Cano Health is separating the roles of CEO and board chairman following a public clash with three directors who resigned last month.
Solomon Trujillo, a communications executive and serial investor who has served as an independent director since 2021, was named Cano’s chairman, the company said Monday. CEO Dr. Marlow Hernandez, who had served as chairman, will remain a director.
The move comes after Barry Sternlicht, a billionaire real estate investor; Dr. Lewis Gold, co-founder of Sheridan Healthcare; and Elliot Cooperstone, managing partner of InTandem Capital Partners, resigned from the board in late March and called for Hernandez’ ouster.
Last week, the three ex-directors entered into a group agreement to pursue changes at the company, according to a Securities and Exchange Commission filing. Together, the three hold approximately 35.7% of Cano’s shares.
A spokesperson for Sternlicht, Gold and Cooperstone declined to comment on the appointment.
Sternlicht helped the Miami-based primary care provider go public through a special purpose acquisition company in 2021. He and other investors provided the company with $1.4 billion in capital in June 2021, driving up its valuation to $4.4 billion.
The company’s market capitalization was $744.7 million as of Monday.
Outside of Florida, the company has clinics in California, Illinois, Nevada, New Mexico, Puerto Rico and Texas.
In a statement on Monday, Trujillo said the board would focus on improving Cano’s cash flow and value to stakeholders.
Cano faces major liquidity issues amid rapid growth. The company recorded a net loss of $428 million on $2.7 billion in revenue in 2022, partially due to a non-cash goodwill impairment, according to regulatory filings. Cano treats 310,000 patients, more than half of whom are Medicare enrollees covered under value-based arrangements.
In a letter to shareholders on Monday, Cano Health committed to increasing capacity at its existing medical centers, improving patient engagement and liquidity to accelerate profitability. The company said it is consolidating its network of clinics and considering the sale of non-core assets.
“We are by no means satisfied with our recent stock price performance, but with unanimous alignment at the Board level, we are taking immediate action intended to realize the intrinsic value of our model by driving greater efficiency, productivity, and sustainable profitability,” the company told shareholders.