Cano Health said Dr. Marlow Hernandez agreed to immediately step down as CEO in an announcement made a day after the company's Thursday annual shareholder meeting.
Hernandez, who served as CEO since 2014, will continue to serve as a director.
Cano’s chief strategy officer, Mark Kent, will step in as interim CEO while the board searches for a permanent successor.
Hernandez' removal follows an 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 Tuesday morning, no filing had been made.
Three former directors who actively sought Hernandez’s removal as CEO said in a statement Tuesday that 82% of shareholders voted to withhold their vote rather than vote for Muney and Rivera.
In the statement, 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 while they support the choice of Kent as interim CEO, it doesn’t go far enough.
They said the board is not equipped to oversee Cano Health and pick a permanent replacement for Hernandez and Muney and Rivera only retained their seats based on what they said was Cano Health’s “archaic plurality voting policy.” Muney and Rivera didn’t require a majority of shareholders to be reelected.
The trio also expressed dismay that Hernandez continues to serve as a director, alleging that it’s not permitted under his employment agreement. A Cano spokesperson did not immediately respond to a request for comment.
On June 9, the three former directors sought to reopen the nomination window for directors by filing a preliminary injunction with Delaware Court of Chancery last Friday to prevent Cano from conducting the annual meeting of stockholders. That motion was denied.