The McKesson Board Battle

Tickers in this article: HPQ MCK
NEW YORK (TheStreet) -- This reads like another page from the annals of what makes publicly traded companies tough to govern. When the shareholders (or a group of them) get fed up, the feathers can really start flying.

That's apparently what's going on at McKesson , a company as old as the hills.

According to the company's historians, "Over the past 180+ years we have played a fundamental role in helping to shape the design and direction of health care: helping to set standards for the health care supply chain and playing a large role in our industry's technology revolution."

Now the company faces another historical showdown. A rather powerful union investment group is opposing the reelection of MCK's chairman and two other board directors. Among other complaints -- CtW Investment Group, which represents this investors group, says the chairman and CEO is paid too much.

They also claim Chairman and CEO John Hammergren has ignored a directive from a shareholder advisory vote calling for his dual roles to be split in two. The union investment group doesn't want two other board members who head the compensation and governance committees to be re-elected either.

You may recall that CtW was the group that led a campaign earlier this year that opposed Hammergren's outside activity as a longtime director of Hewlett-Packard . It led to his eventual resignation from the HPQ board of directors.

CtW, a group representing the labor federation Change to Win, advises union pension funds. CtW said recently that its fund owns a total of 1.4 million of MCK shares. MCK has about 228.5 million shares outstanding and a market cap of nearly $26 billion.

As the one-year chart below illustrates, it has been a banner year for MCK shares even though its dividend of 80 cents per share offers a paltry yield of only 0.70%. Not exactly what you'd call "shareholder-friendly."

MCK ChartMCK data by YCharts