December 02, 2009
ICCR Members Target Executive Compensation at Health Industry Companies
by Robert Kropp
In their shareowner resolution, 30 ICCR members ask 21 companies in the health industry to report
on disparities between executive compensation, including health benefits, to compensation of
Thirty members of the Interfaith Center on Corporate
Responsibility (ICCR) have filed shareowner resolutions addressing executive compensation at 21
US-based companies in the health industry. According to ICCR, "Among the insurers, medical device
makers and other companies receiving the resolutions are many of the leading opponents of
Congressional action on health care reform."
The resolution cites an article from Business Week, which found that in 2007, an S&P 500 CEO
earned in three hours what a minimum-wage worker did for the entire year. Furthermore, according to
an April, 2009 study from the McKinsey
Global Institute also cited by the investor group, "increased health benefit costs have
negatively impacted lower wage employees more than higher income employees.
resolution, the 30 members of ICCR asked the 21 health industry companies to compare the total
compensation packages of top executives to those of the lowest paid employees, analyze changes in
the relative size of the disparity since 2000, evaluate whether executive compensation packages are
excessive, and explain whether the findings invite moderation of executive compensation packages.
The investors asked that the targeted companies submit a report on their review of
executive compensation packages by October 1, 2010.
According to the ICCR, the health care
industry consists of the pharmaceuticals, health insurance, medical systems, hospitals, and drug
stores chains sectors. Because ICCR members are actively engaging many pharmaceutical companies on
the issue of health care reform, those companies were not targeted by the resolution.
21 companies targeted by the shareowner resolution are Aetna, AIG, Allstate, Amerisource Bergen,
Amgen, Cardinal Health, Cigna, Coventry Health, General Electric, Humana, Eli Lilly, Lincoln
National, McKesson, Medco Health Solutions, Medtronic, Stryker, Travelers, 3M, UnitedHealth
Group, UNUM Group, and WellPoint.