Walgreens Boots Alliance Inc. appointed Tim Wentworth as its next chief executive officer, giving the industry veteran the challenge of turning around the beleaguered drugstore chain amid a faltering push into the wider health-care scene.
(Bloomberg) — Walgreens Boots Alliance Inc. appointed Tim Wentworth as its next chief executive officer, giving the industry veteran the challenge of turning around the beleaguered drugstore chain amid a faltering push into the wider health-care scene.
Wentworth, the former CEO of pharmacy-benefits manager Express Scripts who led its 2018 merger with Cigna Group, succeeds Rosalind Brewer, a longtime retail executive whose 2 1/2-year tenure saw the shares lose half their value. Alongside restocking a depleted C-suite, Wentworth will take on managing initiatives such as Walgreens’ move to open hundreds of doctors’ offices in its stores. The appointment will take effect Oct. 23, when Wentworth will also join the company’s board.
Bloomberg first reported that Wentworth, 63, was in the running for the top job on Sept. 29 — news that was well-received by analysts and sent Walgreens shares up more than 6%. Wentworth now must get the chain back on track after falling behind rival CVS Health Corp. — whose bet on health care has largely paid off — and replace recently departed executives including former chief financial officer James Kehoe.
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The hire is a solid first step in potentially returning the company to predictable growth, although it may take time, John Boylan, an analyst with Edward Jones, said Wednesday in an email. “This announcement may help raise investor sentiment for Walgreens shares, at least in the short term,” he said.
The stock jumped as much as 7% at the New York market open. Walgreens is slated to report earnings Thursday.
Before her abrupt departure at the end of August, Brewer, 61, had been working to broaden Walgreens’ offerings with moves like a $5.2 billion investment in primary-care provider VillageMD. Analysts have said the strategy was solid, yet investors were impatient.
Walgreens had said it would seek a replacement for Brewer with “deep healthcare experience.” Wentworth graduated from Monroe Community College and Cornell University before rising to the top of some of the largest US health-care companies. He worked at PepsiCo Inc. and Mary Kay Inc. early in his career, and then held senior roles at pharmacy benefits manager Medco Health Solutions before mergers with Express Scripts and Cigna.
In an internal memo seen by Bloomberg News that discussed talking points about the appointment, Walgreens said Wentworth had been appointed because he is “widely recognized as a leading executive in the healthcare industry.”
Wentworth will “accelerate the company’s path to profitability” and is acting “to ensure the healthcare segment is on track to achieve positive EBITDA” in the first half of 2024, according to the memo. “He believes that while WBA has made progress against several key initiatives, the company needs to do better.”
The memo also said Wentworth would have to come off conflicting boards, but didn’t say which ones. Searches and appointments to replace Kehoe and former chief information officer Hsiao Wang, who left this month, would “resume expeditiously,” it added.
The talking points also attempted to address replacing a woman of color with a white man, and affirmed the company’s commitment to diversity. As the company’s first Black CEO, Brewer was a champion of diversity. She added other Black women to the upper ranks, including executive vice president and global chief legal officer Danielle Gray as well as Tracey Brown in the newly created role of chief customer officer.
The memo outlined that Wentworth has spent “decades as a champion for underrepresented groups — especially women. He is also the father of three daughters.”
Walgreens’ board retained an executive search firm to help identify potential candidates and that the board voted to confirm his appointment, according to the memo. Interim CEO Ginger Graham wasn’t considered for the permanent role, it said.
Wentworth “is the right person to lead WBA’s next phase of growth into a customer-centric health-care company,” Stefano Pessina, Walgreens’ executive chairman and former CEO, said Wednesday in a statement.
(Updates with analyst comment in fourth paragraph)
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