Shares of Rite Aid, the Camp Hill, Pa.-based drugstore chain, rose 3 cents to $1.08 in trading Tuesday after 84 percent of shareholders voted against the company's proposed executive pay package including a $3 million bonus for chief executive John T. Standley, according to the International Brotherhood of Teamsters labor union, which represents some Rite Aid workers and holds shares in the struggling company.
While such votes are typically not binding on managers, the Rite Aid outcome shows investor disgust with the company, whose shares have fallen from over $7 a share in 2017 to less than $1 last month after merger deals with rival Walgreens and with Acme's owner Albertsons unraveled. Rite Aid and other discount drug chains also face strong retail competition and market and insurer resistance to higher drug prices.
Standley has agreed to step down as chairman of Rite Aid, now a 2,000-store chain after selling stores to Walgreens' in lieu of a sale last year. His replacement as chairman is Bruce G. Bodaken, a former chairman and CEO of Blue Shield of California. Standley remains as Rite Aid chief executive officer.
"CEO Standley must rebuild trust," said Ken Hall, general secretary of the Teamsters, in a statement.
"Anybody else in CEO Standley's position would be out of a job by now," he added. He said executives' attempts to reward themselves at many times the salaries hourly workers earn, at a time when Rite Aid has been closing stores, "erodes morale."