Rite Aid Corporation has named Heyward Donigan, 58, as its new chief executive officer and a member of the board, effective immediately. As planned, John Standley, who served as CEO for the Camp Hill, PA-based drug chain since 2010, will leave the company which operates nearly 2,500 stores in 18 states.
“Today’s announcement is an important step in positioning Rite Aid for the future, and we are confident that Heyward is the right person to lead the company in capitalizing on the opportunities in the evolving healthcare environment,” said Bruce Bodaken, chairman of Rite Aid’s Board of Directors. “Over the past several months the Rite Aid Board conducted a thorough search, and Heyward’s strong senior executive experience, proven leadership capabilities and consistent track record of driving profitable growth, as well as her broad healthcare knowledge and digital shopping technology expertise set her apart. Her skillset will be invaluable as we work to deliver on the full potential of our business and create additional long-term value for our shareholders, associates, customers and patients.”
Donigan has spent 30 years in the healthcare industry, most recently (since 2015) as the president and chief executive officer of Sapphire Digital (formerly Vitals), which designs and develops omnichannel platforms that help consumers choose their best fit healthcare providers. Prior to Sapphire Digital, Donigan was president and chief executive officer of ValueOptions, then the nation’s largest independent behavioral health improvement company, where she helped the company surpass $1 billion in annual revenue. Previously, Donigan served as executive vice president and chief marketing officer at Premera Blue Cross, where she was responsible for driving growth across the individual, small group, mid-market and national account businesses.
Earlier in her career, Donigan served as senior vice president of all operations at Cigna Healthcare. She also held executive roles at General Electric, Empire BCBS and U.S. Healthcare, and previously served on the boards at several public companies, including Kindred Healthcare.
Donigan graduated with a Bachelor of Arts in English from the University of Virginia and holds a Master of Public Administration from New York University.
“I am deeply honored to have been selected to lead a company with such a strong brand, deep culture and dedicated team of associates. I see tremendous opportunity to revitalize the company’s position as a leader in meeting the health and wellness needs of customers and patients through our store and pharmacy benefit management platforms. I look forward to working with the talented Rite Aid team, as we continue to support the needs of our customers and patients and drive growth, improved performance and shareholder value,” said Donigan.
Bodaken also acknowledged Standley for his many contributions to Rite Aid. “On behalf of the board, I want to thank John for his numerous achievements in helping to reshape Rite Aid in the face of an evolving environment during his tenure. In particular, I want to thank him for his leadership in guiding the company through some incredibly challenging times. His commitment to facilitating a smooth transition for Rite Aid is greatly appreciated, and we wish him the best in his future endeavors.”
“I’d like to thank our talented Rite Aid team for their dedication and support in taking great care of our customers and patients throughout my tenure,” said Standley. “I have tremendous confidence in this team and I’m excited about the future prospects of this company.”
Donigan will certainly be challenged in her new role. After the Federal Trade Commission partially blocked the drug chain’s attempt to merge with rival Walgreens in 2017, Rite Aid has scrambled to improve sales and earnings. It ultimately sold approximately 2,000 stores to Walgreens, but it found it difficult to operate successfully as a declining third-place entity against both Walgreens and CVS.
A year ago, Rite Aid attempted another merger, this time a $24 billion deal with grocery chain Albertsons, but the proposed deal was killed by Rite Aid’s board even before shareholders voted on the proposal.
Subsequent to that, Rite Aid replaced Standley as chairman (elevating board member Bodaken; Standley remained chief executive) and in March 2018, announced it would begin a search for a new CEO. It also riffed 400 executives.
A few months earlier, Rite Aid was put on notice by the New York Stock Exchange that it was in jeopardy of being delisted because its share price fell below the $1 mark for 30 consecutive days. Rite Aid’s shareholders then authorized a rare 1-for-20 reverse stock split. The drug chain’s shares have lost about 50 percent of their value over the past 12 months.
In accordance with New York Stock Exchange Rules, on August 12, 2019, Rite Aid also announced that Donigan will be granted an employment inducement award, consisting of a restricted stock award with a grant date fair value equal to $2,000,000 (which will vest in equal annual installments on each of the three successive anniversaries of her commencement date) and nonqualified stock options with a grant date fair value equal to $2,000,000 (which will vest and become exercisable in equal installments on each of the four successive anniversaries of her commencement date).