After years of preparation, UnitedHealth Group recently announced a CEO change. David Wichmann, president of the nation’s largest health insurer since 2014, will become CEO and a director of the company effective Sept. 1. On that date, Stephen Hemsley, the current CEO, will become executive chairman of the board of directors, a newly created post, and Richard Burke, the current board chairman, will become “lead independent director.”
In its Aug. 16 press release, UnitedHealth Group said the changes “are designed to ensure continuity as the company continues to grow and evolve.” Hemsley, 65, said this is “the right time for this transition to take place” given that the company “is performing strongly and has a positive outlook” for the future. Hemsley said Wichmann, 54, has worked nearly two decades for UnitedHealth and has “deep expertise” in critical areas, “especially growth-oriented technology, operations and global markets.”
Credit Suisse analyst Scott Fidel said UnitedHealth has been “methodically preparing” for the leadership transition for years and there was never any doubt that Wichmann would become the next CEO. “The only real question was when UnitedHealth would decide to make the change,” Fidel said in an Aug. 16 note. “From a timing perspective, United is making this announcement from a position of strength; its operations are highly stable, the company is growing robustly, and the overall financial profile is in pristine condition.”
On July 18, UnitedHealth reported better-than-anticipated profits for the quarter ended June 30 (HPW 7/24/17, p. 3). Since Hemsley became CEO in November 2006, UnitedHealth’s value has grown remarkably, Fidel said. “The fact that Hemsley plans to remain heavily engaged in the company’s strategy for years to come as executive chairman will likely be very well received by investors,” he said.
Wichmann joined UnitedHealth in 1998 and served as chief financial officer from 2011 to mid-2016.
See UnitedHealth’s announcement at http://tinyurl.com/yb6fu9ua.