(Story was updated at 3:13 p.m. ET)
TeamHealth has named as its new CEO Leif Murphy, most recently CFO of LifePoint Health. He will succeed the retiring Mike Snow.
Murphy will receive a base salary of $1 million plus a signing bonus of $2.8 million. He also will be eligible for performance bonuses and awards.
TeamHealth, which has 19,000 physicians and 3,400 hospital clients, is about to be supplanted as the nation's largest physician staffing company.
When a merger between Amsurg and Envision Healthcare is complete, that combined company will hold the crown.
The switch in leadership comes five months after activist investor Jana Partners demanded and received three board seats on the struggling physician staffing giant.
Two of the five TeamHealth board members involved in the CEO search were Jana representatives, including Edwin “Mac” Crawford, who was Murphy's boss at CVS Caremark in the mid-2000s.
For the past three years, Murphy has been CFO at LifePoint, a growing investor-owned hospital chain that also operates several hospitals in joint ventures with Duke University Health System. Murphy joined LifePoint in 2011.
Snow, 61, was hired in 2013 to serve as TeamHealth's president. The next year, he was was named CEO. In a regulatory filing Monday, TeamHealth said Snow and the company parted "amicably." He will receive about $3 million over the next two year in bi-weekly payments representing double his base salary and his average annual bonuses.
Murphy faces some challenges in his new role. Pressure has mounted on the company since late 2015 when management and the board rejected a $5 billion merger offer from rival Amsurg.
At the time, TeamHealth's stock price was trading about $60 per share, or nearly twice the $34 it stands at today.
As earnings declined, the company's depressed stock price drew in Jana, who complained that management and the board had made strategic errors in leading TeamHealth.
TeamHealth posted net income in its second quarter of $18.8 million, or $0.25 diluted net earnings per share, compared with net earnings of $28.9 million, or $0.39 diluted net earnings per share, in the second quarter of 2015.
Revenue in the second quarter was $1.12 billion, a 28% increase over the year-earlier quarter. Knoxville, Tenn.-based TeamHealth said the increase was largely the result of the $1.6 billion acquisition of IPC Healthcare late last year.
Brentwood, Tenn.-based LifePoint is the nation's sixth-largest, investor-owned hospital company with 67 hospitals and 2015 revenue of $5.2 billion.
Murphy has been a key architect of the chain's growth since his arrival in 2011 as chief development officer.
Over that time, the Duke LifePoint partnership has grown from one hospital to 13. And LifePoint now employs about 1,800 physicians vs. less than 400 when Murphy, who also is in charge of physician services, came aboard.
LifePoint will replace Murphy with Michael Coggin effective Sept. 30. Coggin, 47, has served at LifePoint as senior vice president and chief accounting officer since December 2008. He is responsible for external financial reporting, corporate accounting and consolidation functions.
Before LifePoint, Murphy was CEO of DSI Renal between 2008 and 2011.
During part of his stint at CVS Caremark between 2006 and 2008, Murphy served under Crawford as treasurer and senior VP of finance. In 2007, Crawford led Caremark through a giant merger with drug chain CVS that created a combined company valued at $26.5 billion.
LifePoint, along with HCA Holdings, has been among the most-consistent financial performers among hospital stocks since investors turned off the sector last summer in the face of flattening volumes from Affordable Care Act exchange patients.
But even LifePoint has not been immune to recent stumbles. For example, its stock price fell $4.83 a share, or 8%, to $59.18 on July 29 when the company missed second-quarter earnings projections predominantly because of physician departures at just one hospital.
At 2:30 p.m. Eastern Tuesday, LifePoint's stock traded at $57.58, down 14 cents on the day. The company's 52-week high was $80.13 last September.
