CVS Pushes Out Former Aetna Chief as It Shrinks Board

(Bloomberg) -- The former chief executive officer of Aetna said he was pushed off the board of CVS Health Corp., which bought the health insurer in a $68 billion deal a year and a half ago.

Mark Bertolini said he had offered to remain on CVS’s board past his current term, but that he wasn’t renominated. Known as a highly visible and outspoken executive, he steered Aetna from 2010 until he sold it to CVS in 2018.

“I offered to continue my service to the board in what I think is the most transformative effort in health care for the company and for the nation,” Bertolini said in a phone interview, “and the board felt otherwise.”

The Aetna acquisition, announced in December 2017, was the health, pharmacy and benefits company’s biggest ever, a bet that the U.S. health-care system is shifting to a more integrated model. But investors have been lukewarm on the combination. Since the deal closed in late November 2018, CVS shares have fallen about 15%.

“With the bulk of the integration behind us and the Aetna business performing strongly,” CVS spokesman T.J. Crawford said in an emailed statement, “the board felt it was the right time for Mark to focus on his other endeavors.”

The changes come after activist investor Starboard Value LP took a stake in the health-care company late last year, according to people familiar with the matter. It is unclear the size of Starboard’s stake or the type of changes it may be seeking at the company.

A representative for Starboard couldn’t be reached for comment.

Shares of Woonsocket, Rhode Island-based CVS were down 0.6% at $67.44 at 12:33 a.m. Monday in New York.

Two other directors are also being dropped from CVS’s 16-member board, to “further align with corporate governance best practices,” the company said in a statement Monday. Richard Swift, former CEO of energy-services company Foster Wheeler Ltd., and Richard Bracken, ex-CEO of for-profit hospital chain HCA Inc., also will exit.

Bertolini said that he serves on six boards, three for-profit companies and three nonprofits, including Verizon Communications Inc. and Fidelco Guide Dog Foundation. He is helping his son’s high-school friends with a microgrid energy company.

CVS said the changes will go into effect after the company’s annual meeting of shareholders. The company hasn’t set a date for the 2020 meeting yet; last year’s was held in May.

--With assistance from Scott Deveau.

To contact the reporters on this story: Angelica LaVito in New York at alavito@bloomberg.net;Drew Armstrong in New York at darmstrong17@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

©2020 Bloomberg L.P.