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Talk of the bay

CVS boss rakes in riches after Eckerd buyout

By MARK ALBRIGHT
Published April 4, 2005

Tom Ryan, chairman and chief executive of CVS Corp., had his own payday after the drugstore chain gobbled down and digested Eckerd Corp.

Officially, Ryan got a $100,000 bonus specifically tied to the Eckerd deal, but the Woonsocket, R.I., company found other ways to hand Ryan a 25 percent pay increase for buying 1,260 Eckerd stores that pushed CVS slightly ahead of Walgreens, according to SEC filings.

Even as CVS was switching the store signs to CVS, the company had a compensation consultant on board figuring out how much the CEOs of larger retail companies are paid.

By the time the options, stock grants and enhanced performance bonuses were added up, Ryan walked off with $15.7-million in 2004. That's more than twice the $5.8-million he earned two years ago. In addition, he cashed in $40-million in previously earned options in 2004. Despite all the cash, however, CVS also picked up $78,000 in personal travel Ryan and his family made flying the corporate jet in 2004.

In contrast, David Bernauer, chairman and chief executive of rival Walgreen Co., got $9-million in pay and stock options in 2004.

At least Ryan can point out that during the two years his compensation doubled, CVS's stock price doubled to $117.

Nonetheless, the early lead in the race for this year's poster child for outrageous executive pay packages goes to Blockbuster Inc. chief executive officer John Antioco.

In a year that saw Blockbuster's stock drop 47 percent, Antioco got $33.8-million, most of it in stock grants and options after the company was split off from Viacom Inc. Worse, the day Blockbuster revealed his pay package last week, the company disclosed plans to lay off up to 250 employees at Blockbuster headquarters in Dallas.

To be sure, however, the proxy season when companies reveal last year's compensation packages is young.

[Last modified April 2, 2005, 21:25:02]