Summary
McKesson Corporation (MCK) filed an 8-K on April 28, 2022, detailing amendments to its executive compensation and severance policies, effective April 26, 2022. The primary focus is on the adoption of an Amended and Restated Severance Policy for Executive Employees. This policy outlines the severance payments and benefits executives are entitled to in the event of a termination without cause that qualifies as a 'separation from service' and does not trigger change-in-control benefits. The severance benefit is calculated as the lesser of 12 months' base salary plus one additional month per year of service, or 24 months' base salary, contingent upon a release of claims and adherence to restrictive covenants.
Key Highlights
- 1Adoption of an Amended and Restated Severance Policy for Executive Employees, effective April 26, 2022.
- 2Severance for eligible executives in case of termination without cause is the lesser of 12 months' salary plus one month per year of service, or 24 months' salary.
- 3Severance payments are contingent on the execution of a release of claims and compliance with restrictive covenants.
- 4Approval of an Amended and Restated Management Incentive Plan (MIP), primarily to update references to Section 162(m) of the Internal Revenue Code.
- 5The MIP now includes terminations qualifying for severance under the new Executive Severance Policy as a trigger for receiving the current fiscal year's award based on actual performance, if termination occurs on or after January 1 of the fiscal year.
- 6Amendments to outstanding equity awards under the 2013 Stock Plan to include 'Severance' terminations as defined by the Executive Severance Policy.
- 7Equity award holders experiencing a 'Severance' termination will be eligible for six months of continued vesting or retirement treatment if eligible for Normal Retirement within six months post-termination.