Every time you take an aspirin you may be paying a tiny fraction of John Hammergren’s pension.
John Hammergren, the CEO of McKesson Corp., has the distinction of looking forward to one of the wealthiest retirements in corporate history--a record-breaking $159 million pension, according to the Wall Street Journal. Not only that, the 54 year old is one of the highest paid execs, earning more than—wait for it--$50 million a year from a health care business services company that’s ranked 14 on the Fortune 500 list.
McKesson distributes drugs—the legal kind as far as we know— and other medical supplies to more than 40,000 retail chains, independent retail pharmacies and medical providers (think hospitals). But the company does a lot more than that. It offers new technologies for hospitals; integrated information systems for doctors and patients; and more.
In April of 2012, McKesson settled a suit filed by the Department of Justice for inflating drug prices. McKesson “agreed to pay the United States more than $190 million to resolve claims that it violated the False Claims Act by reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs,” according to the DOJ.
There’s no doubt that Hammergren has done a reasonably good job since becoming CEO in 2001. The San Francisco-based company increased annual revenues from $30 billion to $122 billion and its stock price more than tripled.
Still, should Hammergren get a larger pension than, say, Rupert Murdoch, who actually founded a company and grew News Corp. into a powerful media juggernaut? Maybe. But in light of the country’s continuing crisis in health care costs, Hammergren’s salary and pension are obscene.
One thing is certain: Hammergren had one sharp lawyer in 1996 when he made the deal to join McKesson. Forbes reported that if he were let go because of a change in control of the company, Hammergren would waltz away with $469 million. And if he dies or becomes disabled, he or his heirs get a cool $260 million.
Better keep taking your overpriced meds, John…and be nice to your wife.