Hold the Donuts, but Please Pass the Perks.

Shareholder activists have done a dutiful job in putting excessive executives’ compensation packages in the public spotlight. Perhaps now is the time for shareholders to ask that the same scrutiny be given to board members’ pay packages, too.

On March 1,2006, the Board of Directors of CVS approved a thirty percent increase in the annual retainer for non-employee directors from $50,000 to $65,000, payable 50% in CVS stock and 50% in cash.

Members of a Compensation Committee are recommended by the Governance and Nominating Committee and are appointed by and serve at the discretion of the Board of Directors.

The purpose of the Compensation Committee is to discharge certain of the responsibilities of the Board of Directors, including but not limited to all forms of compensation to be provided to the executive officers and directors of the Company.

A conundrum–or just a vanilla-flavored conflict of interest?

Seattle-based Cell Therapeutics, Inc. (CTIC) is hoping to rebound from a turbulent 2005. The Company reported disappointing late-stage clinical results for its lead oncology drug candidate called Xyotax. In March 2005, management disclosed that a Phase III clinical trial with Xyotax had missed its primary endpoint of superior overall survival. In fact, complete research findings from this trial were presented at the American Society of Clinical Oncology, or ASCO, meeting in May 2005 and at the 11th World Conference on Lung Cancer in July 2005. This data demonstrated in the Phase III clinical trial, called STELLAR 3, that Xyotax had just similar efficacy and median-survival rates compared to the control arm in patients with chemotherapy-naive advanced non-small cell lung cancer.

After the disappointing clinical trial news, the Company also shifted its R&D efforts and shed scores of workers, looking to shave fifty-percent, or approximately $20 million, off its operating budget per quarter.

Despite all this bad news and continued concerns on how to best cut monthly cash burn-rates, somehow the Compensation Committe managed to get the Board of Directors to ratify a 38.9% increase in non-employee directors’ annual retainer to $25,000 from $18,000.

In the last 12-months, the percentage increases in monetary perks have outpaced the stock prices of both CVS and Cell Therapeutics, which have changed 10.83% and (63.08)%, respectively.