CVS Replaces CEO Karen Lynch with Executive David Joyner Amid Declining Profits and Share Price
David Joyner Takes Over as CVS Health CEO, Replacing Karen Lynch Amid Profit Struggles and Stock Decline
Longtime CVS Health executive David Joyner has replaced Karen Lynch as CEO as the company grapples with declining profits and stock performance, CVS announced on Friday. The change took effect on Thursday, just one day before the announcement, as CVS shares have dropped nearly 20% this year and plunged about 13% in premarket trading on Friday.
CVS has been facing several challenges, including rising medical costs affecting its insurance division, Aetna, and decreased consumer spending at its retail pharmacies. In August, the company reduced its full-year profit forecast and revealed plans to cut $2 billion in expenses over the next few years.
In its Friday announcement, CVS also forecasted adjusted earnings between $1.05 and $1.10 per share for the third quarter, with higher-than-expected medical costs and a medical benefit ratio of 95.2% in the quarter. The company advised investors not to rely on its previous guidance given during its second-quarter earnings call on August 7, 2024, due to ongoing cost pressures.
CVS is scheduled to report its third-quarter earnings on November 6. The company has been under pressure from major shareholder Glenview Capital, which has called for significant changes at the company.
Reports have indicated that CVS' board has engaged strategic advisors to explore various options, including a potential breakup of its insurance and retail divisions.
Joyner, who previously led the company’s pharmacy services as president of CVS Caremark, has a background in pharmacy benefit services and has served as executive vice president of sales and marketing at CVS Health. Chairman Roger Farah expressed confidence in Joyner's ability to tackle the company's challenges, saying, "We believe David and his deep understanding of our integrated business can help us more directly address the challenges our industry faces, more rapidly advance the operational improvements our company requires, and fully realize the value we can uniquely create."
Karen Lynch has also stepped down from CVS's board of directors, with Joyner taking her place on the board and Farah assuming the role of executive chairman.
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