Tax Notes: Investors Seek Tax Transparency at Merck

Nana Ama Sarfo writes in Tax Notes about the recent shareholder push for tax transparency at the pharmaceutical giant, Merck & Co, which has come under recent scrutiny for its tax arrangements.

CICTAR has been at the heart of the shareholder push for tax transparency. Over the past few years, facilitated by CICTAR’s work, investors have filed proposals at tech companies and extractives giants like Microsoft, Amazon, Cisco, ExxonMobil, and Chevron, and now they have turned their attention to the pharmaceutical industry. On May 27 Merck held its annual shareholder meeting, where shareholders voted on a tax
transparency proposal filed by two institutional investors who said they want more information about Merck’s tax data.

The Merck proposal earned nearly 23 percent of the vote — a showing that is on par with the final
votes at the companies mentioned above.

“The outcome shows that the issue of tax transparency continues to have momentum with a wide range of mainstream investors,” Jason Ward, principal analyst for the Centre for International Corporate Tax Accountability and Research, told Tax Notes. “Despite opposition from management and lack of support from ISS, the largest proxy voting advisory service, nearly a quarter of shareholders supported the call for public country by country reporting”

“Shareholders have no idea what Merck’s income and revenue is from the largest, growing emerging markets in the world. And it does have several subsidiaries in those markets.“”