Business, Healthcare

Viatris shareholders to take nonbinding vote on executive pay during December annual meeting

MORGANTOWN — Viatris shareholders will get the opportunity to make a nonbinding vote on executive pay during the company’s 2022 annual meeting, set for Dec. 9, in Florida.

Shareholders will also vote to re-elect four directors and consider a proposal by a New York-based shareholder to change how top leadership is appointed.

The executive pay vote is a “Say-on-Pay,” a “mandatory, advisory, nonbinding shareholder resolution.” The compensation packages are described in Viatris’ 2022 proxy statement. The proxy statement does not give a preview of pay for the year ahead but provides a look back.

The statement says, “Although advisory and not binding, the Compensation Committee and the Board will take into account the outcome of this vote when considering future compensation arrangements for Viatris’ NEOs [named executive officers] as they deem appropriate.”

Last year, shareholders overwhelmingly voted against the company’s executive compensation packages during the company’s first annual shareholder meeting. Viatris told The Dominion Post after the vote, “The Viatris Compensation Committee and board already addressed shareholder concerns by implementing a new, comprehensive performance-based shareholder-aligned compensation program for 2021 consistent with our stated company priorities. This new program will be reflected in the summary compensation table in next year’s proxy.”

The proxy statement lists a number of changes the company made in response to shareholder suggestions.

The proxy statement details the compensation packages for five Viatris NEOs: Michael Goettler, CEO; Rajiv Malik, president; Sanjeev Narula, chief financial officer; Anthony Mauro, president, Developed Markets; Robert Coury, executive chairman. The proxy statement mentions each officer’s total 2021 target compensation, with base salary, annual incentives, long-term incentives total compensation.

Coury’s 2021 total was the highest: $1.8 million base salary, $2.7 million annual incentives, $10.8 million long-term incentives, for a total $15.3 million.

Goettler was second: $1.3 million base, $1.95 million annual incentives, $9.1 million long-term incentives, for a total $12.35 million.

Malik’s base salary was $1.2 million; his total package was $9.9 million. Mauro had a base salary of $800,000 and a total of $4.92 million. Narula also had a base of $800,000 with a total package of $4.4 million.

Regarding executive pay, the statement says, “The Viatris compensation program for 2021, 2022 and beyond is highly performance-based and aligned with shareholders. Our streamlined compensation program was developed to incentivize achievement of our strategic goals, support the short- and longer-term needs of the company to meet those goals and help ensure long-term sustainability, meet the competition for executive talent, consider perspectives of shareholders relating to prior compensation programs, and focus on shareholder value creation.“

Coury made some comments about company performance at the beginning of the proxy statement.

“In Phase 1 of our strategy, which is expected to be completed by the end of 2023,” he said, “we have been focused on setting up our company for long-term sustainability and a return to growth. During this phase, we have focused on de-levering our balance sheet by paying down debt and returning capital to shareholders through the initiation of a dividend in 2021, which the Board increased by 9% in 2022, returning approximately $835 million to shareholders to date.

“I am proud of the significant progress that we have made since the creation of Viatris, especially in this past year,” he said. “In 2022, we continued our efforts to reshape our company, build for the future, and increase our financial flexibility, all while returning capital to shareholders and delivering on our stated financial commitments.

Viatris was formed in 2020 by the merger of Mylan and Upjohn and has about 37,000 employees around the world. It is located in more than 70 countries and headquartered in the U.S. with global centers in Pittsburgh, Shanghai and Hyderabad, India.

Director vote

Shareholders will vote to re-elect four directors to serve through 2023: Malik and three independent directors: W. Don Cornwell, Harry A. Korman and Richard A. Mark.

Shareholder proposal

Shareholder Kenneth Steiner, who owns at least 2,800 shares, has put forth a proposal that would effectively unseat Coury as executive director.

His proposal would require two separate people to serve as independent board chair and CEO, and exclude any former company employee from serving as chair. He says the two jobs are fundamentally different: the CEO is supposed to manage the company; the chair is supposed to oversee the CEO and management.

The board opposes the proposal and recommends a vote against it. It says the two jobs are already separate. “In particular, the board believes that its current leadership structure … enables our executive chairman to lead the board and oversee the strategic direction of the company in collaboration with executive management, and our chief executive officer to lead the overall operation of the company and execute on the company’s strategy.”

It continues, “The lead independent director [Mark Parrish] provides leadership for independent oversight of management and the company. The board further believes it is valuable for Mr. Coury to serve as executive chairman because his familiarity with and knowledge of our company and business is unmatched.”

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