McKesson CEO John Hammergren took a 'voluntary' $45 million cut to his pension after shareholders said 'no more' to his lavish wages at the company's annual meeting in August.
His pension is now 'only' about $114 million. Last year, he took home $51.7 million in pay. Meanwhile, McKesson pays some of its workers so little they can’t afford health care.
The Wall Street Journal reported today:
Medical-products distributor McKesson Corp. said it made more changes to its executive compensation programs and its chief executive voluntarily reduced his pension benefit, after activist investors complained about the company's pay structure.
CEO John H. Hammergren will reduce his pension benefit by $45 million, which McKesson said Friday will eliminate the volatility of pension benefit calculations, which result from changes in interest rates or other issues.
Companies such as McKesson are increasingly using unconventional earnings measures when determining bonuses, which makes it easier for them to appear more profitable when they reward executives with big pay days, according to a Wall Street Journal report this week.
Shareholders in August voted by more than 3-to-1 to reject Hammergren's compensation package. They also approved a shareholder proposal to strengthen the executive pay clawback policy. The proposed clawback policy would allow the company to recoup some of the boss’s pay if it is discovered the pay was based on inaccurate financial reporting or misconduct.
McKesson has had to pay out nearly a billion dollars to settle allegations of price fixing and Medicaid fraud. The scandal happened during John Hammergren’s tenure as chief executive. Still, the board richly rewarded him with roughly $50 million a year in total compensation. Before his pension was trimmed from $159 million, it was likely the highest for any executive in history according to compensation consultants interviewed by the Wall St. Journal.
Perhaps even more shameful than the CEO’s pay is the workers’ pay. Workers at the Lakeland, Fla., distribution center have said their pay is so low that many can't afford to pay for their healthcare.
Workers at the Lakeland facility voted for Teamster representation nearly two years ago and still don’t have a first contract. The company has hired union busters and retaliated against workers who support the union. At a rally outside the San Francisco shareholder meeting, Teamster leaders pledged the solidarity of Teamster members throughout North America to support the fight of McKesson’s workers in Florida.