CVS Health Corp. is increasing bonuses for regular corporate employees in 2025, reflecting improved profitability across its insurance and retail operations under CEO David Joyner.
Bonuses will be 42.3% above baseline levels, according to records reviewed by Bloomberg News — a sharp reversal from 2024, when payments were more than 60% below target. For context, in 2022 bonuses were 80% above targets and in 2023 they were 50% above them.
The bonus increase comes as CVS meets or exceeds its internal profit targets, particularly in the Aetna insurance unit, which had previously struggled with margins. Joyner, who took over in October 2024 amid pressure from an activist investor and ongoing challenges at Aetna, implemented cost controls and operational improvements that helped drive results. Adjusted operating income for 2025 ultimately reached $14.4 billion, on par with the company's forecast, while adjusted earnings per share rose 25%, marking the largest annual increase in nearly two decades. Meeting these targets directly influenced the size of employee bonuses, rewarding teams for their contribution to the company's turnaround.
CVS spokesperson David Whitrap told Bloomberg bonuses are calculated based on three factors: performance relative to internal expectations on adjusted operating income, the ratio of enterprise operating expenses to revenue, and net promoter score, a measure of customer loyalty.
"We exceeded our target performance across each of the three components of our bonus plan," Whitrap said. Bonuses are paid to most corporate salaried employees, though levels vary by role and seniority.
The contextual backdrop for CVS's bonus rebound includes a series of financial challenges at its Aetna insurance unit. Aetna grappled with elevated medical costs and utilization trends that cut into profitability, prompting multiple profit-forecast reductions and strategic exits from underperforming segments such as the individual ACA exchange market. Analysts note that while segments like Medicare Advantage margins are improving, cost pressures and operational recalibrations have weighed on earnings and contributed to broader cost-management efforts.
CVS has also faced workforce reductions in the past year, including a layoff of more than 300 employees, as it navigated profitability challenges in both its insurance and retail operations.
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