Push to link Abbott exec pay, compliance fails
By MICHAEL VIRTANEN Associated Press August 16, 2013 6:07AM
Abbott Laboratories located in the 1400 block of Sheridan Road North Chicago. | Thomas Delany Jr.~Sun-Times Media
Updated: September 18, 2013 6:06AM
ALBANY, N.Y. (AP) — New York’s comptroller, who oversees the state’s $160 billion pension fund, says he will keep fighting to use the power of massive investments to hold corporate executives accountable for mistakes that could affect the bottom line.
A recent pension fund shareholder resolution that called for pharmaceutical giant Abbott Laboratories to link executive pay and bonuses to compliance penalties may have failed again this year, but Comptroller Thomas DiNapoli was encouraged that it drew 39 percent support, almost 5 percent more than last year.
“That issue is one we will continue to be engaged on,” said DiNapoli, trustee for about 1 million state and local government workers and retirees.
Six other big drugmakers have made changes in pay policies over the past year while under pressure from investors. They include Bristol-Myers Squibb, where the New York fund withdrew a similar resolution following an agreement.
The social activism embedded in 67 shareholder resolutions the comptroller’s office pushed this year ranged from corporate board diversity and disclosures of political spending to labor standards at overseas factories, non-discrimination based on sexual orientation, environmental cleanup and nuclear safety.
In 26 cases, the resolutions were withdrawn following corporate agreements. Four were passed, 27 failed and others were the subject of ongoing talks or withdrawn because other shareholders had filed similar proposals.
“We went through a very active season,” DiNapoli said this week, emphasizing that the main focus is long-term investment. “What we’ll do is make a judgment as to which ones we might want to reintroduce next year.”
Each, as in Abbott’s case, was advocated as protecting the bottom line.
Abbott paid $1.5 billion in compliance penalties to state and federal regulators last year for marketing the anti-seizure and mood-stabilizing drug Depakote for unapproved uses such as treatment of schizophrenia, agitated dementia and autism.
The company’s directors opposed the comptroller’s resolution, saying in a statement that its method for evaluating executive performance considers long-term and not just temporary results.
Abbott said New York’s shareholder proposal “disregards the need to analyze the facts and circumstances of a particular situation.”
The New York fund owns about 4.9 million shares of Abbott valued at about $175 million, a small fraction of its 1.55 billion outstanding shares.