CVS's $15 million man
CVS gave Tom Ryan a fond financial farewell prior to his retirement earlier this month as the company’s CEO.
CVS Caremark paid Ryan $15.5 million in 2010, down from $16.2 million in 2009 and $19.2 million in 2008, according to WPRI.com calculations based on a new SEC filing by the Woonsocket-based company.
Ryan’s 2010 pay package included a $1.48 million salary; a $2.2 million bonus (formally known as “non-equity incentive plan compensation”); $11.5 million in stock and stock option awards; and $281,481 in “other compensation.”
The “other compensation” was made up of $71,872 worth of personal use of CVS’s corporate jet; $2,391 worth of personal use of a CVS company car; $15,000 for financial planning services; $3,028 for home security; $186,250 in retirement contributions; and $2,940 in life insurance premiums, the company said.
Ryan was not the highest paid CVS executive in 2010, however. That distinction went to Per Lofberg, the new chief of the company’s troubled pharmacy-benefit management (PBM) division, who earned $15.6 million.
CVS paid $9 million to Larry Merlo, Ryan’s successor as CEO. Chief Financial Officer David Denton got $3.4 million and Chief Legal Officer Douglas Sgarro received $4.2 million. All the executives got salary increases last year except Lofberg, who was still a new employee in 2010, despite what the company described as its “challenging” performance last year.
Ryan, Merlo and Sgarro are the only three active participants in CVS’s “Supplemental Retirement Plan I for Select Senior Management,” a pension plan which is unfunded and has now been closed to new participants, the company said.
Merlo succeeded Ryan as CVS’s CEO on March 1 after replacing him as its president last year. Ryan will also step down as the company’s chairman after its annual meeting in May, when David Dorman will take that job.
Once Ryan retires, “he will receive compensation and benefits consistent with his outstanding agreements and the terms of the benefit plans in which he participates,” CVS said.
(WPRI.com’s compensation estimates differ from three of the amounts CVS reported in its SEC form because those add in yearly changes in the actuarial value of executives’ pensions; including that would increase the totals to $29.2 million for Ryan; $10.9 million for Merlo; and $4.9 million for Sgarro.)
Outsiders have expressed concern about compensation policy at CVS. The Corporate Library, an independent advisory group, gave the company a “D” for executive pay based on Ryan’s 2010 earnings.
Update: Or did Tom Ryan make $124 million last year? That’s the figure Dow Jones Newswires came up with after digging through the footnotes:
Thomas Ryan received total 2010 compensation of $29.2 million for the last year of a dozen-year stint at the helm of CVS Caremark Corp. (CVS), and another $50.4 million from stock-award vestings and the exercise of stock options.
Additionally, the executive decided to take his pension benefit in a lump sum, rather than in annuity payments, upon his retirement this year, netting him another roughly $58.4 million. That results in a take of nearly $125 million for his final 14 months or so on the job after certain adjustments.
My apologies to Ryan for lowballing his pay by $108 million. (In my defense, The Associated Press went with $15.5 million, too.) I’m hoping to discover a similar-sized error in my own paycheck this Friday.
(photo: CVS Caremark)