Sreekanth K. Chaguturu
CVS HEALTHAbout Sreekanth K. Chaguturu
Executive Vice President and President, Health Care Delivery at CVS Health since November 2024, previously Executive Vice President and Chief Medical Officer (May 2022–May 2025) and Chief Medical Officer of CVS Caremark (Sep 2019–May 2022). He is age 45 as of February 7, 2024, and remains a practicing internal medicine physician at Massachusetts General Hospital and an instructor at Harvard Medical School; he holds a BS in biology and an MD from Brown University, with internal medicine/primary care training at MGH . During his transition to lead Health Care Delivery, CVS highlighted positive operating momentum across Oak Street, Signify, and MinuteClinic; at the enterprise level, 2024 revenue was $372.8B (92nd percentile vs peer group), though 2022 PSUs paid out at 0% due to below-threshold Adjusted EPS, underscoring the rigor of pay-for-performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CVS Health | EVP & President, Health Care Delivery | Nov 2024 – present | Oversees Health Care Delivery (Oak Street Health, Signify Health, MinuteClinic) with noted acceleration in Aetna member engagement and at-risk membership growth . |
| CVS Health | EVP & Chief Medical Officer | May 2022 – May 2025 | Led medical affairs, clinical quality, access, outcomes, and cost reduction across the enterprise . |
| CVS Caremark (CVS Health) | Chief Medical Officer | Sep 2019 – May 2022 | Provided clinical oversight of the PBM business . |
| Mass General Brigham (Partners HealthCare) | Chief Population Health Officer | Aug 2017 – Aug 2019 | Led the ACO and clinical care delivery/innovation programs . |
| Mass General Brigham (Partners HealthCare) | VP, Population Health Management | Jun 2014 – Aug 2017 | Built population health management capabilities . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Massachusetts General Hospital | Attending Physician (Internal Medicine) | Jul 2007 – present | Ongoing clinical practice informs payer-provider and care delivery strategies . |
| Harvard Medical School | Instructor in Internal Medicine | Jul 2007 – present | Academic engagement supports leadership credibility in clinical programs . |
Fixed Compensation
- Program design (EVP-level): Fixed base salary reviewed annually; target bonus set as % of salary under the Management Incentive Plan (MIP). Proxies provide detailed NEO values but Dr. Chaguturu was not a named executive officer in the latest proxy; therefore individual base salary/target bonus % not disclosed for him .
- Annual bonus calculation framework: Target bonus % × Company performance (80% MIP Adjusted Operating Income, 20% NPS) × Individual performance modifier (0–120%) × Workforce/culture modifier (downward only, up to -10% for VP+); 2024 company performance factor was 32.4%, leading to sharply reduced bonuses for NEOs generally .
Performance Compensation
Annual Incentive (MIP) – Structure and 2024 Outcomes
| Component | Weighting/Mechanics | 2024 Company Outcome |
|---|---|---|
| MIP Adjusted Operating Income | 80% of corporate factor | Included in 32.4% corporate performance factor . |
| Net Promoter Score (NPS) | 20% of corporate factor | Included in 32.4% corporate performance factor . |
| Individual Modifier | 0–120% | Applies at individual level; not disclosed for Dr. Chaguturu . |
| Workforce/Culture Modifier | Downward-only, up to -10% for VP+ | Applies as a cap/reduction; programmatic design . |
Long-Term Incentives (LTI) – 2024+ Design
| Award Type | Weight | Key Metrics and Terms |
|---|---|---|
| PSUs | 60% | 2024–2026 awards: 70% three-year cumulative Adjusted EPS (threshold $21.65; target $26.79–$27.33; max $32.47); 30% Strategic Scorecard: (1) % Medicare members in 4+ Star plans; (2) % Commercial members on CVS CostVantage by YE26; (3) % unique customers with 2+ CVS offerings by YE26; rTSR modifier ±25% with no upward adjustment if absolute TSR negative; max payout 200%; one-year post-vesting holding . |
| RSUs | 20% | Four-year ratable vest; dividend equivalents accrue and pay only upon vesting . |
| Stock Options | 20% | Four-year ratable vest; 10-year term; value only if stock appreciates . |
Historical PSU rigor signals: the 2022 PSU cycle paid 0% (2024 PSU Adjusted EPS of $5.48 below the $8.85 threshold), demonstrating downside risk in realized pay when performance underperforms targets .
Equity Ownership & Alignment
Initial Beneficial Ownership on Joining CVS ELT (Form 3)
| Security | Amount | Notes |
|---|---|---|
| Common Stock (direct) | 2,342.7803 shares | Directly held . |
| RSUs (various tranches) | 996; 354; 2,154; 1,258; 2,085; 2,776; 6,182 | Multiple legacy RSU tranches with restrictions lapsing beginning 2/26/2023 or 4/1/2023 and in subsequent installments per award footnotes . |
Stock Options Outstanding (as of Form 3)
| Grant (Option) | Shares | Exercise Price | Vesting Schedule | Expiration |
|---|---|---|---|---|
| 11/29/2019 grant | 5,952 | $75.27 | 4 equal annual installments starting 11/29/2020 | 11/29/2029 . |
| 04/01/2020 grant | 9,579 | $58.34 | 4 equal annual installments starting 04/01/2021 | 04/01/2030 . |
| 04/01/2021 grant | 9,502 | $74.30 | 4 equal annual installments starting 04/01/2022 | 04/01/2031 . |
| 04/01/2022 grant | 12,993 | $101.09 | 4 equal annual installments starting 04/01/2023 | 04/01/2032 . |
Policies enhancing alignment and limiting risk:
- Stock ownership guidelines: EVPs/NEOs must hold stock equal to 4x salary (CEO 7x); five-year compliance window. 2025 proxy specifies Joyner 7x and all other NEOs 4x; company discloses NEOs are in compliance or on track .
- Anti-hedging/pledging: Insiders are prohibited from pledging, margin purchases, short sales, options/derivatives, and other hedges; 10b5-1 plans allowed under strict guidelines and cooling-off periods .
Employment Terms
| Topic | Key Terms (EVP/NEO program) |
|---|---|
| Severance (pre-CIC) | Under CVS Severance Plan for Non-Store Employees, up to 18 months of base salary if terminated without cause or constructive termination; subject to release and restrictive covenants (non-compete, non-solicit); equity: unvested RSUs continue vesting during severance; PSUs vest pro rata; options generally continue per qualified retirement/severance terms . |
| Change-in-Control (CIC) | Double-trigger: upon CIC plus covered termination, cash severance equals 1.5× (base salary + target annual bonus); immediate vesting of stock options and RSUs; PSU/LTIP treatment per program; no excise tax gross-ups—agreements apply a 280G “cutback” if beneficial to after-tax outcome . |
| Clawback | PSU award agreements include clawback/forfeiture for detrimental conduct; post-vesting holding applies to PSUs (two years historically; reduced to one year for 2024 PSUs) . |
Performance & Track Record
- Leadership scope expanded in Nov 2024 to President, Health Care Delivery; company cited stronger operating indicators: Aetna members served by Signify nearly doubled YoY, Oak Street at-risk membership up 32% YoY, and Aetna members enrolled at Oak Street approximately quadrupled since close of the acquisition, reflecting integration progress across assets he now oversees .
- Enterprise performance-pay linkage remains tight: 2024 corporate MIP factor was 32.4% (depressing cash bonuses), and the 2022 PSU cycle paid out at 0% due to below-threshold Adjusted EPS—both signal high bar for payout and sensitivity to execution .
Compensation Committee/Peer Group Context
- The MP&D Committee updated 2024 LTI design to 60% PSUs / 20% RSUs / 20% options to better align with market practice and retention while maintaining performance emphasis; PSU metrics now include three-year cumulative Adjusted EPS (70%) and a strategic scorecard (30%) with rTSR modifier; max payout capped at 200% and no upward rTSR if absolute TSR negative .
- 2024 compensation peer group (unchanged) spans 19 diversified large-cap health/retail/tech companies (e.g., UNH, ELV, WMT, TGT, JNJ, PFE); CVS 2024 revenue at $372.8B ranks at the 92nd percentile vs peer group .
Equity Ownership & Alignment Summary Table
| Alignment Lever | CVS Policy / Dr. Chaguturu Status |
|---|---|
| Ownership guideline | 4x salary for EVPs; five-year compliance window (CEO 7x). Company states NEOs are in compliance/on track . |
| Hedging/pledging | Prohibited (no pledging/margin/shorts/derivatives/hedges); pre-clearance required; 10b5-1 plans allowed with strict limits and cooling-off . |
| Initial holdings on entry | Direct common shares 2,342.7803; multiple RSU tranches and four legacy option grants with 4-year ratable vesting schedules as disclosed in Form 3 filings . |
Employment & Contracts Summary Table
| Provision | Term |
|---|---|
| Severance (no CIC) | Up to 18 months base salary; RSUs continue through severance; PSUs pro rata; options continue per plan; subject to non-compete/non-solicit and release . |
| CIC protection | Double-trigger; 1.5× base + target bonus; immediate vest of options/RSUs; 280G cutback, no gross-ups . |
| Clawback/holding | PSU clawback/forfeiture; post-vesting holding (one year for 2024 PSUs) . |
Investment Implications
- Alignment: Strong ownership requirements (4x salary), anti-hedging/pledging, post-vesting holding, and clawbacks reduce misalignment risk and discourage short-termism; 10b5-1 safeguards reduce optics risk around discretionary selling .
- Realized pay pressure/retention risk: A 32.4% 2024 MIP corporate factor and 0% payout on 2022 PSUs indicate below-target performance translating to lower realized compensation; the 2024 introduction of RSUs in the mix partially mitigates retention risk while keeping 60% of LTI performance-based .
- Overhang/trading cadence: Legacy options and RSUs vest ratably (notably around April 1 and related anniversaries), which may create periodic selling windows under 10b5-1 plans; hedging/pledging prohibitions and pre-clearance reduce forced-selling/pledging risk .
- Execution focus: As President, Health Care Delivery, Dr. Chaguturu’s incentives are directly tied to enterprise EPS and strategic scorecard outcomes (Medicare Stars, CostVantage adoption, multi-product penetration), aligning his remit with value creation levers investors track in the integrated care delivery thesis .