UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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CVS Health Corporation

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Notice of 2020
Annual Meeting
of Stockholders
and Proxy Statement

May 14, 2020; 8:00 a.m.

CVS Health Corporation
Customer Support Center
One CVS Drive
Woonsocket, Rhode Island 02895

The Annual Meeting may be held solely by means of remote communication for the health and safety of our stockholders and employees. This Notice of 2020 Annual Meeting and Proxy Statement is being mailed or transmitted on or about April 3, 2020 to stockholders of record at the close of business on March 18, 2020.

Message from Our Chair and Our Chief Executive Officer

Dear Fellow Stockholders:

In 2019, CVS Health laid a strong foundation for long-term sustainable growth and made significant progress executing against our strategic plan. We delivered value through growth in our businesses and contributions from integration synergies that exceeded our expectations. We remain focused on helping people on their path to better health by making health care more local and simpler, while also lowering costs for consumers, members and clients.

Strategic Priorities Guiding our Transformation
We have four strategic priorities that drive our work to transform the way health care is delivered across the U.S.: grow and differentiate our businesses; deliver transformational products and services; create a consumer-centric technology infrastructure; and modernize Enterprise functions and capabilities. We advanced all four of these priorities in the past year. Our Health Care Benefits segment outpaced the industry in Medicare Advantage membership growth, and our Retail/ LTC segment outpaced the industry in growth in prescriptions filled. In 2019, our pharmacy benefit manager, CVS Caremark, initiated a new $0 out-of-pocket program for diabetes care that will be available this year. We developed and launched our Transform Oncology Care^® program to help patients receive the most effective cancer treatments utilizing our integrated assets and capabilities, including a precision medicine program using the latest genomic science and technology. We continued the addition of HealthHUB^® locations to select retail stores, ending the year with over 50 such locations, introducing a number of innovative products and services within those locations and are working to make those new products and services available across our retail stores in additional geographies.

Corporate Social Responsibility
Our Corporate Social Responsibility (“CSR”) strategy is integral to how we deliver on our purpose of helping people on their path to better health. As we look to the future, we have an opportunity to transform health care for our patients, members, customers, clients and colleagues. To do this, we are investing in community health at the local level to improve outcomes, supporting the economic and professional development of our colleagues and partners, and utilizing our scale and expertise as a health care leader to improve the health of our environment. Our vision for the future is bold, and we ask you to join us on our journey to transform health.

Corporate Governance
Over the course of the year, management and the Board worked closely together on the advancement of our strategic plan. We proactively engaged with our stockholders to enhance our understanding of your needs. The feedback we received has driven some of the changes you’ll read about in this proxy statement. We pride ourselves on our strong governance practices, we thank you for your continued support and we welcome your feedback regarding future improvements.

Overall 2019 Financial Performance
CVS Health delivered strong revenue growth of 32.0%, driven by the addition of Aetna and continued strong growth in Enterprise prescriptions filled, which was 3.8% for the year. We delivered GAAP diluted earnings per share of $5.08, with adjusted earnings per share of $7.08,* above the high end of our guidance range. We are pleased with the progress we made in 2019 in laying the foundation to accelerate future growth. In February 2020, we updated our 2020 adjusted earnings per share outlook from the low-single digit growth projection we provided at our June 2019 Investor Day to low- to mid-single digit growth. In addition, our significant cash flow generation has enabled us to deleverage in accordance with our plan, paying down approximately $4.7 billion of net long-term debt in 2019 and approximately $8 billion from the close of the Aetna acquisition through year-end 2019. We remain confident in our outlook for 2020 and beyond, and we believe we are well-positioned to be at the forefront of driving change in the evolving health care landscape.

Annual Meeting of Stockholders
As we look to our 2020 Annual Meeting, we are facing a global health crisis and volatile market environment with significant uncertainty related to the COVID-19 pandemic. At CVS Health, the health and wellbeing of our colleagues has always come first, and we are taking actions to support our colleagues and their families to help them navigate these uncertain times. These steps include one-time bonuses to those who are required to be at CVS Health facilities to assist patients and customers in this time of unprecedented need, child and elder care assistance and paid sick leave for part-time colleagues to help them manage through the COVID-19 pandemic. In these volatile and unprecedented times, we are reminded of CVS Health's vital purpose, and we have taken actions to serve our communities.

Our 2020 Annual Meeting of Stockholders will be held on Thursday, May 14, 2020, at 8:00 a.m. We ask you to please vote at your earliest convenience. Your vote is important.

Thank you for your interest and investment in CVS Health. We appreciate your continued support as we look to transform the way health care is delivered today to improve access, quality and outcomes.

Sincerely,

David W. Dorman Chair of the Board	Larry J. Merlo President and Chief Executive Officer

* Adjusted earnings per share is a non-GAAP measure. See Annex A to the proxy statement.

Table of Contents

Notice of Annual Meeting of Stockholders		1
Proxy Statement Highlights		2
Corporate Governance and Related Matters		8
	Item 1: Election of Directors	8
The Board’s Role and Activities in 2019		18
Board Structure and Processes		21
Committees of the Board		22
Board Meetings and Attendance		30
Non-Employee Director Compensation		30
Audit Committee Matters		32
	Item 2: Ratification of the Appointment of Our Independent Registered Public Accounting Firm for 2020	32
Executive Compensation and Related Matters		34
	Item 3: Say on Pay, a Proposal to Approve, on an Advisory Basis, the Company’s Executive Compensation	34
Letter from the Management Planning and Development Committee		36
Compensation Committee Report		36
Compensation Discussion and Analysis		37
Summary		37
Business and Performance Highlights		41
Detailed Program Discussion		42
Compensation of Named Executive Officers		60
Important Information Regarding the Presentation of Executive Compensation		60
Summary Compensation Table		60
Grants of Plan-Based Awards		63
Outstanding Equity Awards at Fiscal Year-End		64
Option Exercises and Stock Vested		66
Pension Benefits		66
Nonqualified Deferred Compensation		67
Payments/(Forfeitures) Under Termination Scenarios		68
CEO Pay Ratio		72
Management Proposals		73
	Item 4: Proposal to Amend the Company’s 2017 Incentive Compensation Plan to Increase the Number of Shares Authorized to Be Issued Under the Plan	73
	Item 5: Proposal to Amend the Company’s 2007 Employee Stock Purchase Plan to Increase the Number of Shares Available for Sale Under the Plan	82
Stockholder Proposals		86
	Item 6: Stockholder Proposal for Reducing the Ownership Threshold to Request a Stockholder Action by Written Consent	86
	Item 7: Stockholder Proposal Regarding Our Independent Board Chair	88
Ownership of and Trading in Our Stock		90
Executive Officer and Director Stock Ownership Requirements		90
Share Ownership of Directors and Certain Executive Officers		91
Share Ownership of Principal Stockholders		92
Other Information		93
Information About the Annual Meeting and Voting		93
Stockholder Proposals and Other Business for Our Annual Meeting in 2021		96
Other Matters		96
Annex A – Reconciliation of Certain Amounts to the Most Directly Comparable GAAP Measure		A-1
Annex B – 2017 Incentive Compensation Plan of CVS Health Corporation, as Proposed to be Amended		B-1
Annex C – CVS Health Corporation 2007 Employee Stock Purchase Plan, as Proposed to be Amended		C-1

Notice of Annual Meeting of Stockholders

Date and Time
May 14, 2020
8:00 a.m.
Eastern Time Place
CVS Health Corporation
Customer Support Center
One CVS Drive
Woonsocket,
Rhode Island 02895

As part of our precautions regarding the coronavirus or COVID-19 pandemic, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication for the health and safety of our stockholders and employees. If we take this step, we will publicly announce the decision to do so in advance by press release, which will be posted on our website at www.cvshealth.com/newsroom/press-releases, as soon as practicable before the Annual Meeting. In that event, the Annual Meeting would be conducted remotely via live audio webcast at the date and time listed above. Details on how stockholders can participate in the Annual Meeting will be available at www.cvshealthannualmeeting.com, including if the Annual Meeting is held solely by means of remote communication, and including information on how stockholders entitled to vote at the Annual Meeting can vote their shares if they elect not to do so in advance of the Annual Meeting.

Items to be Voted

● Elect 13 director nominees named in this proxy statement;

● Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2020;

● Say on pay, an advisory vote to approve the Company’s executive compensation;

● Proposal to amend the Company’s 2017 Incentive Compensation Plan to increase the number of shares authorized to be issued under the plan;

● Proposal to amend the Company’s 2007 Employee Stock Purchase Plan to increase the number of shares available for sale under the plan;

● Act on two stockholder proposals, if properly presented; and

● Conduct any other business properly brought before the Annual Meeting.

Eligibility to Vote
Stockholders of record at the close of business on March 18, 2020 may vote at the Annual Meeting.

By Order of the Board of Directors,

Colleen M. McIntosh
Senior Vice President, Corporate Secretary and Chief Governance Officer
April 3, 2020

Your vote is important.

Our proxy statement and proxy card are being mailed or transmitted to stockholders entitled to vote at the Annual Meeting beginning on or about April 3, 2020. Whether or not you plan to attend the Annual Meeting, please vote your shares. In addition to voting in person or by mail, stockholders of record have the option of voting by telephone or via the Internet. If your shares are held in the name of a bank, broker or other holder of record (i.e., in “street name”), please read your voting instructions to see which of these options are available to you. Even if you are attending the Annual Meeting in person, we encourage you to vote in advance by Internet, phone or mail.

We are pleased to take advantage of the U.S. Securities and Exchange Commission (the “SEC”) rules that allow issuers to furnish proxy materials to their stockholders on the Internet. As a result, beginning on or about April 3, 2020, we are mailing a notice of Internet availability to many of our stockholders instead of paper copies of our proxy statement and our 2019 Annual Report, which contains our Annual Report on Form 10-K for the year ended December 31, 2019, including our financial statements. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how stockholders can receive a paper copy of our proxy materials, including the proxy statement, our 2019 Annual Report and proxy card.

How to Vote Your vote is important to the future of CVS Health. You are eligible to vote if you were a stockholder of record at the close of business on March 18, 2020. Even if you plan to attend the Annual Meeting, please vote as soon as possible using one of the following methods. In all cases, you should have your proxy card in hand:
	Use the Internet www.proxyvote.com
	Use a Mobile Device Scan this QR Code
	Call Toll-Free 1-800-690-6903
	Mail Your Proxy Card Follow the instructions on your voting form
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on May 14, 2020: The proxy statement and 2019 Annual Report are available at www.cvshealthannualmeeting.com and at www.proxyvote.com/cvs. Stockholders must present a form of personal photo identification in order to be admitted to the Annual Meeting. No cell phones, cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Annual Meeting.

cvshealthannualmeeting.com          1

Proxy Statement Highlights

This summary highlights selected information in this Proxy Statement – please review the entire document before voting.

All of our Annual Meeting materials are available in one place at www.cvshealthannualmeeting.com. There, you can download electronic copies of our Annual Report and proxy statement, and use the link to vote.

Voting Items

Item 1
Election of directors	Our 13 continuing directors are seasoned leaders who bring a mix of skills and qualifications to our Board of Directors		FOR each director nominee
				8-31
Item 2
Ratify the appointment of the Company’s independent registered public accounting firm for 2020	Based on its recent evaluation, our Audit Committee believes that the retention of Ernst & Young LLP is in the best interests of the Company and its stockholders		FOR
				32-33
Item 3
Say on pay - an advisory vote on the approval of the Company’s executive compensation	Our executive compensation program reflects our unwavering commitment to paying for performance and reflects feedback received from stockholder outreach		FOR
				34-35
Item 4
Approve the proposed amendment of the Company’s 2017 Incentive Compensation Plan (the “2017 ICP”) to increase the number of shares authorized to be issued under the 2017 ICP	Our 2017 ICP is an important tool to attract and retain quality executives and employees		FOR
				73-81
Item 5
Approve the proposed amendment of the Company’s 2007 Employee Stock Purchase Plan (the “2007 ESPP”) to increase the number of shares available for sale under the 2007 ESPP	Our 2007 ESPP plays an important role in encouraging broad-based stock ownership by employees, which provides an incentive for employees to contribute to the Company’s continued profitability and success		FOR
				82-85
Items 6 and 7
Stockholder proposals	See the Board’s statement of opposition AGAINST each stockholder proposal		AGAINST
				86-89

2                2020 Proxy Statement

The CVS Health Board

You are asked to vote on the election of the following 13 nominees to serve on the Board of Directors (the “Board” or “our Board”) of CVS Health Corporation (“CVS Health” or the “Company”). All directors are elected by a majority of votes cast, and all presently serve on the Board. The information below reflects the expected membership and leadership of each of the Board’s committees after the Annual Meeting.

						Committees
			Director		Other Public
	Name	Age	Since	Independent	Company Boards	A	I&F	MP&D	N&CG	MA	E
	Fernando Aguirre Former Chairman, President and CEO of Chiquita Brands International, Inc.	62	2018	YES	2	●			●
	C. David Brown II Partner and Member of Executive Committee of Nelson Mullins Riley & Scarborough	68	2007	YES	1				●		●
	Alecia A. DeCoudreaux President Emerita of Mills College and Former Executive at Eli Lilly and Company	65	2015	YES	2	●				●
	Nancy-Ann M. DeParle Managing Partner and Co-Founder of Consonance Capital Partners, LLC and Former Director of White House Office of Health Reform	63	2013	YES	1					●	●
	David W. Dorman Chair of the Board of CVS Health Corporation and Former Chairman and CEO of AT&T Corporation	66	2006	YES	2			●	●
	Roger N. Farah Chairman of Tiffany & Co. and Former Executive at Tory Burch and Ralph Lauren	67	2018	YES	2			●		●
	Anne M. Finucane Vice Chairman and Member of the Executive Management Team of Bank of America Corporation	67	2011	YES	None			●			●
	Edward J. Ludwig Former Chairman and CEO of Becton, Dickinson and Company	68	2018	YES	1		●				●
	Larry J. Merlo President and CEO of CVS Health Corporation	64	2010	NO	None						●
	Jean-Pierre Millon Former President and CEO of PCS Health Systems, Inc.	69	2007	YES	None	●				●
	Mary L. Schapiro Vice Chair of Public Policy and Special Advisor to the Chairman of Bloomberg L.P. and former Chairman of the Securities and Exchange Commission	64	2017	YES	1	●	●
	William C. Weldon Former Chairman and CEO of Johnson & Johnson	71	2013	YES	1			●	●
	Tony L. White Former Chairman, President and CEO of Applied Biosystems, Inc.	73	2011	YES	2			●			●

Key
●	Member	A	Audit	MP&D	Management Planning and Development	MA	Medical Affairs
	Committee Chair	I&F	Investment and Finance	N&CG	Nominating and Corporate Governance	E	Executive

1	Following the Annual Meeting, Ms. Finucane is expected to become Chair of the Investment and Finance Committee, replacing Mr. Ludwig when he becomes Chair of the Audit Committee, and a member of the Executive Committee.
2	Following the Annual Meeting, Mr. Ludwig is expected to become Chair of the Audit Committee, replacing Mr. Swift when he retires.
3	Following the Annual Meeting, Mr. White is expected to become Chair of the Medical Affairs Committee, replacing Mr. Bracken when he retires, and a member of the Executive Committee.

cvshealthannualmeeting.com          3

Selecting Our Directors For Election At the Annual Meeting

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:

4                2020 Proxy Statement

Board and Corporate Governance Highlights

The Board continues to evaluate the Company’s corporate governance policies and practices to ensure that the right mix of individuals are present in our boardroom to best serve the stockholders we represent by ensuring effective oversight of our strategy and management. We are committed to maintaining the highest standards of corporate governance and have established a strong and effective framework by which the Company is governed and reviewed.

	Further Information
2019-2020 Board and Corporate Governance Developments
●Our Board remains committed to ensuring that we are developing solutions to prescription opioid misuse and abuse through expanded education, safe prescription drug disposal, utilization management, funding for treatment and recovery programs and advocating for legislative and regulatory changes. Within the Board, the Audit Committee, the Medical Affairs Committee, the Nominating and Corporate Governance Committee and the Management Planning and Development Committee each play a significant role in the Board’s oversight efforts. Details on the Board’s Role in Our Opioid Action Plan are available on our website at https://cvshealth.com/sites/default/files/cvs-health-boards-role-in-opioid-action-plan.pdf		►	pages 19-20
●Board decreased to 13 directors in order to further align with corporate governance best practices and consistent with stockholder input		►	page 6
●In 2019, Nancy-Ann DeParle was appointed Chair of the Nominating and Corporate Governance Committee. It is expected that Edward Ludwig will be appointed Chair of the Audit Committee, Anne Finucane will be appointed Chair of the Investment and Finance Committee and Tony White will be appointed Chair of the Medical Affairs Committee after the Annual Meeting		►	page 23
Board Communication and Stockholder Rights
●Our Board supports our stockholder outreach program and has responded to stockholder input with changes in our compensation program and other areas		►	pages 6-7
●Majority voting in director elections		►	page 17
●Proxy access by-law		►	page 17
●Annual election of all directors		►	page 8
●Annual “say on pay” vote		►	page 34
●Right to act by written consent and to call special meetings		►	See our Certificate of Incorporation and By-laws at https://investors. cvshealth.com under “Governance Documents”
Director Alignment with Stockholder Interests
●At least 75% of our directors’ annual retainer mix is paid in shares of CVS Health common stock		►	pages 30-31
●Directors must own at least 10,000 shares of CVS Health common stock		►	page 90
●Director meeting attendance averaged over 96%, and each director attended more than 75% of the meetings of the Board and the committees of which he or she was a member		►	page 30
●Diversity of Board and Board committee leadership		►	page 4

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	Further Information
Board Oversight of Risk
●Full Board and individual committees focus on understanding and assessing Company risks	►pages 19-20
●Our independent Chair and our CEO are focused on the Company’s and the Board’s risk management efforts and ensure that Enterprise risks are appropriately brought to the Board and/or its committees for review	►pages 19-20
●At least annually, the Audit Committee reviews our policies and practices with respect to risk assessment and risk management, including discussing with management our major risks and the steps that have been taken to monitor and mitigate such risks	►page 20
●The Management Planning and Development Committee is responsible for reviewing and assessing potential risks arising from the Company’s compensation policies and practices	►page 28
●The Nominating and Corporate Governance Committee is responsible for oversight of our policies, practices and risks related to cybersecurity and data and information security governance, a responsibility shifted from the Audit Committee in early 2019	►page 26

Stockholder Outreach – Governance and Compensation Actions

Our stockholder advisory vote on executive compensation has received strong support in each of the last two years, with more than 90% of votes cast in favor of the proposals. The Management Planning and Development Committee (the “MP&D Committee”) believes this strong support, along with the direct feedback from stockholders received through the extensive outreach conducted by management and our MP&D Committee Chair, reflects the MP&D Committee’s commitment to align CVS Health’s compensation program to its business strategies and performance outcomes. In addition, it reflects support for the enhancements the MP&D Committee has made in response to stockholder feedback to simplify and enhance the performance-based nature of the program and to increase overall transparency.

In the latter part of 2019 and early 2020, management reached out to stockholders representing approximately 52% of our outstanding shares and held calls with holders of nearly 22% of our outstanding shares. The Chair of the MP&D Committee participated in certain of those calls. During our outreach, we discussed a range of compensation, governance and other relevant topics with stockholders, including those described below, and received positive feedback.

What we heard

Our response

Is the size of the Board too large?

We believe our Board is well-balanced, with the skills, qualifications and perspectives that allow it to fully and effectively address the Company’s needs. Our Board’s membership grew to 16 members at the time of the Aetna acquisition with the addition of four Aetna directors who supplemented the depth of our Board’s knowledge of the health care industry, consumer products and brand management, international business operations and medical technology. Since that acquisition, one director has resigned and, following the Annual Meeting, the Board will be further reduced to 13 directors. We believe this reduction further aligns us with corporate governance best practices.

6                2020 Proxy Statement

What we heard	Our response
How is CVS Health addressing prescription opioid misuse and abuse?	We believe we are part of the solution. CVS Health is dedicated to helping communities address and prevent prescription opioid misuse and abuse. The Company has a range of programs aimed at addressing various aspects of the issues regarding prescription opioids, including safe medication disposal units, pharmacist counseling, enhanced utilization management through our PBM, our youth education program, Pharmacists Teach, and making opioid overdose reversal medication widely and more easily available. Our Board is actively engaged in our efforts to address prescription opioid misuse and abuse through its oversight and review of the programs we are implementing to respond to prescription opioid abuse and is working with our executive team as it develops new strategies to address this issue. Please see our opioid response page on our website at www.cvshealth.com/OpioidResponse.
Why did the Peer Group expand to include non-health care companies?	In consideration of the Aetna acquisition, the MP&D Committee determined that two compensation peer groups are appropriate for 2019 to better account for our evolving business following the Aetna acquisition, including our size, our diverse business segments and our international presence, which results in our NEOs’ jobs having a greater level of complexity than similar roles at certain of our health care and retail comparator companies.
How have you improved your executive compensation program?	Starting in 2019, the compensation program includes only a single performance stock unit (“PSU”) structure, in place of the two forms of PSUs awarded in 2018. The overall long-term incentive compensation mix remains 75% PSUs and 25% stock options. We also aligned the metrics in the 2019 PSUs to the shift in our business strategy and our commitment to reduce debt, and we are providing more transparency in the metrics selection and target setting process. Please see the Compensation Discussion and Analysis (the “CD&A”) on pages 37-59.

For more information on changes to our compensation program, see the letter from the MP&D Committee on page 36, Executive Compensation Topics Discussed with Stockholders, beginning on page 38 and Elements of Our Compensation Program beginning on page 43. For more information on corporate governance at CVS Health, please refer to pages 8-31 of this proxy statement and to our website at https://investors.cvshealth.com/investors/ corporate-governance/default.aspx.

cvshealthannualmeeting.com          7

Corporate Governance and Related Matters

Item 1 Election of Directors Our Board of Directors has nominated 13 candidates for election as directors at the Annual Meeting. All 13 nominees currently serve as directors. If elected, each nominee will hold office until the next annual meeting and until their respective successors have been duly elected and have qualified. The Nominating and Corporate Governance Committee (“N&CG Committee”) believes that the Board is well-balanced and that it fully and effectively addresses the Company’s needs. All of our nominees are seasoned leaders, the majority of whom hold or held senior executive leadership positions, who bring to the Board skills, qualifications and perspectives gained during their tenure at a wide array of public companies, private companies, non-profits, governmental and regulatory agencies and other organizations. We have indicated below for each nominee certain of the experience, qualifications, attributes and skills that led the N&CG Committee and the Board to conclude that the nominee should continue to serve as a director. Please note that for each director we have only listed the core attributes that the Board considered to be most relevant to each nominee. Each director nominee possesses qualifications in addition to those listed under his or her name.

The Board of Directors unanimously recommends a vote FOR the election of all director nominees.

For more information about our directors, please refer to pages 9-15 of this proxy statement.

8                2020 Proxy Statement

Corporate Governance and Related Matters     Item 1

Biographies of our Incumbent Board Nominees

	Fernando Aguirre INDEPENDENT DIRECTOR Former Chairman, President and CEO of Chiquita Brands International, Inc.			C. David Brown II INDEPENDENT DIRECTOR Partner and Member of the Executive Committee of Nelson Mullins Riley & Scarborough LLP
CVS Health Board Committees Audit; Nominating and Corporate Governance Other Public Boards Barry Callebaut AG Synchrony Financial		Age 62 Director since November 2018	CVS Health Board Committees Management Planning and Development (Chair); Nominating and Corporate Governance; Executive Other Public Board Rayonier Advanced Materials Inc.		Age 68 Director since March 2007
Director Qualification Highlights ●Business Operations; Consumer Products and Services ●International Business Operations ●Corporate Governance ●Business Development and Corporate Transactions ●Finance ●Health Care/Regulated Industry Education B.S., Southern Illinois University Biography Mr. Aguirre was a member of the board of directors of Aetna from 2011 until the closing of the Aetna acquisition, when he became a director of CVS Health. 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. He served as a director of Coveris (packaging) from 2014 to 2015, Levi Strauss (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. 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.			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 Education B.S.B.A., University of Florida; J.D., University of Florida College of Law Biography Mr. Brown has been a partner and a member of the Executive Committee 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 also is currently the lead director of Rayonier Advanced Materials Inc. (“RYAM”), a leading specialty cellulose production company. Mr. Brown previously served on the board of directors and as lead director of Rayonier Inc., a real estate development and timberland management company, prior to the spin-off of RYAM in June 2014. He also served as a director of ITT Educational Services, Inc., a national provider of technology-oriented degree programs, from April 2015 until September 2016. 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. 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. 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.

cvshealthannualmeeting.com          9

Corporate Governance and Related Matters     Item 1

	Alecia A. DeCoudreaux INDEPENDENT DIRECTOR President Emerita of Mills College and Former Executive at Eli Lilly and Company			Nancy-Ann M. DeParle INDEPENDENT DIRECTOR Managing Partner and Co-Founder of Consonance Capital Partners, LLC and Former Director of the White House Office of Health Reform
CVS Health Board Committees Audit; Medical Affairs Other Public Boards Parnassus Funds and Parnassus Income Funds		Age 65 Director since March 2015	CVS Health Board Committees Nominating and Corporate Governance (Chair); Medical Affairs; Executive Other Public Board HCA Holdings, Inc.		Age 63 Director since September 2013
Director Qualification Highlights ●Business Development, Corporate Strategy and Transactions ●Legal and Regulatory Compliance ●Health Care/Regulated Industry ●Corporate Governance ●Risk Management ●Public Policy and Government Affairs Education B.A., Wellesley College; J.D., Indiana University School of Law Biography 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 of the Parnassus Funds trust and the Parnassus Income Funds trust, each a family of investment funds that integrates environmental, social and governance (“ESG”) factors and fundamental investment principles. 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.			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 Education B.A., University of Tennessee; B.A. and M.A., Balliol College, Oxford University; J.D., Harvard Law School Biography Ms. DeParle has been 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 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 a director of HCA Holdings, Inc., a health care services company that owns, manages or operates hospitals and various other health care facilities. 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              2020 Proxy Statement

Corporate Governance and Related Matters     Item 1

	David W. Dorman INDEPENDENT DIRECTOR Chair of the Board of CVS Health Corporation, Former Chairman and CEO of AT&T Corporation, and Founding Partner of Centerview Capital Technology Fund			Roger N. Farah INDEPENDENT DIRECTOR Chairman of Tiffany & Co. and Former Executive at Tory Burch and Ralph Lauren
CVS Health Board Committees Management Planning and Development; Nominating and Corporate Governance; Executive Other Public Boards Dell Technologies, Inc. PayPal Holdings, Inc.		Age 66 Director since March 2006	CVS Health Board Committees Management Planning and Development; Medical Affairs Other Public Boards The Progressive Corporation; Tiffany & Co. (expected to resign in mid-2020 due to acquisition by LVMH Moët Hennessy Louis Vuitton SE)		Age 67 Director since November 2018
Director Qualification Highlights ●Finance ●International Business Operations; Consumer Products or Services ●Technology and Innovation ●Risk Management ●Corporate Governance ●Business Development, Corporate Strategy and Transactions Education B.S., Georgia Institute of Technology Biography Mr. Dorman has been the Chair of the Board of CVS Health Corporation since May 2011. He also has been a Founding Partner of Centerview Capital Technology Fund, a private investment firm, since July 2013. He served as Lead Director of Motorola Solutions, Inc. (formerly Motorola, Inc.), a communications products company, until his retirement from that board in May 2015, and was Non-Executive Chairman of the Board of Motorola from May 2008 through May 2011. From October 2006 through April 2008, he was a Managing Director and Senior Advisor with Warburg Pincus LLC, a global private equity firm. From November 2005 until January 2006, Mr. Dorman served as President and a director of AT&T Inc., a telecommunications company (formerly known as SBC Communications). From November 2002 until November 2005, Mr. Dorman was Chairman of the Board and Chief Executive Officer of AT&T Corporation. He was a director of Yum! Brands, Inc., a global quick service restaurant company, from 2005 until his retirement from that board in May 2017. Mr. Dorman is currently a director of PayPal Holdings, Inc., a leading digital and mobile payments company, as well as Dell Technologies, Inc., a leading global end-to-end technology provider. Skills and Qualifications of Particular Relevance to CVS Health Mr. Dorman’s experience in leading large companies, beginning with Sprint and later Pacific Bell and AT&T, lends a perspective and skill set that is greatly valued by the Board. His business background of growing companies is in line with and useful to our business and strategy. In addition, Mr. Dorman’s experience investing in technology companies at Warburg Pincus and Centerview Capital and his service on the board of Dell Technologies provides an important perspective and expertise in innovation, technology and information security. The Board believes that Mr. Dorman’s experience leading the boards of AT&T and Motorola make him well-suited to serve as its independent Chair.			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 Education B.S., University of Pennsylvania Biography Mr. Farah was a member of the board of directors of Aetna from 2007 until the closing of the Aetna acquisition, when he became a director of CVS Health. Mr. Farah is the Chairman of the Board and a director of Tiffany & Co., a retailer of jewelry and specialty products, and also serves as a director of The Progressive Corporation, an auto insurance company. He was a director of Metro Bank PLC, a financial services company, until his retirement from that board in March 2020. 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 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. 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.

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Corporate Governance and Related Matters Item 1

	Anne M. Finucane INDEPENDENT DIRECTOR Vice Chairman of Bank of America Corporation and Chairman of the Board of Bank of America Merrill Lynch Europe			Edward J. Ludwig INDEPENDENT DIRECTOR Former Chairman and Chief Executive Officer of Becton, Dickinson and Company
CVS Health Board Committees Investment and Finance (pending Chair); Management Planning and Development Other Public Boards None		Age 67 Director since January 2011	CVS Health Board Committees Audit (pending Chair); Investment and Finance (current Chair); Executive Other Public Board Boston Scientific Corporation		Age 68 Director since November 2018
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 ●Risk Management Education B.A., University of New Hampshire Biography Ms. Finucane has been Vice Chairman of Bank of America Corporation, an international financial services company, since July 2015 and Chairman of the Board of Bank of America Merrill Lynch Europe since July 2018. 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 has served as senior advisor to four chief executive officers and the Board of Directors. As a member of the executive management team, Ms. Finucane is responsible for the strategic positioning of Bank of America and leads the company’s environmental, social and governance, sustainable finance, capital deployment and public policy efforts. She is 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 stewards Bank of America’s $300 billion environmental business initiative, oversees the company’s $1.6 billion Community Development Financial Institution portfolio, and chairs the Bank of America Charitable Foundation. 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.			Director Qualification Highlights ●Business Operations ●Business Development, Corporate Strategy and Transactions ●Finance ●Health Care/Regulated Industry ●Technology and Innovation ●Risk Management ●International Business Operations Education B.A., College of the Holy Cross; M.B.A., Columbia University Biography Mr. Ludwig was lead director of the Aetna board of directors from 2003 until the closing of the Aetna acquisition, when he became a director of CVS Health. 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. He serves as the lead independent director of Boston Scientific Corporation (medical devices) and as a director of POCARED Diagnostics Ltd. (a diagnostics technology manufacturer based in Israel). 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 positioned him well to serve as Chair of our Investment and Finance Committee and positions him well to serve as Chair of our Audit Committee.

12              2020 Proxy Statement

Corporate Governance and Related Matters Item 1

	Larry J. Merlo NON-INDEPENDENT DIRECTOR President and Chief Executive Officer of CVS Health Corporation			Jean-Pierre Millon INDEPENDENT DIRECTOR Former President and Chief Executive Officer of PCS Health Systems, Inc.
CVS Health Board Committees Executive Other Public Boards None		Age 64 Director since May 2010	CVS Health Board Committees Audit; Medical Affairs Other Public Boards None		Age 69 Director since March 2007
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 ●Pharmacy Benefit Management ●Real Estate Education B.S., Pharmacy, University of Pittsburgh Biography Mr. Merlo has been Chief Executive Officer of CVS Health Corporation since March 2011 and President of CVS Health Corporation since May 2010. Mr. Merlo formerly served as Chief Operating Officer of CVS Health Corporation from May 2010 through March 2011 and was President of CVS Pharmacy from January 2007 through May 2010, and Executive Vice President – Stores from April 2000 to January 2007. Skills and Qualifications of Particular Relevance to CVS Health Mr. Merlo has been with CVS Health and its subsidiaries for nearly 40 years and provides our Board with invaluable experience and insight into the retail drugstore and health care industries. Mr. Merlo has a track record of achievement and innovation demonstrated during his long tenure with CVS Health. Mr. Merlo has a proven record of developing talented leaders, and he is a recognized thought leader in the health care industry.			Director Qualification Highlights ●Finance ●Business Development, Corporate Strategy and Transactions ●Health Care/Regulated Industry ●International Business Operations ●Pharmacy Benefit Management ●Public Company Board Service Education B.S., Ecole Centrale de Lyon (France); B.A., Université de Lyon (France); M.B.A., Kellogg School of Business, Northwestern University Biography Mr. Millon is the former President and Chief Executive Officer of PCS Health Systems, Inc. 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. 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. 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.

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Corporate Governance and Related Matters     Item 1

	Mary L. Schapiro 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			William C. Weldon INDEPENDENT DIRECTOR Former Chairman of the Board and Chief Executive Officer of Johnson & Johnson
CVS Health Board Committees Audit; Investment and Finance Other Public Board Morgan Stanley		Age 64 Director since May 2017	CVS Health Board Committees Management Planning and Development; Nominating and Corporate Governance Other Public Board Exxon Mobil Corporation		Age 71 Director since March 2013
Director Qualification Highlights ●Public Policy and Government Affairs ●Finance ●Risk Management ●Legal and Regulatory Compliance ●Public Company Board Service Education B.A., Franklin and Marshall College; J.D., George Washington University Biography 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. 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. Prior to becoming SEC 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 a director of Morgan Stanley, a global financial services company. Ms. Schapiro 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. 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, finance, risk management, and public policy and government affairs.			Director Qualification Highlights ●Finance ●Health Care/Regulated Industry ●International Business Operations; Consumer Products or Services ●Risk Management ●Corporate Governance ●Public Company Board Service Education B.S., Quinnipiac University Biography 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 as Chief Executive Officer in April 2012 and his retirement from the board in December 2012. Mr. Weldon previously served in a variety of senior executive positions during his 41-year career with Johnson & Johnson. Mr. Weldon also is a director of Exxon Mobil Corporation, an international energy provider and chemical manufacturing company. He was a director of JPMorgan Chase & Co., a global financial services company, until his retirement from that board in May 2019, and The Chubb Corporation, an international insurance company, until it was acquired by ACE Limited in January 2016. Mr. Weldon is expected to join the board of Fairfax Financial Holdings Ltd., a property and casualty insurance and reinsurance company, in April 2020. 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.

14              2020 Proxy Statement

Corporate Governance and Related Matters     Item 1

	Tony L. White INDEPENDENT DIRECTOR Former Chairman of the Board, President and Chief Executive Officer of Applied Biosystems, Inc.
CVS Health Board Committees Management Planning and Development; Medical Affairs (pending Chair) Other Public Boards Ingersoll Rand Inc. Trane Technologies plc		Age 73 Director since March 2011
Director Qualification Highlights ●Finance ●Health Care/Regulated Industry ●Technology and Innovation ●Risk Management ●Corporate Governance ●Public Company Board Service Education B.A., Western Carolina University Biography Mr. White is the former Chairman of the Board, President and Chief Executive Officer of Applied Biosystems, Inc. (formerly Applera Corporation), a developer, manufacturer and marketer of life science systems and genomic information products, having served in those positions from September 1995 until his retirement in November 2008. Mr. White is a director of Ingersoll Rand Inc., a diversified industrial company, and Trane Technologies plc, a climate technologies company. He was a director of C.R. Bard, Inc. (“Bard”), a company that designs, manufactures and sells medical, surgical, diagnostic and patient care devices, from 1996 until Bard was acquired by Becton, Dickinson and Company in December 2017. Skills and Qualifications of Particular Relevance to CVS Health Mr. White’s wealth of management experience in the life sciences and health care industries, including over 13 years as Chairman and CEO of an advanced-technology life sciences company and 26 years in various management positions at Baxter International, Inc., a provider of medical products and services, makes him well qualified to serve as a director of CVS Health and as the new Chair of our Medical Affairs Committee.

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Corporate Governance and Related Matters     Item 1

Director Qualification Criteria; Diversity

Recognizing that the selection of qualified directors is complex and crucial to the long-term success of the Company, the N&CG Committee has established in its charter guidelines for the identification and evaluation of candidates for membership on the Board. Under its charter, the N&CG Committee recommends to the Board criteria for Board membership and recommends individuals for membership on the Board. The criteria used by the N&CG Committee in nominating directors are found in the N&CG Committee’s charter and provide that candidates should be distinguished individuals who are prominent in their fields or otherwise possess exemplary qualities that will enable them to effectively function as directors. While the N&CG Committee does not believe it appropriate to establish any specific minimum qualifications for candidates, it focuses on the following qualities in identifying and evaluating candidates for Board membership:

● Background, experience and skills

● Character, reputation and personal integrity

● Judgment

● Independence

● Diversity

● Viewpoint

● Commitment to the Company and service on the Board

● Any other factors that the N&CG Committee may determine to be relevant and appropriate

The N&CG Committee makes these determinations in the context of the existing composition of the Board so as to achieve an appropriate mix of characteristics. Consistent with this philosophy, the N&CG Committee is committed to including in each search qualified candidates who reflect diverse backgrounds, including diversity of gender and race. The N&CG Committee also takes into account all applicable legal, regulatory and stock exchange requirements concerning the composition of the Board and its committees. The N&CG Committee reviews these guidelines from time to time as appropriate (and in any event at least annually) and modifies them as it deems appropriate.

The N&CG Committee also reviews the composition of the Board in light of the current challenges and needs of the Board and the Company, and determines whether it may be appropriate to add or remove individuals after considering, among other things, the need for audit committee expertise and issues of independence, diversity, judgment, character, viewpoint, reputation, age, skills, background, experience and corporate governance best practices.

The N&CG Committee values diversity, which it broadly views in terms of, among other things, gender, race, background and experience, as a factor in selecting members to serve on the Board. Our nominees reflect that diversity, including in terms of race, gender and ethnic background. In addition, to ensure that it has access to a broad range of qualified, experienced and diverse candidates, the N&CG Committee may use the services of an independent search firm to help identify and assist in the evaluation of candidates.

Board Evaluation Process

When considering current directors for re-nomination to the Board, the N&CG Committee takes into account the performance of each director, which is part of the N&CG Committee’s annual Board evaluation process. In 2019, that process included individual interviews of each director by our General Counsel, followed by a report to the N&CG Committee and the Board summarizing his findings. Each committee of the Board also evaluates its own performance on an annual basis, and the Chair of each committee reports its findings and recommendations to counsel for inclusion in his report to the Board. In 2020, in order to enhance the process and as a corporate governance best practice, the Board engaged an independent third-party to conduct the interviews and deliver the report summarizing his findings. The N&CG Committee may then recommend actions for the Board to consider to maximize effectiveness, or the Board can take action on its own accord.

Board Refreshment; Retirement Age

The N&CG Committee and the Board believe that setting a retirement age for CVS Health directors is advisable to facilitate the addition of new directors. Accordingly, our Corporate Governance Guidelines provide that no director who is or would be over the age of 74 at the expiration of his or her current term may be nominated to a new term, unless the Board waives the retirement age for a specific director in exceptional circumstances. In the event any waiver is provided, the Board will disclose the rationale for its decision.

16              2020 Proxy Statement

Corporate Governance and Related Matters     Item 1

Messrs. Swift and Bracken will not stand for re-election at the Annual Meeting. The Board will be reduced from 15 to 13 directors effective at the time of the Annual Meeting in order to further align with corporate governance best practices. Mr. Swift will be retiring from the Board after having reached the mandatory retirement age. He has served as a director of CVS Health since September 2006. Mr. Bracken will be leaving the Board and retiring from board service after a 40-plus year career in health care to spend more time on personal interests. He has served as a director of CVS Health since January 2015.

Majority Voting

As discussed elsewhere in this proxy statement, directors are elected by a majority of the votes cast at the Annual Meeting (assuming that the election is uncontested). Under our by-laws, each nominee who is a current director is required to submit an irrevocable resignation, which resignation would become effective upon (1) that person not receiving a majority of the votes cast in an uncontested election, and (2) acceptance by the Board of that resignation in accordance with the policies and procedures adopted by the Board. The Board, acting on the recommendation of the N&CG Committee, will no later than at its first regularly scheduled meeting following certification of the stockholder vote, determine whether to accept the resignation of an unsuccessful incumbent. Absent a determination by the Board that a compelling reason exists for concluding that it is in the best interests of the Company for an unsuccessful incumbent to remain as a director, the Board will accept that person’s resignation. In the event any resignation is not accepted, the Board will disclose the rationale for its determination.

Compensation Committee Interlocks and Insider Participation

As of March 18, 2020, the members of the MP&D Committee are Mr. Brown (Chair), Messrs. Dorman, Farah, Weldon and White and Ms. Finucane. None of the members of the MP&D Committee has ever been an officer or employee of the Company. There are no interlocking relationships between any of our executive officers and any MP&D Committee member.

Stockholder Submission of Nominees

The N&CG Committee will consider any director candidates proposed by stockholders who submit a written request to our Corporate Secretary (including via our proxy access by-law, described below). All candidates should meet the Director Qualification Criteria, discussed above. The N&CG Committee evaluates all director candidates and nominees in the same manner regardless of the source. If a stockholder would like to nominate a person for election or re-election to the Board, he or she must provide notice to the Company as provided in our by-laws and described in this proxy statement. The notice must include a written consent indicating that the candidate is willing to be named in the proxy statement as a nominee and to serve as a director if elected and any other information that the SEC would require to be included in a proxy statement when a stockholder submits a proposal. See “Other Information – Stockholder Proposals and Other Business for Our Annual Meeting in 2021” for additional information related to proposals, including any nominations, for our 2021 Annual Meeting.

Proxy Access

CVS Health has had a proxy access by-law since January 2016. The key terms of its proxy access by-law are:

A stockholder, or a group of up to 20 stockholders, owning at least 3% of the Company’s outstanding common stock continuously for at least 3 years May nominate and include in the Company’s proxy materials director nominees constituting up to the greater of 2 nominees or 20% of the Board Provided that the stockholders and the nominees satisfy the requirements specified in the Company’s by-laws

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Corporate Governance and Related Matters     The Board’s Role and Activities in 2019

Independence Determinations for Directors

Under our Corporate Governance Guidelines, a substantial majority of our Board must be comprised of directors who meet the director independence requirements set forth in the Corporate Governance Rules of the New York Stock Exchange (the “NYSE”) Listed Company Manual. Under NYSE Rules, no director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with the Company.

Our Board has adopted categorical standards to assist in making director independence determinations. Any relationship that falls within the following standards or relationships will not, in itself, preclude a determination of independence. These categorical standards are set forth in Annex A to the Company’s Corporate Governance Guidelines, which are available on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx or upon request to our Corporate Secretary.

2020 Determinations

The N&CG Committee undertook its annual review of director independence in March 2020. The N&CG Committee recommended that the Board determine, and the Board determined, that each of Mmes. DeCoudreaux, DeParle, Finucane and Schapiro, and each of Messrs. Aguirre, Bracken, Brown, Dorman, Farah, Ludwig, Millon, Swift, Weldon and White is independent. Mr. Merlo is not an independent director because of his employment as President and CEO of the Company. Messrs. Bracken and Swift will not be standing for re-election as directors at the Annual Meeting.

The Board’s Role and Activities in 2019

The Board acts as the ultimate decision-making body of the Company and advises and oversees management, which is responsible for the day-to-day operations and management of the Company. In carrying out its responsibilities, the Board reviews and assesses CVS Health’s long-term strategy and its strategic, competitive and financial performance.

The Board oversaw CVS Health’s 2019 performance driven by strong operating execution across the Enterprise, with all segments meeting or exceeding expectations. The Board believes that the Company’s strategy to create an innovative health care model that will address many of the issues facing the nation’s health care system and furthers the Company’s purpose of helping people on their path to better health. In 2019, the Board oversaw the Company’s efforts to transform health care in the United States, including the rollout of the new HealthHUB^® concept, with a goal of establishing 1,500 HealthHUB locations across the nation by the end of 2021, and expansion of its Kidney Care business, including an ongoing clinical trial of a home hemodialysis machine. The Board also continued its oversight of the Company’s efforts to address prescription opioid misuse and abuse, issuing an updated report on the subject in October 2019.

CVS Health’s total revenues increased by 32% in 2019 to a record $256.8 billion, and the Company continued to generate significant cash flow in 2019, with cash flow from operations totaling $12.8 billion. The Board returned $2.6 billion to stockholders in 2019 based on a cash dividend of $2.00 per share. The Company repaid approximately $8.0 billion of net long-term debt from the close of the Aetna acquisition through year-end 2019, ahead of the $7.5 billion target announced at the Company’s June 2019 Investor Day. In addition, the Board received regular reports regarding the successful first full year of Aetna integration, which produced synergies of approximately $500 million, exceeding expectations.

The Board’s Role in Strategy and Succession Planning

The Board reviews the Company’s financial performance on a regular basis at Board meetings and through periodic updates, with a particular focus on peer and competitive comparisons. The Board also periodically reviews the Company’s long-term strategy, and assesses its strategic, competitive and financial performance, on both an absolute basis and in relation to the performance, practices and policies of its peers and competitors. While the Board receives updates regarding strategic matters throughout the year, at least one Board meeting per year is focused almost entirely on the Company’s short- and long-term strategic direction. The Board receives reports from management, and expert speakers often are invited to present to the Board. At this annual strategy-focused meeting, the Board provides input and oversight on short-term strategic goals and sets the long-term strategic direction of the Company.

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Corporate Governance and Related Matters     The Board’s Role and Activities in 2019

The Board also reviews the Company’s succession planning, including succession planning in the case of the incapacitation, retirement or removal of the CEO. In that regard, the CEO provides an annual report to the Board recommending and evaluating potential successors, along with a review of any development plans recommended for such individuals. The CEO also provides to the Board, on an ongoing basis, his recommendation as to a successor in the event of an unexpected emergency. The Board also reviews succession planning with respect to the Company’s other key executive officers. The Board also ensures that directors have substantial opportunities to engage with successor candidates, including emerging leaders. The Board also has access to external consultants, as needed.

The Board’s Role in Risk Oversight

The Board’s role in risk oversight involves both the full Board and its committees, as well as members of management.

Risk Oversight Framework

BOARD OF DIRECTORS

●Focuses on understanding Company-wide risks and ensuring that risk matters are appropriately brought to the Board and/or its Committees for review.

●Ensures that the Corporate Governance Guidelines, the Board’s leadership structure and the Board’s practices facilitate the effective oversight of risk and communication with management.

BOARD COMMITTEES Each of the Board’s principal committees is responsible for oversight of risk management practices for categories of risks relevant to their functions.
Audit Committee	Management Planning and	Nominating and Corporate
Primary committee charged with carrying	Development Committee	Governance Committee
out risk oversight responsibilities on	Investment and Finance	Medical Affairs Committee
behalf of the Board, including reviewing	Committee
financial, operational, compliance,
reputational and strategic risks.

MANAGEMENT

●Each major business unit is responsible for identifying risks, assessing the likelihood and potential impact of significant risks, and reporting to the Business Planning Committee (the “BPC”), CVS Health’s most senior executive group, on actions to monitor, manage and mitigate significant risks.

●The CFO, Treasurer, Chief Compliance Officer, Chief Audit Executive, General Counsel, Chief Human Resources Officer and Chief Governance Officer periodically report to relevant Board committees and to the full Board on the Company’s risk management policies and practices, including risk assessments and evaluation of compliance and legal risks.

● The Board is regularly updated on specific risks in the course of its review of corporate strategy, business plans and reports to the Board by its respective committees.

● The corporate risk management culture begins from the top with the BPC setting the tone on the importance of risk management with the support of the Board and its committees. The BPC mandates the management of identified risks through Risk Champions with guidance and oversight by the Company’s Enterprise Risk Management (“ERM”) function and support by the Operational Risk Committee (the “ORC”), which includes the Risk Champions and the head of the Company’s internal audit function.

● To ensure connections at all levels for identification of risks, CVS Health utilizes a Risk Committee structure comprised of the ORC working group, which supports the BPC. The Audit Committee provides overall ERM program oversight and reviews management’s progress in managing risks. This structure allows for effective communication and information flow throughout the risk framework.

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Corporate Governance and Related Matters     The Board’s Role and Activities in 2019

● The Audit Committee is charged with the primary role in carrying out risk oversight responsibilities on behalf of the Board. Pursuant to its charter, the Audit Committee annually reviews the Company’s policies and practices with respect to risk assessment and risk management, including discussing with management, the Company’s independent registered public accounting firm and the Company’s internal auditors the Company’s major financial risk exposures and the steps that have been taken to monitor and mitigate such exposures. The Audit Committee reviews CVS Health’s major financial risk exposures as well as major operational, compliance, reputational and strategic risks, including developing steps to monitor, manage and mitigate those risks. In 2019, responsibility for oversight of risks related to cybersecurity and data and information security governance was transferred from the Audit Committee to the N&CG Committee, whose members possess expertise regarding those subjects.

● Each Board committee is responsible for oversight of risk management practices for categories of risks relevant to its function. For example, the MP&D Committee has oversight responsibility for the Company’s overall compensation structure, including review of its compensation practices, with a view to assessing associated risk. See “Compensation Risk Assessment” on page 28 for additional information. The Medical Affairs Committee reviews and assesses risks arising from the Company’s provision of health care services across the Enterprise, including safety issues related to prescription opioid misuse and abuse, and the steps taken to monitor and mitigate those risks. The Investment and Finance Committee (the “I&FC”) reviews risks related to the Company’s investment portfolio and its capital and financial resources.

● The Board considers its role in risk oversight when evaluating the Company’s Corporate Governance Guidelines and the Board’s leadership structure. Both the Corporate Governance Guidelines and the Board’s leadership structure facilitate the Board’s oversight of risk and communication with management. Our independent Chair and our CEO are focused on CVS Health’s and the Board’s risk management efforts and ensure that risk matters are appropriately brought to the Board and/or its Committees for their review.

The Board’s Role in Corporate Social Responsibility Oversight

The N&CG Committee, pursuant to its charter, is formally charged with oversight of the Company’s CSR strategy and performance. The Company’s Senior Vice President of CSR and Philanthropy regularly updates the N&CG Committee on CSR risks and opportunities, and the N&CG Committee provides feedback and direction on the Company’s approach to key issues. The N&CG Committee also reviews the Company’s annual CSR Report prior to its publication. The 2019 CSR Report will be available on the Company’s website at https://cvshealth.com/social-responsibility prior to the Annual Meeting.

Stockholder Outreach

The Company values each of its stockholders and their opinions, and we regularly interact with our stockholders on a variety of matters. In the latter part of 2019 and early 2020, at the direction of the Board, the Company engaged in a proactive stockholder outreach effort to best understand and address any concerns stockholders might have. Additional details regarding our outreach effort and the actions taken are found on pages 34 and 38 of this proxy statement.

Much of our dialogue with stockholders was focused on corporate governance, financial results, social responsibility issues, such as the Company’s response to prescription opioid misuse and abuse, and executive compensation matters. Matters related to the integration of Aetna and the Company’s ongoing initiatives to transform health care were also discussed with our stockholders during the outreach process.

Contact with the Board, the Chair and Other Independent Directors

Stockholders and other parties interested in communicating directly with the Board, the independent Chair of the Board or with the independent directors as a group may do so by writing to CVS Health Corporation, One CVS Drive, MC 1160, Woonsocket, RI 02895. The N&CG Committee has approved a process for handling letters received by the Company and addressed to the Board, the independent Chair of the Board or to independent directors as a group. Under that process, our Corporate Secretary reviews all such correspondence and regularly forwards to the Board copies of all correspondence that, in her opinion, deals with the functions of the Board or its committees or that she otherwise determines requires their attention.

20              2020 Proxy Statement

Corporate Governance and Related Matters     Board Structure and Processes

Code of Conduct

CVS Health has adopted a Code of Conduct that applies to all of our directors, officers and employees, including our CEO, CFO and Chief Accounting Officer. Our Code of Conduct is available on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and will be provided to stockholders without charge upon request to our Corporate Secretary. We intend to post amendments to, or waivers of, our Code of Conduct (to the extent applicable to our executive officers or directors) at that location on our website within the timeframe required by SEC rules.

Related Person Transaction Policy

In accordance with SEC rules, the Board has adopted a written Related Person Transaction Policy (the “Policy”). The N&CG Committee has been designated as the Board Committee responsible for reviewing, approving or ratifying any related person transactions under the Policy, since the N&CG Committee already has responsibility for evaluating the impact of conflicts involving directors on independence. The N&CG Committee reviews the Policy on an annual basis and will amend the Policy as it deems appropriate.

Pursuant to the Policy, all executive officers, directors and director nominees are required to notify our General Counsel or Corporate Secretary of any financial transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships, involving the Company in which an executive officer, director, director nominee, five percent beneficial owner or any immediate family member of such a person has a direct or indirect material interest.

The General Counsel or the Corporate Secretary presents any reported new related person transactions, and proposed transactions involving related persons that might be deemed to be related person transactions, to the N&CG Committee at its next regular meeting, or earlier if appropriate. The General Counsel or Corporate Secretary provides the N&CG Committee with an analysis and recommendation regarding each reported transaction. The N&CG Committee reviews these transactions, including the analysis and recommendation. The N&CG Committee may conclude, upon review of all relevant information, that the transaction does not constitute a related person transaction, and thus that no further review is required under the Policy. If after its review, the N&CG Committee determines not to approve or ratify a related person transaction, the transaction will not be entered into or continued, as the N&CG Committee shall direct. The N&CG Committee may ratify or approve a related person transaction if, upon consideration of all relevant information, the transaction is in, or not inconsistent with, the best interests of the Company and its stockholders.

In March 2020, the N&CG Committee reviewed certain transactions reported under the Policy and determined that no transactions constituted reportable related person transactions under the Policy.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines, which are available on our investor relations website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and are also available to stockholders at no charge upon request to our Corporate Secretary. These Guidelines meet the listing standards adopted by the NYSE, the exchange on which our common stock is listed.

Board Structure and Processes

The Board’s Leadership Structure

David W. Dorman is the independent Chair of our Board. The independent Chair presides at all meetings of the Board and works with our CEO to set Board meeting agendas and the schedule of Board meetings. In addition, the independent Chair has the following duties and responsibilities:

● the authority to call, and responsibility to lead, independent director sessions;

● the ability to retain independent legal, accounting or other advisors in connection with these sessions;

● the responsibility to facilitate communication and serve as a liaison between the CEO and the other independent directors; and

● the duty to advise the CEO of the informational needs of the Board.

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Corporate Governance and Related Matters     Committees of the Board

The Board believes that Board independence and oversight of management will be maintained effectively through the independent Chair, the Board’s composition and its committee system.

Director Education

CVS Health’s Corporate Governance Guidelines establish recommendations for director education. All new members of the Board are encouraged to participate in the Company’s orientation program for directors. Other directors may also attend the orientation program. All directors are encouraged to participate in continuing education programs, with any associated expenses to be reimbursed by the Company, in order to stay current and knowledgeable about the business of the Company. Such orientation and continuing education programs are overseen by the N&CG Committee.

Committees of the Board

CVS Health’s Board oversees and guides the Company’s management and its business. Committees support the role of the Board on issues that are better addressed by smaller, more focused subsets of directors.

For 2019, the Board utilized six committees. The table below presents for 2019, the committees of the Board, the membership of such committees and the number of times each such committee met in 2019. For further details regarding committee membership and activities see pages 24-30. Messrs. Bracken and Swift will not stand for re-election at the Annual Meeting.

Name	Audit Committee	Investment and Finance Committee	Management Planning and Development Committee	Nominating and Corporate Governance Committee	Medical Affairs Committee	Executive Committee
Fernando Aguirre
Mark T. Bertolini
Richard M. Bracken
C. David Brown II
Alecia A. DeCoudreaux
Nancy-Ann M. DeParle
David W. Dorman
Roger N. Farah
Anne M. Finucane
Edward J. Ludwig
Larry J. Merlo
Jean-Pierre Millon
Mary L. Schapiro
Richard J. Swift
William C. Weldon
Tony L. White
2019 Meetings	11	5	9	5	5	1

	Committee Chair
*	Audit Committee Financial Expert

22              2020 Proxy Statement

Corporate Governance and Related Matters     Committees of the Board

The table below presents the expected membership and leadership of each of the Board’s six committees after the Annual Meeting.

Name	Audit Committee	Investment and Finance Committee	Management Planning and Development Committee	Nominating and Corporate Governance Committee	Medical Affairs Committee	Executive Committee
Fernando Aguirre
C. David Brown II
Alecia A. DeCoudreaux
Nancy-Ann M. DeParle
David W. Dorman
Roger N. Farah
Anne M. Finucane1
Edward J. Ludwig2
Larry J. Merlo
Jean-Pierre Millon
Mary L. Schapiro
William C. Weldon
Tony L. White3

	Committee Chair
*	Audit Committee Financial Expert
1	Following the Annual Meeting, Ms. Finucane is expected to become Chair of the I&FC, replacing Mr. Ludwig when he becomes Chair of the Audit Committee, and a member of the Executive Committee.
2	Following the Annual Meeting, Mr. Ludwig is expected to become Chair of the Audit Committee, replacing Mr. Swift when he retires.
3	Following the Annual Meeting, Mr. White is expected to become Chair of the Medical Affairs Committee, replacing Mr. Bracken when he retires, and a member of the Executive Committee.

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Corporate Governance and Related Matters     Committees of the Board

Audit Committee

Each member of the Audit Committee is financially literate and independent of the Company and management under the standards set forth in applicable SEC rules and the Corporate Governance Rules of the NYSE. The Board designated each of Messrs. Swift, Aguirre, Ludwig and Millon and Ms. Schapiro as an audit committee financial expert, as defined under applicable SEC rules. The Board has approved a charter for the Audit Committee, which can be viewed on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and also is available to stockholders without charge upon request to our Corporate Secretary.

2020 Committee Members		2019 Committee Members
(independent)		(independent)
1	Mary Schapiro*	Fernando Aguirre*
2	Alecia DeCoudreaux	Alecia DeCoudreaux
3	Ed Ludwig (Chair)*	Ed Ludwig*
4	Jean-Pierre Millon*	Jean-Pierre Millon*
5	Fernando Aguirre*	Mary Schapiro*
		Dick Swift (Chair)*

* Audit Committee Financial Expert

Joining
None Retiring
Dick Swift (Chair)
(May 2020)

Meetings in 2019: 11

Primary Responsibilities
Pursuant to its charter, the Audit Committee assists the Board in its oversight of:

● the integrity of our financial statements;

● the qualifications, independence and performance of our independent registered public accounting firm, for whose appointment the Audit Committee bears principal responsibility;

● the performance of our internal audit function;

● our policies and practices with respect to risk assessment and risk management, including discussing with management the Company’s major financial risk exposures and the steps that have been taken to monitor and control such exposures;

● compliance with, and approval of, our Code of Conduct;

● the review of our business continuity and disaster recovery program;

● the review of our environmental, health and safety program; and

● our compliance with legal and regulatory requirements, including the review and oversight of matters related to compliance with Federal health care program requirements.

Audit Committee Activities in 2019

The Audit Committee met eleven times in 2019. Except for three absences for one member of the Audit Committee, all due to unavoidable conflicts, each member of the Audit Committee attended all of its meetings while he or she was a member. Several of the Audit Committee’s meetings were focused primarily on our annual or quarterly financial reports, including our Form 10-K, Forms 10-Q and our related earnings releases. At each of these meetings the Audit Committee reviewed the documents in depth with our CFO and our Chief Accounting Officer, as well as our Chief Compliance Officer (“CCO”), Chief Audit Executive, General Counsel and other key members of management. The Audit Committee also received reports from our internal audit department and our independent registered public accounting firm, Ernst & Young LLP (“Ernst & Young”). The Audit Committee regularly meets with Ernst & Young outside the presence of management, and also meets individually with members of management, including the CCO, the Chief Compliance Officer for Omnicare and the Chief Audit Executive. In addition to its responsibilities related to our financial statements, the Audit Committee plays a primary role in risk oversight, including reviews of our enterprise risk management program and our Own Risk Solvency Assessment (“ORSA”) report and in oversight of our anti-money laundering and sanction screening compliance programs, business continuity and disaster recovery program, privacy programs, and environmental, health and safety program. The Audit Committee also reviews our legal and regulatory compliance program on a quarterly basis, including oversight of the Company’s compliance with its Corporate Integrity Agreements, or CIAs. During 2019, the Audit Committee provided the required annual certification of compliance with the Company’s 2014 CIA related to PBM operations and reviewed the post CIA workplan, and the 2016 CIA related to our institutional pharmacy services (long-term care) operations. The Audit Committee also provided the report found on page 32 of this proxy statement, and recommended the inclusion of the Company’s audited financial statements in its 2019 Form 10-K.

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Corporate Governance and Related Matters     Committees of the Board

Investment and Finance Committee

Each member of the I&FC is independent of the Company and management under the standards set forth in applicable SEC rules and the Corporate Governance Rules of the NYSE. The Board has approved a charter for the I&FC, which can be viewed on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and also is available to stockholders without charge upon request to our Corporate Secretary. At its meetings, various members of management provide the I&FC with updates on areas of its responsibility, including the Chief Financial Officer and Chief Investment Officer.

2020 Committee Members		2019 Committee Members
(independent)		(independent)
1	Mary Schapiro	Richard Bracken
2	Anne Finucane (Chair)	Anne Finucane
3	Ed Ludwig	Ed Ludwig (Chair)
		Mary Schapiro

Joining
None Retiring
Richard Bracken
(May 2020)

Meetings in 2019: 5

Primary Responsibilities
Pursuant to its charter, the I&FC assists the Board in its oversight of:

● the investment policies, strategies, programs and portfolio of CVS Health and its subsidiaries;

● the approval of investment transactions on behalf of the Company that exceed any delegated authority;

● investment portfolio transactions made on behalf of CVS Health and its subsidiaries;

● the performance of the investment portfolios of CVS Health and its subsidiaries;

● the Company’s processes for managing the finances of its employee pension and defined contribution benefit plans;

● the Company’s capital plan, including the review of significant financial policies and matters of financial corporate governance, such as the Company’s dividend policy, share repurchase program and credit facilities and the issuance or retirement of debt and other securities;

● significant multi-year strategic capital project expenditures and management;

● the review and approval of the Company’s decision to enter into swap transactions that are not cleared and are not traded on a designated contract market or swap execution facility, including establishing policies governing the use of such swaps; and

● the Company’s stock repurchase programs, including assessing whether to recommend modification to such programs to the Board.

Investment and Finance Committee Activities in 2019

The I&FC met five times in 2019. Each member of I&FC attended all of its meetings while he or she was a member. The I&FC spent significant time focused on investment management updates and our capital allocation plans. The I&FC reviewed the Company’s 2019 investment performance as well as an in-depth study of the Company’s investment assets. The I&FC also reviewed reports from our treasury department and regularly meets individually with members of management, including the Treasurer and the Chief Investment Officer. As a new Committee formed in late 2018, the I&FC developed its charter at the beginning of 2019 and also evaluated it at its last meeting of 2019. The I&FC reviewed quarterly investment reports and capital allocation reports, the Company’s debt tender and refinancing transaction, and various finance programs of the Company, such as sale-leasebacks and certain reinsurance transactions, and made recommendations to authorize resolutions for the Company’s investment and finance activity. The I&FC also reviews reports on investments by the Company’s pension plan and its 401(k) plans.

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Corporate Governance and Related Matters  Committees of the Board

Nominating and Corporate Governance Committee

Each member of the N&CG Committee is independent of the Company and management under the standards set forth in the NYSE Corporate Governance Standards. The Board has approved a charter for the N&CG Committee, which can be viewed on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and also is available to stockholders without charge upon request to our Corporate Secretary. At its meetings, various members of management provide the N&CG Committee with updates on areas of its responsibility, including the General Counsel, the Chief Governance Officer, the Senior Vice President of Government Affairs, the Senior Vice President of CSR and Philanthropy, the Executive Vice President and Chief Information Officer and the Chief Information Security Officer.

2019 and 2020 Committee Members
(independent)
1	David Dorman
2	William Weldon
3	Nancy-Ann DeParle (Chair)
4	Fernando Aguirre
5	David Brown

Meetings in 2019: 5

Primary Responsibilities

Pursuant to its charter, the N&CG Committee has responsibility for:

● identifying individuals qualified to become Board members consistent with criteria approved by the Board;

● recommending to the Board director nominees for election at the next annual or special meeting of stockholders at which directors are to be elected or to fill any vacancies or newly-created directorships that may occur between such meetings;

● recommending directors for appointment to Board Committees;

● making recommendations to the Board as to determinations of director independence;

● evaluating Board and Committee performance;

● the oversight of our information governance framework, including our privacy and information security programs, as well as the cybersecurity aspects of our information security program and cybersecurity risk exposures;

● the review and ratification of any related person transactions in accordance with our policy on such matters;

● considering matters of corporate governance and reviewing, at least annually, our Corporate Governance Guidelines and overseeing compliance with such Guidelines; and

● reviewing and considering our policies and practices on issues relating to corporate social responsibility, charitable contributions, political spending practices and other significant public policy issues.

Nominating and Corporate Governance Committee Activities in 2019

The N&CG Committee met five times in 2019, and each member of the N&CG Committee attended all of its meetings. Throughout the year, the N&CG Committee evaluated, and continues to evaluate, potential candidates for future election to the Board. In addition, the N&CG Committee reviewed the Company’s political activities and expenditures in depth during three of its meetings, considered significant public policy issues and government affairs’ priorities and activities, and reviewed the Company’s corporate social responsibility framework, refreshed for 2019 as Better Health, Better Community, Better World, and the Company’s charitable contribution budget. The N&CG Committee also oversaw the evaluation process for the Board and its Committees in 2019, which consisted of an in-depth interview of each director by the Company’s General Counsel. At the completion of the interview process, the General Counsel reviewed the results with the N&CG Committee and the Board, which resulted in a number of enhancements to the Board and Committee meeting processes. In 2020, the process was enhanced by the interviews of each director being conducted by an independent third-party, rather than our General Counsel, followed by a presentation to the Board. Also, the N&CG Committee received updates about legal and regulatory developments concerning corporate governance and business and trends in the health care industry, stockholder engagement strategy, as well as updates on the proxy season and stockholder communications. Effective in January 2019, the N&CG Committee assumed responsibility for oversight of cybersecurity and information governance, including privacy and information security, and for review and ratification of related person transactions. The N&CG Committee reviewed and approved our Related Person Transaction Policy, made recommendations regarding the director slate, Committee composition, independence determinations and Audit Committee financial experts. In early 2020, the N&CG Committee made recommendations regarding a reduction in the size of the Board, in response to stockholder feedback and in furtherance of corporate governance best practices.

26              2020 Proxy Statement

Corporate Governance and Related Matters  Committees of the Board

Management Planning and Development Committee

Each member of the MP&D Committee is independent of the Company and management under the standards set forth in applicable SEC rules and the Corporate Governance Rules of the NYSE. The Board has approved a charter for the MP&D Committee, which can be viewed on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and also is available to stockholders without charge upon request to our Corporate Secretary. No MP&D Committee member participates in any of our employee compensation programs and none is a current or former officer or employee of CVS Health or its subsidiaries. At MP&D Committee meetings, non-members, such as the CEO, the CFO, the Chief Accounting Officer, the Chief Human Resources Officer, the Chief Governance Officer, other senior human resources and legal officers, or external consultants, may be invited to provide information, respond to questions and provide general staff support. However, no CVS Health executive officer is permitted to be present during any discussion of his or her compensation or performance, and the MP&D Committee regularly exercises its prerogative to meet in executive session without management.

2019 and 2020 Committee Members
(independent)
1	Roger Farah
2	Tony White
3	David Brown (Chair)
4	William Weldon
5	Anne Finucane
6	David Dorman

Meetings in 2019: 9

Primary Responsibilities
Pursuant to its charter, the MP&D Committee:

● oversees our compensation and benefits policies and programs generally;

● evaluates the performance of designated senior executives, including the CEO;

● in consultation with our other independent directors, oversees and sets compensation for the CEO;

● oversees and sets compensation for our designated senior executives;

● reviews and recommends to the Board compensation (including cash and equity-based compensation) for our non-employee directors; and

● prepares and recommends to the full Board for inclusion in this and each other applicable proxy statement a compensation committee report. The Compensation Committee Report for this proxy statement is on page 36

The MP&D Committee may delegate its authority relating to employees other than executive officers and directors as it deems appropriate and may also delegate its authority relating to ministerial matters.

Management Planning and Development Committee Activities in 2019

The MP&D Committee met nine times in 2019. Except for a total of four absences by three different members of the MP&D Committee due to unavoidable conflicts, each member of the MP&D Committee attended all of its meetings while he or she was a member. In addition to reviewing the independence of its advisor as described below, the MP&D Committee devoted substantial time to its oversight of the Company’s compensation and benefit programs as part of its annual governance process. This review is aimed at ensuring that the Company is providing its employees with compensation and benefit programs that are appropriate. The MP&D Committee received updates on compensation trends and legislative and regulatory developments. The MP&D Committee also reviewed the Company’s activities to integrate Aetna colleagues into a total rewards program that offers consistent compensation and benefit plans to a combined company. In addition, the MP&D Committee devoted considerable time to CVS Health’s stockholder outreach efforts and the feedback received from investors. The MP&D Committee also reviewed director compensation. The MP&D Committee’s review of executive compensation matters and its decisions, including changes made in response to input from our stockholders, is discussed in the CD&A beginning on page 37 of this proxy statement.

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Corporate Governance and Related Matters  Committees of the Board

Compensation Risk Assessment

The MP&D Committee is responsible for reviewing and assessing potential risk arising from the Company’s compensation policies and practices. In 2019, the Company performed a comprehensive risk assessment of its compensation policies and practices to ascertain any potential material risks that may be created by its compensation programs. The Company’s assessment included all major components of the Company’s compensation programs, including: the mix between annual and long-term compensation; short-term incentive program design; long-term incentive program performance measures; incentive plan performance criteria and corresponding objectives; a comparison of the Company’s programs with those of its peers; the Company’s severance and change-in-control policies; its recoupment policy; its share retention requirements and ownership guidelines; and the Internal Audit Department’s review of the controls regarding the Company’s long-term incentive program. The MP&D Committee considered the findings of the assessment and concluded that the Company’s compensation programs are aligned with the interests of its stockholders, appropriately reward pay for performance, and do not promote excessive risk-taking.

Independent Compensation Consultant

Exequity LLP is the MP&D Committee’s independent compensation consultant. Exequity provides no other services to the Company. Exequity’s fees for compensation consulting to the MP&D Committee for 2019 were $331,588. During 2019, Exequity:

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

● Developed and delivered to the MP&D Committee an annual briefing on legislative and regulatory developments and trends in executive compensation and their implications for CVS Health;

● Provided guidance, including relevant competitive market data, in support of discussions related to the design of the Company’s long-term incentive program; and

● Analyzed market data and provided recommendations for non-employee director compensation to the MP&D Committee for approval by the Board.

The MP&D Committee believes that the advice it receives from Exequity is objective and not influenced by any other business relationship. The MP&D Committee and Exequity have policies and procedures in place to preserve the objectivity and integrity of the compensation consulting advice, including:

● The MP&D Committee has the sole authority to retain and terminate the compensation consultant;

● The compensation consultant reports to the MP&D Committee Chair and has direct access to the MP&D Committee without management involvement;

● While it is necessary for the compensation consultant to interact with management to gather information, the MP&D Committee determines if and how the compensation consultant’s advice can be shared with management; and

● The MP&D Committee regularly meets with the compensation consultant in executive session, without management present, to discuss recommendations.

The MP&D Committee conducts an annual review of the independence of its compensation consultant, taking into account the standards above, the items required to be considered under the NYSE Corporate Governance Standards and applicable rules and regulations. The MP&D Committee determined that its compensation consultant is independent and that its consultant’s work does not raise any conflicts.

28              2020 Proxy Statement

Corporate Governance and Related Matters  Committees of the Board

Medical Affairs Committee

Each member of the Medical Affairs Committee is independent of the Company and management under the standards set forth in applicable SEC rules and the Corporate Governance Rules of the NYSE. The Board has approved a charter for the Medical Affairs Committee, which can be viewed on our website at https://investors.cvshealth.com/investors/corporate-governance/documents/default.aspx and also is available to stockholders without charge upon request to our Corporate Secretary.

In light of the Company’s expanded offerings throughout the spectrum of health care, the Medical Affairs Committee was formed in March 2016 and renamed in November 2018. The Medical Affairs Committee focuses on oversight of the Company’s medical- and pharmacy-related strategies and initiatives, matters relating to the advancement of quality of pharmacy and medical care, patient safety and patient experience, the enhancement of access to cost-effective quality health care, and the promotion of member health.

2020 Committee Members		2019 Committee Members
(independent)		(independent)
1	Roger Farah	Richard Bracken (Chair)
2	Nancy-Ann DeParle	Alecia DeCoudreaux
3	Tony White (Chair)	Nancy-Ann DeParle
4	Alecia DeCoudreaux	Roger Farah
5	Jean-Pierre Millon	Jean-Pierre Millon
		Tony White

Joining
None Retiring
Richard Bracken
(Chair) (May 2020)

Meetings in 2019: 5

Primary Responsibilities
Pursuant to its charter, the Medical Affairs Committee:

● reviews significant medical, pharmacy and other health-related strategies and initiatives of the Company, and matters concerning efforts to (1) advance the quality of pharmacy and medical care, patient safety and experience, (2) enhance access to cost-effective quality health care, and (3) promote member health;

● reviews the Company’s medical, pharmacy, and other strategies and initiatives designed to foster health care innovation, lower patient costs and improve the delivery of clinic, in-home, and other health care solutions;

● reviews matters and receives reports concerning the quality performance of the Company’s (1) pharmacy and medical care activity, such as (a) dispensing, compounding, and infusion services and (b) nursing and medical clinic operations; (2) patient safety and experience; (3) management of claims against the Company related to pharmacy services and health care provided by the Company; and (4) management of regulatory activity related to pharmacy and health care; and

● takes such other actions and performs such services as may be referred to it from time to time by the Board, including the conduct of special reviews as it may deem necessary or appropriate to fulfill its responsibilities.

Medical Affairs Committee Activities in 2019

The Medical Affairs Committee met five times in 2019. Except for one absence for one Committee member due to an unavoidable conflict, each member of the Medical Affairs Committee attended all of its meetings while he or she was a member. The Medical Affairs Committee’s meetings focused on a wide variety of matters related to the Company’s provision of health care services across the Enterprise, including retail, mail, specialty and long-term care pharmacy, retail clinic services provided by MinuteClinic^®, and complex medical claims issues concerning Aetna. The Medical Affairs Committee reviewed various issues related to patient safety, including matters related to the Company’s efforts to address prescription opioid misuse and abuse. The Medical Affairs Committee also received updates on claims against the Company related to pharmacy services and health care provided by the Company, as well as the steps being taken to minimize and mitigate those claims. The Medical Affairs Committee was updated on the Company’s health care complaint, grievance and appeals process and its Medicare star ratings. The Medical Affairs Committee also was briefed on quality and safety issues in the pharmaceutical supply chain. The Medical Affairs Committee received reports regarding various lines of business across the Enterprise, and other efforts to measure and improve patient safety and clinical effectiveness.

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Corporate Governance and Related Matters     Committees of the Board

Executive Committee

At all times when the Board is not in session, the Executive Committee may exercise many of the powers of the Board, as permitted by applicable law.

The Executive Committee met one time during 2019, to discuss urgent matters.

Nancy-Ann DeParle was added to the Executive Committee in May 2019, when she became Chair of the N&CG Committee. Each of Anne Finucane and Tony White are expected to be added to the Executive Committee in May 2020, when they become Chair of the I&FC and Medical Affairs Committee, respectively.

2020 Committee Members		2019 Committee Members
1	Ed Ludwig	Richard Bracken
2	Anne Finucane	David Brown
3	Larry Merlo	Nancy-Ann DeParle
4	David Dorman (Chair)	David Dorman (Chair)
5	Nancy-Ann DeParle	Ed Ludwig
6	Tony White	Larry Merlo
7	David Brown	Dick Swift

Joining
Anne Finucane
Tony White Retiring
Richard Bracken
(May 2020)
Dick Swift (May 2020)

Meetings in 2019: 1

Board Meetings and Attendance

During 2019, there were seven meetings of the Board. Directors are expected to make every effort to attend the Annual Meeting, all Board meetings and the meetings of the Committees on which they serve. All of our directors at the time of our 2019 Annual Meeting of Stockholders attended that Annual Meeting. In 2019, all directors attended more than 75% of the meetings of the Board and the committees of which he or she was a member, with attendance averaging over 96%.

One Board meeting was our annual meeting of independent directors. The independent directors also regularly hold executive sessions during regularly scheduled Board meetings in which our management does not participate.

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 2019-2020 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).

Additional retainers were paid to the Chairs of the Committees and the Board as follows: Audit, $25,000; I&FC, $15,000; MP&D, $20,000; Medical Affairs, $15,000; N&CG, $15,000; and independent Chair of the Board, $275,000.

At least 75% of each additional retainer must be paid in shares of our common stock, with the remaining 25% paid in cash, unless the director elects to be paid an additional percentage in shares. Each retainer was paid in two equal installments, in May and November of 2019. 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.

30              2020 Proxy Statement

Corporate Governance and Related Matters     Committees of the Board

On November 20, 2019, the MP&D Committee and Exequity LLP reviewed a director compensation study prepared by Exequity, and the Board approved the compensation package for non-employee Directors for the 2020-2021 Board year. The Board annual retainer will remain at $310,000, with at least 75% paid in stock, and all of the Chair retainers will remain the same as the current Board year.

Non-Employee Director Retainer Mix

All Other 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. Through December 31, 2019, we allowed all directors to enroll themselves and their eligible dependents in our prescription drug benefit program, paying the same premium rates as employees. Effective January 1, 2020, that program was terminated for all directors and eligible dependents who were able to obtain commercial coverage.

The following table shows amounts paid to each of our non-employee directors in 2019.

Non-Employee Director Compensation – 2019

Name	Fees Earned and Paid in Cash1 ($)	Cash Fees Elected to be Paid in Stock1 ($)	Stock Awards2 ($)	All Other Compensation3 ($)	Total ($)
Fernando Aguirre	77,588	—	232,412	—	310,000
Mark T. Bertolini4	77,588	—	232,412	—	310,000
Richard M. Bracken	81,373	—	243,627	851	325,851
C. David Brown II	82,618	—	247,382	2,210	332,210
Alecia A. DeCoudreaux	77,500	—	232,500	973	310,973
Nancy-Ann M. DeParle	81,373	—	243,627	—	325,000
David W. Dorman	126	146,124	438,750	—	585,000
Roger N. Farah	0	77,500	232,500	—	310,000
Anne M. Finucane	77,588	—	243,412	—	310,000
Edward J. Ludwig	81,373	—	243,627	14,740	339,740
Jean-Pierre Millon	77,588	—	232,412	2,043	312,043
Mary L. Schapiro	82	—	309,918	—	310,000
Richard J. Swift	83,862	—	251,138	2,043	337,043
William C. Weldon	0	77,500	232,500	—	310,000
Tony L. White	77,588	—	232,412	2,043	312,043

1	The amounts shown include cash payments made in lieu of fractional shares to Mmes. DeCoudreaux, DeParle, Finucane and Schapiro and Messrs. Aguirre, Bertolini, Bracken, Brown, Dorman, Ludwig, Millon, Swift and White. The following directors elected to receive all or a portion of their cash fees to be paid in stock, or deferred stock: Messrs. Dorman, Farah and Weldon and Ms. Schapiro.
2	These awards are fully vested at grant, and the amounts shown represent both the fair market value and the full fair value on the grant date. During 2019, each director receiving an annual retainer received 3,773 shares of our common stock with a total value of approximately $232,500 (the “mandatory annual stock retainer”) on the grant date; and each director electing to receive his or her entire annual cash retainer in stock also received 1,257 shares of our common stock valued at approximately $77,500 on the grant date. As of December 31, 2019, our directors had deferred receipt of shares of our common stock as follows: Mr. Brown, 61,065 shares; Ms. DeCoudreaux, 14,832 shares; Ms. DeParle, 3,585 shares; Mr. Dorman, 17,612 shares; Mr. Farah, 5,081 shares; Ms. Finucane, 5,940 shares; Ms. Schapiro, 11,324 shares; Mr. Swift, 64,438 shares and Mr. Weldon, 27,319 shares.
3	Represents Company contributions for director health and prescription benefits.
4	Mr. Bertolini resigned from the Board on February 7, 2020.

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Audit Committee Matters

Item 2 Ratification of the Appointment of Our Independent Registered Public Accounting Firm for 2020 The Audit Committee of the Company’s Board of Directors has appointed Ernst & Young LLP (“Ernst & Young”), an independent registered public accounting firm, to audit the financial statements of the Company for the fiscal year ending December 31, 2020, and recommended to our full Board that it approve that appointment. We are submitting the appointment by the Audit Committee to you for your ratification.

The Board of Directors unanimously recommends a vote FOR this proposal.

Audit Committee Report

During 2019, the Audit Committee was composed of six independent directors. Set forth below is the report of the Audit Committee on its activities with respect to CVS Health’s audited financial statements for the fiscal year ended December 31, 2019 (the audited financial statements).

● The Audit Committee has reviewed and discussed the audited financial statements with management;

● The Audit Committee has discussed with Ernst & Young, CVS Health’s independent registered public accounting firm, the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the U.S. Securities and Exchange Commission;

● The Audit Committee has received the written disclosures and the letter from Ernst & Young pursuant to applicable requirements of the PCAOB regarding Ernst & Young’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young its independence from the Company; and

● Based on the review and discussions referred to above and relying thereon, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in CVS Health’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for filing with the SEC.

Richard J. Swift,	Fernando	Alecia A.	Edward J.	Jean-Pierre	Mary L.
Chair	Aguirre	DeCoudreaux	Ludwig	Millon	Schapiro

Independent Registered Public Accounting Firm Independence and Fee Approval Policy

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm. The Audit Committee has retained Ernst & Young as CVS Health’s external audit firm since September 2007. In order to assure continuing external auditor independence, the Audit Committee periodically considers whether there should be a rotation of the audit firm. Further, in conjunction with the mandated rotation of the external audit firm’s lead engagement partner, the Audit Committee and its Chair are directly involved in the selection of Ernst & Young’s new lead engagement partner. Based on its most recent evaluation of Ernst & Young, the members of the Audit Committee believe that the continued retention of Ernst & Young to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders. Among the factors considered by the Audit Committee in reaching this recommendation are the following: the quality of Ernst & Young’s staff, work and quality control; its capability and technical expertise, given the complexity of the Company’s business; its independence from the Company; the quality and candor of its communications with the Company and the Audit Committee; and the benefits of its tenure as auditors, including enhanced audit quality and competitive fees.

32              2020 Proxy Statement

Audit Committee Matters     Item 2

All audit services, audit-related services, tax services and other services provided to the Company by Ernst & Young were pre-approved by the Audit Committee, and the Audit Committee is ultimately responsible for audit fee negotiations associated with the retention of Ernst & Young. The Audit Committee has considered whether Ernst & Young’s provision of services is compatible with maintaining Ernst & Young’s independence. The Audit Committee’s charter requires pre-approval of the audit and non-audit services to be provided by the Company’s independent registered public accounting firm. The Audit Committee reviews and approves Ernst & Young’s services on an annual basis. During the year, Ernst & Young also may request pre-approval of additional services, and the Audit Committee considers such requests for approval and approves them as circumstances warrant. The Audit Committee charter authorizes the Audit Committee to delegate to one or more of its members authority to pre-approve permitted services, as long as such pre-approvals are reported to the full Audit Committee at its next meeting.

Representatives of Ernst & Young will be at the Annual Meeting to answer your questions and will have the opportunity to make a statement if they so desire.

If you do not ratify the appointment of Ernst & Young, the Audit Committee will reconsider the appointment of Ernst & Young, although in the event of reconsideration the Audit Committee may determine that Ernst & Young should continue in its role. Even if you ratify the appointment of Ernst & Young, the Audit Committee retains its discretion to reconsider Ernst & Young’s appointment if it believes that reconsideration is necessary in the best interest of the Company and its stockholders.

Fees of Independent Accounting Firm

The following table summarizes the fees paid to Ernst & Young for services rendered during fiscal 2019 and 2018.

	Fiscal Year Ended 12/31/19 ($)	Fiscal Year Ended 12/31/18 ($)
Audit Fees1	25,105,000	24,210,000
Audit-Related Fees2	6,167,537	2,269,395
Tax Fees3	2,191,851	1,642,816
All Other Fees4	75,000	—

1	Represents the aggregate fees and expenses billed for the audit of our consolidated financial statements and the audit of our internal control over financial reporting, the reviews of the condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q, services provided in connection with statutory audits, regulatory filings and other audits for the year, and consultations on technical matters.
2	Represents the aggregate fees billed for audit and other services that are typically performed by auditors, including audits of our employee benefit plans, compliance reporting, non-financial metric reporting and certain agreed upon procedures reports. Audit-related fees increased in 2019 due to additional reports related to Aetna and various due diligence services.
3	Includes $150,000 and $152,500 for the years ended December 31, 2019 and 2018, respectively, related to tax compliance and preparation services.
4	Represents fees related to cybersecurity assessments and simulation exercises.

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Executive Compensation and Related Matters

Item 3 Say on Pay, a Proposal to Approve, on An Advisory Basis, the Company’s Executive Compensation
	The Board of Directors unanimously recommends a vote FOR this proposal.

Background

We are asking our stockholders to approve, on an advisory basis, the compensation paid to our Named Executive Officers, as described in the Compensation Discussion and Analysis (“CD&A”) and the Executive Compensation sections of this proxy statement. Although the advisory vote is not binding upon the Company, the MP&D Committee (referred to in this Item 3 as the “Committee”), which is responsible for designing and administering our executive compensation program, values our stockholders’ opinions and will continue to consider the outcome of the vote in its ongoing evaluation of our executive compensation program.

At CVS Health, our executive compensation philosophy and practice reflect our unwavering commitment to paying for performance – both short- and long-term. We define performance as the achievement of results measured against challenging internal financial targets that take into account our results relative to that of our peer companies, as well as industry and market conditions. We believe that our multi-faceted executive compensation plans, with their integrated focus on short- and long-term metrics, provide an effective framework by which progress against our strategic goals may be appropriately measured and rewarded.

Our 2019 Vote; Stockholder Outreach

Following our 2019 Annual Meeting of Stockholders, the Committee reviewed the results of the stockholder advisory vote on executive compensation. Approximately 91% of votes were cast in favor of the proposal, consistent with the 2018 voting results on the proposal.

In the latter part of 2019 and early 2020, management reached out to stockholders representing approximately 52% of our outstanding shares and held calls with holders of nearly 22% of our outstanding shares. The Chair of the MP&D Committee participated in certain of those calls. During our outreach, we discussed a range of compensation, governance and other relevant topics with stockholders, including those described below, and received positive feedback.

The Committee implemented several changes to our 2019 plan design aimed principally at simplifying the design of the Company’s performance-based equity awards and increasing overall transparency, including:

● revising the Company’s compensation program to include a single PSU structure in place of the two forms of PSUs awarded in 2018. The overall long-term incentive compensation mix remains 75% PSUs and 25% stock options; and

● transparency and alignment in PSU metric selection and target setting as described in the CD&A.

For 2020, in response to stockholder feedback, we included in this proxy statement reconciliations to the most directly comparable GAAP financial measure of non-GAAP financial measures included in the Company’s compensation program.

34              2020 Proxy Statement

Executive Compensation and Related Matters     Item 3

Our 2019 Performance and Pay Actions

In 2019, the Company delivered on our financial expectations. Revenues grew 32% and GAAP diluted earnings per share and adjusted earnings per share were $5.08 and $7.08¹, respectively. We returned more than $2.6 billion to stockholders through cash dividends during 2019. We have suspended both dividend increases and our stock buyback program in connection with the Aetna acquisition as we take steps to return to our target debt leverage ratio through disciplined capital allocation. To that end, through year-end 2019, we had repaid approximately $8 billion of net long-term debt since the closing of the Aetna acquisition.

The value of our Named Executive Officers’ compensation is significantly influenced by the value of our stock. Approximately 75% of target total compensation under our 2019 executive compensation program is provided through stock-based pay (PSUs and stock options). Our pay-for-performance philosophy places a majority of an executive officer’s compensation at risk and emphasizes long-term incentives tied to individual and Company performance as well as continued service. As a result of our long vesting periods and the two-year holding requirement for net shares issued under the PSUs, the members of our executive team, like our stockholders, have been affected by the fluctuations in our stock price and only ultimately achieve or exceed the target grant value of their equity compensation by creating long-term stockholder value.

1 Adjusted earnings per share is a non-GAAP financial measure. For more information, see Annex A to this proxy statement.

Conclusion; Resolution

We urge stockholders to read the letter from the Committee found on page 36 and the CD&A beginning on page 37 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narratives appearing on pages 60-72, which provide detailed information on the compensation of our Named Executive Officers.

The Committee and the Board of Directors believe that the policies and procedures articulated in the CD&A are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this proxy statement has contributed to CVS Health’s long-term success.

Stockholders are being asked to vote on the following resolution:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the CVS Health executive officers named in the Summary Compensation Table, as disclosed pursuant to the SEC’s compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures).”

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Letter from the Management Planning and Development Committee

Dear CVS Health Corporation Stockholder,

As the members of the Board’s Management Planning and Development Committee (for purposes of this letter, the “Committee”), we are responsible for and highly focused on overseeing the design and implementation of competitive compensation programs that align pay and performance, support our long-term strategic goals and drive stockholder value.

2019 was a pivotal year in which CVS Health continued to drive business performance and generate positive momentum across the Enterprise. We made significant progress on the effective implementation of our Aetna integration strategy and took further steps toward building an integrated health care model that will bring substantial value to all of our stakeholders. Throughout the year, we maintained strong financial performance and exceeded our operating expectations on several fronts as we executed against our key priorities to accelerate growth. The Committee took into account these factors, along with the direct feedback we have received from our stockholders, as we implemented the 2019 compensation program.

We remain firmly committed to incentivizing management to remain focused on drivers of sustainable performance over the long-term. The Committee made several decisions to effectively and transparently align long-term incentive compensation to the creation of stockholder value and the achievement of the Company’s strategic priorities. Specifically, the Committee simplified the structure of the PSUs and selected performance metrics that are aligned with sustained growth and that will be critical measures of success for you, our stockholders. The targets established for the financial metrics within these awards are consistent with the guidance the Company has provided to investors. In addition, the Committee made a decision to accelerate the grant of our CEO’s 2020 PSUs to August 2019 to most effectively align his long-term incentives with the creation of stockholder value, the completion of the Aetna integration and the first phase of the Company’s initiatives to transform health care. As a result of this decision, he will not receive an annual PSU award in 2020.

The above decisions were discussed with stockholders. The structure and metrics for our 2019 PSUs reflect feedback provided by stockholders. Further, during the Company’s discussions with stockholders in the latter part of 2019 and early 2020, stockholders did not raise any concerns regarding the accelerated timing of the 2020 PSU grant to our CEO. More broadly, our compensation program reflects a number of substantive enhancements made over several years that are responsive to stockholder feedback and support our core compensation principles.

We believe that our compensation program drives the right behaviors by our executives, which in turn benefit our stockholders by driving forward our business strategies and goals. Further, the Committee is evaluating the impact of the global COVID-19 pandemic on compensation program design for 2020, including the timing for granting equity awards. All decisions will be in accordance with our executive compensation core principles. We look forward to ongoing dialogue and collaboration with our stockholders as we transform the consumer health care experience.

Compensation Committee Report

We met with management to review and discuss the Compensation Discussion and Analysis (the “CD&A”). Based on that review and discussion, we recommended to the Board that the CD&A be included in this proxy statement.

Roger N. Farah	Tony L. White	C. David Brown II (Chair)	William C. Weldon	Anne M. Finucane	David W. Dorman

36              2020 Proxy Statement

Compensation Discussion and Analysis

The Compensation Discussion & Analysis (“CD&A”) explains how our executive compensation programs are designed and operate with respect to our named executive officers (“NEOs” or “Named Executive Officers”), who for 2019 are:

Larry J. Merlo	President and Chief Executive Officer (“CEO”)
Eva C. Boratto	Executive Vice President (“EVP”) and Chief Financial Officer (“CFO”)
Jonathan C. Roberts	EVP and Chief Operating Officer
Derica W. Rice	Former EVP and President – CVS Caremark – Mr. Rice left the Company on March 1, 2020
Thomas M. Moriarty	EVP, Chief Policy and External Affairs Officer and General Counsel

The CD&A is organized into the following sections:

Summary	►page 37
Business and Performance Highlights	►page 41
Detailed Program Discussion	►page 42

Summary

Our Executive Compensation Core Principles

Five core principles drive our executive compensation philosophy:

I	II	III	IV	V
Support, Communicate and Drive Achievement of our business strategies and goals	Attract and Retain the highest-caliber executive officers by providing compensation opportunities comparable to those offered by other companies with which we compete for business and talent	Motivate High Performance from executive officers in an incentive-driven culture by delivering greater rewards for superior performance and reduced awards for underperformance	Align Interests of our executive officers and our stockholders and foster an equity ownership environment	Reward Achievement of short-term results as well as long-term stockholder value creation

Management and the MP&D Committee believe these principles motivate our executive officers to take personal responsibility for the performance of the business and deliver long-term stockholder value, consistent with CVS Health’s values of Innovation, Collaboration, Caring, Integrity and Accountability.

Our compensation programs:

● are tailored to our short- and long-term business strategies and drive performance,

● reflect the rapidly changing health care landscape,

● drive sustainable performance in an era where human, social, natural and intellectual capital are joining financial and

● operating capital as performance drivers, and operate within strong governance parameters.

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Compensation Discussion and Analysis     Summary

Stockholder Outreach and Consideration of 2019 “Say On Pay” Vote

Our stockholder advisory vote on executive compensation has received strong support in each of 2019 and 2018, with more than 90% of votes cast in favor of the proposals. The MP&D Committee believes this strong support, along with the direct feedback from stockholders received through the extensive outreach conducted by management and our MP&D Committee Chair, reflects our commitment to align our compensation program to our business strategies and performance outcomes. In addition, it reflects support for the enhancements the MP&D Committee has made in response to stockholder feedback to simplify and enhance the performance-based nature of the program and to increase overall transparency.

In the latter part of 2019 and early 2020, management reached out to stockholders representing approximately 52% of our outstanding shares and held calls with holders of nearly 22% of our outstanding shares. The Chair of the MP&D Committee participated in certain of those calls. During our outreach, we discussed a range of compensation, governance and other relevant topics with stockholders, including those described below, and received positive feedback.

Executive Compensation Topics Discussed with Stockholders

Timing of Mr. Merlo’s 2020 PSU award ►See page 48 for details	The MP&D Committee determined to accelerate the timing of the 2020 PSU award to our CEO. Mr. Merlo’s 2020 PSU was awarded in August 2019 (the “August 2019 PSUs”) in lieu of the annual PSU award that otherwise would have been made in 2020 to most effectively align his long-term incentives with the creation of stockholder value, the completion of the Aetna integration and the first phase of the Company’s initiatives to transform health care. As a result, Mr. Merlo will not receive an annual PSU award in 2020. Further, the target value of the August 2019 PSU grant is unchanged from the target value of Mr. Merlo’s 2018 and 2019 PSU grants. Investors did not raise any concerns with the MP&D Committee’s decision to accelerate the grant of 2020 annual PSUs to our CEO to most effectively align his long-term incentives to our integration and other stated initiatives and were supportive provided that the award would be in lieu of and not in addition to an annual PSU award in 2020.
Simplification of long-term equity (PSUs) ►See pages 46-48 for details	Starting in 2019, the Company’s compensation program includes a single PSU structure in place of the two forms of PSUs awarded in 2018. The overall long-term incentive compensation mix remains 75% PSUs and 25% stock options. The MP&D Committee determined to simplify our long-term equity compensation program structure in response to investor feedback and to most effectively align our PSUs to the shift in our business strategy. Investors told us the multiple forms of PSUs granted in 2018 were confusing.
Transparency and alignment in PSU metric selection and target setting ►See page 44 for details	The metrics selected by the MP&D Committee for the 2019 PSUs align with our shift in business strategy and commitment to reduce debt and are key to driving long-term sustained growth. The performance metric for the 2019 PSUs is 2021 Adjusted Earnings Per Share (“Adjusted EPS”), subject to two modifiers: 1) leverage ratio (adjusted debt to adjusted EBITDA), and 2) a relative total stockholder return (“rTSR”) versus a selected peer group of S&P 500 health care and S&P 500 consumer staples companies (the “Relative TSR Peer Group”). The targets established for the Adjusted EPS and leverage ratio metrics for the 2019 PSUs are consistent with the guidance the Company has provided to investors and are clearly disclosed in this CD&A. While investors provided various views on metrics, feedback was consistent that we explain our rationale for the metrics selected and provide disclosure on targets. In addition, as a result of stockholder feedback, the maximum payout under the PSUs that will be granted in 2020 was reduced from 250% to 200% of the number of PSUs granted.
Transparency in calculation methodology for performance measures ►See page 58 and Annex A for details	To the extent non-GAAP performance metrics are included in our compensation program, we will include a reconciliation in the proxy statement to the most directly comparable GAAP financial measure in tabular form. See Annex A to this proxy statement. This commitment was made following feedback from investors that they would like us to include the methodology used for the calculation of any non-GAAP financial measures in the compensation program.

38              2020 Proxy Statement

Compensation Discussion and Analysis     Summary

Recoupment/ Clawback policy ►See page 56 for details

In 2019, the Board amended our recoupment policy to include a commitment to transparency. Under our amended policy, which covers both fraud and material financial misconduct, we will publicly disclose the circumstances of any recoupment from any executive officer (to the extent doing so would not violate any law or contractual obligations). This change was put in place after discussions with a group of stockholders. Stockholders also requested additional disclosure regarding events that result in cancellation/forfeiture of equity awards.

Compensation peer groups ►See pages 53-54 for details

For 2019, the MP&D Committee used two peer groups as reference points for executive compensation, a Health Care and Retail Group and a General Industry Group (collectively, the “2019 Compensation Peer Groups”). This approach better reflects our evolving business following the Aetna acquisition, including our size, our diverse business segments and our international presence, which results in our NEOs’ jobs having a greater level of complexity than similar roles at certain of our health care and retail comparator companies. No changes were made to the 2019 Compensation Peer Groups for 2020 other than to reflect applicable acquisition activity and changes in the membership of the 30 largest U.S. companies, irrespective of industry, but excluding banks. Stockholders requested enhanced disclosure of the MP&D Committee’s selection of comparator companies in our compensation peer groups.

The above matters are in addition to enhancements made to our compensation program in prior years as a result of stockholder input that remain in effect, including (among others):

● Replacing time-vested restricted stock units (“RSUs”) with PSUs for our executives, which had the effect of increasing the portion of long-term incentive awards fully at risk and subject to an additional two-year holding period after vesting from 50% to 75%.

● Long-term performance-based grants denominated as PSUs and as a result reported in the Summary Compensation Table (“SCT”) and Grants of Plan-Based Awards table in the year of grant to eliminate confusion and allow for a more complete analysis of our compensation program. See “Impact of Long-Term Incentive Plan Design Changes and Decisions” on page 40 for additional information.

● Modifying the annual cash incentive program to simplify the design, eliminate the bonus pool, add transparency to the individual component and reduce the maximum awards that may be earned.

● Changing the comparator group for measuring rTSR under our PSUs from the S&P 500 to an index of companies that more closely reflects our business, including over 55 health care and over 30 consumer staples companies.

Compensation Program Design

Our pay-for-performance philosophy places a majority of an executive officer’s compensation at risk and emphasizes long-term incentives tied to individual and Company performance as well as continued service. As a result, the only fixed compensation is base salary, which represents 9% of the CEO’s total target compensation and no more than 15% of the other NEOs’ total target compensation. In 2019, the MP&D Committee accelerated awards to Messrs. Merlo and Moriarty in lieu of future awards. No other awards were made outside of our compensation program in 2019. For additional information see “August 2019 PSU Awards for Messrs. Merlo and Moriarty” beginning on page 48 and “2019 Annual Cash Incentive Award” on page 46 for a description of Mr. Moriarty’s one-time cash bonus.

2019 CEO Target Pay Mix

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Compensation Discussion and Analysis     Summary

Impact Of Long-Term Incentive Plan Design Changes and Decisions

In 2016, in response to stockholder feedback, the Company moved from a Long-Term Incentive Plan (“LTIP”) award that was partially settled in cash to awards denominated in cash and settled 100% in stock. This resulted in a change in our reporting, as previously awards were reported half in the year of grant and half in the year of vesting. In accordance with SEC guidance, the LTIP payouts for the 2016 and 2017 grants were reported at the end of the three-year performance period as cash even though they were settled and were paid fully in stock. Although our stockholders generally approved of the design (payment in stock that is subject to a two-year post-vesting holding period), they found the multi-year reporting confusing and that it resulted in an incomplete analysis of our compensation program. To address these concerns, commencing with the 2018 grants, LTIP awards were made in PSUs (“LTIP PSUs”) that were reported in the year of the grant as stock awards in the SCT and Grants of Plan-Based Awards table. To further simplify our compensation program, commencing with the 2019 grants, LTIP PSUs and PSUs were combined into one PSU grant.

During the transition period, which included the payout of the 2016-2018 and 2017-2019 performance cycles, there will be timing issues that occur as awards for multiple years will appear in the SCT as follows:

● The 2018 SCT in last year’s proxy statement included 100% of the value earned for the 2016-2018 LTIP performance cycle (reported in the “Non-Equity Incentive Plan Compensation” column) and 100% of the grant date fair value at target performance for the awards granted in 2018 for the 2018-2020 LTIP performance cycle (reported in the “Stock Awards” column).

● The 2019 SCT in this proxy statement includes 100% of the value earned for the 2017-2019 LTIP performance cycle (reported in the “Non-Equity Incentive Plan Compensation” column) and 100% of the grant date fair value at target performance for the awards granted in 2019 for the 2019-2021 PSU performance cycle (reported in the “Stock Awards” column).

We will return to normal, single cycle reporting in the 2020 SCT in next year’s proxy statement. The 2020 SCT will include 100% of the grant date fair value at target performance for the PSU awards granted in 2020.

The SCT reporting is further complicated by the accelerated granting of PSUs to our CEO in August 2019 in lieu of his 2020 annual PSU grant.

The table below shows the MP&D Committee’s compensation determinations for our CEO and, as such, is a more comparable representation of the CEO’s annual compensation than the disclosure provided in the SCT. The value at target of the compensation to Mr. Merlo in 2019 remained relatively consistent with the prior years. In addition, Mr. Merlo’s August 2019 PSUs were granted in lieu of his 2020 annual PSU award. The table below shows the MP&D Committee’s compensation determinations for our CEO with the grant of Mr. Merlo’s August 2019 PSUs and the LTIP-related double reporting removed.

CEO Compensation Determinations

	Salary ($)	Annual Cash Incentive Award1 ($)	RSU ($)	PSU Grant Value2 ($)	Stock Option Grant Value ($)	LTIP Grant Value3 ($)	All Other Compensation ($)	Total Compensation ($)
2019	1,630,000	3,875,000	0	10,124,983	3,374,998	0	571,783	19,576,764
2018	1,630,000	2,605,000	0	3,374,955	3,374,995	6,749,992	667,156	18,402,098
2017	1,630,000	2,128,800	3,374,960	0	3,374,998	6,750,000	754,106	18,012,864

1	Excludes payout of LTIP awards granted for the following three-year performance periods: 2015-2017, 2016-2018 and 2017-2019. Such payouts were reported in the “Non-Equity Incentive Plan Compensation” column of the SCT for each of the respective years.
2	2019 represents PSU awards granted on June 5, 2019 (“Annual PSUs”). 2018 represents PSUs with a three-year performance period based on adjusted earnings before interest, taxes, depreciation and amortization targets (“EBITDA PSUs”) granted in 2018.
3	For 2019, only PSUs were granted. For 2018, the LTIP award was granted as LTIP PSUs. For 2017, the LTIP award was cash denominated with settlement in shares following the three-year performance period.

40              2020 Proxy Statement

Compensation Discussion and Analysis     Business and Performance Highlights

Leading Practices In Compensation Programs

Our pay practices align with our core compensation principles and facilitate our implementation of those principles. They also demonstrate our commitment to sound compensation and governance practices.

We apply leading executive compensation practices

✓	Core Executive Compensation Principles Designed to Promote Company Growth
✓	Performance Measures Aligned with Stockholder Interests
✓	Majority of the Total Compensation Opportunity is Performance-Based
✓	No Excise Tax Gross-Ups
✓	No Option Repricing
✓	No Recycling of Shares
✓	Recoupment Policy and Commitment to Disclose any Recoupment
✓	Broad Anti-Pledging and Anti-Hedging Policy
✓	Executive Severance Policy
✓	Limited Perquisites and Personal Benefits
✓	SERP Closed to New Participants
✓	Double Trigger Vesting of Equity Awards
✓	Robust Stock Ownership Guidelines
✓	Two-year post-vesting holding period on net shares of resulting from PSUs for NEOs
✓	Dividend Equivalents on RSUs Paid Only When Awards Vest
✓	Board Committee Oversight of Comprehensive Annual Compensation Program Risk Assessment
✓	Cap on Annual Cash Incentive Awards for NEOs
✓	Simplified and Improved Disclosure for Annual Cash Incentive Program
✓	Ten-year term for stock options
✓	rTSR modifier

Business and Performance Highlights

We are the nation’s premier health innovation company helping people on their path to better health. Whether in one of our pharmacies or through our health services and plans, CVS Health is pioneering a bold new approach to total health by making quality care more affordable, accessible, simple and seamless. CVS Health is community-based and locally focused, engaging consumers with the care they need when and where they need it. The Company has approximately 9,900 retail locations, approximately 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 105 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year and expanding specialty pharmacy services. CVS Health also serves an estimated 37 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan. The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

32.0%
revenue growth

$7.08*
Adjusted EPS

Maintained dividend of
$2.00
per share

* Adjusted EPS is a non-GAAP measure. See Annex A to this proxy statement for a reconciliation of this and other non-GAAP financial measures to the most directly comparable GAAP measures.

Our full-year financial results reflect strong financial and operational execution in our first full year as a combined company since the close of the Aetna acquisition. We experienced positive business momentum across the Enterprise with results meeting or exceeding our expectations as we seek to transform the way health care is delivered to millions of Americans across the United States. We delivered strong revenue growth in 2019 of 32.0%, driven

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Compensation Discussion and Analysis     Detailed Program Discussion

by the addition of Aetna and continued strong growth in Enterprise prescriptions filled, which was 3.8% for the year. We delivered GAAP diluted earnings per share of $5.08, with Adjusted EPS of $7.08,* above the high end of our guidance range. We are pleased with the progress we made in 2019 in laying the foundation to accelerate future growth. In addition, our significant cash flow generation has enabled us to maintain our dividend of $2.00 per share and deleverage in accordance with our plan. We paid down approximately $4.7 billion of net long-term debt in 2019 and approximately $8 billion from the close of the Aetna acquisition through year-end 2019.

Our unmatched combination of assets positions us to deliver integrated health and wellness offerings that are unparalleled in the marketplace. We have a clear set of near-term and long-term performance goals which are spelled out in the scorecard we use to measure our progress and provide to investors each quarter. Client, member and consumer reception to our innovative product and service offerings, including our HealthHUB locations, has been positive. We remain confident that we are on the right path to delivering significant value to all of our stakeholders over the long term as we increase access, drive costs lower and improve health outcomes.

For more information on our financial performance and strategy, please refer to our 2019 Annual Report on Form 10-K mailed with this proxy statement and available at www.cvshealthannualmeeting.com. Please also refer to page 58 of and Annex A to this proxy statement for additional information about how we calculate: (i) Management Incentive Plan (“MIP”) Adjusted Operating Income, a metric used to determine annual cash awards; (ii) Return on Net Assets, a metric used in connection with our long-term incentive awards; (iii) Adjusted EBITDA, a metric used in connection with our long-term equity awards; (iv) Adjusted EPS, a metric used in connection with our long-term equity awards; and (v) Adjusted Debt, a measure used in connection with our long-term equity awards.

We are committed to helping people on their path to better health. Our values of innovation, collaboration, caring, integrity and accountability affect how we drive performance. We remain firmly committed to evaluating and incenting management to remain focused on drivers of sustainable performance over the long-term, even though we recognize that this focus is not always reflected in our stock price. We invest in our employees at all levels of the Company by rewarding performance that balances risk and reward, which is consistent with our values and supports short- and long-term goals and, ultimately, value creation for our stockholders. We provide opportunities for professional growth and development and aim to offer affordable benefits and programs that meet the diverse needs of our employees and their families. Feedback from stockholders during our annual outreach confirms strong support for this commitment and for the value we place on other forms of capital—including human, natural, social and intellectual. Please see the back pages of this proxy statement for information on our Corporate Social Responsibility (“CSR”) strategy and our 2019 CSR achievements.

* Adjusted EPS is a non-GAAP measure. See Annex A to this proxy statement.

Detailed Program Discussion

CVS Health Values

When determining compensation awards and incentive payments, the MP&D Committee validates that our results were achieved in line with the Company’s five core values:

	Innovation			Collaboration			Caring
Demonstrating openness, curiosity and creativity in the relentless pursuit of delivering excellence.			Sharing and partnering with people to explore and create things that we could not do on our own.			Treating people with respect and compassion so they feel valued and appreciated.

	Integrity			Accountability
Delivering on our promises; doing what we say and what is right.			Taking personal ownership for our actions and their results.

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Compensation Discussion and Analysis     Detailed Program Discussion

Elements of Our Compensation Program

The vast majority of our NEOs’ pay is tied to challenging performance measures. We saw strong operational and financial performance in 2019, our first full year as a combined company since the close of the Aetna acquisition. As a result, our performance exceeded our short-term incentive targets, and our long-term incentive awards paid out at target. Consequently, our NEOs’ actual realized pay with respect to 2019 is just above the target grant value but below maximum, demonstrating the strong performance-based and at-risk nature of our pay programs.

● The 2019 corporate performance result for our annual cash incentive award was 113.2% of target.

● In addition, based on 2019 Return on Net Assets (“RoNA”) results and the MP&D Committee reducing the calculated result, the 2017-2019 LTIP award paid out at 100% of target.

The table below outlines each element of our executive compensation program for 2019, its connection to our five core compensation principles and how it supports our long-term strategy and growth. Information about our voluntary deferral program and other benefits can be found beginning on page 54.

2019 Compensation Program

				Target Basis	Link to Strategy/Growth	Additional Information
			Base Salary	●Set based on experience, comparative market data and level of responsibility		●Reviewed annually ●Adjusted periodically based on market positioning and individual qualifications
			Annual Cash Incentive	●Financial and nonfinancial targets approved by the MP&D Committee at the beginning of the fiscal year ●Individual performance goals set by the MP&D Committee at the beginning of the year	●Payout based on key measures of profitability that are followed closely by investors and on client satisfaction ●Important drivers of recurring revenue and the achievement of long-term strategic and operational goals	●Maximum award capped at 200% of target ●Payments reflect performance against MIP Adjusted Operating Income target and customer, client and member service/ satisfaction metrics ●Payout, if any, determined by MP&D Committee. MP&D Committee determines the final payout based on individual performance, which may result in no payout or a payout up to 20% higher than Company performance
			PSUs	●Established at start of a three-year performance cycle ●Target grant value based on market data, level of responsibility and desired pay mix	●Payout based on profitability and performance measure, subject to adjustment by modifiers relating to longterm strategic debt reduction (leverage ratio modifier) and market-based outcomes (rTSR modifier)	●Minimum performance threshold required for any payout ●Maximum payouts capped ●Denominated and settled in stock ●Two-year holding period post-vesting
			Stock Options	●Grant value based on market data, level of responsibility and desired pay mix	●Stock price appreciation aligned to stockholder interests	●Ten-year term ●Vest 25% per year over 4 years

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Compensation Discussion and Analysis     Detailed Program Discussion

Performance Metrics Support Corporate Strategy and Long-Term Growth

The MP&D Committee believes that performance indicators, including profitability and cash flow, debt reduction and market comparability, as well as stock price, also should be factored into our executive compensation program. By using a variety of pay vehicles and balancing short- and long-term awards, the MP&D Committee believes our program supports retention and long-term growth creation because the metrics are measured independently, and no single factor impacts all elements of performance.

The table below describes the performance metrics the MP&D Committee set for 2019.

Pay Element	2019 Performance Metric (weightings)	Rationale
Annual Cash Incentive	MIP Adjusted Operating Income (80%)	●Key measure of profitability followed closely by investors
Financial/ Operational Goal	Retail Customer Service, PBM Client Satisfaction and Health Care Benefits Member Satisfaction Result (20%)	●Important drivers of recurring revenue and the achievement of long-term strategic and operational goals ●Emphasize and reinforce the business objectives of the Enterprise
Individual Goal	Individual Performance Goals (modifier 0-120%)	●Established early in the fiscal year and drives specific, job-related performance that is linked to overall Company performance ●The MP&D Committee has sole authority to determine the amount, if any, of each annual cash incentive award
PSUs	2021 Adjusted EPS (100%)	●Measures profitability and performance during the final year of the 3-year performance period
	Leverage Ratio (modifier to Adjusted EPS +/- 25%)	●Measures achievement of our goal of debt reduction over the 3-year performance period. Also measures ability to maintain a strong capital structure which enables the resumption of normal capital deployment. Leverage ratio modifier adjusts any PSU payout resulting from achievement of the 2021 Adjusted EPS metric by +/- 25%
	rTSR (modifier to Adjusted EPS +/-25%)	●TSR modifier adjusts any PSU payout resulting from achievement of the 2021 Adjusted EPS metric by +/- 25% based on our Company’s TSR performance relative to the broad market of companies with which we compete for talent and capital over the 3-year performance period

Base Salary

The MP&D Committee annually reviews the base salaries of all senior officers, including the NEOs, and adjusts them periodically as needed by evaluating the evolving responsibilities of the position, the experience of the individual, and the marketplace in which we compete for executive talent as defined by our compensation peer groups. Upon consideration of the latest competitive market analysis of our compensation peer groups and input from its independent compensation consultant, the MP&D Committee increased salaries for Messrs. Moriarty and Rice in 2019. In approving the increases for Mr. Moriarty, the MP&D Committee considered that his responsibilities include Government Affairs, External Affairs and Corporate Communications, which are greater than those of a typical general counsel. Given Mr. Moriarty’s impact, influence and criticality over the next few years, the MP&D Committee believes the increase was warranted for the scope of his continued efforts and contributions.

	2018 Salary ($)	2019 Salary ($)	Percentage Increase
Larry J. Merlo	1,630,000	1,630,000	0%
Eva C. Boratto	850,000	850,000	0%
Jonathan C. Roberts	1,200,000	1,200,000	0%
Derica W. Rice	1,050,000	1,100,000	5%
Thomas M. Moriarty	850,000	1,000,000	18%

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Compensation Discussion and Analysis     Detailed Program Discussion

2019 Annual Cash Incentive

Our NEOs participate in our annual cash incentive program, the MIP, under which they are eligible for a cash award based on the achievement of pre-established financial, operating and individual performance objectives. Awards are paid out, if earned, in the first quarter of the following year based on the following formula:

NEO
Base Salary
Paid in 2019 X NEO
Target Annual
Incentive % X Corporate
Performance % X Individual
Performance
Modifier % = Final Award

NEO Target Annual Incentive

In the first quarter of each year, the MP&D Committee approves for each NEO an annual target bonus amount expressed as a percentage of the executive’s base salary. For 2019 these percentages were: 200% for Mr. Merlo, 175% for Mr. Roberts, and 150% for each of Ms. Boratto and Messrs. Rice and Moriarty.

Corporate Performance

For 2019, the MP&D Committee measured Company performance using MIP Adjusted Operating Income (80% weighting) and retail customer service, PBM client satisfaction and health care benefits member satisfaction results (20% weighting). Corporate performance can range from 50% at threshold performance to 200% at maximum performance. The MP&D Committee established a challenging MIP Adjusted Operating Income target that is consistent with the earnings guidance we provided to investors and which requires year-over-year growth. Our customer service and client/member satisfaction metrics ensure that we are providing excellent service and position us to retain and win new business.

Individual Performance

The MP&D Committee also approved individual goals and objectives for business operations, Aetna integration, and talent and organizational development. Each NEO’s individual performance was evaluated against his or her goals and assigned a value between 0% and 120%. The MP&D Committee did not assign specific weightings to any NEO’s goals. The individual performance modifier cannot exceed 120% or 20% above what would have been earned based solely on corporate performance. An individual performance modifier of less than 100% will reduce payouts below what would have been earned based solely on Company performance. In all cases, total payouts cannot exceed 200% of target when including both Company and individual performance.

Actual Performance

The Company performance result was 113.2% for 2019 — based on 2019 MIP Adjusted Operating Income (performance of 100.9% of target, resulting in funding of 114.7%, weighted at 80%) and customer service and client/member satisfaction aggregate results (performance of 100.4% of target, resulting in funding of 106.9%, weighted at 20%).

*     Dollars in millions.

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Compensation Discussion and Analysis     Detailed Program Discussion

The MP&D Committee evaluates each NEO’s performance and considers Mr. Merlo’s input on the performance of the other NEOs. In determining the annual cash incentive for Mr. Merlo, the MP&D Committee consulted with the other independent members of the Board. For 2019, the MP&D Committee assigned a numeric performance result for each NEO’s individual performance against his or her pre-established goals. The MP&D Committee used its judgment in evaluating each NEO’s performance. The individual performance assessments resulted in modifiers ranging from 0% to 20% above what was earned based on Company performance.

Executive	Fiscal 2019 Individual Performance Assessment
Larry J. Merlo	●The MP&D Committee acknowledged Mr. Merlo’s leadership in significantly advancing the progress of the critical aspects of the Company’s integration of Aetna while leading the Company to above target financial and operational results in all three of our segments.
Eva C. Boratto	●Ms. Boratto showed critical leadership impact in the strong operating execution of the Retail/ LTC, Pharmacy Services and Health Care Benefits segments in 2019 and provided highly effective oversight of our capital allocation process.
Jonathan C. Roberts	●Mr. Roberts oversaw the Retail/LTC and Pharmacy Services segments in their achievement of financial and operational goals in 2019 while also playing a critical role in the technological integration of Aetna and CVS Health.
Derica W. Rice	●Mr. Rice’s award was paid pursuant to his Separation Agreement.
Thomas M. Moriarty	●Mr. Moriarty delivered superlative results in his leadership of the Company’s public policy, external/government affairs and legal matters during 2019, including overseeing the Company’s successful completion of the complex regulatory process associated with the Aetna acquisition.

The actual payout of each NEO’s, other than Mr. Rice’s, 2019 annual cash incentive award, as approved by the MP&D Committee, is set forth in the table below:

2019 Annual Cash Incentive Award

	NEO 2019 Eligible Earnings ($)	Target Annual Incentive %		Company Performance %		Individual Performance Modifier %		Final Award ($)	Final Payout as a % of Target
Larry J. Merlo	1,630,000	200	%	113.2	%	105	%	3,875,000	118.9	%
Eva C. Boratto	850,000	150	%	113.2	%	110	%	1,588,000	124.5	%
Jonathan C. Roberts	1,200,000	175	%	113.2	%	100	%	2,377,000	113.2	%
Thomas M. Moriarty	920,833	150	%	113.2	%	120	%	1,876,000	135.8	%

The MP&D Committee also approved a one-time cash bonus of $1,000,000 paid to Mr. Moriarty in early 2019 to reward him for significant work in government affairs, corporate communications, and legal matters during a critical transition period following the closing of the Aetna acquisition, continued accomplishments in managing the legislative and regulatory challenges facing our Pharmacy Services segment, establishing CVS Health as a national thought leader, and supporting external Enterprise messaging.

Long-Term Incentive Compensation

Each year the MP&D Committee approves long-term incentive compensation awards to employees, including the NEOs. Following the MP&D Committee’s comprehensive review of our compensation program, which included input from our stockholders, the MP&D Committee approved changes to the long-term incentive compensation program to further simplify the program by combining the performance based target value (formerly LTIP PSUs and EBITDA PSUs) into one annual PSU award for 2019. For 2019, long-term incentive compensation is comprised of PSUs and stock options as set forth below. The PSUs may be earned based on a 2021 Adjusted EPS goal as adjusted by the leverage ratio and rTSR modifiers. The PSUs are subject to a three-year performance period, and the resulting net shares of our common stock are subject to a two-year post-vesting holding period.

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Compensation Discussion and Analysis    Detailed Program Discussion

2019 Long-Term Incentive Target Mix

2019 PSU and Stock Option Grant Decisions

The PSU portion of our long-term incentive program features formulaically determined payouts based on performance goals established at the beginning of the three-year performance period and adjusted by leverage ratio and rTSR modifiers as described below. The MP&D Committee approved 2021 Adjusted EPS as the core performance measure for the 2019 PSUs. The target, threshold and maximum goals are aligned with the Company’s long-term targets communicated to investors and were set at a level expected to generate strong profitability over the next three years. The leverage ratio modifier measures achievement of our goal of debt reduction, and the rTSR modifier is designed to focus on performance relative to the broad market with which we compete for talent and capital over the same time period. The $7.53 target for 2021 Adjusted EPS aligns with the guidance that was communicated during our Investor Day in June 2019.

The leverage ratio modifier is applied to Adjusted EPS results based on our Adjusted Debt to Adjusted EBITDA results at the end of the performance period. If performance is within the target range of 3.61x to 3.71x, there is no modification. The Adjusted EPS result will be adjusted up by 25% if we achieve better than our target range or adjusted down by 25% if we do not achieve our target range.

The rTSR modifier also is applied to Adjusted EPS results based on our position over the three-year performance period. The comparator group for measuring rTSR is an index of over 55 health care and over 30 consumer staples companies that closely reflect our business. The companies included in the Relative TSR Peer Group are listed on page 59. Awards are adjusted if rTSR performance is above or below the 50th percentile as shown in the chart to the right. The modifier is applied in quartiles on a pro-rata basis to provide for reduced payout for below median performance or increase payout for above-median performance.

Net shares of our common stock resulting from PSU awards earned after the three-year performance period are subject to an additional two-year holding period.

For 2019, the MP&D Committee determined to grant Annual PSUs following our Investor Day presentation on June 4. The following table sets out the MP&D Committee’s award value determinations for the stock options granted on April 1, 2019 and the Annual PSUs granted on June 5, 2019. The performance period for the Annual PSUs is 2019-2021.

Executive Name	2019 Stock Option Award Value1 ($)	2019 Annual PSU Award Value1, 2 ($)
Larry J. Merlo	3,375,000	10,125,000
Eva C. Boratto	1,250,000	3,750,000
Jonathan C. Roberts	1,875,000	5,625,000
Derica W. Rice	1,500,000	4,500,000
Thomas M. Moriarty	1,250,000	3,750,000

1	The grant date fair value of these awards is reported in the SCT and the Grants of Plan-Based Awards table.
2	Excludes August 2019 PSUs described below.

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Compensation Discussion and Analysis     Detailed Program Discussion

The following summarizes LTIP and PSU awards granted in the last three years, each of which are described in more detail below.

*	Excludes Additional LTIP PSU awards granted in 2018.
**	Excludes August 2019 PSU awards described below.

August 2019 PSU Awards for Messrs. Merlo and Moriarty

In mid-2019, the MP&D Committee had discussions over several meetings regarding the acceleration of the Company’s transformation initiatives, the increasing complexity of the Company’s business, and the importance of management continuity during a critical period of transition. The MP&D Committee reviewed alternatives to address these matters and received input from its independent compensation consultant. The MP&D Committee believed that it was imperative to consider a unique, one-time modification to planned compensation for two key executives.

Following its review and consideration, in August 2019, the MP&D Committee approved accelerating the grant date of Mr. Merlo’s 2020 annual PSU award. The value of the August 2019 award was equal to the target value of Mr. Merlo’s 2019 Annual PSU award. The August 2019 PSUs were granted to align Mr. Merlo’s incentives to the completion of the Aetna integration and the first phase of the Company’s initiatives to transform health care. This grant was in lieu of Mr. Merlo’s 2020 annual PSU award, and Mr. Merlo will not be granted any annual PSUs in 2020. Mr. Merlo is expected to receive a stock option grant in 2020 as part of our normal course equity grant practices. The performance period for the August 2019 PSUs runs through December 2021, and the net shares earned are subject to a 2-year post-vesting holding period. Mr. Merlo’s award provides for full vesting at actual performance if Mr. Merlo is separated without cause and pro-rated vesting at actual performance upon qualified retirement. Mr. Merlo’s award will be forfeited if he resigns or is terminated for cause and will otherwise be subject to the terms of the 2017 ICP.

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Compensation Discussion and Analysis    Detailed Program Discussion

In August 2019, the MP&D Committee also approved accelerating the grant date of Mr. Moriarty’s 2020, 2021 and 2022 annual PSU awards. Mr. Moriarty is critical to the Company’s ongoing successful navigation of the regulatory, legal and public policy landscapes as we continue our transformative journey. The value of the August 2019 award was equal to 75% of the aggregate target value of Mr. Moriarty’s expected annual long-term incentive awards for those years, as the MP&D Committee contemplates an annual grant of stock options that represent 25% of target long-term incentive compensation. The August 2019 PSUs were granted to retain Mr. Moriarty’s services through the Aetna integration and execution of our Transformation initiatives and to provide continuity of critical legal, policy and government affairs support to our Board and senior leaders through December 2022. This grant was in lieu of Mr. Moriarty’s 2020, 2021 and 2022 annual PSU awards, and Mr. Moriarty will not be granted any annual PSUs in 2020, 2021 or 2022. Mr. Moriarty is expected to receive a stock option grant in each of 2020, 2021 and 2022 as part of our normal course equity grant practices. The vesting date for Mr. Moriarty’s August 2019 PSUs is December 31, 2022, nine months later than the 2019 Annual PSUs, to account for the multi-year nature of the grant. The net shares earned under the August 2019 PSUs are subject to a 2-year post-vesting holding period. Mr. Moriarty generally must stay employed with the Company through the vesting date in order to fully vest. Mr. Moriarty’s award provides for pro-rated vesting at actual performance upon termination without cause. Mr. Moriarty’s award will be forfeited if he resigns or is terminated for cause and will otherwise be subject to the terms of the 2017 ICP.

The performance metrics for the August 2019 PSUs are identical to the metrics for the Annual PSUs described above. The August 2019 PSU awards are subject to the achievement of pre-defined performance targets based on metrics that were selected following engagement with stockholders, including Adjusted EPS, de-levering and rTSR performance. For Adjusted EPS and de-levering performance, the targets are consistent with guidance provided in June 2019 at our Investor Day. The period to measure performance is the same as the 2019 Annual PSUs and runs through December 31, 2021.

Executive Name	August 2019 PSU Award Value1 ($)
Larry J. Merlo	10,125,000
Thomas M. Moriarty	12,375,000

1 The grant date fair value of these awards is reported in the SCT and the Grants of Plan-Based Awards table.

2017-2019 LTIP Performance Period Results

The performance goal for the 2017-2019 LTIP award was based on 2019 RoNA and was subject to a modifier based on our rTSR performance relative to the S&P 500 over the same three-year period (+/- 25% for above or below median performance). The MP&D Committee set the RoNA goal in early 2017 at 43.76%, a challenging level designed to drive performance. The goal aligned with the Company’s long-term targets communicated to investors in 2017 and anticipated bolt-on M&A activity but did not anticipate an acquisition transaction the size of Aetna. The Aetna acquisition helped drive the RoNA result for the 2017-2019 LTIP performance cycle to the level necessary to achieve a 200% payout level prior to the application of the rTSR modifier.

Our rTSR performance over this same period reduced the payout level by 25% resulting in a calculated payment level of 150%.

During the three-year 2017-2019 LTIP performance period, the Company executed on our long-term growth strategy: to identify a health plan target and announce and consummate a deal. The Aetna acquisition was initiated, approved and closed within the three-year performance cycle, fulfilling the objectives of our stated long-term growth strategy. Considering that the RoNA results were not fully reflective of actual CVS business performance and recognizing the impact of the Aetna acquisition, the MP&D Committee reduced the calculated result of the 2017-2019 LTIP performance cycle, resulting in a final payout of 100%.

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Compensation Discussion and Analysis     Detailed Program Discussion

The following tables set forth the target goal, the range of potential payouts as a percent of target, our actual performance and the final payout for the 2017-2019 LTIP award.

	% of RoNA Target		Payout Level as a % of Target
Threshold (minimum level of performance) (41.23%)	94.2	%	40	%
Target (43.76%)	100.0	%	100	%
Maximum (47.97%)	109.6	%	200	%
Actual (52.3%)	119.5	%	200	%
Calculated payout after application of rTSR modifier of 25% (reflecting 20th percentile)			150	%
Final payout after MP&D Committee reduction			100	%

2017– 2019 LTIP Grant Opportunities and Actual Award Payments

Executive Name	Minimum Award (% of Target)		Threshold Award (% of Target)1		Target Award (% of Target)1		Maximum Award (% of Target)1		Target Grant Value of Award ($)	Actual Value of Total Award At 100% ($)	Actual # of Shares Delivered in Settlement of Award Net of Tax Withholding2
Larry J. Merlo	0	%	40	%	100	%	200	%	6,750,000	6,749,952	114,058
Eva C. Boratto	0	%	40	%	100	%	200	%	2,000,000	1,999,988	33,795
Jonathan C. Roberts	0	%	40	%	100	%	200	%	3,750,000	3,750,000	63,366
Derica W. Rice	0	%	40	%	100	%	200	%	1,298,611	1,298,587	21,943
Thomas M. Moriarty	0	%	40	%	100	%	200	%	1,875,000	1,875,000	31,683

1	Assumes 0% rTSR modifier, which can range from -25% to +25%.
2	Shares delivered on February 28, 2020, based on the $59.18 closing price of our common stock on that date, in accordance with the terms of the applicable award agreement.

Linking Pay to Performance

The MP&D Committee annually examines the relationship between CVS Health’s NEOs’ pay and Company performance. For 2019, the MP&D Committee assessed CVS Health’s NEO pay-for-performance relationship using a subset of our 2019 Compensation Peer Groups (the “2019 Pay-for-Performance Group”). The 2019 Pay-for-Performance Group consists of 22 Health Care and Retail Comparator Companies and General Industry Comparator Companies, each with annual revenues greater than $100 billion. The subset of companies included were identified by the MP&D Committee’s independent compensation consultant as fitting the stipulated parameters. The subset best reflects CVS Health’s size and performance expectations. CVS Health’s full-year 2018 revenues of $195 billion rank at the 77^th percentile relative to the 2019 Pay-for-Performance Group. The following graphs illustrate the results of the MP&D Committee’s assessment and illustrate the relationship between:

● our CEO’s realized compensation (base salary earned, incentives earned, value of RSUs that vested during the period, the value of stock options exercised during the period, and changes in the value of unvested RSUs and unexercised options held during the period); and

● CVS Health’s performance as measured by TSR – over one-year (2018) and three-year (2016 – 2018) periods (the most recent periods for which financial and compensation data were available at the time).

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Compensation Discussion and Analysis     Detailed Program Discussion

● In the following graphs, data points that are within the shaded area designate ideal pay-performance relationships. Data points below the shaded area identify peer companies where pay was lower than expected given the organization’s performance, and those data points above the shaded area identify companies where pay was higher than anticipated.

1-Year CEO Compensation Realized Percentile vs. Total Shareholder Return Percentile (2018)

The graph above illustrates the relationship between the CEO pay rank and the relative return to stockholders for CVS Health and the 2019 Pay-for-Performance Group during 2018. Our CEO’s realized compensation during 2018 was within the range that characterizes an ideal pay-performance alignment.

3-Year CEO Compensation Realized Percentile vs. Total Shareholder Return Percentile (2016-2018)

The graph above illustrates the relationship between the CEO pay rank and the relative return to stockholders for CVS Health and the 2019 Pay-for-Performance Group over the 3-year period 2016 to 2018. Our CEO’s realized compensation during this period was well within the range that characterizes ideal pay-for-performance alignment.

The MP&D Committee believes this historical view validates that our executive compensation programs work as intended and link pay and performance, while demonstrating the MP&D Committee’s commitment to maintaining design and administration practices that ensure alignment with stockholder interests.

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Compensation Discussion and Analysis     Detailed Program Discussion

Executive Compensation Planning and Review Process

The MP&D Committee follows the framework below to review, discuss and approve all aspects of our executive compensation program.

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Compensation Discussion and Analysis     Detailed Program Discussion

2019 Compensation Peer Groups

The MP&D Committee uses various data sources, including peer groups, to assess financial performance and compensation competitiveness. In 2018, the MP&D Committee approved the use of two compensation peer groups to better account for our evolving business following the Aetna acquisition, including our size, our diverse business segments and our international presence, which results in our NEOs’ jobs having a greater level of complexity than similar roles at certain of our health care and retail comparator companies. As a result, the MP&D Committee reviewed pay data from two compensation peer groups (the “2019 Compensation Peer Groups”) when reviewing and setting 2019 compensation levels:

● Health Care and Retail Group—20 companies with operations comparable to CVS Health’s, 13 of which are health care organizations and 7 of which are retailers. Full-year 2018 median revenues for the Health Care and Retail Group were $100 billion, with the independent compensation consultant’s estimate of CVS Health’s pro forma consolidated full-year 2018 total revenues ranking at the 95^th percentile. CVS Health’s full-year 2019 total revenues of $257 billion continue to rank at the 95^th percentile relative to the Health Care and Retail Group.

● General Industry Group—30 largest U.S. companies, irrespective of industry, but excluding banks (where compensation frameworks tend to be industry-specific). Full-year 2018 median revenues for the General Industry Group were $119 billion, with the independent compensation consultant’s estimate of CVS Health’s pro forma consolidated full-year 2018 total revenues ranking at the 92^nd percentile. CVS Health’s full-year 2019 total revenues of $257 billion rank at the 97^th percentile relative to the General Industry Group.

Health Care and Retail Comparator Companies
●Aflac Incorporated ●AmerisourceBergen Corporation2 ●Anthem, Inc. ●Cardinal Health, Inc.2 ●Centene Corporation ●Cigna Corporation2 ●Costco Wholesale Corporation2	●Express Scripts Holding Company1 ●HCA Healthcare, Inc. ●The Home Depot, Inc.2 ●Humana Inc. ●Kaiser Permanente Inc. ●The Kroger Co.2 ●Lowe’s Companies, Inc.	●McKesson Corporation2 ●MetLife, Inc. ●Target Corporation ●UnitedHealth Group Incorporated2 ●Walgreens Boots Alliance, Inc.2 ●Walmart Inc.2
General Industry Comparator Companies
●AmerisourceBergen Corporation2 ●Anthem, Inc. ●Apple Inc.2 ●AT&T Inc.2 ●The Boeing Company2 ●Cardinal Health, Inc.2 ●Chevron Corporation2 ●Comcast Corporation ●Costco Wholesale Corporation2 ●Express Scripts Holding Company1	●Exxon Mobil Corporation2 ●Ford Motor Company2 ●General Electric Company2 ●General Motors Company2 ●The Home Depot, Inc.2 ●International Business Machines Corporation ●Johnson & Johnson ●The Kroger Co.2 ●Lowe’s Companies, Inc. ●McKesson Corporation2	●Microsoft Corporation2 ●PepsiCo, Inc. ●Phillips 662 ●Target Corporation ●United Parcel Service, Inc. ●UnitedHealth Group Incorporated2 ●Valero Energy Corporation2 ●Verizon Communications Inc.2 ●Walgreens Boots Alliance, Inc.2 ●Walmart Inc.2

1	Express Scripts Holding Company merged with Cigna Corporation on December 20, 2018.
2	Member of the 2019 Pay-for-Performance Group.

The MP&D Committee reviews the compensation and relative TSR peer groups annually, considering input from its independent compensation consultant. The MP&D Committee continues to believe that utilizing both General Industry and Health Care and Retail Groups is the most effective way to assess competitiveness given the breadth of the Company’s operations. No changes were made to the 2019 compensation or relative TSR peer groups for 2020 other than to reflect applicable acquisition activity and changes in the membership of the 30 largest U.S. companies, irrespective of industry, but excluding banks.

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Compensation Discussion and Analysis     Detailed Program Discussion

Pay Positioning

The MP&D Committee does not target NEOs’ pay to a specified percentile relative to the 2019 Compensation Peer Groups, but rather reviews peer group compensation data at the 50^th and 75^th percentile for each element of compensation, including base salary, target total cash (base salary plus target bonus) and target total compensation (target total cash plus long-term incentive compensation). Individual compensation positioning relative to comparable positions in the 2019 Compensation Peer Groups varies by job, and the MP&D Committee considers a number of factors, including market competitiveness, specific duties and responsibilities of the NEO versus those in similar positions at the peer group companies and succession planning. In addition to this assessment, the MP&D Committee considers Company and individual performance and internal pay equity among the Company’s executive officers in evaluating and determining executive compensation. The MP&D Committee believes it is appropriate to reward the Company’s executive officers with compensation above the competitive median if the rigorous financial targets associated with the Company’s variable pay programs are exceeded in a way that is consistent with the Company’s core values.

Other Compensation Arrangements and Benefits

The Company maintains medical and dental benefits, life insurance and short- and long-term disability insurance programs for all of its employees. Executive officers are eligible to participate in these programs on the same basis and with the same level of financial subsidy as our other salaried employees.

Executive officers may participate in the CVS Future Fund, which is our qualified defined contribution, or 401(k), plan. An eligible CVS Health employee may defer up to 85% of his or her total eligible compensation, defined as salary plus annual cash incentive, to a maximum defined by the IRS. In 2019, that maximum was $19,000, plus an additional $6,000 for those age 50 and above. After the first full year of employment, CVS Health will match the employee’s deferral dollar-for-dollar up to a maximum equaling 5% of total eligible compensation. CVS Health’s matching cash contributions into the CVS Health Future Fund for the NEOs who participated are included in the “All Other Compensation” column of the SCT and described in the note 8 following the SCT on page 62.

We offer other benefits that are available to eligible employees, including executive officers, as follows.

Deferred Compensation Plan and Deferred Stock Plan

Eligible executive officers may choose to defer earned and vested compensation into the Deferred Compensation Plan (the “DCP”) and the Deferred Stock Compensation Plan (the “DSP”), which are available to any U.S. employees meeting the Plans’ eligibility criteria. The plans are intended to provide retirement savings in a tax-efficient manner and to enhance stock ownership. The DCP offers a variety of investment crediting choices, none of which represents an above-market return. The individual contributions of each of the NEOs during fiscal 2019 to the DCP and the DSP, including earnings on those contributions, any distributions during 2019 and their respective total account balances as of the end of 2019, are shown in the Nonqualified Deferred Compensation table on page 67.

Perquisites and Other Personal Benefits

We provide the following personal benefits to our NEOs:

● Financial planning: A benefit of up to $15,000 to cover the cost of a Company-provided financial planner to assist with personal financial and estate planning. We believe it is important to provide to our executives the professional expertise required to ensure that they maximize the efficiencies of our compensation and benefit programs and are able to devote their full attention to the management of the Company.

● Home security: An allowance to the NEOs to cover the costs of the installation and maintenance of home security monitoring systems. While the MP&D Committee believes these security costs are business expenses, disclosure of these costs as personal benefits is required.

● Limited personal use of corporate aircraft: We maintain corporate aircraft that may be used by our employees to conduct Company business. Pursuant to an executive security program established by the Board upon the MP&D Committee’s recommendation, the CEO is required to use our aircraft for all travel needs, including personal travel, in order to minimize and more efficiently use his travel time, protect the confidentiality of his travel and our business, and enhance his personal security. Certain other NEOs were also permitted to use our corporate aircraft for personal travel on a very limited basis during fiscal 2019. The cost of such personal use is included in “All Other Compensation” and described in the notes following the SCT.

The value of these items is treated as income taxable to the NEOs. The aggregate incremental cost to the Company of providing these personal benefits to each of the NEOs during fiscal 2019 is shown in the SCT beginning on page 60.

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Compensation Discussion and Analysis     Detailed Program Discussion

Partnership Equity Program

In addition to the core long-term incentive compensation plans described above, since 1997 the Company has maintained the Partnership Equity Program (the “PEP”). The PEP is designed to ensure that those executives with significant impact on the future success of CVS Health have a substantial “at-risk” personal equity investment in CVS Health common stock and is generally provided to selected newly-hired or newly-promoted senior executives in critical positions who can drive the strategic objectives of the Company. The MP&D Committee believes that the PEP strongly links the economic interests of senior executives with CVS Health stockholders, provides future long-term compensation opportunities that are competitive in the external marketplace and reflect internal responsibility levels, and assures key management stability, retention, motivation and long-term focus on corporate strategy. To invest in the PEP, an executive chooses to purchase a number of “Employee-Purchased RSUs,” which are matched by CVS Health on a one-for-one basis (“Company-Matching RSUs”) and vest on the fifth anniversary of the purchase date.

In addition, the executive receives an option to purchase shares of CVS Health common stock equal to ten times the number of Company-Matching RSUs. The stock option grant vests ratably on each of the third, fourth and fifth anniversaries of the grant date. The vesting for each of the stock option grant and the Company-Matching RSU award is contingent upon the executive retaining the Employee-Purchased RSUs until all of the stock options and Company-Matching RSUs are vested and upon the continued employment of the executive through the vesting period.

Agreements with Named Executive Officers

As previously disclosed, we have an employment agreement (the “Employment Agreement”) with Mr. Merlo and change in control agreements (collectively, the “CIC Agreements”) with Messrs. Rice, Roberts and Moriarty, and Ms. Boratto.

In addition, CVS Pharmacy, Inc., a wholly-owned subsidiary of CVS Health, entered into a separation agreement (the “Separation Agreement”) with Mr. Rice on March 3, 2020 in connection with his termination of employment with the Company on March 1, 2020 (the “Separation Date”). Under the Separation Agreement, the Company has agreed to provide Mr. Rice with 18 months of continued base salary as severance following his last day of employment (the “Severance Period”). Mr. Rice’s equity awards will vest and be settled in accordance with their existing terms. Specifically, Mr. Rice’s stock options and restricted stock unit awards (other than his Company-Matching RSUs) will continue to vest through the end of the Severance Period. His outstanding PSU awards will vest on a pro-rated basis through the Separation Date based on actual performance through the end of the applicable performance period. Mr. Rice’s Company-Matching RSUs will vest on a pro-rated basis through the Separation Date. Under the Separation Agreement, Mr. Rice also is entitled to (1) a bonus for performance year 2019 of $1,847,000, (2) a pro-rated bonus for performance year 2020 of $275,000, (3) a one-time lump sum cash payment of $300,000 in lieu of remaining entitlements under the Company’s relocation policy and (4) reimbursement of up to $15,000 for tax preparation and financial planning services through December 31, 2020. The Separation Agreement also contains a release of claims against the Company, with customary confidentiality and cooperation covenants, and incorporates by reference any other covenants to which Mr. Rice already is subject, including his restrictive covenant agreement, as amended pursuant to the Separation Agreement to conform the non-competition period to applicable law.

The MP&D Committee believes that the interests of stockholders are best served by ensuring that the interests of our senior management are aligned with our stockholders. The CIC Agreements with NEOs (other than Mr. Merlo) are intended to eliminate, or at least reduce, the reluctance of senior management to pursue potential change-in-control transactions that may be in stockholders’ best interests. The Agreements serve to eliminate distraction caused by uncertainty about personal financial circumstances during a period in which CVS Health requires focused and thoughtful leadership to ensure a successful outcome. Accordingly, the CIC Agreements provide certain specified “double trigger” severance benefits to the covered executives in the event of their termination under certain circumstances following a change in control. The MP&D Committee believes a “double trigger” severance benefit provision is more appropriate, as it provides an incentive for greater continuity in management following a change in control. “Double trigger” benefits require that two events occur in order for severance to be paid, typically a change in control of the Company followed by the executive’s involuntary termination of employment. The 2010 and 2017 Incentive Compensation Plans that govern the terms of outstanding equity awards to all NEOs, and the 2017 Incentive Compensation Plan as proposed to be amended at the Annual Meeting, also require a “double trigger” for vesting of equity change in control benefits.

The MP&D Committee reviews the Company’s severance benefits annually with the assistance of its independent compensation consultant to evaluate both their effectiveness and competitiveness. The review for fiscal 2019 found the current level of benefits to be within competitive norms for design. Details of hypothetical payments that would have been made to the NEOs upon a change in control on December 31, 2019 and under various termination scenarios; provisions for the treatment of equity awards, supplemental executive retirement plan and other benefits; and estimated payments that would be made to the executives whose employment terminates following a change in control may be found in “Payments/(Forfeitures) Under Termination Scenarios” beginning on page 68.

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Compensation Discussion and Analysis     Detailed Program Discussion

Supplemental Executive Retirement Plan

We maintain an unfunded supplemental executive retirement plan (the “SERP”), which is designed to supplement the retirement benefits of selected executive officers. The SERP is a legacy plan in which participation has decreased over the years as individuals have retired. We have not provided SERP benefits to new participants since 2010. Mr. Merlo is the only active executive officer in the SERP. Mr. Merlo has reached the maximum amount of service under the SERP based on his more than 30 years with the Company. As a result, any increase to his benefits would be primarily as a result of performance-based bonuses. See the Pension Benefits table on page 67 for more information.

Key Policies Related To Compensation

Forfeiture and Recoupment

Since 2009, we have maintained a recoupment policy that applies to all annual cash incentive and long-term incentive awards, including equity-based awards, granted to our employees. The policy applies in cases where financial or operational results used to determine an award amount are meaningfully altered based on fraud or material financial misconduct (collectively, “Misconduct”), as determined by the Board, and applies to any employee determined to have been involved in the Misconduct.

The policy applies to Misconduct committed during the performance period that is discovered during the performance period or the three-year period following the performance period. The policy allows us to recoup the entire award, not only excess amounts generated by the Misconduct, subject to the determination of the Board, and the policy may apply even where there is no financial restatement.

In addition, in March 2019, in response to stockholder feedback, the Board approved an amendment to the Recoupment Policy to increase transparency of the policy. The amendment requires CVS Health to publicly disclose the circumstances of any recoupment from any “executive officer” under the Recoupment Policy to the extent the underlying event already has been publicly disclosed in CVS Health’s filings with the SEC and the disclosure would not violate applicable law, violate legal privilege, breach contractual obligations or be likely to result in, or exacerbate any existing or threatened, employee, stockholder or other litigation, arbitration, investigation or proceeding against the Company.

The table below summarizes our forfeiture and recoupment policies.

	WHO	WHEN	WHAT
Misconduct Cancellation/ Forfeiture	●Applies to all employees who receive equity-based awards as part of their incentive compensation	●An employee is terminated for “cause”: ●willfully and materially breaches any of his or her obligations to the Company with respect to confidentiality, cooperation with regard to litigation, non-disparagement and non-solicitation; ●is convicted of a felony involving moral turpitude;  or ●engages in conduct that constitutes willful gross neglect or willful gross misconduct in carrying out his or her duties to the Company, resulting, in either case, in material harm to the financial condition or reputation of the Company	●All unvested equity awards will be cancelled/forfeited
Incentive Compensation Recoupment Policy	●Applies to all of our employees who receive annual cash incentive or long-term incentive awards, including equity-based awards	●When fraud or material financial misconduct by an executive officer meaningfully alters financial or operational results used to determine an award amount, as determined by our Board ●Applies to fraud or material financial misconduct committed during the performance period for the award amount that is discovered during the performance period or the three-year period following the performance period	●Applies to all annual and long-term incentive awards ●Allows for recoupment of the entire award, not only excess amounts generated by the executive officer’s fraud or material financial misconduct ●Amendment approved in March 2019 requires public disclosure of the circumstances of any recoupment from any executive officer (to the extent doing so would not violate any law or contractual obligations)

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Compensation Discussion and Analysis     Detailed Program Discussion

Anti-Gross-Up Policy

CVS Health maintains a broad policy against tax gross ups. The only current exception to our anti-gross-up policy is for tax payments that may be due under our broad-based relocation policy, which is applicable to a large number of employees (i.e., those who must relocate upon hire, transfer or promotion).

Insider Trading Policy; Anti-Pledging and Anti-Hedging Policy

A significant percentage of executive compensation has been and continues to be payable in CVS Health common stock. The Board and executive management of CVS Health take seriously their responsibilities and obligations to exhibit the highest standards of behavior relative to trading our stock. All transactions in our stock by any director, executive officer or designated employee who has a significant role in, or access to, our financial reporting process (collectively, “lnsiders”), must be pre-cleared by either the General Counsel, the Corporate Secretary or their designee. Insiders are generally prohibited from trading in any of our securities except during periods of varying length beginning shortly after the release of our financial results for each quarter, and Insiders and other employees may be required to refrain from trading during other designated periods when significant developments or announcements are anticipated. In addition, it is our policy that Insiders and other employees may not engage in any of the following activities with respect to our securities:

● Trading in our securities on a short-term basis (stock purchased in the open market must be held for at least six months);

● Purchasing stock on margin or pledging our stock or any stock incentive award as collateral for a loan or margin account;

● Engaging in short sales of our stock;

● Buying or selling puts, calls, exchange traded options or other derivative securities based on our stock; or

● Engaging in any other hedging transactions with respect to our stock, which includes transactions designed to offset any decrease in the market value of equity securities.

Our most senior executives and Board members are generally required to use a 10b5-1 trading plan to sell our stock, and our other executives are encouraged to use 10b5-1 trading plans. A 10b5-1 trading plan is a contract that allows the individual to sell a pre-determined number of shares at a time in the future when pre-determined conditions in the plan are met. However, the Company has extensive guidelines that govern the use of 10b5-1 trading plans, including the timing of entry or modification of a plan, the price at which shares will be traded, a “cooling off” period after the plan is entered into during which no trades can take place, minimum and maximum terms, restrictions on the number of plans an individual can maintain, a prohibition on trading outside of the plan, and pre-approval of plans (and any modification of plans) by the General Counsel or Corporate Secretary.

Stock Ownership Guidelines

The MP&D Committee oversees the Company’s stock ownership guidelines, which require the Company’s directors and executive officers to maintain ownership of a minimum number of shares, in the case of directors, or stock valued at a multiple of annual salary, in the case of executive officers. For additional details, see “Executive Officer and Director Stock Ownership Requirements” on page 90.

Compliance With Section 162(m) of the Internal Revenue Code

Starting in 2018, with exceptions only for compensation paid pursuant to certain binding contracts as described in Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”), the tax deduction for annual compensation of each of our NEOs is limited to $1 million. Certain previously-available exceptions to the $1 million limitation for “performance-based pay” were eliminated for years after 2017. In addition, beginning in 2019, CVS Health is considered a “covered health insurance provider” as defined in the Code and, as such, the annual limitation on the deductibility of compensation paid to any of our employees, including our NEOs, as well as certain service providers, generally is limited to $500,000 per person. Although the MP&D Committee considers the impact of Section 162(m), it believes that stockholder interests are best served by not restricting the MP&D Committee’s discretion and flexibility in crafting the Company’s executive compensation program, even if non-deductible compensation expenses could result.

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Compensation Discussion and Analysis     Detailed Program Discussion

Non-GAAP Financial Measures Used In Compensation Discussion And Analysis

Throughout this CD&A, we refer to various financial measures. Certain of these financial measures are calculated in accordance with U.S. generally accepted accounting principles, or GAAP. However, there are some financial measures that management adjusts and uses to assess our year-over-year performance. These adjusted financial measures are commonly referred to as non-GAAP. An explanation of how we calculate these non-GAAP financial measures is included below. See Annex A to this proxy statement for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

MIP Adjusted Operating Income

MIP Adjusted Operating Income is defined as operating income adjusted for 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 rationalization charges, gains/losses on divestitures and any other items specifically identified herein.

RoNA or Return on Net Assets

RoNA, or Return on Net Assets, is calculated by dividing adjusted net operating profit after tax (“Adjusted NOPAT”) by the most recent two year’s Adjusted Average Net Assets. Adjusted NOPAT is earnings before interest and taxes adjusted for certain financial items described below. Adjusted Average Net Assets for the purposes of this calculation is defined as current assets plus net fixed assets less accounts payable and accrued expenses adjusted for certain financial items described below. For the purposes of measuring performance against established targets in any period, Adjusted NOPAT and Adjusted Average Net Assets exclude the impact of tax reform, which would have improved the performance measured by RoNA. Adjusted Average Net Assets are also adjusted for funding to our captive insurance entity related to a tax planning strategy associated with the tax reform.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)

Adjusted EBITDA is defined as (i) net income (GAAP measure) before interest, tax, 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.

Adjusted EPS

Adjusted EPS is calculated by dividing adjusted net income attributable to CVS Health by the Company’s weighted average diluted shares outstanding. The Company defines adjusted net income attributable to CVS Health as net income 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 transaction and integration costs, store rationalization charges, gains/losses on divestitures, net interest expense on financings associated with proposed acquisitions (for periods prior to the acquisition), the corresponding tax benefit or expense related to the items excluded from adjusted net income attributable to CVS Health, the corresponding impact to income allocable to participating securities, net of tax, related to the items excluded from net income attributable to CVS Health in determining adjusted net income attributable to CVS Health, and any other items specifically identified.

Adjusted Debt

Adjusted Debt is defined as short-term debt and total long-term debt (including the current portion of long-term debt), 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.

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Compensation Discussion and Analysis     Detailed Program Discussion

Relative TSR Peer Group for 2019-2021 PSU Awards

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

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Compensation of Named Executive Officers

Important Information Regarding the Presentation of Executive Compensation

The table below shows the MP&D Committee’s compensation determinations for our CEO and, as such, is a more comparable representation of the CEO’s annual compensation than the disclosure provided in the SCT. The value at target of the compensation to Mr. Merlo in 2019 remained relatively consistent with the prior years. As discussed in detail on page 40, we changed our approach to the denomination of our LTIP awards, which resulted in an overlap in disclosure of both awards granted and earned during a fiscal year, which results in awards for multiple years being reported in a single year in the SCT. In addition, Mr. Merlo’s August 2019 PSUs were granted in lieu of his 2020 annual PSU award. The table below shows the MP&D Committee’s compensation determinations for our CEO with the grant of Mr. Merlo’s August 2019 PSUs and the LTIP-related double reporting removed.

	CEO Compensation Determinations
	Salary ($)	Annual Cash Incentive Award1 ($)	RSU ($)	PSU Grant Value2 ($)	Stock Option Grant Value ($)	LTIP Grant Value3 ($)	All Other Compensation ($)	Total Compensation ($)
2019	1,630,000	3,875,000	0	10,124,983	3,374,998	0	571,783	19,576,764
2018	1,630,000	2,605,000	0	3,374,955	3,374,995	6,749,992	667,156	18,402,098
2017	1,630,000	2,128,800	3,374,960	0	3,374,998	6,750,000	754,106	18,012,864

1	Excludes payout of LTIP awards granted for the following three-year performance periods: 2015-2017, 2016-2018 and 2017-2019. Such payouts were reported in the “Non-Equity Incentive Plan Compensation” column of the SCT for each of the respective years.
2	2019 represents Annual PSUs granted on June 5, 2019. 2018 represents EBITDA PSUs granted in 2018.
3	For 2019, only PSUs were granted. For 2018, the LTIP award was granted as LTIP PSUs. For 2017, the LTIP award was cash denominated with settlement in shares following the three-year performance period.

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 for services rendered in all capacities during the 2019 fiscal year and the applicable comparable data for the 2018 and 2017 fiscal years. Neither Ms. Boratto nor Mr. Rice was a named executive officer in 2017.

Name & Principal 2019 Positions1	Year	Salary ($)	Bonus ($)	Stock Awards ($)4	Option Awards ($)5	Non-Equity Incentive Plan Compensation ($)6	Change In Pension Value and Nonqualified Deferred Compensation Earnings ($)7	All Other Compensation ($)8	Total ($)
Larry J. Merlo President and Chief Executive Officer	2019	1,630,000	—	20,249,968	3,374,998	10,625,000	—	571,783	36,451,749
	2018	1,630,000	—	10,124,947	3,374,995	6,142,000	—	667,156	21,939,098
	2017	1,630,000	—	3,374,960	3,374,998	3,118,800	—	754,106	12,252,864
Eva C. Boratto Executive Vice President and Chief Financial Officer	2019	850,000	—	3,749,981	1,249,999	3,588,000	—	126,243	9,564,223
	2018	630,303		4,799,831	299,997	1,164,200		78,090	6,972,421
Jonathan C. Roberts Executive Vice President and Chief Operating Officer	2019	1,200,000	—	5,624,971	1,874,996	6,127,000	—	221,413	15,048,380
	2018	1,162,500	—	9,624,917	2,124,994	2,927,000	—	227,557	16,066,968
	2017	1,033,333	—	1,999,953	1,999,994	1,605,000	—	244,484	6,882,764

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Compensation of Named Executive Officers     Summary Compensation Table

Name & Principal 2019 Positions1	Year	Salary ($)	Bonus ($)		Stock Awards ($)4	Option Awards ($)5	Non-Equity Incentive Plan Compensation ($)6	Change In Pension Value and Nonqualified Deferred Compensation Earnings ($)7	All Other Compensation ($)8	Total ($)
Derica W. Rice Executive Vice President and President – CVS Caremark	2019	1,087,500	250,000	2	4,499,969	1,499,997	3,145,611	—	143,142	10,626,219
	2018	791,477	950,000		8,124,848	1,705,312	949,000		285,436	12,806,073
Thomas M. Moriarty Executive Vice President, Chief Policy and External Affairs Officer and General Counsel	2019	920,833	1,000,000	3	16,124,957	1,249,999	3,751,000	—	108,145	23,154,934
	2018	825,000	—		6,749,933	1,249,993	2,081,500	—	77,430	10,983,856
	2017	750,000	—		1,249,971	1,249,998	1,160,000	—	102,585	4,512,554

1	Principal position at December 31, 2019. On March 1, 2020, Mr. Rice terminated employment with the Company.
2	In accordance with his Offer Letter, Mr. Rice received the second installment of his cash sign-on bonus of $250,000.
3	Represents a one-time bonus that the MP&D Committee approved on February 15, 2019, to reward Mr. Moriarty for significant work in government affairs, corporate communications, and legal matters during a critical transition period following the closing of the Aetna acquisition, continued accomplishments in managing the defense of the PBM (drug pricing, rebates, network contracting, restrictive state laws), establishing CVS Health as a national thought leader, and supporting external Enterprise messaging.
4	Included in this column is the full grant date fair value of all RSU and PSU awards made to each NEO in the applicable year, including the August 2019 PSUs approved by the MP&D Committee and granted to Messrs. Merlo and Moriarty on August 30, 2019, in lieu of Mr. Merlo’s annual 2020 PSU award and Mr. Moriarty’s annual 2020, 2021 and 2022 PSU awards, respectively. 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 PSUs granted in 2019 are based upon the probable outcome of the performance conditions associated with these PSUs as of the grant date, and specifically, the values of the Annual PSUs and August 2019 PSUs are 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 be paid in shares of our common stock, net of applicable withholding taxes, subject to a two-year post-vesting holding period. Vesting of the Annual PSUs granted to the NEOs on June 5, 2019 will occur, if at all, on April 1, 2022, and full vesting generally is subject to continued employment of the applicable NEO on April 1, 2022. Vesting of the August 2019 PSUs granted to Messrs. Merlo and Moriarty on August 30, 2019 will occur, if at all, on May 31, 2021 and December 31, 2022, respectively, and full vesting generally is subject to continued employment of the applicable NEO on those dates.
	The grant date fair value of the PSUs granted to the NEOs in 2019, assuming the highest level of performance conditions associated with these PSUs occurs and each of the leverage ratio modifier and the rTSR modifier is +25%, is as follows:

Name	Award Type	Grant Date	Grant Date Fair Value Assuming Highest Level of Performance Conditions Achieved ($)
Larry J. Merlo	Annual PSUs	June 5, 2019	25,312,458
	August 2019 PSUs	August 30, 2019	25,312,463
Eva C. Boratto	Annual PSUs	June 5, 2019	9,374,953
Jonathan C. Roberts	Annual PSUs	June 5, 2019	14,062,430
Derica W. Rice	Annual PSUs	June 5, 2019	11,249,923
Thomas M. Moriarty	Annual PSUs	June 5, 2019	9,374,953
	August 2019 PSUs	August 30, 2019	30,937,440

5	Included in this column is the full grant date fair value of the options granted to the NEOs on April 1, 2019. These options have an exercise price of $54.19 (the closing price of our common stock on April 1, 2019) 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 are calculated using a modified Black-Scholes Model for pricing options. Refer to our 2019 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 in the Grants of Plan-Based Awards table.
6	The figures shown include amounts earned in 2019 as annual cash incentive awards (see page 46). Mr. Rice’s annual cash incentive award was paid pursuant to his Separation Agreement. For the 2017-2019 performance cycle, LTIP awards were settled in stock and are reported in the final year of the cycle. The 2017-2019 cycle is reported in the Non-Equity Incentive Plan column because these awards are denominated in cash and then paid in common stock that is subject to a two-year holding requirement. Beginning with the 2018-2020 performance cycle, LTIP awards were granted in PSUs and reported in the “Stock Awards” column in the year of grant.
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 value of Mr. Merlo’s pension benefit decreased by $1,436,904 in 2019 from the prior year’s valuation; however, under SEC rules the negative change in the pension value is disclosed as $0. The Company adopted a policy in 2010 stating that it will not offer SERP benefits to new participants. Mr. Merlo is the only active executive officer participating in the SERP. For additional information on the SERP, see “Pension Benefits” beginning on page 66.

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Compensation of Named Executive Officers     Summary Compensation Table

8 Set forth below is additional information regarding the amounts disclosed in the “All Other Compensation” column for 2019.

All Other Compensation – 2019

Name	Perquisites & Other Personal BenefitsA ($)	Company Contributions to Defined Contribution PlansB ($)	OtherC ($)
Larry J. Merlo	90,408	211,750	269,625
Eva C. Boratto	23,062	92,850	10,331
Jonathan C. Roberts	42,456	127,750	51,207
Derica W. Rice	61,118	66,250	15,774
Thomas M. Moriarty	15,320	71,042	21,783

A	The amounts above reflect the following: for Mr. Merlo, $15,000 for financial planning services, $6,357 for home security and $69,051 associated with personal use of Company aircraft; for Ms. Boratto, $15,000 for financial planning services and $8,062 associated with personal use of Company aircraft; for Mr. Roberts, $15,000 for financial planning services, $18,496 for home security, $210 associated with personal use of Company aircraft and $8,750 associated with the CVS Health Charity Classic; for Mr. Rice $15,000 for financial planning services, $1,973 associated with personal use of Company aircraft, $24,830 associated with relocation benefits under the Company’s broad-based relocation program, and $19,315 in tax assistance provided in connection with the relocation benefits; and for Mr. Moriarty, $15,000 for financial planning services and $320 for home security. The Company determines the amount associated with personal use of Company aircraft by calculating the incremental cost to the Company based on the cost of fuel, trip-related maintenance, deadhead flights, crew travel expenses, landing fees, trip-related hangar costs and smaller variable expenses.
B	The amounts in this column include Company matching contributions to the CVS Health Future Fund 401(k) Plan (the “401(k) Plan”) of $14,000 for each of Messrs. Merlo, Roberts, Rice and Moriarty and Ms. Boratto. These amounts also include Company matching contributions credited to notional accounts in the unfunded Deferred Compensation Plan equal to: $197,750 for Mr. Merlo; $78,850 for Ms. Boratto; $113,750 for Mr. Roberts; $52,250 for Mr. Rice; and $57,042 for Mr. Moriarty. The Company matching contributions also are reported in the “Cash” lines of the “Registrant Contributions in Last FY” column of the Nonqualified Deferred Compensation table on page 67.
C	This amounts in this column consist of cash dividend equivalents paid by the Company on certain unvested RSUs and distributions of cash dividend equivalent payments distributed from the Deferred Stock Plan (the “DSP”). The cash dividend equivalent payments from the DSP also are reported in the “Stock” lines of the “Aggregate Withdrawals/Distributions” column of the Nonqualified Deferred Compensation table.

62              2020 Proxy Statement

Compensation of Named Executive Officers     Grants of Plan-Based Awards

Grants of Plan-Based Awards

This table reflects awards granted during 2019 under the CVS Health Corporation 2017 Incentive Compensation Plan in the respective amounts listed. The MP&D Committee approved all of the 2019 awards.

Grants of Plan-Based Awards – 2019

	Award Type		Date of Committee Action		Est. Future Payouts Under Non-Equity Incentive Plan Award			Est. Future Payouts Under Equity Incentive Plan Awards			All Other Option Awards: Number of Securities Underlying Options (#)4	Exercise or Base Price of Option Awards ($ / Sh)4	Grant Date Fair Value of Stock and Option Awards ($)
Name				Grant Date	Threshold ($)1	Target ($)	Maximum ($)	Threshold (#)1	Target (#)	Maximum (#)
Larry J. Merlo	Stock Options		2/15/2019	4/1/2019							545,419	54.19	3,374,998
	Annual PSUs	2	2/15/2019	6/5/2019				93,902	234,755	586,888			10,124,983
	August 2019 PSUs	2, 3	8/28/2019	8/30/2019				75,800	189,500	473,750			10,124,985
	Annual Cash				1,630,000	3,260,000	6,520,000	—	—	—
Eva C. Boratto	Stock Options		2/15/2019	4/1/2019							202,007	54.19	1,249,999
	Annual PSUs	2	2/15/2019	6/5/2019				34,778	86,946	217,365			3,749,981
	Annual Cash				637,500	1,275,000	2,550,000	—	—	—
Jonathan C. Roberts	Stock Options		2/15/2019	4/1/2019							303,010	54.19	1,874,996
	Annual PSUs	2	2/15/2019	6/5/2019				52,167 130,419		326,048			5,624,971
	Annual Cash				1,050,000	2,100,000	4,200,000	—	—	—
Derica W. Rice	Stock Options		2/15/2019	4/1/2019							242,408	54.19	1,499,997
	Annual PSUs	2	2/15/2019	6/5/2019				41,734 104,335		260,838			4,499,969
	Annual Cash				815,625	1,631,250	3,262,500	—	—	—
Thomas M. Moriarty	Stock Options		2/15/2019	4/1/2019							202,007	54.19	1,249,999
	Annual PSUs	2	2/15/2019	6/5/2019				34,778	86,946	217,365			3,749,981
	August 2019 PSUs	2, 3	8/28/2019	8/30/2019				92,644	231,611	579,028			12,374,976
	Annual Cash				690,625	1,381,250	2,762,500	—	—	—

1	Represents the threshold achievement in order to receive a payout for the applicable award. Performance below the threshold results in no payout.
2	For the 2019-2021 cycle, awards were denominated 100% in PSUs. These awards are included in the SCT in the “Stock Awards” column. The award earned, based on the Company’s 2021 Adjusted EPS will be modified by up to +/- 25% based on each of (a) CVS Health’s leverage ratio and (b) CVS Health’s performance as measured by rTSR. All “Est. Future Payouts Under Equity Incentive Plan Awards” assume a leverage ratio modifier of +25% and a rTSR modifier of +25%. Each vested PSU represents one share of CVS Health common stock and will be paid in shares of CVS Health common stock, net of taxes, as a result of a determination by the MP&D Committee. The PSUs do not earn dividend equivalents and have no voting rights.
3	Represents August 2019 PSUs granted on August 30, 2019 under the 2017 ICP. Effective August 28, 2019, the MP&D Committee decided to grant this PSU award to Mr. Merlo in lieu of any annual PSU award in 2020, subject to the terms set forth in the award agreement, with an effective grant date of August 30, 2019. Effective August 28, 2019, the MP&D Committee decided to grant this PSU award to Mr. Moriarty in lieu of any annual PSU award in 2020, 2021 and 2022, subject to the terms set forth in the award agreement, with an effective grant date of August 30, 2019. The PSUs do not earn dividend equivalents and have no voting rights. The vesting date for Mr. Merlo’s August 2019 PSUs is May 31, 2021; and the vesting date for Mr. Moriarty’s August 2019 PSUs is December 31, 2022.
4	The stock option awards shown above 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 Company’s policy is to establish the exercise price for stock options as the closing price of CVS Health’s common stock on the grant date.

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Compensation of Named Executive Officers     Outstanding Equity Awards at Fiscal Year-End

Outstanding Equity Awards at Fiscal Year-End

This table reflects stock option, PSU and RSU awards granted to our Named Executive Officers under the applicable plan that were outstanding as of December 31, 2019. Unearned LTIP PSUs and EBITDA PSUs granted in 2018, as well as the Annual PSU and August 2019 PSU awards granted in 2019, are shown at target performance, with no adjustment for rTSR modifier performance for the 2018 PSUs and no adjustment for leverage ratio modifier performance or rTSR modifier performance for the 2019 PSUs.

Outstanding Equity Awards at 2019 Year-End

	Stock Option Awards1						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
Larry J. Merlo	4/1/2013	314,713	—	3	54.53	4/1/2020
	4/1/2014	335,697	—	3	74.29	4/1/2021
	4/1/2015	273,929	—	3	102.26	4/1/2022	19,558	5	1,452,964
	4/1/2016	215,090	71,697	3	104.82	4/1/2023	19,080	5	1,417,453
	4/3/2017	169,052	169,053	3	78.05	4/3/2024	43,241	5	3,212,374
	4/1/2018	98,522	295,569	3	62.21	4/1/2025				54,251	8	4,030,307
	4/1/2018									120,128	9	8,924,309
	4/1/2019	—	545,419	4	54.19	4/1/2029
	6/5/2019									234,755	11	17,439,949
	8/30/2019									189,500	12	14,077,955
Eva C. Boratto	4/1/2014	18,882	—	3	74.29	4/1/2021
	4/1/2015	27,392	—	3	102.26	4/1/2022	1,956	5	145,311
	4/1/2016	16,131	5,378	3	104.82	4/1/2023	1,431	5	106,309
	2/28/2017						462	6	34,322
	4/3/2017	17,530	17,532	3	78.05	4/3/2024	4,484	5	333,116
	4/1/2018	8,757	26,273	3	62.21	4/1/2025				4,822	8	358,226
	4/1/2018									8,898	9	661,032
	8/31/2018									16,823	10	1,249,781
	11/28/2018									18,153	9	1,348,586
	11/28/2018									15,127	10	1,123,785
	4/1/2019	—	202,007	4	54.19	4/1/2029
	6/5/2019									86,946	11	6,459,218
Jonathan C. Roberts	9/4/2012	108,870	—	3	45.93	9/4/2022
	4/1/2013	68,844	—	3	54.53	4/1/2020
	4/1/2014	73,433	—	3	74.29	4/1/2021