DEF 14A of CVS HEALTH Corp, Apr 1, 2022

DEF 14A of CVS HEALTH Corp

Filed Apr 1, 2022 · FY20210001206774-22-000965

Open on EDGAR

  1. Annual Meeting of Stockholders

    | CEO Pay Ratio | 89 | | Stockholder Proposals | 91 | | Item 4: Stockholder Proposal for Reducing our Ownership Threshold to Request a Special Stockholder Meeting | 91 | | Item 5: Stockholder Proposal Regarding Our Independent Board Chair | 93 | | Item 6: Stockholder Proposal on Civil Rights and Non-Discrimination Audit Focused on “Non-Diverse” Employees | 95 | | Item 7: Stockholder Proposal Requesting Paid Sick Leave for All Employees | 98 | | Item 8: Stockholder Proposal Regarding a Report on the Public Health Costs of Our Food Business to Diversified Portfolios | 101 | | Ownership of and Trading in Our Stock | 104 | | Executive Officer and Director Stock Ownership Requirements | 104 | | Share Ownership of Directors and Certain Executive Officers | 105 | | Share Ownership of Principal Stockholders | 107 | | Delinquent Section 16(a) Reports | 107 | | Other Information | 108 | | Information About the Annual Meeting and Voting | 108 | | Stockholder Proposals and Other Business for Our Annual Meeting in 2023 | 111 | | Other Matters | 112 | | Annex A – Reconciliation of Certain Amounts to the Most Directly Comparable GAAP Measure | A-1 |

  2. Director Nominee Expertise, Skills and Experience

    Director Nominee Expertise, Skills and Experience Our director nominees possess relevant experience, skills and qualifications that allow the Board to effectively oversee the Company’s strategy and management. Our directors’ principal areas of expertise include:

  3. Director Nominee Expertise, Skills and Experience

    | 6 | CVS Health |

  4. Biographies of our Incumbent Board Nominees

    Biographies of our Incumbent Board Nominees

  5. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Former Chairman, President and CEO of Chiquita Brands International, Inc. Age: 64 Director since: November 2018 Race/Ethnicity and Gender White, Hispanic/Latino Male Education B.S., Southern Illinois University, Edwardsville CVS Health Board Committees Audit; Nominating and Corporate Governance Other Public Boards Barry Callebaut AG Synchrony Financial | Fernando Aguirre Mr. Aguirre is the former Chairman, President and Chief Executive Officer of Chiquita Brands International, Inc. (“Chiquita”), a global distributor of consumer products, having served as Chiquita’s President and Chief Executive Officer from January 2004 to October 2012 and its Chairman from May 2004 to October 2012. Prior to joining Chiquita, Mr. Aguirre worked for more than 23 years in brand management, general management and turnarounds at The Procter & Gamble Company (“P&G”), a manufacturer and distributor of consumer products. Mr. Aguirre began his P&G career in 1980, serving in various capacities including President and General Manager of P&G Brazil, President of P&G Mexico, Vice President of P&G’s global snacks and U.S. food products, and President of global feminine care. Mr. Aguirre was a member of the board of directors of Aetna from 2011 until the closing of Aetna’s merger with CVS Health in November 2018 (the “Aetna Transaction”), when he became a director of CVS Health. He served as a director of Coveris, a manufacturer of packaging, from 2014 to 2015, Levi Strauss & Co., a manufacturer of clothing, from 2010 to 2014, and Coca-Cola Enterprises Inc., a manufacturer and distributor of consumer products, from 2005 to 2010. Mr. Aguirre also serves as a director of Barry Callebaut AG, a manufacturer of high-quality chocolate and cocoa products, and Synchrony Financial, a consumer financial services company. Director Qualification Highlights ● Business Operations; Consumer Products and Services ● International Business Operations ● Corporate Governance and Sustainability ● Business Development and Corporate Transactions ● Finance ● Public Company Board Service Skills and Qualifications of Particular Relevance to CVS Health Mr. Aguirre brings to the Board extensive consumer products, global business and executive leadership experience. As a former Chairman and CEO of a large public company that produces and distributes consumer products worldwide, he has significant brand management and international experience that is valuable to the Board’s strategic and operational understanding of global markets. Mr. Aguirre’s experience and service on other large public company boards, where he chaired various committees, positions him well as a member of our Audit and Nominating and Corporate Governance Committees. |

  6. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Partner and Former Member of the Executive Committee of Nelson Mullins Riley & Scarborough LLP Age: 70 Director since: March 2007 Race/Ethnicity and Gender White Male Education B.S.B.A., University of Florida; J.D., University of Florida College of Law CVS Health Board Committees Management Planning and Development (Chair); Nominating and Corporate Governance; Executive Other Public Boards None | C. David Brown II Mr. Brown has been a partner of Nelson Mullins Riley & Scarborough LLP (“Nelson Mullins”), a national law firm, since the August 2018 merger of Nelson Mullins and the Florida-based Broad and Cassel, of which Mr. Brown was Chairman from March 2000 through the time of the merger. He was also a member of the executive committee of Nelson Mullins until he rotated off the committee in December 2021. He served as the lead director of Rayonier Advanced Materials Inc., a leading specialty cellulose production company, until his retirement from that board in May 2020. Mr. Brown previously served on the board of Caremark Rx, Inc. from March 2001 until the closing of the merger transaction involving CVS Health and Caremark, when he became a director of CVS Health. Director Qualification Highlights ● Business Operations; Real Estate ● Business Development, Corporate Strategy and Transactions ● Finance ● Legal and Regulatory Compliance ● Health Care/Regulated Industry ● Risk Management ● Public Company Board Service Skills and Qualifications of Particular Relevance to CVS Health Mr. Brown’s legal expertise and health care experience are highly valued by the Board, as is his ability to analyze and interpret complex issues and facilitate Board engagement. He has a broad background in large-scale corporate and real estate transactions, both domestically and internationally. Mr. Brown has significant health care experience, including through his oversight of UF Health while serving as Chairman of the Board of Trustees for the University of Florida and as a former member of the board of directors and executive committee of Orlando Health, a not-for-profit health care network. The Board believes that Mr. Brown’s experience adds knowledge and leadership depth to the Board. |

  7. Biographies of our Incumbent Board Nominees

    | 2022 Proxy Statement | 13 |

  8. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR President Emerita of Mills College and Former Executive at Eli Lilly and Company Age: 67 Director since: March 2015 Race/Ethnicity and Gender African-American Female Education B.A., Wellesley College; J.D., Indiana University School of Law CVS Health Board Committees Audit; Medical Affairs Other Public Boards Parnassus Funds and Parnassus Income Funds | Alecia A. DeCoudreaux Ms. DeCoudreaux is President Emerita of Mills College, a liberal arts college for women with graduate programs for women and men, having served a five-year term as President from July 2011 through June 2016. Previously, Ms. DeCoudreaux served in a number of leadership roles at Eli Lilly and Company, a global pharmaceutical manufacturer (“Eli Lilly”), including as Vice President and Deputy General Counsel, Specialty Legal Team, from 2010-2011, Vice President and General Counsel, Lilly USA, from 2005-2009, and Secretary and Deputy General Counsel of Eli Lilly from 1999-2005. During her 30-year career with Eli Lilly, Ms. DeCoudreaux also previously served as Executive Director of Lilly Research Laboratories, Director of Federal Government Relations, Director of State Government Relations and Director of Community Relations. In addition, Ms. DeCoudreaux has served on a number of charitable, educational, for profit and nonprofit boards, including as both a trustee and board chair at Wellesley College. She currently serves as Lead Independent Trustee and Chairperson of the Board of Trustees of Parnassus Funds and Parnassus Income Funds, each a family of investment funds that integrates ESG factors and fundamental investment principles. Director Qualification Highlights ● Business Development, Corporate Strategy and Transactions ● Legal and Regulatory Compliance ● Health Care/Regulated Industry ● Corporate Governance and Sustainability ● Risk Management ● Business Operations ● Public Policy and Government Affairs Skills and Qualifications of Particular Relevance to CVS Health Ms. DeCoudreaux has more than 30 years of experience in the pharmaceutical industry, and her experience as an attorney in that field and in the area of corporate governance makes her a great asset to our Board. |

  9. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Managing Partner and Co-Founder of Consonance Capital Partners, LLC and Former Director of the White House Office of Health Reform Age: 65 Director since: September 2013 Race/Ethnicity and Gender Eurasian Female Education B.A., University of Tennessee; B.A. and M.A., Balliol College, Oxford University; J.D., Harvard Law School CVS Health Board Committees Nominating and Corporate Governance (Chair); Medical Affairs; Executive Other Public Board HCA Healthcare, Inc. | Nancy-Ann M. DeParle Ms. DeParle has been a Managing Partner of Consonance Capital Partners, LLC, a private equity firm focused on investing in small and mid-size health care companies, since March 2020, and was a Partner from August 2013 until March 2020. She also is a Co-founder of the firm. From March 2009 to January 2013, Ms. DeParle served in the White House, first as Counselor to the President and Director of the White House Office of Health Reform, and later as Assistant to the President and Deputy Chief of Staff for Policy. In addition, from 1993 to 2000, Ms. DeParle served as the Associate Director for Health and Personnel for the White House Office of Management and Budget, and later as the Administrator of the Centers for Medicare & Medicaid Services (then known as the Health Care Financing Administration). From 2001 to March 2009, Ms. DeParle served as a Senior Advisor with JPMorgan Partners and as a Managing Director of its successor entity, CCMP Capital, L.L.C., focusing on private equity investments in health care companies. Ms. DeParle is also currently a director of HCA Healthcare, Inc., a health care services company that owns, manages or operates hospitals and other health care facilities and was elected to the Duke University Board of Trustees in 2021. Director Qualification Highlights ● Business Development, Corporate Strategy and Transactions ● Finance ● Legal and Regulatory Compliance ● Health Care/Regulated Industry ● Public Policy and Government Affairs ● Public Company Board Service ● Risk Management Skills and Qualifications of Particular Relevance to CVS Health Ms. DeParle has more than 25 years of experience in the health care arena. She is widely considered to be one of the nation’s leading experts in health care policy, management and financing, which makes her an excellent fit for our Board. |

  10. Biographies of our Incumbent Board Nominees

    | 14 | CVS Health |

  11. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Former Chairman of Tiffany & Co. and Former Executive at Tory Burch and Ralph Lauren Age: 69 Director since: November 2018 Race/Ethnicity and Gender White Male Education B.S., University of Pennsylvania CVS Health Board Committees Management Planning and Development; Medical Affairs Other Public Board The Progressive Corporation | Roger N. Farah Mr. Farah is former Chairman of the Board and a director of Tiffany & Co., a retailer of jewelry and specialty products, having served in that role from October 2017 to January 2021. He has been appointed Independent Chair of the Board of CVS Health effective immediately following the Annual Meeting, subject to his re-election. He served as Executive Director of Tory Burch LLC, a retailer of lifestyle products, from March 2017 to September 2017, having previously served as Co-Chief Executive Officer and director from September 2014 to February 2017. He is former Executive Vice Chairman of Ralph Lauren Corporation, a retailer of lifestyle products, having served in that position from November 2013 to May 2014, and previously served as President and Chief Operating Officer (“COO”) from April 2000 to October 2013, and a director from April 2000 to August 2014. During his 40-plus year career in retailing, Mr. Farah also held director and/ or executive positions with Venator Group, Inc. (now Foot Locker, Inc.), R.H. Macy & Co., Inc., Federated Merchandising Services, the central buying and product development arm of Federated Department Stores, Inc., Rich’s/Goldsmith’s Department Stores, and Saks Fifth Avenue, Inc. Mr. Farah was a member of the board of directors of Aetna from 2007 until the closing of the Aetna Transaction, when he became a director of CVS Health. He was a director of Metro Bank PLC, a financial services company, until his retirement from that board in March 2020. He currently serves as a director of The Progressive Corporation, an auto insurance company. Director Qualification Highlights ● Business Operations ● Business Development, Corporate Strategy and Transactions ● Health Care/Regulated Industry ● Public Policy and Government Affairs ● Public Company Board Service ● International Business Operations ● Corporate Governance and Sustainability Skills and Qualifications of Particular Relevance to CVS Health Mr. Farah brings extensive business and leadership experience to our Board. He has strong marketing, brand management and consumer insights developed in his over 40 years of experience in the retail industry. His former positions as Executive Vice Chairman, President and COO of Ralph Lauren and Executive Director and Co-CEO of Tory Burch give Mr. Farah important perspectives on the complex financial and operational issues facing the Company. The Board believes that his experience as a board chair and executive leading consumer-facing companies makes him very well suited to serve as Independent Chair of our Board. |

  12. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Chairman of the Board of Bank of America Europe DAC and Former Vice Chairman of Bank of America Corporation Age: 69 Director since: January 2011 Race/Ethnicity and Gender White Female Education B.A., University of New Hampshire CVS Health Board Committees Investment and Finance (Chair); Management Planning and Development; Executive Other Public Board Williams Sonoma, Inc. | Anne M. Finucane Ms. Finucane has been Chairman of the Board of Bank of America Europe DAC since July 2018. Ms. Finucane served as a Vice Chairman of Bank of America Corporation, an international financial services company, from July 2015 until her retirement in December 2021. From 2006 through July 2015, Ms. Finucane served as Global Chief Strategy and Marketing Officer for Bank of America and served as Northeast Market President from 2004 through July 2015. During her 20-plus years as a senior leader at Bank of America and its legacy firms, Ms. Finucane served as senior advisor to four chief executive officers and the Board of Directors. As a member of the executive management team, Ms. Finucane was responsible for the strategic positioning of Bank of America and led the company’s environmental, social and governance, sustainable finance, capital deployment and public policy efforts. She was chair of Bank of America’s Environmental, Social and Governance Committee, which directs all of its ESG efforts, and the Capital Deployment Group, which collaborates across business lines to deliver innovative financing solutions to address global issues. Ms. Finucane stewarded Bank of America’s $300 billion environmental business initiative, oversaw the company’s $1.6 billion Community Development Financial Institution portfolio and chaired the Bank of America Charitable Foundation. She currently serves as a director of Williams Sonoma, Inc., a retailer of kitchen and home products. Director Qualification Highlights ● Business Operations; Consumer Products or Services ● Business Development, Corporate Strategy and Transactions ● Public Policy and Government Affairs ● Regulated Industry ● Finance ● Corporate Governance and Sustainability ● Risk Management ● International Business Operations Skills and Qualifications of Particular Relevance to CVS Health Ms. Finucane’s experience in the financial services industry, consumer policy, strategy, marketing, corporate social responsibility and government affairs provides our Board with valuable insight in those key areas. Her distinguished career in banking also makes her an excellent Chair of our Investment and Finance Committee. |

  13. Biographies of our Incumbent Board Nominees

    | 2022 Proxy Statement | 15 |

  14. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Former Chairman and Chief Executive Officer of Becton, Dickinson and Company Age: 70 Director since: November 2018 Race/Ethnicity and Gender White Male Education B.A., College of the Holy Cross; M.B.A., Columbia University CVS Health Board Committees Audit (Chair); Investment and Finance; Executive Other Public Board Boston Scientific Corporation | Edward J. Ludwig Mr. Ludwig is the former Chairman of the Board of Directors of Becton, Dickinson and Company (“BD”), a global medical technology company, having served in that position from February 2002 through June 2012. He also served as Chief Executive Officer of BD from January 2000 to September 2011, President of BD from May 1999 to December 2008 and Chief Financial Officer of BD from January 1995 to May 1999. Mr. Ludwig joined BD as a Senior Financial Analyst in 1979. Prior to joining BD, Mr. Ludwig was a senior auditor with Coopers and Lybrand (now PricewaterhouseCoopers) where he earned his CPA. Mr. Ludwig also served as a director of Xylem, Inc., a water technology company, from 2011 to 2017, and Chairman of Advanced Medical Technology Association, or AdvaMed, a medical device trade association, from 2006 to 2008. Mr. Ludwig was lead director of the Aetna board of directors from 2012 until the closing of the Aetna Transaction, when he became a director of CVS Health. He currently serves as the lead independent director of Boston Scientific Corporation, a global manufacturer of medical devices. Director Qualification Highlights ● Business Operations ● Business Development, Corporate Strategy and Transactions ● Finance ● Health Care/Regulated Industry ● Public Company Board Service ● Risk Management ● International Business Operations ● Technology and Innovation Skills and Qualifications of Particular Relevance to CVS Health Mr. Ludwig’s more than 30 years of experience in the field of medical technology give him a unique perspective on the Company’s strategy. As the former Chairman and CEO of BD, Mr. Ludwig brings a thorough appreciation of the strategic and operational issues facing a large public company in the health care industry. As a former CFO and a CPA, Mr. Ludwig offers our Board a deep understanding of financial, accounting and audit-related issues. Mr. Ludwig’s experience positions him well to serve as Chair of our Audit Committee. |

  15. Biographies of our Incumbent Board Nominees

    | NON-INDEPENDENT DIRECTOR President and Chief Executive Officer of CVS Health Corporation Age: 59 Director since: February 2021 Race/Ethnicity and Gender White Female Education B.S., Boston College, Executive M.B.A., Boston University CVS Health Board Committee Executive Other Public Board U.S. Bancorp (not seeking re-election in 2022) | Karen S. Lynch Ms. Lynch became Chief Executive Officer and President of CVS Health on February 1, 2021. Prior to this appointment, Ms. Lynch served as an Executive Vice President of CVS Health and President of Aetna from November 2018 through January 2021. Ms. Lynch also served as President of Aetna Inc. from 2015 until January 2021. She previously served as Executive Vice President of Aetna’s Local and Regional Business from 2013 to 2014 and Executive Vice President of Aetna’s Specialty Products Business from 2012 to 2013. Before joining Aetna, Ms. Lynch held executive positions at Magellan Health Services, a health care management company, where she served as president, and at Cigna Corporation, a global health insurance company. Ms. Lynch began her career as a Certified Public Accountant at the auditing firm of Ernst & Young LLP. Ms. Lynch serves on the board of directors of U.S. Bancorp and is chair of its audit committee, but has decided not to stand for re-election at U.S. Bancorp’s 2022 annual meeting. Director Qualification Highlights ● Business Operations; Consumer Products or Services ● Business Development, Corporate Strategy and Transactions ● Health Care/Regulated Industry ● Technology and Innovation ● Public Policy and Government Affairs ● Finance ● Corporate Governance and Sustainability Skills and Qualifications of Particular Relevance to CVS Health Ms. Lynch is a seasoned health care expert who has over three decades of experience in the industry. She is consistently rated as a top innovator and influencer in the health care space and has been recognized for her leadership in health care by numerous organizations and publications. She has been named to Fortune’s Most Powerful Women in Business list in each of the past five years. Ms. Lynch is the right leader to guide CVS Health into its next era of growth as the Company continues its transformation. |

  16. Biographies of our Incumbent Board Nominees

    | 16 | CVS Health |

  17. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Former President and Chief Executive Officer of PCS Health Systems, Inc. Age: 71 Director since: March 2007 Race/Ethnicity and Gender White Male Education B.S., Ecole Centrale de Lyon (France); B.A., Université de Lyon (France); M.B.A., Kellogg School of Business, Northwestern University CVS Health Board Committees Audit; Medical Affairs (pending Chair) Other Public Boards None | Jean-Pierre Millon Mr. Millon is the former President and Chief Executive Officer of PCS Health Systems, Inc. (“PCS”), a pharmacy benefit management company. Mr. Millon joined PCS in 1995, where he served as President and Chief Executive Officer from June 1996 until his retirement in September 2000. Prior to that, Mr. Millon served as an executive of and held several global leadership positions with Eli Lilly and Company, a global pharmaceutical manufacturer. Mr. Millon previously served on the board of Caremark from March 2004, upon Caremark’s acquisition of AdvancePCS, and as a director of AdvancePCS (which resulted from the merger of PCS and Advance Paradigm, Inc.) beginning in October 2000. He became a director of CVS Health upon the closing of the merger transaction involving CVS Health and Caremark. Mr. Millon has over ten years of financial management experience and 15 years of general functional management experience, including strategic planning experience specific to pharmacy benefit management companies as the former head of PCS. He also has extensive venture capital and public and private company board experience. Director Qualification Highlights ● Finance ● Business Development, Corporate Strategy and Transactions ● Health Care/Regulated Industry ● International Business Operations ● Pharmacy Benefit Management ● Public Company Board Service ● Technology and Innovation Skills and Qualifications of Particular Relevance to CVS Health Mr. Millon’s extensive background and experience in the pharmacy benefit management, pharmaceutical and life sciences businesses, combined with his financial expertise, provide our Board with additional perspective across the enterprise, and make him well qualified to serve as the next Chair of our Medical Affairs Committee. |

  18. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Vice Chair for Global Public Policy and Special Advisor to the Founder and Chairman of Bloomberg L.P., and former Chairman of the U.S. Securities and Exchange Commission Age: 66 Director since: May 2017 Race/Ethnicity and Gender White Female Education B.A., Franklin and Marshall College; J.D., George Washington University CVS Health Board Committees Audit; Investment and Finance Other Public Board Morgan Stanley | Mary L. Schapiro Since October 2018, Ms. Schapiro has been Vice Chair for Public Policy and Special Advisor to the Founder and Chairman of Bloomberg L.P., a privately held financial, software, data and media company. Since January 2014, Ms. Schapiro has also served as Vice Chair of Promontory Advisory Board, part of Promontory Financial Group, a leading strategy, risk management and regulatory compliance firm. She is Vice Chair of the Board of The Value Reporting Foundation, formed when Sustainability Accounting Standards Board (“SASB”) Foundation merged with The International Integrated Reporting Council (“IIRC”). Ms. Schapiro was Vice Chair of the SASB Foundation, an independent, non-profit organization that sets standards to guide the disclosure of financially material sustainability information by companies and investors, from May 2014 until its merger with IIRC in 2021. From January 2009 through December 2012, Ms. Schapiro was Chairman of the U.S. Securities and Exchange Commission, becoming the first woman to serve as that agency’s Chairman. Ms. Schapiro was Chairman and CEO of the Financial Industry Regulatory Authority (“FINRA”) from 2006 through 2008, and held a number of key executive positions at FINRA and its predecessor from 1996 through 2006. She also served as Chairman of the Commodity Futures Trading Commission (“CFTC”) from 1994 to 1996. Ms. Schapiro is currently a director of Morgan Stanley, a global financial services company, and was a director of General Electric Company and of the London Stock Exchange Group PLC, until her retirement from those boards in April 2018 and October 2018, respectively. Director Qualification Highlights ● Corporate Governance and Sustainability ● Public Policy and Government Affairs ● Finance ● Risk Management ● Legal and Regulatory Compliance ● Public Company Board Service Skills and Qualifications of Particular Relevance to CVS Health Ms. Schapiro’s experience in leading the SEC, FINRA and the CFTC makes her extremely well qualified to serve on our Board. Ms. Schapiro’s leadership of the SEC during the turbulent period that followed the 2008 financial crisis, one of the busiest rulemaking periods in the agency’s history, demonstrates her ability to navigate through a difficult and complex regulatory and political environment. Our Board believes that her skills fill important needs in the areas of legal and regulatory compliance, sustainability, finance, risk management and public policy and government affairs. |

  19. Biographies of our Incumbent Board Nominees

    | 2022 Proxy Statement | 17 |

  20. Biographies of our Incumbent Board Nominees

    | INDEPENDENT DIRECTOR Former Chairman of the Board and Chief Executive Officer of Johnson & Johnson Age: 73 Director since: March 2013 Race/Ethnicity and Gender White Male Education B.S., Quinnipiac University CVS Health Board Committees Management Planning and Development; Nominating and Corporate Governance Other Public Board Fairfax Financial Holdings Limited | William C. Weldon Mr. Weldon is the former Chairman of the Board and Chief Executive Officer of Johnson & Johnson, a global developer and manufacturer of health care products, having served in those positions from 2002 until his retirement in 2012. Mr. Weldon previously served in a variety of senior executive positions during his 41-year career with Johnson & Johnson. Mr. Weldon is a director of Fairfax Financial Holdings Ltd., a property and casualty insurance and reinsurance company that is listed on the Toronto Stock Exchange. He was a director of JPMorgan Chase & Co., a global financial services company, until his retirement from that board in May 2019 and Exxon Mobil Corporation, an international energy provider and chemical manufacturing company, until his retirement from that board in May 2021. Director Qualification Highlights ● Finance ● Health Care/Regulated Industry ● International Business Operations; Consumer Products or Services ● Risk Management ● Corporate Governance and Sustainability ● Technology and Innovation ● Public Company Board Service Skills and Qualifications of Particular Relevance to CVS Health Mr. Weldon’s experience in managing a complex global health care company and his deep knowledge of the worldwide health care market across multiple sectors makes him extremely well suited to serve on our Board. His background in international business management and operating in the highly-regulated health care industry is also greatly valued by our Board. |

  21. Biographies of our Incumbent Board Nominees

    | 18 | CVS Health |

  22. Non-Employee Director Compensation

    Non-Employee Director Compensation CVS Health’s approach to compensating non-employee directors for Board service is to provide directors with an annual retainer comprised of a mandatory 75% paid in shares of our common stock and 25% paid in cash (or up to 100% stock at the director’s election). The payment of a significant portion of the annual retainer, and additional retainers as outlined below, in our common stock is consistent with our policy of using equity compensation to better align directors’ interests with stockholders. This also enhances the directors’ ability to meet and continue to comply with our stock ownership guidelines, which are described below. For the 2021-2022 Board year, the total annual retainer for non-employee directors was $310,000, consisting of shares of our stock valued at $232,500 (the mandatory annual stock retainer) and a cash payment of $77,500 (unless the director elected to receive up to 100% of the annual retainer in shares of our common stock). Each retainer was paid in two equal installments, in May and November. Directors may elect to defer receipt of shares, and deferred shares are credited with dividend reinvestment shares to the extent dividends are paid to stockholders. There are no meeting fees. Additional retainers were paid to the Chairs of the committees and the Board as follows: Audit, $25,000; I&F, $15,000; MP&D, $20,000; Medical Affairs, $15,000; N&CG, $15,000; and Independent Chair of the Board, $275,000. No additional compensation is paid for service on the Executive Committee. In November 2021 the MP&D Committee and its independent compensation consultant, Korn Ferry, reviewed a director compensation study prepared by Korn Ferry and recommended to the Board updated director and Chair retainers. In January 2022, the Board approved director compensation for non-management directors for the 2022 – 2023 Board year. The Board increased the per-director retainer for 2022-2023 to $335,000, consisting of at least 75% stock-based compensation and the remainder in cash or stock. In addition, for 2022-2023 the Committee Chair retainers for N&CG, I&F and Medical Affairs will be increased from $15,000 to $20,000. The other Chair retainers will be unchanged. Ad hoc committees of the Board may be established from time to time to work on special projects and members may receive additional compensation for these services, as approved by the Board. In 2021, the Board formed an Ad Hoc Technology Committee and the compensation paid in respect of service on that committee is disclosed below.

  23. Non-Employee Director Compensation

    | 34 | CVS Health |

  24. All Other Non-Employee Director Compensation and Benefits

    All Other Non-Employee Director Compensation and Benefits Directors are eligible to participate in the employee discount program in the Company’s stores and are subject to the same terms of the program as our employees. Directors are generally reimbursed for business expenses incurred directly in connection with their roles and duties on the Board, such as travel, meals, lodging and executive support. The following table shows amounts paid to each of our non-employee directors in 2021. The table also includes $5,000 for each of Messrs. Dorman, Ludwig, Millon, Weldon and White for their 2021 service on the Board’s Ad Hoc Technology Committee, to be paid in May 2022, with 75% of the fee included in the stock column and 25% of the fee in the cash column, which may be delivered in shares of stock, or as deferred stock, if elected by the director.

  25. Non-Employee Director Compensation – 2021

    Non-Employee Director Compensation – 2021

  26. Non-Employee Director Compensation – 2021

    | Name | Fees Earned and Paid in Cash(1) ($) | Cash Fees Elected to be Paid in Stock(2) ($) | Stock Awards(2) ($) | All Other Compensation ($) | Total ($) | | Fernando Aguirre | 77,601 | 0 | 232,399 | — | 310,000 | | C. David Brown II | 0 | 82,500 | 247,500 | — | 330,000 | | Alecia A. DeCoudreaux | 77,500 | 0 | 232,500 | — | 310,000 | | Nancy-Ann M. DeParle | 77,590 | 3,750 | 243,660 | — | 325,000 | | David W. Dorman | 1,363 | 146,250 | 442,387 | — | 590,000 | | Roger N. Farah | 0 | 77,500 | 232,500 | — | 310,000 | | Anne M. Finucane | 81,298 | 0 | 243,702 | — | 325,000 | | Edward J. Ludwig | 85,000 | 0 | 255,000 | — | 340,000 | | Jean-Pierre Millon | 78,851 | 0 | 236,149 | — | 315,000 | | Mary L. Schapiro | 152 | 77,500 | 232,348 | — | 310,000 | | William C. Weldon | 1,250 | 77,500 | 236,250 | — | 315,000 | | Tony L. White | 82,548 | 0 | 247,452 | — | 330,000 |

  27. Non-Employee Director Compensation – 2021

    | The amounts shown include cash payments made in lieu of fractional shares to Mmes. DeParle, Finucane and Schapiro, and Messrs. Aguirre, Dorman, Millon and White.(1) | | These awards are fully vested at grant and the amounts shown represent both the fair market value and the full fair value at grant. During 2021, each director receiving a 12-month retainer received 2,632 shares of stock with a total value of $232,500 (the mandatory annual stock retainer) on the date of grant; each director electing to receive the remaining portion of the annual retainer in stock also received 876 shares valued at $77,500 on the date of grant. As of December 31, 2021, our directors had deferred balances of shares of Company common stock, including dividends, as follows: Mr. Brown, 68,411 shares; Ms. DeCoudreaux, 22,092 shares; Ms. DeParle, 3,296 shares; Mr. Dorman, 18,646 shares; Mr. Farah, 13,899 shares; Ms. Finucane, 10,211 shares; Mr. Ludwig, 6,905 shares; Ms. Schapiro, 14,638 shares; and Mr. Weldon, 37,443 shares.(2) |

  28. Non-Employee Director Compensation – 2021

    | 2022 Proxy Statement | 35 |

  29. 2021 MIP Adjusted Operating Income

    2021 MIP Adjusted Operating Income MIP Adjusted Operating Income is defined as operating income (a GAAP measure) excluding certain financial items. For the purposes of measuring performance against established targets in any period, when applicable those excluded items include amortization of intangible assets and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, such as acquisition-related integration costs, store impairments, goodwill impairments, acquisition purchase price adjustments outside of the acquisition accounting measurement period and net realized capital gains in excess of $100 million.

  30. 2021 PSU Leverage Ratio

    2021 PSU Leverage Ratio PSU Leverage Ratio is defined as Adjusted Debt divided by adjusted earnings before interest expense, income taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted Debt is defined as short-term debt and total long-term debt, including the current portion of long-term debt (a GAAP measure), plus the present value of future operating lease payments at a discount rate of 8.5% assuming lease payments occur at the end of the year. Adjusted EBITDA is defined as (i) income from continuing operations (a GAAP measure) before interest expense, income taxes, depreciation and amortization, plus (ii) implied interest expense on future operating lease payments at a discount rate of 8.5% assuming lease payments occur at the end of the year, less (iii) other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance such as acquisition-related integration costs, store impairments, goodwill impairments, acquisition purchase price adjustments outside of the acquisition accounting measurement period, loss on early extinguishment of debt and the impact of the Health Insurer Fee (“HIF”).

  31. 2021 PSU Leverage Ratio

    | 2022 Proxy Statement | 69 |

  32. Relative TSR Peer Groups for 2021-2023 PSU Awards

    Relative TSR Peer Groups for 2021-2023 PSU Awards

  33. Relative TSR Peer Groups for 2021-2023 PSU Awards

    | S&P 500 Health Care | | | | ● Abbott Laboratories ● AbbVie Inc. ● ABIOMED, Inc. ● Agilent Technologies, Inc. ● Alexion Pharmaceuticals, Inc. ● Align Technology, Inc. ● AmerisourceBergen Corporation ● Amgen Inc. ● Anthem, Inc. ● Baxter International Inc. ● Becton, Dickinson and Company ● Biogen Inc. ● Bio-Rad Laboratories, Inc. ● Boston Scientific Corporation ● Bristol-Myers Squibb Company ● Cardinal Health, Inc. ● Catalent, Inc. ● Centene Corporation ● Cerner Corporation ● Cigna Corporation ● The Cooper Companies, Inc. ● Danaher Corporation | ● DaVita Inc. ● DENTSPLY SIRONA Inc. ● Dexcom, Inc. ● Edwards Lifesciences Corporation ● Eli Lilly and Company ● Gilead Sciences, Inc. ● HCA Healthcare, Inc. ● Henry Schein, Inc. ● Hologic, Inc. ● Humana Inc. ● IDEXX Laboratories, Inc. ● Illumina, Inc. ● Incyte Corporation ● Intuitive Surgical, Inc. ● IQVIA Holdings Inc. ● Johnson & Johnson ● Laboratory Corp of America Holdings ● McKesson Corporation ● Medtronic Public Limited Company ● Merck & Co., Inc. | ● Mettler-Toledo International Inc. ● PerkinElmer, Inc. ● Perrigo Company plc ● Pfizer Inc. ● Quest Diagnostics Incorporated ● Regeneron Pharmaceuticals, Inc. ● ResMed Inc. ● STERIS Public Limited Company ● Stryker Corporation ● Teleflex Incorporated ● Thermo Fisher Scientific Inc. ● UnitedHealth Group Incorporated ● Universal Health Services, Inc. ● Varian Medical Systems, Inc. ● Vertex Pharmaceuticals Incorporated ● Viatris Inc. ● Waters Corporation ● West Pharmaceutical Services, Inc. ● Zimmer Biomet Holdings, Inc. | | S&P 500 Consumer Staples | | | | ● Altria Group, Inc. ● Archer-Daniels-Midland Company ● Brown-Forman Corporation ● Campbell Soup Company ● Church & Dwight Co., Inc. ● The Clorox Company ● The Coca-Cola Company ● Colgate-Palmolive Company ● Conagra Brands, Inc. ● Constellation Brands, Inc. ● Costco Wholesale Corporation | ● The Estée Lauder Companies Inc. ● General Mills, Inc. ● The Hershey Company ● Hormel Foods Corporation ● The J. M. Smucker Company ● Kellogg Company ● Kimberly-Clark Corporation ● The Kraft Heinz Company ● The Kroger Co. ● Lamb Weston Holdings, Inc. ● McCormick & Company, Incorporated | ● Molson Coors Beverage Company ● Mondelēz International, Inc. ● Monster Beverage Corporation ● PepsiCo, Inc. ● Philip Morris International Inc. ● The Procter & Gamble Company ● Sysco Corporation ● Tyson Foods, Inc. ● Walgreens Boots Alliance, Inc. ● Walmart Inc. |

  34. Relative TSR Peer Groups for 2021-2023 PSU Awards

    | 70 | CVS Health |

  35. Relative TSR Peer Group for 2022-2024 PSU Awards

    Relative TSR Peer Group for 2022-2024 PSU Awards

  36. Relative TSR Peer Group for 2022-2024 PSU Awards

    | S&P 500 Health Care | | | | ● Abbott Laboratories ● AbbVie Inc. ● ABIOMED, Inc. ● Agilent Technologies, Inc. ● Align Technology, Inc. ● AmerisourceBergen Corporation ● Amgen Inc. ● Anthem, Inc. ● Baxter International Inc. ● Becton, Dickinson and Company ● Biogen Inc. ● Bio-Rad Laboratories, Inc. ● Bio-Techne Corporation ● Boston Scientific Corporation ● Bristol-Myers Squibb Company ● Cardinal Health, Inc. ● Catalent, Inc. ● Centene Corporation ● Cerner Corporation ● Charles River Laboratories International, Inc. ● Cigna Corporation ● The Cooper Companies, Inc. | ● Danaher Corporation ● DaVita Inc. ● DENTSPLY SIRONA Inc. ● Dexcom, Inc. ● Edwards Lifesciences Corporation ● Eli Lilly and Company ● Gilead Sciences, Inc. ● HCA Healthcare, Inc. ● Henry Schein, Inc. ● Hologic, Inc. ● Humana Inc. ● IDEXX Laboratories, Inc. ● Illumina, Inc. ● Incyte Corporation ● Intuitive Surgical, Inc. ● IQVIA Holdings Inc. ● Johnson & Johnson ● McKesson Corporation ● Medtronic Public Limited Company ● Merck & Co., Inc. ● Mettler-Toledo International Inc. ● Moderna, Inc. | ● Organon & Co. ● PerkinElmer, Inc. ● Pfizer Inc. ● Quest Diagnostics Incorporated ● Regeneron Pharmaceuticals, Inc. ● ResMed Inc. ● STERIS Public Limited Company ● Stryker Corporation ● Teleflex Incorporated ● Thermo Fisher Scientific Inc. ● UnitedHealth Group Incorporated ● Universal Health Services, Inc. ● Vertex Pharmaceuticals Incorporated ● Viatris Inc. ● Waters Corporation ● West Pharmaceutical Services, Inc. ● Zimmer Biomet Holdings, Inc. ● Zoetis Inc. |

  37. Relative TSR Peer Group for 2022-2024 PSU Awards

    | 2022 Proxy Statement | 71 |

  38. Summary Compensation Table

    Summary Compensation Table The following Summary Compensation Table shows information about the compensation received by our CEO, our CFO and each of our three other most highly compensated executive officers, as well as our former CEO and CFO, for services rendered in all capacities during the 2021 fiscal year and the applicable comparable data for the 2020 and 2019 fiscal years.

  39. Summary Compensation Table

    | Name & Principal 2021 Positions(1) | Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4) | Option Awards ($)(5) | Non-Equity Incentive Plan Compensation ($)(7) | Change In Pension Value and Nonqualified Deferred Compensation Earnings ($)(8) | All Other Compensation ($)(9) | Total ($) | | Karen S. Lynch President and Chief Executive Officer | 2021 | 1,429,167 | — | 9,749,990 | 3,249,997 | 5,616,000 | — | 343,258 | 20,388,412 | | | 2020 | 1,214,615 | — | 5,624,957 | 1,846,381 | 2,538,000 | — | 83,963 | 11,307,916 | | Shawn M. Guertin Executive Vice President and Chief Financial Officer | 2021 | 738,636 | 1,000,000 | 8,249,980 | 1,749,999(6) | 2,585,000 | — | 15,615 | 14,339,230 | | | | | — | | | | | | | | Troyen A. Brennan Executive Vice President and Chief Medical Officer | 2021 | 843,750 | — | 4,312,477 | 1,437,498 | 2,109,000 | — | 90,539 | 8,793,264 | | Alan M. Lotvin Executive Vice President and President – Pharmacy Services | 2021 | 962,500 | — | 5,249,995 | 1,749,990 | 2,887,000 | — | 162,075 | 11,011,560 | | | 2020 | 831,250 | — | 3,749,972 | 1,230,918 | 1,577,000 | — | 83,035 | 7,472,175 | | Jonathan C. Roberts Executive Vice President and Chief Operating Officer | 2021 | 1,237,500 | — | 7,499,993 | 2,499,994 | 3,887,000 | — | 230,094 | 15,354,581 | | | 2020 | 1,200,000 | — | 6,374,952 | 2,092,561 | 3,024,000 | — | 309,699 | 13,001,212 | | | 2019 | 1,200,000 | — | 5,624,971 | 1,874,996 | 6,127,000 | | 221,413 | 15,048,380 | | Larry J. Merlo Former President and Chief Executive Officer | 2021 | 679,167 | — | — | — | 2,438,000 | — | 666,905 | 3,784,072 | | | 2020 | 1,630,000 | — | — | 4,185,131 | 4,694,000 | 11,875,749 | 658,942 | 23,043,822 | | | 2019 | 1,630,000 | — | 20,249,968 | 3,374,998 | 10,625,000 | — | 571,783 | 36,451,749 | | Eva C. Boratto Former Executive Vice President and Chief Financial Officer | 2021 | 933,333 | — | 4,499,996 | 1,499,993 | 2,513,000 | — | 439,368 | 9,885,690 | | | 2020 | 962,500 | — | 4,499,966 | 1,477,098 | 1,819,000 | — | 162,589 | 8,921,153 | | | 2019 | 850,000 | — | 3,749,981 | 1,249,999 | 3,588,000 | — | 126,243 | 9,564,223 |

  40. Summary Compensation Table

    | Principal positions at December 31, 2021. On February 1, 2021, Ms. Lynch became President and CEO of CVS Health, and Mr. Merlo became a Strategic Advisor to the Company. Mr. Merlo then retired on May 31, 2021. On May 28, 2021, Mr. Guertin became EVP and CFO of CVS Health and Ms. Boratto resigned as CFO and continued employment with CVS Health in a special senior advisory capacity until December 1, 2021. Ms. Lynch, Mr. Guertin and Drs. Brennan and Lotvin were not NEOs in 2019 and Mr. Guertin and Dr. Brennan were not NEOs in 2020.(1) | | Amount of salary actually received in any year may differ from the annual base salary amount reported due to the timing of payroll periods and the timing of changes in base salary, which typically occur in April or following an off-cycle promotion.(2) | | In connection with rejoining the Company, Mr. Guertin received a one-time cash sign-on bonus.(3) |

  41. Summary Compensation Table

    | 72 | CVS Health |

  42. Summary Compensation Table

    | Included in this column is the full grant date fair value of all PSU awards made to each NEO in the applicable year. The grant date fair value of each grant is computed in accordance with Financial Accounting Standards Board Accounting Standards Codification, Compensation – Stock Compensation, Topic 718 (“FASB ASC Topic 718”), excluding forfeiture estimates. The grant date fair values for PSU awards granted in 2021 are based upon the probable outcome of the performance conditions associated with these PSU awards as of the grant date and is calculated using a Monte Carlo simulation in accordance with FASB ASC Topic 718. Additional details regarding the grants of stock awards can be found in the Grants of Plan-Based Awards table. Each PSU represents one share of our common stock and upon vesting, will settle in shares, if earned, of CVS Health common stock, net of applicable withholding taxes, and subject to a two-year post-vesting holding period. Mr. Merlo did not receive a PSU award in 2020 or 2021. Vesting of the PSU awards granted to the applicable NEOs on April 1, 2021, other than Mr. Guertin who received his PSU award on May 28, 2021, will occur, if at all, on April 1, 2024, and full vesting generally is subject to continued employment of the applicable NEO through April 1, 2024. In addition, included for Mr. Guertin, is the grant date fair value of his sign-on RSU award, which he received upon rejoining the Company on May 28, 2021 and which cliff vests on May 28, 2024.(4) | | The grant date fair value of the PSU awards granted to the NEOs in 2021, assuming the highest level of performance conditions associated with these PSUs occurs (capped at 200% of target): |

  43. Summary Compensation Table

    | Name | Grant Date | Grant Date Fair Value Assuming Highest Level of Performance Conditions Achieved(a) ($) | | Karen S. Lynch | April 1, 2021 | 19,499,981 | | Shawn M. Guertin | May 28, 2021 | 10,499,987 | | Troyen A. Brennan | April 1, 2021 | 8,624,955 | | Alan M. Lotvin | April 1, 2021 | 10,499,990 | | Jonathan C. Roberts | April 1, 2021 | 14,999,985 | | Larry J. Merlo(b) | N/A | 0 | | Eva C. Boratto(c) | April 1, 2021 | 2,999,997 |

  44. Summary Compensation Table

    | The maximum PSU payout for the 2021 PSU awards is 200%.(a) | | Mr. Merlo did not receive a PSU award in 2021.(b) | | Reflects the maximum value of pro-rated PSUs. Pursuant to her Separation Agreement, Ms. Boratto’s outstanding PSUs vested on a pro-rated basis through the separation date and will be settled, if earned, on the original vesting date.(c) |

  45. Summary Compensation Table

    | Except for the options granted to Mr. Guertin in 2021, which are discussed in footnote 6 of the SCT, the amounts reported in the Option Awards column represent the grant date fair value of stock option awards granted to each of the NEOs on April 1, 2021, calculated in accordance with FASB ASC Topic 718. These options have an exercise price of $74.30 (the closing price of our common stock on April 1, 2021) and will vest in equal installments on the first, second, third and fourth anniversaries of the grant date and expire ten years from the grant date. The option values were calculated using a modified Black-Scholes Model for pricing options. Refer to our 2021 Annual Report, Notes to Consolidated Financial Statements at Note 11, “Stock Incentive Plans,” for all relevant valuation assumptions used to determine the grant date fair value of these options. Additional details regarding the grants of stock option awards can be found under “2021 PSU and Stock Option Awards” beginning on page 57 and in the Grants of Plan-Based Awards table.(5) | | Represents the grant date fair value of the options granted to Mr. Guertin on May 28, 2021, calculated in accordance with FASB ASC Topic 718. These options have an exercise price of $86.44 (the closing price of our common stock on May 28, 2021) and will vest in equal installments on the first, second, third and fourth anniversaries of the grant date and expire ten years from the grant date. The option value is calculated using a modified Black-Scholes Model for pricing options. The assumptions used to determine the grant date fair value of these options were:(6) |

  46. Summary Compensation Table

    | Dividend yield | 2.31% | | Expected volatility | 27.22% | | Risk-free interest rate | 1.128% | | Expected life (in years) | 6.25 | | Weighted-average grant date fair value | $17.94 |

  47. Summary Compensation Table

    | The figures shown include amounts earned in 2021 as annual cash incentive awards (see pages 51-57).(7) | | The amounts reported in this column represent only changes in pension value, as the Company does not pay above-market earnings on deferred compensation. The amount reported for Mr. Merlo under this column for the 2021 fiscal year is reported as zero under applicable SEC regulations because the aggregate change in actuarial present value of his pension benefit was a negative amount (a reduction of $52,157,023). This reflects a distribution of $53,069,900 from the SERP to Mr. Merlo during 2021, as described in the Pension Benefits section and related table beginning on page 80, net of an increase of $912,877 resulting from the fact that Mr. Merlo’s 2020 annual cash bonus amount, received in early 2021, was greater than the bonus amount used in the assumptions to calculate Mr. Merlo’s SERP value at the end of the 2020 fiscal year. The SERP is a legacy plan in which participation has decreased over the years as participants have retired, and the Company has not provided SERP benefits to new participants since 2010. Mr. Merlo was the only executive participant in the SERP.(8) | | Set forth below is additional information regarding the amounts disclosed in the “All Other Compensation” column for 2021.(9) |

  48. Summary Compensation Table

    | 2022 Proxy Statement | 73 |

  49. Grants of Plan-Based Awards

    Grants of Plan-Based Awards This table reflects awards granted during 2021 under the 2017 Incentive Compensation Plan of CVS Health Corporation, as amended (the “2017 ICP”), in the respective amounts listed. The MP&D Committee approved all of the 2021 awards.

  50. Grants of Plan-Based Awards – 2021

    Grants of Plan-Based Awards – 2021

  51. Grants of Plan-Based Awards – 2021

    | | | | | Est. Future Payouts Under Non- Equity Incentive Plan Award(2) | | | Est. Future Payouts Under Equity Incentive Plan Awards(3) | | | All Other Stock | All Other Option | | Grant Date | | Name | Award Type | Date of Committee Action(1) | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Awards: Number of Shares of Stock or Units (#) | Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($ / Sh)(4) | Fair Value of Stock and Option Awards ($)(5) | | Karen S. Lynch | Stock Options(6) | 2/17/2021 | 4/1/2021 | | | | | | | | 224,604 | 74.30 | 3,249,997 | | | PSUs(7) | 2/17/2021 | 4/1/2021 | | | | 52,910 | 132,275 | 264,550 | | | | 9,749,990 | | | Annual Cash | | | 1,404,157 | 2,808,313(9) | 5,616,626 | — | — | — | | | | | | Shawn M. Guertin | Stock Options(6) | 5/12/2021 | 5/28/2021 | | | | | | | | 97,562 | 86.44 | 1,749,999 | | | PSUs(7) | 5/12/2021 | 5/28/2021 | | | | 23,235 | 58,088 | 116,176 | | | | 5,249,993 | | | RSUs(8) | 5/12/2021 | 5/28/2021 | | | | | | | 34,706 | | | 2,999,987 | | | Annual Cash | | | 646,307 | 1,292,613(9) | 2,585,226 | — | — | — | | | | | | Troyen A. Brennan | Stock Options(6) | 2/17/2021 | 4/1/2021 | | | | | | | | 99,344 | 74.30 | 1,437,498 | | | PSUs(7) | 2/17/2021 | 4/1/2021 | | | | 23,402 | 58,506 | 117,012 | | | | 4,312,477 | | | Annual Cash | | | 527,344 | 1,054,688(9) | 2,109,376 | — | — | — | | | | | | Alan M. Lotvin | Stock Options(6) | 2/17/2021 | 4/1/2021 | | | | | | | | 120,940 | 74.30 | 1,749,990 | | | PSUs(7) | 2/17/2021 | 4/1/2021 | | | | 28,490 | 71,225 | 142,450 | | | | 5,249,995 | | | Annual Cash | | | 721,875 | 1,443,750(9) | 2,887,500 | — | — | — | | | | | | Jonathan C. Roberts | Stock Options(6) | 2/17/2021 | 4/1/2021 | | | | | | | | 172,772 | 74.30 | 2,499,994 | | | PSUs(7) | 2/17/2021 | 4/1/2021 | | | | 40,700 | 101,750 | 203,500 | | | | 7,499,993 | | | Annual Cash | | | 1,082,813 | 2,165,625(9) | 4,331,250 | — | — | — | | | | | | Larry J. Merlo(10) | Stock Options | — | — | | | | | | | | — | — | — | | | PSUs | — | — | | | | — | — | — | | | | — | | | Annual Cash | | | 679,167 | 1,358,334(9) | 2,716,668 | — | — | — | | | | — | | Eva C. Boratto | Stock Options(6) | 2/17/2021 | 4/1/2021 | | | | | | | | 103,663 | 74.30 | 1,499,993 | | | PSUs(7) | 2/17/2021 | 4/1/2021 | | | | 24,420 | 61,050 | 122,100 | | | | 4,499,996 | | | Annual Cash | | | 700,000 | 1,400,000(9) | 2,800,000 | — | — | — | | | | |

  52. Grants of Plan-Based Awards – 2021

    | Represents the date the MP&D Committee approved the 2021 grant values for stock options, PSU and RSU awards. Refer to “2021 PSU and Stock Option Awards” beginning on page 57 for a detailed discussion of the PSU awards.(1) | | Represents the threshold, target and maximum payout levels of cash bonuses granted under the 2021 MIP. Performance below the threshold results in no payout. See “Annual Cash Incentive” beginning on page 51 for a discussion of the 2021 MIP metrics and payouts.(2) | | Represents the threshold, target and maximum achievement in order to receive a payout for the applicable award. Performance below the threshold results in no payout. Refer to “2021 PSU and Stock Option Awards” beginning on page 57 for a detailed discussion.(3) | | All options were granted with an exercise price equal to the closing price of our common stock on the date of the grant.(4) | | Refer to our 2021 Annual Report, Notes to Consolidated Financial Statements at Note 11, “Stock Incentive Plans,” and note 6 of the SCT for all relevant valuation assumptions for all grants. Included in this column is the full grant date fair value of the options granted to all of the NEOs on April 1, 2021, other than Mr. Guertin, who received his options on May 28, 2021. The option values are calculated using a modified Black-Scholes Model for pricing options.(5) |

  53. Grants of Plan-Based Awards – 2021

    | 2022 Proxy Statement | 75 |

  54. Grants of Plan-Based Awards – 2021

    | Represents stock options granted under the 2017 ICP in the respective amounts and on the respective dates listed. These stock options vest on the first, second, third and fourth anniversaries of the grant date and expire ten years from the grant date.(6) | | Represents PSU awards granted under the 2017 ICP in the respective amounts and on the respective dates listed. For the 2021-2023 cycle, these PSU awards are included in the SCT in the “Stock Awards” column. The PSU award, if earned, is based on the Company’s 2023 Adjusted EPS and will be modified by up to +/- 25% based on CVS Health’s performance as measured by rTSR. The maximum PSU payout for the 2021 PSU awards under “Est. Future Payouts Under Equity Incentive Plan Awards” is 200%, even with the maximum rTSR modifier of +25%. Each vested PSU represents one share of CVS Health common stock and will settle in shares, if earned, of CVS Health common stock, net of taxes, as a result of a determination by the MP&D Committee. The PSU awards do not earn dividend equivalents and have no voting rights. See the discussion of long-term incentive equity awards under “2021 PSU and Stock Option Awards” beginning on page 57 for a discussion of the vesting and payout of these awards based on the MP&D Committee’s determination that the Company has achieved the applicable performance result. Refer to footnote 4 of the SCT beginning on page 72 for a discussion of how the number of vested PSUs will be determined.(7) | | Represents sign-on RSUs granted under the 2017 ICP. These RSUs cliff vest on the third anniversary of the grant date.(8) | | Ms. Lynch’s 2021 annual target bonus opportunity was pro-rated to reflect an increase to her target bonus opportunity to 200% and an increase to her base salary, in each case, occurring on February 1, 2021, in connection with her promotion to President and CEO. Mr. Guertin’s 2021 annual target bonus opportunity was pro-rated to reflect that he rejoined the Company in May of 2021. Mr. Guertin’s 2021 full year target bonus opportunity is 175% of base salary. Drs. Lotvin and Brennan and Mr. Roberts’ 2021 annual target bonus opportunities are pro-rated to reflect the date their respective salaries were increased in April 2021. Mr. Merlo’s 2021 annual target bonus opportunity was pro-rated bonus to reflect the date of his retirement on May 31, 2021. Ms. Boratto’s 2021 annual target bonus opportunity was pro-rated bonus to reflect a merit increase as well as pursuant to the terms of her Separation Agreement.(9) | | Due to his retirement, Mr. Merlo did not receive any equity grants in 2021.(10) |

  55. Grants of Plan-Based Awards – 2021

    | 76 | CVS Health |

  56. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End This table shows information regarding the outstanding equity awards held by each of our Named Executive Officers under the applicable plan that were outstanding as of December 31, 2021. The unearned PSU awards granted in 2021 and 2020 are shown at target performance, with no adjustment for the rTSR modifier performance in 2021 or for the 2021 PSU Leverage Ratio* modifier performance or rTSR modifier performance in 2020. The 2019 PSUs are shown at maximum, but actual performance for these awards are explained in the footnotes below.

  57. Outstanding Equity Awards at Fiscal Year-End

    | 2021 PSU Leverage Ratio is a non-GAAP financial measure. See Annex A to this proxy statement for an explanation and a reconciliation to the most comparable GAAP financial measure.* |

  58. Outstanding Equity Awards at 2021 Year-End

    Outstanding Equity Awards at 2021 Year-End

  59. Outstanding Equity Awards at 2021 Year-End

    | | | Stock Option Awards(1) | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares or Units of Stock that Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares or Units of Stock that Have Not Vested ($)(2) | | Karen S. Lynch | 2/19/2016 | 93,989 | —(3) | 37.91 | 2/18/2026 | | | | | | | 2/17/2017 | 192,741 | —(3) | 45.91 | 2/16/2027 | | | | | | | 4/1/2019 | 121,204 | 121,204(4) | 54.19 | 4/1/2029 | | | | | | | 6/5/2019 | | | | | | | 260,837(13) | 26,907,945 | | | 4/1/2020 | 52,799 | 158,397(4) | 58.34 | 4/1/2030 | | | | | | | 8/31/2020 | | | | | | | 103,305(14) | 10,656,944 | | | 4/1/2021 | — | 224,604(4) | 74.30 | 4/1/2031 | | | 132,275(15) | 13,645,489 | | Shawn M.Guertin | 5/28/2021 | — | 97,562(5) | 86.44 | 5/28/2031 | 34,706(9) | 3,580,271 | 58,088(16) | 5,992,358 | | Troyen A.Brennan | 4/1/2015 | 47,937 | —(6) | 102.26 | 4/1/2022 | | | | | | | 4/1/2016 | 53,772 | —(6) | 104.82 | 4/1/2023 | | | | | | | 4/3/2017 | 75,134 | —(6) | 78.05 | 4/3/2024 | 4,805(10) | 495,684 | | | | | 4/1/2018 | — | 21,894(6) | 62.21 | 4/1/2025 | | | | | | | 4/1/2019 | — | 80,803(4) | 54.19 | 4/1/2029 | | | | | | | 6/5/2019 | | | | | | | 173,892(13) | 17,938,699 | | | 4/1/2020 | — | 84,478(4) | 58.34 | 4/1/2030 | | | | | | | 8/31/2020 | | | | | | | 55,096(14) | 5,683,703 | | | 4/1/2021 | — | 99,344(4) | 74.30 | 4/1/2031 | | | 58,506(15) | 6,035,479 | | Alan M. Lotvin | 4/1/2015 | 21,386 | —(6) | 102.26 | 4/1/2022 | | | | | | | 4/1/2016 | 27,395 | —(6) | 104.82 | 4/1/2023 | | | | | | | 4/3/2017 | 32,911 | —(6) | 78.05 | 4/3/2024 | | | | | | | 4/1/2018 | 16,905 | 5,636(6) | 62.21 | 4/1/2025 | 5,827(11) | 601,113 | | | | | 4/1/2019 | 30,300 | 40,402(4) | 54.19 | 4/1/2029 | | | | | | | 6/5/2019 | | | | | | | 86,945(13) | 8,969,246 | | | 4/1/2020 | 35,199 | 105,598(4) | 58.34 | 4/1/2030 | | | | | | | 8/31/2020 | | | | | | | 68,870(14) | 7,104,629 | | | 4/1/2021 | — | 120,940(4) | 74.30 | 4/1/2031 | | | 71,225(15) | 7,347,571 |

  60. Outstanding Equity Awards at 2021 Year-End

    | 2022 Proxy Statement | 77 |

  61. Outstanding Equity Awards at 2021 Year-End

    | | | Stock Option Awards(1) | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares or Units of Stock that Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares or Units of Stock that Have Not Vested ($)(2) | | Jonathan C.Roberts | 4/1/2015 | 68,482 | —(6) | 102.26 | 4/1/2022 | | | | | | | 4/1/2016 | 161,318 | —(6) | 104.82 | 4/1/2023 | | | | | | | 4/3/2017 | 200,358 | —(6) | 78.05 | 4/3/2024 | 12,812(10) | 1,321,686 | | | | | 4/1/2018 | 186,098 | 62,033(6) | 62.21 | 4/1/2025 | | | | | | | 4/1/2019 | 151,504 | 151,506(4) | 54.19 | 4/1/2029 | | | | | | | 6/5/2019 | | | | | | | 326,047(13) | 33,635,009 | | | 4/1/2020 | 59,838 | 179,517(4) | 58.34 | 4/1/2030 | | | | | | | 8/31/2020 | | | | | | | 117,079(14) | 12,077,870 | | | 4/1/2021 | — | 172,772(4) | 74.30 | 4/1/2031 | | | 101,750(15) | 10,496,530 | | Larry J. Merlo | 4/1/2015 | 273,929 | —(7) | 102.26 | 4/1/2022 | | | | | | | 4/1/2016 | 286,787 | —(7) | 104.82 | 4/1/2023 | | | | | | | 4/3/2017 | 338,105 | —(7) | 78.05 | 4/3/2024 | 20,987(12) | 2,165,019 | | | | | 4/1/2018 | — | 98,523(7) | 62.21 | 5/31/2024 | | | | | | | 4/1/2019 | — | 272,710(7) | 54.19 | 5/31/2024 | | | | | | | 6/5/2019 | | | | | | | 472,770(13) | 48,770,953 | | | 8/30/2019 | | | | | | | 473,750(17) | 48,872,050 | | | 4/1/2020 | — | 359,034(7) | 58.34 | 5/31/2024 | | | —(18) | — | | Eva C. Boratto | 4/1/2015 | 27,392 | —(8) | 102.26 | 4/1/2022 | | | | | | | 4/1/2016 | 21,509 | —(8) | 104.82 | 4/1/2023 | | | | | | | 4/3/2017 | 35,062 | —(8) | 78.05 | 4/3/2024 | 2,242(10) | 231,285 | | | | | 4/1/2018 | 26,272 | 8,758(8) | 62.21 | 12/1/2024 | | | | | | | 4/1/2019 | — | 101,004(8) | 54.19 | 12/1/2024 | | | | | | | 6/5/2019 | | | | | | | 217,365(13) | 22,423,373 | | | 4/1/2020 | 42,239 | 126,717(8) | 58.34 | 12/1/2024 | | | | | | | 8/31/2020 | | | | | | | 55,096(19) | 5,683,703 | | | 4/1/2021 | — | 77,747(8) | 74.30 | 12/1/2024 | | | 20,350(19) | 2,099,306 |

  62. Outstanding Equity Awards at 2021 Year-End

    | The Company had no equity incentive plan awards that were securities underlying unexercised, unearned options at fiscal year-end, so that column is intentionally omitted from this table.(1) | | The value of the RSUs and PSUs is based on a price of $103.16 per share, which was the closing price of the Company’s common stock on December 31, 2021 the last trading day of the Company’s fiscal year. Each vested RSU and PSU represents one share of Company’s common stock and will settle in shares, if earned (for PSUs), of Company common stock, net of taxes.(2) | | Represents stock appreciation rights (“SARs”) that were granted prior to the Aetna Transaction and expire ten years from the date of grant.(3) | | These stock options vest in one-quarter increments on each of the first, second, third and fourth anniversaries of the grant date and expire ten years from the date of the grant.(4) | | Represents stock options granted to Mr. Guertin at the time of hire and vest in one-quarter increments on each of the first, second, third and fourth anniversaries of the grant date and expire ten years from the date of the grant.(5) | | These stock options vest in one-quarter increments on each of the first, second, third and fourth anniversaries of the grant date and expire seven years from the date of the grant.(6) |

  63. Outstanding Equity Awards at 2021 Year-End

    | 78 | CVS Health |

  64. Outstanding Equity Awards at 2021 Year-End

    | Mr. Merlo’s stock options vest in one-quarter increments on each of the first, second, third and fourth anniversaries of the grant date and expire seven years from the date of the grant, except for his 2019 and 2020 option grants, which expire ten years from the date of grant. Pursuant to Mr. Merlo’s employment agreement and the applicable option award agreements, any unvested stock options will continue to vest during the three-year period following his retirement date and he may exercise his stock options, to the extent vested, at any time during such three-year period, but not beyond the original term of the stock option or, with respect to each unvested portion of his stock options, the first anniversary of the vesting date. As a result, the second and the third tranches of the stock option awarded to Mr. Merlo in 2020 will expire on May 31, 2024 and the final tranche will expire on April 1, 2025 (the first tranche vested on April 1, 2021 and has been exercised). The expiration dates listed for these stock options represent the earlier of the original term of the stock options and the three-year anniversary of his retirement date. However, as discussed above, the final tranche of the stock option granted to Mr. Merlo in 2020 will expire on April 1, 2025.(7) | | Ms. Boratto’s stock options vest in one-quarter increments on each of the first, second, third and fourth anniversaries of the grant date and expire seven years from the date of the grant, except for the 2019, 2020 and 2021 option grants, which expire ten years from the date of grant. Pursuant to Ms. Boratto’s Separation Agreement and the applicable option award agreements, any unvested stock options will continue to vest through the third anniversary of her separation date and she may exercise her stock options, to the extent vested, at any time during such three-year period, but not beyond the original term of the stock option. The expiration dates listed for these stock options represent the earlier of the original term of the stock options and the three-year anniversary of her separation date.(8) | | RSUs cliff vest on the third anniversary of the grant date.(9) | | RSUs vest in increments of 50% on the third anniversary of the grant date and 50% on the fifth anniversary of the grant date.(10) | | RSUs cliff vest on the fourth anniversary of the grant date. 200 RSUs were surrendered for payment of FICA taxes due as disclosed in Dr. Lotvin’s Form 4 dated December 28, 2021.(11) | | RSUs vest in increments of 50% on the third anniversary of the grant date and 50% on the fifth anniversary of the grant date. 634 RSUs were surrendered for payment of FICA taxes due upon Mr. Merlo’s retirement, as disclosed in his Form 4 dated June 2, 2021.(12) | | The number of PSUs granted on June 5, 2019 that will vest on April 1, 2022 depends upon the attainment of specified performance goals over a period beginning on January 1, 2019 and ending on December 31, 2021. As of December 31, 2021, actual performance with respect to the 2019 PSUs exceeded target performance levels and therefore pursuant to SEC requirements the number of shares reported with respect to the 2019 PSUs is the number of shares that would be earned assuming maximum performance is achieved (250%). However, the actual payout of the 2019 PSUs was at 247.2% after applying the 2021 PSU Leverage Ratio modifier and the rTSR modifier. (2021 PSU Leverage Ratio modifier is a non-GAAP financial measure. See Annex A to this proxy statement for an explanation and a reconciliation to the most comparable GAAP financial measure.) Please see “Status of Prior PSU Performance Programs” beginning on page 59 for a discussion of the MP&D Committee’s determination that the Company surpassed the applicable performance metrics and applied both the 2021 PSU Leverage Ratio and rTSR modifiers. Due to Mr. Merlo’s retirement, his PSU award was pro-rated to reflect his last day of employment.(13) | | Consists of the value of the PSU awards granted on April 1, 2020, which may vest on April 1, 2023. The performance period for these PSUs is January 1, 2020 to December 31, 2022.(14) | | Consists of the value of the PSU awards granted on April 1, 2021, which may vest on April 1, 2024. The performance period for these PSUs is January 1, 2021 to December 31, 2023.(15) | | Represents PSUs granted to Mr. Guertin at the time of hire, which may vest on April 1, 2024. The performance period for these PSUs is January 1, 2021 to December 31, 2023.(16) | | Consists of the value of the PSU award granted on August 30, 2019 in lieu of Mr. Merlo’s annual 2020 PSU award. The number of PSUs granted on August 30, 2019 depends upon the attainment of specified performance goals over a period beginning on January 1, 2019 and ending on December 31, 2021. As of December 31, 2021, actual performance with respect to the 2019 PSUs exceeded target performance levels and therefore pursuant to SEC requirements the number of shares reported with respect to the 2019 PSUs is the number of shares that would be earned assuming maximum performance is achieved (250%). However, the actual payout of the 2019 PSUs was at 247.2% after applying the 2021 PSU Leverage Ratio modifier and the rTSR modifier. (2021 PSU Leverage Ratio modifier is a non-GAAP financial measure. See Annex A to this proxy statement for an explanation and a reconciliation to the most comparable GAAP financial measure.) Please see “Status of Prior PSU Performance Programs” beginning on page 59 for a discussion of the MP&D Committee’s determination that the Company surpassed the applicable performance metrics and applied both the 2021 PSU Leverage Ratio and rTSR modifiers. Vesting of these PSUs granted to Mr. Merlo occurred on May 31, 2021.(17) | | Mr. Merlo did not receive a PSU award in 2020.(18) | | Pursuant to the Separation Agreement, Ms. Boratto’s outstanding PSUs vested on a pro-rated basis through the separation date and will be settled, if earned, on their original vesting dates.(19) |

  65. Outstanding Equity Awards at 2021 Year-End

    | 2022 Proxy Statement | 79 |

  66. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The table below reflects information for the fiscal year ended December 31, 2021 concerning options exercised and the vesting of previously granted RSUs and PSUs and non-transferable shares for each of the NEOs specified in the table. The value of the shares acquired upon exercise of the options and the shares represented by the vesting of RSUs and PSUs is based on the closing price of our common stock on the date of exercise and the date of vesting, respectively.

  67. Option Exercises and Stock Vested – 2021

    Option Exercises and Stock Vested – 2021

  68. Option Exercises and Stock Vested – 2021

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Karen S. Lynch | — | — | 126,446 | 9,931,237 | | Shawn M. Guertin | — | — | — | — | | Troyen A. Brennan | 229,192 | 5,224,718 | 98,094 | 7,288,384 | | Alan M. Lotvin | 25,836 | 221,354 | 99,988 | 7,429,027 | | Jonathan C. Roberts | 182,303 | 5,356,952 | 186,544 | 13,860,219 | | Larry J. Merlo | 1,023,651 | 26,259,766 | 243,246 | 18,475,100 | | Eva C. Boratto | 119,885 | 4,086,904 | 89,931 | 6,681,873 |

  69. Option Exercises and Stock Vested – 2021

    | Includes the RSU value deferred by Dr. Lotvin and Mr. Roberts during 2021, which is also included in the “Stock” row of the “Executive Contributions in Last FY” column of the Nonqualified Deferred Compensation table on page 82.(1) |

  70. Pension Benefits

    Pension Benefits We maintain an unfunded supplemental executive retirement plan, or SERP, which is designed to supplement the retirement benefits of select executives in lieu of a tax qualified defined benefit plan. The SERP is a legacy plan in which participation has decreased over the years as participants have retired, and the Company has not provided SERP benefits to new participants since 2010. Mr. Merlo was the only active executive officer participating in the SERP at the time of his retirement. Under the SERP’s benefit formula, participants (including Mr. Merlo and certain retired executives) will receive an annual benefit commencing on the later of age 55 or retirement, equal to 1.6% of a three-year average of final compensation (as defined in the SERP) for each year of service up to 30 years, with no offset for any amounts provided by our tax qualified plans, Social Security or other retirement benefits. Final compensation for purposes of the SERP benefit formula is the average of the executive’s three highest years of annual salary and annual cash bonus during the last ten years of service. The credited years of benefit service for Mr. Merlo as of the measurement date of December 31, 2021 was 30 years (Mr. Merlo’s years of service are capped at 30, in accordance with the terms of the SERP). Benefits under the SERP formula are payable in annual installments for the life of the executive, unless the executive has made an advance election in accordance with plan and IRS rules to have the benefit paid in the form of a lump sum or joint and survivor annuity of equivalent actuarial value. Mr. Merlo made an election to receive his distribution payable in the form of a lump sum on account of his termination of employment due to retirement. In connection with Mr. Merlo’s retirement, he received his distribution in two lump sum payments, as described in the Pension Benefit Table below. Mr. Merlo reached the maximum amount of service under the SERP based on his more than 30 years with the Company. The accumulated value in the Pension Benefits Table and the change in value reflected in the Summary Compensation Table for Mr. Merlo as of the December 31, 2021 measurement date, reflects the decrease in present value of his SERP benefit resulting from the lump sum payout due to his retirement. Mr. Merlo has not accrued any additional service credit under the SERP. For further information regarding pension assumptions, please see the Note 9, “Pension Plans and Other Postretirement Benefits”, in our 2021 Annual Report.

  71. Pension Benefits

    | 80 | CVS Health |

  72. Pension Benefits – 2021

    Pension Benefits – 2021

  73. Pension Benefits – 2021

    | Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Karen S. Lynch | N/A | — | — | — | | Shawn M. Guertin | N/A | — | — | — | | Troyen A. Brennan | N/A | — | — | — | | Alan M. Lotvin | N/A | — | — | — | | Jonathan C. Roberts | N/A | — | — | — | | Larry J. Merlo | SERP | 30(1) | 0(2) | 53,069,900(2) | | Eva C. Boratto | N/A | — | — | — |

  74. Pension Benefits – 2021

    | Mr. Merlo was with the Company for more than 30 years, but his years of service were capped at 30 years under the terms of the SERP.(1) | | In 2021, following Mr. Merlo’s retirement in May, he was paid two lump sum payments with one occurring in June in the amount of $14,310,852 and the second occurring in December in the amount of $38,759,048. Mr. Merlo no longer has an accumulated benefit under the SERP. There was a slight increase in his accumulated benefit during 2021 as Mr. Merlo’s 2020 annual cash bonus, received in early 2021, was greater than the bonus amount used in the assumptions to calculate Mr. Merlo’s SERP value at the end of the 2020 fiscal year. This increase was partially offset by the application of mortality table assumptions.(2) |

  75. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation Executive officers and select members of management may participate in the DCP and the DSP. The DCP allows participants to defer payment of a portion of their salary and a portion of their annual cash incentive to facilitate their personal retirement or financial planning. For participants in the DCP, we provide a maximum match of up to 5% of the eligible compensation (base+bonus) that exceeds the IRS earnings limit that applies to 401(k) plans after completion of one year of service. The investment crediting options for the DCP mirror those offered for the 401(k) Plan. Each year, the amount of a participant’s deferred compensation account increases or decreases based on the appreciation and/or depreciation in the value of the investment crediting alternatives selected by the participant. There are no vesting requirements on deferred compensation accounts. Under the DSP, participants may elect to defer settlement of RSUs and PSUs beyond the scheduled vesting date. Following vesting, dividends are reinvested during the deferral period. During 2021, Mr. Roberts and Dr. Lotvin deferred portions of their respective equity-based compensation under the DSP. Executive officers are not permitted to defer proceeds of stock option exercises. The amounts shown in the table below for “Cash” and “Stock” were deferred pursuant to the DCP and the DSP, respectively.

  76. Nonqualified Deferred Compensation

    | 2022 Proxy Statement | 81 |

  77. Nonqualified Deferred Compensation – 2021

    Nonqualified Deferred Compensation – 2021

  78. Nonqualified Deferred Compensation – 2021

    | Name | Type | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($)(4) | Aggregate Balance at Last FYE ($)(5) | | Karen S. Lynch | Cash | 71,458 | 71,458 | 14,361 | — | 833,559(6) | | | Stock | — | — | — | — | — | | Shawn M. Guertin | Cash | — | — | — | — | — | | | Stock | — | — | — | — | — | | Troyen A. Brennan | Cash | 74,250 | 74,250 | 533,276 | — | 3,853,608 | | | Stock | — | — | — | — | — | | Alan M. Lotvin | Cash | 442,375 | 112,475 | 461,592 | 477,813 | 2,354,095 | | | Stock | 32,430 | — | 668,278 | — | 3,079,446 | | Jonathan C. Roberts | Cash | 728,550 | 198,575 | 1,312,365 | — | 13,476,325 | | | Stock | 797,462 | — | 12,437,671 | 11,652 | 35,039,799 | | Larry J. Merlo | Cash | 268,658 | 264,816 | 1,310,842 | 0 | 11,771,480 | | | Stock | — | — | 39,810,554 | 3,794,565 | 110,346,689 | | Eva C. Boratto | Cash | 137,617 | 123,117 | 355,872 | — | 1,849,281 | | | Stock | — | — | — | — | — |

  79. Nonqualified Deferred Compensation – 2021

    | The stock contributions for Mr. Roberts represent deferred settlement under the DSP of RSUs and PSUs granted in prior years that vested in 2021. The stock contribution for Dr. Lotvin includes the deferred settlement under the DSP of Performance-Based RSUs granted in 2018.(1) | | All amounts shown are also disclosed in the SCT under All Other Compensation and reflect amounts credited and/or earned in 2021.(2) | | All earnings shown on the Stock line are attributable to dividend equivalents credited as additional deferred RSUs and the change in our common stock price since December 31, 2021.(3) | | All amounts reported are distributions of cash dividend equivalent payments from the DSP, and for Dr. Lotvin and Mr. Merlo, distributions of previously deferred compensation from the DCP and DSP, respectively.(4) | | The following amounts included in this column have been previously reported in the SCTs in our proxy statements since 2007:(5) |

  80. Nonqualified Deferred Compensation – 2021

    | | Cash | Stock | | Ms. Lynch | $— | $— | | Mr. Guertin | — | — | | Dr. Brennan | — | — | | Dr. Lotvin | 260,501 | — | | Mr. Roberts | 6,487,450 | 14,513,432 | | Mr. Merlo | 5,834,503 | 20,476,290 | | Ms. Boratto | 411,780 | — |

  81. Nonqualified Deferred Compensation – 2021

    | Ms. Lynch’s DCP account balance was inadvertently omitted from the Nonqualified Deferred Compensation table in the Company’s 2021 proxy statement due to an administrative error in connection with the integration of a legacy Aetna deferred compensation plan, in which Ms. Lynch participated, into the DCP. As of December 31, 2020, Ms. Lynch’s DCP account balance was $676,282, which consisted solely of contributions made by Ms. Lynch prior to 2020 under the legacy Aetna deferred compensation plan. No contributions were made to Ms. Lynch’s DCP account in 2020.(6) |

  82. Benefits and Payments upon Qualified Retirement or Voluntary Termination

    Benefits and Payments upon Qualified Retirement or Voluntary Termination In the event of voluntary termination, all unvested equity awards would be canceled unless the employee is eligible for “Qualified Retirement” treatment. “Qualified Retirement” means a termination of employment on or after attainment of age 55 with at least 10 years of continuous service, or attainment of age 60 with at least five years of continuous service, provided that if the NEO has options and/or PSUs, he or she has provided the Company with at least 90 days advance notice of his or her retirement date. A NEO will also be deemed to have experienced a Qualified Retirement if the Company elects to terminate his or her employment without Cause and he or she has met the age and service requirements set forth above prior to or during the severance period set forth in a severance agreement with the Company. For purposes of this termination scenario in this disclosure, we have assumed that if a NEO has met the age and years of continuous service requirements for Qualified Retirement treatment as of December 31, 2021, he or she has also met the advance notice requirement for Qualified Retirement treatment. In the event a continuing NEO’s employment with the Company terminates by reason of a deemed Qualified Retirement, outstanding equity awards held by the NEO would be treated as follows:

  83. Benefits and Payments upon Qualified Retirement or Voluntary Termination

    | ● | Unvested options will continue to vest during a three-year post-termination period. | | ● | RSUs will vest on a pro-rata basis as of the NEO’s termination of employment date, except for RSUs held by Mr. Roberts, which would vest in full pursuant to his RSU and RCA agreements. | | ● | PSUs would vest on a pro-rata basis as of the NEO’s termination of employment date based on actual performance, except for PSUs held by Mr. Roberts, which would vest in full pursuant to his PSU and RCA agreements. |

  84. Benefits and Payments upon Qualified Retirement or Voluntary Termination

    Based on age and tenure with the Company as of December 31, 2021, Drs. Brennan and Lotvin and Mr. Roberts are eligible for Qualified Retirement treatment under the Company’s equity programs and the MIP. Mr. Guertin was not retirement eligible as of December 31, 2021. Pursuant to her Employment Agreement, Ms. Lynch will be treated as retirement eligible under the terms of her equity awards.

  85. Benefits and Payments upon Qualified Retirement or Voluntary Termination

    | 2022 Proxy Statement | 83 |

  86. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause Prior to a Change in Control of the Company (“CIC”)

    Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause Prior to a Change in Control of the Company (“CIC”) The CVS Health Severance Plan for Non-Store Employees (the “Severance Plan”), which covers executives, including our NEOs (other than Ms. Lynch), was approved by the MP&D Committee as described under “Other Compensation Arrangements and Benefits” on page 63. With respect to each of the continuing NEOs (other than Ms. Lynch), in the event of a termination without Cause or constructive termination prior to a CIC, pursuant to a RCA and the Severance Plan, the NEOs would be eligible to receive up to 18 months of base salary as severance, paid in equal semi-monthly installments, provided that he or she executes a separation agreement with the Company and complies with post-employment restrictive covenants. Pursuant to Ms. Lynch’s Employment Agreement, upon a qualifying termination of employment, including a termination of employment for “Good Reason”, prior to a CIC, Ms. Lynch would be entitled to a cash severance payment equal to two times the sum of her highest base salary in effect during the six-month period immediately prior to the date of her termination of employment and her target annual bonus opportunity for the year of her termination of employment. Ms. Lynch would also be entitled to a pro-rated annual bonus for the year of her termination of employment and up to 18 months of continued health and benefit plan participation at the same benefit and cost sharing level at which Ms. Lynch and her eligible dependents were participating on the date of her termination of employment. Ms. Lynch’s severance benefits are subject to her execution of a release and compliance with post-employment restrictive covenants. “Good Reason” is defined in her Employment Agreement to mean the occurrence of one or more of the following without Ms. Lynch’s written consent: (a) a reduction by the Company of base salary or target annual bonus opportunity from the level then in effect, except in the event of a ratable reduction affecting all senior officers of the Company; (b) an assignment of any duties that are materially inconsistent with her duties and responsibilities or a material diminution of duties and responsibilities, in each case as such duties and responsibilities were in effect immediately following February 1, 2021; (c) any failure of a successor of the Company to assume and agree to perform the Company’s entire obligations under her Employment Agreement; (d) reporting to any person other than the Board; (e) removal of Ms. Lynch as President and Chief Executive Officer of the Company (other than in connection with a termination of employment for Cause); (f) any action or inaction by the Company that constitutes a material breach of the terms of her Employment Agreement; or (g) the Company’s failure to nominate and recommend Ms. Lynch for re-election to the Board. In the event of a NEO’s termination without Cause or constructive termination prior to a CIC, outstanding equity awards held by the NEO would be treated as follows:

  87. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause Prior to a Change in Control of the Company (“CIC”)

    | ● | Unvested options (other than those held by Mr. Guertin) will continue to vest during a three-year post-termination period, as they would be entitled to Qualified Retirement treatment under the terms of the awards. Mr. Guertin’s unvested options would continue to vest through the end of the severance period as he is not currently retirement eligible. | | ● | If the NEO is entitled to severance, unvested RSUs will continue to vest during the applicable severance period. | | ● | If the NEO is entitled to severance, PSUs (other than those held by Mr. Roberts) would vest on a pro-rata basis as of the NEO’s termination of employment date. For Mr. Roberts’, his unvested PSUs would vest in full pursuant to his PSU and RCA agreements. |

  88. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC Ms. Lynch’s Employment Agreement and the CIC Agreements with Messrs. Guertin and Roberts and Drs. Brennan and Lotvin provide that upon a CIC and subsequent termination of employment, all outstanding unvested stock options will vest in full and restrictions will lapse on all RSUs and PSUs (at target achievement levels). In addition, each continuing NEO (other than Ms. Lynch) would receive a cash severance payment equal to 1.5 times of annual base salary, 1.5 times the then-current annual cash incentive at target and a pro-rated cash incentive bonus at target for the year of termination. Pursuant to Ms. Lynch’s Employment Agreement, upon a qualifying termination of employment within two-years following a CIC, Ms. Lynch’s cash severance payment would increase to two-and-a-half times the sum of her highest base salary in effect during the six-month period immediately prior to the date of her termination of employment and her target annual bonus opportunity for the year of her termination of employment.

  89. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | 84 | CVS Health |

  90. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    Under their CIC Agreements and Ms. Lynch’s Employment Agreement, any severance benefits would be reduced to avoid the excise tax under Section 280G of the Code if that would give the NEO a better after-tax result. With respect to the tables below for all NEOs:

  91. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | ● | The value of options is determined by multiplying the number of unvested options outstanding as of December 31, 2021 by the difference between the exercise price and $103.16, the closing price of our common stock on December 31, 2021, the last trading day of our fiscal year. Generally, the option grant agreements provide for the following post-termination exercise periods, but in no case will the post-termination exercise period be longer than the original option term: |

  92. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | ● | In the case of constructive termination without cause prior to a CIC, during the severance period; | | ● | In the case of constructive termination without cause after a CIC, during the remainder of the option term; | | ● | In the case of a voluntary termination, awards granted in 2017 and later include a 90-day post-termination option exercise period; options granted before 2017 expire immediately upon a voluntary termination; | | ● | In the case of termination for cause, generally there is no post-termination exercise period; and | | ● | In the case of Qualified Retirement, during a 3-year post termination exercise period. |

  93. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | ● | The value of RSUs is determined by multiplying the number of unvested RSUs as of December 31, 2021 by $103.16, the closing price of our common stock on December 31, 2021, the last trading day of our fiscal year. | | ● | The value of unvested PSUs assumes (a) no proration for the 2019 PSUs, pro-rated amounts for the outstanding 2020 PSUs (two-thirds) and 2021 PSUs (one-third); (b) a share price of $103.16, the closing price of our common stock on December 31, 2021, the last trading day of our fiscal year; (c) all outstanding performance cycles are achieved and paid at target; and (d) no adjustment for the applicable 2021 PSU Leverage Ratio modifier and/or rTSR modifier. |

  94. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Karen S. Lynch | Death ($) | Termination for Cause ($) | Qualified Retirement(1) or Voluntary Termination ($) | Termination w/o Cause or Constructive Termination w/o Cause Prior to CIC or Good Reason ($) | Termination w/o Cause or Constructive Termination w/o Cause After CIC ($) | | Cash Severance Value | | | | | | | Base Salary | 0 | 0 | 0 | 2,900,000 | 3,625,000 | | Bonus(2) | 2,900,000 | 0 | 0 | 8,700,000 | 10,150,000 | | Vesting (Forfeiture) of Equity | | | | | | | Value of Options | 19,516,785 | (19,516,785) | 17,896,267 | 17,896,267 | 19,516,785 | | Value of RSUs | — | — | — | — | — | | Value of PSUs | 35,065,631 | (35,065,631) | 22,416,256 | 22,416,256 | 35,065,631 | | Benefits and Other | | | | | | | Health Insurance | 0 | 0 | 0 | 16,421 | 16,421 | | Excise Tax Gross-Up | 0 | 0 | 0 | 0 | 0 | | Total | 57,482,416 | (54,582,416) | 40,312,523 | 51,928,944 | 68,373,837 |

  95. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Pursuant to her Employment Agreement, Ms. Lynch is treated as retirement eligible under the terms of her equity awards.(1) | | Represents annual incentive cash bonus amount at target, calculated using Ms. Lynch’s base salary for the year ending December 31, 2021 and the applicable multiplier described above.(2) |

  96. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | 2022 Proxy Statement | 85 |

  97. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Shawn M. Guertin | Death ($) | Termination for Cause ($) | Qualified Retirement(1) or Voluntary Termination ($) | Termination w/o Cause or Constructive Termination w/o Cause Prior to CIC ($) | Termination w/o Cause or Constructive Termination w/o Cause After CIC ($) | | Cash Severance Value | | | | | | | Base Salary | 0 | 0 | 0 | 1,875,000 | 1,875,000 | | Bonus(2) | 2,187,500 | 0 | 0 | 0 | 5,468,750 | | Vesting (Forfeiture) of Equity | | | | | | | Value of Options | 1,631,237 | (1,631,237) | 0 | 815,602 | 1,631,237 | | Value of RSUs | 3,580,271 | (3,580,271) | 0 | 3,580,271 | 3,580,271 | | Value of PSUs | 5,992,358 | (5,992,358) | 0 | 1,331,589 | 5,992,358 | | Benefits and Other | | | | | | | Health Insurance | 0 | 0 | 0 | 7,991 | 7,991 | | Excise Tax Gross-Up | 0 | 0 | 0 | 0 | 0 | | Total | 13,391,366 | (11,203,866) | 0 | 7,610,453 | 18,555,607 |

  98. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Based on his age and tenure with the Company as of December 31, 2021, Mr. Guertin is not eligible for Qualified Retirement treatment under the Company’s equity program.(1) | | Represents annual incentive cash bonus amount at target, calculated using Mr. Guertin’s base salary for the year ending December 31, 2021 and the applicable multiplier described above.(2) |

  99. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Troyen A. Brennan | Death ($) | Termination for Cause ($) | Qualified Retirement(1) or Voluntary Termination ($) | Termination w/o Cause or Constructive Termination w/o Cause Prior to CIC ($) | Termination w/o Cause or Constructive Termination w/o Cause After CIC ($) | | Cash Severance Value | | | | | | | Base Salary | 0 | 0 | 0 | 1,275,000 | 1,275,000 | | Bonus(2) | 1,062,500 | 0 | 1,062,500 | 0 | 2,656,250 | | Vesting (Forfeiture) of Equity | | | | | | | Value of Options | 11,506,854 | (11,506,854) | 10,790,087 | 10,790,087 | 11,506,854 | | Value of RSUs | 495,684 | (495,684) | 446,064 | 495,684 | 495,684 | | Value of PSUs | 18,894,682 | (18,894,682) | 12,976,393 | 12,976,393 | 18,894,682 | | Benefits and Other | | | | | | | Health Insurance | 0 | 0 | 0 | 18,380 | 18,380 | | Excise Tax Gross-Up | 0 | 0 | 0 | 0 | 0 | | Total | 31,959,720 | (30,897,220) | 25,275,044 | 25,555,544 | 34,846,850 |

  100. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Based on his age and tenure with the Company as of December 31, 2021, Dr. Brennan is eligible for Qualified Retirement treatment under the Company’s equity program and MIP.(1) | | Represents annual incentive cash bonus amount at target, calculated using Dr. Brennan’s base salary for the year ending December 31, 2021 and the applicable multiplier described above.(2) |

  101. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | 86 | CVS Health |

  102. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Alan M. Lotvin | Death ($) | Termination for Cause ($) | Qualified Retirement(1) or Voluntary Termination ($) | Termination w/o Cause or Constructive Termination w/o Cause Prior to CIC ($) | Termination w/o Cause or Constructive Termination w/o Cause After CIC ($) | | Cash Severance Value | | | | | | | Base Salary | 0 | 0 | 0 | 1,500,000 | 1,500,000 | | Bonus(2) | 1,500,000 | 0 | 1,500,000 | 0 | 3,750,000 | | Vesting (Forfeiture) of Equity | | | | | | | Value of Options | 10,432,511 | (10,432,511) | 9,559,929 | 9,559,929 | 10,432,511 | | Value of RSUs | 601,113 | (601,113) | 562,222 | 601,113 | 601,113 | | Value of PSUs | 18,039,899 | (18,039,899) | 10,773,205 | 10,773,205 | 18,039,899 | | Benefits and Other | | | | | | | Health Insurance | 0 | 0 | 0 | 25,742 | 25,742 | | Excise Tax Gross-Up | 0 | 0 | 0 | 0 | 0 | | Total | 30,573,523 | (29,073,523) | 22,395,356 | 22,459,989 | 34,349,265 |

  103. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Based on his age and tenure with the Company as of December 31, 2021, Dr. Lotvin is eligible for Qualified Retirement treatment under the Company’s equity program and MIP.(1) | | Represents annual incentive cash bonus amount at target, calculated using Dr. Lotvin’s base salary for the year ending December 31, 2021 and the applicable multiplier described above.(2) |

  104. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Jonathan C. Roberts | Death ($) | Termination for Cause ($) | Qualified Retirement(1) or Voluntary Termination ($) | Termination w/o Cause or Constructive Termination w/o Cause Prior to CIC ($) | Termination w/o Cause or Constructive Termination w/o Cause After CIC ($) | | Cash Severance Value | | | | | | | Base Salary | 0 | 0 | 0 | 1,875,000 | 1,875,000 | | Bonus(2) | 2,187,500 | 0 | 2,187,500 | 0 | 5,468,750 | | Vesting (Forfeiture) of Equity | | | | | | | Value of Options | 22,991,652 | (22,991,652) | 21,745,102 | 21,745,102 | 22,991,652 | | Value of RSUs | 1,321,686 | (1,321,686) | 1,321,686 | 1,321,686 | 1,321,686 | | Value of PSUs | 36,028,424 | (36,028,424) | 36,028,424 | 36,028,424 | 36,028,424 | | Benefits and Other | | | | | | | Health Insurance | 0 | 0 | 0 | 22,315 | 22,315 | | Excise Tax Gross-Up | 0 | 0 | 0 | 0 | 0 | | Total | 65,529,262 | (60,341,762) | 61,282,712 | 60,992,527 | 67,707,827 |

  105. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Based on his age and tenure with the Company as of December 31, 2021, Mr. Roberts is eligible for Qualified Retirement treatment under the Company’s equity program and MIP.(1) | | Represents annual incentive cash bonus amount at target, calculated using Mr. Roberts’ base salary for the year ending December 31, 2021 and the applicable multiplier described above.(2) |

  106. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    The following table reflects payments and benefits due to Mr. Merlo upon his retirement from the Company on May 31, 2021. Pursuant to his employment agreement, upon retirement, Mr. Merlo is entitled to receive the pro-rata

  107. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | 2022 Proxy Statement | 87 |

  108. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    cash portion of his MIP Award for 2021. In addition, Qualified Retirement is defined in Mr. Merlo’s applicable stock option, PSU and RSU award agreements. Mr. Merlo’s unvested June 2019 PSU award was pro-rated for Qualified Retirement, which resulted in 45,647 PSUs being cancelled. Additionally, in connection with Mr. Merlo’s retirement, he received a distribution of $53,069,900 from the SERP during 2021 as discussed in the Pension Benefits section and related table beginning on page 80. Mr. Merlo received no additional benefits in connection with his retirement.

  109. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Larry J. Merlo | Retirement as of May 31, 2021 ($) | | Cash Severance Value | | | Base Salary | 0 | | Bonus | 2,438,000 | | Qualified Retirement Treatment Equity Values | | | Value of Options | 33,481,029 | | Value of RSUs | 2,165,019 | | Value of PSUs | 19,508,381 | | Benefits and Other | | | Health Insurance | 0 | | Excise Tax Gross-Up | 0 | | Total | 57,592,429 |

  110. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    CVS Pharmacy, Inc. entered into the Separation Agreement with Ms. Boratto on June 9, 2021 in connection with her separation from the Company effective December 1, 2021. The following table reflects additional payments and benefits that have been made to Ms. Boratto upon her departure from the Company and estimates of certain amounts that may be payable to Ms. Boratto in the future, subject to her ongoing compliance with the terms of her Separation Agreement, which includes compliance with post-employment restrictive covenants. Ms. Boratto’s stock options, RSUs and PSUs are treated in accordance with the terms of the applicable equity agreement. Based on Ms. Boratto’s age and tenure with the Company at the time of her Separation Date, she was eligible for Qualified Retirement treatment under the Company’s equity program. As such, her options continue to vest and remain exercisable for up to three years following her Separation Date, RSUs continue to vest during her salary contribution period and PSUs were pro-rated as of her Separation Date.

  111. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Eva C. Boratto | Termination w/o Cause Prior to CIC as of December 1, 2021 ($) | | Cash Severance Value | | | Base Salary Continuation | 1,879,167 | | Bonus | 2,513,000 | | Qualified Retirement Treatment Equity Values | | | Value of Options(1) | 13,228,040 | | Value of RSUs(1) | 231,285 | | Value of PSUs(1) | 16,752,358 | | Benefits and Other | | | Health Insurance | 0 | | Excise Tax Gross-Up | 0 | | COBRA Subsidy Payments(2) | 3,670 | | Expense Reimbursement | 90,000 | | Total | 34,697,520 |

  112. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | Based on Ms. Boratto’s age and tenure with the Company at the time of her Separation Date, she was eligible for Qualified Retirement treatment under the Company’s equity program. As such, her options continue to vest and remain exercisable for up to three years following her Separation Date, RSUs continue to vest during the Salary Continuation Period and PSUs were pro-rated as of her Separation Date.(1) | | This amount reflects the total COBRA subsidy payments received by Ms. Boratto between her Separation Date and February 28, 2022, at which time she ceased receiving COBRA benefits.(2) |

  113. Benefits and Payments upon Termination w/o Cause or Constructive Termination w/o Cause After CIC

    | 88 | CVS Health |

  114. CEO Pay Ratio

    CEO Pay Ratio We strive to invest in our employees at all levels of the Company by rewarding performance that balances risk and reward. We recognize how vital our colleagues are to our success and strive to offer comprehensive and competitive wages and benefits to meet the varying needs of our colleagues and their families. The benefits and programs include annual bonuses, 401(k) plans, stock awards, an employee stock purchase plan, health care and insurance benefits, paid time off, flexible work schedules, family leave, dependent care resources, colleague assistance programs and tuition assistance, among many others, depending on eligibility. In recognition of the critical role that the attraction and retention of talent plays in the success of our business, during 2021, we also announced a significant investment in our employees through an increase in the Company’s minimum hourly wage to $15.00 an hour effective July 2022, with incremental increases to the Company’s competitive hourly rates beginning in August 2021. The new wage structure also incorporates additional increases beyond the $15.00 minimum, with higher starting hourly rates for roles such as pharmacy technicians and call center representatives. In addition, during 2021 we awarded incremental bonuses to select colleague groups in recognition of their ongoing contributions throughout the COVID-19 pandemic, the most significant of which included bonuses to our pharmacist and distribution center colleagues. As required by current SEC rules, we are disclosing the ratio of compensation of Ms. Lynch, who served as our CEO for the majority of 2021 and served in that position on December 31, 2021, to that of the employee who was identified on December 31, 2021 as having an annual total compensation that is the median of all of our employees as of that date. While we are allowed under relevant rules to use the same median employee as we did last year, that employee was promoted during the year to a position that paid substantially more, resulting in an increase of their annual total compensation, and we believed that the employee was no longer an appropriate median employee. We identified the new median employee by ranking the total compensation based on W-2 information for all employees, excluding Ms. Lynch, who were employed by the Company on December 31, 2021. The population of our approximately 300,000 employees includes many part-time, temporary and seasonal workers. Adjustments were made to annualize the compensation of full-time and part-time employees who were not employed by the Company for the entire year. We did not apply any cost-of-living adjustments as part of the calculation. Consistent with our previous practice, we also excluded employees who joined CVS Health through businesses that we acquired during 2021. As permitted by SEC rules under the de minimis exception, we excluded all of our 1,188 employees located outside the United States, who represent less than 5% of our total employees as follows: Bahrain (1), Bermuda (1), Canada (10), China (118), Hong Kong Special Administrative Region (45), Indonesia (12), India (2), Ireland (11), Kuwait (1), Qatar (1), Singapore (78), South Africa (5), Thailand (344), United Arab Emirates (223) and United Kingdom (336). Using this methodology, our new median employee was determined to be a full-time employee. The annual compensation for our median employee was $45,010, calculated in accordance with the rules applicable to the SCT which begins on page 72 of this proxy statement. The annual compensation for our median employee includes the Company-paid portion of health benefits plus company contributions to the 401(k) Plan, if applicable. As permitted by SEC rules, the Company elected to annualize the compensation of Ms. Lynch, who became CEO of the Company on February 1, 2021 and was serving as CEO on December 31, 2021, the anniversary of the determination date previously used by the Company for purposes of identifying the median employee. To annualize Ms. Lynch’s compensation for 2021, the following adjustments were made:

  115. CEO Pay Ratio

    | ● | her base salary was annualized to $1,450,000 (from the $1,429,167 reported in the SCT, which reflected her lower salary during the month of January 2021 before her promotion); and | | ● | her non-equity incentive plan compensation was annualized to $5,800,000 (from the $5,616,000 reported in the SCT, which reflects her 2021 actual bonus, pro-rated based on her time serving as CEO and the time serving in her prior role). |

  116. CEO Pay Ratio

    No annualization was required for the other components of Ms. Lynch’s compensation.

  117. CEO Pay Ratio

    | 2022 Proxy Statement | 89 |

  118. CEO Pay Ratio

    CEO Pay Ratio Therefore, for 2021, the annual total compensation for Ms. Lynch was $20,604,192, which is $215,780 higher than the amount shown in our SCT because of the inclusion of Company-paid medical benefits ($10,947) and the annualization of her salary and bonus, as noted above, which are not reflected in the SCT in accordance with SEC rules. The ratio of Ms. Lynch’s annual compensation to that of our median employee for 2021 is 458-to-1. Given the different methodologies that various public companies use to determine their estimates of pay ratio, including different methodologies, exclusions, estimates and assumptions allowed under SEC rules, and different employment and compensation practices among companies, the ratio reported above should not be used as a basis for comparison between CVS Health and other companies.

  119. CEO Pay Ratio

    | 90 | CVS Health |

  120. CEO Pay Ratio

    | Item 4: Stockholder Proposal for Reducing our Ownership Threshold to Request a Special Stockholder Meeting On or about November 12, 2021 (and later revised on December 3, 2021), the Company received the following proposal from John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278. Mr. Chevedden represents that he has held at least 50 shares of the Company’s stock for the past year and intends to continue to hold such amount through the date of the Company’s next annual meeting. In accordance with SEC rules, we are reprinting the proposal and supporting statement (which we refer to as the “John Chevedden Proposal”) in this proxy statement as they were submitted to us: |

  121. CEO Pay Ratio

    | Proposal 4 - Special Shareholder Meeting Improvement Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. It is important for 10% of shares to have the right to call for a special shareholder meeting to help make up for our totally useless right to act by written consent. It is worse to have no right at all than to find that a right that is technically on the books is totally useless. Why would any group of shareholders, who own 25% of our company, find it attractive to do so little as to ask management to look a calendar and come up with a record date for written consent when a fraction of their members (with 15% stock ownership) can compel management to hold a special shareholder meeting? What group of shareholders who own 15% of our company and can already compel management to hold a special shareholder meeting, would then prefer to take their chances to seek out the support of shareholders who own another 10% of our company - to simply get a record date from management? To initiate written consent at CVS, 25% of shares now must petition management for the baby step of obtaining a record date. Once a record date is obtained then shareholders are on a tight schedule to obtain the consent of 51% of shares outstanding which is equal to 70% of the shares that vote at the annual meeting. It would be hopeless to think that shares that do not have the time to vote would have the time to go through the special procedural steps to act by written consent. This turns into a classic Catch-22 dilemma. In order to get a record date, 25% of shares must give their contact information to management. Thus it is easier than shooting fish in a barrel for management, with free access to the corporate war chest and professional proxy solicitors, to pester the 25% of shares to change their mind and revoke their support for acting by written consent. Thus while the base of 25% of shares are easily venerable [sic] to management attack with deep pockets company money, shareholders have the formidable task of doubling their number to 51% of shares (which equals 70% of the shares that vote at the annual meeting) in a limited time period with money out of their own pockets. We need a right for 10% of shares to call for a special shareholder meeting to help make up for our useless right to act by written consent. Please vote yes: Proposal 4 - Special Shareholder Meeting Improvement |

  122. CEO Pay Ratio

    | 2022 Proxy Statement | 91 |

  123. Adjusted EPS

    Adjusted EPS Adjusted EPS is calculated by dividing adjusted income from continuing operations attributable to CVS Health by the Company’s weighted average diluted shares outstanding. The Company defines adjusted income from continuing operations attributable to CVS Health as income from continuing operations attributable to CVS Health (GAAP measure) excluding the impact of amortization of intangible assets and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, such as acquisition-related integration costs, store impairments, goodwill impairments, acquisition purchase price adjustments outside of the acquisition accounting measurement period, gains/losses on divestitures, income associated with the receipt of fully reserved amounts owed to the Company under the Patient Protection and Affordable Care Act and the Health Care and Educa tion Reconciliation Act of 2010 (collectiv ely, the “ACA”) risk corridor program, losses on early extinguishment of debt and the corresponding income tax benefit or expense related to the items excluded from adjusted income from continuing operations attributable to CVS Health. In 2021 and 2020, the Company’s non-GAAP tax provision also excludes certain tax benefits. In 2021, the tax benefits primarily related to the Internal Revenue Service (“IRS”) approval of a prior year tax refund claim. In 2020, the Company realized certain tax losses that were able to be used to offset a portion of the taxable gain related to the July 2020 sale of the Company’s Coventry Health Care Workers’ Compensation business (the “Workers’ Compensation business”), which reduced total tax expense in 2020.

  124. Adjusted EPS

    | 2022 Proxy Statement | A-1 |

  125. Adjusted EPS

    The following are reconciliations of income from continuing operations to adjusted income from continuing operations attributable to CVS Health and calculations of GAAP diluted EPS from continuing operations and Adjusted EPS for the years ended December 31, 2021 and 2020:

  126. Adjusted EPS

    | | Year Ended December 31, 2021 | | Year Ended December 31, 2020 | | | In millions, except per share amounts | Total Company | Per Common Share | Total Company | Per Common Share | | Income from continuing operations (GAAP measure) | $7,898 | | $7,201 | | | Net (income) loss attributable to noncontrolling interests (GAAP measure) | 12 | | (13) | | | Income from continuing operations attributable to CVS Health (GAAP measure) | 7,910 | $5.95 | 7,188 | $5.47 | | Non-GAAP adjustments: | | | | | | Amortization of intangible assets(1) | 2,259 | 1.70 | 2,341 | 1.78 | | Acquisition-related integration costs(2) | 132 | 0.10 | 332 | 0.25 | | Store impairments(3) | 1,358 | 1.02 | — | — | | Goodwill impairment(4) | 431 | 0.33 | — | — | | Acquisition purchase price adjustment outside of measurement period(5) | (61) | (0.05) | — | — | | Gain on divestiture of subsidiary(6) | — | — | (269) | (0.20) | | Receipt of fully reserved ACA risk corridor receivable(7) | — | — | (307) | (0.23) | | Loss on early extinguishment of debt(8) | 452 | 0.34 | 1,440 | 1.09 | | Tax impact of non-GAAP adjustments(9) | (1,316) | (0.99) | (877) | (0.67) | | Receipt of fully reserved ACA risk corridor receivable attributable to noncontrolling interest, net of tax(10) | — | — | 12 | 0.01 | | Adjusted income from continuing operations attributable to CVS Health | $11,165 | $8.40 | $9,860 | $7.50 | | Weighted average diluted shares outstanding | | 1,329 | | 1,314 |