LeAnn Smith
MCKESSONAbout LeAnn Smith
LeAnn B. Smith is Executive Vice President and Chief Human Resources Officer (CHRO) of McKesson, effective December 1, 2022; she joined McKesson in April 2021 after senior HR leadership roles at Walmart and Accenture. She holds a B.S. in Health Information Management from Saint Louis University and an Executive MHRM from Cornell University’s ILR School . In FY 2025, McKesson delivered 16% revenue growth to $359B, Adjusted EPS of $33.05, Adjusted Operating Profit of $5.6B, and Free Cash Flow of $5.2B; FY 2023–FY 2025 PSU payouts were 148% with rTSR at the 93.33rd percentile, signaling strong enterprise performance alignment for executive incentives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| McKesson | SVP, Talent Management & Development | 2021–Nov 2022 | Led leadership/executive development, performance & engagement, succession, executive talent acquisition, org effectiveness, change management |
| McKesson | CHRO (EVP) | Dec 2022–present | Enterprise-wide HR leadership across talent attraction, development, retention, D&I, transformation; reports to CEO |
| Walmart | Chief People Leader, Global Corporate Functions | Not disclosed | Collaborated with C-Suite on corporate transformation strategy |
| Accenture | Various HR leadership roles | Not disclosed | HR leadership experience across functions |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Walmart | Chief People Leader, Global Corporate Functions | Not disclosed | Senior HR leadership role prior to McKesson |
| Accenture | HR leadership roles | Not disclosed | Earlier HR leadership positions |
Fixed Compensation
Multi-year cash compensation and bonus outcomes for Smith (fiscal years end March 31):
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | 515,083 | 635,418 | 658,750 |
| Target Bonus % (MIP as % of salary) | 67.25% (prorated) | — | 100% |
| Annual MIP Payout ($) | 676,177 | 724,377 | 783,913 |
| Bonus ($) | 100,000 (sign-on installment) | 100,000 (sign-on installment) | 0 |
| All Other Compensation ($) | 33,435 | 80,941 | 74,255 |
| Total Compensation ($) | 3,375,529 | 3,541,115 | 3,717,899 |
Sign-on cash award: $300,000 total (paid $100k at hire Apr-2021, $100k Apr-2022, $100k Apr-2023) .
Performance Compensation
FY 2025 Annual MIP – Metrics, Targets, Actuals and Payout
| Metric | Weight | Target | Actual Achievement | Contribution to Payout |
|---|---|---|---|---|
| Adjusted EPS | 50% | $33.01 | 132% | Drives valuation and shareholder expectations |
| Adjusted Operating Profit (AOP) | 25% | $5,610M | 114% | Rewards operational performance |
| Free Cash Flow (FCF) | 25% | Not disclosed | 100% | Rewards cash generation for growth/returns |
| Total MIP Payout | — | — | 119% | FY 2025 MIP earned 119% for Smith |
Long-Term Incentives – PSU Program (FY 2023–FY 2025)
| Component | Weight | Result | Payout Factor | Notes |
|---|---|---|---|---|
| Cumulative Adjusted EPS | 50% | $86.35 applied | 147% | Non-GAAP operational focus; aligns with guidance |
| Average ROIC | 25% | 24.03% | 96% | Emphasizes capital efficiency |
| rTSR (vs comparator group) | 25% | 93.33rd percentile | 200% | Capped at target if absolute TSR negative |
| Total PSU Payout | — | — | 148% | Three-year program with share delivery upon certification |
PSUs earned by Smith for FY 2023–FY 2025: 831 (pre-exec award in May 2022, EPS/ROIC only) and 3,050 (Feb 2023 CHRO promotion award), totaling 3,881 shares .
Long-Term Incentives – RSUs (FY 2025 and historical grants)
| Grant | Units (#) | Grant Value ($) | Grant FMV/Unit |
|---|---|---|---|
| FY 2025 RSUs (May 2024) | 1,594 | 880,510 | $552.39 |
| FY 2023 RSUs (May 2022 annual) | 1,948 | 700,272 | $328.80 |
| May 2022 non-officer retention RSUs | 913 | Not disclosed | $328.80 |
| May 2022 pre-exec annual RSUs | 426 | Not disclosed | $328.80 |
| Feb 2023 CHRO promotion RSUs | 1,522 | Not disclosed | $368.07 |
Vesting Schedule (Unvested RSUs as of 3/31/2025)
| Vest Date | Shares |
|---|---|
| May 21, 2025 | 531 |
| May 23, 2025 | 678 |
| May 24, 2025 | 447 |
| Feb 10, 2026 | 508 |
| May 21, 2026 | 531 |
| May 23, 2026 | 679 |
| May 21, 2027 | 532 |
Stock vested in FY 2025: 3,843 shares; value realized $2,158,092; dividend equivalents paid $7,558 .
Equity Ownership & Alignment
- Beneficial ownership: 2,800 shares (<1% of class) as of May 28, 2025; shares outstanding were 125,104,722 .
- Unvested RSUs: 3,906 units; unearned PSUs (in-flight): 14,031 units (threshold disclosure) as of 3/31/2025; market values based on $672.99 closing price .
- Stock ownership guideline: 3x base salary; Smith is at 5.0x ($3,336,011 value) and in compliance as of 3/31/2025 .
- Anti-hedging and anti-pledging: hedging and pledging of Company securities is prohibited for directors and executive officers .
- Equity plan design: annual PSUs with three-year performance; RSUs vest over three years; stock options discontinued .
Employment Terms
- Executive Severance Policy: minimum 12 months’ base salary plus one month per year of service up to 24 months, paid as salary continuation; benefits subject to restrictive covenants and clawback; “Cause” definitions govern forfeitures .
- Change-in-Control (CIC) Policy: double-trigger vesting; tier-one cash benefit equal to 2.99x “Earnings” (base salary + greater of target MIP or average of prior 3-year MIPs); COBRA premiums for three years; excise tax gross-ups eliminated (payments reduced if beneficial to participant) .
Potential Payments Upon Termination (as of 3/31/2025)
| Scenario | Salary Continuation / Severance ($) | MIP ($) | Value of Stock Vesting ($) | Medical ($) | Total ($) |
|---|---|---|---|---|---|
| Death or Disability | — | 783,913 | 7,013,231 | — | 7,797,144 |
| Termination for Cause | — | — | — | — | — |
| Voluntary Termination | — | — | — | — | — |
| Involuntary Termination (non-CIC) | 834,054 | 783,913 | 2,931,545 | — | 4,549,512 |
| Involuntary Termination in Connection with CIC | 4,057,157 | 783,913 | 8,656,000 | 76,699 | 13,573,769 |
Valuations used $672.99 closing price on March 31, 2025 .
Compensation Structure Notes and Governance
- FY 2025 target direct compensation for Smith: base $663,000, MIP target $663,000 (100% of salary), PSUs $1,320,471, RSUs $880,510; total target $3,526,981 .
- Pay-for-performance: committee reaffirmed program for FY 2025 based on shareholder feedback; mix emphasizes variable pay; MIP/PSU metrics tied to Adjusted EPS, AOP, FCF, ROIC, and rTSR with rigorous targets and caps .
- Clawback policies: compensation recoupment policies (including reputational harm triggers) incorporated in incentive plans .
- Perquisites (FY 2025): 401(k) match $13,800; SRSP match $41,525; financial counseling $18,930; total other comp $74,255 .
Compensation Peer Group – rTSR Comparator (FY 2023–FY 2025)
| Comparator Companies |
|---|
| Cencora (COR); Cardinal Health (CAH); CVS Health (CVS); Elevance Health (ELV); Cigna (CI); Henry Schein (HSIC); Johnson & Johnson (JNJ); Kroger (KR); Owens & Minor (OMI); Pfizer (PFE); Sanofi (SNY); Teva (TEVA); UnitedHealth Group (UNH); Viatris (VTRS); Walgreens Boots Alliance (WBA) |
Additional Governance and Committee Context
- Compensation and Talent Committee members (FY 2025): Donald R. Knauss, Richard H. Carmona, M.D., Julie L. Gerberding, M.D., M.P.H., James H. Hinton, Kathleen Wilson-Thompson; all independent .
- CHRO role in governance: Smith attends committee meetings to provide perspective on compensation matters .
- Best practices: double-trigger CIC vesting; robust ownership guidelines; no option repricing; no excise tax gross-ups on CIC; mitigates undue risk-taking through plan design .
Investment Implications
- Alignment: Smith’s pay is predominantly at risk via MIP and 60% PSUs with multi-year metrics; FY 2025 MIP payout at 119% and FY 2023–FY 2025 PSU payout at 148% reflect strong linkage to Adjusted EPS, ROIC, and rTSR—positive for incentives aligned to shareholder returns .
- Retention and selling pressure: Upcoming RSU vests in May 2025/2026/2027 and Feb 2026, plus continued PSU cycles, create predictable liquidity windows; the 75% post-tax hold requirement until guideline compliance and anti-hedging/pledging policies reduce near-term selling pressure risk .
- Ownership and skin-in-the-game: Smith meets/exceeds 3x salary ownership requirement at 5.0x, with beneficial ownership and substantial unvested/equity-incentive exposure, indicating ongoing alignment with shareholders .
- Change-in-control economics: Standard double-trigger vesting and 2.99x CIC cash multiple (no gross-ups) balance retention with shareholder protections; potential CIC payout for Smith is ~$13.6M based on FY 2025 values, implying adequate retention in strategic scenarios .