By Mitchell Young
WOONSOCKET: A suburb city of Providence, Rhode island the country’s smallest state is the home of CVS [NYSE:CVS] the company that will be the new corporate owner of Hartford based health insurer Aetna [NYSE: AET].
Aetna CEO Mark Bertolino who famously added lifestyle benefits and higher minimum wages to the company had previously announced his intention to move the company to the ultra hip “Meatpacking District" in New York in a newly constructed headquarters’ building at a cost of $85 million
The city of New York reportedly offered $34 million in incentives to move the 250 “home office” employees to the city, where they were to occupy 145,000 square feet.
Bertolini will get a seat on the board of CVS and what will be as much as $500 million of compensation, as his stock ownership, stock options, and change of ownership bonuses come into play, but he won’t be CEO.
|Aetna CEO Mark Bertonlin has promoted a $16 minimum wage to his corporate brethren, he is expected to yield $500 million from Aetna sale.|
The huge payout will come from shares of Aetna stock he already owns, as well as the stock options he has the right to exercise. Bertolini owns 925,000 shares that are now worth e worth $191.5 million at the $207 per share price that CVS will pay. He would also net $222.5 million from his stock options, the rest of the payout will come from change of ownership provisions in his contract, reportedly worth $65-$80 million alone.
The new power behind the company will be the far more economical CVS CEO Larry Merlo that started his career at pharmacy school. Merlo’s CVS is headquartered in the small suburban town of Woonsocket, population, 41,000.
Merlo has made his bones as a discount retailer at Thrift Drug and later CVS where he worked his way from a VP running stores to the top job.
|Will tighfisted CVS CEO Merlo move Aetna to the high-flying NYC Meatpacking District?|
Merlo, married for 38 years, lives in the tiny but wealthy town of East Greenwich Rhode island, implemented a no tobacco policy and a limit to Opioid sales. Merlo has the reputation as a penny pincher, being criticized for keeping down the store employee count and other store operating expenses down, including the length and number of breaks the pharmacists can take..
In 2015, Fortune magazine said Merlo had the “highest CEO-to-average-employee pay ratio of any American company.”
CVS declined to support the Aetna headquarters’ move saying “All real estate locations will be evaluated by CVS Health during the integration planning process, according to Carolyn Castel, VP of Corporate Communications for CVS.