Thermal Shutdown & reset

Afternoon all,
I am working on a project using an Arduino Mega 2560. According to the website specifications the unit should be able to run on 12VDC without issue.

Input Voltage (recommended) 7-12V
Input Voltage (limit) 6-20V

I noticed that the outlined chip on the board became so hot it would burn me, you could smell the overheating. I then checked the temperature of the chip with my fluke meter, and it registered about 120c when powering the unit with 12vDC, and would eventually shutdown and reset.

I tried two different bkprecision Model 9132B power supplies, and two different 2560 Arduinos. Is this normal behavior, incorrect specifications, or did I somehow hit the proverbial jackpot?

When the system is powered via USB there are no issues, or if I drop the input voltage on the barrel connector to 6 volts there are also no issue. Ideas?