CVS Health announced on Monday that it struck a deal with dissident investor Glenview Capital for four board seats, just a few weeks after the healthcare giant ousted former chief Karen Lynch.
Glenview CEO Larry Robbins will join the CVS board effective immediately, alongside three other directors, which CVS said emerged from a “productive discussion” with Glenview. CVS’ board will expand to 16 members.
“In our discussions with the leadership at Glenview, we agreed that we can deliver greater value from our integrated businesses to all of our stakeholders,” CVS chairman Roger Farah said in a release.
The other new directors are Leslie Norwalk, Guy Sansone and Doug Schulman. Glenview amassed a sizable stake in the healthcare conglomerate and worked with management in the lead-up to Lynch’s ouster.
“We appreciate the board engaging with us on a cooperative basis that allows all energies to be productively dedicated towards further strengthening this iconic company,” Glenview’s Robbins said.
CVS has had a challenging year, driven in part by difficulties with its Medicare Advantage business. It initiated a strategic review this fall and has begun to lay off workers in a multi-billion dollar cost-cutting drive.
Several activist fights this season have resulted in settlements. Elliott Management struck a deal with Southwest Airlines in October in which the activist fund secured six seats on the carrier’s board. Activist Ancora also settled with railroad Norfolk Southern this month, averting a second proxy fight following the firing of CEO Alan Shaw.
