Walgreens Boots Alliance CEO Rosalind Brewer has stepped down as head of the company and as a member of its board of directors, the company said Friday.
Brewer and the board “mutually agreed” on Brewer’s exit, which took effect Thursday, the company said in a news release. Walgreens said Brewer will advise the company while it conducts a search for a permanent CEO and receive a $375,000 monthly consulting fee through February.
Related: Walgreens bets big on VillageMD as it expands healthcare services
Walgreens appointed Ginger Graham, who serves as its lead independent director, as interim CEO.
Brewer played a big role in Walgreens’ efforts in the past two years to extend its reach far beyond its drugstore roots and move into healthcare services, investing billions of dollars in the strategy just months after her arrival. But the investments came at a price.
The company’s U.S. healthcare operations reported an adjusted operating loss of $172 million in its fiscal third quarter, ended May 31. That brought its year-to-date operating loss in its healthcare operations to $483 million–lackluster results some analysts said were not surprising given the massive transition Walgreens is undertaking.
Stefano Pessina, executive chairman, in a statement thanked Brewer for her work at Walgreens, including navigating the company through the pandemic.
Brewer’s separation agreement includes $9 million in cash severance, or two times the sum of her base salary plus target annual bonus, according to a Securities and Exchange Commission filing. She also will receive annual bonus payments earned in this fiscal year, and vest in any earned long-term incentives and performance awards. Her non-solicitation agreement with Walgreens was reduced by half to six months, according to the SEC filing.
Brewer was not made available for an interview, and a Walgreens spokesperson declined to provide additional information.
Brewer was named CEO in March 2021 and at the time became one of only two Black women running Fortune 500 companies. She previously served as chief operating officer at Starbucks for more than three years, and before that, was president and CEO at Sam’s Club for five years.
Seven months after her arrival, Walgreens announced one of its biggest bets, plans to invest $5.2 billion for majority ownership in primary care provider VillageMD. A month earlier, the company had said it would spend $970 million to take a majority stake in specialty pharmacy company Shields Health Solutions. Last year, Walgreens announced plans to buy the rest of home care company CareCentrix for $392 million.
VillageMD, which is opening hundreds of clinics co-located with Walgreens stores, acquired Summit Health-CityMD earlier this year in an $8.9 billion deal, as part of a larger push into urgent and specialty care.
News of Brewer’s departure comes less than a month after James Kehoe resigned as CFO to join financial-technology company FIS Global.
“This change adds to the leadership turnover,” Lisa Gill, managing director of equity research at J.P. Morgan, wrote in a Friday research note. “With [Walgreens] still in the midst of its healthcare-centric transformation, we view continued leadership uncertainty as adding to investor concerns.”
Shareholders appear to have their doubts about the shift. The company’s stock price has dropped 32% year-to-date and more than 14% in the last month alone.
Its stock closed at $23.43 a share Friday, down about 7%.
