McKesson: CEO entitled to record $159M pension

McKesson’s Chairman and CEO John Hammergren has set a new record in corporate America: Largest pension around.

The drug distribution company disclosed in a regulatory filing Friday 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.

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 due to several CEOs with large pensions 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, the San Franciso company’s annual revenues have increased from $30 billion to $122 billion, while its 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.

More in Herald Business Journal

Snohomish County’s campaign to land the 797 takes off

Executive Dave Somers announced the formation of a task force to urge Boeing to build the plane here.

A decade after the recession, pain and fear linger

No matter how good things are now, it’s impossible to forget how the collapse affected people.

Panel: Motorcycle industry in deep trouble and needs help

They have failed to increase sales by making new riders out of women, minorities and millennials.

Costco rises as results display big-box retailer’s resiliency

Their model has worked in the face of heightened competition from online, brick-and-mortar peers.

For modern women, 98-year-old rejection letters still sting

In a stark new video, female Boeing engineers break the silence about past inopportunity.

Tax reform needs the public’s input on spending priorities

The GOP tax plan is a good idea, but the next step should give us a voice on how taxes are spent.

Commentary: GM, Boeing fight a war of words over Mars

Boeing is strongly signaling how crucial deep-space exploration is to its future.

Under cloud of ethics probes, Airbus CEO Enders to step down

He leaves in 2019 after 14 years. Meanwhile, aircraft division CEO Fabrice Bregier leaves in February.

$4.99 sandwich promotion irks some Subway business owners

Management insists that “most franchisees support the promotion.”

Most Read