10 Things You Didn’t Know About McKesson CEO John H. Hammergren
John H. Hammergren is the CEO of the world famous McKesson drug distributor. If you haven’t heard of him, you’re probably aware of the massive corporation that he’s at the helm of. Those of you who have been following his career are probably aware that he’s one of the top paid CEOs in the nation. While some may argue that he’s overpaid, McKesson thinks that his services are worth every penny of his huge salary and compensation package. One glance at the company’s standings will serve as a confirmation of the fact. Hammergren doesn’t go overboard in soliciting attention for his impressive achievements, and it’s his humility that make us feel obliged to give him perhaps, just a little bit of the attention that he deserves. Here are ten things that you didn’t know about him.
1. His retirement fund is worth a fortune
Hammergren who is still in his 50s, was given the opportunity to retire if he saw fit. McKesson was willing to offer him a pension package that would have been worth $159 million if he relinquished his positions in the company. That wasn’t something he was interested in doing, so he continues on as the massive drug corporation’s leader, earning in the neighborhood of $73 million a year.
2. McKesson offered special treatment for Hammergren
As the rule goes, any executive working for McKesson is penalized for what is deemed “early retirement” if they do so before reaching the age of 62. In Hammergren’s case, they were willing to waive the penalty who was just 54 years old at the time that they offered him the generous voluntary retirement package. This would put him at an advantage that is 28 percent higher than what it would have been if they were to treat him like any other exec in the company.
3. Hammergren made a killing on stock options
Although Hammergren’s annual salary is obscenely high, this isn’t his only income source through McKesson. He cashed out several stock options he had been accumulating throughout the years and raked in $145 million within a single year, when you combine wages and cash out values. This goes to show you how much McKesson wanted to keep Hammergren happy. It’s estimated that Hammergren has raked in about $500 million from McKesson so far.
4. His perks are nice
What more could a company possibly offer their President and CEO aside from a massive salary and great stock options? First, let’s start with a company car and a chauffeur to drive it for him. He also has free use of the McKesson corporate jet, and not just for business travel. It’s free for him to use for personal travel as well. In addition to this, McKesson also allots him an extra seventeen thousand to hire a financial planner to help keep him on track with his personal finances.
5. He has a sterling reputation
Hammergren has been investigated and analyzed thoroughly. There are no skeletons to be found in his closet and his track record shows that he’s been squeaky clean throughout his professional life. This could be the main reason why McKesson was willing to give him such obscene compensation amidst scandal and near ruin before John’s appointment as President and CEO of McKesson.
6. He got lucky in 1999
The McKesson corporation was rocked by a far reaching scandal in the 1990s. A lawsuit was filed by its shareholders and the result was a conviction of fraud committed by inflating its sales numbers. Several of the top executives of the company were found guilty of conspiring to hide the fraudulent activities. This left the company devoid of several key leadership positions and they were in need of reputable candidates to plug into the holes. Hammergren who had a squeaky clean record was made CEO and president. He was an unknown who was working in the division of McKesson that sold prescription drugs. It was a stretch to bring him into such a high ranking position, but it was one that paid off.
7. McKesson won’t justify why Hammergren is paid so much
There has been a lot of speculation around the unusually high pay and compensation package that McKesson orchestrated for Hammergren. He was largely an unknown, and aside from his clean record and upstanding reputation, wasn’t that remarkable as far as candidates for an executive position went. When asked about it, the spokeswoman of the corporation firmly declined to comment and the company would not allow any board members or employees of the company to be interviewed. It’s well-known that the entities in charge of pay and compensation packages are the board of directors, but they’re not willing to comment on why McKesson is lavishing such extreme compensation on Hammergren. When approached with the question, Alton F. Irby II, chair of the compensation committee referred the interviewer back to the company’s proxy statement and then hung up on the interviewer.
8. His home is more like a resort
You would expect Hammergren to live in an upscale home, but his place goes over the top. It is more like a resort than a home. For anyone that knows him, this is a bit of a surprise. He’s not the flamboyant type, but rather a quiet fellow who keeps to himself unless business calls him to the fore. He’s not into publicly flaunting his success, but in his private life, he enjoys the very best environment that money can buy.
9. He’s a native of Minnesota
Hammergren was born in St. Paul, Minnesota in 1969. He attended the University of Minnesota in 1981, then pursued his MBA at Xavier University in 1987. Since becoming successful, he established his main home in Orinda, a suburb of San Francisco, California, but bought a second home in New Hampshire, where he spends some of his time. The second home is where he chooses to get away from the fast paced life of an executive.
10. He had a rough beginning
Hammergren was raised in a very small community in Minnesota. His family taught him strong moral values with high ethics. He was a natural in business. His father was also in the healthcare industry as a traveling salesman. He frequently took John along when he hit the road on business. At the age of 16, John lost his father. His mother went back to work to support herself and John and it was a hard time in their lives. John learned that he had to work hard to make it on his own, and that is precisely what he’s done.
