In March, McKesson announced plans to cut nearly 1,600 U.S. jobs to help trim costs. Cutting jobs, though, still comes at a cost, mostly due to severance payments. But a Bloomberg report suggests the company could cut just one position for the same price: the CEO.
The cost of cutting those 1,600 jobs is approximately $300 million, according to Bloomberg. The report also indicates McKesson CEO John Hammergren is eligible for approximately $187 million of severance and benefits if he leaves the company, which is about the same as the cost of cutting 1,000 workers.
Mr. Hammergren's exit deal, valued as of March 31, is comprised of a $114 million pension, $39.3 million in equity awards, $25 million in cash bonuses, $5 million in severance, $1.7 million in life insurance and $2.4 million in other benefits, according to Bloomberg.
"The staggering ratio is yet further evidence that McKesson is being run first and foremost for [Mr.] Hammergren, with shareholders, employees and customers left far behind," KenHall, general secretary-treasurer of the labor union International Brotherhood of Teamsters, told Bloomberg. McKesson employees are members of the labor union.
Kristin Hunter, a spokesperson for McKesson told Bloomberg employee severance and vesting of equity awards are unrelated.
"Accelerated vesting is common in large, publicly traded companies and keeps McKesson competitive when competing for executive talent," she added.
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