Brian Tyler
MCKESSONAbout Brian Tyler
Brian S. Tyler (age 58) has served as McKesson’s Chief Executive Officer since April 2019 and as a director since 2019. He holds a Ph.D. in Economics from the University of Chicago, specializing in industrial organization, labor economics, and public finance/project evaluation . Under his tenure, McKesson delivered FY2025 revenue of $359.1B, Adjusted EPS of $33.05, Adjusted Operating Profit of $5.6B, and Free Cash Flow of $5.2B, with compensation plans using Adjusted EPS, AOP, FCF, ROIC, and relative TSR as core metrics . McKesson’s four-year cumulative TSR (value of $100 invested as of Mar 31, 2020 → Mar 31, 2025) reached $514.93 versus $179.18 for the S&P 500 Health Care Index, materially outperforming sector peers over the period disclosed .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| McKesson Corporation | CEO | 2019–present | Leads portfolio modernization and specialty/biopharma services growth; set plan metrics tied to EPS, ROIC, rTSR . |
| McKesson Corporation | President & COO | 2018–2019 | Enterprise operations leadership prior to CEO appointment . |
| McKesson Europe AG | Chairman, Management Board | 2017–2018 | Led European operations and governance . |
| McKesson Europe | President & COO | 2016–2017 | Integrated European operations focus . |
| McKesson North American Pharmaceutical Distribution & Services | President | 2015–2016 | Managed core U.S. distribution and specialty platform . |
| McKesson Corporate Strategy & Business Development | EVP | 2012–2015 | Led M&A/strategy underpinning portfolio shifts . |
| McKesson U.S. Pharmaceutical; Medical-Surgical; Specialty Health | President (various) | Prior years | Specialty roll-ups, channel and practice solutions . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Republic Services, Inc. | Director | 2021–present | Current public company board . |
| International Federation of Pharmaceutical Wholesalers (IFPW) | Director | Ongoing | Also serves on IFPW Foundation board . |
| American Cancer Society (North Texas) | CEOs Against Cancer member | Ongoing | Advocacy/industry engagement . |
Fixed Compensation
| Component | FY2024 | FY2025 | Notes |
|---|---|---|---|
| Base Salary ($) | 1,500,000 | 1,550,000 | FY2025 salary effective at fiscal year end . |
| Security/Perqs ($) | 864,725 | 450,368 | Includes aircraft for security, vetted transport, home security; no tax gross-up for security per policy . |
| 401(k) Match ($) | — | 13,800 | Company match . |
| Nonqualified Deferred Comp Match ($) | — | 173,563 | SRSP company match . |
Notes: FY2025 “All Other Compensation” detail for Tyler: 401(k) match $13,800; SRSP match $173,563; financial counseling $20,092; executive security $231,525; relocation-related tax gross-up tied to prior assignment $1,356; other perqs $10,032 .
Performance Compensation
- Program design and weights
- Annual cash (MIP): Adjusted EPS (50%), Adjusted Operating Profit (25%), Free Cash Flow (25%); discretionary non-financial modifier is downward-only .
- LTI mix: PSUs 60% (3-year Cumulative Adjusted EPS 50%, 3-year average ROIC 25%, relative TSR 25%), RSUs 40% (time-based, 3-year ratable vesting) .
FY2025 Management Incentive Plan (MIP) – Metrics and Outcome
| Metric (weight) | Target construct | Certified result | Weighting application | Note |
|---|---|---|---|---|
| Adjusted EPS (50%) | Board-approved plan | $33.01 used for payout | 132% factor | Non-GAAP reconciled in Appendix A . |
| Adjusted Operating Profit (25%) | Growth vs FY2024 | $5,610M used for payout | 114% factor | Reconciliation provided . |
| Free Cash Flow (25%) | Growth vs FY2024 | $5,226M used for payout | 100% factor | Reconciliation provided . |
| Non-financial modifier | Downward-only | No adjustment | — | Objectives largely met . |
| Executive | Eligible Earnings ($) | MIP Target (%) | Target ($) | Blended metric factor | FY2025 MIP Payout ($) |
|---|---|---|---|---|---|
| Brian S. Tyler | 1,541,667 | 200% | 3,083,334 | 119% | 3,669,167 |
PSUs – FY2023–FY2025 Performance and Payout
| Metric (weight) | Certified result | Factor |
|---|---|---|
| Cumulative Adjusted EPS (50%) | $86.35 | 147% . |
| 3-year Average ROIC (25%) | 24.03% | 96% . |
| Relative TSR (25%) | 93.33rd percentile | 200% (capped only if absolute TSR negative) . |
| Executive | Target PSUs (#) | Earned PSUs (#) | Payout % |
|---|---|---|---|
| Brian S. Tyler | 22,188 | 32,838 | 148% . |
FY2025 LTI Grants (new cycle FY2025–FY2027)
| Executive | PSUs Granted (#) | PSU Grant Value ($) | RSUs Granted (#) | RSU Grant Value ($) | RSU Vesting |
|---|---|---|---|---|---|
| Brian S. Tyler | 14,805 | 8,700,417 | 10,500 | 5,800,095 | 1/3 each year for 3 years . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 70,828 shares directly/indirectly beneficially owned as of May 28, 2025 (includes 215 shares in 401(k)) . |
| Ownership guideline | CEO must hold ≥6× base salary; executives must retain 75% of net-after-tax shares until compliant . |
| Compliance status | As of Mar 31, 2025, Tyler at 29.5× salary; value of shares counted for policy compliance $45,686,510 (at $672.99/sh) . |
| Hedging/pledging | Prohibited for directors and officers; no margin/pledge of company securities permitted . |
| Options | Company has discontinued granting stock options; current LTI is PSUs/RSUs . |
Vesting runway and potential selling windows
- RSUs generally vest one-third on each of the first three anniversaries of grant; FY2025 RSUs granted 5/23/2024 follow this schedule .
- As of Mar 31, 2024 (most recent award table with vest schedule), Tyler’s outstanding time-based RSU vestings included tranches on May 23/24/25 of 2024–2026 (4,579–8,333 shares per date). Specifically for Tyler: 4,579 (5/23/2025), 5,272 (5/24/2025), 4,579 (5/23/2026) among others . Combined with FY2025 RSUs (10,500 total), upcoming vest tranches represent a periodic source of potential sales for tax withholding/liquidity, though ownership guidelines mitigate forced selling .
Employment Terms
| Topic | Key terms |
|---|---|
| Severance policy (non-CIC) | Executive Severance Policy provides salary continuation (and limited equity acceleration for awards vesting within 6 months) on involuntary termination without Cause; retirement provisions allow continued vesting if “normal retirement” (55+ with 10 yrs for grants on/after 4/23/2024) conditions met . |
| Change-in-Control (CIC) cash | Tier 1 CIC severance equals 2.99× “Earnings” (base salary + greater of target MIP or 3-year average) on qualifying termination within 6 months before or 24 months after CIC; company-paid life insurance (3 years) and COBRA-equivalent cash for 3 years; no excise tax gross-up (payments reduced if necessary for better after-tax outcome) . |
| CIC equity | “Double trigger” vesting: upon qualifying termination after CIC, unvested equity accelerates; PSUs convert at greater of target or actual performance through CIC date . |
| Clawbacks | Two recoupment policies: (1) broad misconduct/reputational harm policy allowing recovery of incentive comp; (2) Section 10D/NYSE-compliant mandatory restatement clawback for Section 16 officers (no-fault) . |
Potential payouts as of 3/31/2025 (scenario analysis)
| Scenario (as of 3/31/2025) | Salary/Severance ($) | MIP ($) | Value of Stock Vesting ($) | Medical ($) | Total ($) |
|---|---|---|---|---|---|
| Death/Disability | — | 3,669,167 | 50,760,944 | — | 54,430,111 . |
| Involuntary (non-CIC) | 3,112,400 | 3,669,167 | 31,084,735 | — | 37,866,302 . |
| Involuntary in connection with CIC | 17,414,505 | 4,123,338 | 61,684,244 | 97,331 | 83,319,418 . |
Board Governance (CEO as Director)
| Attribute | Detail |
|---|---|
| Board role | Director since 2019; not independent; no committee assignments . |
| Board leadership | Independent Chair structure (Donald R. Knauss); independent directors hold executive sessions at every regular board meeting . |
| Committees & oversight | Five standing committees (Audit; Compensation & Talent; Compliance; Finance; Governance & Sustainability), all comprised of independent directors; focused oversight of compensation, compliance, cybersecurity/AI, finance, governance . |
| Attendance | FY2025: 100% board meeting attendance; six total board meetings; executive sessions at every regular meeting . |
| Director pay | Employee-directors (including CEO) receive no additional director compensation . |
Dual-role implications
- Separation of Chair and CEO mitigates independence concerns; 11 of 12 nominees are independent; independent Chair presides over executive sessions, sets agendas, and leads CEO evaluation .
- Stock ownership guidelines for directors and executives reinforce alignment; anti-hedging/pledging rules further support governance standards .
Director Compensation (for context; CEO not eligible)
- Non-employee directors receive annual $120,000 cash retainer and RSUs valued at ~$215,000; Independent Chair receives additional $240,000 (50% cash/50% RSUs); committee chairs receive $20,000 ($25,000 for Audit) .
- RSUs to directors are vested on grant; if below ownership guideline (6× retainer), delivery is deferred until separation .
Say-on-Pay & Shareholder Feedback
- Approximately 90% of votes cast supported the executive compensation program at the 2024 Annual Meeting; Compensation & Talent Committee made no structural changes for FY2025, citing investor feedback and pay-for-performance alignment .
Risk Indicators & Red Flags
- Legal/regulatory environment: Ongoing opioid-related litigation and regulatory scrutiny; FY2025 recognized $108M claims/litigation charge; legal proceedings disclosed in 10-K risk factors .
- Perquisites: Security-related aircraft use and home security for CEO mandated by security policy; no tax gross-up for perqs (Tyler did receive a small relocation-related tax gross-up tied to a prior assignment) .
- Hedging/pledging prohibited for directors/officers; reduces misalignment/credit risk from pledged shares .
Compensation Structure Analysis
- Cash vs equity mix: High at-risk, performance-weighted structure; for CEO FY2025 target direct compensation: base $1.55M, MIP target 200% salary, target LTI $14.5M (60% PSUs/40% RSUs) .
- Metric rigor: MIP and PSU goals emphasize Adjusted EPS, AOP/FCF, ROIC, and rTSR; FY2025 MIP achieved 119% (EPS/AOP above target, FCF at target). FY2023–FY2025 PSUs paid at 148%, driven by strong cumulative EPS and top-decile rTSR .
- Option usage: Discontinued; shift to RSUs/PSUs reduces risk and changes incentive convexity .
- Clawbacks: Robust dual-policy framework, including Section 10D-compliant restatement clawback and separate reputational-harm clawback .
Equity Ownership & Alignment Detail (quantitative)
| Metric | Value |
|---|---|
| CEO stock ownership guideline | ≥6× base salary . |
| CEO actual (as of 3/31/2025) | 29.5× salary; $45,686,510 at $672.99/sh . |
| Beneficial shares (5/28/2025) | 70,828 (incl. 215 in 401(k)) . |
Vesting schedule exemplar (as of 3/31/2024 award table)
- Mr. Tyler’s time-based RSUs showed scheduled vestings on 5/23/2025 (4,579 sh), 5/24/2025 (5,272 sh), 5/23/2026 (4,579 sh), in addition to tranches that vested in 2024; separate FY2025 RSU grant (10,500) will vest ratably over 2025–2027 .
Employment Terms (selected summaries)
- Severance/CIC economics summarized above; no excise tax gross-up; double-trigger equity vesting; normal retirement updated (55+ with 10 yrs for awards granted on/after 4/23/2024) .
- Stock ownership/retention: 75% net after-tax retention until guideline met; all NEOs met ownership requirements as of 3/31/2025 .
- Anti-hedge/pledge policy for directors/officers; insider trading policy with pre-clearance and trading window restrictions .
Investment Implications
- Alignment: High at-risk mix tied to Adjusted EPS, ROIC, and rTSR; strong ownership (29.5× salary) and anti-hedging/pledging mitigates agency risk; continued use of rTSR encourages market-relative value creation .
- Retention and selling pressure: Large unvested equity and 3-year cliff PSU cycles support retention; near-term RSU tranches present routine liquidity events but policy and high ownership multiple reduce forced selling risk .
- Transaction risk: CIC payout potential of ~$83.3M (as of 3/31/2025) could be a consideration in strategic M&A/privatization scenarios; nonetheless, double-trigger design and no gross-up align with governance norms .
- Governance: Independent Chair, strong committee oversight (including Compensation & Talent; Compliance for regulatory/cyber/AI), and consistent say-on-pay support (~90%) lower governance discount risk .
Appendix: Key FY2025 Performance Figures (for context)
- Revenue $359.1B; EPS (GAAP) $25.72; Adjusted EPS $33.05; AOP (Adj) $5.6B; FCF $5.226B; all used as performance anchors in incentives and reconciled in Appendix A .