Indivior faces shareholder revolt over ex-chief’s bonus
Shaun Thaxter was sentenced to six months in US prison for his role over drug misinformation case
Last modified on Wed 5 May 2021 14.50 EDT
Indivior faces the threat of a shareholder revolt over the drugmaker’s decision to maintain bonus payments for its British former chief executive, who was jailed last year in a case related to the US opioid crisis.
Shaun Thaxter, 53, was sentenced to six months in federal prison in the US state of Virginia last October and agreed to pay $600,000 (£432,000) in fines and forfeiture, after pleading guilty in June to federal charges related to Indivior’s Suboxone Film, used to help reduce withdrawal symptoms in recovering opioid addicts. He is due to be released on 10 May.
Two influential shareholder advisory groups – Institutional Shareholder Services (ISS) and Glass Lewis – have advised investors to vote against the company’s pay report at its annual meeting on Thursday. They have questioned why “malus and clawback provisions” have not been applied, which allow businesses to reduce or cancel bonus payments, or ask executives to pay back bonuses, in certain circumstances.
Thaxter’s case focused on his role when certain Indivior employees gave “false and misleading” information about the safety of the medicine in submissions to Massachusetts’ Medicaid programme. This led to the drug being prescribed to patients with children under six years old – rather than a rival non-opioid product.
In July, Indivior agreed to pay $600m to federal and state authorities to settle criminal and civil investigations related to the marketing of Suboxone which portrayed it as a safer drug than rival medicines, following a $1.4bn settlement agreed with its former parent company, Reckitt Benckiser.
The US government has clamped down on the opioid epidemic in recent years – largely caused by the pharmaceutical industry’s push to sell opioid painkillers – which has claimed about half a million lives in two decades.
ISS said Thaxter left the company with 1.1m shares outstanding under its long-term incentive plan (LTIP), which will vest in 2022 and 2023 and are worth £1.65m at the current share price.
ISS said: “As a lead executive of the business since 2009, Shaun Thaxter is ultimately accountable for the financial and reputational harm suffered by the company in connection with the mis-selling of Suboxone. This litigation had hung over the company for many years, and was material to the financial statements.
“In these circumstances, the company would at minimum be expected to apply the full weight of the malus provisions to cancel all outstanding incentive awards. There also would appear to be a clear case for an attempt at clawback of previous payments remitted to Thaxter.”
Indivior said the company’s remuneration committee “determined, based on Mr Thaxter’s leadership that produced years of positive operational performance, and the absence of any findings of personal wrongdoing or malfeasance, to allow Mr Thaxter to retain his outstanding LTIP awards”.
When he left last summer, Thaxter received $1.1m in lieu of salary and benefits, along with $66,484 for legal fees and $42,314 for unused holidays. He also has options over 921,461 shares..
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