McKesson Corp. trimmed the overall compensation of its CEO, John Hammergren, by about 10% in the aftermath of a rebellion by displeased shareholders over the pharmaceutical giant's alleged role in the opioid epidemic in the U.S., Bloomberg News reported on June 15.
The revolt was led by The International Brotherhood of Teamsters, who began a vote-no campaign in 2017 against the drug distributor's executive pay plan and who blame McKesson for fueling the opioid crisis.
To curb growing concerns, San Francisco-based McKesson's board whittled Hammergren's total reported pay for fiscal 2018 by $1.95 million and changed incentive plan metrics, the news outlet reported, citing a June 15 proxy statement to the SEC from the McKesson board's lead independent director, Edward Mueller.
In addition, the company agreed to look over "compliance risk related to opioid distribution" upon making decisions related to compensation.
Hammergren's base salary is $1.68 million. With stock awards, option awards and other incentive plan compensation, his total compensation for fiscal 2018 was $18.1 million, compared to about $20.1 million in fiscal 2017 and more than $23.6 million in fiscal 2016, according to the proxy statement.
Shareholders will now get to vote on the new pay package at the company's annual shareholders' meeting July 25.
In May, Florida became the latest state to sue McKesson over its role in the opioid crisis and seeking payment for the company's actions. Other jurisdictions that have sued McKesson include Ohio, Delaware, New York City, Kentucky and New Mexico.
Nine other healthcare companies are being questioned by their investors over opioid sales, raising an issue during the proxy season. These include Johnson & Johnson, Pfizer Inc., Endo Pharmaceuticals Holdings Inc., Depomed Inc., INSYS Therapeutics Inc., Mallinckrodt PLC, Alkermes PLC, AmerisourceBergen Corp. and Cardinal Health Inc.