Pension funds take aim at EpiPen maker board members

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(AP)

A group of institutional investors unhappy over high executive pay at Mylan are taking aim at six board members at the EpiPen maker. 

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Four major pension funds launched a campaign late Tuesday urging fellow Mylan shareholders to oppose the re-election of Chairman Robert J. Coury and five other directors at the company's June 22 annual meeting. Mr. Coury, Mylan's former chief executive, received nearly $100 million in 2016, when the company ignited a public furor over hefty price increases on its lifesaving allergy medicine. 

Mr. Coury's pay package, among the largest disclosed for 2016, included a termination benefit of $22.3 million. He switched from executive chairman to nonemployee chairman last year. For his current role, Mr. Coury gets a cash retainer of $1.8 million a year along with other rewards. 

"Mylan's board reached new lows in corporate stewardship in 2016, when it agreed to make extraordinary and egregious payments in 2016 and over the next five years" to Mr. Coury, the pension funds wrote in a letter to shareholders. 

Mr. Coury also was "paid quite extravagantly" long after he stepped down as CEO in 2012, the letter added. 

Mylan directors "designed executive compensation programs to drive continued execution against our strategy" and aligned the compensation "with company performance and long-term shareholder value creation," a spokeswoman said. As of Tuesday evening, she said the company hadn't yet reviewed the letter. 

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The company previously said Mylan delivered strong financial performance during Mr. Coury's long tenure and that his new compensation package is aligned with the company's stock performance. Mr. Coury declined to comment. 

New York City and New York State pension funds plus the California State Teachers' Retirement System and PGGM, a Dutch pension fund, signed the letter. The investors own about 4.3 million shares of Mylan, which represents less than 1% of its shares outstanding. 

Mylan's board has "a history of oversight failures," said New York City Comptroller Scott M. Stringer. "There needs to be change." 

The institutions also urged Mylan shareholders to reject the company's executive compensation plans because they say directors repeatedly approve "excessive pay" for top officers. About 35% of votes cast in this nonbinding referendum gave thumbs down to Mylan's pay practices last year. 

While executive chairman and CEO, Mr. Coury served "as a key architect in helping Mylan become a global leader in the generic and specialty pharmaceutical industry," its latest proxy statement said. 

The campaign represents more of a high-profile protest than a serious threat to Mylan directors, since all six directors are running unopposed. Besides Mr. Coury, the pension funds oppose the chairmen of two board committees who encountered significant investor opposition during last year's annual meeting. 

One is Wendy Cameron, head of its compensation committee and a Mylan director since 2002. The second is Mark W. Parrish, who joined the board in 2009 and leads its compliance committee. Both got less than 84% of votes cast last year. Ms. Cameron and Mr. Parrish declined to comment. 

The drugmaker in 2016 came under fire over repeated price increases for EpiPen. In October, the company agreed to pay $465 million to settle allegations that it had overcharged the U.S. government for its EpiPen products. Mylan previously said the settlement included no finding of wrongdoing by the company or its employees. 

Write to Joann S. Lublin at joann.lublin@wsj.com