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Executive pay: Because he?s worth it

July 4, 2013

THIS has been a bumper year for John Hammergren. The boss of McKesson, a big American wholesaler of drugs and other health-care supplies, pocketed total compensation of $52m in the year to March, a nice rise on the $46m he received in 2011. But like Liberace he will be crying all the way to the bank, given the hostile reaction from shareholder activists. They are urging not just a ?no? in the ?say on pay? vote at the firm?s annual meeting later this month but a vote against his re-election to the board.The campaign is being led by the pension fund of Change to Win, a trade union. It describes Mr Hammergren?s pay package as ?one of the most exorbitant? among S&P 500 companies. It is especially unhappy with his pension, which accounted for $24.2m of his latest pay package. Mr Hammergren?s pension pot is now $159m?more than any other current boss?s.Last year only 63% of shareholders voted in favour of McKesson?s executive pay. Given the reluctance of many institutional shareholders to vote against management, this amounted to an expression of deep discontent. According to the Manhattan Institute, a think-tank, at the 250 largest publicly traded American firms so far this year only 7% of shareholder resolutions have succeeded in getting a majority of votes, the lowest since at least 2006. And just two of these firms have lost a say-on-pay vote.McKesson says that in response...

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