Message from the Management Planning and Development Committee

DEAR CVS HEALTH CORPORATION STOCKHOLDER,

As the members of the Management Planning and Development Committee of the Board of Directors, we are responsible for overseeing the design and implementation of competitive compensation programs that further the interests of stockholders and demonstrate strong pay-for-performance. This responsibility includes listening to and considering your views on executive compensation.

The Compensation Discussion & Analysis (CD&A) that follows describes what we pay, why we pay it, and how we made our pay decisions for 2016. It also demonstrates how our executive pay program reflects our compensation philosophy and our long-term corporate strategy. In addition, the program reflects the actions we took based on your feedback. For example:

  • Beginning with 2017 grants, dividend equivalents on RSUs will only be paid if and when the underlying award vests.
  • We reduced the maximum Executive Incentive Plan (EIP) award opportunity to align with the broad-based Management Incentive Plan (MIP) (maximum bonus is 200% of target).
  • We formalized the guardrails we use for discretionary adjustments for superior performance under the EIP (no more than 25% of the calculated payout under the MIP).
  • We revised the total shareholder return (TSR) modifier for the 2017-2019 Long-Term Incentive Plan (LTIP) award by adjusting awards by +/- 25% for performance above or below the 50th percentile.

We remain firm in our belief that our compensation programs drive the right behaviors for our executives, which in turn benefits our stockholders by driving our business strategies and goals. Though in the short-run the stock price may not correlate with these actions, we believe our stockholders’ interests are best served over time by a balanced compensation program that takes a longterm, holistic view of our business strategy and emphasizes the drivers of long-term value creation.

You can find additional information in this Proxy Statement as well as the Annual Report, both of which can be found on the Company’s website (www.cvshealth.com) or our annual meeting website (www.cvshealthannualmeeting.com).

 


C. David Brown II
(Chairman)

David W. Dorman

Anne M. Finucane

William C. Weldon

Tony L. White