v3.25.0.1
Stock Incentive Plans (Tables)
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Summary of Stock-Based Compensation The following table is a summary of stock-based compensation for the years ended December 31, 2024, 2023 and 2022:
In millions202420232022
Restricted stock units and performance stock units
$461 $497 $369 
Stock options and stock appreciation rights (“SARs”) (1)
79 91 78 
Total stock-based compensation (2)
$540 $588 $447 
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(1)Includes the Employee Stock Purchase Plan (“ESPP”).
(2)Total stock-based compensation for the year ended December 31, 2024 included $60 million and $41 million of post-combination expense associated with replacement equity awards granted in connection with the Oak Street Health and Signify Health acquisitions, respectively. Total stock-based
compensation for the year ended December 31, 2023 included $71 million and $72 million of post-combination expense associated with replacement equity awards granted in connection with the Oak Street Health and Signify Health acquisitions, respectively.
Restricted Stock Unit and Performance Stock Unit Activity
The following table is a summary of the restricted stock unit and performance stock unit activity for the year ended December 31, 2024:
In thousands, except weighted average grant date fair valueUnitsWeighted Average
Grant Date
Fair Value
Outstanding at beginning of year, nonvested16,994 $77.65 
Granted
9,978 $75.97 
Vested (1)
(6,532)$76.08 
Forfeited(1,928)$78.71 
Outstanding at end of year, nonvested18,512 $77.19 
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(1)Vested performance stock units have been included at target level performance. Based on actual performance, the number of restricted stock units and performance stock units vested during the year ended December 31, 2024 was 6.6 million.
Summary of Stock Option and SAR Activity
The following table is a summary of stock option and SAR activity that occurred for the years ended December 31, 2024, 2023 and 2022:
In millions202420232022
Cash received from stock options exercised (including ESPP)
$361 $277 $551 
Payments for taxes for net share settlement of equity awards
185 181 370 
Intrinsic value of stock options and SARs exercised
33 31 118 
Fair value of stock options and SARs vested
225 227 219 
Schedule of Valuation Assumptions
The fair value of each stock option and SAR is estimated using the Black-Scholes option pricing model based on the following assumptions at the time of grant:
202420232022
Dividend yield (1)
4.29 %3.27 %2.18 %
Expected volatility (2)
28.36 %28.15 %27.34 %
Risk-free interest rate (3)
4.13 %3.55 %2.46 %
Expected life (in years) (4)
5.35.96.3
Weighted-average grant date fair value$11.31 $21.78 $24.15 
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(1)The dividend yield is based on annual dividends paid and the fair market value of CVS Health Corporation stock at the grant date.
(2)The expected volatility is estimated based on the historical volatility of CVS Health Corporation’s daily stock price over a period equal to the expected life of each option grant after adjustments for infrequent events such as stock splits.
(3)The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options being valued.
(4)The expected life represents the number of years the options are expected to be outstanding from grant date based on historical option or SAR holder exercise experience.
Schedule of Stock Options and Stock Appreciation Rights Award Activity
The following table is a summary of the Company’s stock option and SAR activity for the year ended December 31, 2024:
In thousands, except weighted average exercise price and remaining contractual termSharesWeighted
Average
Exercise
 Price		Weighted
Average
Remaining
Contractual
Term		Aggregate
Intrinsic
Value
Outstanding at beginning of year15,126 $68.13 
Granted
4,435 $68.91 
Exercised(2,806)$59.61 
Forfeited(1,046)$79.05 
Expired(690)$78.69 
Outstanding at end of year15,019 $68.69 5.10$3,279 
Exercisable at end of year7,579 $65.01 3.251,939 
Vested at end of year and expected to vest in the future14,646 $68.66 5.023,252 
Schedule ESPP Valuation Assumptions
The following table is a summary of the assumptions used to value the ESPP awards for the years ended December 31, 2024, 2023 and 2022:
202420232022
Dividend yield (1)
2.01 %1.54 %1.12 %
Expected volatility (2)
31.40 %25.61 %23.54 %
Risk-free interest rate (3)
5.31 %5.17 %1.42 %
Expected life (in years) (4)
0.50.50.5
Weighted-average grant date fair value$12.39 $14.26 $16.25 
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(1)The dividend yield is calculated based on semi-annual dividends paid and the fair market value of CVS Health Corporation stock at the grant date.
(2)The expected volatility is estimated based on the historical volatility of CVS Health Corporation’s daily stock price over the previous six month period.
(3)The risk-free interest rate is selected based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP purchases (i.e., six months).
(4)The expected life is based on the semi-annual purchase period.