An advisory shareholder proposal at McKesson Corp. sponsored by the $52 billion UAW Retiree Medical Benefits Trust, Ann Arbor, Mich. and Amalgamated Bank to strengthen the company's clawback policy was approved by a majority of stockholders at the company's annual meeting on Wednesday.
The non-binding proposal, supported by proxy advisory firms Institutional Shareholder Services and Glass Lewis, claimed the company's existing policy “sets too high a standard under which clawbacks may be applied, noting that the current standard would not cover fraud, theft or embezzlement as long as the errant executive does not steal enough money to materially harm the corporation.”
The text of the proposal states it “encourages the board to strengthen the company's clawback policy and disclose when the clawback is applied to senior executives' incentive compensation.”
Scott Zdrazil, director of corporate governance at Amalgamated Bank, said in a statement, “We're pleased that investors agreed that McKesson should strengthen and disclose the use of its clawback policy. Robust and rigorous clawbacks promote pay-for-performance and help set clear incentives for ethical conduct and accurate financial reporting.”
An Amalgamated Bank news release states the proposal is believed to be the first clawback proposal ever to receive a majority vote from investors.
According to the proposal, McKesson has “paid over $1 billion in recent years to settle various regulatory and legal disputes” while McKesson's CEO John Hammergren was “the highest paid executive in the country” last year, earning $131.19 million in total compensation.
A McKesson news release acknowledges the vote, with specific information regarding the vote to follow in a pending 8-K filing with the SEC. Efforts to reach officials at McKesson were not immediately successful.