Walgreens Boots Alliance CEO Rosalind Brewer, the veteran retail executive who led the chain as its stores became an important distribution point for the COVID-19 vaccine, stepped down after less than three years at the helm.
Brewer's final day as chief executive and director was Thursday, said Walgreens Boots Alliance, or WBA. She took over as CEO in March 2021.
“Roz navigated the company through the global pandemic, overseeing the critical rollout of vaccines in Walgreens pharmacies and to high-risk populations across the country," WBA Executive Chairman Stefano Pessina said in a statement. "She furthered our consumer-facing capabilities while supporting the culture of community and team-member engagement in difficult times."
The Deerfield, Illinois-based company said its board appointed Ginger Graham, 67, lead independent director of WBA, as interim CEO of one of the largest drug store chains in the United States. WBA's retail pharmacy unit operates 8,886 drugstores in 50 states, the District of Columbia, Puerto Rico and the Virgin Islands. Its Boots division in the United Kingdom has 2,200 stores including community pharmacies and large health-and-beauty outlets.
The shift at the top position comes as Walgreens works to regain its footing after seeing its stock price fall this year partly because of reduced sales of coronavirus testing kits and vaccines. The departure of Brewer, 61, who has held high-level positions at Starbucks, Sam's Club and Walmart, comes during a time of change for Walgreens Boots, said Neil Saunders, managing director of GlobalData.
"The group, which previously grew through various pharmacy acquisitions, is now looking to consolidate and focus its efforts on the U.S. healthcare sector," Saunders said in a research note. "While the wisdom of this move is debatable, healthcare is not Ms. Brewer’s forte."
Healthcare Emphasis
WBA's retail business, "where Ms. Brewer has much more experience, is simply not an area that Walgreens wants to pursue as a major growth opportunity," he said. "The company seems more than content to let its retail operation bump along the bottom with mediocre sales results."
A WBA spokesman did not immediately respond to a request for more information on the reason for Brewer's departure. The company's shares are down about 32% this year "as its pharmacy unit has been hit by a steeper-than-expected fall in demand for" the tests and shots, Reuters reported.
Last year Brewer received a total compensation package valued at nearly $17.3 million that included a base salary of $1.5 million, according to WBA's 2022 proxy statement issued in December. In 2021, at the height of the pandemic, her total payment package was $28.3 million. That included a cash bonus of $4.5 million and stock awards valued at more than $20 million, according to the proxy statement.
Brewer will continue to advise WBA while it conducts a search for a permanent CEO, the company said. Brewer will serve as a special adviser through February 29 and receive a monthly consulting fee of $375,000, according to a filing made Friday with the Securities and Exchange Commission.
Brewer and WBA entered into a separation agreement under which she will receive a cash severance of $9 million, or twice the annual salary base, plus her targeted annual bonus. She also will receive "payment of any annual bonus earned in respect of the current fiscal year, based on actual company performance," according to the SEC filing.
In a LinkedIn post, Brewer said departing Walgreens was not easy.
"This is perhaps one of the most difficult notes I have ever written over the course of my career, but I wanted to share with you directly that the board and I have mutually agreed that I will step down as the company’s CEO and as a member of the board," she said in a LinkedIn post, Friday. "This decision did not come without great consideration for what is best for all of you, our shareholders, customers, patients and my family. In the near term, I will continue to advise the Board as they search for a permanent CEO with healthcare expertise."