The approval of CVS Health Corp.’s $68 billion merger with Aetna Inc. last year led to a big payday for the acquirer’s top in-house lawyer.
Thomas Moriarty received nearly $23.2 million in total compensation from CVS Health in 2019, according to an annual proxy statement filed by the company April 2.
Moriarty is an executive vice president, chief policy and external affairs officer, and general counsel for CVS Health, where he has worked in a variety of in-house legal roles since joining the Woonsocket, R.I.-based company in 2012.
Moriarty did not respond to a request for comment, but a CVS Health spokesman told Bloomberg Law in an email that his compensation was based on merit and need.
Moriarty’s 2019 pay package, which to date trails only the $25.2 million earned last year by Apple Inc. general counsel Katherine Adams, is more than double the nearly $11 million in total compensation he received from CVS Health in 2018. Moriarty received nearly $4.5 million from the company in 2017.
The significant increase in Moriarty’s total compensation last year was due to a desire to retain his expertise and oversight of government affairs, corporate communications, and legal matters “through the Aetna integration and execution of our transformation initiatives,” the CVS Health spokesman said.
Moriarty’s compensation includes $920,833 in base salary, a one-time $1 million cash bonus, more than $3.75 million in non-equity incentive plan compensation, and over $17.37 million in total stock and options awards, according to CVS Health’s 2019 proxy.
Bloomberg Law data shows that Moriarty owns CVS Health stock currently valued at $7.13 million.
CVS Health’s Expansion
CVS Health has grown rapidly in recent years through its purchase of Aetna, the third-largest health care company in the U.S., and its $12.7 billion buy in 2015 of Omnicare Inc., a deal that made CVS Health the nation’s largest pharmacy chain.
The company said Moriarty’s one-time cash bonus in 2019 was a reward for his “significant work in government affairs, corporate communications, and legal matters during a critical transition period following the closing of the Aetna acquisition,” which was announced in December 2017.
CVS Health also credited Moriarty for his “continued accomplishments in managing the defense” of its pharmacy benefits management business—on matters such as drug pricing, network contracting, rebates, and restrictive state laws—and “establishing CVS Health as a national thought leader,” the company said.
The management planning and development committee of CVS Health’s board of directors—a group chaired by Nelson Mullins Riley & Scarborough partner C. David Brown II that reviews the company’s compensation policies—delivered its own assessment of Moriarty’s job performance. The committee cited Moriarty’s “impact, influence, and criticality over the next few years” and the “scope of his continued efforts and contributions” as supporting its August 2019 decision to accelerate the grant date of his 2020, 2021, and 2022 stock awards.
“Mr. Moriarty delivered superlative results in his leadership of the company’s public policy, external/government affairs, and legal matters during 2019, including overseeing the company’s successful completion of the complex regulatory process associated with the Aetna acquisition,” the committee said in its evaluation.
Dechert, McDermott Will & Emery, Shearman & Sterling, and Williams & Connolly took the lead advising CVS Health on its acquisition of Aetna, which turned to Davis Polk & Wardwell and Simpson Thacher & Bartlett for outside counsel. Thomas Sabatino Jr., Aetna’s former general counsel, left the Hartford-based company in 2018 with an estimated $13.6 million in severance, according to securities filings.