J. Mario Molina, MD, and John Molina have been ousted as CEO and CFO, respectively, of the company started by their father over “disappointing financial performance.”
Molina Healthcare announced the brothers’ firings after a decline in net income in 2016 blamed mostly on poor performance in the Affordable Care Act’s health insurance exchanges, though the company remained profitable overall. Despite the ACA losses, Mario Molina had been one of the healthcare industry’s most outspoken supporters of the law, saying the Republican attempts to repeal it would “destabilize the marketplace.”
The press release from Molina doesn’t mention the CEO’s public statements, citing a need for “new leadership” with the industry in “dynamic transition.”
“The Board of Directors appreciates Mario and John Molina’s leadership and contributions for more than two decades,” Molina’s chairman, Dale Wolf, said in a statement. “In light of the Company’s disappointing financial performance, the Board has determined to change leadership in order to drive profitability through operational improvements. These changes represent targeted and deliberate actions to enhance the Company’s focus and improve its competitive position within the healthcare industry.”
Taking over both the CEO and CFO roles on an interim basis will be Chief Accounting Officer Joseph White.
The company has been run by the Molina family since its founding in 1980 by C. David Molina, MD, an emergency room physician. Mario took over the roles of president and CEO when his father died in 1996, overseeing the transition to a publicly-traded company in 2002.
For the time being, both brothers still hold positions on the company’s board. Mario will have to be re-elected at Molina’s annual meeting, which has been delayed to May 10 to “allow stockholders time to consider” the change in leadership.