Rite Aid shareholders voted down the pharmacy chain's "say on pay" proposal at its annual meeting Oct. 30, demonstrating their disapproval with executive compensation for the 2018 fiscal year, according to Bloomberg.
The shareholders' denouncement of the program comes as the pharmacy chain faces criticism over offering its senior executives special bonuses tied to failed mergers. For example, after the $24 billion merger between Rite Aid and grocery store chain Albertsons was called off, Rite Aid CEO John Standley received a $3 million retention payment.
Prior to the compensation vote, several shareholders — including the International Brotherhood of Teamsters and the two largest proxy advisory firms — came out against it. Ken Hall, IBT's general secretary, blasted the payments, calling them "pay-for-failure" retention bonuses.
"After today's shareholder meeting, it is clear CEO [Mr.] Standley must rebuild trust among Rite Aid investors and workers alike," Mr. Hall told Bloomberg. "This startling lack of accountability and executive enrichment not only exposes a cultural void at the top, but also erodes morale among rank-and-file employees."
Several shareholders also have expressed concern about Rite Aid's executive leadership team in recent months as the company fights to stop its declining stock value, which was just above $1 at Bloomberg's time of publication Oct. 30. As a result, in September, shareholders stripped Mr. Standley of his role as chairman of the board and nominated three new board members.
All three nominated board members were approved by shareholders at the annual meeting. Mr. Standley will remain in his role as CEO.