EpiPen maker Mylan is racing to halt a revolt from shareholders outraged by a $98 million (€87 million) pay package for its former CEO.
Institutional Shareholder Services (ISS), a shareholder advisory firm, made a surprise move in urging investors to oust all of Mylan's existing directors.
ISS criticised the Mylan board for "multiple egregious pay decisions" and a failure to heed "warning signs" ahead of last summer's scandal over EpiPen pricing.
Mylan (MYL) was already under fire for a relentless series of price increases on a two-pack of EpiPens, with the price increasing 400% over seven years.
Despite this, Mylan decided to give former CEO Robert Coury a $98 million pay packet last year as he transitioned to the role of executive chairman.
In a report published earlier this week, ISS criticised the "outsized compensation" in the face of "harm to the company inflicted by the EpiPen controversies" and "steep shareholder losses."
Glass Lewis, another advisory firm, put out a separate report last week, slamming Coury's "colossal pay package" and giving Mylan an "F" for its compensation decisions.
Both firms urged Mylan shareholders to vote against the nonbinding 'say-on-pay' proposal at the company's June 22 annual meeting.
'Say-on-pay' a term used for a rule in corporate law whereby a firm's shareholders have the right to vote on the remuneration of executives.
Mylan's pay practices were unpopular even before the EpiPen scandal, with the proposal only receiving 65.2% of support last year.
ISS and Glass Lewis also recommended letting go of Mylan directors Wendy Cameron, Neil Dimick and Mark Parish, all of whom sit on the compensation committee that approves executive pay.
ISS is further recommending that all of Mylan's existing directors should be voted out, including current CEO Heather Bresch.
Response
Mylan said the ISS call was "simply irrational" because it would leave the company "without any leadership."
In a statement, the company said it's "confident" shareholders will "recognize that that this Board has overseen a period of strong and sustainable long-term growth."
Mylan also sought to ease worries by sending a letter to shareholders on Monday arguing that Coury has been "integral to the success of Mylan and he will continue to provide strategic leadership for the next five years."
