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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 lowest-paid employees.

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.

In their 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.

The 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.


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