Outcome: Omitted by SEC
RESOLVED: CVS Health Corporation shareholders urge the Board to adopt and publish principles for minimum wage reform.
This proposal does not encompass payments used for lobbying or ask the Company to take a position on any particular piece of legislation. Nor does this proposal seek to address the Company’s internal approach to compensation, general employee compensation matters, or implementation of its principles for minimum wage reform. The appropriate timing for publishing the principles should be in the Board’s discretion.
We believe that principles for minimum wage reform should recognize that:
1. A sustainable economy must ensure a minimum standard of living necessary for the health and general well-being of workers and their families; and
2. The minimum wage should be indexed to maintain its ability to support a minimum standard of living; and to allow for orderly increases, predictability and business planning.
Until the early 1980s, an annual minimum-wage income — after inflation adjustment — was above the poverty line for a family of two. Today, the federal minimum wage of $7.25 per hour, working 40 hours per week, 52 weeks per year, yields an annual income of $15,080, well below the federal poverty line for families.
Poverty-level wages and income inequality may undermine consumer spending and economic growth. A widely reported 2014 S&P research brief stated: “increasing income inequality is dampening U.S. economic growth.” Peter Georgescu of Young & Rubicam has written: “Business has the most to gain from a healthy America, and the most to lose by social unrest.” According to MSCI, stagnant wages can be a key driver of populist movements, which can lead to stagflation and material losses for broadly diversified portfolios.
There are many examples of corporate and civic leaders supporting strong wages and indexing:
• In his campaign, president-elect Donald Trump (then Chairman of the Trump Organization) called for a minimum wage increase.
• Costco CEO Jelinek, Morgan Stanley CEO Gorman, former McDonald’s CEO Thompson, and Panera CEO Shaich have indicated support for a federal minimum wage increase.
• Subway CEO DeLuca supports a minimum wage increase and indexing to enable business planning.
• JPMorgan CEO Dimon said in a 2016 op-ed: “Wages for many Americans have gone nowhere for too long.”
Polling demonstrates minimum wage reform is one of the nation’s most significant social policy issues. For example, an August 2016 Pew Research Poll shows that 58 percent of Americans favor a $15 federal minimum wage.
More than six hundred leading economists, including seven Nobel Prize winners, say that the U.S. should raise the minimum wage and index it. Studies indicate that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers. Some research suggests a minimum wage increase could have a small stimulative effect on the economy.