May 29, 2019

Shareholders' transparency proposals for Big Pharma executive pay flop

Small groups of pharmaceutical industry shareholders have pushed for companies to disclose whether higher drug prices fuel lavish bonuses for top executives. But those proposals were handily defeated.

The bottom line: The industry and its largest stockholders are not about to start self-regulating when it comes to drug prices and incentive pay packages.

Driving the news: The shareholder proposals failed by large margins at AbbVieJohnson & JohnsonPfizer and Vertex. Each company vigorously opposed them.

  • Top executives receive cash bonuses based on meeting certain targets, like revenue and earnings per share. Hitting those numbers usually requires companies to sell more drugs, raise prices or both.
  • The proposals would have urged companies to create reports detailing "the extent to which risks related to public concern over drug pricing strategies" are part of executives' bonuses, if at all.

Between the lines: The drug pricing reports would not have been required, and companies would not have been forced to make any changes to bonuses — and the proposals still failed.

Go deeper: Pharma CEOs are among the highest-paid in health care

Go deeper

HBCUs are missing from the discussion on venture capital's diversity

Illustration: Eniola Odetunde/Axios

Venture capital is beginning a belated conversation about its dearth of black investors and support of black founders, but hasn't yet turned its attention to the trivial participation of historically black colleges and universities (HBCUs) as limited partners in funds.

Why it matters: This increases educational and economic inequality, as the vast majority of VC profits go to limited partners.

Unemployment rate falls to 13.3% in May

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. unemployment rate fell to 13.3% in May, with 2.5 million jobs gained, the government said on Friday.

Why it matters: The far better-than-expected numbers show a surprising improvement in the job market, which has been devastated by the coronavirus pandemic.

The difficulty of calculating the real unemployment rate

Data: U.S. Department of Labor; Note: Initial traditional state claims from the weeks of May 23 and 30, continuing traditional claims from May 23. Initial PUA claims from May 16, 23, and 30, continuing PUA and other programs from May 16; Chart: Andrew Witherspoon/Axios

The shocking May jobs report — with a decline in the unemployment rate to 13.3% and more than 2 million jobs added — destroyed expectations of a much worse economic picture.

Why it matters: Traditional economic reports have failed to keep up with the devastation of the coronavirus pandemic and have made it nearly impossible for researchers to determine the state of the U.S. labor market or the economy.