Rankled by Sale, Investor Group Urged Headrick to Step Down
By Josh Fineman
Bloomberg News
Wednesday, July 4, 2007
CVS/Caremark, the second-biggest U.S. drugstore chain, said director Roger L. Headrick stepped down from the board after a shareholder group called for his resignation.
William H. Joyce will succeed Headrick as chairman of the audit committee, the company said in a filing late Monday with the Securities and Exchange Commission.
Headrick faced criticism from CTW Investment Group, which advises unions on shareholder issues, because investors didn't like how Caremark Rx carried out its sale to CVS. Headrick, a former independent Caremark director, survived a shareholder vote in May.
"This is a benchmark in terms of having authentic election of directors and ensuring elector accountability," said Bill Patterson, director of CTW.
Headrick, who joined Caremark's board in 1996, said that his decision had nothing to do with the calls for his resignation. "I have a lot of other things to do that I'm involved in and want to pursue," he said.
CVS spokesman Michael DeAngelis declined to comment beyond the regulatory filing.
Headrick is chief executive of ProtaTek International, a St. Paul, Minn., company that develops biological products for the animal-health industry.
The board of Caremark, the second-biggest manager of employee drug benefits, initially agreed to a $21 billion offer from CVS and refused to negotiate with Express Scripts, leading investors, including a Louisiana pension fund, to question whether they were being shortchanged. CVS increased its bid and purchased Caremark for $27.2 billion in March.
Headrick also faced opposition because of option grants given to Caremark executives that are under investigation by federal regulators.
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