Walgreens is welcoming a new CEO Oct. 28 as one of the company's former chief executives remains highly involved in the direction of the business, Bloomberg reports.
Stefano Pessina entered the picture after Walgreens bought the Swiss-based Alliance Boots, of which he headed, in 2014. He served as CEO of Walgreens from 2015 to 2021 and now serves as executive chairman of the Walgreens Boots Alliance board of directors.
Bloomberg reports that Mr. Pessina handpicked his successor Rosalind "Roz" Brewer — a former Starbucks and Sam's Club executive — in 2021, who carried out a number of moves further into healthcare before abruptly resigning in September.
"The reason may simply be that former CEO Pessina was never very far away," Bloomberg reports, noting that Mr. Passina handpicked her interim replacement Ginger Graham as well. Walgreens notes that the CEO is elected by the board of directors.
Shortly after Walgreens and Alliance Boots came together, Mr. Pessina as CEO replaced the U.S. management team of Walgreens with their European counterparts with Boots executives taking four of the merged company's top nine positions. Mr. Pessina installed his life partner, Ornella Barra, as co-COO in 2016; she still holds that role.
Insiders told Bloomberg that Mr. Pessina's healthcare strategy as CEO rested on partnerships versus buying companies, which was not enough to give the company an edge. Insiders also say that Mr. Pessina and his Boots Alliance team did not take the time to learn how things worked in the U.S., from antitrust laws to consumer expectations for cosmetics. The company went from being worth almost $100 billion to less than half that under his leadership.
"Pessina is the largest single shareholder, and he's the chair. I just get the impression that he still calls the shots," Tom McCaney, director of corporate social responsibility for faith-based group and Walgreens investor Sisters of St. Francis of Philadelphia, told Bloomberg.
Mr. Pessina and the board he chairs have selected Tim Wentworth as Walgreens' new CEO, effective Oct. 28, after noting they sought a CEO with "deep healthcare experience." Mr. Wentworth is CEO of Cigna subsidiary Evernorth and former CEO of Express Scripts.
"The biggest challenge may lie in convincing Wentworth and others that [Mr. Pessina is] not going to get in their way," according to Bloomberg.
Days after announcing Mr. Wentworth's appointment, Walgreens reported its latest fiscal year results: a net loss of $3.1 billion, compared with net earnings of $4.3 billion the year prior. The company is planning to cut at least $1 billion in costs and the closure of approximately 60 of its primary care subsidiary VillageMD clinics in fiscal 2024.
Read the Bloomberg story in full here.