With a Push-out Score of 4, the CEO departure at McKesson Corp. is in the lower range of the scale and looks bittersweet.
As announced on November 1, 2018, John H. Hammergren decided to retire from his roles as CEO and chairman of the board at the health care company, effective as of March 31, 2019.
Hammergren’s age of 59 years, the lead time of 150 days, his tenure of 18 years and the succession plan are inconspicuous and free of red flags.
His duties will be taken over by Brian S. Tyler, age 51 and currently president and chief operating officer of McKesson.
Hammergren says: “This is the right time to turn the leadership reins over to the next generation and no one is better equipped than Brian to lead McKesson into the future.”
This explanation leaves room for speculation. It remains unclear what exactly triggered his move. That’s the first point for the Push-out Score.
The change follows a decline in McKesson’s share price of more than 40 percent since May 2015. Point number 2.
Hammergren steps aside at a critical time. Point number 3.
Hammergren faced shareholder criticism over his compensation and has come under fire for the company’s role in the epidemic use of prescription opioid painkillers.
McKesson is contending with more than 1,000 civil suits across the U.S. related to its distribution of controlled substances.
The language of the announcement provides one additional point.
In the announcement from San Francisco, California-based McKesson, Hammergren receives accolades, praise and thanks, but no word of regret and no good wishes.
On the one hand, the company praises Hammergren for quadrupling McKesson’s revenue since he became CEO in 2001 and delivering shareholder stock returns of more than 400 percent.
On the other hand, Edward Mueller, currently lead independent director, states that Hammergren’s successor “has a strong point of view on the future of the industry … as well as how McKesson will continue to play an integral role in improving care while driving value for McKesson’s shareholders.”
All this indicates that McKesson may benefit from a CEO with slightly different skills. The Push-out Score of 4 suggests that the incumbent CEO may have decided to leave his post after some subtle encouragement.
Hammergren will continue to support McKesson in an advisory capacity after his retirement.