ISS, Glass Lewis Support Investors for Three Opioid Accountability Shareholder Proposals at AmerisourceBergen (NYSE:ABC)
$2.2 Trillion Investor Coalition Proposes Board Accountability Measures
Detroit, Michigan (February 14, 2018) - Proxy advisory firms Institutional Investor Service (ISS) and Glass Lewis are supporting three shareholder proposals at AmerisourceBergen calling for board oversight of opioid business risks. The shareholder proposals were submitted by members of the Investors for Opioid Accountability (IOA), a coalition of 43 institutional investors with $2.2 trillion in assets co-led by Mercy Investment Services, Inc. and the UAW Retiree Medical Benefits Trust. The proposals will be voted on by investors at AmerisourceBergen’s March 1, 2018 annual shareholder meeting.
AmerisourceBergen, the nation’s third largest drug distributor, is under scrutiny for business practices related to opioids. In 2016 AmerisourceBergen agreed to pay $16 million in a settlement with the Attorney General of West Virginia for failure to provide effective controls and procedures related to the diversion of controlled substances and related matters. As part of multi-state investigation, 41 state attorneys general recently requested documents from three opioid distributors, including AmerisourceBergen, to determine if distributors are engaged in unlawful practices related to opioids.
The shareholder proposals are:
Proposal No. 5, The Independent Chair Proposal, submitted by the International Brotherhood of Teamsters
Proposal No. 7, The Clawback Disclosure Proposal, submitted by the UAW Retiree Medical Benefits Trust and the Connecticut Retirement Plans and Trust Funds
Proposal No. 8, The Board Report Proposal, requesting a report on how the board is addressing opioid-related business risks submitted by the Sisters of St. Francis of Philadelphia, Trinity Health, JLens Investors Network and Missionary Oblates OIP Investment Trust.
The IOA released the following statement in response to ISS and Glass Lewis’ support for the three proposals:
“We welcome the support of ISS and Glass Lewis ahead of AmerisourceBergen’s annual meeting. Without these important board governance reforms, investors cannot know what steps the board is taking to act independently and transparently as it continues to face legal, reputational and financial risks associated with its opioid distribution business.
“An independent chair of the board (Proposal No. 5), separate from the CEO and from management, is the strongest measurer of accountability and oversight a board of directors can have during challenging times such as those AmerisourceBergen faces now. Disclosing the use of its clawback policy (Proposal No. 7) is the only way investors can know if the board has taken action to recoup ill-gotten gains and aligned pay for performance. Finally, the board report on risk mitigation (Proposal No. 8) is key to restoring investor confidence that AmerisourceBergen’s board is taking concrete steps to strengthen its internal governance measures related to internal controls and compliance as well as compensation incentives related to its opioid business. Right now, investors have no information on what steps the board has taken to ameliorate these risks.”
Members of the Investors for Opioid Accountability
- The Socially Responsive Industry Group of 1919
- Investment Counsel
- AEGON Asset Management
- American Federation of Teachers
- Bailard, Inc.
- Benedictine Sisters, Boerne, Texas
- Bricklayers & Trowel Trades
- California State Teachers' Retirement System
- Calvert Research and Management
- Catholic Health Initiatives
- City of Philadelphia Public Employees
- Congregation of St. Joseph
- Connecticut State Treasurer, Denise L. Nappier
- CtW Investment Group
- Daughters of Charity, Province of St. Louise
- Dignity Health
- Diocese of Springfield, IL
- Domini Impact Investments
- Dominican Sisters of Springfield, IL
- Hermes EOS
- Illinois State Treasurer Michael Frerichs
- Interfaith Center on Corporate Responsibility
- International Brotherhood of Teamsters
- JLens Investor Network
- Mercy Health
- Mercy Investment Services
- NEI Investments
- New York State Common Retirement Fund
- Neuberger Berman
- Northwest Coalition for Responsible Investment
- Office of New York City Comptroller, Scott M. Stringer
- Pennsylvania State Treasurer, Joe Torsella
- Rhode Island General Treasurer, Seth Magaziner
- School Employees Retirement System of Ohio
- Segal Marco Advisors
- Sisters of St. Francis of Philadelphia
- Socially Responsible Investment Coalition
- Trinity Health
- UAW Retiree Medical Benefits Trust
- United Church Funds
- Walden Asset Management
- West Virginia State Treasurer, John Perdue
- Zevin Asset Management
