The National Legal and Policy Center, a right-wing advocacy and watchdog group, had asked the company to revisit its DEI goals in executive pay incentives.
Merck is the latest Big Pharma to shake off an attempt by a conservative lobbying group to unwind its diversity, equity and inclusion policies, as shareholders on May 27 voted down a measure aimed at removing executive incentives around employee inclusion.
“Our company has a long-standing commitment to diversity and inclusion. It is at the core of who we are, our values, and how we operate as a company. It is also a strategic imperative,” CEO Rob Davis said in response to a question about the measure during the company’s annual general meeting (AGM) earlier this week. “We remain dedicated to providing fair, equal and merit-based opportunities, preventing bias and ensuring we have a vibrant and inclusive workplace.”
The National Legal and Policy Center, a right-wing advocacy and watchdog group, brought a proposal to Merck’s May 27 AGM that asked the company to revisit its DEI goals in executive pay incentives. The measure took aim at Merck’s employee and executive annual cash incentives scorecard that weighs some compensation based on sustainability and health access and inclusion of employees.
NLPC, which owns enough stock in the pharmaceutical company to have such a measure included in the meeting agenda, claimed that leadership development programs available to employees at the company “leave Merck ripe for regulatory, reputational and litigation risk.”
The group pointed to the June 2023 Supreme Court decision in Students for Fair Admissions v. Harvard College, which successfully challenged Harvard’s admissions process on the basis of what it characterized as discrimination against Asian American and white applicants. The case had a ripple effect on DEI initiatives across the U.S., and the issue has become a pillar of President Donald Trump’s second term.
Merck’s board had previously opposed the NLPC proposal, arguing that a review of the programs had already been conducted. Davis repeated this message during the AGM, urging shareholders to reject the proposal.
He added that the commitment to DEI initiatives “enables us to fully execute on the scientific method and catalyze contributions and innovations from across our enterprise.”
That message echoes the company’s website, which says “inclusion is at the heart of everything we do.” Merck runs a number of leadership programs, including groups for LGBTQ+, Hispanic-Latino, Asia-Pacific, African, veterans and interfaith employees.
“As George Merck notably said in the following quote: ‘We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear,’” Davis said. “This is core to how the company has been run for over 130 years and ultimately creates shareholder value as well as value for all of our stakeholders and a healthy future for people and communities everywhere.”
Proxy Season Winds Down
This is the second attempt NLPC has made to alter DEI proposals at a pharma company, after undertaking a similar effort at Johnson & Johnson. The initiatives are being brought through NLPC’s Corporate Integrity Project. The project’s director, Paul Chesser, told BioSpace that J&J and Merck are the only two companies where the NLPC has enough stock to make these proposals but that the group has targeted several other industries as well.
And NLPC is not the only group bringing anti-DEI proposals to pharma board rooms. Gilead and Bristol Myers Squibb faced such proposals from other organizations during this year’s proxy season.
Chesser admitted that these proposals rarely pass but said the aim is to raise the profile of the issue. “Vote outcomes aren’t the point—there are many other reasons for shareholder proposals to be put up for consideration—otherwise the companies wouldn’t try so hard, and go to such great expense, to try to get them excluded from their proxy statements every year.”
After the Merck loss and with the annual proxy season winding down for these initiatives to be brought forward, Chesser said NLPC will regroup and make a plan for next year.
