David Joyner, a longtime CVS Health executive, has replaced Karen Lynch as CEO as the company faces challenges in driving profits and stock performance. CVS shares have fallen nearly 20% this year, leading to the leadership change. The company has struggled with higher medical costs impacting its insurance unit, Aetna, and a drop in consumer spending at its retail pharmacies. CVS has recently cut its full-year profit guidance and announced plans to reduce costs by $2 billion over the next few years.
CVS expects adjusted earnings of $1.05 to $1.10 per share in the third quarter, citing higher medical costs than previously anticipated. The company’s board engaged strategic advisors to explore options, including potentially breaking up its insurance and retail businesses. Joyner, who previously oversaw CVS Caremark’s pharmacy services business, is seen as someone who can address industry challenges, implement operational improvements, and maximize the company’s value.
Lynch stepped down as CEO and from the board of directors, with Joyner taking her place on the board. Chairman Roger Farah praised Joyner’s understanding of the business and ability to drive operational improvements. The company is set to report its third-quarter earnings on November 6. Major CVS shareholder Glenview Capital has been pushing for changes at the company, adding pressure for CVS to enhance its performance and profitability.
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