UnitedHealth stock drops nearly 18% as CEO Witty is replaced by Hemsley

Andrew Witty is stepping down as CEO of health care giant UnitedHealth Group in a surprise transition that follows a period of unprecedented turbulence for the nation’s largest health insurer, including the public killing of a company executive and financial woes that only intensified in recent weeks.

UnitedHealth suspended its financial guidance for the year, and its stock price closed down Tuesday nearly 18%.

Witty is leaving for personal reasons, the company said, and will remain a senior adviser. He will be replaced as chief executive by former CEO and longtime company leader Stephen Hemsley, who has been board chair since 2017.

The shakeup at the top of Minnesota‘s largest company comes just over six months after the fatal ambush of UnitedHealth Group executive Brian Thompson on a New York City sidewalk and weeks after a one-day stock sell-off driven by deteriorating results that wiped away $120 billion in the company’s market value.

Shares in the Eden Prairie-based company have fallen even further since that 22% stock plunge on April 17, which stemmed from higher-than-expected use of medical services in the company’s massive UnitedHealthcare health insurance business as well as within Optum Health, the fast-growing division that runs a national network of outpatient medical centers.

The company employs some 400,000 people, including 19,000 in Minnesota.

Tuesday morning, with the share price plunging further even before the official market open, UnitedHealth Group held an impromptu call with investors to explain why it was discontinuing its financial forecast for the remainder of the year.

“I’ll start by conveying on behalf of the UnitedHealth Group board, our fellow employees and myself, our deepest thanks and appreciation to Andrew Witty for his leadership of this company, a vital role he played with real integrity and compassion during one of the most difficult periods any company could endure,” Hemsley told investors. “We understand his decision and I’m grateful he has agreed to serve as a senior adviser to me.”

The company said it was suspending its 2025 outlook as care activity continues to accelerate while also broadening to more types of benefit offerings than seen in the first quarter. The medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than anticipated, UnitedHealth Group said, adding it expects to return to profitable growth in 2026.

Challenges continue to pile up for the company, said Morningstar analyst Julie Utterback. She noted in a Tuesday note to investors that the share price has dropped from more than $600 on the day of Thompson‘s killing to below $350.

“Since December, UnitedHealth shares have [faced] broad regulatory concerns and company-specific questions around its coverage decisions, risk ratings in Medicare Advantage, conflicts between its medical insurance and Optum operations and surging medical utilization,” Utterback wrote. “Although we suspect investors may eventually appreciate Hemsley taking a firmer grip on UnitedHealth while the major inputs for 2026’s results can still be influenced, the murky outlook for 2025 and executive suite shakeup inject more uncertainty into the situation.”

Another factor driving uncertainty are reports that the U.S. Justice Department is investigating UnitedHealth Group’s billing practices to see if the company has wrongly used patient diagnosis data to inflate its payments from the Medicare Advantage program.

Hemsley, 72, is an accountant by training. He joined the company as chief operating officer in 1997 and became president two years later, serving beside Dr. William McGuire, the visionary CEO who left the company in 2006 amid a scandal over stock option pricing. With McGuire’s departure, Hemsley stepped in as chief executive and held the job until 2017, a timespan that saw remarkable growth.

Witty, 60, became chief executive of UnitedHealth Group in 2021 and shortly thereafter named Thompson as CEO for the company’s health insurance business. Previously the top executive at pharmaceutical giant GlaxoSmithKline, Witty started his career at UnitedHealth by running the company’s Optum division, which sells a variety of health care services including pharmacy benefits management and health care data consulting.

Optum is the faster-growing but less visible part of UnitedHealth Group, which covers just over 50 million people nationwide through its UnitedHealthcare division.

Early in the COVID-19 pandemic, Witty stepped away from company leadership to work on the development of vaccines at the World Health Organization. After returning and becoming CEO, he was the public face of the company during a remarkably difficult 2024, which included a congressional grilling over how it handled a cyberattack at its Change Healthcare subsidiary.

It was Witty who stepped onstage to suddenly close the company’s investor conference in December, as word spread of Thompson‘s killing. In the following days, he issued a moving video message to employees, calling the killing immeasurably sad and profoundly shocking while encouraging colleagues to take time for family.

“Leading the people of UnitedHealth Group has been a tremendous honor as they work every day to improve the health system, and they will continue to inspire me,” Witty said in a statement Tuesday.

Despite the recent stock plunge, UnitedHealth remains a huge force in the nation’s health care economy, with its most recent quarter featuring revenue of $109.6 billion and a profit after adjusting for one-time factors of $6.16 billion.

UnitedHealth put out a news release on the CEO change at 5:30 a.m. CT and held a conference call with investors 90 minutes later. Witty was not on the call, in which Hemsley and Chief Financial Officer John Rex addressed questions about the abrupt transition and next steps.

Hemsley said he was deeply disappointed in the recent setbacks in financial performance and apologized for them, saying they involved both external and internal challenges.

UnitedHealthcare is continuing to see greater health care spending, Rex said, for seniors who are new to its Medicare Advantage health plans, a privatized version of the federal government‘s health insurance program.

Hemsley said he remained confident in the company’s strategy built on “value-based care” initiatives, meaning health plan contracts with financial incentives for doctors and hospitals to provide better care at lower total cost. The new CEO also pledged UnitedHealth Group would “understand, in a more precise level, exactly what‘s going on” with the recent performance failings.

“I hope that people understand that there are a whole host of remedial responses in motion across this enterprise on both the UnitedHealthcare side and the Optum side,” Hemsley said. “So, we are gaining momentum on these things.”

UnitedHealth Group has been a Wall Street darling for decades, routinely exceeding financial guidance and seldom surprising markets. Near-term expectations are now significantly diminished among a number of stock analysts, although several on Tuesday continued to express fundamental optimism in the company’s long-term prospects.

“We remain optimistic that Hemsley can guide this company through this period,” wrote Michael Wiederhorn, an analyst with Oppenheimer, in a note to investors.

John Boylan, an analyst with Edward Jones, wrote that he believed the company’s “business model of being a one-stop shop for health care services is sound and eventually will translate into growth with new management as issues are resolved.”

Utterback of Morningstar wrote that UnitedHealth Group “remains the strongest managed care organization we cover with a significant margin for executional error like we are seeing currently.”

The CEO change “doesn’t strike us terribly surprising in light of recent business developments and deterioration in investor trust,” wrote Whit Mayo, an analyst with Leerink Partners. The suspension of financial guidance is more concerning, Mayo added, although it might let Hemsley “settle into the role, figure out trend, and begin the process of reestablishing some credibility’' with investors.

This marks the second time Hemsley has stepped into the CEO role at a critical juncture for the company.

When he did so back in 2006, some former executives told the Minnesota Star Tribune it had been the lower-profile Hemsley who brought a basic business discipline to the company when it was sorely needed following a string of acquisitions dating to the 1990s. It was Hemsley’s company, they said, even as McGuire, the commanding physician-turned-executive, did most of the talking at meetings with stock analysts.

Described over the years as everything from a numbers guy to a brainy professor type, Hemsley suggested an appetite to dig into the problems as he soberly described the path ahead.

“I am humbled to return to the mission of this company and to the thousands of employees dedicated to that mission,” Hemsley said. “I have every confidence in the leadership team and the capacities of this enterprise to continue to create and pursue significant opportunities to make substantial contributions to health care in this country and to return to our long-term growth expectations.”