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Teamsters Lead Shareholder Victory at McKesson
In a critical victory for corporate citizenship and responsibility, McKesson shareholders recently defeated the company’s “Say on Pay” executive compensation vote and threw their support behind corporate governance reforms aimed at holding the nation’s largest drug distributor accountable for its role in fueling the opioid crisis.
In an effort led by the International Brotherhood of Teamsters, a long-term shareholder in McKesson, a majority of McKesson shareholders voted to reject the board’s request to approve McKesson’s executive compensation policies. The Teamsters argued the company’s executive pay practices risked insulating CEO John Hammergren from the legal, political and reputational risks surrounding the company’s role in the opioid crisis.
In addition, the company acquiesced to the Teamsters demand to separate the positions of Chair and CEO.
A First
“For the first time ever, shareholders have voted to hold a company accountable for its role in the opioid epidemic,” said Ken Hall, Teamsters General Secretary-Treasurer.
“The country’s largest drug distributor cannot get away with ballooning executive pay and failures in oversight as Americans die every day from opioid addiction. This shareholder vote should serve as a wake-up call to AmerisourceBergen, Cardinal Health and other companies involved in the manufacturing or distribution of prescription opioids that shareholders want to see change. We cannot afford another decade of business as usual. The Teamsters will not back down from this fight.”
McKesson is the largest drug distributor in the United States. Together with Cardinal Health and AmerisourceBergen, the company has been a key player in supplying prescription opioids to communities across the country. In West Virginia, one of states hit hardest by the opioid epidemic, the “Big Three” shipped enough doses of hydrocodone and oxycodone between 2007 and 2012 to provide 235 pills to every man, woman and child in the state. At the same time, CEOs of these companies received more than half a billion in compensation.
Accountability
The International Brotherhood of Teamsters has been leading a growing shareholder effort to hold the “Big Three” distributors accountable for their role in fueling the opioid epidemic. In addition to calls for executive pay and governance reform, the Teamsters have urged the board of directors of each of the companies to set up an independent committee to investigate opioid sales practices and compliance programs.
Other states and entities are joining Teamster efforts to provide oversight and accountability to the Big 3—state treasurers in Illinois, Pennsylvania, West Virginia and California are all sending letters to these companies reinforcing the union’s call for them to address business practices that have contributed to the opioid crisis.