CVS Caremark Corporation (CVS)

Statement of The Board Recommending a Vote AGAINST the CRPTF Proposal

The Board recognizes that executive compensation is an important issue in corporate governance and has considered the proposal and the issues associated with a stockholder advisory vote on executive compensation. The Management Planning and Development Committee (“MPD Committee”), consisting entirely of independent directors, operates under a written charter adopted by the Board and is responsible for maintaining an executive compensation program designed to identify, recruit, develop and retain key management and business talent. This program is discussed in detail in this Proxy Statement in the section entitled “Executive Compensation and Related Matters - Compensation Discussion and Analysis.” The MPD Committee has considered the CRPTF Proposal and the issues associated with a stockholder advisory vote on executive compensation, and reported its findings to the Board. Those findings are reflected below.

The Board values the input of its stockholders, but the proposed advisory vote would benefit neither the Company nor its stockholders because it would not provide the MPD Committee with any clear indication of the meaning of the vote. The results of such a vote would not communicate stockholder views of the merits, limitations or preferred enhancements of CVS Caremark’s executive compensation. A negative vote could signify that stockholders do not approve of the amount or of the type of compensation awarded - or alternatively, that stockholders do not approve of the format or level of disclosure in the Summary Compensation Table and accompanying narrative disclosure. A ratification vote is a blunt and impractical mechanism when more effective means of communicating concerns to the MPD Committee are available to stockholders.

As described in “Contact with the Lead Director and Other Non-Management Directors”, stockholders have the means and opportunities to raise any issues or concerns affecting the Company, including executive compensation matters. These communications have the benefit of allowing stockholders to voice their views about executive compensation prior to decisions being made, as opposed to simply voting on the results of those decisions.

Adopting this practice could negatively affect stockholder value by hindering the Company’s ability to attract and retain executives, since the Company’s executive compensation practices could be viewed as more restricted than the practices at the Company’s competitors for executive talent who do not seek advisory votes. The proposal states that public companies in the United Kingdom allow stockholders to cast an advisory vote on executive compensation, but in that jurisdiction the advisory vote process is mandated by law and therefore applies to all public companies, eliminating the risk of companies being placed at a competitive disadvantage. In the United States, the issue of a stockholder vote on executive compensation decisions may be the subject of legislative initiatives in the near term. Passage of this stockholder proposal prior to the resolution of any such proposed legislation may inappropriately subject the Company to standards that differ from the standards that may apply to our competitors.

The Board exercises great care in determining and disclosing executive compensation. The Board does not believe the advisory vote will enhance governance practices or improve communication with stockholders, nor is it in the best interest of the Company’s stockholders.

Accordingly, the Board recommends a vote AGAINST the CRPTF Proposal.

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