McKesson CEO's $159M pension smashes record; more than doubles Rupert Murdoch's
By From Staff and Wire Reports
Published: Wednesday, June 26, 2013, 12:01 a.m.
McKesson's Chairman and CEO John Hammergren has set a record in corporate America: Largest pension around.
The drug distribution company disclosed in a regulatory filing that Hammergren was entitled to a $159 million lump-sum payment for his pension, had he voluntarily left the company on March 31.
The size of his pension was first reported by the Wall Street Journal on Tuesday.
McKesson's Pittsburgh operation, known as McKesson Automation Inc., is in Cranberry. Last year, McKesson acquired Green Tree-based MED3000, a health care management and technology company, for an undisclosed price.
Several compensation consultants say it is by far the largest pension for a current executive of a public company.
GMI Ratings, which tracks executive pay, said the 54-year-old's pension is more than double that of the next largest, $74 million for Rupert Murdoch, chairman and CEO of News Corp.
Chris McGoldrick, a senior analyst for Equilar, also said it is by far the largest pension on record. Equilar provides data on executive compensation.
According to GMI, 54 percent of CEOs of companies in the Standard & Poor's 500 index have accumulated pension benefits. The average value of their pensions is just over $7 million, down from $11.5 million a year ago.
GMI researcher Greg Ruel said the drop is because several CEOs with large pensions are retiring, not corporate restraint.
Pensions used to be a common retirement benefit. Many companies have eliminated them and moved to defined contribution plans, such as 401(k)s, to control costs. But some still have special pension plans for executives.
McKesson spokesman Kris Fortner said in an email to the Associated Press that Hammergren's pension was shaped by an employment agreement put in place more than 14 years ago and modeled on his predecessor's contract, as well as outstanding company performance. When Hammergren took over in 1999, the company was in turmoil following an accounting scandal that hurt its reputation and stock price. Since then, annual revenues have increased from $30 billion to $122 billion, while the company's market capitalization has more than tripled, to $25 billion.
Companies are required to estimate the current value of executive pensions and disclose what executives would receive under various termination scenarios.
The Associated Press contributed to this report.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- France bound by role in Africa
- Credit card companies offer free credit scores
- Lawmakers’ plan would point cameras at train engineers
- Keep a jingle in your pocket
- Madoff fraud still stings ex-clients 5 years later
- Startup aims to replace chicken, egg
- Senate Dems to push Obama nominees
- Holiday giving can be charitable for you, too
- Investors put squeeze on prospective homeowners’ American dreams
- How can I delete my search history on Facebook?
- PNC to pay $81M to Freddie Mac to resolve problem mortgages