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CVS » Topics » Role of Consultants

This excerpt taken from the CVS DEF 14A filed Mar 24, 2009.

Role of Consultants

To assist the Committee with its responsibilities, it continues to engage the services of Mercer, an external compensation consulting firm. During fiscal 2008, Mercer:

 

  n Collected, organized and presented quantitative competitive market data for a relevant competitive peer group with respect to executive officers’ target, annual and long-term compensation levels;

 

  n Reviewed and commented on management recommendations on salary increases, short- and long-term compensation awards, and incentive compensation design;

 

  n Developed and delivered an annual Committee briefing on executive compensation legislative and regulatory developments and trends and their implications for CVS Caremark;

 

  n Collected market data and provided recommendations for non-employee director compensation to the Committee for approval by the Board; and

 

  n Conducted an in-depth analysis of competitive change-in-control practices, including peer group and general industry trends.
This excerpt taken from the CVS DEF 14A filed Mar 28, 2008.

Role of Consultants

To assist the Committee with its responsibilities, it continues to engage the services of Mercer, an external compensation consulting firm. During fiscal 2007, Mercer:

 

  n Collected, organized and presented objective competitive market data for a relevant competitive peer group with respect to executive officers’ target, annual and long-term compensation levels;

 

  n Reviewed and commented on management-developed recommendations on salary increases, short- and long-term compensation awards, and incentive compensation design;

 

  n Developed and delivered an annual Committee briefing on executive compensation legislative and regulatory developments and trends and their implications for CVS Caremark;

 

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  n Collected market data and provided recommendations for approval by the Board for non-employee director compensation; and

 

  n Conducted an in-depth analysis of CVS Caremark’s stock plan share utilization past practices and future needs.

As provided in its charter, the Committee has the authority to determine the scope of the external compensation consultant’s services and may terminate the engagement at any time. The external compensation consultant reports to the Committee Chair.

The executive compensation services performed for the Committee are by far the most significant component of the direct consulting relationship that CVS Caremark has with Mercer; fees for those services accounted for over 92% of the total fees charged by Mercer to CVS Caremark in 2007. On occasion, CVS Caremark’s human resources department uses Mercer for general human resources and compensation consulting. In 2007, the Company engaged Mercer to collect and organize competitive market data for key non-executive positions, such as pharmacists. In addition, CVS Caremark has contracted with IBM Corporation to perform a variety of HR services. An affiliate of Mercer is a subcontractor of IBM delivering defined benefit administration services to CVS Caremark and other IBM clients through a strategic alliance between IBM and the Mercer affiliate. All billing, project management and contract negotiations for this relationship are handled by IBM.

EXCERPTS ON THIS PAGE:

DEF 14A
Mar 24, 2009
DEF 14A
Mar 28, 2008

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