Independent Investors Support Shareholder Proposals on Opioids at AmerisourceBergen Shareholder Meeting

Date: 
Mar 2nd 2018

Shareholder Resolutions of Investors for Opioid Accountability, a $2.2 Trillion Investor Coalition, Receive Resounding Support   

Detroit, Michigan (March 2, 2018) A strong message was sent today to the board of directors of AmerisourceBergen when 62 percent of independent voters supported a board report calling for accountability on opioid risks; 52 percent supported requiring the board to disclose the use of its clawback and 49 percent supported an independent chair of the board. This support signals serious investor concerns about how AmerisourceBergen is managing potential business risks and strategies as it faces mounting legal pressures related to its opioid business.

The three proposals were submitted by members of the Investors for Opioid Accountability (IOA), a coalition of 44 institutional investors with $2.2 trillion in assets co-led by Mercy Investment Services, Inc. and the UAW Retiree Medical Benefits Trust.  The proposals were voted on today by investors at AmerisourceBergen’s March 1, 2018, annual shareholder meeting in Naples, Florida.

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 were:

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 today’s votes:

“We appreciate this resounding support of AmerisourceBergen independent investors on proposals we believe are key to board accountability.  There is no more important time than now for AmerisourceBergen’s board to be responsive to its investor base, especially as it faces potential legal costs and reputational damage related to its distribution of opioids.

“We are especially pleased with 62 percent of independent investor support for the first-time shareholder proposal (Proposal No. 8) calling for a board report by independent directors.  This report will assist investors in understanding what past practices may be contributing to the scrutiny the company is currently under by government regulators and as well how it plans to mitigate these risks going forward. 

“Despite formal requests, AmerisourceBergen’s board of directors have yet to meet with the IOA members to discuss why they are not willing to appoint an independent chair of the board, disclose the use of their clawback or investigate the company’s opioid business risks.  We hope these votes signal that meaningful shareholder engagement is the cornerstone of board accountability and that now it’s up to the board to decide whether or not it will be responsive to its investor base on these key provisions.”

Contacts:

Patricia McCarthy, (313) 418-4155, patty@prmccarthy.com

Susana McDermott, (212) 870-2938, smcdermott@iccr.org 

Members of the Investors for Opioid Accountability*

  1. The Socially Responsive Industry Group of 1919
  2. Investment Counsel
  3. AEGON Asset Management
  4. American Federation of Teachers
  5. Bailard, Inc.
  6. Benedictine Sisters, Boerne, Texas
  7. Bricklayers & Trowel Trades
  8. California State Teachers' Retirement System
  9. Calvert Research and Management
  10. Catholic Health Initiatives
  11. City of Philadelphia Public Employees
  12. Congregation of St. Joseph
  13. Connecticut State Treasurer, Denise L. Nappier
  14. CtW Investment Group
  15. Daughters of Charity, Province of St. Louise
  16. Dignity Health
  17. Diocese of Springfield, IL
  18. Domini Impact Investments
  19. Dominican Sisters of Springfield, IL
  20. Illinois State Treasurer Michael Frerichs 
  21. Interfaith Center on Corporate Responsibility
  22. International Brotherhood of Teamsters
  23. JLens Investor Network
  24. Mercy Health
  25. Mercy Investment Services
  26. NEI Investments
  27. New York State Common Retirement Fund
  28. Neuberger Berman
  29. Northwest Coalition for Responsible Investment
  30. Office of New York City Comptroller,

Scott M. Stringer

  1. Pennsylvania State Treasurer, Joe Torsella
  2. Rhode Island General Treasurer, Seth Magaziner
  3. School Employees Retirement System of Ohio
  4. Segal Marco Advisors
  5. Sisters of St. Francis of Philadelphia
  6. Socially Responsible Investment Coalition
  7. Trinity Health
  8. UAW Retiree Medical Benefits Trust
  9. United Church Funds
  10. Walden Asset Management
  11. West Virginia State Treasurer, John Perdue
  12. Zevin Asset Management

* The remaining investors decline to be named.

 

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