June 26, 2013 in Business

CEO lands $159 million pension

Associated Press
 

Hammergren
(Full-size photo)

McKesson’s Chairman and CEO John Hammergren has set a new record in corporate America: Largest pension around.

The drug distribution company disclosed in a regulatory filing Friday that Hammergren was entitled to a $159 million lump-sum payment for his pension, had he voluntarily left the company on March 31. The size of his pension was first reported by the Wall Street Journal on Tuesday.

Several compensation consultants say it is by far the largest pension for a current executive of a public company.

GMI Ratings, which tracks executive pay, said the 54-year-old’s pension is more than double that of the next largest, $74 million for Rupert Murdoch, chairman and CEO of News Corp.

Chris McGoldrick, a senior analyst for Equilar, also said it is by far the largest pension on record. Equilar provides data on executive compensation.

According to GMI, 54 percent of CEOs of companies in the Standard & Poor’s 500 index have accumulated pension benefits. The average value of their pensions is just more than $7 million, down from $11.5 million a year ago.

GMI researcher Greg Ruel said the drop is due to several CEOs with large pensions retiring, not corporate restraint.

Pensions used to be a common retirement benefit. Many companies have eliminated them and moved to defined contribution plans, such as 401(k)s, to control costs. But some still have special pension plans for executives.

McKesson spokesman Kris Fortner said in an email to the Associated Press that Hammergren’s pension was shaped by an employment agreement put in place more than 14 years ago and modeled on his predecessor’s contract, as well as outstanding company performance.

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