Not to be any more of a bearer of unsettling news in a difficult time but has anyone played with the numbers, and timing of the restructructuring charges, MCK filed in the regulatory filing.
Lots of smarter folks out there than I but here's an initial take. Feedback welcome
$250MM-$275MM charge in FY16 divided by 1600 people = Avg. severance cost/employee of $187,500-$206,250. Seems a bit steep considering what's being posted relative to position titles being cut. That's seems like, IMHO, long-term VP types being let go (which wouldn't be a bad thing from what I understand).
Recognizing much goes into a total severance pkg cost, like COBRA, unused PTO, etc., still that's quite a bit, per "announced" employee layoff numbers. And per my, for now, MCK-employed spouse, 401K contributions are fully vested from day 1...sowe don't believe that would have a material impact the number reported to the SEC.
Most "concerning" is TOTAL reported charge of $300MM - $330MM. So, thats another $50-55MM STILL to come in FY17.
This doesn't appear to be over in a couple of weeks folks....makes no sense to not take the total earnings hit in FY16 if that were the case. Basic corp. finance states to take the hit, stock price at 52 week low, start the new FY with a clean slate and move on.
Speaking of moving on, my spouse has had enough of the fear, uncertainty, mediocre leadership/VP's at the various BU levels. Cherry on top of heading out are the huge comp packages, and shares being offloaded, by Hammergren and team.
lots of more nimble and stable firms in MCK's space grabbing up expertise from MCK. And it now appears the "historic" (prehistoric??) strategy Hammergren has employed for so many years has outlived itself vs. the market and competition changing with it.
The "old" distrib. competitors have shifted and the HIT firms are quickly distancing themselves from MCK offerings. Buying up Rexall and yet another speciality pharmacy seems to be the same old song and dance. Yawn!
Hammergren alone pulls down 2X the "average" CEO salary for a Fortune 100 company, not including shares, incentives, etc. based on a report in Forbes/WSJ recently.
And has anyone looked at what the man has cashed out in the last 12 months? Back of the napkin math puts it a $71 million. How long has he been there?? Things looking pretty cushy for him going forward.
Wonder if he even cares about the families the company is impacting while reaping millions with a seemingly decaying strategy? Disappointing but new opps await for my other half while we await more sad news on whos been impacted across the company