CVS Health has announced that longtime executive David Joyner is replacing Karen Lynch as CEO amid struggles to increase profits and stock performance. The company has seen a nearly 20% drop in shares this year, with challenges including higher medical costs impacting its insurance unit, Aetna, and declining consumer spending at its retail pharmacies. CVS recently cut its full-year profit guidance and plans to reduce costs by $2 billion over the next few years. The company expects adjusted earnings of $1.05 to $1.10 per share in the third quarter, with higher medical costs than previously anticipated.
Major shareholder Glenview Capital has been pushing for changes at CVS, with speculation about potential strategic shifts such as separating its insurance and retail businesses. Joyner, who previously oversaw the pharmacy services business, has taken over as CEO, replacing Lynch who assumed the role in February 2021. Lynch has also stepped down from the board of directors, with Joyner taking her place and Farah becoming the executive chairman.
CVS is set to report third-quarter earnings in November, with Joyner’s experience in the integrated business expected to address industry challenges and accelerate operational improvements. The move comes as the company aims to fully realize its unique value creation potential.
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