Saturday, May 17, 2025

Foreword

Alyson Shontell

Editor-in-Chief

Good morning,

Six months ago, a top executive at the biggest health care company in America was shot dead. Brian Thompson, CEO of the $300 billion insurance arm of UnitedHealth Group (UHG), was murdered on his way to the company's investor day in New York City.

At the time, UHG’s business had never been stronger. The health care giant also runs a prescription-drug benefit operation, employs thousands of doctors, and makes billions for running medical billing systems. Just a few weeks after Thompson was shot, the company announced that its revenue topped $400 billion in 2024—more than three times what it was 10 years ago.

But the murder forced UHG to face a harsh fact: The health care system has never felt more broken for the patients it's meant to serve. The alleged killer is a young man who was angry that the company had soared in value even as it denied care to patients. On social media, disturbingly, many thousands of people celebrated the killing. But a far larger number of people clearly feel that UHG and other insurers use their size and power for profit, not for the greater good.

Since then, UHG’s earnings and share price have plunged. This week, the company took a one-two punch: On Tuesday its CEO, Andrew Witty, stepped down, and the company pulled its earnings guidance; on Wednesday, the Wall Street Journal reported that the Department of Justice was investigating UHG for Medicare fraud. (The company said in a statement that it stood by the integrity of its Medicare work.)

Witty was succeeded by Stephen Hemsley, the former chief whose acquisitions made the company huge in the first place. Clearly, he’ll have a lot of work to do—including reckoning with the imperative of striking a better balance in UHG’s management of patient care. And it’s a reminder that any company can get in trouble when it puts profits too far ahead of humanity.

Fortune 500 C-suite Power Moves

Cisco (No. 74) appointed Mark Patterson, who currently serves as EVP and Chief Strategy Officer, as its next CFO. Patterson will succeed Scott Herren, who will retire. Intuitive Surgical (No. 497) appointed David J. Rosa, who currently serves as President, as CEO. Rosa will succeed Gary S. Guthart, who will transition to Executive Chair of the Board. UnitedHealth Group (No. 4) Board Chairman and former CEO Stephen Hemsley returned to the CEO role after Andrew Witty stepped down for personal reasons.

And more in this week's Fortune 500 Power Moves.

Deals & Developments

Phillips 66 (No. 26) announced it will sell majority stakes in its Germany and Austria retail fueling business ahead of a proxy fight with Elliott Investment Management, which owns a nearly 6% stake in Phillips 66 and is seeking to break up the company. Elliott has cited company performance concerns and is pushing for the company to double down on oil refining, versus seeking growth via its midstream pipeline business and other areas.
Charter Communications (No. 76) has agreed to merge with Cox Communications. The transaction is valued at about $34.5 billion, including debt, and the merger of these two major broadband providers will better equip them to compete with wireless providers for internet customers.
NRG Energy (No. 150) is acquiring 18 natural gas-fired power plants and the CPower virtual power plant platform from LS Power in a cash-and-stock deal valued at up to $12 billion, including debt. The move will double NRG’s generation capacity to over 25 gigawatts, significantly expand its presence in key markets like Texas and the Northeast, and position NRG to benefit from surging power demand driven by AI and data centers.
Dick’s Sporting Goods (No. 313) announced it is buying Foot Locker (No. 458) for $2.4 billion. But Foot Locker faces ongoing struggles, which persist despite the leadership of CEO Mary Dillon, who proved herself an effective leader at Ulta Beauty. “In theory, the deal allows Dick’s … to expand into new markets, go deeper into the sneaker boom, and increase its market share,” Fortune’s Phil Wahba writes. “It remains to be seen whether or not [Dick’s] can actually pull off that feat,” Phil adds, “and Wall Street has doubts.”

Overheard

“Run towards the hardest problems—not walk, run.”

—Advanced Micro Devices (AMD) (No. 181) CEO Lisa Su recounting the best career advice she’s ever received

On earnings calls:

Walmart (No. 1) CEO Doug McMillon warned that the retailer will still have to raise prices despite the Trump Administration’s roll-back of tariffs. “We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” McMillon said in a statement alongside Walmart’s earnings.
Deere (No. 64) saw a net income drop of roughly half a billion year over year ($1.8 billion in the second quarter this year compared to $2.37 for the same period last year). But CEO John May remained optimistic: Despite the near-term market challenges, we remain confident in the future.”
Cisco (No. 74) CEO Chuck Robbins noted that the company hasn’t seen any significant change in customer behavior due to tariffs. “I think the AI transition is just so important that they're going to continue to spend until they just absolutely have to stop. And I think that as of right now, they're still comfortable.”
NRG Energy (No. 150)