A union investment group affiliated with the Teamsters says the $159 million pension given to McKesson’s CEO is cause for the compensation committee chairman to resign.
The Teamsters represent 1,500 McKesson warehouse workers across the U.S. and in Canada. But in Lakeland, Fla., where many McKesson distribution workers cannot afford to pay for their health insurance or contribute to their 401(k) plan, McKesson has hired union-busting firms and retaliated against workers who support the union. After nearly two years as Teamsters, the workers are still fighting for a fair first contract.
Now, the Change to Win Investment Group is demanding the resignation of McKesson director and compensation committee chairman Alton Irby. It also asked for the renegotiation and reduction of CEO John Hammergren’s $159 million pension benefit “as part of a comprehensive overhaul of the company’s compensation structure.”
Steve Vairma, Teamsters international vice president, said Hammergren’s compensation is an insult to the company’s front-line workers.
“Hammergren’s staggering $159 million pension and $50 million/year total compensation is a slap in the face to so many McKesson workers who have no pension at all and cannot even afford to contribute to their 401 (k) plan or pay for health care coverage for their families,” said Vairma, who is also director of the IBT Warehouse division, which represents some 1,500 McKesson workers across the U.S. and Canada.
Chris Rauber at the San Francisco Business Times has the story about CtW Investment Group’s demands:
Both demands were made in an Aug. 5 letter from CtW's Executive Director Dieter Waizenegger to Edward Mueller, McKesson's lead independent director, a role created after an earlier round of pressure on the San Francisco-based drug distribution and health care IT giant.
CtW said last week's vote by shareholders at McKesson's annual meeting showed that "shareholders rejected the board's work in extraordinarily strong numbers." It said 78 percent voted against management's position on executive pay, 53 percent supported strengthening the company's policies to "clawback" executive compensation in the wake of executive misdeeds, and 40 percent voted against Irby's re-election to the board.
Last week, Scott Zdrazil, director of corporate governance for Amalgamated Bank, a union-owned institution that oversees a fund that owns a significant chunk of McKesson stock, said the July 31 shareholders' vote "may be the first clawback proposal to ever receive majority support" from a company's investors.
The Aug. 5 letter to McKesson's lead independent director said Hammergren's huge pension was the driving force behind what CtW called "a clear referendum" last week against flaws in executive compensation policies at the company, adding that the benefit "provides no clear alignment with the interests of shareholders."