HARTFORD, Conn. - Aetna Inc., the biggest U.S. health insurer, said William Donaldson, who led the $7.7 billion sale of two units and the spinoff of the health-care business, will step down as chairman next month.
Mr. Donaldson, 69, was expected to give up the post sometime after Aetna spun off its health care unit to shareholders in December. John Rowe, who was named chief executive last September, will add the role of chairman. Aetna also named Ronald Williams as chief of health operations.
Mr. Donaldson became Aetna's chairman and chief executive in February 2000, when Richard Huber quit under pressure from shareholders upset with the company's performance. Under Mr. Donaldson, Aetna sold its financial services and international units to ING Group for $7.7 billion to focus on health care. Mr. Donaldson also hired Mr. Rowe, a gerontologist who had been president at Mount Sinai Medical Center in New York.
"I think it signals the company is very comfortable with Jack Rowe," said John Szabo, a CIBC World Markets Inc. analyst who has a "hold" rating on Aetna shares. "It's an indication that he's taken the reins of the company and is doing a good job in the eyes of the board."
The addition of Mr. Williams will strengthen Aetna's management team, Mr. Szabo said. He had said Aetna needed to fill key management jobs with managed-care veterans to boost its profits.
Mr. Williams, 51, had been group president of the large group division of WellPoint Health Networks Inc. and president of WellPoint's Blue Cross of California unit, Aetna said. He is expected to join Aetna next month, the company said.
In February, Aetna hired William Popik, a former Cigna Corp. executive, as its chief medical officer. The position is important because the company is trying to improve relationships with physicians who have complained that Aetna meddled in medical decisions and required too much paperwork.
Mr. Donaldson, who co-founded the investment banking firm Donaldson, Lufkin & Jenrette, joined Aetna's board of directors in 1997. He will remain on the Aetna board.
"Bill Donaldson wanted to stay until Aetna finished the ING transaction and got the company turned around and on the right course again," said spokesman Fred Laberge. "He and the board decided this was the appropriate time to complete that transition."