The drugmaker at the center of a firestorm over hefty price increases on the lifesaving EpiPen put a special incentive plan in place more than two years ago that rewards executives only if they hit aggressive profit targets.
Why did Mylan Pharmaceuticals double the list price of the EpiPen, which delivers an emergency shot of anti-allergy medication, bringing the cost to $608 for a two-dose package and the total increase since 2007 to nearly 550 percent? Because its board decided to dramatically boost the pay of its top executives -- but only if they more than doubled the company's earnings per share. Pesto! CEO Heather BreschBresch earned $18.9 million last year, up from $9 million in 2013.
It’s amazing how much corporate performance can improve when share prices are linked to wildly-excessive executive pay. And amazing how much consumers can be forced to cough up when such pay agreements occur in an industry where competition is inadequate.
What do you think?