Prem Shah
CVS HEALTHAbout Prem Shah
Prem S. Shah is Executive Vice President and Group President at CVS Health, appointed effective November 6, 2024; he is age 44 and joined CVS in 2013, rising through specialty pharmacy and retail leadership roles to oversee operational performance across Caremark, CVS Pharmacy, and Health Care Delivery (Oak Street Health and Signify Health) . In his current role, Shah’s 2024 compensation was reset to a $1.1 million base salary, 175% target bonus, and $9 million target long-term incentive opportunity, plus a one-time $6 million premium-priced option award vesting over three years—explicitly aligning incentives with stock price improvement . CVS ties executive pay primarily to three-year Adjusted EPS (70%), a strategic scorecard (30%), and a relative TSR modifier of up to ±25% (maximum payout 200%), with a one-year post-vest holding period—providing performance-linked exposure rather than guaranteed outcomes . CVS prohibits pledging/hedging and enforces pre-clearance and trading windows; all Section 16 officers, including Shah, are subject to its insider trading policy and clawback frameworks .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CVS Health | EVP & Group President | Nov 2024–present | Responsible for operational performance and integrated value creation across CVS Caremark, CVS Pharmacy, and Health Care Delivery . |
| CVS Health | President, Pharmacy & Consumer Wellness | Sep 2023–Nov 2024 | Led omnichannel pharmacy strategy and consumer wellness; previously Co-President from Jan 2022 . |
| CVS Health | EVP & Chief Pharmacy Officer | Nov 2021–Sep 2023 | Oversight of pharmacy enterprise; transitioned concurrently with P&CW leadership . |
| CVS Health | EVP, CVS Specialty | Jun 2018–Nov 2022 | Led specialty pharmacy; preceded by VP, CVS Specialty (Jan 2013–Jun 2018) . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ICORE Healthcare (Magellan Health Services company) | Senior Vice President | Not disclosed | Not disclosed in filings . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 916,667 | 950,000 | 972,917 (paid) |
| Annual Base Salary Setting | — | — | $1,100,000 FY24; +15.8% vs 2023 |
| Target Bonus (%) | — | — | 175% of base ($1,925,000 target) |
| Actual Bonus Paid ($) | 1,949,000 | 1,421,000 | 0 (declined; requested funds go to colleague relief) |
Performance Compensation
Annual Cash Incentive (MIP) – Structure
| Element | 2024 Design | Note |
|---|---|---|
| Target bonus opportunity | 175% of base ($1,925,000) | Approved Nov 12, 2024 |
| Corporate Performance Factor | Rigorous annual goals; formula includes corporate factor, individual modifier (0–120%), workforce modifier (downward up to 10%); cap 200% | Company-set targets reflect current business conditions |
| 2024 Payout | $0 (declined by Shah) | Voluntary waiver of bonus |
Long-Term Incentives – 2024 Grants
| Award Type | Grant Date | Shares/Units | Fair Value ($) | Vesting | Key Terms |
|---|---|---|---|---|---|
| PSUs (2024–2026 cycle) | Apr 1, 2024 | Target 46,978; Threshold 13,859; Max 93,956 | 3,599,924 | End of 3-year performance period | Metrics: Adjusted EPS 70% (cumulative), Strategic Scorecard 30%; rTSR modifier ±25%; PSU max 200% even with TSR modifier . |
| RSUs (annual) | Apr 1, 2024 | 15,082 | 1,199,924 | 4 equal annual tranches from first anniversary | Time-based; one-year post-vest holding period on net shares in program design . |
| Stock Options (annual) | Apr 1, 2024 | 62,695 | 1,199,982 | 4 equal annual tranches from first anniversary | Exercise price $79.56; 10-year term to 4/1/2034 . |
| Premium-Priced Stock Options (promotion) | Nov 30, 2024 | 746,268 | 5,999,995 | 3 equal annual tranches | Exercise price = 120% of 11/29/2024 close; $71.82; 7-year term to 11/30/2031 . |
PSU Program – Performance Metrics
| Metric | Weighting | Target | Payout Range | Vesting |
|---|---|---|---|---|
| Adjusted EPS (3-year cumulative) | 70% | Company-set; not disclosed | 0–200% with rTSR modifier up to ±25% (cap remains 200%) | At end of 3-year performance period . |
| Strategic Scorecard (3-year objectives) | 30% | Measurable strategic initiatives aligned to Investor Day commitments | 0–200% with rTSR modifier | At end of 3-year performance period . |
| rTSR Modifier | — | Relative TSR vs peers | ±25% to earned PSUs (subject to 200% cap) | Applied at settlement . |
Equity Ownership & Alignment
| As of March 17, 2025 | Common Shares | Rights to Acquire within 60 Days | Deferred Officer Units | Total Beneficial Ownership | Percent of Shares Outstanding | Pledging Status |
|---|---|---|---|---|---|---|
| Prem S. Shah | 48,282 | 184,762 (options/RSUs) | 3,510 | 241,923 | <1% | None pledged; policy prohibits pledging . |
- Executive stock ownership guideline: 4x salary; Shah in compliance .
- Counting rules: unvested RSUs count; unexercised options and unearned PSUs do not count; compliance reviewed annually .
Outstanding Equity Awards at FY 2024 Year-End (selected)
| Grant Date | Instrument | Unexercised Exercisable (#) | Unexercised Unexercisable (#) | Exercise Price ($) | Expiration | RSUs/PSUs (#) | Market Value ($) |
|---|---|---|---|---|---|---|---|
| 4/1/2018 | Stock Options | 846 | — | 62.21 | 4/1/2025 | — | — |
| 8/31/2018 | Stock Options | — | 26,580 | 75.24 | 8/31/2028 | — | — |
| 4/1/2019 | Stock Options | 9,469 | — | 54.19 | 4/1/2029 | — | — |
| 4/1/2020 | Stock Options | 28,596 | — | 58.34 | 4/1/2030 | — | — |
| 4/1/2021 | Stock Options | 20,516 | 8,207 | 74.30 | 4/1/2031 | RSUs 1,599 | 71,779 |
| 4/1/2022 | Stock Options | 20,790 | 20,790 | 101.09 | 4/1/2032 | Stock Awards 11,795 | 529,478 |
| 8/31/2022 | Stock Awards | — | — | — | — | RSUs 20,376 | 914,679 |
| 4/1/2023 | Stock Options | 22,268 | 66,805 | 74.31 | 4/1/2033 | PSUs 70,921 | 3,183,644 |
| 4/1/2024 | Stock Options | — | 62,695 | 79.56 | 4/1/2034 | RSUs 15,082; PSUs 46,978 | 677,031; 2,108,842 |
| 11/30/2024 | Premium Options | — | 746,268 | 71.82 | 11/30/2031 | — | — |
Employment Terms
| Provision | Disclosure |
|---|---|
| Change-in-Control (CIC) | Double-trigger severance; ICP equity also requires double trigger for vesting . |
| Cash Severance Policy | No cash severance >2.99x (salary + target bonus) without shareholder approval; executive plan provides 1.5x base salary; CIC agreements provide 1.5x base + target bonus . |
| Clawbacks | Incentive Compensation Recoupment (fraud/material misconduct) up to full award with public disclosure; Restrictive Covenant recoupment of equity profits for breaches; Dodd-Frank compliant clawback on restatements . |
| Insider Trading | Pre-clearance, trading windows; anti-pledging, anti-hedging, no margin, no short sales, options/derivatives prohibited; 10b5-1 plans permitted under strict guidelines . |
| Anti-Gross-Up | Broad policy against tax gross-ups (exception only for broad-based relocation) . |
Estimated Payments/(Forfeitures) Under Termination Scenarios (Prem S. Shah)
| Scenario | Base Salary ($) | Target Bonus ($) | RSUs ($) | PSUs ($) | Health ($) | Total ($) |
|---|---|---|---|---|---|---|
| Death | 0 | 1,925,000 | 1,663,489 | 6,616,247 | 0 | 10,204,736 |
| Termination for Cause | 0 | 0 | (1,663,489) forfeiture | (6,616,247) forfeiture | 0 | (8,279,736) |
| Qualified Retirement or Voluntary Termination | 0 | 0 | 0 | 0 | 0 | 0 |
| Termination Without Cause or Constructive Termination Without Cause Prior to CIC | 1,650,000 | 0 | 1,324,928 | 4,149,093 | 33,742 | 7,157,763 |
| Termination Without Cause or Constructive Termination Without Cause After CIC | 1,650,000 | 4,812,500 | 1,663,489 | 6,616,247 | 33,742 | 14,775,978 |
- Not eligible for Qualified Retirement treatment as of December 31, 2024 (age-based) .
Compensation Structure
| Component | Year-over-Year Dynamics |
|---|---|
| Cash vs Equity Mix | 2024 total included stock awards of $4,799,848 and options of $7,199,977 due to a one-time premium option award; strong tilt toward equity with performance PSUs at 60% of annual LTI . |
| Equity Instruments | Shift emphasizes PSUs and RSUs plus annual options; promotional premium-priced options designed to only have value above 120% of grant-date price—heightening alignment and performance risk . |
| At-Risk Pay | PSU program maintains three-year cumulative EPS and strategic scorecard with rTSR modifier; shares settle net of taxes and include a one-year holding requirement on net shares in program design . |
| Discretionary Elements | Shah declined his 2024 MIP payout; no evidence of option repricing or tax gross-ups in executive program . |
Equity Awards – Detail Tables
2024 Plan-Based Awards – Prem S. Shah
| Award | Committee Action Date | Grant Date | Est. Cash Threshold ($) | Target ($) | Max ($) | Equity Threshold (#) | Target (#) | Max (#) | Exercise Price ($/sh) | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|---|---|---|---|
| Annual Cash (MIP) | — | — | 750,478 | 1,500,955 | 3,001,910 | — | — | — | — | — |
| PSUs | Feb 12, 2024 | Apr 1, 2024 | — | — | — | 13,859 | 46,978 | 93,956 | — | 3,599,924 |
| RSUs | Feb 12, 2024 | Apr 1, 2024 | — | — | — | — | — | — | — | 1,199,924 |
| Stock Options (annual) | Feb 12, 2024 | Apr 1, 2024 | — | — | — | — | — | — | 79.56 | 1,199,982 |
| Premium Stock Options (promotion) | Nov 12, 2024 | Nov 30, 2024 | — | — | — | — | — | — | 71.82 | 5,999,995 |
Multi-Year Summary Compensation – Prem S. Shah
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 916,667 | 950,000 | 972,917 |
| Stock Awards | 4,999,820 | 4,499,937 | 4,799,848 |
| Option Awards | 999,999 | 1,499,989 | 7,199,977 |
| Non-Equity Incentive | 1,949,000 | 1,421,000 | 0 |
| All Other Compensation | 149,732 | 211,440 | 293,113 |
| Total | 9,015,218 | 8,582,366 | 13,265,855 |
Governance, Policies, and Ownership Guidelines
- Stock ownership guidelines require 4x salary for NEOs; Shah is in compliance .
- Anti-pledging/anti-hedging; no margin or short sales; strict pre-clearance; 10b5-1 plans permitted with cooling-off, min/max term limits, and pre-approval .
- Clawbacks: recoupment for fraud/material financial misconduct; Dodd-Frank restatement clawback; restrictive covenant recoupment of equity profits within two years .
- Severance: cash severance limited to 1.5x salary; CIC agreements provide 1.5x salary + target bonus with double trigger .
Investment Implications
- High alignment and retention: Shah’s $6 million premium-priced options vest over three years and only have value above 120% of grant-date price, increasing sensitivity to sustained stock price improvement and discouraging near-term selling; annual options and RSUs vest ratably with a one-year post-vest hold on net shares in program design .
- Limited insider selling/pledging risk: Insider policy prohibits pledging/hedging; ownership guidelines at 4x salary and compliance reduce forced selling; beneficial ownership includes substantial in-the-money rights to acquire but none pledged .
- Pay-for-performance structure: PSU weighting (70% Adjusted EPS/30% strategy) with rTSR modifier enforces multi-year operating and strategic execution; Shah’s voluntary bonus waiver for 2024 reduces short-term cash incentives and signals stakeholder alignment during transition .
- CIC economics are competitive but controlled: Double-trigger requirement and 1.5x salary + target bonus under CIC (cap policy at 2.99x) limit windfalls while ensuring continuity during potential strategic transactions; termination scenario totals imply meaningful equity treatment only under CIC or death .