8-KMaterial Agreements

MCKESSON CORP 8-K Report, Material Agreement (May 27, 2005)

Filed May 27, 2005For Securities:MCK

Summary

McKesson Corporation (MCK) filed an 8-K on May 27, 2005, detailing material definitive agreements related to executive compensation. The Compensation Committee approved cash awards under the Management Incentive Plan for the fiscal year ending March 31, 2005, for its named executive officers, including significant payouts to CEO John Hammergren. Additionally, the committee authorized payments under the Long Term Incentive Plan for the fiscal years 2003-2005, again with substantial awards to top executives. The filing also outlines the performance metrics and target awards for the Long Term Incentive Plan covering fiscal years 2006-2008. The primary performance measure for this period will be cumulative earnings per share over the three years, with a minimum payout tied to the average annual Business Scorecard results. This provides insight into the company's forward-looking compensation strategy and its focus on long-term shareholder value through EPS growth.

Key Highlights

  • 1McKesson's Compensation Committee approved Management Incentive Plan cash awards for FY 2005, with CEO John Hammergren receiving $2,200,000.
  • 2Long Term Incentive Plan (LTIP) awards for FY 2003-2005 were authorized, with John Hammergren receiving $3,697,200.
  • 3The performance measure for the FY 2006-2008 LTIP will be cumulative earnings per share (EPS) over the three-year period.
  • 4A minimum payout for the 2006-2008 LTIP is linked to average annual Business Scorecard results.
  • 5Target awards for the 2006-2008 LTIP were set, with John Hammergren's target at $2,700,000.
  • 6The filing details compensation for key named executive officers, including Paul Julian, Jeffrey Campbell, Pamela Pure, and Ivan Meyerson.

Frequently Asked Questions

This 8-K filing primarily details material definitive agreements concerning executive compensation. It announces cash awards approved under McKesson's Management Incentive Plan for the fiscal year ended March 31, 2005, and payments authorized under the Long Term Incentive Plan for the fiscal years 2003-2005.

For the Long Term Incentive Plan covering fiscal years 2006-2008, the primary performance measure will be cumulative earnings per share (EPS) over that three-year period. Additionally, there is a provision for a minimum payout tied to the average annual Business Scorecard results for the executive officers.

No, the Long Term Incentive Plan awards for fiscal years 2003-2005 represent authorized payments based on performance during that period. The target awards for the 2006-2008 LTIP are also not guaranteed; the actual amounts paid in 2008 will depend on McKesson's actual performance against the set EPS and Business Scorecard targets.

The named executive officers include John Hammergren (Chairman, President and CEO), Paul Julian (Executive Vice President, Group President), Jeffrey Campbell (Executive Vice President and CFO), Pamela Pure (Executive Vice President, President McKesson Provider Technologies), and Ivan Meyerson (Executive Vice President, General Counsel and Secretary).