Council of Institutional Investors The Voice of Corporate Governance

The May 9, 2007 board elections at CVS/Caremark Corp. were a case study of how broker votes can skew elections. Roger Headrick was re-elected to the CVS/Caremark board with about 57 percent of the votes cast. But it appeared that uninstructed votes cast by brokers swung the election for Headrick. Without them, he would have failed to win reelection under CVS/Caremark’s majority vote standard for director elections. CtW Investment Group, which had spearheaded opposition to Headrick, called for his resignation. The Council and several public fund members sent letters to CVS/Caremark urging the company to disclose the broker vote portion of the vote total for Headrick, so that shareowners could see whether broker votes tipped the election in his favor. Although, the company responded that it was unable to do so, on July 2 Headrick announced that he was retiring from the board.