WOONSOCKET, R.I. — After a dozen years at the helm of CVS Caremark Corp., Tom Ryan plans to retire next year.
Ryan, who has been CVS Caremark’s president and chief executive officer since 1998 and its chairman since 2007, is slated to step down at the company’s annual shareholders meeting next May.
He is expected to be succeeded by Larry Merlo, who has been executive vice president at CVS Caremark and president of the CVS/pharmacy retail operation.
To prepare him for what CVS Caremark expects will be his move into the CEO role next year, the 54-year-old Merlo has been named president and chief operating officer by the company’s board of directors.
The board says it is looking for someone to take over as CVS/pharmacy president and that Merlo will continue to oversee the operation until a replacement is found.
To ease the transition to a new CEO, the CVS Caremark board has created what it calls an office of the chairman, consisting of Ryan, Merlo and Per Lofberg, who earlier this year became president of Caremark Pharmacy Services, the company’s pharmacy benefits management unit.
Ryan says that after nearly four decades with CVS, he has never seen the company in a better position and feels confident that CVS Caremark will be in good hands.
“I felt this was the right time to move forward with our transition plan,” the 58-year-old Ryan says. “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,” he says. “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.”
Ryan says that he expects the transition from his leadership to Merlo’s to be a smooth one. He calls Merlo “the ideal executive to lead our business forward.”
“Larry Merlo is a high-energy, customer-focused leader who has delivered outstanding results in every position he has held,” Ryan remarks. “He has worked alongside me for the past 20 years and has been instrumental in developing our vision for CVS Caremark as an integrated health care company.”
Ryan began his career at CVS in 1975, working his way up from staff pharmacist to the company’s top executive.
During his tenure in the executive suite, CVS grew from a regional drug chain with revenue of $5 billion in 1994 to a health care conglomerate with revenues approaching $100 billion.
In just the past few years, Ryan has guided the company through a series of acquisitions that has seen it strengthen its position in key markets across the country.
He also took the drug chain to the top of the PBM business when he engineered its $27.2 billion acquisition of Caremark Rx Inc. in 2007.
CVS Caremark lead director Terry Murray calls Ryan’s accomplishments during his time as chairman, president and chief executive officer “nothing short of spectacular.”
Merlo has been with CVS for 20 years and has spent more than three decades in chain drug retailing.
“This is an exciting time for CVS Caremark as our integrated health care model gains further traction and we take full advantage of the opportunities to build on our unique market position,” he says. “I look forward to continuing our positive momentum and to further enhancing the long-term value of the company.”
As part of his new role, Merlo will oversee CVS Caremark’s human resources, legal, corporate compliance and government relations operations.
“Larry has been a terrific partner as we’ve worked together this year,” Lofberg says. “And I look forward to our further collaboration as we continue to develop our integrated health care offering and build on the success we have already achieved.”