McKesson Reduces CEO's Pay 10% Following Revolt by Investors
(Bloomberg) -- McKesson Corp. cut Chief Executive Officer John Hammergren’s pay by about 10 percent following a shareholder revolt spurred by claims about the health-care firm’s alleged role in the nation’s opioid crisis.
The International Brotherhood of Teamsters led a vote-no campaign in 2017 against the firm’s executive pay plan after accusing the drug distributor of aggravating the opioid epidemic. Last year’s pay package received 26.6 percent support, the second-lowest to date and among the worst of S&P 500 companies.
“Our compensation committee undertook a robust process to review the company’s executive compensation structure, taking into account feedback from our shareholders gathered during an extensive outreach effort,” Ed Mueller, McKesson’s lead independent director, said in an emailed statement.
Those efforts led to the trimming Hammergren’s total reported pay for fiscal 2018 by $1.95 million, changing incentive plan metrics and agreeing to weigh “compliance risk related to opioid distribution” when making compensation decisions, the San Francisco-based company said Friday in a regulatory filing.
Hammergren, 59, received a reported pay package of $18.1 million for the last fiscal year, including a $1.68 million salary, a $3.48 million cash bonus, a long-term cash payout of $570,000 and equity awards of $11.8 million. He forfeited a $7.32 million target performance award from 2016 after the firm posted returns that trailed those of the S&P 500 Health Care Sector Index over the past three years.
Shareholders will vote on the pay package at the firm’s annual meeting July 25.
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