Cardinal Health’s board of directors reduced bonus payouts for CEO Mike Kaufmann and his four top-paid executives due to the cost of opioid litigation.

After pressure from investors, Cardinal Health (NYSE:CAH) for the first time has disclosed how its board of directors factored the opioid litigation settlement costs into the pay packages of Kaufmann, Chief Financial Officer Jason Hollar, Pharmaceutical Segment CEO Victor Crawford, Medical Segment CEO Stephen Mason and Chief Legal and Compliance Officer Jessica Mayer.

Kaufmann was eligible for about $2.2 million in annual incentives for fiscal 2021 and received $780,000. The board eliminated any payout to Kaufmann for the earnings component of his annual cash incentive award, but awarded him 40% of his target, according to a new Securities and Exchange Commission disclosure filed Friday.

“His payout was based solely on strong performance under (Cardinal Health’s) cost savings and ‘Our Path Forward’ strategic goals,” Cardinal Health said in the filing.

Dublin, Ohio-based Cardinal Health reported Kaufmann’s total compensation at nearly $12.5 million for fiscal 2021, down from $14.2 in the prior year and nearly $15.6 in fiscal 2019.

The changes come after what Cardinal Health board chair Gregory Kenny called a “disappointing say-on-pay vote” last year.

The annual say-on-pay votes are non-binding, but allow investors to show their support for executive pay packages. The pharmaceutical distributor and medical product manufacturer boasted eight straight years of at least 90 percent support from voting investors for its executive pay plans leading up to its last annual meeting, but that support dropped to 61 percent when the votes were tallied in November 2020.

After last year’s vote, Kenny and Carrie Cox, chair of the board’s Human Resources and Compensation Committee, met with investors to discuss their concerns, Kenny wrote in his new letter to shareholders, which accompanied the executive pay disclosure.

“In these meetings, shareholders expressed support for the fundamentals of our executive compensation program and its alignment of pay and performance but thought that we should have disclosed how the committee considered opioid litigation accruals in our compensation determinations last year,” Kenny said.

Cardinal Health would pay up to $6.4 billion over 18 years under terms of a proposed opioid litigation settlement, the company said in July. The company accrued an additional $1.2 billion related to opioid litigation in fiscal 2021 alone, according to the new filing.

The board also deferred half of Kaufmann’s fiscal 2022 performance share unit (PSU) grant to pay out over a two-year period after vesting, a move meant “to ensure stronger long-term alignment with shareholders,” the compensation committee explained. Similarly, the committee increased his stock ownership guideline to 10 times his base salary from six to “to further align his interests with the interests of shareholders,” they said.

The board cut fiscal 2021 annual cash incentive awards for the other named executive officers by 20%, putting their final awards at 90% of their targets. That reduction was not only due to the impact of the opioid litigation on the company and shareholders, but also for below-target operating performance, the company said. A third of their fiscal 2022 PSU grants were deferred to pay out one year after vesting.

It’s not clear whether this is the first time the Cardinal Health board has specifically factored the opioid litigation costs into executive pay, or just the first time it has detailed the rationale. More information was not immediately available from a company spokesperson Monday.

Cardinal Health’s annual shareholder meeting is scheduled for Nov. 5, where executive compensation will once again be up for a nonbinding “say-on-pay” vote.