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Illuminated signage is displayed outside a Rite Aid Corp. store. in Oakland, California, United States, Friday, December 29, 2017. Photographer: David Paul Morris / Bloomberg
Rite Aid unveiled a new governance, stripping the leader of the pharmacy chain from the role of president while adding new board members following a failed merger and growing losses.
Rite Aid said Thursday that three new independent directors would be appointed to the board of directors at next month's annual meeting and that the positions of president and chief executive would be separated. Bruce Bodaken, a former health insurance executive and a board member of Rite Aid, will serve as chairman of the board at the 2018 annual meeting, replacing John Standley, who remains at the helm of the company. .
Governance changes occur after Rite Aid failed to convince shareholders of its plan to merge with Albertsons. Shareholders complained that the transaction was intended to enrich executive management rather than rewarding shareholders.
The governance measures would be a blow for Standley, who will be one of the board members and the three new independent directors who will be re-elected next month. Standley has been Chairman of the Board of Directors of Rite Aid since June 21, 2012 and Chief Executive Officer since June 2010, says the company's website.
Also on Thursday, Standley reported Rite Aid recorded a net loss of $ 352 million in the second quarter or 33 cents per share, compared a net profit of $ 188.4 million, or 18 cents per share in the same quarter of last year. Revenues increased slightly to $ 5.4 billion.
Rite Aid attempted to merge with the big grocer Albertsons, but it collapsed this summer thanks to angry shareholders who thought that assets such as Rite Aid's Pharmaceutical Benefit Management Company (PBM) were undervalued. Many Rite Aid shareholders also thought the sale to Albertsons was about allowing the biggest grocery investors, such as private equity firm Cerberus, to cash in rather than exhaust other opportunities for the chain. pharmacies, PBM and clinics.
Some shareholders expressed dissatisfaction with the transaction and its execution. The board of directors of Rite Aid listened.
"These changes will significantly strengthen and strengthen the oversight of the board's governance and reflect our commitment to aligning Rite Aid's interests with those of shareholders," Bodaken said in a statement. "Since the completion of the transaction with Albertsons, we have directly engaged a large number of our major shareholders. Based on the valuable information and feedback we have received, we are accelerating our efforts to refresh the board. "
The three new nominees for independent directors, who also attend the annual shareholders' meeting on October 30 in New York, are: Robert Knowling, Jr., Louis Miramontes and Arun Nayar. "We are delighted to welcome Bob, Lou and Arun and believe that their new perspectives will be important assets as we continue to oversee the development and implementation of our strategy to position Rite Aid to create value." long term for shareholders ".
Since the end of the deal with Albertsons, the share price has fallen below $ 1.50 a share, with Wall Street analysts turning a deaf ear to Rite Aid.
Among their complaints, Rite Aid shareholders hoped that Rite Aid would take steps to develop its PBM system, EnvisionRx, in partnership. Instead, Rite Aid's PBM rivals are only expanding with the Justice Department this month, endorsing Cigna's acquisition of giant PBM Express Scripts. PBMs and rivals Rite Aid, CVS Health and Walgreens Boots Alliance, create tight pharmacy networks to integrate patients into their stores and grow.
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Illuminated signage is displayed outside a Rite Aid Corp. store. in Oakland, California, United States, Friday, December 29, 2017. Photographer: David Paul Morris / Bloomberg
Rite Aid unveiled a new governance, stripping the leader of the pharmacy chain from the role of president while adding new board members following a failed merger and growing losses.
Rite Aid said Thursday that three new independent directors would be appointed to the board of directors at next month's annual meeting and that the positions of president and chief executive would be separated. Bruce Bodaken, a former health insurance executive and a board member of Rite Aid, will serve as chairman of the board at the 2018 annual meeting, replacing John Standley, who remains at the helm of the company. .
Governance changes occur after Rite Aid failed to convince shareholders of its plan to merge with Albertsons. Shareholders complained that the transaction was intended to enrich executive management rather than rewarding shareholders.
The governance measures would be a blow for Standley, who will be one of the board members and the three new independent directors who will be re-elected next month. Standley has been Chairman of the Board of Directors of Rite Aid since June 21, 2012 and Chief Executive Officer since June 2010, says the company's website.
Also on Thursday, Standley reported Rite Aid recorded a net loss of $ 352 million in the second quarter or 33 cents per share, compared a net profit of $ 188.4 million, or 18 cents per share in the same quarter of last year. Revenues increased slightly to $ 5.4 billion.
Rite Aid attempted to merge with the big grocer Albertsons, but it collapsed this summer thanks to angry shareholders who thought that assets such as Rite Aid's Pharmaceutical Benefit Management Company (PBM) were undervalued. Many Rite Aid shareholders also thought the sale to Albertsons was about allowing the biggest grocery investors, such as private equity firm Cerberus, to cash in rather than exhaust other opportunities for the chain. pharmacies, PBM and clinics.
Some shareholders expressed dissatisfaction with the transaction and its execution. The board of directors of Rite Aid listened.
"These changes will significantly strengthen and strengthen the oversight of the board's governance and reflect our commitment to aligning Rite Aid's interests with those of shareholders," Bodaken said in a statement. "Since the completion of the transaction with Albertsons, we have directly engaged a large number of our major shareholders. Based on the valuable information and feedback we have received, we are accelerating our efforts to refresh the board. "
The three new nominees for independent directors, who also attend the annual shareholders' meeting on October 30 in New York, are: Robert Knowling, Jr., Louis Miramontes and Arun Nayar. "We are delighted to welcome Bob, Lou and Arun and believe that their new perspectives will be important assets as we continue to oversee the development and implementation of our strategy to position Rite Aid to create value." long term for shareholders ".
Since the end of the deal with Albertsons, the share price has fallen below $ 1.50 a share, with Wall Street analysts turning a deaf ear to Rite Aid.
Among their complaints, Rite Aid shareholders hoped that Rite Aid would take steps to develop its PBM system, EnvisionRx, in partnership. Instead, Rite Aid's PBM rivals are only expanding with the Justice Department this month, endorsing Cigna's acquisition of giant PBM Express Scripts. PBMs and rivals Rite Aid, CVS Health and Walgreens Boots Alliance, create tight pharmacy networks to integrate patients into their stores and grow.
