MORGANTOWN — Mylan shareholders will take an advisory vote on executive compensation and vote to appoint 13 board members — up one from the current 12 — during the company’s Annual General Meeting, set for June 21.
The company filed its preliminary proxy statement, called Pre 14A, with the SEC on Friday.
The executive compensation vote is called Say on Pay and is a “mandatory, nonbinding shareholder resolution,” according the Center on Executive Compensation. While not required by law, Mylan is among the companies that hold a Say on Pay vote annually.
The Pre 14A says, “Although advisory and not binding, the Compensation Committee and the board will take into account the outcome of this vote when considering future compensation arrangements for Mylan’s executive officers.”
The Pre 14A does not give a preview of 2019 pay, but details the officers’ 2018 pay and offers some comparisons to two previous years.
CEO Heather Bresch’s base pay has been unchanged since 2016: $1.3 million. But her total compensation, including stock awards, incentives and other income, has fluctuated: $13.33 million in 2018; $12.74 million in 2017; $13.78 million in 2016.
President Rajiv Malik is the second-highest earner. His base pay is $1 million. He made $9.5 million in 2018; $8.74 million in 2017; $8.69 million in 2016.
For 2018, former Chief Legal Officer Daniel Gallagher made $5.28 million; Chief Commercial Officer Anthony Mauro made $4.45 million; Chief Financial Officer Kenneth Parks made $4.4 million.
The board comments: “The Compensation Committee and board believe that each member of the executive team has the critical experience, business skills, leadership, executional capabilities, and commitment to our mission and strategy necessary to lead the company now and in the future, to the benefit of shareholders and all other stakeholders.
“Their leadership and execution have led to the development of a durable, diversified, and sustainable company that is built to last, and they continued to perform and execute at high levels during 2018, despite significant industry, regulatory, and other headwinds … that impacted our performance in 2018.
“Although we expect that the healthcare industry will continue to evolve in complex and unpredictable ways, we remain confident that the leadership of our outstanding current executive team will enable Mylan to continue to withstand these headwinds and successfully execute on our strategy.”
Mylan’s stock price per share on Friday was $22.17. The price has declined since 2105, when the company fended off a takeover bid by Israel-based Teva (which offer $82 per share) while unsuccessfully making a takeover bid for Ireland-based Perrigo.
Here are Mylan’s stock prices for May 10, 2018 through 2015: $37.90, $38.21, $40.81, $70.67.
On Aug. 8, 2018, the board formed a Strategic Review Committee to examine the question of Mylan’s undervalued stock and “evaluate a wide range of alternatives to unlock the true value of Mylan’s one-of-a-kind platform.”
Mylan’s current board contains two executive directors, Bresch and Malik, and 10 non-executive directors: chair and former CEO Robert Coury, Robert Cindrich, JoEllen Dillion, Neil Dimick, Melina Higgins, Harry Koman, Mark Parrish, Pauline Mohr, Randall Vanderveen and Sjoerd Vollebregt.
The potential 13th, if approved, will be Richard Mark.
Mohr did not serve the full year and Coury receives a different type of compensation package. The other directors received compensation ranging from $335,039 to $405,039. Coury earned $1.8 million.
Coury and the five executives are also entitled to personal use of the company aircraft. Coury’s contract entitles him to 70 hours use or up to $1.5 million for unused time. In 2018, he used 26.5 hours and received $947,524 for the unused time.
In a company overview, the board commented: “Since 2008, we have transformed from a mid-sized U.S. generics company with a workforce of more than 15,000 globally and $5.1 billion in total revenues to a highly differentiated global pharmaceutical company with a global workforce of more than 35,000 and $11.4 billion in total revenues capable of delivering better health to customers around the world.
“At Mylan, we are extremely proud to have had the vision over a decade ago to transform and expand our company in a controlled and balanced way. We invested in organic growth while carefully integrating strategic acquisitions, creating one of the most durable global platforms in our industry today.”
Coury commented, “As Chairman, I truly believe that our long-term vision will continue to benefit the company going forward, even more so now than at any time in our past. Our belief rings especially true given the current industry environment, including the complex and often unpredictable challenges of adverse pricing and supply chain dynamics, unanticipated regulatory developments, and heightened governmental scrutiny of the US healthcare system, among other challenges.
“These issues have impacted and will continue to impact all healthcare companies in the US, including Mylan. But because Mylan had the foresight to expand and transform its business by building a one-of-a-kind, diversified global platform, we have been able to withstand these headwinds and have done so better than most.”
“As part of our transformation, we will be taking a hard look at the way we think about the future of healthcare around the world. We intend to leverage the many successes we have achieved through our proven and enhanced scientific capabilities, while remaining mindful of the ever-changing commercial dynamics in our markets around the globe. In so doing, it should come as no surprise that we will be considering additional changes in our approach to how we choose to manage our current and future diverse global assets, including how we allocate capital in the future.”
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