Who is Per G.H. Lofberg and what is his role at CVS Caremark?

Per G.H. Lofberg has been appointed as Executive Vice President, CVS Caremark Corporation and President, Pharmacy Benefit Services, starting January 4, 2010. He brings substantial experience from his previous roles as founder, President, and CEO of Generation Health, and prior leadership positions at Merck-Medco Managed Care.

What is the compensation structure for Mr. Lofberg?

Mr. Lofberg's compensation includes an annual base salary of $900,000, an annual bonus opportunity of up to 130% of salary, and an annual target equity award value of $2,000,000 (split between stock options and restricted stock units). He will also receive a long-term incentive award with a target value of $3,000,000 for the period of January 1, 2010, through December 31, 2012, and will participate in the Partnership Equity Program (PEP).

What are the terms regarding Mr. Lofberg's departure from Generation Health?

CVS Caremark is acquiring Mr. Lofberg's entire interest in Generation Health. The Lofberg Family Partnership LP will receive $5,213,330 for its stake in Generation Health.

What severance benefits is Mr. Lofberg entitled to?

If Mr. Lofberg's employment is terminated by the Company without 'cause' or by him for 'good reason' before December 31, 2012, he is entitled to severance compensation. This includes continued salary for 12 months, a pro-rata annual bonus for the year of termination, and continued medical/health insurance coverage for 12 months, provided he signs a release and adheres to restrictive covenants.

CVS 8-K SEC Disclosure — Dec 24, 2009

Summary

CVS Caremark Corporation (CVS) announced the appointment of Per G.H. Lofberg as Executive Vice President and President of Pharmacy Benefit Services, effective January 4, 2010. Mr. Lofberg, previously the founder, President, and CEO of Generation Health, brings significant experience in pharmacy benefit management, having previously led Merck-Medco Managed Care. This strategic hire signals CVS Caremark's intent to bolster its PBM services. Investors should note the comprehensive compensation package and employment terms for Mr. Lofberg. This includes a substantial base salary, bonus opportunity, significant equity awards (stock options and restricted stock units), and participation in partnership equity programs, reflecting the company's investment in key executive talent. The filing also details severance provisions and restrictive covenants designed to protect the company's interests, as well as the financial terms of CVS Caremark's acquisition of Mr. Lofberg's interest in Generation Health.

Key Highlights

1Appointment of Per G.H. Lofberg as Executive Vice President and President, Pharmacy Benefit Services.
2Mr. Lofberg's extensive background includes leadership roles at Generation Health and Merck-Medco Managed Care.
3Significant executive compensation package including $900,000 base salary, 130% bonus target, and $2 million annual equity target ($1M options, $1M RSUs).
4Additional long-term incentive award of $3 million target value for 2010-2012.
5Participation in Partnership Equity Program (PEP) with a $1.5 million initial investment and matching contributions.
6Severance package for termination without cause or for good reason prior to Dec 31, 2012, including 12 months salary and bonus.
7CVS Caremark is acquiring Mr. Lofberg's entire interest in Generation Health for $5,213,330.

CVS HEALTH Corp 8-K Report, Corporate Update (Dec 24, 2009)

Summary

Key Highlights

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