Teamsters move to restrict obscene payout to McKesson CEO

John Hammergren

The Teamsters are more than a little annoyed that McKesson CEO John Hammergren stands to take home $616.5 million if the company were sold tomorrow.

Call Hammergren the poster child for inequality. Employees at McKesson's Lakeland, Fla., facility voted to become Teamsters because some of them don't earn enough to afford health care. McKesson's idea of fairness is to try to bust the union while giving its CEO more than a half-billion dollars.

The Teamsters have charged McKesson with illegally busting unions, coercing employees, discriminating against union members and firing a worker for exercising her First Amendment rights.

All the Teamsters want is a fair share of the profit they help produce. To that end, the Teamsters are fighting to curb Hammergren's immoral take-home pay at the company's annual shareholders' meeting. Bloomberg today reported on the Teamsters proposal:

Hammergren’s potential payout under a change in control would include equity awards worth $140.6 million that were set up to vest only over time. They’d be his right away, though, if he were terminated after a sale. The International Brotherhood of Teamsters, which calls that kind of pay “unearned compensation for top executives on their way out the door,” has proposed a ballot measure urging McKesson’s board to reduce the accelerated vesting. 

While it’s not unusual for unions to challenge CEO pay provisions, the Teamsters’ proposal is endorsed by proxy advisory firm Institutional Shareholder Services. It has also drawn support from CtW Investment Group, which represents investors with $250 billion in retirement assets under management, and the New York State Common Retirement Fund, which oversees $160.7 billion in retirement money, according to officials at both organizations.

According to Bloomberg's assessment, Hammergren is doing 'reasonably well':

His $292 million change-in-control severance package, combined with $289 million more in company stock and options he already owns, would bring his total kitty in the event of a termination to $581 million on paper—a figure based on valuations as of March 31. Factor in an 8.8 percent increase in share price since then, and it would come to roughly $616.6 million, according to calculations by Equilar.