In a major leadership shift, CVS Health has named longtime executive David Joyner as its new CEO, replacing Karen Lynch.
The decision comes as CVS faces significant profit struggles, driven by rising medical costs and a drop in consumer spending at its retail pharmacies.
The announcement, made on Friday, follows a nearly 20% decline in CVS shares this year, with the stock plunging 13% in premarket trading after the leadership change was disclosed.
The company has been grappling with challenges in its insurance unit, Aetna, where higher-than-expected medical costs have weighed on profitability.
In August, CVS cut its full-year profit guidance and revealed plans to trim $2 billion in costs over the next few years to stabilize its financial performance.
CVS stock: company cites medical benefit ratio of 95.2%
In its latest statement, CVS provided guidance for the third quarter, forecasting adjusted earnings between $1.05 and $1.10 per share.
The company also cited an expected medical benefit ratio of 95.2%—higher than previously anticipated due to ongoing cost pressures in its healthcare segment. Investors were cautioned not to rely on prior earnings guidance, given the continued strain on the company’s health benefits unit.
CVS is scheduled to release its third-quarter earnings report on November 6, a key date for investors awaiting more clarity on the company’s financial direction.
The leadership change follows growing pressure from Glenview Capital, a major CVS shareholder, which has been advocating for significant changes at the company.
Reports also surfaced last month that CVS’s board was working with strategic advisors to explore various options, including a potential breakup of its insurance and retail divisions.
David Joyner, who previously led CVS’s pharmacy services as president of CVS Caremark, is expected to bring deep industry expertise to the CEO role.
Joyner started his career at Aetna in pharmacy benefits and has held several senior leadership positions within CVS.
His appointment is seen as a strategic move to navigate the company through its current challenges and unlock future value.
“We believe David’s deep understanding of our integrated business will allow us to tackle the challenges our industry faces and accelerate the operational improvements needed,” said Chairman Roger Farah, who will now assume the role of executive chairman.
Karen Lynch, who stepped down from her position as CEO, also resigned from the company’s board.
Joyner will now take a seat on the board as part of the leadership transition.
As CVS works to restore investor confidence and improve profitability, the new leadership under Joyner aims to steer the company through this critical phase of transformation.
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