Dive Brief:
- UnitedHealth announced on Thursday it will replace its CFO, another significant executive change for the healthcare behemoth as it mounts a financial turnaround.
- Wayne DeVeydt, most recently a managing director and operating partner at investment firm Bain Capital, will take up the CFO role on Sept. 2, according to a press release.
- John Rex, the company’s CFO since 2016, will become a strategic advisor to CEO Stephen Hemsley, who returned to the top job in May after UnitedHealth’s previous CEO stepped down.
Dive Insight:
DeVeydt will take up the job at UnitedHealth, which includes the nation’s largest insurer as well as a major pharmacy benefit manager and large network of physicians, as the firm faces an array of challenges, including growing scrutiny over its business practices that increased after the head of its health insurance unit was killed in December.
Last month, the healthcare giant confirmed it’s under federal investigation from the Department of Justice over its Medicare program.
The company also pulled its 2025 guidance this spring after posting first-quarter financial results that missed investor expectations. UnitedHealth’s stock is trading about 50% less than it was at the start of the year, and the firm was recently downgraded by investment banks.
The shakeup comes months after Hemsley, chairman of UnitedHealth’s board of directors and a former head of the healthcare giant, replaced Andrew Witty as chief executive.
Now, UnitedHealth is again shaking up its leadership at the top level by replacing Rex, who joined the firm in 2012 as CFO of its new Optum health services business.
Before working at Bain, incoming CFO DeVeydt served as chairman and CEO of surgical facility operator Surgery Partners from 2018 to 2020. He’d also previously worked at insurer Anthem, now named Elevance, and consultancy PricewaterhouseCoopers, according to a press release.
Earlier this week, UnitedHealth set new financial guidance for the year that fell below analyst expectations. The company now projects $16 in adjusted earnings per share between $445.5 billion and $448 billion in revenue.
In the second quarter, the firm reported $111.6 billion in revenue, up 13% year over year, while profit declined 19% to $3.4 billion.
As CFO, DeVeydt will receive an annual base salary of $1 million, according to a securities filing. He will also receive a sign-on bonus of $1.2 million, as well as a stock sign-on award with a fair value of $5 million, according to the filing.
