $8.74 million in 2017; $8.69 million in 2016.
In May 2020, The Dominion Post reported that for 2019, Bresch got a boost in her annual base pay, from $1.3 million — her base since 2016 — to $1.5 million. But her total compensation, including stock awards, incentives and other income, increased by more than $5 million: from $13.33 million in 2018 to $18.51 million in 2019. Her total compensation in 2017 was $12.74 million; in 2016, $13.78 million.
According to an Upjohn SEC filing, Bresch’s projected golden parachute was just over $30.8 million. That included $17.9 million in cash, $12.6 million in equity awards and $309,000 in benefits.
Coury’s total 2019 compensation was $1.83 million. In addition, based on a prior agreement, he was entitled to up to 70 hours of personal use of the company aircraft or a cash payment of up to $1.5 million for unused time; he used 66.9 hours, which Mylan valued at the full $1.5 million.
Mylan Chief Financial Officer Ken Parks did not join Viatris. His golden parachute was estimated at $10.3 million and included $6.2 million in cash, $3.5 million in equity awards and $542,000 in benefits.
Malik’s base pay increased from $1 million in 2018 to $1.15 million in 2019. His total compensation rose from $9.51 million in 2018 to $12.38 million in 2019.
The Mylan/Viatris stock price per share has declined since 2015, when the company fended off a takeover bid by Israel-based Teva (which offered $82 per share) while unsuccessfully making a takeover bid for Ireland-based Perrigo. From June 2018 through May 2019, Mylan’s stock share price fell from $37.45 to $21.53. Viatris’ closing price on Friday was $13.76.
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