UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.     )

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McKESSON CORPORATION

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A LETTER FROM OUR INDEPENDENT CHAIR

  June 9, 2022   Dear Fellow Shareholders,   On behalf of the entire Board, I thank you for your continued investment in McKesson and the confidence you place in this Board to oversee your interests in our Company. As directors, we play a key role in overseeing our Company’s culture, setting the tone at the top and ensuring a continued focus on our mission of improving care in every setting — one product, one partner, one patient at a time. Over the last year, we have made significant changes to the leadership structure and composition of our Board. Following a planned transition led by former Independent Chair Edward A. Mueller, the Board elected me Independent Chair of the Board as of April 1, 2022. We thank Mr. Mueller for his years of steady leadership and invaluable contributions as the chair of our Board. I am excited to collaborate with my fellow Board members, our CEO, Brian Tyler, and our talented management team as we all work to deliver shareholder value and execute against priorities to drive growth at McKesson.   As we approach the 2022 Annual Meeting, I would like to share an update on some of the key aspects of the Board’s work over the last year:

Executing on Our Strategic Priorities

Supporting the development of our Company’s strategy and overseeing its execution is our Board’s most critical function. As a Board, we are proud that our Company has developed a clear enterprise strategy, centered around a set of four company priorities. First, we are focused on our people and culture, building a strong and talented team anchored by our I²CARE values (integrity, inclusion, customer-first, accountability, respect and excellence). Our second priority is to drive sustainable growth in our core pharmaceutical and medical distribution businesses and enhance our ability to compete as the partner of choice for hospitals, health systems and pharmacies of all sizes. Third, we are streamlining the portfolio by maximizing the organization’s operational efficiency and focusing our resources on the highest growth opportunities. Our final priority is to expand our oncology and biopharma ecosystems. By leveraging our differentiated assets and capabilities, we are developing innovative solutions and services that solve complicated healthcare problems and improve patients’ lives. As we reflect on FY 2022, our financial results are a strong testament to the significant progress against our Company priorities and our transformation to a diversified healthcare services company. McKesson continues to rise to the challenge and meet the evolving demands of our customers and partners. Page 2 of this proxy statement provides highlights of some of our more significant financial and strategic accomplishments.

Commitment to Board and Committee Refreshment

As Independent Chair, I recognize that thoughtful and ongoing attention to Board composition is an important part of my role — and that of the Governance Committee — as we seek to ensure an appropriate mix of tenure and expertise that provides a balance of fresh perspectives and significant institutional knowledge. Since our last annual meeting, we appointed Richard H. Carmona, James H. Hinton, Kathleen Wilson-Thompson and W. Roy Dunbar to the Board. Our new directors’ deep expertise in healthcare, technology and environmental, social and governance (ESG) matters is particularly valuable as we build on our commitment to positively impact healthcare for all as a diversified healthcare services company. We also refreshed the composition of all five board committees. As part of this, in addition to refreshing the members within each committee, we have appointed Maria N. Martinez as Chair of the Governance Committee, Susan R. Salka as Chair of the Finance Committee and Linda P. Mantia as Chair of the Compensation Committee.

Consistent with our commitment to thoughtful governance, we continually assess our policies and structures to incorporate best practices. Last year we committed to establishing science-based greenhouse gas emissions targets that are intended to meet the standards of the Science Based Targets initiative. We also implemented a policy, beginning this year, requiring directors with a tenure of more than 12 years to offer to resign from Board service annually. If the Board were to decide that the Company’s and its shareholders’ interests are best served by rejecting a resignation offer, the Board would disclose its rationale.

Holistic Approach to ESG Matters

McKesson takes a holistic approach to ESG matters. Earlier this year, we created an executive steering committee comprised of our Chief Impact Officer, Chief Human Resources Officer, Chief Financial Officer and Chief Legal Officer to focus on the implications of ESG across the enterprise, and in May 2022, our Board approved charter amendments to rename our Governance and Sustainability Committee and Compensation and Talent Committee (formerly, Governance Committee and Compensation Committee, respectively) to refine their oversight of ESG matters. As part of this oversight, the Governance and Sustainability Committee’s charter expressly provides for an annual review of McKesson’s sustainability and ESG strategy. Similarly, the Compensation and Talent Committee’s charter expressly provides for its oversight of talent development, employee engagement, culture and diversity, equity, and inclusion (DEI). The Company’s Corporate Governance Guidelines were also revised to provide for coordination amongst the Board and its committees to help manage overlapping oversight responsibilities.

We continue to make DEI integral to everything we do at McKesson. As we consider the importance of DEI at our Company, we have set forth public goals to increase representation of women (across North America) and people of color (across the U.S.) amongst our leadership ranks by 20% in 2025, as compared to FY 2021. We are also investing in a culture where we want everyone to feel a sense of belonging and passion to build a rewarding, dynamic career. We are proud to have launched “Leading Inclusively” for all our people leaders, an interactive session that encourages inclusive behavior and tactics to build a team culture. We also launched “Ignite Inclusion” to help all our employees improve their understanding of inclusion, identify tactics that lead to belonging, and teach ways to address bias in the workplace.

Global Actions to Support COVID-19 Vaccination Efforts

As the COVID-19 pandemic has continued to present challenges, the Board and management have been collaborating to help ensure the stability of our critical services to our customers while protecting our employees. Our purpose of advancing health outcomes for all has been magnified throughout this pandemic. Between operating as the U.S. government’s centralized distributor for certain COVID-19 vaccines and assembling ancillary supply kits needed to administer the vaccines, our response has spanned multiple disciplines across our enterprise.

This critical work highlights the important role McKesson plays in the health care supply chain and the depth of our expertise. The Board is proud to see that our global approach to supporting vaccine efforts and addressing the pandemic has been consistent with our vision to improve care in every setting. We believe that McKesson will continue to be part of the recovery, serving our customers, partners and patients every step of the way.

Approach to Risk Oversight

We take our role in risk oversight seriously, including on matters related to controlled substances. Our Board works with management to establish and communicate the right ethical tone, which is designed to guide our conduct and helps protect the Company’s reputation. Further, the entire Board and its committees seek to understand and review our corporate risks — including oversight of matters such as reputation, legal reporting risk, compensation practices and cyber.

One area in particular that we continue to prioritize is our effort to help communities’ prevent and reduce opioid use disorder, in partnership with the national, independent Foundation for Opioid Response Efforts (FORE^®). Over the years, FORE has funded several projects to expand access to treatment and recovery services for underserved populations, including people of color, those in rural and tribal communities, and those involved with the criminal justice system. We are focused on making progress on these initiatives and our proactive policy work, as well as continuing to enhance our Controlled Substances Monitoring Program (CSMP) to address changing needs. In July 2021, the Company announced that it, along with two other national distributors, had negotiated a settlement that would resolve the substantial majority of opioid lawsuits filed by states and local governments. We believe that this settlement is in the best interests of our shareholders and is an important step toward delivering meaningful relief to affected communities across the United States.

We Ask for Your Support

On behalf of the Board, I thank McKesson’s investors for regularly engaging with the Company and sharing their valuable perspectives on what we are doing well and how we can continue to improve. As part of our year-long, robust outreach and engagement program, we spoke with many of our investors on topics including Board composition and refreshment, sustainability, human capital management, human rights oversight, our executive compensation program, our CSMP and COVID-19 efforts. We look forward to hearing your views at this year’s annual meeting and in the years to come.

We value the trust you place in us through your investment in McKesson. Your board members appreciate the opportunity to serve McKesson on your behalf in 2022 and beyond, and we will continue our focus on the sustainable and long-term growth of the Company. Your vote is very important to us. We strongly encourage you to read both our proxy statement and annual report in their entirety prior to the Annual Meeting on July 22, 2022, and request that you support our voting recommendations.

Donald R. Knauss

Independent Chair

Notice of 2022 Annual Meeting of Shareholders

To be Held on July 22, 2022

The 2022 Annual Meeting of Shareholders (Annual Meeting) will be held on July 22, 2022 at 8:30 a.m. Central Daylight Time, solely by means of remote communication. You will be able to attend the Annual Meeting online, vote, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/MCK2022 and entering the 16-digit control number included in our Notice Regarding the Availability of Proxy Materials, voting instructions form or proxy card. Online access to the audio webcast will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for you to log in and test the computer audio system.

ITEMS OF BUSINESS:

• Elect for a one-year term a slate of 11 directors as nominated by the Board of Directors;

• Ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2023;

• Conduct a non-binding advisory vote on executive compensation;

• Approve our 2022 Stock Plan;

• Approve an Amendment to our 2000 Employee Stock Purchase Plan;

• Vote on 2 shareholder proposals, if properly presented; and

• Conduct such other business as may properly be brought before the meeting.

Shareholders of record at the close of business on May 27, 2022 are entitled to notice of and to vote at the meeting or any adjournment or postponement of the meeting.

June 9, 2022

By Order of the Board of Directors

Saralisa C. Brau

Corporate Secretary and

Assistant General Counsel

On or about June 9, 2022, we began delivering proxy materials to all shareholders of record at the close of business on May 27, 2022. The mailing address of our principal executive offices is McKesson Corporation, 6555 State Highway 161, Irving, Texas 75039.

Vote via Internet	Call Toll-Free	Vote by Mail	Vote at Meeting
www.proxyvote.com or visit the URL located on your proxy card	Call the phone number located at the top of your proxy card	Follow the instructions on your proxy card	Join our Annual Meeting at www.virtualshareholdermeeting.com/MCK2022

TABLE OF CONTENTS

Proxy Summary			1
Item 1.	Election of Directors		10
		Nominees	10
		The Board, Committees and Meetings	16
		Corporate Governance	19
		Director Compensation	24
Item 2.	Ratification of Appointment of Deloitte  & Touche LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2023		27
		Audit Committee Report	28
Principal Shareholders			29
		Security Ownership of Certain Beneficial Owners	29
		Security Ownership of Directors and Executive Officers	30
Executive Compensation			31
		Compensation Discussion and Analysis	32
		Compensation Committee Report on Executive Compensation	51
		Compensation Committee Interlocks and Insider Participation	51
		2022 Summary Compensation Table	52
		2022 Grants of Plan-Based Awards Table	54
		2022 Outstanding Equity Awards Table	55
		2022 Option Exercises and Stock Vested Table	56
		2022 Nonqualified Deferred Compensation Table	57
		Executive Severance Policies	59
		Potential Payments upon Termination or Change in Control	60
		CEO Pay Ratio	62
Item 3.	Advisory Vote on Executive Compensation		63
Item 4.	Approval of our 2022 Stock Plan		64
Item 5.	Approval of Amendment to our 2000 Employee Stock Purchase Plan		72
Item 6.	Shareholder Proposal on Special Shareholder Meeting Improvement		76
Item 7.	Shareholder Proposal on Transparency in Rule 10b5-1 Trading Policy		79
Annual Meeting Information			82
Appendix A	Supplemental Information: GAAP to Non-GAAP Reconciliation		A-1
Appendix B	2022 Stock Plan		B-1
Appendix C	2000 Employee Stock Purchase Plan		C-1

PROXY SUMMARY

This summary highlights certain information in this proxy statement and does not contain all the information you should consider in voting your shares. Please refer to the complete proxy statement and our annual report prior to voting at the Annual Meeting of Shareholders to be held on July 22, 2022.

Meeting Information

2022 Annual Meeting of Shareholders
Date and Time	Friday, July 22, 2022 | 8:30 a.m. Central Daylight Time
Location	This year’s Annual Meeting will be held virtually. Shareholders of record as of the record
date will be able to attend and participate in the Annual Meeting online at www.virtualshareholdermeeting.com/MCK2022.
Record Date	May 27, 2022

Voting Items

	Items	Your Board’s Recommendation
1	Election of 11 Directors for a One Year Term (see page 10)	FOR
	Diverse slate of Directors with broad and relevant leadership and profession. Ten out of eleven nominees are independent.
2	Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2023 (see page 27)	FOR
	Deloitte & Touche LLP is an independent accounting firm with the breadth of expertise and knowledge necessary to audit our company.
3	Advisory Vote on Executive Compensation (see page 63)	FOR
	Our executive compensation program is the result of thorough Compensation Committee review, continues to emphasize pay for performance, and reflects shareholder feedback.
4	Approval of our 2022 Stock Plan (see page 64)	FOR
	Approval of the 2022 Stock Plan will enable the Company to continue to provide stock-based compensation to our employees and non-employee directors.
5	Approval of Amendment to our 2000 Employee Stock Purchase Plan (see page 72)	FOR
	Approval of the amendment to the ESPP enable the Company to continue to offer the plan to a broad-based employee population.
6	Shareholder Proposal on Special Shareholder Meeting Improvement (see page 76)	AGAINST
	Lower than the ownership threshold set at most S&P 500 companies with a special meeting right, a 15% ownership threshold effectively balances our shareholders’ ability to act on important matters and concerns to protect the Company and its shareholders from small groups with special interests.
7	Shareholder Proposal on Transparency in Rule 10b5-1 Trading Policy (see page 79)	AGAINST
	McKesson has robust processes and procedures for monitoring executive trading and the proposed policy would subject the Company to reporting requirements not required of other public companies.

 - 2022 Proxy Statement   1

             PROXY SUMMARY             

The Foundation of McKesson

McKesson Corporation is a diversified healthcare services leader. We partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products and services to help make quality care more accessible and affordable. The foundation of our company is focused on addressing the changing needs of our customers, their patients, and the broader healthcare industry. We developed a clear enterprise strategy centered around a set of four company priorities:

Focus on People and Culture

Everything we do starts with our talent – especially our leaders. Our strong focus is centered in a cultural foundation, which starts with our purpose, advancing health outcomes for all. And it includes our vision, to improve care in every setting – one product, one partner, one patient at a time. Our culture is also anchored in our I²CARE values: integrity, inclusion, customer-first, accountability, respect and excellence.

Sustainable Core Growth

Our operational excellence and ability to leverage our scale and distribution expertise is one of the many reasons why McKesson continues to be the partner of choice for hospitals, health systems and pharmacies of all sizes.

Streamline the Portfolio

We are focused on unlocking more innovation, more speed and improving focus of the organization by maximizing the organization’s operational efficiency and focusing our resources on the highest growth opportunities.

Expand Oncology and Biopharma Ecosystems

We are building integrated ecosystems that leverage our differentiated assets and capabilities. We continue to develop innovative solutions and services that solve complicated healthcare problems and improve patients’ lives.

Fiscal Year 2022 Highlights                

Our results are a testament to McKesson’s ability to execute during challenging times, and speak to the dedication of our people, the resilience of our business, and the important leadership role McKesson plays in the healthcare supply chain:

• Full-year total revenues of $264.0 billion, an increase of 11%;

• Full-year operating cash flow of $4.4 billion and free cash flow of $3.9 billion;

• Returned $3.8 billion of cash to shareholders, including $3.5 billion in share repurchases;

• Announced our strategic intent to exit from the European market and entered into agreements to sell operations in 10 of 12 countries;

• Continued to expand our differentiated Oncology and Biopharma ecosystems, further demonstrating significant progress against company priorities; and

• Played a leading role in the fight against COVID-19 and continued to support the U.S. Government as a centralized distributor of COVID-19 vaccines and ancillary supplies.

See Appendix A to this proxy statement for a reconciliation of free cash flow to the most directly comparable U.S. GAAP metrics.

2     - 2022 Proxy Statement

             PROXY SUMMARY             

Executing Our Corporate Responsibility

Our Board’s goal is to build long-term value for the Company’s shareholders and strengthen the vitality of the Company for its employees, customers, suppliers and other stakeholders that depend on McKesson. To help achieve this goal, the Board continues to monitor the Company’s overall performance with respect to certain environmental, social and governance (ESG) matters. In FY 2022, we created an executive steering committee comprised of our Chief Impact Officer, Chief Human Resources Officer, Chief Financial Officer and Chief Legal Officer to coordinate and focus ESG efforts across the enterprise. Our Board also approved amendments to the Governance Committee Charter and the Compensation Committee Charter in May 2022 to further strengthen oversight of ESG matters as highlighted in the table below:

ESG Oversight Responsibilities
Governance and Sustainability Committee (Governance Committee)	The committee’s new name reflects its responsibility to lead the oversight of certain ESG matters, including an annual review of the Company’s sustainability and ESG strategy. The committee continues to receive periodic updates from the Chief Impact Officer on ESG matters. The Chief Legal Officer and Corporate Secretary also provide updates on regulatory matters and corporate governance trends. The committee has first oversight of corporate governance, environmental, climate, and sustainability matters, among others.
Compensation and Talent Committee (Compensation Committee)	The committee’s expanded responsibilities include oversight of senior management succession planning and talent development, employee engagement, culture, and diversity, equity and inclusion matters, in coordination with the Board and other committees.
The Board also revised the Company’s Corporate Governance Guidelines (Guidelines) to provide for coordination between the Board and its committees to facilitate the execution of coinciding oversight responsibilities, among other matters. Please refer to page 19 of this proxy statement for additional corporate governance highlights and instructions for finding the charter governing each of the Board’s five standing committees, including the Governance and Sustainability Committee Charter and the Compensation and Talent Committee Charter.

Focus on People & Culture

With our I²CARE and ILEAD values as our anchor, our first priority is our people, our teams and our culture. Part of our focus on culture is our continued improvement in diversity and inclusion. While we are proud of our Board’s diversity, we also placed particular focus on hiring, developing and promoting what we call a best talent strategy at McKesson. We invest heavily in employee growth and development and provide regular feedback and training to our employees. For example, we have implemented employee development programs, including Amplify, a program designed specifically for McKesson’s high potential talent, and Women in Leadership. These programs include training and coaching, and support not only the careers of future leaders, but also employees in their organizations. The health and safety of our employees also remains critical in our day-to-day work, and we are deeply committed to supporting our team and their families through various initiatives, including our first-ever day of wellness — “Your Day, Your Way” — giving employees a special day off to relax and recharge.

Our employees lead 10 employee resource groups, offering opportunities to make authentic connections, showcase leadership skills and create a positive impact. Recently, we were recognized as one of the best places to work for LGBTQ+ equality for the ninth year in a row. McKesson previously stated that by 2025, we would strive to increase representation of women across North America and people of color across the United States amongst our VP+ leadership ranks, each by 20% as compared to FY 2021. The Company remains committed to these aspirational goals and we are encouraged that progress is on track. At March 31, 2022, women and people of color represented the following:

Metric(1)	McKesson Overall		McKesson Leadership(2)
Women(3)		64%		46%
People of Color(4) (5)		47%		22%

(1) The data for our metrics is derived from our voluntary self-identification process as of March 31, 2022 and therefore represents our best estimate at this time. For fiscal year 2021, our metrics did not include our employees related to The U.S. Oncology Network as the data was not available.

(2) Represents our leadership at the vice president level and above.

(3) Represents worldwide employees. In North America, women represent 60% of “McKesson Overall” and 48% of “McKesson Leadership.”

(4) Represents U.S. employees only because the data for Canada and Europe is not available.

(5) People of Color includes the following races and ethnicities: American Indian or Alaska Native, Asian, Black or African American, Hispanic or Latino, Native Hawaiian or Other Pacific Islander, or Two or More Races.

 - 2022 Proxy Statement   3

             PROXY SUMMARY             

Protecting the Planet

In FY 2022, McKesson committed to set science-based targets for scope 1, 2 and 3 greenhouse gas (GHG) emissions that are intended to meet the standards of the Science Based Targets initiative (SBTi). We anticipate that SBTi will begin the validation process later this calendar year. We will publish a report within 90 days of receiving validation by SBTi that describes the validated targets and objectives and strategies on GHG reduction, renewable energy, and energy efficiency.

Investing in Local Communities

During FY 2022, our employees volunteered more than 26,500 hours, supported 30 projects as part of McKesson’s annual Community Days volunteer event and logged the ‘Most Accrued Distance’ in the American Cancer Society’s Fit2Be Cancer Free Challenge. Our General Counsel Organization also made a meaningful impact through its volunteer and pro bono efforts by supporting a myriad of events and activities near office locations in the Dallas Metro Area, the Atlanta Metro Area, and beyond.

Additionally, the McKesson Foundation, a 501(c)(3) corporate entity (Foundation), continued to support our employees and their communities disbursing nearly $4.5 million to support three focus areas: Reducing the Burden of Cancer; Diversifying the Healthcare Talent Pipeline; and Accelerating Disaster Relief and Improving Emergency Preparedness. In FY 2022, the Foundation’s donations included:

• $1.4M to nonprofit organizations working to reduce the burden of cancer and diversify the healthcare talent pipeline;

• $900K to charitable organizations working to accelerate disaster relief and improve emergency preparedness, including food banks striving to mitigate rising food insecurity during the COVID-19 pandemic;

• $1.1M in matching gifts by employees to benefit more than 1,700 charities selected by them; and

• $286K in recognition of employees’ nonprofit volunteer and board service activities.

McKesson also remains committed to help fight the opioid crisis. Earlier this year, McKesson and other distributors announced a comprehensive agreement to settle the vast majority of the opioid lawsuits filed by state and local governmental entities against them. This settlement will provide thousands of communities across the U.S. with up to approximately $19.5 billion over 18 years.

We believe this proposed settlement is an important step toward delivering meaningful relief to communities across the U.S. We are committed to work and engage with others who share our dedication to act with urgency to address the opioid epidemic, offer thoughtful public policy recommendations and support innovative programs and partnerships.

4     - 2022 Proxy Statement

             PROXY SUMMARY             

We Solicit Shareholder Feedback Year Round

Our Board believes proactive solicitation and consideration of shareholder feedback is critical to driving long-term growth and creating shareholder value. Our shareholder engagement program is a robust, year round process encompassing meetings held throughout the year with shareholders during which we encourage ongoing, meaningful dialogue about the issues they find most important. We report shareholder feedback regularly to our Board.

Our Board reviews our annual meeting results, ongoing shareholder feedback and corporate governance and compensation trends to help drive and develop our shareholder engagement priorities.

Scope of Outreach and Key Topics

Since our 2021 Annual Meeting, we proactively reached out to shareholders representing almost 62% of our outstanding common stock and engaged with shareholders representing nearly 40% of our outstanding common stock. Our current Independent Chair led an engagement regarding the Board’s oversight of human rights risk. Other topics discussed with our shareholders included:

• Board Oversight, Refreshment & Diversity

• COVID-19 Response Efforts

• Sustainability and ESG

• Pay for Performance Alignment

• Human Capital Management

• Controlled Substances Monitoring Program Developments

• Lobbying Expenditures and Activities

• Corporate Governance Practices and Policies

Moreover, our Chief Executive Officer, Chief Financial Officer, and Investor Relations team hosted an Investor Day event and attended six healthcare conferences in FY 2022 together with other members of Team McKesson to discuss the Company’s strategic priorities and other topics.

 - 2022 Proxy Statement   5

             PROXY SUMMARY             

Executive Compensation Highlights

As discussed in detail under “Compensation Discussion and Analysis,” with the goal of building long-term value for our shareholders, we have developed an executive compensation program designed to strike the right balance of pay for performance; attracting and retaining an exceptionally talented executive team; and steering McKesson’s leadership to meet ambitious goals without taking undue risk.

The Compensation Committee continually evaluates our executive compensation program and results, considering the formulaic outcomes built into the program in the broader context of performance, shareholder feedback and other events. We were pleased to receive positive feedback from shareholders regarding our program over the past year, including at our 2021 Annual Meeting of Shareholders, where approximately 90% of votes cast were in favor of our say-on-pay proposal.

Under our executive team’s leadership, McKesson’s dedicated employees delivered outstanding performance, while playing a critical role in the COVID-19 vaccine distribution and kitting programs with the U.S. government. In FY 2022, we delivered adjusted operating results that exceeded our original expectations at the enterprise level and across all our business units. We focused on execution against our Company priorities, making solid progress on people and culture, delivering sustainable core growth, streamlining the businesses and continued advancement of our strategic growth pillars. McKesson’s accomplishments remain the foundation for McKesson’s future and our ability to continue creating long-term value for our shareholders.

FY 2022 Pay Elements and Performance Metrics

Our executive compensation program is predominantly performance-based, consisting of four primary compensation elements that each serve a unique purpose. The metrics below incentivize our executives to focus on operational objectives that are expected to drive shareholder value.

Pay Element	Performance Metric	Rationale	Target Pay
Base Salary	—	Attracts and retains high-performing executives by providing market-competitive fixed pay	—
Management Incentive Plan (annual cash incentive)	Adjusted EPS (50%)	Rewards operational performance and profitability; important driver of share price valuation and shareholder expectations	100% — 175% of Base Salary
	Adjusted Operating Profit (25%)	Rewards focus on operational performance and profitability; important driver of share price valuation and shareholder expectations
	Free Cash Flow (25%)	Rewards generating cash to invest in growth and return of capital to shareholders; important valuation metric
Performance Stock Units (long-term equity incentive)	3-Year Cumulative Adjusted EPS (50%)	Measures long-term earnings power, drives long-term returns for the Company and directly correlates to share price performance	60% of Target LTI Value
	3-Year Average ROIC (25%)	Encourages leaders to make sound investments that generate returns for shareholders; important valuation metric
	MCK TSR vs. Comparator Group (25%)	Rewards share price performance relative to comparator group over time
Restricted Stock Units (long-term equity)	—	Directly aligns with value delivered to shareholders	40% of Target LTI Value

6     - 2022 Proxy Statement

             PROXY SUMMARY             

Director Nominees and Our Approach to Governance

Our director nominees exhibit a mix of skills, experience, backgrounds and perspectives. Additional information about each director’s experience and qualifications can be found beginning on page 10 of this proxy statement.

	Name	Age		Director Since		Independent	Current Committee Memberships	Other Public Company Boards
	Richard H. Carmona, M.D. Chief of Health Innovations of Canyon Ranch Inc. and 17th Surgeon General of the United States		72		2021	✓	• Compensation • Compliance	• The Clorox Company • Herbalife Nutrition Ltd. • Better Therapeutics, Inc.
	Dominic J. Caruso Retired EVP & CFO, Johnson & Johnson		64		2018	✓	• Audit (Chair) • Compliance	• Kyndryl Holdings, Inc.
	W. Roy Dunbar Retired CEO and Chairman, Network Solutions, LLC		61		2022	✓	• Audit • Governance	• SiteOne Landscape Supply, Inc. • Johnson Controls International plc • Duke Energy Corp.
	James H. Hinton Operating Partner, Welsh Carson Anderson & Stowe		63		2022	✓	• Compliance • Finance	None
	Donald R. Knauss Retired Chairman & CEO, The Clorox Company		71		2014	✓	• Compensation • Finance	• Kellogg Company • Target Corporation
	Bradley E. Lerman Retired SVP, General Counsel & Corporate Secretary, Medtronic plc		65		2018	✓	• Audit • Compliance (Chair)	None
	Linda P. Mantia Retired SEVP & COO, Manulife Financial Corporation		53		2020	✓	• Compensation (Chair) • Governance	• Ceridian HCM Holding Inc.
	Maria Martinez EVP & COO, Cisco Systems, Inc.		64		2019	✓	• Finance • Governance (Chair)	• Cue Health Inc.
	Susan R. Salka CEO & President, AMN Healthcare Services, Inc.		57		2014	✓	• Audit • Finance (Chair)	• AMN Healthcare Services, Inc.
	Brian S. Tyler CEO, McKesson Corporation		55		2019			• Republic Services, Inc.
	Kathleen Wilson-Thompson Retired EVP & Global CHRO, Walgreens Boots Alliance, Inc.		64		2022	✓	• Compensation • Governance	• Tesla, Inc • Wolverine World Wide, Inc.

Diversity   5 out of 11 director nominees are women or persons of color   Independent Directors   10 out of 11 director nominees are independent Board Refreshment   At least 1 new director joined our Board each year since 2018

 - 2022 Proxy Statement   7

             PROXY SUMMARY             

Diverse Skills, Experiences and Qualifications

The skills matrix below identifies our director nominees’ prominent experiences and qualifications by name. Each director nominee brings his or her own unique background and range of expertise, knowledge and experience which provides an appropriate and diverse mix of qualifications necessary for our Board to effectively fulfill its oversight responsibilities. By its nature, the information contained in this summary is not intended to be exhaustive, however, it aims to convey the general breadth of experience and qualifications that our director nominees bring to their work on the McKesson Board of Directors to oversee strategy, performance, culture and risk at the Company.

Board Skills

6 Directors with Risk Management & Compliance Experience 8 Directors with Healthcare Industry Experience 4 Directors with Sustainability and ESG Experience

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Risk Management and Compliance

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Additional Diversity Highlights

Persons of Color	Women	Country Location Outside of U.S.	Veteran Status
3	4	1	2
- two Black/African-American and one Hispanic -	- three of whom chair a Board committee -	- one director based in Canada -	- two directors served in the U.S. military -

8     - 2022 Proxy Statement

             PROXY SUMMARY             

Governance Highlights

Board and Committee refreshment. Don Knauss serves as the Board’s Independent Chair, effective April 1, 2022. Four independent directors joined our Board in the last year. Rich Carmona was appointed to the Board effective, September 6, 2021. Jim Hinton and Kathleen Wilson-Thompson were appointed to our Board effective January 13, 2022. Roy Dunbar was appointed to our Board effective, April 1, 2022. Ed Mueller will not stand for reelection at the 2022 Annual Meeting. In FY 2022, Linda Mantia, Maria Martinez and Susan Salka were appointed to serve as Chair of the Compensation, Governance and Finance committees, respectively.

This year we also adopted a modified tenure policy, which will contribute to our continual board refreshment and succession planning. The policy requires directors with a tenure of more than 12 years to offer their resignation from Board service annually. If the Board were to decide it is in the best interests of the Company and its shareholders to not accept a resignation offer, the Board would disclose its rationale.

Other leading corporate governance practices. Below we highlight some of the key features of our corporate governance practices:

Shareholder Rights	Board of Directors	Corporate Governance
•   Proxy access •   Meaningful right to call special meeting of shareholders (15% ownership threshold) •   No supermajority vote provisions	•   Separate CEO/Chair roles •   Independent Board Chair •   10 of 11 director nominees are independent •   Regular executive sessions of independent directors •   Annual elections	•   Pay for performance alignment •   No poison pill •   Robust board and senior management succession planning process

Please see the section entitled “Corporate Governance” on page 19 of this proxy statement for more information on our corporate governance practices.

 - 2022 Proxy Statement   9

PROPOSALS TO BE VOTED ON

ITEM 1.   Election of Directors

There are 11 nominees for election to the Board of Directors of the Company. The directors elected at the 2022 Annual Meeting of Shareholders (Annual Meeting) will hold office until the 2023 Annual Meeting of Shareholders and until their successors have been elected and qualified, or until their earlier resignation, removal or death.

All nominees are current directors. Dominic Caruso, Don Knauss, Brad Lerman, Linda Mantia, Maria Martinez, Susan Salka and Brian Tyler were elected to the Board at the 2021 Annual Meeting of Shareholders. Rich Carmona was appointed to the Board effective September 6, 2021. Jim Hinton and Kathleen Wilson-Thompson were appointed to the Board effective January 13, 2022, and Roy Dunbar was appointed the Board effective April 1, 2022.

The Governance Committee has recommended the reelection of each nominee as a director at the Annual Meeting. Each nominee has informed the Board that he or she is willing to serve as a director. If any nominee should decline or become unable or unavailable to serve as a director for any reason, your proxy authorizes the persons named in the proxy to vote for a replacement nominee, or the Board may reduce its size.

The following section provides a brief description of the age, principal occupation, position and business experience, including other public company directorships, for at least the past five years and major affiliations of each of the nominees. Each nominee’s biographical information includes a description of the nominee’s experience, qualifications, attributes or skills that qualify the nominee to serve on the Company’s Board at this time.

Nominees

Your Board recommends a vote “FOR” each Nominee.

  Age: 72   Director since: 2021   Committees:   Compensation   Compliance   Director Qualification Highlights:   Public Health and
Healthcare Industry
Experience   Richard H. Carmona, M.D.   Chief of Health Innovations of Canyon Ranch Inc. and 17th Surgeon General of the United States   Dr. Carmona has served as chief of health innovations of Canyon Ranch Inc. since 2017. He has also served in several other executive roles since joining Canyon Ranch Inc. in 2006, including vice chairman, chief executive officer of the Canyon Ranch health division and president of the nonprofit Canyon Ranch Institute. Prior to Canyon Ranch, Dr. Carmona served as the 17th Surgeon General of the United States from 2002 through 2006, achieving the rank of Vice Admiral. Prior to serving as the Surgeon General, he was chairman of the State of Arizona Southern Regional Emergency Medical System, a professor of surgery, public health, and family and community medicine at the University of Arizona, and surgeon and deputy sheriff of the Pima County, Arizona Sheriff’s Department. He also served in the United States Army and the Army’s Special Forces and is a combat-decorated veteran. Dr. Carmona is a director of The Clorox Company, Herbalife Nutrition Ltd. and Better Therapeutics, Inc. He joined the board of directors of Axon Enterprise, Inc. in 2007, serving until he retired from that role effective May 20, 2022.   Skills & Qualifications: Dr. Carmona has gained valuable public company experience serving on public company boards and committees for the past 15 years. In addition, he brings hands-on experience in public health, clinical sciences and healthcare management. He is well-versed in the international and domestic legislative and policy aspects of the healthcare industry through his experience as the 17th U.S. Surgeon General and as the CEO of a hospital and health care system. Dr. Carmona brings insight into the Company’s mission to improve care in every setting.

10     - 2022 Proxy Statement

             ITEM 1. ELECTION OF DIRECTORS             

Age: 64 Director since: 2018 Committees: Audit (Chair) Compliance Director Qualification Highlights: Financial Expertise Risk Management and Controls

Dominic J. Caruso Retired Executive Vice President and Chief Financial Officer, Johnson & Johnson Mr. Caruso retired as executive vice president and chief financial officer of Johnson & Johnson, a manufacturer of medical devices, pharmaceutical and consumer packaged goods, in August 2018, having served in the role since 2007. He led the company’s financial and investor relations activities, as well as the procurement organization. Mr. Caruso joined Johnson & Johnson in October 1999 as chief financial officer for Centocor, Inc., upon the completion of the merger of Centocor and Johnson & Johnson. Prior to joining Centocor he had varied industry experiences with KPMG. Mr. Caruso is actively involved in government relations activities globally, including having served as co-chair of the U.S. Chamber of Commerce Global Initiative on Health and the Economy. He currently serves on the Board of Trustees of The Children’s Hospital of Philadelphia, the Cystic Fibrosis Foundation and is on the board of directors for Kyndryl Holdings, Inc. Skills & Qualifications: Mr. Caruso brings to the Board financial expertise and leadership, as well as a deep familiarity with investors’ perspectives, having previously served as an executive officer of a publicly traded healthcare company. With a focus on healthcare compliance throughout his career at Johnson & Johnson, Centocor, Inc. and KPMG, Mr. Caruso also brings experience in financial and compliance risk oversight.

Age: 61 Director since: 2022 Committees: Audit Governance Director Qualification Highlights: Technology Sustainability & ESG

W. Roy Dunbar Retired CEO and Chairman, Network Solutions, LLC Mr. Dunbar most recently served as chief executive officer and chairman at Network Solutions, LLC. From 2004 to 2008, he served as president of global technology and operations for MasterCard where he was responsible for its global payments platform and operations. Prior to that, he spent over a decade at Eli Lilly and Company where he served as president for the intercontinental region, vice president of information technology and chief information officer. In 2003, he was named CIO of the Year by Information Week. Mr. Dunbar graduated from Manchester University in the United Kingdom with a pharmacy degree and a master’s degree in business administration from Manchester Business School. He currently serves on the boards of SiteOne Landscape Supply, Inc., Johnson Controls International plc, and Duke Energy Corp. Mr. Dunbar served on the board of directors of Humana Inc. from 2005 to 2020. Skills & Qualifications: Mr. Dunbar brings to the Board experience in technology, operations and healthcare, as well as in the evolving areas of data governance and cybersecurity. He also brings additional expertise in sustainability and ESG matters to help guide the Company’s increasing focus on global impact initiatives. Mr. Dunbar has served in various executive capacities where he was accountable for international operations.

 - 2022 Proxy Statement   11

             ITEM 1. ELECTION OF DIRECTORS             

Age: 63 Director since: 2022 Committees: Compliance Finance Director Qualification Highlights: Healthcare Operations and Compliance

James H. Hinton Operating Partner, Welsh Carson Anderson & Stowe Mr. Hinton currently serves as an operating partner for the private equity firm Welsh Carson Anderson & Stowe. From 2017 through 2021, he served as the CEO of Baylor Scott & White Health, the largest not-for-profit health system in Texas and one of the largest in the U.S. Beginning in 1983, Mr. Hinton served for 21 years as president and CEO of not-for-profit Presbyterian Healthcare Services, New Mexico’s largest not-for-profit healthcare provider. During that time, he was a member of the American Hospital Association Board of Trustees and served as its Chair in 2014. Mr. Hinton holds a master’s degree in healthcare administration from Arizona State University and a bachelor’s degree in economics from the University of New Mexico. Skills & Qualifications: Mr. Hinton brings to the Board broad-based healthcare experience, including in all aspects of leading a complex healthcare services organization, as well as experience in healthcare operations and compliance. He also brings expertise into the development of integrated systems, adding value to the customer experience and affordability.

Age: 71 Director since: 2014 Committees: Compensation Finance Director Qualification Highlights: Human Capital Management Distribution/Supply Chain Experience

Donald R. Knauss Retired Chairman & Chief Executive Officer, The Clorox Company Mr. Knauss retired from the Clorox Company, a consumer goods company, in 2015, having served as executive chairman of the board from November 2014 until July 2015 and chairman and chief executive officer from October 2006 until November 2014. He was executive vice president of the Coca-Cola Company and president and chief operating officer for Coca-Cola North America from February 2004 until September 2006. Prior to his employment with The Coca-Cola Company, he held various positions in marketing and sales with PepsiCo, Inc. and Procter & Gamble and served as an officer in the United States Marine Corps. He currently serves as a director of the Kellogg Company and the Target Corporation. Mr. Knauss also serves as the chairman of the board of trustees for the University of San Diego. He was formerly a director of URS Corporation. Skills & Qualifications: Mr. Knauss brings to the Board substantial board leadership skills through his prior chairmanship role at The Clorox Company. He also brings substantial executive experience through which he has developed valuable operational insights and strategic and long-term planning capabilities, as well as extensive international business management and retail expertise, which includes experience in the retail pharmacy area. Mr. Knauss also has significant other public company board experience.

12     - 2022 Proxy Statement

             ITEM 1. ELECTION OF DIRECTORS             

  Age: 65   Director since: 2018   Committees:   Audit                   Compliance (Chair)   Director Qualification
Highlights:   Risk Management and Compliance   Healthcare Industry Experience   Bradley E. Lerman   Retired Senior Vice President, General Counsel and Corporate Secretary of Medtronic plc   Mr. Lerman retired as the senior vice president, general counsel and corporate secretary of Medtronic plc in January 2022, having served in the role since May 2014. He led the company’s global legal, government affairs and ethics and compliance functions. Prior to Medtronic, Mr. Lerman served as executive vice president, general counsel and corporate secretary for the Federal National Mortgage Association (Fannie Mae). Prior to Fannie Mae, he served as senior vice president, associate general counsel and chief litigation counsel for Pfizer. Mr. Lerman also served as a litigation partner at Winston & Strawn LLP in Chicago and as an assistant U.S. attorney in the Northern District of Illinois. He received a law degree from Harvard Law School and his bachelor’s degree in economics from Yale University.   Skills & Qualifications: Mr. Lerman brings to the Board significant legal and regulatory expertise gained from years of large law firm practice and government positions with law enforcement responsibilities. He also brings a multilayered understanding of the healthcare industry and experience linking compliance and legal consideration with corporate strategy.

  Age: 53   Director since: 2020   Committees:   Compensation (Chair) Governance   Director Qualification Highlights:   Technology   Financial Expertise   Linda P. Mantia   Retired SEVP & COO, Manulife Financial Corporation   Ms. Mantia retired as senior executive vice president and chief operating officer of Manulife Financial Corporation (operating as John Hancock in the U.S.), an international insurance and financial services company, in 2019, having served in the role since 2016. She played a critical role in defining Manulife’s corporate strategy and oversaw its innovation portfolio and other corporate functions. Ms. Mantia has also served in a series of leadership roles at Royal Bank of Canada, a multinational financial services company, including executive vice president of Digital Banking, Payments and Cards. Earlier in her career, she worked at McKinsey & Co., and practiced law at Davies Ward Phillips & Vineberg LLP. Ms. Mantia also serves on the board of directors at Ceridian HCM Holding Inc. and serves on the advisory board of Verily Life Sciences. Additionally, Ms. Mantia is active in the Canadian community on the boards of Sunnybrook Health Sciences Centre and Canada’s Walk of Fame. She was formerly a director at MindBeacon Holdings, Inc. Ms. Mantia received a law degree from Queen’s University Faculty of Law and has been twice recognized as one of Canada’s Top 100 Most Powerful Women.   Skills & Qualifications: Ms. Mantia brings to the Board significant financial services, global payments, digital technology and corporate strategy experience. She also brings a multinational perspective to our Board.

 - 2022 Proxy Statement   13

             ITEM 1. ELECTION OF DIRECTORS             

  Age: 64   Director since: 2019   Committees:   Finance   Governance (Chair)   Director Qualification Highlights:   Technology   International Experience   Maria Martinez   Executive Vice President & Chief Operating Officer, Cisco Systems, Inc.   Ms. Martinez has served as executive vice president and chief operating officer since March 2021 and was executive vice president and chief experience officer from April 2018 until March 2021 at Cisco Systems, Inc. Prior to joining Cisco, Ms. Martinez served in a variety of senior executive roles at Salesforce, Inc., including president, Global Customer Success and Latin America from March 2016 to April 2018; president, Sales and Customer Success from February 2013 to March 2016; executive vice president and chief growth officer from February 2012 to February 2013; and executive vice president, Customers for Life from February 2010 to February 2012. Prior to joining Salesforce, she managed the global services business for Microsoft Corporation, including professional services and customer support for all products. Ms. Martinez has also held a number of other leadership positions at Motorola, Inc. and AT&T Inc., and served as chief executive officer of Embrace Networks, Inc. She also serves on the board of directors for Cue Health Inc. and the Silicon Valley Education Foundation. Ms. Martinez has received several distinctions for her leadership, most recently being ranked No. 2 on the ALPFA (Association for Latino Professionals for America) list of the 50 Most Powerful Latinas.   Skills & Qualifications: Ms. Martinez brings to our Board leadership experience at leading technology companies, which enhances the Board’s depth of experience in business and digital transformation. She also brings a global leadership perspective, as well as a focus on customer success and customer experience.

  Age: 57   Director since: 2014   Committees: Audit   Finance (Chair)   Director Qualification Highlights:   Human Capital Management   Financial Expertise   Susan R. Salka   Chief Executive Officer & President, AMN Healthcare Services, Inc.   Ms. Salka has served as chief executive officer and president of AMN Healthcare Services, Inc., a provider of healthcare workforce solutions and staffing services to healthcare facilities across the nation, since 2005, and a director of the company since 2003. Since joining AMN Healthcare Services Inc. in 1990, she has also served as chief operating officer, chief financial officer, and senior vice president of business development. Ms. Salka is passionately and actively involved in the areas of corporate social responsibility, diversity and inclusion, and gender equality. A member of Women Business Leaders and Women Corporate Directors Foundation, Ms. Salka is a proponent of promoting women in leadership. She was formerly a director of Beckman Coulter Inc. and Playtex Products. Ms. Salka currently serves on the editorial advisory board of Directors & Boards Magazine, a quarterly journal dedicated to the topics of leadership and corporate governance.   Skills & Qualifications: Ms. Salka brings to the Board a deep understanding of emerging trends in healthcare services, having over 30 years of experience in the healthcare industry. She also brings significant leadership experience through having served in several executive leadership positions, which have provided her with business management, operations, financial and long-range planning experience, and through her significant public company board service.

14     - 2022 Proxy Statement

             ITEM 1. ELECTION OF DIRECTORS             

  Age: 55   Director since: 2019   Director Qualification Highlights:   Business Transformation   International Experience   Brian S. Tyler   Chief Executive Officer, McKesson Corporation   Mr. Tyler has served as chief executive officer of McKesson Corporation since April 1, 2019 and previously served as the Company’s president and chief operating officer from August 2018 to March 2019. Mr. Tyler served as chairman of the Management Board of McKesson Europe AG from 2017 to 2018, president and chief operating officer McKesson Europe from 2016 to 2017, the Company’s president of North American Pharmaceutical Distribution and Services from 2015 to 2016, and as the Company’s executive vice president, corporate strategy and business development from 2012 to 2015. Mr. Tyler previously served in various other leadership roles in the Company, including as president of U.S. Pharmaceutical, president of McKesson Medical-Surgical, and president of McKesson Specialty Health. Mr. Tyler is a member of the board of directors of the International Federation of Pharmaceutical Wholesalers (IFPW) and a member of the IFPW Foundation board of directors. He is a member of the American Cancer Society’s CEOs Against Cancer group in the North Texas chapter. He has been a member of the board of directors of Republic Services since March 2021. Mr. Tyler earned his Ph.D. from the University of Chicago, Department of Economics specializing in industrial organization, labor economics and public finance/project evaluation.   Skills & Qualifications: Mr. Tyler brings more than 22 years of business and healthcare experience to the Board. As McKesson’s CEO and a long-time leader of McKesson’s businesses, Mr. Tyler has extensive knowledge of the Company’s culture and workforce, and its challenges and opportunities.

  Age: 64   Director since: 2022   Committees: Compensation   Governance   Director Qualification Highlights:   Healthcare Industry Sustainability & ESG   Kathleen Wilson-Thompson   Retired EVP & Global Chief Human Resource Officer, Walgreens Boots Alliance, Inc.   Ms. Wilson-Thompson served as executive vice president and global chief human resources officer of Walgreens Boots Alliance, Inc. from December 2014 to January 2021, after serving as senior vice president and chief human resources officer of Walgreens from January 2010 to December 2014. She served as senior vice president, global human resources from January 2010 to December 2014 at Kellogg Company, where she also served as chief labor and employment counsel. Ms. Wilson-Thompson earned an A.B. degree from the University of Michigan, and J.D. and LL.M. (Corporate and Finance Law) degrees from Wayne State University. She serves on the boards of Tesla, Inc. and Wolverine World Wide, Inc. Ms. Wilson-Thompson is also chair of the board of directors of the University of Michigan Alumni Association and a member of the board of trustees of the NAACP Foundation.   Skills & Qualifications: Ms. Wilson-Thompson brings to the Board more than a decade of senior executive level experience leading human resources and human capital management strategy at global healthcare companies. She also brings experience through her extensive board service at large public companies in the manufacturing and retail industries.

 - 2022 Proxy Statement   15

             ITEM 1. ELECTION OF DIRECTORS             

The Board, Committees and Meetings

The Board of Directors is the Company’s governing body with responsibility for oversight, counseling and direction of the Company’s management to serve the long-term interests of the Company and its shareholders. The Board’s goals are to build long-term value for the Company’s shareholders and to ensure the vitality of the Company for its customers, employees and other individuals and organizations that depend on the Company. To achieve its goal, the Board monitors both the performance of the Company and the performance of the Chief Executive Officer. The Board currently consists of twelve directors. After the 2022 Annual Meeting, if all nominees are elected, the Board will consist of eleven directors. Don Knauss serves as the Board’s Independent Chair, effective April 1, 2022. All of the directors during the time they served on the Board were, and the director nominees are, independent with the exception of Brian Tyler, the Company’s CEO.

The Board has five standing committees: the Audit Committee, Compensation Committee, Compliance Committee, Finance Committee, and Governance Committee. Each of these committees is governed by a written charter approved by the Board in compliance with the requirements of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE), where applicable. The charter of each committee is reviewed annually by that committee and the Board. Each member of our standing committees is independent, as determined by the Board, under the NYSE listing standards and the Company’s director independence standards. In addition, each member of the Audit Committee and Compensation Committee meets the additional, heightened independence criteria applicable to such committee members under the applicable rules. The members of each standing committee are appointed by the Board each year for a term of one year or until their successors are elected and qualified or their earlier resignation.

Board and Meeting Attendance

The Board met seven times during FY 2022. Each director attended at least 75% of the aggregate number of meetings of the Board and meetings of its committees during the period on which he or she served as a member of the Board and of such committees. The independent directors also met in executive session during FY 2022, as necessary. Directors meet their responsibilities not only by attending Board and committee meetings, but also through communication with senior management, independent accountants, advisors and consultants and others on matters affecting the Company. Directors are also expected to attend the upcoming virtual Annual Meeting. All directors then serving attended the 2021 Annual Meeting of Shareholders. The current membership of each standing committee and the number of committee meetings held during FY 2022 are identified in the section immediately below.

Committee Membership, Responsibilities and Other Information

As discussed under “Executing Our Corporate Responsibility” on page 3 of this proxy statement, our Board approved in May 2022 amendments to the Governance Committee Charter and the Compensation Committee Charter to address the oversight of certain ESG matters. The charter governing each of the Board’s five standing committees can be found at www.mckesson.com/investors/corporate-governance. We also refreshed the composition of those committees in May 2022, which are as follows:

Audit Committee

Current responsibilities include:

Current Members: Dominic J. Caruso*, Chair W. Roy Dunbar Bradley E. Lerman Susan S. Salka* Meetings in FY 2022: 10 (Includes 1 joint meeting with the Compliance Committee) All members are independent and financially literate *  designated as “audit committeefinancial expert”

•   Reviewing with management the interim and annual audited financial statements filed in the Quarterly Reports on Form 10-Q and Annual Report on Form 10-K, respectively, including any major issues regarding accounting principles and practices, critical audit matters, and the adequacy and effectiveness of internal controls over financial reporting that could significantly affect the Company’s financial statements •   Reviewing with management and the independent registered public accounting firm the interim and annual financial statements •   Appointing the independent accountants, monitoring their independence, evaluating their performance, and approving their fees •   Reviewing and overseeing the annual audit plan, including the scope of the audit activities of the independent accountants and performance of the Company’s internal audit function •   Assisting the Board with respect to its oversight of the Company’s policies and procedures regarding compliance with applicable laws and regulations

16     - 2022 Proxy Statement

             ITEM 1. ELECTION OF DIRECTORS             

Compensation Committee

Current responsibilities include:

Current Members: Linda P. Mantia, Chair Richard H. Carmona, M.D. Donald R. Knauss Edward A. Mueller Kathleen Wilson-Thompson Meetings in FY 2022: 5

•   Reviewing and overseeing the Company’s overall compensation philosophy and the development and implementation of compensation programs aligned with the Company’s business strategy •   Reviewing ESG matters relevant to the Committee’s oversight responsibilities, including succession planning and talent development, employee engagement, culture and DEI matters, in coordination with the Board and other committees •   Determining the structure and amount of all elements of executive officer compensation and benefits, including material perquisites, after consideration of management’s recommendation and in consultation with the committee’s independent compensation consultant •   Reviewing and making determinations regarding the adoption, administration, and amendments to all equity incentive plans for employees, and cash incentive plans for executive officers •   Evaluating the relationship between the incentives associated with Company plans and the level of risk-taking by executive officers in response to such incentives •   Participating with management in the preparation of the Compensation Discussion and Analysis for the Company’s proxy statement •   Evaluating the qualifications, performance and independence of its advisors

Compliance Committee

Current responsibilities include:

Current Members: Bradley E. Lerman, Chair Richard H. Carmona, M.D. Dominic J. Caruso James H. Hinton Meetings in FY 2022: 7 (includes 1 joint meeting with the Audit Committee)

•   Overseeing the Company’s compliance programs and policies relating to the Company’s principal legal and regulatory compliance risks •   Reviewing the Company’s approach to, and results of, risk identification, assessment and mitigation plans for the principal legal and regulatory compliance risks facing the Company •   Reviewing the Company’s compliance with laws and policies governing the distribution of controlled substances and reporting of suspicious orders •   Overseeing any significant complaints and other matters raised through the Company’s compliance reporting mechanisms that involve allegations relating to violations of non-compliance with the Controlled Substances Monitoring Program or distribution of opioids. •   Reviewing any significant government inquiries or investigations and other significant legal actions •   Receiving information about current and emerging legal and regulatory compliance risks and enforcement trends that may affect the Company’s business operations, performance or strategy •   Commissioning studies, surveys, reviews as appropriate to evaluate the Company’s compliance and quality of personnel/committees providing compliance •   Reviewing appointment, performance, compensation and replacement of the Company’s Chief Compliance Officer and the Senior Vice President of the Controlled Substances Monitoring Program

Finance Committee

Current responsibilities include:

Current Members: Susan R. Salka, Chair James H. Hinton Donald R. Knauss Maria N. Martinez Meetings in FY 2022: 5

•   Reviewing with management the long-range financial policies of the Company •   Providing advice and counsel to management on the financial aspects of significant acquisitions and divestitures, major capital commitments, proposed financings and other significant financial transactions •   Reviewing with management significant changes in the capital structure of the Company •   Reviewing tax policy utilized by management and the funding status and investment policies of the Company’s tax-qualified retirement plans

 - 2022 Proxy Statement   17

             ITEM 1. ELECTION OF DIRECTORS             

Governance Committee

Current responsibilities include:

Current Members: Maria N. Martinez, Chair W. Roy Dunbar Linda P. Mantia Edward A. Mueller Kathleen Wilson-Thompson Meetings in FY 2022: 5

•   Reviewing the size and composition of the Board and recommending measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity •   Recommending the slate of nominees to be proposed for election at the annual meeting of shareholders, recommending qualified candidates to fill Board vacancies •   Evaluating the Board’s overall performance, reviewing the level and form of non-employee director compensation, and administering the Company’s related party transactions policy •   Monitoring emerging corporate governance trends, and overseeing and evaluating the Company’s corporate governance policies and programs •   Annual review of the Company’s sustainability and ESG strategy

Director Qualifications, Nomination and Diversity

To fulfill its responsibility to recruit and recommend to the Board nominees for election as directors, the Governance Committee considers all qualified candidates who may be identified by any of the following sources: current or former Board members, a professional search firm, Company employees, shareholders or other parties.

Shareholders may make a recommendation for a director candidate by submitting the candidate’s name, resume and biographical information and qualifications to the attention of the Corporate Secretary’s Office by email at CorpSecretary@mckesson.com or by courier or regular mail at 6555 State Highway 161, Irving, Texas 75039. All recommendations received by the Corporate Secretary will be presented to the Governance Committee for its consideration. The Governance Committee will consider recommendations from shareholders using the same process it follows for other candidates. The Governance Committee will consider director candidates who meet the criteria described below, and the Governance Committee will recommend to the Board nominees who best suit the Board’s needs. In order for a shareholder to make a nomination of a director candidate for election at an upcoming annual meeting of shareholders, such shareholder’s nomination must comply with the requirements set forth in the Company’s By-Laws.

In evaluating candidates for the Board, the Governance Committee reviews each candidate’s independence, skills, experience and expertise against the criteria adopted by the Board. Members of the Board should have the highest professional and personal ethics, integrity and values, and represent diverse backgrounds and experience consistent with the Company’s values. They should have broad experience at the policy-making level in business, technology, healthcare or public interest, or have achieved prominence in a relevant field. The Governance Committee will consider whether the candidate’s background and experience demonstrate the ability to make the kind of important and sensitive judgments that the Board is called upon to make, and whether the nominee’s skills are complementary to the existing Board members’ skills. In addition, Board members must be able to devote sufficient time and energy to the performance of his or her duties as a director and must be open to hearing different perspectives.

Messrs. Carmona, Dunbar and Hinton and Ms. Wilson-Thompson have been nominated to stand for election by the shareholders for the first time. Each of these candidates was identified by either a third-party search firm or by other Board members. Several members of the Board interviewed each candidate prior to their appointment to serve on the Board. The Board does not maintain a formal policy regarding diversity; however, the Governance Committee considers diversity to include diversity of backgrounds, cultures, education, experience, skills, thought, perspectives, personal qualities and attributes, and geographic profiles (i.e., where the individuals have lived and worked), as well as race, ethnicity, gender, national origin and other categories. Our Governance Committee and the Board believe that a diverse representation on the Board fosters a robust, comprehensive, and balanced deliberation and decision-making process that is essential to the continued effective functioning of the Board and continued success of the Company. Women and people of color comprise approximately 36% and 27%, respectively, of our slate of director nominees.

18     - 2022 Proxy Statement

             ITEM 1. ELECTION OF DIRECTORS             

Corporate Governance

We are committed to continually assessing our governance policies and structures to incorporate best practices. We highlight some of our corporate governance practices below.

Key Governance Attributes
Independent Chair	In 2019, we adopted an independent chair structure with the election of Ed Mueller as Independent Chair. Following a planned transition, the Board elected Don Knauss as Independent Chair, effective April 1, 2022.
CEO and Senior Management Succession Planning	Recognizing that succession planning is a key component of the Company’s continued success, the Board is committed to CEO and senior management succession planning. Brian Tyler’s appointment as CEO in 2019 is a product of that work and commitment. The Board continues its focus on senior management succession planning.
Reduced Ownership Threshold to Call a Special Meeting to 15%	In 2019, the Company reduced the ownership threshold required to call a special meeting of shareholders from 25% to 15%.
Committed to Board Refreshment	Nine of our 11 nominees have served on our Board for fewer than five years. In 2021 we added one new director, and we added three new directors in 2022. This year, we also implemented a policy that would require directors with a tenure of more than 12 years to offer to resign from Board service annually.
Significant Risk Oversight	The Board and its committees devote significant time and effort to understanding and reviewing enterprise risks. This includes oversight of our Company’s strategy and review of risks related to financial reporting, compensation practices, cyber, ESG, and distribution of controlled substances, among other risks. In 2019, the Board established a standing Compliance Committee. The purpose of the Compliance Committee is to assist the Board in oversight of McKesson’s compliance programs and management’s identification and evaluation of our primary legal and regulatory compliance risks. The FY 2022 report of the Compliance Committee is included on page 22.
Code of Conduct	Revised in May 2022, McKesson’s Code of Conduct describes fundamental principles, policies and procedures that shape our work and help our employees, officers and directors make ethical decisions. The Code of Conduct is available in multiple languages. Please visit www.mckesson.com/Investors/Corporate-Governance/Code-of-Conduct/ for more information.
Other Governance Best Practices	•  Regular executive sessions of the independent directors •  Proxy access right since 2015 •  Eliminated supermajority voting requirements in 2011 •  Majority voting standard for uncontested director elections •  Annual director elections •  No poison pill

The following governance materials appear on our website at www.mckesson.com/investors/corporate-governance:

•   Certificate of Incorporation	•   Committee Charters
•   By-Laws	•   Director Independence Standards
•   Corporate Governance Guidelines	•   Code of Conduct

 - 2022 Proxy Statement   19

             ITEM 1. ELECTION OF DIRECTORS             

Evaluating Board Composition, Performance and Effectiveness

Board evaluations play a critical role in assessing the effective functioning of our Board, which conducts an annual evaluation to consider where they believe our Board functions most effectively, and more importantly, to identify areas in which they believe the Board can make a better contribution to the Company. The following graphic illustrates the core elements of our Board’s evaluation process:

Our Governance Committee leads the evaluation of the Board and the performance of the Independent Chair. Our Independent Chair also speaks to directors individually, and that feedback is later reported to the entire Board. Each committee is responsible for evaluating its own performance and determining their workplan for the following year. The Governance Committee establishes a workplan for the Board, and reviews periodically the Board’s evaluation process and makes enhancements based on the Company’s evolving business strategies and risks.

Director Independence

Under the Company’s Corporate Governance Guidelines, the Board must have a substantial majority of directors who meet the applicable criteria for independence required by the NYSE. Each year, the Board must determine, based on all relevant facts and circumstances, whether in its business judgment the non-executive directors satisfy the criteria for independence, including the absence of a material relationship with the Company. The Board will deem a director independent if no relationship or transaction exists that would disqualify such a director under these standards, and no other relationship or transaction exists of a type not specifically mentioned in NYSE standards that, in the Board’s opinion, taking into account all relevant facts and circumstances, would impair a director’s ability to exercise his or her independent judgment. Applying these standards, and all applicable laws, rules or regulations, the Board has determined that, with the exception of Brian Tyler, all of the Company’s director nominees, namely Rich Carmona, Dominic Caruso, Roy Dunbar, Jim Hinton, Don Knauss, Brad Lerman, Linda Mantia, Maria Martinez, Susan Salka and Kathleen Wilson-Thompson, are independent. Ed Mueller, who is not standing for reelection at the Annual Meeting, and Ken Washington, who resigned effective October 5, 2021, were independent during the time they served.

Board Leadership Structure

The Board has an independent chair leadership structure with Don Knauss serving as Independent Chair of the Board and Brian Tyler serving as CEO. The Board believes that this is the most effective Board leadership structure for the Company at this time. Mr. Knauss’ experience serving on McKesson’s Board, as well as other public company boards, positions him to effectively lead the Board.

The Chair regularly solicits input from the CEO and independent directors as to the additional matters to place on the Board agenda and the information that would be useful for their review and consideration. All of the Board’s standing committees are composed solely of, and chaired by, independent directors. The independent directors regularly meet in executive sessions presided over by Mr. Knauss as Independent Chair.

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             ITEM 1. ELECTION OF DIRECTORS             

Mr. Tyler is a 25-year McKesson veteran who brings expert perspective on the future of the industry, both in the U.S. and globally. Having spent his entire career in healthcare, he has a clear vision on how McKesson will continue to play an integral role in improving care while driving value for McKesson’s shareholders. He also brings with him a deep understanding of the Company, its culture and what is important to its employees. We believe the combined leadership of Mr. Knauss as independent Board Chair and Mr. Tyler as CEO best serves the Company and its shareholders at this time.

The Governance Committee and Board annually evaluate the Board’s leadership structure to determine the structure that would best serve the Company and its shareholders.

Board of Directors’ Role in Risk Oversight

Our Board has responsibility for overseeing the business and affairs of the Company. This general oversight responsibility includes oversight of risk management, which the Board carries out as a whole or through its committees. Among other things, the Board as a whole periodically discusses the Company’s enterprise risk management process, including its identification, ranking and assessment of operations, strategic, financial and compliance risks. This discussion includes the output of that Board oversight process. Below, as an example, we highlight three risk areas under the Board’s role in risk oversight, which are not comprehensive of the risks they review:

COVID-19 Risk Oversight

Our Board actively oversees the Company’s critical work in the ongoing COVID-19 pandemic, including regular updates from and discussions with the Company’s management team. The Board’s review and discussion spans a broad range of matters, including protecting the health and safety of our employees, expanding benefits for and supporting our employees, evaluating the impact of the pandemic on strategy, operations, liquidity and financial matters, the Company’s role in delivering crucial supplies and minimizing supply chain disruption, partnering with governments, monitoring continued compliance with applicable laws, and supporting the communities in which we operate.

Controlled Substance Distribution Risk Oversight

Our Board actively oversees the Company’s work to address the opioid epidemic. It regularly receives reports on the Company’s Controlled Substances Monitoring Program (CSMP) and discusses the Company’s compliance with federal and state controlled substances regulatory requirements and the effectiveness of the Company’s CSMP. The Board additionally receives updates on pending litigation and investigations. Further, the Compliance Committee regularly receives updates on the CSMP.

Cybersecurity Risk Oversight

At least quarterly, the Board addresses cybersecurity trends, risk reduction strategy or related topics. Management’s quarterly reports to the Board focus on:

• Cybersecurity trends and regulatory updates

• Information protection program strategy, framework and program scorecard

• Implications for the Company’s business strategy

• Operational technology strategy and risk reduction

• Audit and compliance

 - 2022 Proxy Statement   21

             ITEM 1. ELECTION OF DIRECTORS             

Role of Board Committees in Risk Oversight

Although the Board has ultimate responsibility for overseeing risk management, it has delegated certain oversight responsibilities to committees with specific areas of responsibility and expertise. Each of the standing committees regularly meets in executive session. The chairs of the committees report to the full Board the significant risks facing the Company, as identified by management, and the measures undertaken by management for controlling and mitigating those risks.

Committee Roles in Risk Oversight
Audit Committee	Governance Committee
• Assists the Board in monitoring integrity of financial statements, the independent auditor’s qualifications, independence and performance, critical audit matters and the performance of the Company’s internal audit function • Coordinates with the Compliance Committee in monitoring compliance with legal and regulatory requirements	• Oversees evaluation of the Board’s performance, Board composition, refreshment and committee leadership • Evaluates the Company’s governance practices and monitors shareholder feedback
Compliance Committee	Finance Committee
• Assists the Board in oversight of compliance programs and management’s identification and evaluation of the Company’s principal legal and regulatory compliance risks • Coordinates with the Audit Committee in monitoring compliance with legal and regulatory requirements • Coordinates with the Compensation Committee in incorporating compliance with laws into compensation decisions	• Oversees risk assessment and management processes related to, among other things, credit, capital structure, liquidity and insurance programs • Assists the Board in oversight of the financial aspects of significant acquisitions and divestitures and other significant transactions of a financial nature
Compensation Committee
• Oversees risk assessment and management with respect to the Company’s compensation policies and practices

McKesson senior leadership is responsible for the day-to-day management of the risks facing the Company, including macroeconomic, financial, strategic, operational, public reporting, legal, regulatory, political, talent, cybersecurity, compliance, and reputational risks. Management carries out this risk management responsibility through a coordinated effort among the various risk management functions within the Company. As part of its ongoing compliance program, the Company monitors potential uses of conflict minerals in its businesses, particularly in the context of acquisitions, and it reports when required these diligence efforts and determinations.

Report of the Compliance Committee

Since its formation in 2019, our Compliance Committee has assisted the Board in overseeing management’s identification and evaluation of the Company’s principal legal and regulatory compliance risks and related compliance programs. The Compliance Committee has four members and is chaired by Brad Lerman, who brings significant legal and regulatory expertise and a deep understanding of the healthcare industry to our Board. The other members of the Compliance Committee include Dominic Caruso (Audit Committee Chair), Rich Carmona and Jim Hinton, all of whom bring significant healthcare industry expertise to our Board. During FY 2022, the Compliance Committee formally met seven times, including one joint meeting with the Audit Committee, and received updates from management during and outside of formal meetings.

The Compliance Committee’s key FY 2022 accomplishments include, but are not limited to:

• Reviewed and discussed management’s approach to risk assessment and mitigation, key principal risk areas, and emerging risk areas;

• Met regularly with the Chief Legal Officer and Chief Compliance Officer, including in separate executive sessions. The Compliance Committee also met with other members of senior management throughout the year;

• Provided oversight on compliance programs, such as the Controlled Substances Monitoring Program (CSMP), and participated in focused risk reviews of several of the Company’s enterprise risks, including additional deep dive sessions related to the Company’s Oncology and Biopharma strategies, and Canadian operations;

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             ITEM 1. ELECTION OF DIRECTORS             

• Met with outside counsel on matters related to the CSMP and the results of the Company’s annual risk assessment process;

• Reviewed staffing and activities of the Compliance and CSMP organizations;

• Discussed significant government inquiries and investigations, and significant matters raised through the Integrity Line, including review and discussion of metrics and trends; and

• Conducted a joint meeting with the Audit Committee to discuss, among other things, the Company’s annual assessment of its regulatory and compliance programs, an overview of progress made in FY 2022, and significant complaints and other matters raised through the Integrity Line.

Risk Assessment of Compensation Policies and Practices

We annually conduct a review of all incentive compensation plans utilized throughout the Company, using a framework for risk assessment provided to us by a nationally recognized outside compensation advisor. In conducting our review, a detailed assessment of each incentive compensation plan, without regard to materiality, is first prepared by representatives from the Company’s business units and then reviewed by senior executives of our Human Resources Department. The review framework requires representatives of our business units to examine and report on the presence of certain design elements under both cash and equity incentive compensation plans that could encourage our employees to incur excessive risk, such as the selection and documentation of incentive metrics, the ratio of incentive to fixed compensation, the year-over-year variability in payouts, the amount of management discretion, and the percentage of compensation expense as compared to the business units’ revenues. Consistent with our findings in past years, management concluded that for FY 2022 our policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. A summary of management’s findings was reviewed with the Compensation Committee at its April 2022 meeting.

The Compensation Committee discussed management’s findings and considered that the Company utilizes many design features that mitigate the likelihood of encouraging excessive risk-taking behavior. Among these design features are:

• Multiple metrics across the entire enterprise that balance top-line, bottom-line and cash management objectives;

• Linear payout curves, performance thresholds and caps;

• Reasonable goals and objectives, which are well-defined and communicated;

• Strong compensation recoupment policy; and

• Training on our Code of Conduct and other policies that educate our employees on appropriate behaviors and the consequences of taking inappropriate actions.

• In addition, incentives for senior management feature the following:

• Balance of short- and long-term variable compensation tied to a mix of financial and operational objectives and the long-term value of our stock;

• The Compensation Committee’s ability to exercise downward discretion in determining payouts, including after consideration of regulatory, compliance and legal issues; and

• Rigorous stock ownership and retention guidelines.

Based on the foregoing, the Compensation Committee concurred with management that our compensation policies and practices do not create inappropriate or unintended significant risk to the Company as a whole. We believe that our incentive compensation plans do not provide incentives that encourage risk-taking beyond the organization’s ability to effectively identify and manage significant risks, are compatible with effective internal controls and the risk management practices of the Company, and are supported by the oversight and administration of the Compensation Committee with regard to our executive compensation program.

Related Party Transactions Policy and Transactions with Related Persons

The Company has a Related Party Transactions Policy requiring approval or ratification of certain transactions involving executive officers, directors and nominees for director, beneficial owners of more than 5% of the Company’s common stock, and immediate family members of any such persons, where the related person had, has or will have a direct material interest.

 - 2022 Proxy Statement   23

             ITEM 1. ELECTION OF DIRECTORS             

Additionally, they are required to notify the General Counsel of any potential related party transaction. Under the policy, the Company’s General Counsel initially determines if a transaction or relationship constitutes a transaction that requires compliance with the policy. If so, the matter will be referred to the Governance Committee. Annually, our directors, nominees and executive officers are asked to identify any transactions that might fall under the policy as well as to identify immediate family members. The transaction may be approved or ratified if, in the Governance Committee’s business judgment and based on the review of all relevant facts and circumstances, it is determined that the transaction is fair and reasonable to the Company and consistent with its best interests. Factors that may be taken into account in making that determination include, without limitation: (i) the business purpose of the transaction; (ii) whether the transaction is made in the ordinary course of business and is entered into on an arm’s-length basis; (iii) whether it would impair the independence of a director; and (iv) whether it would violate the provisions of the Company’s Code of Conduct. There are no reportable related party transactions.

Communications with Directors

Shareholders and other interested parties may communicate with any of the directors, including the Board Chair and any other, or all of the directors as a group, by addressing their correspondence to the Board member or members, c/o the Corporate Secretary’s Office, McKesson Corporation, 6555 State Highway 161, Irving, Texas 75039, or via e-mail to boardchair@mckesson.com or to nonmanagementdirectors@mckesson.com. The Corporate Secretary’s office maintains a log of such correspondence received by the Company that is addressed to members of the Board, other than advertisements, solicitations or correspondence deemed by the Corporate Secretary to be irrelevant to Board responsibilities. Directors may review the log at any time, and request copies of any correspondence received.

Director Compensation

Director compensation at McKesson includes a combination of cash and equity-based compensation. The Governance Committee reviews the level and form of compensation paid to our non-employee directors and, if it deems appropriate, recommends changes to the Board. In reviewing our non-employee director compensation program, the committee is guided by these principles:

• Our non-employee directors should be compensated at competitive levels for the work required in a company of our size and scope, differentiating among directors where appropriate to reflect different levels of responsibilities;

• A significant portion of compensation should be in the form of stock, to align the directors’ interests with our shareholders; and

• The structure of the program should be simple and transparent.

Each non-employee director of the Company is paid an annual cash retainer and an annual restricted stock unit (RSU) award. Our non-executive Board Chair is provided additional compensation that the Board believes is commensurate with that role. Our non-employee director compensation structure is as follows:

• Annual cash retainer of $110,000

• Annual RSU award with a grant date value of $180,000

• Independent Board Chair annual premium of $240,000 (50% cash, 50% RSUs)

• Annual cash retainer of $10,000 for chairing a standing committee ($20,000 for chairs of Audit and Compensation Committees)

Detail on the value of the annual cash retainers and RSU awards paid to each non-employee director for FY 2022 is provided below. The Governance Committee retains the right to determine on a case-by-case basis whether meeting fees are appropriate for non-employee directors. Non-employee directors are paid their reasonable expenses for attending Board and committee meetings. Directors who are employees of the Company or its subsidiaries do not receive any compensation for service on the Board.

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             ITEM 1. ELECTION OF DIRECTORS             

Cash Compensation

Each non-employee director receives an annual retainer, and the independent Board Chair and chairs of the standing committees receive an additional annual retainer. Information on retainers and meeting fees, in each case as paid in FY 2022, are set forth in the table above. Directors may elect in advance of a calendar year to defer up to 100% of their annual retainer (including any standing committee chair or Board Chair retainer) under the Company’s Deferred Compensation Administration Plan III (DCAP III). The minimum deferral period for any amounts deferred is five years; however, notwithstanding the deferral election, if a director ceases to be a director of the Company for any reason other than disability, retirement or death, the account balance will be paid in a lump sum in the first January or July which is at least six months following and in the year after the director’s separation from service. In the event of disability, retirement or death, the account balance will be paid in accordance with the director’s deferral election. To be eligible for retirement, a director must have served on the Board for at least six consecutive years prior to the director’s separation. A director may elect to have all or part of his or her DCAP III account credited with earnings (or losses) based on the director’s choice of a hypothetical investment in certain funds available under the Company’s 401(k) Retirement Savings Plan. To the extent no such hypothetical investment selection is made by the director, interest is credited at a default interest rate equal to 120% of the long-term applicable federal rate published by the Internal Revenue Service (IRS) for December of the immediately preceding calendar year.

Equity Compensation

Non-employee directors receive an automatic annual grant of RSUs with an approximate grant date value of $180,000. The actual number of RSUs granted is determined by dividing $180,000 by the closing price of the Company’s common stock on the grant date (with any fractional unit rounded up to the nearest whole unit); provided, however, that the number of units granted in any annual grant will in no event exceed 5,000, in accordance with our 2013 Stock Plan. As shown in the above table, the Board Chair receives an additional automatic annual grant of RSUs with an approximate grant date value of $120,000.

The RSUs granted to non-employee directors are vested upon grant. If a director meets the director stock ownership guidelines (currently $660,000, six times the annual cash retainer), then the director will, on the grant date, receive the shares underlying the RSUs, unless the director elects to defer receipt of the shares. The determination of whether a director meets the director stock ownership guidelines is made as of the last day of the deferral election period preceding the applicable RSU award. If a non-employee director has not met the stock ownership guidelines as of the last day of such deferral election period, then issuance of the shares underlying the RSUs will automatically be deferred until the director’s separation from service.

Recipients of RSUs are entitled to dividend equivalents at the same dividend rate applicable to the Company’s common shareholders, which is determined by our Board and currently is $0.47 per share each quarter. Dividend equivalents are not distributed until the shares underlying the RSUs are issued to the director. Dividend equivalents on RSUs granted prior to April 28, 2020 are credited to an account that accrues interest at the default interest rate set forth in DCAP III, which is 120% of the long-term applicable federal rate published by the IRS for December of the immediately preceding calendar year. Interest accrual on dividend equivalents was eliminated for RSU awards granted after April 28, 2020.

All Other Compensation and Benefits

Non-employee directors are eligible to participate in the McKesson Foundation’s Executive Request Program and Matching Gifts Program. Under the Executive Request Program, our non-employee directors may request that the foundation make donations to qualifying public charitable organizations. Under the Matching Gifts Program, our non-employee directors’ own gifts to schools, educational associations or funds and other public charitable organizations are eligible for a match by the foundation of up to $5,000 per director for each fiscal year.

 - 2022 Proxy Statement   25

             ITEM 1. ELECTION OF DIRECTORS             

2022 Director Compensation Table

The following table sets forth information concerning the compensation paid to or earned by each non-employee director for the fiscal year ended March 31, 2022. Mr. Tyler is not included in this table as he was an employee of the Company during FY 2022 and received no compensation for his service as a director. The compensation paid to or earned by Mr. Tyler as an officer of the Company is shown in the 2022 Summary Compensation Table.

Name	Fees Earned or Paid in Cash ($)(1)	Stock Awards ($)(2)		All Other Compensation ($)	Total ($)
Richard H. Carmona, M.D.	89,972		155,936	-0-	245,908
Dominic J. Caruso	157,500		180,138	-0-	337,638
N. Anthony Coles, M.D.	39,375		—	-0-	39,375
James H. Hinton	23,833		94,300	-0-	118,133
M. Christine Jacobs	34,375		—	-0-	34,375
Donald R. Knauss	112,500		180,138	-0-	292,638
Marie L. Knowles	34,375		—	-0-	34,375
Bradley E. Lerman	120,000		180,138	-0-	300,138
Linda P. Mantia	110,000		180,138	-0-	290,138
Maria Martinez	117,500		180,138	-0-	297,638
Edward A. Mueller	245,000		300,298	-0-	545,298
Susan R. Salka	120,000		180,138	-0-	300,138
Kenneth E. Washington	90,000		180,138	-0-	270,138
Kathleen Wilson-Thompson	23,833		94,300	-0-	118,133

(1) Consists of the director annual cash retainer and the annual standing committee chair and Board Chair retainers, whether paid or deferred.

(2) Represents the aggregate grant date fair value of RSUs, computed in accordance with Accounting Standards Codification issued by the Financial Accounting Standards Board, Topic 718, labeled “Compensation — Stock Compensation” (ASC Topic 718) disregarding any estimates of forfeitures related to service-based vesting conditions. Such values do not reflect whether the recipient has actually realized a financial benefit from the award. For information on the assumptions used to calculate the value of the awards, refer to Financial Note 5 of the Company’s consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended March 31, 2022, as filed with the SEC on May 9, 2022. In connection with their initial election to the Board during FY 2022, Dr. Carmona, Mr. Hinton and Ms. Wilson-Thompson each were granted a prorated portion of the automatic annual grant of RSUs made to non-employee directors in July 2021.

26     - 2022 Proxy Statement

ITEM 2. Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2023

Your Board recommends a vote “FOR” this ratification proposal.

The Audit Committee has approved Deloitte & Touche LLP (D&T) as the Company’s independent registered public accounting firm to audit the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending March 31, 2023. The committee believes that D&T is knowledgeable about the Company’s operations and accounting practices, and is well qualified to act as the Company’s independent registered public accounting firm.

We are asking our shareholders to ratify the selection of D&T as the Company’s independent registered public accounting firm. Although ratification is not required by our By-Laws or otherwise, the Board is submitting the selection of D&T to our shareholders for ratification as a matter of good corporate practice. If shareholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain D&T. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders. Representatives of D&T are expected to be present at the Annual Meeting to respond to questions and to make a statement if they desire to do so. For the fiscal years ended March 31, 2022 and 2021, professional services were performed by D&T, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte & Touche”), which includes Deloitte Consulting. Fees for those years were as follows:

	FY 2022		FY 2021
Audit Fees	$	18,700,000	$	20,925,000
Audit-Related Fees		4,600,000		8,200,000
TOTAL AUDIT AND AUDIT-RELATED FEES		23,300,000		29,125,000
Tax Fees		-0-		40,000
All Other Fees		-0-		1,000,000
TOTAL	$	23,300,000	$	30,165,000

Audit Fees. This category consists of fees for professional services rendered for the audit of the Company’s consolidated annual financial statements, review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by D&T in connection with statutory and regulatory filings or engagements. This category also includes advice on accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, and foreign statutory audits required by non-U.S. jurisdictions.

Audit-Related Fees. This category consists of fees for assurance and related services such as employee benefit plan audits, registration statements and comfort letters, accounting and financial reporting audit-related fees, due diligence in connection with mergers, divestitures and acquisitions, and attest services related to financial reporting that are not required by statute or regulation. The decrease in fiscal year ended March 31, 2022 was related to due diligence activities.

Tax Fees. This category consists of fees for professional services rendered for U.S. and international tax compliance, including services related to the preparation of tax returns and professional services. For the fiscal years ended March 31, 2022 and 2021, no amounts were incurred by the Company for tax advice, planning or consulting services.

All Other Fees. This category consists of fees for permissible advisory work performed by Deloitte that does not meet the above category descriptions.

 - 2022 Proxy Statement   27

             ITEM 2. RATIFICATION OF APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT

             REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2023             

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Pursuant to applicable rules, and as set forth in the terms of its charter, the Audit Committee has sole responsibility for appointing, setting compensation for, and overseeing the work of the independent registered public accounting firm. The Audit Committee has established a policy that requires it to pre-approve all audit and permissible non-audit services, including audit-related and tax services, to be provided by Deloitte & Touche. Between meetings, the Chair of the Audit Committee is authorized to pre-approve services, which are reported to the committee at its next meeting. All of the services described in the fee table above were approved in conformity with the Audit Committee’s pre-approval process.

Audit Committee Report

The Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the Company’s financial reporting processes. The functions of the Audit Committee are described in greater detail in the Audit Committee’s written charter adopted by the Company’s Board of Directors, which may be found on the Company’s website at www.mckesson.com under the caption “Investors — Governance.” The Audit Committee is composed exclusively of directors who are independent under the applicable SEC and NYSE rules and the Company’s independence standards. The Audit Committee’s members are not professionally engaged in the practice of accounting or auditing, and they necessarily rely on the work and assurances of the Company’s management and the independent registered public accounting firm. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal control over financial reporting. D&T is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and expressing opinions on the conformity of those audited financial statements with United States generally accepted accounting principles and the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has: (i) reviewed and discussed with management the Company’s audited financial statements for the fiscal year ended March 31, 2022; (ii) discussed with D&T the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC; (iii) received the written disclosures and the letter from D&T required by applicable requirements of the PCAOB regarding D&T’s communications with the Audit Committee concerning independence; and (iv) discussed with D&T its independence from the Company. The Audit Committee further considered whether the provision of non-audit related services by D&T to the Company is compatible with maintaining the independence of that firm from the Company. The Audit Committee has also discussed with management of the Company and D&T such other matters and received such assurances from them as it deemed appropriate.

The Audit Committee discussed with the Company’s internal auditors and D&T the overall scope and plans for their respective audits. The Audit Committee meets regularly with the internal auditors and D&T, with and without management present, to discuss the results of their audits, the evaluation of the Company’s internal control over financial reporting and the overall quality of the Company’s accounting and financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements for the fiscal year ended March 31, 2022 be included in the Company’s Annual Report on Form 10-K for filing with the SEC.

Audit Committee of the Board of Directors

Dominic J. Caruso, Chair

W. Roy Dunbar

Bradley E. Lerman

Susan R. Salka

28     - 2022 Proxy Statement

PRINCIPAL SHAREHOLDERS

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of May 27, 2022, information regarding ownership of the Company’s outstanding common stock by any entity or person, to the extent known by us or ascertainable from public filings, that is the beneficial owner of more than 5% of the outstanding shares of common stock:

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent    of Class*
The Vanguard Group 100 Vanguard Boulevard Malvern, Pennsylvania 19355		15,497,451	(1)		10.79	%
BlackRock, Inc. 55 East 52nd Street New York, New York 10055		13,171,252	(2)		9.17	%

* Based on 143,580,859 shares of common stock outstanding, as of May 27, 2022.

(1) This information is based upon a Schedule 13G/A filed with the SEC on February 9, 2022 by The Vanguard Group, which reports shared voting power with respect to 249,697 shares, sole dispositive power with respect to 14,873,887 shares, and shared dispositive power with respect to 623,564 shares.

(2) This information is based upon a Schedule 13G/A filed with the SEC on February 1, 2022 by BlackRock, Inc., which reports sole voting power with respect to 11,396,238 shares and sole dispositive power with respect to 13,171,252 shares as a result of being a parent company or control person of certain subsidiaries.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Such officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, all reports required by Section 16(a) of the Exchange Act in FY 2022 from our officers, directors and greater than 10% beneficial owners were timely filed, except that one Form 4 reporting the grant of restricted stock units to our interim principal accounting officer Kevin Emerson was filed one day late due to a clerical error.

 - 2022 Proxy Statement   29

             PRINCIPAL SHAREHOLDERS             

Security Ownership of Directors and Executive Officers

The following table sets forth, as of May 27, 2022, except as otherwise noted, information regarding ownership of the Company’s outstanding common stock by: (i) all directors and director nominees; (ii) each executive officer named in the 2022 Summary Compensation Table below (collectively, our named executive officers or the NEOs); and (iii) all directors, NEOs and executive officers as a group. The table also includes shares of common stock that underlie outstanding RSUs and options to purchase common stock of the Company that either vest or become exercisable within 60 days after May 27, 2022.

Name of Individual	Shares of        Common        Stock        Beneficially        Owned(1)			Percent   of Class
Richard H. Carmona, M.D.		762	(2)		*
Dominic J. Caruso		4,535	(2)		*
W. Roy Dunbar		169	(2)		*
Tracy L. Faber		15,566	(3)		*
Nancy Flores		5,458			*
James H. Hinton		349	(2)		*
Donald R. Knauss		8,056	(2)(4)		*
Bradley E. Lerman		5,004	(2)		*
Linda P. Mantia		1,721	(2)		*
Maria Martinez		3,068	(2)		*
Edward A. Mueller		25,246	(2)		*
Susan R. Salka		10,061	(2)(4)		*
Lori A. Schechter		24,786	(3)(4)		*
Brian S. Tyler		172,549	(3)(5)		*
Britt J. Vitalone		20,562	(3)(5)		*
Kathleen Wilson-Thompson		349	(2)		*
All directors, NEOs and executive officers as a group (17 persons)		302,676	(2)(3)(4)(5)		*

* Less than 1.0%. The number of shares beneficially owned and the percentage of shares beneficially owned are based on 143,580,859 shares of the Company’s common stock outstanding as of May 27, 2022, adjusted as required by the rules promulgated by the SEC. Shares of common stock that may be acquired by exercise of stock options or vesting of RSUs within 60 days after May 27, 2022 and vested RSUs that are not yet settled are deemed outstanding and beneficially owned by the person holding such stock options or RSUs for purposes of computing the number of shares and percentage beneficially owned, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person.

(1) Except as otherwise indicated in the footnotes to this table, the persons named have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.

(2) Includes vested RSUs or common stock units accrued under the 2013 Stock Plan and 2005 Stock Plan (the receipt of the underlying shares having been deferred) as follows: Dr. Carmona, 762 units; Mr. Caruso, 4,535 units; Mr. Dunbar, 169 units; Mr. Hinton, 349 units; Mr. Knauss, 6,760 units; Mr. Lerman, 5,004 units; Ms. Mantia, 1,721 units; Ms. Martinez, 3,068 units; Mr. Mueller, 25,246 units; Ms. Salka, 8,056 units; Ms. Wilson-Thompson, 349 units; and all directors, NEOs and executive officers as a group, 56,017 units. Directors, NEOs and executive officers have neither voting nor investment power with respect to such units.

(3) Includes shares that may be acquired by exercise of stock options or vesting of RSUs within 60 days after May 27, 2022, as follows: Ms. Faber, 10,186 shares; Ms. Schechter, 5,488 shares; Mr. Tyler, 87,065 shares; Mr. Vitalone, 6,324 shares; and all directors, NEOs and executive officers as a group, 110,136 shares.

(4) Includes shares held by immediate family members who share a household with the named person, by family trusts as to which the named person and his or her spouse have shared voting and investment power, or by an independent trust for which the named person disclaims beneficial ownership as follows: Mr. Knauss, 1,296 shares; Ms. Salka, 2,005 shares; Ms. Schechter, 19,178 shares; and all directors, NEOs and executive officers as a group, 22,479 shares.

(5) Includes shares held under the Company’s 401(k) Retirement Savings Plan as of May 27, 2022, as follows: Mr. Tyler, 213 shares; Mr. Vitalone, 544 shares; and all NEOs and executive officers as a group, 757 shares.

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EXECUTIVE COMPENSATION

A Letter From Our Compensation Committee

Dear Fellow Shareholders,

As members of the Compensation Committee, we thank you for your continued investment in McKesson through another dynamic year. We appreciate hearing our shareholders’ perspectives on our executive compensation program and remain committed to ensuring that McKesson’s leadership team is incentivized to perform by building compensation programs aligned to both our strategy and the creation of long-term shareholder value.

Strong Operating Performance Builds Value. We see the work of our committee as playing a critical role in ensuring that we have appropriate incentives in place to drive performance in both the short term and the long term, while navigating potentially rapidly changing market conditions. While the COVID-19 pandemic continued to present challenges in FY 2022, our businesses delivered strong execution, underpinned by stable fundamentals. Our multi-year strategic initiative focuses on driving shareholder value by creating incremental profit growth through cost and efficiency plans, as well as investing in innovation to improve patient care, particularly where we have a set of differentiated assets.

As discussed throughout these materials, under our executive team’s leadership, McKesson’s team of dedicated employees delivered outstanding performance — in particular, while playing a critical role in the COVID-19 vaccine distribution and kitting programs with the U.S. government.

Our accomplishments in FY 2022 remain the foundation for McKesson’s future, and we are confident in our ability to continue creating long-term value for our shareholders. Based on our review of the program outcomes, we believe that our executive compensation program has shown itself to be well aligned with our objectives this year.

Integrating Shareholder Perspectives. As part of our year-round engagement, our Board solicits input to ensure we meet shareholder expectations regarding compensation along with other topics. Shareholders at the 2021 Annual Meeting of Shareholders approved our executive compensation program with approximately 90% of votes cast in favor of our 2021 say-on-pay proposal, indicating to us that shareholder perspectives are being effectively integrated into the Compensation Committee’s process, though we will continue to regularly engage and respond to feedback. The evolution of our compensation program and the decisions that we have made over the years are producing the intended outcomes.

Considering the Broader Context. Each year, the Compensation Committee evaluates our executive compensation program and results, considering the formulaic outcomes built into the program in the broader context of performance, shareholder feedback and other events.

• FY 2020: We reduced payouts under the FY 2020 MIP for our executive officers and business unit presidents, in light of the challenges presented by the COVID-19 pandemic.

• FY 2021: We concluded that a reduction in pay outcomes was appropriate in light of the scale of the charge associated with our progress toward settlement of a substantial majority of pending opioid litigation. The Compensation Committee considered the settlement charge’s impact on the underlying metrics within the incentive plans, as well as the impact on the Company and our stakeholders, and made the decision to exercise downward discretion to reduce payouts for our executive officers under the FY 2021 MIP and FY 2019 — FY 2021 Cash LTIP.

During conversations leading up to, and following, last year’s annual meeting, shareholders expressed approval for the actions taken in response to the pending opioids-related settlement, and were supportive of our stated intention not to take additional action in future years, unless there is a material change in the facts underlying the committee’s decision. The settlement process has continued to move forward as anticipated and we concluded that no discretionary adjustments were necessary this year due to the broader operating context of the business.

Refreshed Compensation Committee. Over the last year, we approved several changes to the composition and leadership of our Compensation Committee. As part of this refreshment, Linda Mantia has assumed the role of Chair effective with the beginning of FY 2023. In addition, since last year’s annual meeting Richard Carmona, Don Knauss and Kathleen Wilson-Thompson have joined the committee as new members. We believe that it is valuable to balance institutional knowledge and fresh perspectives as we consider our committee composition.

The View Ahead. The Compensation Committee will continue to evaluate our program and ensure it is appropriate for McKesson in a time of rapid change. Our executive compensation program will remain rooted in McKesson’s culture, which is

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             EXECUTIVE COMPENSATION             

anchored by our I²CARE values, and we will structure incentives that encourage employees to feel accountable for, and inspired by, the Company’s long-term success. We will remain focused on human capital management, including the attraction, retention, and motivation of our workforce, as well as our goals related to our ESG strategy, including our efforts on diversity, equity and inclusion (DEI), climate change and advancing health equity. We are confident that these goals will keep us on the path towards sustained profitability and long-term shareholder value creation.

We look forward to continuing our dialogue with our shareholders and ask for your continued support.

The Compensation Committee

Linda P. Mantia, Chair

Richard H. Carmona, M.D.

Donald R. Knauss

Edward A. Mueller

Kathleen Wilson-Thompson

Compensation Discussion and Analysis

The Compensation Discussion and Analysis describes McKesson’s executive compensation program and reviews compensation decisions for our CEO and CFO, and our three other most highly compensated executive officers, all of whom were serving as of March 31, 2022 (collectively, our Named Executive Officers or “NEOs”). For FY 2022, our NEOs and their respective titles were as follows:

Name	Title
Brian S. Tyler	Chief Executive Officer
Britt J. Vitalone	Executive Vice President and Chief Financial Officer
Lori A. Schechter	Executive Vice President, Chief Legal Officer and General Counsel
Tracy L. Faber	Executive Vice President and Chief Human Resources Officer
Nancy Flores	Executive Vice President, Chief Information Officer and Chief Technology Officer

Overview

Business Strategy and Key Initiatives

At McKesson, we are focused on executing against clear priorities to drive value. Part of that growth will come through our ability to work together, to execute and to use the capabilities and assets across McKesson to innovate in new and different ways. We will continue to be disciplined in our capital deployment as we execute this strategy.

Focus on People and Culture	Sustainable Core Growth	Streamline the Portfolio	Expand Oncology and Biopharma Ecosystems
I2CARE Values Diversity, Equity and Inclusion Sustainability and ESG	Strength in Distribution Operational Excellence	Centralization of Functional Services Intent to Fully Exit European Region	Leveraging Strengths to Address Healthcare Challenges and Drive Growth

In FY 2022, we shared McKesson’s strategic transformation to a diversified healthcare services company, centered around a set of four Company priorities: our focus on people and culture, driving sustainable growth in our core pharmaceutical and medical distribution businesses, streamlining the portfolio, which includes our intent to fully exit the European region, and continuing to invest in growth in the areas of oncology and biopharma services, where we have key differentiation. We believe the execution against these priorities is critical to our ability to generate long-term sustainable growth.

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FY 2022 Performance Highlights

In FY 2022, we delivered adjusted operating results that exceeded our original expectations at the enterprise level and across all our operating segments. We focused on execution against our Company priorities, making solid progress on people and culture, delivering sustainable core growth, streamlining the businesses, and continued advancement of our strategic growth pillars: Oncology and BioPharma services ecosystems. The commitment to these priorities is critical to our financial performance and sustainable long-term growth. While we saw a benefit in FY 2022 from our role as a centralized distributor for COVID-19 vaccine and ancillary supplies needed to administer vaccines, we were also encouraged by the solid performance of the underlying business and our ability to navigate a dynamic macroeconomic environment. We also made significant progress in exiting the European market and resolving the substantial majority of pending opioid litigation, allowing us to further focus on executing on our Company priorities and creating shareholder value. McKesson remains strategically positioned with a broad set of differentiated assets and capabilities to support healthcare innovation and improve care in every setting. Full-year FY 2022 highlights are shown below.

(1) Reflects continuing operations attributable to McKesson Corporation.

(2) Reflects income from continuing operations before interest expense and income taxes.

In our discussion of executive compensation throughout this proxy statement, we refer to adjusted earnings per diluted share (Adjusted EPS), Adjusted Operating Profit (AOP), Free Cash Flow (FCF), Return on Invested Capital (ROIC) and Relative Total Shareholder Return (rTSR) as performance metrics specifically used in our incentive programs. In Appendix A to this proxy statement, we provide reconciliations from diluted earnings per share from continuing operations, operating profit and operating cash flow calculated in accordance with U.S. generally accepted accounting principles (GAAP) to the non-GAAP metrics used in calculating performance under our incentive plans. A description of ROIC, a non-GAAP metric, can be found on page 41 of this proxy statement.

2021 Say-on-Pay Vote and Continued Shareholder Engagement

We were pleased that our executive compensation program was approved by shareholders at the 2021 Annual Meeting of Shareholders with approximately 90% of votes cast in favor of our say-on-pay proposal. We received positive feedback from shareholders regarding the Compensation Committee’s decision to reduce pay outcomes for our NEOs last year in light of the opioid-related settlement charge. The settlement process has continued to move forward as anticipated and the Compensation Committee concluded that no discretionary adjustments were necessary this year due to the broader operating context of the business. We appreciate our shareholders’ support of our executive compensation program.

We are committed to seeking feedback and soliciting input to ensure we meet ongoing shareholder expectations regarding our compensation, governance and corporate responsibility practices. As we do every year, our Board undertook a significant engagement effort to receive feedback from shareholders regarding our executive compensation program and other matters of importance to the Company and our shareholders. Since our last annual meeting, we have proactively reached out to shareholders representing approximately 62% of our outstanding common stock and engaged with shareholders representing nearly 40% of our outstanding common stock. Our shareholders’ views on executive compensation and corporate governance are important to us, and we value and utilize their feedback and insights each year. The Board and its committees regularly discuss and consider the feedback we receive from investors through this engagement process, as well as the outcome of the

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             EXECUTIVE COMPENSATION             

annual advisory vote on executive compensation. As we continue to execute on our strategy, we look forward to ongoing shareholder engagement, including dialogue focused on our executive compensation program and corporate governance practices. Additional information on our shareholder engagement can be found on page 5 of this proxy statement.

Focus on Corporate Culture

At McKesson, the way we do business is just as important as the business itself, so each executive is evaluated on his or her commitment to the Company’s “I²CARE” and “ILEAD” principles. I²CARE is the cultural foundation of the Company. Our I²CARE principles unify the Company and guide individuals’ behavior toward each other, customers, vendors and other stakeholders. ILEAD is our common definition, shared leadership framework and our commitment to how we drive better health for our company, our customers and the patients whose lives we touch. These principles serve as a guide to all our employees enterprise-wide.

We build the best teams by recruiting, developing and retaining diverse talent. McKesson was recognized for the ninth consecutive year as one of the “Best Places to Work for LGBTQ Equality” by the Human Rights Campaign Foundation; for the sixth year in a row as a “Military Friendly Employer” by GI Jobs; and as a “Best Place to Work” for Disability Inclusion on the Disability Equality Index for the sixth consecutive year. Brian Tyler, our CEO, continues to focus on corporate culture, emphasizing the importance of diverse and inclusive work settings and winning as one team. We aim to continuously leverage our diversity to explore opportunities, elevate our thinking and challenge long-held assumptions. We strive to make diversity, equity, and inclusion integral to everything we do because we believe building a more inclusive future is everyone’s responsibility. The Company engaged internal and external experts to help leaders build skills in these and other areas.

Our vision for a healthier world begins with our employees, who bring our mission to life every day. As a company, we provide opportunities for growth and development, programs for an inclusive workplace so our employees can be their best, and initiatives that focus on employee health and wellness.

Our Board is focused on human capital management, providing guidance to our CEO on culture initiatives, discussing inclusion, diversity and equality efforts and participating in employee town halls and panel discussions hosted by the Company’s employee resource groups. Our Compensation Committee considers executive officers’ efforts on human capital management and culture matters when determining compensation for our executive officers, including our NEOs.

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Integration of Regulatory, Compliance and Legal Considerations

In 2018, the Compensation Committee codified its long-standing practice of considering regulatory, compliance and legal issues when making compensation decisions. The Compensation Committee carefully considered the work that was done to address regulatory and legal aspects of McKesson’s business during FY 2022. The committee has integrated those considerations into its compensation decisions. The Board’s Compliance Committee is actively engaged in overseeing management’s identification and evaluation of principal legal and compliance risks, and as part of its oversight role reviews the Company’s efforts to foster a culture of compliance, ethics and regulatory excellence. Prior to making its decisions regarding FY 2022 incentive payouts, the Compensation Committee reviewed the Compliance Committee’s report regarding senior management’s compliance efforts during FY 2022, including the performance of our NEOs.

Best Practices in Compensation Governance

What We Do
✓	Pay for performance	✓	Engage with shareholders throughout the year
✓	Emphasize long-term performance	✓	Align plan design with business strategy
✓	Design with mix of operational and market-based metrics	✓	Balance mix of annual and long-term metrics
✓	Develop sound financial goals	✓	Engage independent advisors
✓	Maintain robust compensation recoupment policy with trigger for reputational harm	✓	Review Compliance Committee’s assessment of senior management performance
✓	Manage use of equity incentive plan conservatively	✓	Drive progress on culture initiatives
✓	Use double-trigger change in control vesting provisions	✓	Review tally sheets
✓	Maintain rigorous stock ownership guidelines	✓	Mitigate undue risk-taking through sound plan design
What We Don’t Do
	Allow directors and executive officers to hedge or pledge Company securities		Provide excise tax gross-ups
	Re-price or exchange stock options without shareholder approval		Accrue or pay dividend equivalents during performance periods
	Provide tax gross-ups on perquisites for executives, except in the case of certain business-related relocation expenses		Pay above-market interest on deferred compensation

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             EXECUTIVE COMPENSATION             

FY 2022 Pay Elements and Performance Metrics

McKesson’s executive compensation program consists of three direct pay elements — base salary, annual cash incentive and long-term incentives — each of which serves a unique purpose. The metrics below incentivize our executives to focus on operational objectives that are expected to drive shareholder value. All incentives are performance-based, and all long-term incentive (LTI) awards have total performance or vesting periods of three years. In light of the Compensation Committee having made substantial structural changes to our executive compensation program for FY 2020, and given the positive feedback we continue to receive from our shareholders regarding those changes, our Compensation Committee did not make any additional adjustments to the plans for FY 2022.

Pay Element	Performance Metric	Rationale	Target Pay
Base Salary	—	Attracts and retains high-performing executives by providing market-competitive fixed pay	—
Management Incentive Plan (annual cash incentive)	Adjusted EPS (50%)	Rewards operational performance and profitability; important driver of share price valuation and shareholder expectations	100% — 175% of Base Salary
	Adjusted Operating Profit (25%)	Rewards focus on operational performance and profitability; important driver of share price valuation and shareholder expectations
	Free Cash Flow (25%)	Rewards generating cash to invest in growth and return of capital to shareholders; important valuation metric
Performance Stock Units   (long-term equity incentive)	3-Year Cumulative Adjusted EPS (50%)	Measures long-term earnings power, drives long-term returns for the Company and directly correlates to share price performance	60% of Target LTI Value
	3-Year Average ROIC (25%)	Encourages leaders to make sound investments that generate returns for shareholders; important valuation metric
	MCK TSR vs. Comparator Group (25%)	Rewards share price performance relative to comparator group over time
Restricted Stock Units (long-term equity)	—	Directly aligns with value delivered to shareholders	40% of Target LTI Value

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             EXECUTIVE COMPENSATION             

Target Direct Compensation Mix

Our executive compensation program is predominantly variable and performance-based. As an executive’s ability to impact operational performance increases, so does the proportion of at-risk variable compensation. Target LTI grows proportionately as job responsibilities increase, which encourages our executive officers to focus on McKesson’s long-term success and aligns with the long-term interests of our shareholders. The graphics below illustrate the mix of fixed and variable compensation, and the annual MIP and LTI compensation opportunities we provided to our CEO and other NEOs for FY 2022. These graphics also illustrate the proportion of target direct compensation that is based on Company and share price performance.

FY 2022 CEO Compensation Mix                       FY 2022 Other NEOs Compensation Mix                      

FY 2022 Target Direct Compensation. The Compensation Committee established FY 2022 target direct compensation for our NEOs as shown below. The Compensation Committee takes a number of factors into consideration when setting total target direct compensation, and each of the individual elements, including job responsibilities, time in role, and competitive market data derived from our Compensation Peer Group. Further information on the elements of compensation can be found in the following pages, where each pay element is described more fully.

Name	Base Salary ($)(1)		MIP Target (Annual Incentive) (% of Salary)			MIP Target (Annual Incentive) ($)		Target Long-Term Incentives				Total Target Direct Compensation ($)
								PSUs         ($)		RSUs         ($)
Brian S. Tyler		1,400,000		175	%		2,450,000		7,350,330		4,900,108		16,100,438
Britt J. Vitalone		850,000		115	%		977,500		2,100,233		1,400,171		5,327,904
Lori A. Schechter		815,000		100	%		815,000		1,563,219		1,042,042		4,235,261
Tracy L. Faber		645,000		100	%		645,000		1,050,331		700,183		3,040,514
Nancy Flores		575,000		100	%		575,000		870,089		580,023		2,600,112

(1) FY 2022 base salary figures shown above are as of the end of FY 2022.

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             EXECUTIVE COMPENSATION             

Performance-Based Program with Rigorous Targets

Performance Targets Designed to Reward Stretch Performance

Each year the Compensation Committee establishes performance goals to drive operational performance results and shareholder returns. The committee establishes these performance goals for all our corporate incentive plans, after thorough review and discussion over multiple meetings, to motivate our leaders to deliver a high degree of business performance, while encouraging prudent risk-taking. We structure performance-based compensation to reward an appropriate balance of short-term and long-term financial and strategic business results, with an emphasis on managing the business for long-term results. Target-setting involves a rigorous planning process that considers McKesson’s business objectives, the competitive environment, alignment to shareholders’ interests and other external factors. The committee also considers growth expectations for our competitors, as well as the market outlook for our industry.

Key Considerations in Development of Annual and Long-Term Goals
External Factors	Competitive Environment	McKesson’s Objectives
•  Analyst & Shareholder Expectations •  Market Outlook •  International Trends •  Tax Policy •  Public Policy	•  Competitor Performance •  Competitor Plans •  Competitive Landscape •  Market Growth •  Industry Trends	•  Historical Performance and Trends •  Long Range Planning •  Capital Deployment Opportunities •  Recent Capital Deployment Decisions •  Long Range Corporate Strategy

Target Setting for Annual Plans

We set rigorous annual goals based on Company and industry outlook for the year, historical and projected growth rates for McKesson and its peers, and performance expectations from equity research analysts. The annual incentive plan is aligned with the Company’s annual operating plan and is designed so that target payout requires achievement of a high degree of business performance while encouraging prudent risk-taking. Financial goals for our annual plans consider capital deployment decisions. The Company’s annual operating plan serves as the basis of the annual forward earnings guidance we communicate to investors. The annual operating plan contemplates the prior year’s results and the anticipated business environment. Our projected earnings growth reflects market conditions, which also affect our peer group and analyst forecasts. Cash flow goals are set by focusing on working capital efficiency and in the context of operating plans by business unit. We established performance targets for FY 2022 that reflect the following:

• Adjusted EPS and Adjusted Operating Profit targets were set to achieve growth over FY 2021 results; and

• Free Cash Flow target was set in line with the FY 2022 external guidance range, reported at the end of FY 2021, and is consistent with the company’s three-year historical average.

Consistent with prior years, our FY 2022 targets also assumed capital deployment in the form of share repurchases and considered analyst expectations for growth and competitors’ publicly disclosed projected performance as well as public policy.

Target Setting for Long-Term Plans

The Company’s three-year plan considers business strategies that will take longer than 12 months to accomplish and reflects capital deployment, including projected acquisitions, along with other external, public policy and competitive risks, opportunities and challenges. Our FY 2020 — FY 2022 PSU awards were based on three-year cumulative Adjusted EPS, three-year average ROIC and TSR performance relative to a comparator group of companies. The Compensation Committee chose cumulative Adjusted EPS as a metric because it serves as an operational metric – including operating profit growth, tax strategy and capital deployment – that directly correlates to share price performance. Adjusted EPS is also the primary metric underpinning our guidance to investors. ROIC encourages leaders to make sound investments that generate strong returns for shareholders. For the portion of the award tied to rTSR performance, payout at target level continues to require above-median performance at the 55^th percentile of the rTSR comparator group. In addition, the number of shares earned for the rTSR portion of the award is capped at the target amount if absolute TSR is negative during the three-year performance period. No shares are earned for the rTSR portion of the award if rTSR for the three-year period falls below the 35^th percentile of the rTSR comparator group.

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             EXECUTIVE COMPENSATION             

Each Compensation Element Serves a Unique Purpose

Our executive compensation program seeks to motivate and reward our executive officers to meet and exceed challenging business goals and deliver sustained performance growth. McKesson’s executive compensation program consists of four compensation elements, each of which serves a unique purpose. We provide three direct compensation elements: base salary, annual cash incentive and long-term incentives. The fourth element consists of other compensation and benefits (for example, limited perquisites, severance and change in control benefits). Our incentive plans incorporate metrics that we believe are the key measures of our success and will drive long-term shareholder returns.

We focus on Adjusted EPS in our incentive plans because earnings per share is one of the principal measures used by investors to assess financial performance results and establish a price for the Company’s equity, and it is a central component of our guidance to investors. Adjusted EPS aligns our executives’ interests with the broader set of strategic objectives they are tasked to manage, keeping enterprise value and shareholder interests at the forefront of management decisions on both a short- and long-term basis. Accordingly, Adjusted EPS is included as a key component of both our annual and long-term incentives.

Annual Compensation

Annual compensation is delivered in cash with a substantial portion at risk and contingent on the successful accomplishment of pre-established performance targets.

       Base Salary

Base salary is the only fixed component of our executive officers’ total cash compensation and is intended to provide market-competitive pay to attract and retain executives. When considering whether to increase a NEO’s base salary, the Compensation Committee takes into consideration competitive market data derived from our Compensation Peer Group as well as the individual’s performance and experience. Our NEO’s base salaries increased 1.9% to 4.5% over the previous fiscal year, with the exception of Mr. Tyler’s, whose salary increased approximately 12%. Mr. Tyler’s post-adjustment salary approximates median CEO base salary levels within our Compensation Peer Group and reflects his strong performance since his appointment as CEO. This was Mr. Tyler’s first base salary increase since he became CEO in April 2019, when his base salary was set at a level below that of our Compensation Peer Group because it was his first year in the role. Base salary increases for all of our NEOs were effective June 1, 2021.

The table below summarizes FY 2021 and FY 2022 base salaries for our NEOs.

Name	FY 2021 Annual Base Salary ($)		FY 2022 Annual Base    Salary    ($)
Brian S. Tyler		1,250,000		1,400,000
Britt J. Vitalone		820,000		850,000
Lori A. Schechter		800,000		815,000
Tracy L. Faber		625,000		645,000
Nancy Flores		550,000		575,000

       Management Incentive Plan

Overview. The Management Incentive Plan (MIP) is our enterprise annual cash incentive plan. MIP awards are conditioned on the achievement of Company financial and operational performance goals. Based on a competitive market assessment and evaluation of Mr. Tyler’s performance, the Compensation Committee adjusted Mr. Tyler’s FY 2022 MIP target award from 150% to 175% of his base salary to better align with levels in the Compensation Peer Group and in recognition of his strong performance. The maximum MIP payout for executive officers is 200% of target. MIP financial and operational goals are established shortly after the beginning of the fiscal year.

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             EXECUTIVE COMPENSATION             

FY 2022 MIP Performance Metrics. In May 2021, the Compensation Committee selected Adjusted EPS, Adjusted Operating Profit and Free Cash Flow as metrics for the FY 2022 MIP, the same metrics used for the prior fiscal year, as they are key areas of focus to drive our near-term success and advance our long-term strategy. Despite continued uncertainties due to COVID-19, the Compensation Committee aligned FY 2022 MIP targets to our Adjusted EPS outlook. At the time of plan creation, assumptions for our European divestiture activities were not included in the targets. The following summarizes our FY 2022 MIP performance metrics:

• Adjusted EPS (50% of award). Adjusted EPS is an important driver of share price valuation and shareholder expectations. Consistent with prior years, our FY 2022 targets assumed, among other things, capital deployment in the form of share repurchases. The Compensation Committee applied an Adjusted EPS result of $23.26 for purposes of calculating FY 2022 MIP payouts. A related metric, three-year Cumulative Adjusted EPS, is used as a metric for Performance Stock Units. Adjusted EPS is highly relevant in both short- and long-term contexts, and the Compensation Committee believed it was useful to measure Adjusted EPS across both periods with greater economic opportunity in the long-term portion of the program to ensure that short-term gains are not sought at the expense of long-term performance. See Appendix A to this proxy statement for a reconciliation of diluted earnings per share from continuing operations as reported under U.S. generally accepted accounting principles (GAAP) to the Adjusted EPS result used for incentive payout purposes.

• Adjusted Operating Profit (25% of award). Adjusted Operating Profit (AOP) rewards focus on operational performance and profitability. The Compensation Committee applied an AOP result of $4,755 million for purposes of calculating the FY 2022 MIP payouts. See Appendix A to this proxy statement for a reconciliation of operating profit as reported under U.S. GAAP to the AOP result used for incentive payout purposes.

• Free Cash Flow (25% of award). Free Cash Flow (FCF) fuels our portfolio approach to capital deployment. The Compensation Committee applied a FCF result of $3,899 million for purposes of calculating FY 2022 MIP payouts. Cash flow is highly relevant in both short- and long-term contexts, as it measures effective generation and management of cash. Our FY 2022 FCF target was set in line with the FY 2022 external guidance range, reported at the end of FY 2021, and is consistent with the company’s three-year historical average. See Appendix A to this proxy statement for a reconciliation of operating cash flow as reported under U.S. GAAP to the FCF result used for incentive payout purposes.

The following summarizes the FY 2022 MIP payout formula. As is the case for all of the Company’s performance-based payout scales, when a result falls between reference points, we use linear interpolation to determine the result.

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The table below summarizes MIP payouts to our NEOs for FY 2022:

Name	Eligible Earnings	X	MIP Target (%)	=	MIP Target Award ($)	X (	Adjusted EPS Result (%) 50%  Weight	+	AOP Result (%) 25%  Weight	+	FCF Result (%) 25% Weight	) =	FY 2022 MIP Payout ($)
Brian S. Tyler	1,375,000		175%		2,406,250		200%		200%		100%		4,210,938
Britt J. Vitalone	845,001		115%		971,751		200%		200%		100%		1,700,564
Lori A. Schechter	812,500		100%		812,500		200%		200%		100%		1,421,875
Tracy L. Faber	641,667		100%		641,667		200%		200%		100%		1,122,917
Nancy Flores	570,834		100%		570,834		200%		200%		100%		998,960

Long-Term Incentive Compensation

Long-term incentive (LTI) compensation is a critical component of our executive compensation program. It is in our shareholders’ interests that our executives foster a long-term view of the Company’s financial results. Long-term incentives are also an important retention tool that management and the Compensation Committee use to align the financial interests of executives and other key contributors with sustained shareholder value creation.

For FY 2022, the Company’s LTI compensation program for NEOs included two award opportunities:

• Performance Stock Units (60% of target LTI value)

• Restricted Stock Units (40% of target LTI value)

       Performance Stock Unit Program

Overview. The Performance Stock Unit (PSU) program is a long-term equity incentive program with payouts conditioned on achievement against pre-established performance goals. A new three-year performance period begins each fiscal year, and PSU performance goals and the target awards for our executive officers are established shortly after the beginning of the performance period.

FY 2020 — FY 2022 PSU Performance Metrics. In May 2019, the Compensation Committee established three-year Cumulative Adjusted EPS, three-year average Return on Invested Capital (ROIC) and the Company’s Total Shareholder Return (TSR) relative to a comparator group as the performance metrics for FY 2020 — FY 2022 PSU payouts. The following summarizes our FY 2020 — FY 2022 PSU performance metrics:

• Cumulative Adjusted EPS (50% of payout). Cumulative Adjusted EPS was selected as a metric because of the importance of earnings as a driver of share price valuation and shareholder expectations. Consistent with prior performance periods, our Cumulative Adjusted EPS target assumed, among other things, capital deployment in the form of share repurchases. For FY 2020 — FY 2022, the Compensation Committee applied a Cumulative Adjusted EPS result of $50.52 for purposes of calculating PSU payouts. A related metric, one-year Adjusted EPS, is used as a metric for the Management Incentive Plan. Adjusted EPS is highly relevant in both short- and long-term contexts, and the Compensation Committee believed it was useful to measure Adjusted EPS across both periods, with greater economic opportunity in the long-term portion of the program to ensure that short-term gains are not sought at the expense of long-term performance. See Appendix A to this proxy statement for a reconciliation of diluted earnings per share from continuing operations as reported under U.S. GAAP to the Adjusted EPS result used for incentive payout purposes.

• Average ROIC (25% of payout). Return on Invested Capital (ROIC) measures the Company’s ability to create value by generating a return that is above our weighted average cost of capital. Adjusted three-year average ROIC measures, as a percentage, the average of our annual NOPAT divided by average invested capital over the three-year performance period. NOPAT is defined as adjusted operating profit, referenced in Appendix A, excluding interest income and net of taxes. Average invested capital is defined as the average of beginning and ending net assets adjusted for debt and other items. For FY 2020 — FY 2022, the Compensation Committee applied a three-year average ROIC result of 13.42% for purposes of calculating PSU payouts. Consistent with prior years, we excluded the Change Healthcare joint venture in determining this result for payouts for all plan participants.

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             EXECUTIVE COMPENSATION             

• Total Shareholder Return (25% of payout). TSR is calculated as share price appreciation (or reduction) over the performance period, including reinvestment of dividends when paid, divided by the share price at the beginning of the period; provided, that the stock price we use at the beginning and at the end of the period is the average closing price of Company common stock over the 30-day period preceding the applicable date. At the end of the performance period, performance is determined by ranking the Company’s TSR against the TSR of the companies in our FY 2020 — FY 2022 relative TSR comparator group, described below. Payout at target level continues to require above-median performance at the 55^th percentile of the rTSR comparator group. In addition, the number of shares earned is capped at the target amount if absolute TSR is negative during the three-year performance period. No shares are earned for the rTSR portion of the award if rTSR for the three-year period falls below the 35^th percentile of the rTSR comparator group. Upon certification of the result, participants receive shares of Company common stock if the performance threshold is met. For FY 2020 — FY 2022, our TSR was at the 92^nd percentile relative to our relative TSR comparator group over the three-year period ending March 31, 2022, and the Compensation Committee applied this result for purposes of calculating PSU payouts.

Based on these results, our NEO participants received 195% of their target FY 2020 — FY 2022 PSUs. When a metric’s result falls between reference points, we use linear interpolation to determine the result. Ms. Flores was hired during FY 2020 and was not awarded FY 2020 — FY 2022 PSUs.

The table below summarizes PSU payouts for our NEOs for the FY 2020 — FY 2022 performance period:

Name(1)	FY 2020 — FY 2022 Target PSUs (#)	X	(	Cumulative Adjusted EPS Result (%) 50% Weight	+	Average ROIC Result (%) 25% Weight	+	Relative TSR Result (%) 25% Weight	)	=	FY 2020 — FY 2022 Earned PSUs (#)
Brian S. Tyler	43,038			191%		200%		200%			83,924
Britt J. Vitalone	13,075			191%		200%		200%			25,496
Lori A. Schechter	11,354			191%		200%		200%			22,140
Tracy L. Faber(2)	3,748			191%		200%		200%			7,309
Tracy L. Faber(3)	1,730			191% (67% Weight)		200% (33% Weight)		N/A			3,356

(1) Ms. Flores was hired during FY 2020 and was not awarded FY 2020 — FY 2022 PSUs.

(2) Ms. Faber was awarded 3,748 PSUs in November 2019 in connection with her promotion to the position of Executive Vice President and Chief Human Resources Officer, which are subject to the same performance goals as other NEO awards described above.

(3) In May 2019, prior to becoming an executive officer, Ms. Faber was awarded FY 2020 — FY 2022 PSUs with performance metrics consisting of 67% Cumulative Adjusted EPS and 33% Average ROIC.

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FY 2020 — FY 2022 Relative TSR Comparator Group. For the FY 2020 — FY 2022 PSU awards, the Compensation Committee approved a relative TSR comparator group originally comprised of 15 public companies that served as a representative index of our most direct competitors and healthcare supply chain indicator companies. Two companies were subsequently removed from the comparator group due to corporate transactions, reducing the comparator group to 13 companies. The committee reaffirmed that this comparator group of companies more closely aligns with our core business operations than the Compensation Peer Group listed on page 46, which more closely aligns with the market for our executive talent.

The relative TSR comparator group includes seven companies in the Compensation Peer Group that are considered McKesson’s most direct competitors based on their talent pool, size and business focus, as well as six companies that are not viewed as competitors for talent, but are in at least two of the following categories: (i) companies with extensive business overlap; (ii) companies with similar market exposure; (iii) the largest pure play manufacturers representative of the pharmaceutical industry; and/or (iv) manufacturers with large generic pharmaceutical market presence.

These criteria ensure that our relative TSR comparator group serves as a diversified representation of companies in McKesson’s supply chain and broader healthcare ecosystem and acts as an appropriate gauge of overall Company performance.

FY 2020 — FY 2022 Relative TSR Comparator Group(1)(2)
AmerisourceBergen Cardinal Health CVS Health Henry Schein Johnson & Johnson	Kroger Owens & Minor Pfizer Rite Aid Sanofi	Teva Pharmaceutical Viatris (formerly Mylan)(3) Walgreens Boots Alliance

(1) The comparator group includes seven companies that are also included in the Compensation Peer Group.

(2) In December 2019, Diplomat Pharmacy was acquired by UnitedHealth Group Inc. and in August 2021, UDG Healthcare was acquired by Clayton, Dubilier & Rice, LLC, resulting in their removal from the comparator group.

(3) In November 2020, Mylan merged with Upjohn, a division of Pfizer, to form Viatris.

FY 2022 — FY 2024 PSU Performance Metrics. PSUs comprise 60% of the target LTI award granted in FY 2022, and will be earned based on Cumulative Adjusted EPS (50%), three-year average Return on Invested Capital (ROIC) (25%) and TSR relative to a comparator group (25%). The Compensation Committee believes that the combination of Cumulative Adjusted EPS, three-year average ROIC and relative TSR will drive value creation and ensure alignment with shareholders. Consistent with the FY 2020 — FY 2022 and FY 2021 — FY 2023 PSU awards, the comparator group for this performance period includes 13 of our most direct competitors and healthcare supply chain indicator companies listed above. The Company must achieve above-median performance (55th percentile) relative to the comparator group to earn a target payout for the rTSR portion of the award. If the Company’s TSR is negative for the performance period, then the rTSR result is capped at target regardless of ranking relative to the comparator group. No shares are earned for the rTSR portion of the award if rTSR for the three-year period falls below the 35th percentile. The payout formula illustrated below applies to all NEOs:

We generally do not disclose forward-looking goals for our multi-year incentive programs, because the Company does not provide forward-looking guidance to our investors with respect to multi-year periods and it is competitively sensitive information. Consistent with our past and current practice, we will disclose multi-year performance goals in our regular programs in full after the close of the performance period.

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             EXECUTIVE COMPENSATION             

FY 2022 — FY 2024 Performance Stock Unit Awards. At its May 2021 meeting, following a review of all direct compensation components and market data derived from our Compensation Peer Group, the Compensation Committee approved FY 2022 — FY 2024 PSU target awards for our NEOs as follows:

Name	FY 2022 — FY 2024 PSUs (#)		FY 2022 — FY 2024    PSU Grant Value ($)(1)
Brian S. Tyler		36,013		7,350,330
Britt J. Vitalone		10,290		2,100,233
Lori A. Schechter		7,659		1,563,219
Tracy L. Faber		5,146		1,050,331
Nancy Flores		4,263		870,089

(1) A portion of the grant date fair value of PSU awards was determined by an independent third party using a Monte Carlo simulation model because the performance goals applicable to the PSU awards include a combination of operational and market-based (rTSR) criteria.

       Restricted Stock Units

Overview. Restricted Stock Unit (RSU) awards are time-vested equity grants that generally vest one-third on each of the first three anniversaries of the grant date. RSU awards directly align the interests of executives with those of shareholders by tying long-term incentive compensation value to Company share price performance. The Compensation Committee determines the proportion of total target long-term incentives that will be awarded as RSUs by considering the balance of cash and equity in our annual and long-term incentive plans, our strategic and operational objectives, the responsibilities of our NEOs, a review of similar grants made at companies in our Compensation Peer Group and other factors the committee deems relevant.

FY 2022 Restricted Stock Unit Awards. At its May 2021 meeting, following a review of all direct compensation components and market data derived from our Compensation Peer Group, the Compensation Committee granted FY 2022 RSU awards to our NEOs as follows:

Name	FY 2022 RSUs (#)		FY 2022 RSU Grant Value    ($)(1)
Brian S. Tyler		24,998		4,900,108
Britt J. Vitalone		7,143		1,400,171
Lori A. Schechter		5,316		1,042,042
Tracy L. Faber		3,572		700,183
Nancy Flores		2,959		580,023

(1) The RSUs awarded in May 2021 were granted at a fair market value of $196.02 per unit.

Other Compensation and Benefits

The Company provides an array of benefits to all employees. These benefits are comparable to those offered by employers in our industry and geographic footprint, including a competitive suite of health and life insurance and retirement benefits. In providing these benefits, both management and the Compensation Committee determined that they are appropriate for the attraction and retention of talent. In addition to the discussion of benefits below, the compensation associated with these benefits is described in footnote 2 to the 2022 Summary Compensation Table.

The Company offers two voluntary nonqualified, unfunded deferred compensation plans: (i) the Supplemental Retirement Savings Plan (SRSP) and (ii) the Deferred Compensation Administration Plan III (DCAP III). The SRSP is offered to all employees, including executive officers, who may be impacted by compensation limits that restrict participation in the McKesson Corporation 401(k) Retirement Savings Plan (401(k) Plan). Participation in DCAP III is offered to all senior-level management and executive-level employees, including our executive officers, and certain additional categories of senior-level professionals who are highly compensated employees.

Our employees, including our executive officers, are eligible to participate in the McKesson Foundation’s Matching Gifts Program. Under this program, employee gifts to schools, educational associations or funds and other public charitable organizations are eligible for a foundation match. Our executive officers may also request that the McKesson Foundation make one-time grants to qualifying institutions. In addition, under the Board Service Grant Program, our employees, including our executive officers, may apply to the foundation for an annual gift in recognition of their service on the board of such an organization. All of McKesson’s employees in the U.S. and Canada may also request a matching contribution, without limitation, under the McKesson Foundation’s Disaster Relief matching program, which matches contributions made to applicable public charitable organizations.

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A limited number of other benefits are provided to executive officers, because it is customary to provide such benefits or in the best interest of the Company and its shareholders to do so. We provide access to executive health services, including annual physical examinations, to executive officers and their spouses. The Company provides security services for our CEO, which we believe is reasonable, necessary, and in the best interest of the Company and its shareholders. The Company periodically engages an independent security consultant to conduct a comprehensive study of our security program, which includes an evaluation of the risks to certain executive officers and the need for executive transportation and a residential security system. During FY 2022, we engaged an independent security consultant to evaluate security risks for Mr. Tyler. The independent consultant’s evaluation considered the Company’s size and profile, and its business activities in the industry in which it operates. The Compensation Committee concluded that providing security benefits to Mr. Tyler is both necessary and for the Company’s benefit, to address safety concerns arising directly as a result of his role as the CEO of the Company. We believe Mr. Tyler’s security and safety is integral to the Company’s operations and continued value creation for our shareholders. Our Executive Officer Security Policy requires our CEO to use a corporate aircraft for both business and personal use. The security services provided to our CEO also include the installation of home security. We consider the security measures provided to our executive officers to be a reasonable and necessary expense for the Company’s benefit. In accordance with SEC disclosure rules, the aggregate cost of these services is reported in the 2022 Summary Compensation Table. Beginning with FY 2021, Mr. Tyler assumed the costs of ongoing home security monitoring.

Compensation Peer Group

Peer Selection Process

Each year, the Compensation Committee determines which companies best reflect McKesson’s competitors for customers, shareholders and talent. A key objective of our executive compensation program is to ensure that the total compensation package we provide to our executive officers is competitive with the companies against which we compete for executive talent. The Compensation Committee consults with its independent compensation consultant to develop a compensation peer group of companies to serve as the basis for comparing McKesson’s executive compensation program to the market. The Compensation Committee uses the guiding principles and questions below as a foundational tool to determine McKesson’s Compensation Peer Group.

Guiding Principles for McKesson Peer Selection
Consider Industry to identify companies with similar business model or philosophy •    Start with direct distribution peers in the healthcare industry •    Expand to other healthcare peers that might interact with McKesson in its value supply chain •  Extend search to non-healthcare peers with operationally similar business models (i.e., companies that have a manufacturing, distribution, wholesale and/or retail component)
Consider Size to ensure companies are similar in scope
Consider other Business Characteristics to identify publicly traded companies headquartered in the U.S.
Questions Addressed in Developing an Effective Peer Group
Who are key performance comparators?	•    Who is McKesson competing against for customers? •    Which companies have similar market demands and influences?
Who are closest competitors for talent?	•    Which companies might try to recruit from McKesson? •    If McKesson had to replace the executive team, from which companies might it recruit to attract executives with similar capabilities?
Who are the peers from an external perspective?	•    Who is McKesson competing against for shareholders? •    Who do key analysts name as peers? •    Who do current peers name as peers?

FY 2022 Compensation Peer Group and How We Used the Data

Our Company has few direct business competitors, which makes it difficult to create a peer group based on industry codes, revenues or market capitalization alone. The Compensation Committee strives to develop a peer group that best reflects all aspects of McKesson’s complex business. For FY 2022, the committee and its independent compensation consultant used a value supply chain framework to identify companies that may compete with McKesson for executive talent. McKesson’s peers include the following: (i) healthcare companies that may compete or interact with McKesson’s supply chain; (ii) non-healthcare companies that are operationally similar to McKesson or other companies in its supply chain; and (iii) managed care companies.

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             EXECUTIVE COMPENSATION             

The committee then considered factors such as revenue and market capitalization to derive an appropriate number of peers within our value supply chain framework. The committee believes our diverse selection of peer group companies provides a better understanding of the evolving and competitive marketplace for executive talent.

The Compensation Committee used data derived from our Compensation Peer Group to inform its decisions about overall compensation, compensation elements, optimum pay mix and the relative competitive landscape of our executive compensation program. The committee used multiple reference points when establishing target compensation levels. The committee did not strive to benchmark any individual compensation component or compensation in the aggregate to be at any specific percentile level relative to the market. Our 21 peer companies below are sorted by revenue and market capitalization. They reflect the Compensation Peer Group utilized by the Compensation Committee at its May 2021 meeting, when it established FY 2022 target direct compensation for our executive officers.

FY 2022 Compensation Peer Group

(1) Revenues are stated in billions for the most recently completed fiscal year as publicly reported by each company as of May 27, 2022.

(2) Market capitalizations are stated in billions as of March 31, 2022, the last day of our fiscal year.

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Independent Review Process

The Compensation Committee sets performance goals, payout scales and target award levels for executive officers. The committee also determines incentive payouts for the prior fiscal year based on actual results against performance goals. While performance goals and payout scales are initially developed by senior management and driven by the one-year operating plan and the rolling three-year strategic plan reviewed with the Board, the Compensation Committee has the authority to approve, modify or amend management’s performance goals and payout scale recommendations. Performance goals are selected to be consistent with the operating and strategic plans reviewed, challenged and approved by the Board and information routinely communicated to employees or shareholders by management.

Setting Targets for the Fiscal Year	Mid-Year Review	Assessing Year-End Results
•   Compensation Committee’s independent consultant uses data on the Compensation Peer Group derived from independent surveys and disclosures by public companies to inform the committee of competitive pay levels for executive officers. •   Our CEO, in consultation with the Compensation Committee’s independent compensation consultant and our EVP & CHRO, develops compensation recommendations for the other executive officers, for approval by the committee. •   Compensation Committee sets target pay for all executive officers, including our CEO.	•   Compensation Committee examines the design and purpose of all executive compensation pay elements. •   Compensation Committee reviews and considers feedback from shareholders and proxy advisory firms regarding executive compensation program and policies. •   Compensation Committee reviews compliance with Stock Ownership Policy. •   Management updates the committee on performance against incentive plan pre-established targets. •   Compensation Committee reflects on market trends and emerging practices in executive compensation and application to McKesson.	•   Compensation Committee reviews tally sheets, which display current compensation and estimated separation and change in control benefits. •   CEO presents an assessment of his individual performance results to the Board and discusses his goals for the new fiscal year. •   Compensation Committee considers, among other things, regulatory, compliance and legal issues in making executive compensation determinations. •   Board conducts our CEO’s performance review, discusses his performance in executive session and approves his goals for the new fiscal year. •   Compensation Committee determines our CEO’s incentive compensation payouts in executive session with input from its independent compensation consultant.

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             EXECUTIVE COMPENSATION             

Role of Independent Compensation Consultant

Pursuant to its charter, the Compensation Committee may retain and terminate any consultant or other advisor, as well as approve the advisor’s fees and other engagement terms. Each year, the committee evaluates the qualifications, performance and independence of its independent compensation consultant. To ensure it receives independent and unbiased advice and analysis, the committee adopted a formal independence policy certified annually by its compensation consultant.

For FY 2022, the Compensation Committee continued its engagement of Korn Ferry as its independent compensation consultant. As discussed throughout this proxy statement, the Compensation Committee’s independent compensation consultant advises on compensation matters concerning our executive officers. Representatives from Korn Ferry attended all Compensation Committee meetings during FY 2022, participated in executive sessions and communicated directly with committee members. Korn Ferry also provided independent consulting services to the Governance Committee in FY 2022 regarding director compensation. Korn Ferry did not perform any services for management or any other services to the Company other than the services provided to Board committees.

The fees incurred for FY 2022 services provided by Korn Ferry to the Compensation Committee totaled $268,750. During FY 2022, Korn Ferry provided other services to the Company requested by Company management consisting of senior executive searches and management training programs and tools, for fees totaling approximately $217,499. The services requested by Company management were approved by the Chair of the Compensation Committee and were contracted for with members of Korn Ferry that were not part of Korn Ferry’s engagement with the Compensation Committee. The Compensation Committee believes Korn Ferry’s other work for the Company does not raise a conflict of interest and does not impair Korn Ferry’s ability to provide independent advice to the committee concerning executive compensation matters. In reaching its conclusion, Compensation Committee members took into account, among other things, the factors set forth in Exchange Act Rule 10C-1 and the NYSE listing standards.

Role of Management

Our CEO provides the Compensation Committee with pay recommendations for executive officers other than himself. The Compensation Committee, with input from the committee’s independent compensation consultant, determines our CEO’s compensation in executive session. Our Executive Vice President and Chief Human Resources Officer attends committee meetings to provide perspective and expertise relevant to the agenda. Management supports the committee’s activities by providing analyses and recommendations as requested. Management also reports to the committee on a regular basis regarding feedback received in the course of year-round shareholder engagement.

Information on Other Compensation-Related Topics

Severance and Change in Control Benefits

Our Severance Policy for Executive Employees (Executive Severance Policy) affords benefits to selected management employees, including our executive officers. We provide severance benefits to give executives a measure of financial security following the loss of employment, and to protect the Company from competitive activities after the departure of certain executives. We believe these benefits are important to attract and retain executives in a highly competitive industry. This policy applies if an executive officer is terminated by the Company for reasons other than for cause and the termination is not covered by the Company’s Change in Control Policy for Selected Executive Employees (CIC Policy).

Our 2013 Stock Plan and award agreements include change in control provisions which provide for “double-trigger” vesting upon an involuntary or constructive termination of employment following a change in control. Our CIC Policy provides for severance benefits to selected management employees in the event of an involuntary or constructive termination of employment occurring in connection with a change in control. We believe our CIC Policy is in our shareholders’ best interest, so that senior management can remain focused on important business decisions and not on how a potential transaction may affect them personally. The CIC Policy is administered by the Compensation Committee and benefits are consistent with current market practice. More detailed descriptions of the Executive Severance Policy and the CIC Policy are provided below at “Executive Severance Policies.”

Stock Ownership Policy

The Company has robust guidelines for stock ownership by executive officers. Our CEO’s ownership requirement is six times base salary, and the ownership requirement for each of the Company’s other executive officers is three times base salary. Stock options and PSU target awards do not count toward ownership under the policy. The Company reserves the right to

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             EXECUTIVE COMPENSATION             

restrict sales of the underlying shares of vesting equity awards if executives fail to meet the ownership requirements specified in our Stock Ownership Policy. Additionally, executives are required to hold 75% of the net after-tax shares issued upon the vesting or exercise of an award until the policy’s requirements are met. Once the requirement is met, executives must maintain that level of ownership or again be subject to the 75% holding requirement. Members of our Board are also subject to stock ownership guidelines, which are summarized above at “Director Compensation — Equity Compensation.”

The Compensation Committee reviews executive officer compliance with our Stock Ownership Policy each year. As of March 31, 2022, all NEOs satisfied their stock ownership requirement.

Name	Stock Ownership Policy
	Target Ownership				Actual Ownership
	Multiple of          Base Salary		Multiple Expressed in Dollars		Multiple of          Base Salary(1)		Value of Shares Held    by Executives in Dollars(2)
Brian S. Tyler		6		8,400,000		18.8		26,308,680
Britt J. Vitalone		3		2,550,000		17.3		14,667,738
Lori A. Schechter		3		2,445,000		18.4		15,025,884
Tracy L. Faber		3		1,935,000		6.0		3,856,159
Nancy Flores		3		1,725,000		5.8		3,310,203

(1) NEO ownership is stated as of March 31, 2022, using FY 2022 salary levels. The ownership requirement may be met through any combination of the following:

• Direct stock holdings of the Company’s common stock, including shares held in a living trust, a family partnership or corporation controlled by the officer, unless the officer expressly disclaims beneficial ownership of such shares;

• Shares of the Company’s common stock held in the 401(k) Plan;

• Shares of the Company’s common stock underlying outstanding restricted stock and restricted stock unit awards; and/or

• Shares of the Company’s common stock underlying restricted stock units that are vested and deferred under a Company-sponsored deferral program.

(2) Based on the $306.13 closing price of the Company’s common stock as reported by the NYSE on March 31, 2022.

Insider Trading Policy

The Company maintains an insider trading policy applicable to all directors and employees. The policy provides that Company personnel may not: buy, sell or engage in other transactions in the Company’s stock while in possession of material non-public information; buy or sell securities of other companies while in possession of material non-public information about those companies they become aware of as a result of business dealings between the Company and those companies; disclose material non-public information to any unauthorized persons outside of the Company; or engage in hedging transactions through the use of certain derivatives, such as put and call options involving the Company’s securities. The policy also restricts trading for a limited group of Company employees (including all directors and NEOs) to defined window periods which follow our quarterly earnings releases.

Anti-Hedging and Pledging Policy

The Company’s anti-hedging and pledging policy applies to all directors and executive officers. The policy prohibits these individuals from engaging in any hedging transaction with respect to Company securities. These individuals are also prohibited from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan. Pledges of Company securities arising from certain types of hedging transactions are also prohibited under our insider trading policy, as described above.

Equity Grant Practices

The Company has a written equity grant policy which generally prohibits the grant of equity awards when the Company’s directors or employees may be in possession of material non-public information. When the Compensation Committee meeting occurs shortly following our public announcement of earnings, the grant date is the same day as the committee meeting.

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             EXECUTIVE COMPENSATION             

Otherwise, in most situations, the grant date is postponed until the third trading day following the release of our earnings results. The Company’s annual grants generally occur at the end of May each year, close in time to our public announcement of financial results for the prior completed fiscal year and publication of our forward estimate of earnings for the current fiscal year.

The annual PSU program has a three-year performance period and the shares that are earned are not subject to any further vesting conditions. RSU awards generally vest over three years. The Company has discontinued for the time being the grant of stock options in our compensation programs, but stock options having a contractual term of seven years are still outstanding. The Company’s equity grant policy states that stock options will be awarded at an exercise price equal to the closing price of the Company’s common stock on the date of grant. Under the terms of our 2013 Stock Plan, stock option re-pricing is not permitted without shareholder approval.

Tax Deductibility and Considerations for Compensation Design

Prior to its amendment in 2017, IRC Section 162(m) generally provided that publicly held corporations may not deduct in any taxable year specified compensation in excess of $1,000,000 paid to the CEO and the next three most highly compensated executive officers, excluding the chief financial officer, unless the compensation qualified as performance-based compensation meeting specified criteria, including shareholder approval of the material terms of applicable plans. Tax legislation enacted in 2017 expanded the scope of IRC Section 162(m) to include the chief financial officer in the group of covered executive officers, and repealed the exemption for performance-based compensation, in each case for tax years beginning after December 31, 2017. Accordingly, compensation in excess of $1,000,000 per year paid to our covered executive officers beginning with FY 2019 (which was our first tax year beginning after December 31, 2017) will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place prior to November 2, 2017.

Due to the continued importance and benefit to the Company and our shareholders of awarding compensation that is structured to properly incentivize our executive team, the Compensation Committee believes that it is in our best interests to retain flexibility in awarding compensation, even if some awards may be non-deductible compensation expenses.

Compensation Recoupment Policy

The Board is dedicated to maintaining and enhancing a culture focused on integrity and accountability which discourages conduct detrimental to the Company’s sustainable growth. Our Compensation Recoupment Policy (Recoupment Policy) was amended by the Compensation Committee on January 28, 2020, to provide for potential recoupment of incentive compensation granted after that date, in the event that the committee determines that an employee has engaged in conduct not in good faith that causes reputational harm to McKesson or any of its subsidiaries or affiliates. Our Recoupment Policy is incorporated by reference into all of our incentive plans, including those plans in which our NEOs participate.

Under the Recoupment Policy, the Company may recover, or “claw back,” incentive compensation if an employee: (i) engages in misconduct pertaining to a financial reporting requirement under the federal securities laws that in turn would require the Company to file a restatement of its audited financial statements with the SEC to correct an error; (ii) receives incentive compensation based on an inaccurate financial or operating measure that when corrected causes significant harm to the Company; or (iii) engages in any fraud, theft, misappropriation, embezzlement or dishonesty to the detriment of the Company’s financial results as filed with the SEC. In addition, if the Compensation Committee determines that an employee has engaged in conduct which is not in good faith and which disrupts, damages, impairs or interferes with the business, reputation or employees of McKesson or any of its subsidiaries or affiliates, then the committee may recover incentive compensation, after consideration of factors it deems appropriate, such as, for example, the passage of time since the occurrence of the act and any pending or threatened legal proceeding relating to the employee’s conduct.

If triggered, then to the fullest extent permitted by law, the Company may require the employee to reimburse the Company for all or a portion of any incentive compensation received in cash within the last 12 months, and remit to the Company any compensation received from the vesting or exercise of equity-based awards occurring within the last 12 months. The Company will publicly disclose the results of any deliberations about whether to recoup compensation from an executive officer under the Recoupment Policy unless, in individual cases and consistent with any legally mandated disclosure requirements, the Board or the Compensation Committee concludes that legal or privacy concerns would prevent such disclosure.

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Compensation Committee Report on Executive Compensation

We have reviewed and discussed with management the Compensation Discussion and Analysis. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference to McKesson Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

Compensation Committee of the Board of Directors

Linda P. Mantia, Chair

Richard H. Carmona, M.D.

Donald R. Knauss

Edward A. Mueller

Kathleen Wilson-Thompson

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is composed of the five independent directors listed above. No member of the Compensation Committee is, or was during FY 2022, a current or former officer or employee of the Company or any of its subsidiaries. Additionally, during FY 2022, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on the Board or the Compensation Committee of the Company.

 - 2022 Proxy Statement   51

             EXECUTIVE COMPENSATION             

2022 Summary Compensation Table

The table below provides information regarding compensation and benefits earned by: (i) our Chief Executive Officer; (ii) our Executive Vice President and Chief Financial Officer; (iii) the three other most highly compensated executive officers, in each case, serving as of March 31, 2022 (collectively, our Named Executive Officers or “NEOs”):

Name and Principal Position	Fiscal Year		Salary ($)		Bonus ($)		Stock Awards ($)(1)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)(2)(3)		Total ($)
Brian S. Tyler Chief Executive Officer		2022		1,375,000		-0-		12,250,438		4,210,938		315,706		18,152,082
		2021		1,177,083		-0-		11,500,289		1,602,813		559,888		14,840,073
		2020		1,250,000		-0-		9,875,191		3,654,000		656,279		15,435,470
Britt J. Vitalone Executive Vice President and Chief Financial Officer		2022		845,001		-0-		3,500,404		1,700,564		87,763		6,133,732
		2021		792,667		-0-		3,250,313		1,451,567		43,751		5,538,298
		2020		813,333		-0-		3,000,058		1,426,683		57,208		5,297,282
Lori A. Schechter Executive Vice President, Chief Legal Officer and General Counsel		2022		812,500		-0-		2,605,261		1,421,875		429,141		5,268,777
		2021		773,333		-0-		2,605,244		1,242,233		305,657		4,926,467
		2020		800,000		-0-		2,605,167		1,813,010		94,734		5,312,911
Tracy L. Faber Executive Vice President and Chief Human Resources Officer		2022		641,667		-0-		1,750,514		1,122,917		67,383		3,582,481
		2021		604,167		-0-		1,750,361		680,667		60,453		3,095,648
		2020		533,708		-0-		1,300,266		676,927		51,340		2,562,241
Nancy Flores Executive Vice President, Chief Information Officer and Chief Technology Officer		2022		570,834		-0-		1,450,112		998,960		35,100		3,055,006

(1) Amounts shown represent the aggregate grant date fair value of stock-based awards calculated in accordance with ASC Topic 718. These values do not include estimated forfeitures and may not reflect compensation actually received by our executive officers. The assumptions used to calculate the value of these awards can be found in Financial Note 5 of the Company’s consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended March 31, 2022, as filed with the SEC on May 9, 2022. For awards that are not subject to performance conditions, such as stock options, the maximum award levels would not result in awards greater than disclosed in the table above. For awards that are subject to performance conditions, such as PSUs, we report the value at grant date based upon the probable outcome of such conditions consistent with our estimate of aggregate compensation cost to be recognized over the service period determined under ASC Topic 718, excluding the effect of estimated forfeitures.

The following represents the aggregate value based on the maximum number of shares that may be earned for PSU awards computed in accordance with ASC Topic 718 for each of the fiscal years presented above: Mr. Tyler, $14,700,661, $13,800,330 and $11,850,129; Mr. Vitalone, $4,200,466, $3,900,543 and $3,600,088; Ms. Schechter, $3,126,437, $3,126,304 and $3,126,254; Ms. Faber, $2,100,662, $2,100,424, and $1,560,206; and Ms. Flores, $1,740,177.

(2) Amounts shown represent the following with respect to FY 2022:

Matching Contributions to 401(k) Plan and Nonqualified Plans

The amount contributed by the Company to each NEO’s 401(k) Plan account was as follows: Mr. Tyler, $11,600; Mr. Vitalone, $11,600; Ms. Schechter, $11,600; Ms. Faber, $11,600; and Ms. Flores, $11,600.

As described below in the narrative following the 2022 Nonqualified Deferred Compensation Table, the SRSP and the DCAP III provide for matching contributions. The amount contributed by the Company to each NEO’s SRSP account was as follows: Mr. Tyler, $78,713; Mr. Vitalone, $58,663; Ms. Schechter, $41,625; Ms. Faber, $38,233; and Ms. Flores, $0. The amount contributed by the Company to each NEO’s DCAP III account was as follows: Mr. Tyler, $0; Mr. Vitalone, $0; Ms. Schechter, $10,208; Ms. Faber, $0; and Ms. Flores, $0.

Perquisites and Other Benefits

The value provided to each NEO under the Company’s Executive Officer Security Policy was as follows: Mr. Tyler, $156,126; Mr. Vitalone, $0; Ms. Schechter, $0; Ms. Faber, $0; and Ms. Flores, $0. The amount for Mr. Tyler represents the incremental cost of personal use of Company-provided aircraft and the reimbursement of reasonable expenses related to the installation of home security equipment. The Company does not reimburse our NEOs for taxes due on imputed income for items or services provided under the Executive Officer Security Policy.

52     - 2022 Proxy Statement

             EXECUTIVE COMPENSATION             

• Company Aircraft: Mr. Tyler is required under our security policy to use the Company’s aircraft for security, productivity and privacy reasons. The aggregate incremental cost of personal use of Company-provided aircraft for Mr. Tyler in FY 2022 was $152,619. To calculate this cost, the Company determines the total variable annual operating cost for each aircraft, such as fuel, trip-related maintenance, landing and parking fees, crew expenses, supplies and catering. The total variable operating cost is then averaged for all flight hours flown and multiplied by the total number of personal flight hours for each NEO. During FY 2022, due to restrictions on business travel necessitated by the COVID-19 pandemic, there were fewer flights in total, and fewer persons on those flights, which resulted in a higher cost per flight hour. Fixed annual costs that do not change based on usage, such as pilots’ salaries, home hangar expenses, general taxes, routine maintenance and insurance, are excluded from the incremental cost calculation. If an aircraft flies empty before picking up or after dropping off a passenger flying for personal reasons, and the empty flight is not related to any other business-related travel, this “deadhead” segment is included in the incremental cost calculation for determining personal use.

• Home Security: The Company paid $3,507 for the installation of home security devices for Mr. Tyler, based on an evaluation performed by an independent security consultant. For a complete description of Mr. Tyler’s security benefit, please refer to the section entitled “Other Compensation and Benefits” on page 44.

The value of financial counseling services provided to each NEO was as follows: Mr. Tyler, $17,500; Mr. Vitalone, $17,500; Ms. Schechter, $17,500; Ms. Faber, $17,500; and Ms. Flores, $17,500.

For Mr. Tyler, Ms. Schechter, Ms. Faber and Ms. Flores, includes $5,000, $5,000, $50 and $6,000, respectively, in matching contributions made by the McKesson Foundation to charitable organizations. For Ms. Schechter, includes $2,500 donated by the McKesson Foundation to a charitable organization in respect of her service as a director of the organization.

For Ms. Schechter, includes $324,687 for the value of relocation expenses paid by the Company to her or on her behalf and $16,021 for income tax gross-ups pursuant to the Company’s relocation policy. Relocation benefits are consistent with the benefits provided to all employees who relocated from California to Texas in connection with the relocation of the Company’s headquarters from San Francisco, California to Irving, Texas.

Mr. Tyler’s International Assignment and Relocation

Mr. Tyler served on international assignment as Chairman of the Management Board of McKesson Europe for approximately two years, ending with his appointment to the position of President and Chief Operating Officer, when Mr. Tyler and his family repatriated to the United States. Our policies on temporary international assignments and tax equalization are designed to mitigate the inconvenience of such an assignment by covering expenses in excess of what the employee would have incurred had the employee remained in their home country. Accordingly, certain benefits are provided on an income tax-free basis to the employee, and the Company provides for tax equalization to ensure that the employee bears a tax burden comparable to their U.S. tax burden on income that is not related to the international assignment. These benefits are provided to all Company employees covered by the policies. For Mr. Tyler, All Other Compensation includes $46,767 for income tax gross-ups paid during FY 2022 pursuant to the Company’s relocation policy.

(3) For Ms. Schechter, the FY 2021 total includes an additional $19,031 of income tax gross-up payments made in FY 2022 pursuant to the Company’s relocation policy in respect of benefits provided in FY 2021.

 - 2022 Proxy Statement   53

             EXECUTIVE COMPENSATION             

2022 Grants of Plan-Based Awards Table

The table below provides information on plan-based awards, stock awards and stock options granted to our NEOs during the fiscal year ended March 31, 2022:

					Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)						Estimated Future Payouts Under Equity Incentive Plan Awards(2)						All Other Stock Awards: Number of Shares of Stock or Units (#)		Grant Date Fair Value of Stock and Option Awards ($)(5)
Name	Type of Award		Grant Date		Threshold ($)(3)		Target ($)		Maximum ($)		Threshold (#)(4)		Target (#)		Maximum (#)
Brian S. Tyler		RSU		5/25/2021														24,998		4,900,108
		PSU		5/25/2021								18,007		36,013		72,026				7,350,330
		MIP				1,203,125		2,406,250		4,812,500
Britt J. Vitalone		RSU		5/25/2021														7,143		1,400,171
		PSU		5/25/2021								5,145		10,290		20,580				2,100,233
		MIP				485,876		971,751		1,943,502
Lori A. Schechter		RSU		5/25/2021														5,316		1,042,042
		PSU		5/25/2021								3,830		7,659		15,318				1,563,219
		MIP				406,250		812,500		1,625,000
Tracy L. Faber		RSU		5/25/2021														3,572		700,183
		PSU		5/25/2021								2,573		5,146		10,292				1,050,331
		MIP				320,834		641,667		1,283,334
Nancy Flores		RSU		5/25/2021														2,959		580,023
		PSU		5/25/2021								2,132		4,263		8,526				870,089
		MIP				285,417		570,834		1,141,668

(1) Amounts shown represent the range of possible cash payouts under the MIP for the FY 2022 performance period. Amounts actually earned under the FY 2022 MIP are included in the 2022 Summary Compensation Table under the column titled “Non-Equity Incentive Plan Compensation.” Information regarding the operation of the MIP is provided above in the section titled “Each Compensation Element Serves a Unique Purpose.”

(2) Amounts shown for PSUs represent the range of possible awards for the FY 2022 — FY 2024 performance period that the Compensation Committee determined at its May 2021 meeting with respect to annual PSU awards. Payout decisions for these PSU awards will be determined in May 2024.

(3) Amounts shown for MIP represent 50% of the target payout for FY 2022, which is the threshold award payout.

(4) Amounts shown for the annual PSUs represent 50% of the target payout for the FY 2022 — FY 2024 performance period, which is the threshold award payout.

(5) Amounts shown reflect the aggregate grant date fair values of RSU and PSU awards computed in accordance with ASC Topic 718, and do not reflect actual realized values. A portion of the grant date fair value of PSU awards was determined by an independent third party using a Monte Carlo simulation model because the performance goals applicable to the PSU awards include a combination of operational and market-based (rTSR) criteria.