Walgreens Boots Alliance Inc. has appointed health-care veteran Tim Wentworth to be its next chief executive officer, as the company has struggled to leave its retail roots behind and move into more lucrative parts of health care.
Wentworth was CEO of Express Scripts, a top pharmacy benefits manager, and led the company’s $53 billion merger with Cigna Group in 2018. He later became CEO of the company’s newly formed Evernorth health services segment, which includes Express Scripts as well as other units like MDLive.
“We are confident he is the right person to lead WBA’s next phase of growth into a customer-centric health-care company,” former CEO and executive chairman Stefano Pessina said in a statement.
Wentworth’s appointment will be effective Oct. 23 and he’ll also join the company’s board, according to the release.
Bloomberg first reported that Wentworth was in the running for the top job on Sept. 29 — news that was well-received by analysts and sent Walgreens shares jumping by more than 6%, their biggest gain in almost a year. The company is slated to report earnings on Thursday.
Wentworth will now face the challenge of trying to get Walgreens back on track. The company has fallen behind its main rival CVS Health Corp., whose bet to double down on health care — like its 2018 merger with Aetna’s insurance business — has paid off.
Despite efforts to push into health care, Walgreen’s stock lost half its value under the former CEO Rosalind Brewer, a longtime retail executive. Brewer’s most notable effort was a $5.2 billion investment in primary care provider VillageMD. The deal allowed Walgreens to open hundreds of doctors’ offices in its drugstores and move deeper into the primary care space.
Analysts have said her strategy was solid, but investors were impatient. Brewer departed abruptly at the end of August after just two-and-a-half years on the job. On the news of Brewer’s departure, Walgreens said they would seek a replacement with “deep healthcare experience.”
Wentworth graduated from Monroe Community College and Cornell University before rising to the top of some of the US’s largest health care companies. He worked at PepsiCo Inc. and Mary Kay Inc. early in his career, then led pharmacy benefits manager Medco Health Solutions before mergers with Express Scripts and Cigna.
‘Accelerate’ Profitability
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 for CFO and CIO 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, and Tracey Brown in the newly created role of chief customer officer.
“You’re replacing a CEO who was a woman of color with Tim. How does this reflect a commitment to diversity?,” the memo said, outlining that Wentworth has spent “decades as a champion for underrepresented groups — especially women. He is also the father of three daughters.”
The memo said Walgreens’ Board of Directors retained an executive search firm to help identify potential candidates and that the board voted to confirm his appointment. Interim CEO Ginger Graham wasn’t considered for the permanent role, the memo said.
(Updates throughout.)