CVS Health Adds New Board Members

By Sriparna Roy
(Reuters) – CVS Health announced on Monday the addition of four new members to its board, including Larry Robbins, CEO of hedge fund Glenview Capital, in a standstill agreement with the activist investor.

Shares of CVS rose 2% to $54.30 in premarket trading.

The Rhode Island-based company, facing pressure from investors like Glenview, aims to enhance operations and shareholder value while dealing with rising medical costs in its health insurance division.

As of September 30, Glenview holds a 0.95% stake in CVS and stated that its agreement with the company includes other confidential provisions. Additional stakes are held by activist shareholders Third Point (0.13%) and Sachem Capital (0.28%).

Michael Cherny, an analyst at Leerink Partners, commented, "While having additional expertise as part of the company/Board is never a bad thing, we don't think this really changes anything beyond where we think CVS had already started to point the ship."

Earlier this month, CVS appointed Steve Nelson, former head of UnitedHealth insurance, to lead its Aetna business. This change followed the recent resignation of CEO Karen Lynch, replaced by David Joyner, as high medical costs troubled Aetna. Glenview supported Lynch's departure.

Robbins, who identifies as a constructivist shareholder, recently engaged with CVS executives to advocate for changes but did not call for a breakup of the company.

Joining Robbins on the board are three other Glenview executives: Leslie Norwalk, Guy Sansone, and Doug Shulman, increasing total board members to 16.