U.S. Securities and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
1. Name of the Registrant:
MCKESSON CORPORATION
___________________________________________________________________________
2. Name of the person relying on exemption:
CTW INVESTMENT GROUP
___________________________________________________________________________
3. Address of the person relying on exemption:
1900 L STREET, NW, SUITE 900 WASHINGTON, DC 20036
___________________________________________________________________________
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a6(g)(1):
[CTW INVESTMENT GROUP posted the following Tweet on July 15, 2013, which
included a link to the report that follows.]
ISS supports Board Change at #McKesson http://ow.ly/mZlYF $MCK #corpgov
BUSINESS
July 14, 2013, 7:30 p.m. ET
PROXY FIRM URGES VOTE AGAINST 4 MCKESSON DIRECTORS
ISS RECOMMENDATION EXCLUDES CHAIRMAN AND CEO HAMMERGREN
Proxy Firm Urges Vote Against 4 McKesson Directors
By GEORGE STAHL
A prominent proxy adviser said McKesson Corp. MCK -0.12% shareholders should
vote against four directors because of the drug distributor's persistent
problems in addressing shareholders' concerns on executive pay, but it
excluded Chairman and Chief Executive John H. Hammergren.
(PHOTO of McKesson's John H. Hammergren)
"While adverse vote recommendations are not warranted for CEO Hammergren,"
Institutional Shareholder Services said, "the board would benefit from an
independent chairman."
McKesson, which mostly distributes drugs but also sells medical technology,
has come under fire for what a prominent shareholder has called "one of the
most exorbitant CEO pay practices" among companies in the Standard & Poor's
500-stock index.
The shareholder, CtW Investment Group, has said it is opposing the re-election
of McKesson's chairman and two other directors, Alton F. Irby III and Jane E.
Shaw, who respectively head the board's compensation and governance committees.
ISS, in its recommendation, said shareholders should vote against Mr. Irby and
the other three members of the compensation committee - Edward A. Mueller, M.
Christine Jacobs and David M. Lawrence - for failing to fully address
persistent compensation issues. However, the firm didn't recommend removing
Ms. Shaw.
"Shaw is expected to retire in a year, making room for new director talent,"
ISS wrote. "Further, it does not appear that the Audit Committee, and Shaw by
extension, significantly failed in their oversight role with respect to the
regulatory issues raised by CtW."
As for Mr. Hammergren, ISS said a no-vote isn't warranted because the company
has agreed to name a lead independent director, which should address some
shareholder concerns. "Further, CtW's assertion that Hammergren has a philosophy
that directors should be deferent to CEOs is conjecture, and not a supportable
argument based on the current evidence," ISS said.
Still, "McKesson's board would undoubtedly benefit from an independent
chairman," ISS said. A McKesson representative wasn't available to comment on
the ISS report. In the past, the company has argued that its market value has
tripled to more than $25 billion in the 14 years since Mr. Hammergren became
CEO, and a "track record of creating sustained shareholder value is the best
test of our corporate governance."
The opinion from ISS could make McKesson's annual meeting, scheduled for July
31, even more contentious. Last year, shareholders of San Francisco-based
McKesson approved a nonbinding vote to split the roles of chairman and CEO.
The board instead decided to name a lead independent director.
In opposing the re-election of Mr. Irby, the longtime chairman of McKesson's
compensation committee, CtW has cited research from pay consultant Equilar
Inc. that Mr. Hammergren's three-year "realizable pay" was four times the
median among his peers, and mentioned the CEO's "unmatched" $159 million
pension benefit.
CtW, an arm of the labor federation Change to Win, advises union pension funds
that collectively have more than $250 billion in assets. The group says the
funds own a total of 1.4 million McKesson shares out of 228.5 million shares
outstanding.
Many big investment firms make their own voting decisions on corporate policies,
and are unlikely to be swayed by proxy advisers. Other shareholders also
sometimes ignore their advice. This year, shareholders overwhelmingly rejected
a proposal to strip J.P. Morgan Chase JPM +0.81% & Co. CEO James Dimon of his
chairman role, even though ISS had endorsed the proposal.
- Mark Maremont contributed to this report.
Write to George Stahl at george.stahl@dowjones.com
A version of this article appeared July 15, 2013, on page B3 in the U.S. edition
of The Wall Street Journal, with the headline: Proxy Firm Targets Four at
McKesson.
[CTW INVESTMENT GROUP posted the following tweet on July 17, 2013, which
included a link to the report that follows.]
Glass Lewis, second major proxy firm, to oppose # McKesson directors over
CEO #Hammergren pay http://ow.ly/n3uNE #corpgov #Irby #Shaw
GLASS LEWIS RECOMMENDS AGAINST RE-ELECTION OF 2 MCKESSON DIRECTORS
July 16 | Tue Jul 16, 2013 6:00pm EDT
(Reuters) - Glass Lewis on Tuesday became the second major proxy advisory firm
to recommend that McKesson Corp shareholders vote against the re-election of
some of its directors, citing inadequate response to shareholder proposals and
poor executive compensation practices.
The recommendation against voting for two directors comes days after
Institutional Shareholder Services (ISS) urged shareholders of the U.S. drug
wholesaler to not re-elect four directors at the company's July 31 annual
meeting due to concerns about executive compensation.
The concerns relating to $158 million in lump-sum pension payable to McKesson
Chief Executive John Hammergren were first raised by the CtW Investment Group,
which advises pension funds of the Change to Win labor union.
"Given the extraordinary size of (Hammergren's) benefit, we believe
shareholders should question whether the potential costs represent an
appropriate use of the company's capital," Glass Lewis said.
The firm said the long tenure of over half of the McKesson board's independent
directors and the limited change of leadership may not be in shareholders'
best interests.
It recommended that shareholders not vote for Alton Irby and Jane Shaw, both
independent directors - who were also singled out by CtW Investment Group in
its July 1 letter.
On Sunday, ISS urged shareholders to vote against re-election of Irby, and
compensation committee members Edward Mueller, Christine Jacobs and David
Lawrence.
Glass Lewis did not recommend the removal of Jacobs, Lawrence and Mueller.
McKesson shares closed 1 percent down at $118.30 on the New York Stock Exchange
on Tuesday.