Sunday, August 30, 2015

Why pass up a $159 million lump sum pension? Because the average salary exceeds $50 million

The CEO of drug wholesale giant McKesson passed up a lump-sum pension payment of $159 million, according to the Wall Street Journal.

Why pass up a $159 million lump sum pension? Because the average salary exceeds $50 million

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FILE - In this Tuesday April 5, 2005 file photo, John Hammergren, CEO of McKesson Corporation, poses for a photo in the Vision Center at corporate headquarters in San Francisco. Hammergren set a number of records during his time at the drug distribution company, leading it through a period of massive growth. He may have also set a record in corporate America with his $159 million pension. (AP Photo / George Nikitin, File)
FILE - In this Tuesday April 5, 2005 file photo, John Hammergren, CEO of McKesson Corporation, poses for a photo in the Vision Center at corporate headquarters in San Francisco. Hammergren set a number of records during his time at the drug distribution company, leading it through a period of massive growth. He may have also set a record in corporate America with his $159 million pension. (AP Photo / George Nikitin, File)

Most adults - and, unfortunately, a few children - face vexing financial decisions.

John Hammergren was no different. Hammergren is the chief executive officer of McKesson Corp., which is the largest of the big three pharmaceutical wholesalers. Valley Forge-based AmerisourceBergen and Cardinal Health are the other two.

According to the Wall Street Journal (link here), Hammergren faced a difficult decision just before March 31.

At that point, Hammergren had to decide whether to pass up a lump-sum pension payment of $159 million.

Why would anyone pass up a $159 lump sum payment?

Well, he is only 54 and he might like his job. Part of that might be attributable to his yearly salary, which the Journal reported has exceeded $50 million in recent years.

The Journal found no other CEO's with a similar package. The Journal based its report on an analysis by a firm that looks at executive compensation. The firm looked at McKesson's proxy statement filed with the Securities and Exchange Commission. A link to the proxy is here.

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About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com or 215-854-4506.

David Sell
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