Business Context and Reporting Period
This Form 8-K filing by McKesson Corporation, dated May 24, 2005, reports the entry into a material definitive agreement regarding executive compensation. The filing details awards approved by the Compensation Committee for the fiscal year ending March 31, 2005, and establishes targets for the 2006-2008 performance period.
Key Financial Metrics
The filing does not provide consolidated revenue, profit, cash flow, margins, debt, or liquidity metrics. It focuses exclusively on specific cash award amounts and target incentive values for named executive officers.
| Executive Officer | FY 2005 Cash Award | FY 2003-2005 LTIP Payout | FY 2006-2008 LTIP Target |
|---|---|---|---|
| John Hammergren (CEO) | $2,200,000 | $3,697,200 | $2,700,000 |
| Paul Julian (EVP) | $775,000 | $1,437,800 | $1,050,000 |
| Jeffrey Campbell (CFO) | $550,000 | $513,500 | $500,000 |
| Pamela Pure (EVP) | $525,000 | $410,800 | $300,000 |
| Ivan Meyerson (General Counsel) | $400,000 | $410,800 | Not Disclosed |
Material Changes
The filing does not report material changes to the company's financial position or operations compared to prior periods. The primary change is the formalization of compensation awards and the establishment of new performance targets for the upcoming three-year cycle.
Guidance, Outlook, and Risks
Performance Metrics: For the 2006-2008 Long Term Incentive Plan (LTIP), the Committee determined that the performance measure will be cumulative earnings per share (EPS) over the three-year period. A minimum payout is tied to the average annual Business Scorecard results for fiscal years 2006, 2007, and 2008.
Outlook: Actual awards for the 2006-2008 period may vary from the target amounts listed above depending on the company's actual performance against the cumulative EPS metric.
Risks: The filing does not explicitly list new risks or contingencies beyond the inherent variability of performance-based compensation.
Investor Verification Checklist
- Verify the total cash outflow for the FY 2005 Management Incentive Plan awards ($5,450,000 total for listed executives).
- Confirm the total payout for the FY 2003-2005 LTIP ($6,469,100 total for listed executives).
- Review the 2005 Proxy Statement for the full list of named executive officers and complete compensation details.
- Monitor future earnings reports to track progress toward the cumulative EPS target for the 2006-2008 LTIP.