Cardinal Health is facing over 300 lawsuits from local and state governments for its role in distributing painkillers. The International Brotherhood of Teamsters General Fund and Rhode Island Employees’ Retirement Systems Pooled Trust presented the proposal to the board.
“We believe the opioid emergency presents a heightened level of risk for Cardinal investors. We also believe Cardinal is well positioned to incentivize senior executives to mitigate these risks by ensuring their compensation is tied to effective management of this crisis,” the shareholders said. “As it is structured now, Cardinal may insulate senior executives from legal risks by removing associated costs from the metrics that determine their incentive compensation.”
Cardinal’s board of directors urged shareholders not to adopt the proposal.
“We believe this type of broad and indiscriminate restriction reflects an inappropriate standard that could apply far beyond its stated objective of preventing senior executives from being ‘insulated from legal risks,'” the board members said.
The proposal will go up for vote at Cardinal’s annual shareholder meeting scheduled for Nov. 7.
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