Cano Health said Friday Dr. Marlow Hernandez agreed to immediately step down as CEO in an announcement made a day after the company’s annual shareholder meeting.
Hernandez, who served as CEO since 2014, will continue to serve as a director.
Cano’s chief operating officer, Mark Kent, will step in as interim CEO while the board searches for a permanent successor.
In after-hours trading, Cano’s shares rallied and were trading around $1.45 per share, up 16%.
Hernandez’ removal follows Thursday’s annual meeting, during which shareholders reelected directors Dr. Alan Muney and Kim Rivera. A significant number of shareholders, though, withheld support for Muney and Rivera, according to a post-meeting statement from Chairman Solomon Trujillo.
A company spokeswoman said the vote tally would be included in a regulatory filing. As of Friday afternoon, no filing had been made.
Three former directors who actively sought Hernandez’s removal as CEO said in a statement that 75% of shareholders voted to withhold their vote rather than vote for Muney and Rivera.
The three former directors, Barry Sternlicht, a billionaire real estate investor; Dr. Lewis Gold, co-founder of Sheridan Healthcare; and Elliot Cooperstone, managing partner of InTandem Capital Partners, said Muney and Rivera only retained their seats based on what they said was Cano Health’s “archaic plurality voting policy.” Muney and Rivera did not require a majority of shareholders to be reelected, according to a source at the company.
A spokesperson for the three did not immediately respond to requests for comment.
On June 9, the three former directors sought to reopen the nomination window for directors by filing a preliminary injunction with the Delaware Court of Chancery last Friday to prevent Cano from conducting the annual meeting of stockholders. That motion was denied.