United Church Funds-Led Shareholder Resolutions Receive Support at Two Pharmaceutical Companies’ Annual Meetings
United Church Funds recently coordinated shareholder resolutions at two pharmaceutical companies so that their boards can better serve the corporations and their clients.
A shareholder resolution with Gilead Sciences, Inc. that received 43.4 percent support at Gilead’s annual general meeting on May 6, 2020, requested the company to separate the position of the Chair of the Board from the CEO position.
“We are pleased to receive very high-level support for an investor-led resolution. This result indicates that shareholders believe that proper oversight of a company includes a strong independent board chair,” said Katie McCloskey, UCF’s Director of Social Responsibility.
United Church Funds believes a structure where the CEO runs the business and is accountable to a board led by an independent chair is in the best interests of the company’s shareholders because it eliminates structural conflicts of interest in the dual role, and reduces the risk of the board not providing necessary oversight of the company’s culture, strategy and risk management.
Additionally, on May 8, 23.9 percent of voting shareholders of AbbVie, a U.S. pharmaceutical company, supported a United Church Funds-led shareholder resolution to report on the “feasibility of incorporating public concern over high drug price into the senior executive compensation arrangement.” The resolution asked the company to assess the extent to which incentive compensation arrangements encourage the public’s trust in AbbVie’s innovation and concern for healthy outcomes.
In the argument on behalf of the resolution, United Church Funds stated that AbbVie’s leadership must demonstrate that there are no occurrences of misaligned incentive pay. Such practices discourage executives from focusing on long-term sustainability rather than the “get rich quick” strategies of drug price increases.
Responsible investors believe that the coronavirus pandemic provides a particularly sensitive time for AbbVie to make sure that the economic and health hardships that the world is experiencing are not compounded by drug price increases. Now is not the time to exploit the public health’s fragility by raising drug prices or preventing competition.
United Church Funds also announced its 2020 Q1 Fund Fact Sheets are now online.
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