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Merlo officially named as CVS Caremark CEO
January 24th, 2011
WOONSOCKET, R.I. – Proceeding with its succession plan, CVS Caremark Corp. announced that Larry Merlo will take over the chief executive officer post from Tom Ryan and that it a new nonexecutive chairman will be elected with Ryan's retirement this spring.
CVS Caremark said Monday that Merlo, president and chief operating officer, will take the CEO reins effective March 1. Plans call for Ryan to remain nonexecutive chairman of the board until his retirement at the company's annual shareholders meeting in May.
In addition, CVS Caremark said that with Ryan's retirement in May, board director David Dorman is slated to be elected as nonexecutive chairman at the annual meeting.
The 55-year-old Merlo was designated to become the next CVS Caremark chief executive since last May, when he was promoted from president of CVS/pharmacy president to president and COO of CVS Caremark. The company also had announced that Ryan, 58, would retire as CEO at the next annual shareholders meeting and that, to facilitate the leadership transition, it had formed an office of the chairman including Ryan, Merlo and Per Lofberg, president of Caremark Pharmacy Services, the pharmacy benefit management unit.
Merlo will assume the CEO post a bit earlier than previously announced. He had been slated to take over the position with Ryan's retirement in May 2011.
"I am grateful for the opportunity to lead this company. As the nation's premier integrated pharmacy health care provider, we have a tremendous opportunity to make a difference in the lives of those we serve," Merlo said in a statement. "I look forward to continuing our positive momentum and to further enhancing the long-term value of our company. I've worked directly with Tom for the past 20 years, and I want to thank him for his mentoring and leadership and am confident we will continue to build on his legacy."
CVS Caremark noted that the official appointment of Merlo as CEO comes after the transition of day-to-day oversight for CVS/pharmacy retail operations to Mike Bloom, executive vice president of merchandising and supply chain, and Scott Baker, executive vice president of internal operations and real estate, which the company announced last week. With that move, the company said it will continue its search for a new CVS/pharmacy president to oversee its 7,100 drug stores and drop its plan to hire former Walmart executive Hank Mullany for the post, which faced a legal challenge from the discount store giant.
"Since we announced our transition plan in May of last year, Larry and I have worked hard to successfully transition roles and responsibilities, and Larry is ready to be CEO," Ryan stated. "After 37 years with our company and 16 years as president, I am more confident than ever that our assets along with our innovative products and services are lowering health care costs and improving outcomes.
"Our success took years of hard work, commitment and dedication to our mission from the more than 200,000 CVS Caremark colleagues we have across the company," he added. "I am so proud of all the work we have accomplished together and remain confident that this success will continue well into the future under Larry's leadership."
Ryan has served as chairman of CVS Caremark since November 2007 and as the company's CEO since May 1998. Under his leadership, CVS has evolved from a regional drug store chain with revenue of $5 billion in 1994 to the nation's largest pharmacy health care provider, with sales approaching $100 billion, according to Terry Murray, lead director of CVS Caremark.
"On behalf of the company's board of directors, I would like to thank Tom for all he has done for CVS Caremark," Murray said in a statement. "And along the way Tom has built a culture focused on innovation, customer service and flawless execution. It is the culture Tom fostered over his 37-year tenure that differentiates CVS Caremark in the marketplace today."
Dorman has been on the CVS Caremark board since 2006. Since May 2008, he has served as the nonexecutive chairman of Motorola Inc., which was recently renamed Motorola Solutions Inc. in connection with the separation of Motorola Mobility Holdings Inc. CVS Caremark said Dorman will transition to the position of lead director of Motorola Solutions in May. He was previously chairman and CEO of AT&T Corp. from November 2002 to November 2005.