Rite Aid shareholders voted against the company's proposed executive pay package, including a $3 million bonus for CEO 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.
The resolution passed with 84 percent of shares voted.
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 fell apart. 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' instead of selling the company last year. His replacement as chairman is Bruce G. Bodaken, a former chairman and CEO of Blue Shield of California. Standley remains Rite Aid CEO.
"CEO Standley must rebuild trust," Ken Hall, general secretary of the Teamsters, said in a statement. "Anybody else in CEO Standley's position would be out of a job by now."
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."
A company spokesman was not immediately available for comment.
