Leading Proxy Advisor ISS Recommends Support for Clean Yield’s Proposal on Executive Pay at Walgreens Boots Alliance

WBA logo and I Voted image

The influential proxy advisory firm Institutional Shareholder Services (ISS) has recommended a vote in favor of our shareholder proposal at Walgreen Boots Alliance (WBA), now in its third year. The proposal calls on the company to consider integrating sustainability performance into its formulas for determining executive pay packages.
The ISS endorsement could significantly influence the vote. ISS’s clients include many of the world’s largest asset owners and asset managers.
Since 2014, Clean Yield Asset Management, working with our client the Singing Field Foundation, has lobbied WBA to consider linking executive pay to sustainability performance. We initiated dialogue with the company prior to the merger between the U.S.-based Walgreens and U.K.’s Boots Alliance pharmacy and retail chain. Boots Alliance had exemplary sustainability programs and produced high quality reporting to stakeholders concerning the company’s environmental and social impacts and its strategies to manage the risks and opportunities associated with them.
Two years later, WBA’s sustainability reporting reflects lofty aspirational goals but is notably lacking in quantitative targets, hindering the ability of investors to evaluate how aggressively the company is moving forward in these areas.
On an annual “toxic products” report card produced by the organization Safer Chemicals, Healthy Families, WBA ranked eight out of 11 companies evaluated, scoring only 29.5 out of 130 possible points, or a “D.” The report assesses corporate programs to phase out harmful chemicals from their consumer products. For example, in the past year, Target Corporation expanded the list of chemicals subject to its policies to include those banned in cosmetics in the European Union and Canada.
We’d like to see Walgreens pick up the pace in other areas as well, such as setting carbon emissions reduction targets for its fleet, and ceasing tobacco sales as its rival CVS has done.
Incentivizing top executives is as strong a means that we know of to make sustainability performance a top priority. CEO Stefano Pessina’s paycheck went up this year by $3 million to just north of $10 million. It’s the least he can do.