McKesson’s CEO has decided to voluntarily reduce his pension benefit by about US$45 million ($49.7 million) after negative shareholder feedback.
Last year, it was revealed that John Hammergren would have been entitled to a lump-sum pension benefit of US$159 million ($175.8 million) if he voluntarily left the company.
In addition, the company’s compensation committee has redesigned its long-term equity and cash incentive programs, as well as its compensation peer group, based on investor feedback and a comprehensive review by its new independent compensation consultant.
Beginning with fiscal year 2015, payouts to executive officers under McKesson’s restricted stock unit program will be determined solely by comparing its total shareholder return (TSR) over a three-year period against TSR for the S&P 500 Health Care Index for the same period. The committee also changed the performance period from one to three years; the first payout under this new program will occur in May 2017.
“We continue to address the input we hear from our shareholders and are committed to maintaining industry-leading governance and compensation practices,” says Jane Shaw, chair of the compensation committee of the board of directors.
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