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Aug
2013
8

Teamsters at McKesson In Year Two of Contract Fight While CEO Takes $159M Pension Benefit

McKesson Crapping on Workers

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The Teamsters’ affiliated investment group Change to Win (CtW) is calling for the resignation of McKesson director and compensation committee chairman Alton Irby and for a renegotiation of McKesson CEO John Hammergren’s $159 million pension benefit.  The group says the moves should be made “as part of a comprehensive overhaul of the company’s compensation structure.” The Teamsters union represents 1,500 warehouse workers in the United States and Canada.  

The request comes as McKesson workers in Lakeland, FL fight for a fair contract nearly two years after voting to be represented by the Teamsters.  Without a fair first contract, many front-line workers at McKesson are unable to pay health insurance or into their 401(k) retirement plans.  With McKesson hiring union-busting firms and retaliating against workers who voted to organize, CtW wants to see changes made to Hammergen’s outrageous benefits package until workers can have fair benefits of their own.  According to Teamsters International Vice President Steve Vairma, “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.”

In early July, CtW called for the Board of Directors to vote against the reelection of Alton Brown, Jane Shaw and John Hammergren. After votes of the meeting became public, CtW called for the resignation of Irby and the restructuring of Hammergen’s pension plan noting the low level of support from shareholders.  According to their August 5th letter to McKesson, 78 percent of shareholders rejected management’s say-on-pay proposal and 53 supported strengthening the company’s policies to clawback executive compensation in the wake of executive misdeeds. Despite the shareholder votes of no confidence, McKesson directors took no action .

The situation as explained by Chris Rauber of the San Francisco Business Times:

All of the members of McKesson Corp.’s board of directors were re-elected at the drug distribution and health care IT giant’s annual meeting Wednesday morning,despite calls by powerful investors to protest the company’s executive compensation policies by voting down some board members.

But critics got a big victory when their advisory recommendation on executive compensation was approved by voting shareholders, according to a preliminary tally. “It may be the first clawback proposal to ever receive majority support” from a company’s investors, according to Amalgamated Bank, one of the unhappy investors.

Scott Zdrazil, Amalgamated Bank’s director of corporate governance, characterized the July 31 vote as a sign that investors “agreed that McKesson should strengthen and disclose the use of its clawback policy,” which provide a mechanism to “claw back” executive pay in cases where misconduct by company leaders causes significant harm to their organization.

Robust clawbacks “promote pay-for-performance and help set clear incentives for ethical conduct and accurate financial reporting” Zdrazil said in a statement, benefiting companies and investors alike, especially in heavily regulated industries with complex legal and regulatory risks.

At a recent rally, Teamsters leaders spoke out about pay disparities at the McKesson Corporation. Video below:

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