CVS Caremark Corp. agreed to hold a non-binding shareholder vote at its 2011 annual meeting on compensation paid to its top executives, according to a statement today from Denise L. Nappier, Connecticut state treasurer and sole fiduciary of the $23 billion Connecticut Retirement Plans and Trust Funds, Hartford.
The Connecticut fund withdrew a say-on-pay proxy proposal at CVS Caremark after reaching the agreement.
The company's decision is a victory for shareholders to bring greater accountability in the design of executive compensation, Ms. Nappier said in the statement.
“Shareholders have long advocated for say on pay to signal to the board whether the company has appropriately incentivized executives to perform, not to fail,” Ms. Nappier said in the statement. “CVS Caremark has affirmed its commitment to shareholders by supporting this important corporate governance reform.”
Last year, a say-on-pay proposal at CVS Caremark sponsored by the Connecticut system won 62% of the shareholder vote at the company's annual meeting.
The Connecticut fund owns 446,058 CVS Caremark shares, valued at $15 million, the statement said.
Christine Cramer, CVS Caremark spokeswoman, said, “We can confirm that we will have a say-on-pay vote in 2011 and will continue to monitor the issue.”