WOONSOCKET, R.I. CVS Caremark chairman, president and CEO Tom Ryan has announced that he will retire as CEO of the company at next year’s shareholder’s meeting in May 2011.
The board of directors is appointing Larry Merlo, president and COO, and anticipates Merlo will succeed Ryan as CEO.
Merlo, a seasoned executive with 31 years of experience, including 20 years with CVS, is also being elected to the company's board. Effective immediately, Merlo will assume additional responsibilities, including human resources, legal, corporate compliance and government relations. He most recently served as EVP of the company and president of its CVS/pharmacy retail operations, overseeing a portfolio of more than 7,000 CVS/pharmacy locations with net revenues of more than $55 billion.
The company is initiating a search for Merlo's successor as president of the CVS/pharmacy retail operations, considering both internal and external candidates. Merlo will continue to hold this role until a successor is chosen.
"I felt this was the right time to move forward with our transition plan," stated Ryan. "In my 36 years with the company, including 16 years as president, I have never felt better about our position than I do now. We have tremendous assets, an incredibly talented management team and a strategy that is resonating in the marketplace. I made my decision knowing that CVS Caremark is in an excellent position and that we have the right team in place to build on our success.
"The plan we are announcing [today] will provide for a smooth, seamless transition in the leadership of CVS Caremark," added Ryan. "Larry Merlo is a high-energy, customer-focused leader who has delivered outstanding results in every position he has held. He has worked alongside me for the past 20 years and has been instrumental in developing our vision for CVS Caremark as an integrated healthcare company. With his experience and proven track record, Larry is the ideal executive to lead our business forward. Moreover, in Larry and Per, we have two of the most talented and knowledgeable managers in the industry. With their complementary backgrounds, CVS Caremark is in excellent hands."
To facilitate the transition, the company has formed an office of the chairman including Ryan, Merlo and Per Lofberg, president of Caremark Pharmacy Services, the company's PBM business. Lofberg, a 30-year veteran of the PBM industry and former chairman of Merck-Medco Managed Care, LLC (which became Medco Health Solutions), joined CVS Caremark in January 2010 to strengthen the PBM business, expand its market position and further develop the company's integrated healthcare model.
"This is an exciting time for CVS Caremark as our integrated healthcare model gains further traction and we take full advantage of the opportunities to build on our unique market position,” stated Merlo. “In my new role, I look forward to continuing our positive momentum and to further enhancing the long-term value of the company. Tom has inspired our organization to achieve great things, and we look forward to building on his legacy."
Terry Murray, lead director of CVS Caremark, added, "Tom's accomplishments at CVS Caremark have been nothing short of spectacular. Under his leadership, CVS has evolved from a regional drug store chain with revenues of $5 billion in 1994 to the nation's largest pharmacy health care provider with revenues approaching $100 billion. We thank Tom for all he has done over the past 36 years and look forward to his continued leadership during the transition period ahead."