Heidi Capozzi
CVS HEALTHAbout Heidi Capozzi
Executive Vice President and Chief People Officer since September 2024; previously EVP & Chief People Officer at McDonald’s and SVP & Chief Human Resources Officer at The Boeing Company, with earlier HR roles in defense and automotive industries . CVS’s 2024 results contextualizing incentive alignment: revenue grew 4.2% YoY; Adjusted EPS was $5.42; corporate MIP funding came in at 32.4%; and the 2022–2024 PSU cycle paid 0% as Adjusted EPS was below threshold . 2024 pay design for senior executives emphasized performance, with MIP weighting 80% MIP Adjusted Operating Income and 20% NPS, and PSUs based 70% on 3‑year cumulative Adjusted EPS plus a 30% strategic scorecard modified by rTSR; Capozzi becomes eligible for these programs beginning with 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| McDonald’s Corporation | EVP & Chief People Officer | — | Led global HR, talent management, learning & development, total rewards, and employee relations operations . |
| The Boeing Company | SVP & Chief Human Resources Officer | — | Senior HR leadership; prior senior HR roles across Boeing . |
| Various (defense and automotive industries) | HR roles | — | Early-career HR roles across enterprises in defense and automotive industries . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | None disclosed in CVS proxy materials . |
Fixed Compensation
| Item | 2024 Terms | Notes |
|---|---|---|
| Base salary | $850,000 (annual rate); $265,625 paid in 2024 . | Salary established in offer letter; joined September 2024 . |
| Target annual bonus (MIP) | 150% of base salary (effective for 2025 plan year; not eligible for 2024) . | 2024 MIP ineligible per offer letter . |
| Target annual equity (ongoing program) | $3.6 million (target) beginning with 2025 awards . | Eligible for standard ELT mix from 2025 (PSUs/RSUs/options) . |
| Make‑whole cash | $4.5 million, paid in three $1.5 million installments: 2024 (after 30 days), Jan 2025, Jan 2026; subject to continued employment and 12‑month repayment if voluntary quit or termination for Cause within 12 months of any installment . | Repayment and forfeiture terms per offer letter . |
| Relocation | Standard relocation benefits with tax assistance . | Anti‑gross‑up policy allows relocation tax assistance . |
Performance Compensation
Annual Cash Incentive (MIP) — Program Design and 2024 Results
| Metric | Weight | Target | Actual/Result | Funding | Payout to Capozzi |
|---|---|---|---|---|---|
| MIP Adjusted Operating Income | 80% | $17,634 million | Below threshold | 0.0% | Not eligible for 2024 MIP . |
| Net Promoter Score (NPS) | 20% | Not disclosed (set above 2023 baseline) | 162% of target | 32.4% (weighted) | Not eligible for 2024 MIP . |
| Total Corporate Funding | — | — | — | 32.4% | Not eligible for 2024 MIP . |
Notes:
- 2024 MIP included a downward‑only Workforce Modifier (up to -10%) for VPs and above; Individual Performance Modifier range 0–120% .
- Capozzi participates starting with the 2025 plan year (paid 2026) at 150% target of eligible earnings .
Long‑Term Incentive (LTI) Design (ELT standard; applies for 2024 grants; Capozzi eligible beginning 2025)
| Component | Weight | Performance Measures | Key Terms |
|---|---|---|---|
| PSUs | 60% | 3‑year cumulative Adjusted EPS (70%): Min $21.65, Target $26.79–$27.33, Max $32.47; Strategic Scorecard (30%): three strategic metrics; rTSR modifier ±25% (no upward if absolute TSR negative) . | 3‑year performance; one‑year post‑vesting holding period; max payout 200% before rTSR cap logic . |
| RSUs | 20% | Time‑based | Vest 25% per year over 4 years; dividend equivalents only upon vest . |
| Stock Options | 20% | Stock price appreciation | 4‑year ratable vest; 10‑year term; fair‑market‑value strike . |
2024 PSU performance outcome for the prior 2022–2024 cycle was 0% (Adjusted EPS $5.48 vs threshold $8.85) .
2024 Grants to Capozzi (Make‑Whole Equity)
| Award Type | Grant Date | Shares/Units | Grant Date Fair Value | Vesting |
|---|---|---|---|---|
| RSUs (Make‑Whole) | 11/30/2024 | 83,542 | $4,999,989 | 25% on each of the first, second, third, and fourth anniversaries of grant . |
No options or PSUs were granted to Capozzi in 2024 .
Equity Ownership & Alignment
- Beneficial ownership: 0 shares as of March 17, 2025; less than 1% ownership; no pledges disclosed for Capozzi .
- Outstanding/unvested equity at 12/31/2024: 83,542 RSUs ($3,750,200 market value) .
- Stock ownership guidelines: 4x salary for NEOs; Capozzi “Yes” in compliance or on track within five years .
- Anti‑pledging/anti‑hedging: Insiders and employees prohibited from pledging/margining, short sales, or hedging transactions; trading is pre‑cleared and subject to blackout windows; 10b5‑1 plans permitted under strict guidelines .
Employment Terms
- Start date/role: Appointed EVP & Chief People Officer on September 9, 2024 .
- Ongoing pay targets: Base salary $850,000; MIP target 150% of base; annual equity target $3.6 million (from 2025) .
- Make‑whole cash: $4.5 million across 2024, Jan 2025, Jan 2026; continued‑employment condition; 12‑month repayment upon voluntary resignation or termination for Cause within 12 months of any installment .
- CIC/Restrictive covenants: Entered customary Change‑in‑Control (CIC) Agreement; restrictive covenant agreement includes non‑compete and non‑solicitation for 18 months following employment .
- Severance/CIC economics (policy level): Executive severance plan provides 1.5x base salary; CIC Agreements provide 1.5x base salary plus target bonus, with double‑trigger equity vesting at target; benefits subject to 280G cutback for best after‑tax result .
- Clawbacks/recoupment: Dodd‑Frank Clawback Policy for erroneously awarded incentive pay; broader Recoupment Policy allows recovery for fraud/material misconduct and for restrictive covenant breaches (2‑year look‑back on equity profits) .
- Anti‑gross‑up: Broad anti‑gross‑up policy; relocation benefits may include tax assistance .
- No option/SAR repricing without stockholder approval .
Termination/CIC Scenario Values disclosed for Capozzi (as of 12/31/2024)
| Scenario | Cash Severance: Base | Cash Severance: Bonus | RSUs | PSUs | Health | Total |
|---|---|---|---|---|---|---|
| Death | $0 | $0 | $3,750,200 | — | $0 | $3,750,200 |
| Termination for Cause | $0 | $0 | $(3,750,200) forfeiture | — | $0 | $(3,750,200) |
| Qualified Retirement or Voluntary | $0 | $0 | $0 | — | $0 | $0 |
| Termination w/o Cause or Constructive Termination (pre‑CIC) | $1,275,000 | $0 | $937,528 | — | $7,122 | $2,219,650 |
| Termination w/o Cause or Constructive Termination (post‑CIC) | $1,275,000 | $0 | $3,750,200 | — | $7,122 | $5,032,322 |
Note: Under CIC Agreements, continuing NEOs receive 1.5x base salary and 1.5x target bonus, and all unvested equity vests at target with double trigger; table above reflects Capozzi’s disclosure at 12/31/2024, with no PSUs outstanding for her at that date .
Compensation Structure Analysis
- 2024 design changes increased RSUs to 20% and added a 30% Strategic Scorecard to PSUs; holding period on PSUs reduced to one year, still performance‑heavy overall (60% PSUs) .
- Pay outcomes aligned with performance pressure: 2024 corporate MIP funding 32.4%; 2022–2024 PSU cycle paid 0% .
- Executive severance policy caps cash severance at 2.99x base plus target bonus without stockholder approval; standard severance remains 1.5x base (CIC: 1.5x base + target bonus) .
Equity Ownership & Policies Snapshot (Governance Signals)
- Ownership guideline: 4x salary for NEOs; Capozzi listed as “Yes” in compliance/on track within five years .
- Anti‑pledge/hedge: Strong prohibition on pledging/margining and hedging; 10b5‑1 plans permitted with cooling‑off and strict pre‑clearance .
- “No repricing” and robust clawbacks/recoupment reduce governance risk .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay support: Approximately 85% approval in 2024 (up from 80% in 2023); program refinements reflected stockholder engagement .
Performance & Track Record (Context)
- Company‑level 2024 metrics influencing incentive design: revenue growth 4.2% YoY; corporate MIP funding 32.4%; Adjusted EPS $5.42; CAP vs TSR disclosure shows 2024 value of $100 investment at $70.41 (TSR), indicating negative TSR for the year .
- Capozzi’s remit: leads HR, labor relations, compensation/benefits, and CSR—core levers for talent strategy and execution across an enterprise facing industry‑wide headwinds in 2024 .
Investment Implications
- Alignment and retention: Significant unvested RSUs (four‑year ratable vest) and a multi‑year make‑whole cash schedule with 12‑month repayment provisions create strong retention hooks through 2026; anti‑pledging and blackout/10b5‑1 controls mitigate forced‑sale risk .
- Near‑term selling pressure: First RSU tranche vests on 11/30/2025 and annually through 2028; monitor Form 4s and any 10b5‑1 plan adoptions around these dates for potential supply overhang signals .
- Pay‑for‑performance trajectory: From 2025, Capozzi’s mix includes PSUs linked to cumulative Adjusted EPS and strategic scorecard with rTSR modifier, increasing performance linkage versus 2024 new‑hire make‑whole awards .
- Change‑in‑control exposure: Double‑trigger equity acceleration at target and 1.5x base plus target bonus cash can increase transaction‑related dilution/cash outflows but aligns with competitive norms and includes 280G cutback .