CVS Health : 2024 Annual Report

2024

Notice of Annual Meeting of Stockholders and Proxy Statement

May 16, 2024 | Virtual Meeting at 8:00 a.m., Eastern Time | www.virtualshareholdermeeting.com/CVS2024

CVS Health Corporation | One CVS Drive | Woonsocket, Rhode Island 02895

The Annual Meeting will be held solely by means of remote communication, to allow our stockholders to more easily participate regardless of their geographic location. This Notice of 2024 Annual Meeting and Proxy Statement is being mailed or transmitted beginning on or about April 5, 2024 to stockholders of record at the close of business on March 18, 2024.

Our Vision

Become the leading health solutions company for consumers

Deliver a superior health care experience for consumers

Drive improved health outcomes, lower costs, higher levels of engagement and broader access to high quality care

Message from Our Independent Chair and Chief Executive Officer

Dear Fellow Stockholders:

We are building a world of health around every consumer, enabling access to high quality, convenient, and affordable care that supports individuals in building healthier lives. In 2023, we made strong progress on our journey to transform how care is delivered in the U.S., bringing together integrated health solutions that meet the needs of our consumers.

Our 2023 Financial Performance In 2023, we successfully navigated a challenging environment and delivered on our financial commitments, a powerful testament to the strength of our diversified company. Total revenues grew to approximately $358 billion, an 11% increase year over year, and we generated $13.4 billion of operating cash flow, demonstrating the power of our business model and supporting our strategy. This performance enabled us to return more than $5 billion to stockholders through dividend payments and common stock repurchases.

Advancing the Future of Health Care by Driving Innovation

At CVS Health we work to connect the many entry points of the health care system, delivering better health outcomes at lower costs through simpler and more convenient experiences. Our trusted brands allow us to connect with consumers in more places - in the community, in the home, and virtually. As more people engage across our portfolio of assets, we are able to unlock up to three to four times more enterprise value when members utilize two or more CVS Health offerings. Today, more than

55 million CVS Health customers engage with at least two of our offerings.

We made significant progress on our health care delivery strategy in 2023. We broadened our value-based care capabilities into the home and into primary care with the acquisitions

of Signify Health, Inc. and Oak Street Health, Inc., respectively. We quickly advanced our commitment to offer services and care to more patients, customers and members across CVS Health. We developed new clinic formats that are expected to remove barriers to care for communities with the greatest needs. By enabling more connections across CVS Health's care offerings, we believe we can improve the way a consumer or patient engages in their overall health.

We continuously innovate and offer choices for our customers, clients, and members. In

2023, we announced several areas where we are further expanding our role in delivering high quality, reliable, and cost-effective prescription therapies. Through recent developments, such as the launch of Cordavis™, CostVantage™ and CVS Caremark TrueCost™, we are creating greater simplicity and transparency for consumers, patients, and payors.

With these innovations, among others, we are driving transformation in the industry, leading to a sustainable, differentiated competitive advantage for our businesses in the long-term.

Stockholder Engagement and

Corporate Governance

Over the course of the year, our management team and our Board of Directors work closely together on the advancement of the Company's strategic plan. We proactively engage with our stockholders to enhance our understanding and to be responsive of your perspectives and needs.

As part of CVS Health's commitment to leading corporate governance practices, we have continued to refresh our Board, furthering our work to ensure there is an appropriate mix of skills and experiences that align to

our evolving business. The Board balances new perspectives with important institutional knowledge and maintains a strong culture of engagement. In 2023 the Board appointed two new independent directors, Scott Kirby, Chief Executive Officer and a member of the Board of Directors of United Airlines, and Mike Mahoney, Chairman, CEO and President of Boston Scientific. In addition, effective with the 2024 Annual Meeting, Ed Ludwig will not stand for re-election, as he has decided to retire from the Board and our Board will be reduced to 12 members. We thank Ed for his counsel during his tenure.

We have also restructured and refreshed our Board's committees to be more streamlined with four standing committees: Audit; Management Planning and Development; Nominating and Corporate Governance; Health Services and Technology (formerly Medical Affairs); along with an Executive Committee. The structure allows our committees more time to focus on matters of significance and provide oversight of key strategies and risks.

A Continued Focus on Sustainability and Impact

Our approach to improving the health of communities nationwide is focused on achieving our economic, environmental, and social imperatives across multiple dimensions. We are committed to advancing health equity, broadening access to quality care and supporting sustainable business practices. Our strategy and initiatives are supported by a purpose-driven workforce that reflects the communities we serve and a strong governance framework, including Board level oversight. Our Healthy 2030 Impact Report provides more details about our progress.

Annual Meeting of Stockholders

Our 2024 Annual Meeting will be held virtually at 8 a.m. Eastern Time on Thursday, May 16, 2024, to allow our stockholders to participate more easily regardless of location. We ask you to please vote at your earliest convenience.

Thank you for your continued interest and investment in CVS Health. We appreciate your support as we advance our strategy, deliver on our commitments and increase stockholder value.

Sincerely,

Roger N. Farah	Karen S. Lynch
Independent Chair of	President and Chief
the Board	Executive Officer

2024 Proxy Statement

i

Table of Contents

1. Message from Our Independent Chair and Chief Executive Officer

1 Notice of Annual Meeting of Stockholders

4 Proxy Statement Highlights

12 Corporate Governance and Related Matters

12 Item 1: Election of Directors

1. The Board's Role and Activities in 2023

1. Board Structure and Processes
2. Committees of the Board

1. Audit Committee Matters

42 Item 2: Ratification of the Appointment of Our Independent Registered Public Accounting Firm for 2024

44 Executive Compensation and Related Matters

44 Item 3: Say on Pay, a Proposal to Approve, on an Advisory Basis, the Company's Executive Compensation

1. Letter from the Management Planning and Development Committee
2. Compensation Committee Report
3. Compensation Discussion and Analysis

1. Summary

56 2023 Business and Performance Highlights

56 Executive Compensation Program Discussion

79 Compensation of Named Executive Officers

1. Summary Compensation Table

1. Grants of Plan-Based Awards

1. Outstanding Equity Awards at Fiscal Year-End
2. Option Exercises and Stock Vested
3. Pension Benefits
4. Nonqualified Deferred Compensation
5. Payments/(Forfeitures) Under Termination Scenarios

1. CEO Pay Ratio
2. Pay Versus Performance

1. Management Proposal

98 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

108 Stockholder Proposals

108 Item 5: Stockholder Proposal Requesting an Independent, Third Party Worker Rights Assessment and Report

111 Item 6: Stockholder Proposal to Prohibit the Re-nomination of Any Director Who Fails to Receive a Majority Vote

114 Item 7: Stockholder Proposal for Stockholder Right to Vote on "Excessive" Golden Parachutes

117 Item 8: Stockholder Proposal Requesting a Policy Requiring Our Directors to Disclose Their Expected Allocation of Hours Among All Formal Commitments

120 Ownership of and Trading in Our Stock

1. Executive Officer and Director Stock Ownership Requirements
2. Share Ownership of Directors and Certain Executive Officers
3. Share Ownership of Principal Stockholders
4. Other Information

123 Information About the Annual Meeting and Voting

1. Stockholder Proposals and Other Business for Our Annual Meeting in 2025
2. Other Matters

A-1 Annex A - Reconciliation of Certain Amounts to the Most Directly Comparable GAAP Measure

B-1 Annex B - 2017 Incentive Compensation

Plan of CVS Health Corporation, as Proposed to be Amended

1. CVS Health

Notice of Annual Meeting of Stockholders

May 16, 2024

8:00 a.m., Eastern Time

The Annual Meeting will be held exclusively online at www.virtualshareholdermeeting. com/CVS2024

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, 2024. Even if you plan to attend the Annual Meeting virtually, 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 16, 2024:

The proxy statement and 2023 Annual Report to Stockholders (the "2023 Annual Report"), which includes our Annual Report on Form 10-K and our audited financial statements, are available

at www.proxyvote.com and

at www.cvshealthannualmeeting.com.

Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described in the proxy materials.

You are cordially invited to join our 2024 Annual Meeting of Stockholders, to be held on Thursday, May 16, 2024, at 8:00 a.m., Eastern Time. Our Annual Meeting will be conducted exclusively online.

Items to be Voted

• Elect 12 director nominees named in this proxy statement;
• Ratify the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for 2024;
• Say on pay, an advisory vote to approve the Company's executive compensation;
• Adopt amendments to the Company's 2017 Incentive Compensation Plan;
• Act on 4 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, 2024 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 CVS Health Corporation

One CVS Drive

Woonsocket, Rhode Island 02895 (principal executive office)

April 5, 2024

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 5, 2024. Whether or not you plan to attend the Annual Meeting, please vote your shares. In addition to voting by mail or during the Annual Meeting by following the instructions available on the Annual Meeting website, 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 virtually, we strongly 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 5, 2024, we are mailing a notice of Internet availability to many of our stockholders instead of paper copies of our proxy statement and our 2023 Annual Report. 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 2023 Annual Report and proxy card.

The Annual Meeting will be accessible only at www.virtualshareholdermeeting.com/ CVS2024 (the "Annual Meeting website"). We encourage you to access the Annual Meeting website prior to the start time and allow ample time to log into the Annual Meeting webcast and test your computer system. To be admitted to the Annual

Meeting, you must enter the 16-digit control number found on the proxy card, Notice of Internet Availability or voting instruction form that accompanied your proxy materials when requested by the Annual Meeting website. You also may vote during the Annual Meeting by following the instructions available on the Annual Meeting website.

2024 Proxy Statement

1

The Value We Create

Financials																		2023 Highlights
Total Revenues					Cash Flow from Operations	• Total revenues increased to
in billions of dollars					in billions of dollars							$357.8 billion, up 10.9%
400.0								18.0													compared to prior year.
										16.2
			357.8				16.0
350.0		322.5						14.0							13.4					• Achieved GAAP diluted earnings
300.0																		per share ("EPS") of $6.47 and
							12.0
250.0																				Adjusted EPS* of $8.74.
							10.0
200.0
							8.0													• Generated cash flows from
150.0
							6.0													operations of $13.4 billion.
100.0
							4.0													• Announced a 10% increase to the
50.0								2.0
																			quarterly stockholder dividend,
0.0								0.0
									2022			2023
		2022		2023													which became effective with
Diluted EPS					Adjusted EPS*							the February 1, 2024 dividend
in dollars per common share	in dollars per common share	distribution. Returned over
7.00									10.00												$3 billion to stockholders through
				6.47					9.03		8.74
							9.00						dividends in 2023.
6.00									8.00
5.00									7.00
4.00									6.00
	3.26						5.00
3.00
								4.00
2.00									3.00
								2.00
1.00
								1.00
0.00									0.00
	2022		2023					2022		2023

• Adjusted EPS is a non-GAAP financial measure. See Annex A to this proxy statement for an explanation and a reconciliation to the most comparable GAAP financial measure.

Delivering on our commitments

What we	Advance all-payor			Diversify growth	Enhance
stated we	primary care	Optimize retail		portfolio with new	omni-channel	Return capital to
would do:	delivery capabilities	portfolio		health services	health experiences	stockholders

What we	Acquired Oak	On track to	Acquired	Grew digital	Returned more
delivered:	Street Health	close 900	Signify Health	customers to	than $11 billion
	Launched	stores between	Launched CVS	over 55 million,	dollars to
	2022 and 2024	up 20 million	stockholders
	Healthspire™
	new formats
		since 2021	through
		and Cordavis™
	and enhanced	Exceeded
		dividends
	MinuteClinic®	script and
	Launched		and share
	experience	colleague
	managed service		repurchases in
		retention goals
		organization ("MSO")		the last
		associated
		with $10 billion in		24 months
		with the store
		managed spend
		closure project
		in 2023

2 CVS Health

Our Purpose: Bringing our heart to every moment of your health™

At CVS Health, we are a dedicated and diverse team - more than 300,000 colleagues strong - focused on a bold vision to reimagine health care by putting our colleagues and consumers at the heart of everything we do.

We are committed to building a workplace where every person is welcome, valued, and can fulfill their potential. A workplace fueled by our culture - one where our colleagues are not only measured by what they do, but by how they do it. Our Heart At Work Behaviors™ guide our actions - from how we treat each other, to responding to our customers' needs or serving our communities. We put people first, rise to the challenge, join forces, create simplicity, inspire trust, and champion safety and quality - empowering every person to help CVS Health achieve its goals and unifying them with our shared purpose.

We are proud of the contributions we make and to have a company that reflects the communities we serve. Together we are accountable for creating the culture we want, need and deserve - helping us on our journey to bring our heart to every moment of your health.

Heart At Work

BehaviorsTM

Put people first

We are customer obsessed. We walk in others' shoes to improve the customer and colleague experience. We create an engaging and inclusive work environment where our colleagues reflect the diversity of our customers.

Rise to the challenge

We boldly innovate to care for our customers. We act swiftly and adapt to feedback. We think big and are willing to take smart risks to innovate. We welcome different points of view and learn from mistakes.

Join forces

We unite around our goal of serving the customer. We work across teams to provide the best care possible. We listen and learn from each other. We are conscious of our impact on customers, colleagues and the company.

Inspire trust

We work to earn the trust of our customers and colleagues by meeting our commitments and acting with integrity. We bravely do the right thing, even when it is hard. We speak up to challenge ideas and do so with heart.

Create simplicity

We design for our customers. We continuously simplify by removing extra steps and innovating to create streamlined solutions. We focus on what matters most to our customers and empower those colleagues closest to the work to make the right call.

Champion safety and quality

We are relentless in our pursuit of the safest and highest quality care. We know that in order to keep patients and consumers safe, our colleagues must also feel safe and protected. We ensure safety is at the heart of every decision we make and everything we do.

2024 Proxy Statement

3

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 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 12 continuing directors are seasoned leaders who bring a mix of skills and qualifications to our Board of Directors

FOR

each director nominee

15-20

ITEM 2

Ratify the appointment of the Company's independent registered public accounting firm for 2024

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

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

ITEM 4

Adopt amendments to the Company's 2017 Incentive Compensation Plan (the "2017 ICP")

The amendments to our 2017 ICP will replenish the shares available under the plan and replace two recently acquired existing equity compensation plans; it will be an important tool to attract and retain quality executives and employees

ITEMS 5-8

Stockholder proposals

See the Board of Directors' statement of opposition AGAINST each stockholder proposal

FOR

42-43

FOR

44-45

FOR

98-107

AGAINST

108-119

4 CVS Health

Proxy Statement Highlights

The CVS Health Board

Edward J. Ludwig, an independent member of the Board of Directors (the "Board"), will not be standing for re-election and is retiring from the Board at the 2024 Annual Meeting after an accomplished 30-plus year career in the field of medical technology. Upon the retirement of Mr. Ludwig, the size of the Board will be reduced to 12 directors.

You are asked to vote on the election of the following 12 nominees to serve on the 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 current leadership and expected membership of each of the Board's committees after the Annual Meeting.

Other Public

Committees

Director

Company

Name

Since

Independent

Boards

A

MP&D N&CG

HS&T

E

Fernando Aguirre, 66

Former Chairman, President and CEO

2018

YES

2

of Chiquita Brands International, Inc.

Jeffrey R. Balser, M.D., Ph.D., 62

President and Chief Executive Officer

2022

YES

None

of Vanderbilt University Medical Center

C. David Brown II, 72

Partner and Former Member of

2007

YES

None

Executive Committee of Nelson Mullins

Riley & Scarborough LLP

Alecia A. DeCoudreaux, 69

President Emerita of Mills College at

2015

YES

1

Northeastern University, and Former

Executive at Eli Lilly and Company

Nancy-Ann M. DeParle, 67

Managing Partner and Co-Founder of

Consonance Capital Partners, LLC and

2013

YES

1

Former Director of White House Office

of Health Reform

Roger N. Farah, 71

Independent Chair of the Board of CVS

Health Corporation; Former Chairman

2018

YES

1

of the Board of Tiffany & Co. and

Former Executive at Tory Burch and

Ralph Lauren

Anne M. Finucane, 71

Chair of the Board of Rubicon Carbon

2011

YES

1

and Former Vice Chairman of Bank of

America Corporation

J. Scott Kirby, 56

CEO and a Member of the

2023

YES

1

Board of Directors of

United Airlines Holdings, Inc.

Karen S. Lynch, 61

President and CEO of

2021

NO

None

CVS Health Corporation

Michael F. Mahoney, 59

Chairman of the Board, President and

2023

YES

1

CEO of Boston Scientific Corporation

Jean-Pierre Millon, 73

Former President and CEO of

2007

YES

None

PCS Health Systems, Inc.

Mary L. Schapiro, 68

Vice Chair of Global Public Policy

and Special Advisor to the Chairman

2017

YES

1

of Bloomberg L.P. and Former

Chairman of the U.S. Securities and

Exchange Commission

Key

Member

A Audit

N&CG Nominating and Corporate Governance

E Executive

Committee Chair

MP&D Management Planning and Development

HS&T Health Services and Technology

2024 Proxy Statement

5

Proxy Statement Highlights

Our Directors Nominated for Election at the Annual Meeting

The demographic information presented below is based on voluntary self-identification by each director nominee. Additional biographical information regarding each director nominee is set out starting on page 15.

Director Independence

11director nominees are independent of the Company and management. Ms. Lynch, our President and CEO, is our only non- independent director nominee.

Financial Expertise

Financial Experts

Qualified as Financial Experts

Financially Literate

Four nominees who are members of our 2023 Audit Committee are designated Audit Committee Financial Experts. Four other nominees have qualifications to be financial experts, and the remaining four are financially literate.

Director Tenure

0-4 years

5-9 years

10+ years

Our directors bring a balance of experience and fresh perspective to our boardroom. The average tenure of our director nominees is ~7.5 years.

Diversity of Gender and Background

Female

Racially or Ethnically Diverse

Born Outside of the U.S.

Approximately 42% of our director nominees are women.

Our director nominees come from varied backgrounds, including three who identify as racially or ethnically diverse and two who were born outside of the U.S.

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. The Board has identified key skills, qualifications and experience that are important to the Board as a whole in light of our current business strategy and expected needs. Our director nominees have developed competencies in these skills through education, direct experience and oversight responsibilities. While many of our nominees have experience across most or all of these important skills and qualifications, the following graphic identifies the five most relevant for each nominee (in addition to Senior Leadership, which all of them possess). See page 13 for an individual skills matrix, along with details as to how these skills and expertise link to the Company's strategy.

Business Development and

Corporate Transactions:

7/12

Finance:

8/12

Regulated Industries:

7/12

Senior Leadership:

12/12

Business Operations:

5/12

Health Care and

Health Services:

8/12

Risk Management:

8/12

Corporate Governance

and Sustainability:

7/12

Public Policy and

Government Affairs:

6/12

Technology and Innovation:

4/12

6 CVS Health