Risk & Compliance

Aetna CFO, Chairman, to Retire

The insurer's stock plunges on news that both its chairman and its 55-year old CFO are retiring.
Stephen TaubApril 27, 2006

Aetna shareholders were spooked Thursday when its chief financial officer and chairman both announced their retirements, knocking down the insurer’s stock price by more than 21 percent.

The company also announced higher-than-expected medical costs, which also seemingly contributed to the selloff.

Aetna said senior vice president and CFO Alan M. Bennett plans to retire in the first quarter of 2007. Bennett is 55 and has been CFO since 2001.

The company said Bennett will assist in a comprehensive search for a replacement to assure an orderly transition. He will continue to manage the finance organization until a successor is named.

“Alan has played a critical leadership role in helping to engineer Aetna’s financial turnaround and repositioning the company for profitable growth,” said John W. Rowe, M.D., executive chairman, in a statement.

Bennett was credited with improving operational controls and processes in the finance organization, as well as leading efforts to rein in costs.

Aetna also said that Rowe will retire on October 1. It announced that CEO and president Ronald A. Williams will be appointed Chairman of the Board.

The appointment breaks from a generally growing trend among US companies to separate the chairman role from a company executive. In a statement that reflecting Aetna’s sensitivity to the issue, Rowe said, “Since Ron became CEO on February 14, the Board has reviewed Aetna’s governance structure and concluded that appointing Ron to be chairman will best serve the interests of Aetna’s shareholders, customers, members, employees and others who use our services.”