Shareholders at the McKesson annual shareholder meeting Wednesday sided with the board and management in rejecting separate proposals that would have required greater disclosure of political contributions and sought to limit golden parachutes for senior executives in a change of ownership.
McKesson, the giant drug distributor and technology company, successfully blocked a so-called “dark money” disclosure proposal that would have required the company to tell shareholders how much money it was sending to tax-exempt political organizations.
With the victory at the meeting in Richmond, Vir., McKesson joined health plans Anthem and Aetna in defeating a disclosure proxy at its annual shareholder meeting this year.
Political not-for-profit organizations, also called dark money groups, do not have to reveal their donors, and they can receive unlimited amounts of money, much of which is routed toward influencing elections.
In bringing the proposal to shareholders, the City of Philadelphia Public Employees Retirement System argued that “gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.”
McKesson contributed at least $3.2 million in corporate funds since 2004, the retirement system said, adding that several companies in the healthcare sector have adopted similar disclosure provisions, including Becton Dickinson, Biogen and Bristol-Myers Squibb.
The McKesson board opposed the measure on the grounds that company contributions are small and it has already added disclosure safeguards. Disclosure proposals put before shareholders also failed at annual shareholder meetings in 2014 and 2015.
Among the safeguards is a policy on corporate political contributions which requires all contributions be approved by the Senior Vice President of Public Affairs, with contributions greater than $1,000 approved by the Chairman of the Board and CEO. The company's code of conduct also specifically prohibits any corporate political contribution without prior approval, the company wrote in this year's shareholder proxy.
The other major shareholder proposal to be defeated at the McKesson meeting was one put forth by the International Brotherhood of Teamsters General Fund in Washington, D.C., that sought to limit the accelerated vesting of equity awards granted to any senior executive officer in the event of a change of control at McKesson.
McKesson, which is spinning off its IT business into a $3.4 billion venture with Change Healthcare, said the provision would have made it harder to attract and retain top executive talent.