The executive chairman of Walgreens Boots Alliance on Thursday criticized the Obama administration for turning a corporate-tax-saving tactic into a political issue last year, which may have harmed the company’s image.
James Skinner told shareholders at the company’s annual meeting in Chicago that Walgreens and other U.S. companies that considered moving their legal headquarters to lower-tax countries were used as “whipping boys” to further President Barack Obama’s agenda.
As part of its acquisition of Switzerland-based Alliance Boots last year, Walgreens considered reincorporating in a tax-friendlier country in Europe. But the largest U.S. drugstore chain decided against a so-called corporate inversion and kept its official address in the north Chicago suburb of Deerfield.
“We were disappointed with the publicity around inversions because we never intended to invert in the first place,” Skinner said in response to a question from a shareholder.
In a speech last summer, Obama called out U.S. companies for trying to avoid paying American corporate taxes, although inversions are legal. Said Obama: “I’m not interested in punishing these companies. But I am interested in economic patriotism.”
Illinois Sen. Dick Durbin also demanded that Walgreens abandon its plans to relocate, warning that the company’s “deeply patriotic” customers would not support the company’s decision “to turn its back on the United States.”
In September, the Treasury Department tightened tax rules to deter inversions.
Despite the controversy over inversions, Skinner, the former chief executive of McDonald’s, defended the tax maneuver.
“The inversion would not have affected the 200,000-plus employees who work in America,” he said.
A shareholder suggested that Walgreens lost the public-relations battle in the debate over inversions. Skinner disagreed. “We got sideways on the PR battle,” he said. “I would not say we lost the PR battle.”
Stockholders rejected four proposals, including one that would have made it easier for some long-term Walgreens investors to nominate directors to the board, according to preliminary voting results announced at the meeting.