CVS Health

Annual Meeting: May 14, 2020

Total compensation for CEO Larry Merlo for 2019 was $36,451,749, representing a significant increase. His stock awards more than doubled, from $10,124,947 in 2018, to $20,249,968 in 2019. His cash bonus increased by more than $4 million.

Last year Merlo was number 33 in our list of overpaid CEOs. A regression analysis done by HIP Investor predicted pay based on his performance should have been $11,590,072; instead, his 2018 compensation was $21,939,098. The excess calculated was 89.3%. 

Other executives, in addition to the CEO, received excessive pay at CVS Health. In August 2019, according to the proxy statement, the compensation committee approved accelerating the grant date for Executive Vice President and General Counsel Thomas Moriarty’s 2020, 2021, and 2022 annual PSU (performance share units) awards. The accelerated PSU award was valued at $16,124,957. His total compensation of $23,154,934 is higher than that of most CEOs and likely makes him the highest-paid General Counsel in the S&P 500.

In the section on the pay ratio, the company notes that the annual compensation “for Mr. Merlo was $36,466,470, which is $14,721 higher than the amount shown in our SCT (summary compensation table) because of the inclusion of Company-paid medical benefits, which are not reflected in the SCT in accordance with SEC rules.” The median employee pay at CVS was $46,140, and the pay ratio was 790:1.