A coalition of institutional investors is pushing Eli Lilly (LLY) to adopt a policy to disclose when executive pay is clawed back for misconduct. But the company is refusing to do so, even though more than a dozen large drug makers, wholesalers, and retailers have agreed to take such a step.
The rationale for the move, which was made in a shareholder proposal, is that Lilly faces substantial financial, legal, and reputational risks stemming from allegations that the company engaged in anti-competitive pricing over insulin. Specifically, the drug maker faces several lawsuits filed by various U.S. states as well as congressional investigations into allegations of price gouging.
Although Lilly has a clawback policy, the company could more effectively reassure shareholders that executives are held accountable for misdeeds, according to the proposal filed by Trinity Health, a not-for-profit Catholic health system operating 92 hospitals in 22 states. The system is part of the coalition, called the Investors for Opioid and Pharmaceutical Accountability.
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