Good morning! The New York Liberty win their first WNBA championship, Emily Weiss reflects on 10 years of Glossier, and the top female CEO in the Fortune 500 is out of a job. Have a mindful Monday.
- Out of office. For three years in a row, Karen Lynch was ranked No. 1 on Fortune's Most Powerful Women list. Her job as CEO of CVS Health earned her that title, and she earned the company one as well: the largest Fortune 500 business run by a female CEO, with $357.8 billion in revenue last year. But this year, her power started to slip; she fell from No. 1 to the No. 2 spot on the MPW list published earlier this month as CVS waded through a rough year.
Then, on Friday, Lynch lost her job in a surprise ouster by CVS's board. As my colleague Shawn Tully wrote for Fortune, her tenure "appeared to start brilliantly, then unraveled fast."
Lynch's strategy was to make CVS a "one-stop shop" for healthcare. That transition started with CVS's 2018 $68 billion acquisition of Aetna, which is how former Aetna president Lynch got to the company. Then, as CEO, Lynch made that vision her own; in a 2021 Fortune profile, she told me how her early experiences with the health care system, including caring for an aunt in hospice in her mid-20s and losing her mother to suicide as a child, influenced her dedication to that mission. As CEO, she acquired Medicare-focused primary care network Oak Street Health for $10.5 billion and home health care services provider Signify for $8 billion in 2023. The problem was that CVS overpaid for those companies, putting pressure on its own business to deliver. And a 2023 Fortune story, that put Lynch on the cover of the magazine, asked whether big healthcare getting bigger was good for the rest of the U.S.
Amid a challenging macro environment for insurers this year—the U.S. government reduced payments for Medicare Advantage, for one—CVS started to flounder. It saw a revolving door of executives. Its share price is down 20% so far this year and fell on the news of Lynch's ouster. Read Shawn's story for much more detail on the business and health care industry challenges the company has confronted.
And while Lynch's strategy could still bear fruit, Shawn writes, ultimately CVS decided it was out of time.
Lynch was replaced by David Joyner, who most recently ran CVS's Caremark pharmacy benefits business; the company also named Roger Farah executive chair, which you can read more about here. Of course, that means CVS has now lost its title as the largest Fortune 500 business (No. 6 on that list) led by a female CEO.
That honor now goes back to General Motors, led by this year's returning MPW list No. 1 Mary Barra. (Although GM is much smaller than CVS and ranked No. 19 on the Fortune 500—which means the Fortune 500 just barely has a female chief in its top 20.)
While Lynch's run as CEO is over, her impact on rising female executives will endure. Ultimately, she fell prey to the tough standards imposed on female CEOs: in the Fortune 500, they average 4.5 years in their jobs compared to male CEOs' 7.2. (Lynch held the CEO title for three years and eight months.) But she still showed a generation of female business leaders how high they can climb.
Emma Hinchliffe
emma.hinchliffe@fortune.com
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