Dive Brief:

• Healthcare company CVS Health tapped UPS alum Brian Newman to serve as its CFO effective May 12, granting the newly-minted finance chief a $1 million base salary, according to a securities filing.  
• As finance chief, Newman will also be eligible to receive an annual target cash bonus opportunity of 150% of his base salary, as well as a target annual equity award valued at $7 million — comprised of 60% performance stock units, 20% restricted stock units and 20% stock options for calendar year 2025, according to the filing.
• Newman’s appointment is the latest leadership shift by the Woonsocket, Rhode Island-based healthcare company, coming as CVS Health looks to execute on a turnaround strategy after inking a deal with an activist investor last year in the face of financial challenges. As well as appointing a new CFO, CVS Health also named Amy Compton-Phillips to the role of executive vice president and chief medical officer, effective May 19, according to a Tuesday press release.

Dive Insight:

UPS alum Newman will replace outgoing CVS Health CFO Thomas Cowhey, who will depart from his role as of the effective date, according to the filing with the Securities and Exchange Commission.

Cowhey, who has served in the top financial seat for three years, will continue to be employed as a strategic advisor to CVS Health President and CEO David Joyner and will assist with the transition of his CFO duties until he leaves the company at a date yet to be determined, according to the filing.  

Newman served a five-year term as UPS’ CFO, with the company announcing he would be stepping down from his role as finance chief effective last June, citing a focus on his personal health, CFO Dive previously reported. In July, the package delivery service appointed 25-year company veteran Brian Dykes to the role of CFO, according to a press release.

Prior to UPS, Newman logged a 26-year tenure at beverage conglomerate PepsiCo, serving in various roles including as EVP of Latin America, finance, operations and IT, according to his LinkedIn profile.

Both the CFO and chief medical officer appointments come after a rocky 2024 for the healthcare company—largely driven by losses in its Aetna Medicare Advantage program — led CVS Health to make sweeping changes both operationally and to its executive leadership team following a tug-of-war with activist investor Glenview Capital.

Throughout 2024, CVS Health repeatedly cut its full-year forecast as rising claims drove up costs for its insurance segment, pulling down overall profit, according to an August AP News report. As part of its turnaround effort, in August the company also announced its plan to execute a multi-year initiative to shave $2 billion in costs, AP News reported. In October, the company laid off nearly 3,000 employees, primarily in corporate positions, as part of its bid to cut costs, according to a USA Today report.

However, its efforts failed to assuage the concerns of some investors, notably Glenview Capital, which owns a 1% stake in CVS Health. Also in October, the activist investor issued a statement on the health company, noting that while it has “tremendous assets,” it was operating “well below its potential and has fallen short in its investment and actuarial approach in recent years, creating economic losses and volatility that pressures its people, its customers and its shareholders.” While pushing for change, the investor denied it was advocating for a breakup of CVS Health and said it was engaged in an ongoing dialogue with the company.

Later that month, CVS Health ousted CEO Karen Lynch and appointed Joyner to the role of CEO and president, the company said in a filing. Just a few weeks later, the company appointed four new members to its board in a November deal with Glenview Capital, including its CEO, Larry Robbins, CNBC reported at the time.

“We believe the Company's culture, governance and leadership should be strengthened by those with both appropriate industry experience as well as fresh perspectives and that the company would be best served through prompt board evolution. The decision by Karen Lynch and the board to offer and accept her resignation is one we respect and support,” Glenview Capital said in an October 18 statement on the CEO shift.

The investor noted that it expected losses from the company’s Medicare Advantage program — predicting they would approximate $3.4 billion for full-year 2024 — and that those losses “reflect the poor decisions and risk management of a select few. We believe these issues are quite fixable with strong leadership and appropriate Board oversight and risk management.”

For its Q4 ended Dec. 31, although CVS Health’s earnings surpassed expectations, its health benefits segment reported an adjusted operating loss of $439 million, compared to adjusted operating income of $676 million the prior year — impacted by “increased utilization, the unfavorable impact of the company's Medicare Advantage star ratings for the 2024 payment year and the impact of higher acuity in Medicaid following the resumption of redeterminations,” the company said.

CVS Health is set to report its Q1 2025 earnings results on May 1. The company declined to comment on the CFO appointment beyond its Tuesday press release.