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Indivior faces the prospect of a shareholder revolt at this week’s annual meeting after the London-listed pharmacist retains bonuses for its former chief executive, although he was jailed for his role in the opioid crisis to the United States.
Shaun Thaxter, the former CEO, was sentenced to six months in federal prison last year and agreed to pay $ 600,000 in fines and confiscation later pleading guilty to a felony offense of causing the company to share false and misleading information about the safety of Suboxone Film with a state regulator. The drug is used to treat opioid use disorder.
Shareholders and senior CEOs have criticized the company’s decision to withhold awards awarded to Thaxter under its long-term incentive plan, despite Indivior’s reputational success in the legal proceedings.
Institutional Shareholder Services and Glass Lewis, the influential advisory groups, have advised investors to vote against the company’s payroll report, questioning why Indivior has not enforced malus and clawback provisions, which allow companies to reduce or cancel bonuses or force executives to pay them circumstances.
According to ISS, Thaxter left the company with more than one million shares outstanding, worth more than $ 1.5 million, which will not arrive until 2022 and 2023.
ISS said: “As chief business executive since 2009, Shaun Thaxter is ultimately responsible for the financial and reputational damage the company has suffered in connection with the bad sale of Suboxone.”
One of the top 20 shareholders was also critical of the remuneration committee’s decision to treat Thaxter as a “good dropout” and keep the awards despite the prison sentence.
He U.S. opioid epidemic has cost about half a million lives in the last 20 years, according to U.S. Centers for Disease Control and Prevention, as many Americans became addicted first to prescription opioids and then to illegal versions of drugs. The U.S. Department of Justice, state attorneys general, and localities have sued opioid manufacturers in court, hoping to get reimbursement of the huge health and law enforcement costs associated with the consequences.
Indivior said the compensation committee had decided to allow it to retain its excellent LTIP awards “based on Thaxter’s leadership which produced years of positive operational performance and the absence of findings of personal misconduct or misconduct.”
Suboxone is used to treat opioid use disorder © George Frey / Bloomberg
Suboxone film, which contains buprenorphine and naloxone, is designed to treat opioid addiction. The justice department accused Thaxter of having asked employees to devise a strategy to obtain preferential drug status with MassHealth, the Massachusetts regulator. Some employees shared false and misleading safety information about the risk of accidental exposure for children.
MassHealth later announced that it would provide access to the drug to patients with children under the age of six receiving Medicaid, the U.S. government-backed health insurance program for low-income people.
Thaxter was not accused of intentionally cheating MassHealth. Wick Sollers, Thaxter’s attorney, said: “We believe that Mr. Thaxter’s determination that he should be treated as an ‘abandoned good’ was entirely appropriate in the circumstances of his case, which established that he was unaware of any failure when produced and authorized the corrective action after learning of the matter “.
Thaxter is one of the few pharmaceutical executives to have been jailed on charges associated with the opioid crisis. He ran the company from 2009 until last year, shortly before pleading guilty to the charge, even when he was part of Reckitt Benckiser.
Reckitt paid $ 1.4 billion in 2019 to resolve its liability to the United States over the marketing of Suboxone. Indivior and its subsidiary Indivior Solutions have also previously agreed to pay $ 600 million to settle related liabilities.
Thaxter was paid a total of $ 2.1 million for fiscal year 2019, as well as $ 557,300 in 2020. After his departure in June 2020, he received a lump sum of more than $ 1 million. instead of salary and benefits to cover your 12- contracts. right of monthly notice.
ISS also advised shareholders to vote against the re-election of the chairman of the remuneration committee, arguing the “decision of the company to treat Thaxter as a good abandoner.
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