Proxy advisory firm Institutional Shareholder Services is urging shareholders of McKesson Corp to vote against the re-election of four directors, citing the firm's persistent problems in addressing shareholders' concerns about executive compensation, The Wall Street Journal said on Sunday.
San Francisco-based healthcare firm McKesson has been criticized for having "excessive and poorly structured CEO pay," by CtW Investment Group. CtW Investment is part of the Change to Win labor federation, whose members include pensions funds that are McKesson shareholders.
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CtW said McKesson's board is "entrenched and insular," and noted a "string of multi-billion dollar compliance and internal control failures under the watch of the audit committee," in a July 1 letter to McKesson shareholders.
In that letter, CtW Investment Group urged McKesson shareholders to vote against the re-election of directors Jane Shaw, a 21-year veteran of the board; Alton Irby, a 14-year veteran of the compensation committee and John H Hammergren, chairman and CEO of McKesson.
In its recommendation, ISS said shareholders should vote against Irby and three other members of the compensation committee--Edward Mueller, Christine Jacobs and David Lawrence for failing to address the compensation issues, according to the Wall Street Journal article Sunday.
ISS did not recommend the removal of Shaw. Furthermore, it did not recommend voting against Hammergren because the company has agreed to name a lead director, according to the Wall Street Journal.
Representatives from ISS and McKesson did not return requests for comment Sunday evening.
McKesson's shareholders are scheduled to vote at the company's July 31 annual shareholder meeting.
(Reporting by Jessica Toonkel; Editing by Edwina Gibbs)