145 Million dollar man John Hammergren, the CEO of the McKesson Corp.

Wonder why our health care is so expensive? Why your pension or retirement funds are lacking? The CEO of this medical supply company, is also chairman of the board and can conviently negotiate his own pay package year to year.

:furious: No one person deserves this much money IMO, it takes far more than one person to run the company. I was taught all contribute to the success of the company and not just a few top execs. Even James Reda, a compensation consultant is surprised and shocked.

Some exerps from the article that are sure to leave you fuming. The link is at the bottom of the page to read the whole article. My statements in bold.
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But so what if he made $145 million in a single year? The lion’s share of that money was the slew of stock options Hammergren cashed out after holding them for years. He was awarded the dividends from stock he didn't actually own yet in 2011 to the tune of almost half a million dollars.

Then I read him Hammergren’s annual total compensation payouts, taken from the company’s public filings with the Securities and Exchange Commission: $46 million in 2011; $55 million in 2010; $37 million in 2009; another $41 million in 2008. Hammergren hadn’t founded the company. Wall Street analysts covering McKesson can tell you of the disappointments and miscues that have marked his tenure. But his haul in the 13 years he has been running McKesson? More than $750 million, according to data provided by Equilar, an executive-compensation data firm.

For a moment, Reda is silent. “$40 million, $50 million a year is excessive, no matter what the yardstick,” he says. The average pay package for a CEO running a top 100 company these days, Reda says, is around $12 million. That includes everything, from salary to stock awards to contributions to a retirement account. Yet last year McKesson contributed more than $13 million just to Hammergren’s pension, according to company documents. The company did away with the average workers pension plan...too expensive, but if McKesson were to quit today his pension package is worth 125 million...and he is just one of the overpaid execs.

Among the other perks he enjoys: a chauffeur to drive his company car, free use of the corporate jet for personal travel, and an extra $17,000 a year to pay for a financial planner because handling all those hundreds of millions is no doubt complicated stuff.


“As far as I’m concerned, a board that keeps loading up its chief executive with more stock and options each year is, from a shareholder perspective, basically committing theft,” says Albert Meyer, a former accounting professor who runs a money-management firm called Bastiat Capital. It’s all legal, of course, but to Meyer you can tell if an enterprise exists for the benefit of shareholders or insiders by the number of options it awards its top executives. Options aren’t free; they dilute the worth of everyone’s shares.And the practice hurts more than the privileged few. Anyone who owns an index fund of the country’s 500 largest companies owns shares in McKesson, a Fortune 500 company. “It’s nothing short of a massive wealth transfer from the retirement accounts of middle-class Americans to a privileged few,” hidden in the guise of stock-option programs like McKesson’s, Meyer argues.The party won’t stop once the 52-year-old Hammergren retires. Among his lifetime benefits: a personal assistant and office, which the company figures will cost more than $200,000 a year, and the services of a financial counselor—a perk that will eat up $350,000 in profits, according to company estimates. The goodies keep coming even after he dies. If his wife survives him, she will continue receiving his base salary for six months and will also get $2 million in cash. That cash bonus would actually cost the company nearly twice that amount, as it's promised to cover the widow’s cost of paying taxes on that money.

If McKesson quits today the company owes him....get this....almost half a BILLION dollars!

http://news.yahoo.com/145-million-ceo-094500454.html

This kind of stuff may not be illegal but it ought to be illegal!

The overcompensation like this man is getting and his greed is what caused all the risk taking that brought us into recession.

I wish I knew what "we" could do about this. It is so disgusting and just goes on and on. What is the answer?

Eve

God, this is disgusting. NO ONE person is worth that level of compensation.

I wonder if the members of the McKesson board are sampling some of their own products without abandon.

how much does he deserve to earn?

Charlie09 said:

how much does he deserve to earn?

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What's your opinion Charlie?

eve said:

I wish I knew what "we" could do about this. It is so disgusting and just goes on and on. What is the answer?

Eve

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I don't know Eve, wish I did. I guess educating ourselves on how the 'masters of the universe' plan to grab obscene amounts of wealth at the expense of the rest of us is a start. IMO serving as the president/director,CEO and as board chairman is a terrible conflict of interest.

This is why IMO, people join occupy and the tea party.

Reader said:

This kind of stuff may not be illegal but it ought to be illegal!

The overcompensation like this man is getting and his greed is what caused all the risk taking that brought us into recession.

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I think you are right...too heck with everyone else except a few top delusional CEO's and execs. Do away with the peons pensions and award all that money to the few at the top.

I'm sure there are PLENTY of qualified people in that company or outside the company who can do this man's job much, much cheaper.

Fairy1 said:

God, this is disgusting. NO ONE person is worth that level of compensation.

I wonder if the members of the McKesson board are sampling some of their own products without abandon.

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Probably part of the crony capitalism/political self proclaimed 'elite' who will do whatever to grab as much of the country's wealth no matter what it costs the American people...no patriots here.

Charlie09 said:

how much does he deserve to earn?

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Well Charlie09, for starters, his compensation should be based on his actual performance. If you read the article, the company has failed to successfully grow and has significantly missed its goals in the health technology and surgical supply fields.

Equally concerning (to me, anyway) is the fact that Hammergren is chairman of the board. A board which determines not only his compensation package, but his annual corporate goals. Obviously, that's not unheard of, but it's a huge conflict of interest, IMO. It amounts to a lot of mutual back-scratching.

There are approximately 32,000 McKesson Corporation employees. Obviously, Mr. Hammergren is not running the company single-handedly. I would venture to say, if he left tomorrow, the company would manage to go on without him. They have managed to stay afloat since 1833.

Show Me said:

I think you are right...too heck with everyone else except a few top delusional CEO's and execs. Do away with the peons pensions and award all that money to the few at the top.

I'm sure there are PLENTY of qualified people in that company or outside the company who can do this man's job much, much cheaper.

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One thing these folks (and our government!) never consider is what will happen when those "peons" can no longer work and have no nest egg from which to draw.

And I don't want to hear from the hard-a$$e$ who will say people should be saving. Lots and lots of people are now living paycheck-to-paycheck, despite their efforts to save and invest so they would have something in retirement.

I have been contributing to my 401(k) for years and years. And it has taken a substantial hit, just like everything else in the economy we have been experiencing for the past few years. It's been going backwards as I, chronologically, have been moving forward.

I have always felt fairly compensated for my work and I don't begrudge most folks for what they make. I have been down and picked myself up again and am proud to have what I have. We own our home and have always paid our bills on time. We are comfortable and have worked hard to get where we are.

That said, I do believe Mr. Hammergren is tragically over-paid and would be a much better CEO/chairman if he put his company - and its employees and shareholders - first. But WTH? He's got his.

And such is the philosophy of so many corporate executives....

Fairy1 said:

One thing these folks (and our government!) never consider is what will happen when those "peons" can no longer work and have no nest egg from which to draw.

And I don't want to hear from the hard-a$$e$ who will say people should be saving. Lots and lots of people are now living paycheck-to-paycheck, despite their efforts to save and invest so they would have something in retirement.

I have been contributing to my 401(k) for years and years. And it has taken a substantial hit, just like everything else in the economy we have been experiencing for the past few years. It's been going backwards as I, chronologically, have been moving forward.

I have always felt fairly compensated for my work and I don't begrudge most folks for what they make. I have been down and picked myself up again and am proud to have what I have. We own our home and have always paid our bills on time. We are comfortable and have worked hard to get where we are.

That said, I do believe Mr. Hammergren is tragically over-paid and would be a much better CEO/chairman if he put his company - and its employees and shareholders - first. But WTH? He's got his. And such is the philosophy of so many corporate executives....

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Not a lot or real leaders in the corporate world...seems like their focus on 'compensation' and 'entitlements' trump any thought to shareholders, employees and even job performance.

Publicly traded companies clearly need more reining in-- the SEC needs more teeth, imo. It was established in the 1930's when there were more ethics in the business world. Laws need to change to limit these robber barons from draining the stockholder and pensioners' assets pools. It should be made criminal for a CEO to earn more than a certain percentage of the company's profits as personal income, if you ask me. And that "profit" number comes AFTER pensions are paid into (those are costs, imo).

If all the big boys had to play by some new and enforceable laws, things would begin to straighten out for the working people of this country, and perhaps the middle class would have a chance to reemerge. moo

U.S. Securities and Exchange Commission - Wikipedia, the free encyclopedia

Show Me said:

Not a lot or real leaders in the corporate world...seems like their focus on 'compensation' and 'entitlements' trump any thought to shareholders, employees and even job performance.

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I don't like government interference. I hate the idea that salaries would ever be regulated by government. I believe in free enterprise and individual achievement. Because these individuals have no conscience, no common sense, no view to the future, no regard for their employees -- we are watching our country spiral downward with dire consequences for huge numbers of of hard-working people.

You mention job performance. I find this possibly the most disturbing aspect of all this. Most people I know are dealing with work environments where job performance seems irrelevant and even a detriment to their advancement. At first when I heard people talking about this I thought they were citing isolated instances. However, for the last few years I have observed numerous people in my age group (45-55) being passed over for younger, less experienced people with inferior skills and education. Why is this?

It is as if managers have been given the charge to surround themselves with "yes" people. The people who point out problems and want to focus on excellent product development, customer service and truly good work seem to be punished for it. It's all about quantity, to hell with the quality.

I am shocked at the skill level of many managers. For example, their ability to communicate in plain and proper English is lower than I have ever seen. My husband's boss supervises 60 professional writers with MA, PhD and JD degrees who are between 30-65 years old. She has an Associate degree and cannot even write a decent sentence. She has NEVER done the job she oversees, not even for one day, one hour. She has no idea what she is doing. It is astounding.

Honestly, with the way salaries haven't kept pace with the cost of living, the increase in contract jobs (no security/benefits) and outsourcing for cheap labor, I am amazed at how hard these passed-over, underemployed, underpaid, underappreciated people keep working.

Only to watch the people at the top take everything they can. Only to have people over you who have no idea what your job entails. Do these CEOs have any connection with what goes on way down the line at their companies?

Why isn't much of this money re-invested? That is my biggest question. That would improve company performance, create more and better-paying jobs, no? Don't any of these CEOs care about the future?

God help us.

This is an interesting vid about motivation:
[video=youtube;u6XAPnuFjJc]http://www.youtube.com/watch?v=u6XAPnuFjJc&feature=relmfu[/video]

Eve

It really doesn't require government interference to get this kind of thing under control. McKesson is a publicly traded company with stockholders who, while profiting, should be realizing even better returns on their investments. If they would pay more attention to what's happening under Hammergren's watch, they would (or should, anyway) raise some he!!. Maybe they will now that the cat's out of the bag, so to speak.

Meanwhile, it does appear that McKesson offers a stock-purchase plan to its employees, but no pension or profit sharing plans. While Hammergren and other executives are laughing all the way to the bank. Not only is that the epitome of greed, but it's incredibly short-sighted as well.

Hammergren's compensation package is well above the industry average, even for someone at his level - according to Forbe's. Not only that but, evidently, he stands to benefit greatly if the company is sold. WTH kind of incentive is that for a CEO/chairman?

You said it Fairy it's called GREED and don't get me started. It's worse than HIV because there are no medicines that can slow down the greed. Who could fire him? Whoever it is needs to take a close look because you're absolutely right, he is not earning his money at all. Also think about this, all those compensations, aren't they tax right offs for the company???

That is horrible. BUT my BF's stock is in that company and he signed over 1/2 to me (which my 1/2 is about $300,000 right now) so it's good for us but not for others. Sorry.

Will point this article out to him even though he's probably already seen it cuz he's retired and is up on all that financial stuff.

kato said:

That is horrible. BUT my BF's stock is in that company and he signed over 1/2 to me (which my 1/2 is about $300,000 right now) so it's good for us but not for others. Sorry.

Will point this article out to him even though he's probably already seen it cuz he's retired and is up on all that financial stuff.

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Well, if that's the case then, I'd say Hammergren's got a lot more pillaging to accomplish before moving on. Hang onto your hats, and I pray it doesn't go the way of other mega companies we've seen. But, I see you're both aware of the methods he's using against his own company and shareholders, so you are forewarned.

Good luck! (seriously) :seeya:

kato said:

That is horrible. BUT my BF's stock is in that company and he signed over 1/2 to me (which my 1/2 is about $300,000 right now) so it's good for us but not for others. Sorry.

Will point this article out to him even though he's probably already seen it cuz he's retired and is up on all that financial stuff.

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If he sees the article or knows the news, he'll probably be a little ticked off as this one-man-show-CEO has diluted all the shareholders stock by his excessive stock options...it's worth less.

Unfortunately a lot of companies do the same thing...it's stealing from our retirement funds, pensions and futures.

Show Me said:

If he sees the article or knows the news, he'll probably be a little ticked off as this one-man-show-CEO has diluted all the shareholders stock by his excessive stock options...it's worth less.

Unfortunately a lot of companies do the same thing...it's stealing from our retirement funds, pensions and futures.

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The stock has been diluted due, in large part, to his cash outs. But it's still trading at $78-ish.

That said, it was trading at around $90 when Hammergren started at McKesson 15 years ago and he has been CEO for 12 years. That's a long time and it is said they have thrown billions into failed health-tech platforms in recent years. The stock should be higher than it is, according to the analysts.

The bottom line is, Hammergren is not the only CEO/chairman who is enjoying such a rich (and ridiculous, IMO) compensation package. Folks who own stocks should be paying attention and doing their homework.

I'm not a huge fan of the methods of the "Occupy" movement, but their hearts are in the right place.