BUSINESS
Stringer Presses Gilead to Enact Clawback Policy
Comptroller has succeeded in pushing other companies to sanction executive wrong-doers
BY MATT TRACY
As part of his offi ce’s
partnership with an
opioid accountability
group, Comptroller
Scott Stringer is pushing Gilead to
embrace a “clawback” policy under
which the corporation’s board of
directors would recoup compensation
from top executives engaged
in wrongdoing.
Stringer and New York City Employees’
Retirement Systems, in
conjunction with Investors for Opioid
and Pharmaceutical Accountability
(IOPA), asked for the policy
in a shareholder proposal submitted
to Gilead’s board of directors
on November 13 after the pharma
giant — which produces HIV prevention
and treatment medication
— was hit with a lawsuit from the
US government for patent infringement
. It is also one of four pharma
giants being sued in a class action
case alleging price rigging .
As comptroller, Stringer is an
investment advisor and trustee of
the New York City Pension Funds,
which includes not just the New
York City Employees’ Retirement
System but also the Teachers’ Retirement
System, the New York
City Police Pension Fund, the New
York City Fire Department Pension
Fund, and the Board of Education
Retirement System — making it
one of the nation’s largest institutional
investors. Those systems
own stock in Gilead and, according
to the shareholder proposal
submitted by the city, “each system
intends to continue to hold at least
$2,000 worth of these securities
through the date of the company’s
next annual meeting.”
The proposal would be withdrawn
if the company enacts the
clawback policy at the next annual
meeting.
Stringer is using the proposal as
a way to show investors that ethical
practices lead to fi nancial stability
and growth in the long run. Stringer
told Gay City News in a phone
interview that Gilead’s actions
“punishes the LGBTQ community”
and he ripped the corporate giant
for charging extraordinarily high
prices for drugs — including HIV
prevention medication known as
PrEP — that cost just a few dollars
in other countries.
City Comptroller Scott Stringer is calling on Gilead to adopt a “clawback” policy, but it is not clear
whether it would be enacted in the face of both a government and a class action lawsuit.
“What I found so disgusting is
that the drug costs are $2,000 in
the US and only $8 in Australia,”
Stringer said. “We go in when we
want to stop something bad from
happening and the best way to
do that is to enact clawback policies
that hold the highest people
accountable. You’re not going to
make personal money and act in
ways that hurt people. This conduct
is totally outrageous.”
The comptroller’s offi ce is one of
59 members of the IOPA’s broad coalition
of public, faith-based, labor,
and sustainability funds that engage
with numerous manufacturers,
distributors, and retail pharmacies
to address opioid oversight
practices. Among other initiatives,
the coalition fi les shareholder resolutions
and seeks reports to investors
on how the board is evaluating
risks. Gilead is one of many
companies IOPA will focus on in
2020 and the comptroller’s offi ce
took the lead on engaging with the
corporation, according to those involved
in the coalition.
“Gilead was one of those selected
because of some of their anti-competitive
practices,” Donna Meyer, a
co-leader of the coalition, told Gay
City News in a written statement.
“Investors hope Gilead will agree
to adopt a clawback and disclosure
policy so the resolution can be
withdrawn. Most pharmaceutical
FACEBOOK/ SCOTT STRINGER
companies with whom we work already
have such a policy. However,
if the company does not agree, resolutions
like this usually go on the
company’s proxy so all shareholders
have an opportunity to express
their views.”
The comptroller’s offi ce has had
success seeking clawback policies
in the past — most notably when
convincing Wells Fargo in 2013 to
embrace such a policy that eventually
led to clawbacks totaling
$75 million from a pair of executives
there who were embroiled in
an accounts-related scandal. In
total, Stringer has submitted 18
clawback-related proposals, 11 of
which have been enacted.
In this case, however, it is not
clear whether the board would
move ahead with a clawback policy
in the face of legal action targeting
Gilead. When asked about that,
Stringer only said, “Let’s see how
it plays out.”
Gilead did not respond to a request
for comment on the proposal.
Whether the policy is adopted or
not, Stringer believes the proposal
at least sends a message that investors
are prioritizing fi nancial
stability — and he hopes it will
resonate.
“We’ve come so far, we can’t allow
these companies to take advantage,”
he said.
������������������
������������������������������������
��������������������������
����������������������������������������
������������������������������������
������������������������������������������������
����������������������������
������������������������������������
����������������������������������������������������������������������������������������������
November 28 - December 4 12 , 2019 | GayCityNews.com
/GayCityNews.com
