McKessonMCK Chairman John Hammergren's compensation rose nearly 11% to more than $29.7 million in fiscal 2009 as the prescription-drug distributor grappled with falling profit and the economic downturn.
Hammergren's salary for fiscal 2009 rose 6.3% to just under $1.6 million, according to an Associated Press analysis of data filed with regulators Monday.
The 50-year-old chief executive's package also included $12 million in a performance bonus, up slightly from the prior year, while his perks fell by 3% to $988,793. Those perks include company contributions to a retirement plan and use of the corporate jet, along with a personal driver and security.
The San Francisco-based company also awarded Hammergren stock options and restricted stock that had an estimated value of just under $15.2 million, a boost of 24% from the prior year. Those options though, were granted May 20, 2008 when shares were trading as high as $58.60. The stock has since plunged from that value, making the options less valuable than on the day they were granted.
Overall, shares fell 33% during the fiscal year to close at $35.04 on March 31, 2009.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
In fiscal 2009, the company's profit fell 17% as charges for an investment write-down and litigation costs cut into the bottom-line. Meanwhile, revenue for the year rose 5% to $106.63 billion.
The company expects weaker technology revenue and pricing pressure to cut into profit in fiscal 2010. The economic slump and profit margin pressure were cited as key factors.