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May 9, 2007

CVS/Caremark board survives shareholder challenges

Five embattled directors of CVS/Caremark Corp. this morning survived challenges by dissident shareholders at the newly created company's first annual meeting.

The challenges came as shareholders raised concerns about a number of practices at CVS Corp., the Woonsocket-based drugstore chain and Caremark Corp., its Tennessee-based merger partner.

Shareholders urged company executives to replace some board directors, divide certain executive duties, release more information about a federal inquiry into stock options awards and even change its energy consumption habits.

They peppered executives with questions about the willingness of Caremark directors to accept CVS' initial offer before seeking bids from other companies. They also criticized some CVS directors for crafting multi-million-dollar pay packages for company executives.

Before the meeting, some advisory groups urged CVS/Caremark shareholders to withhold their votes for two or more of the directors.

Voting was unusually close during what is normally a formulaic endorsement of company-made proposals, forcing an extended counting period.

Ultimately, the directors all survived, each garnering at least 55 percent of the shares voted.

"I was actually pleased by the votes," said David B. Blitzstein, who manages investments for the United Food & Commercial Workers International Union. "If this management needs a wake-up call, they just got it."

Extra: Check the latest stock price for CVS/Caremark.

-- Journal staff writer Paul Grimaldi

Posted by Andrea Panciera  at 1:37 PM | Permalink

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