(Adds Walgreen's response)
Aug 20 Drugstore retailer Walgreen Co's
Chief Financial Officer, Wade Miquelon, and another top
executive lost their jobs after a $1 billion forecasting error
in the company's Medicare-related business, the Wall Street
Walgreen named Kraft Foods Group Inc's former CFO,
Timothy McLevish, to replace Miquelon - its CFO of six years -
on Aug. 4.
Miquelon last month cut by $1.1 billion a forecast of $8.5
billion in pharmacy unit earnings for the year ending August
2016 that he had made at an April board meeting, the journal
Miquelon's departure was due to his transitioning to newer
opportunities, Walgreen told Reuters in an email.
The company had earlier said Miquelon would continue as
advisor to assist it with a strategic partnership with Alliance
Boots Holding Ltd.
The newspaper report said the forecast error also led to the
departure of Kermit Crawford, Walgreen's president of pharmacy,
health and wellness.
Crawford announced his retirement last month after 31 years
with the company.
He will continue as an advisor, and moves forward to pursue
new opportunities outside, Walgreen said.
The forecasting error was based partly on contracts to sell
drugs under Medicare, WSJ said.
Walgreen, which gets 25-30 percent of its prescriptions from
Medicare Part D plans, had not factored in a spike in the price
of some generic drugs that it sells as part of annual contracts,
the paper said.
The company said it did not break down its pharmacy business
revenue by segment.
Medicare Part D subsidizes the cost of prescription drugs
and prescription drug insurance premiums for Medicare benefits
in the United States.
Walgreen would pay Miquelon severance of $3.2 million and a
performance bonus of about $1.2 million, and pay $3.3 million to
Crawford as severance and consultation fees, the company said in
a regulatory filing this month.
Miquelon, 49, joined Walgreen in June 2008 as senior vice
president and CFO. In 2012, he was promoted as executive vice
president, CFO and president, international, and joined the
board of Alliance Boots.
Miquelon is also credited with playing a central role in
launching the Walgreens-Alliance Boots deal.
Walgreen said earlier this month it would buy the 55 percent
it does not already own of Alliance Boots for 3.13 billion
pounds ($5.3 billion) in cash and 144.3 million shares, giving a
total deal of about $15 billion.
(Reporting by Shailaja Sharma in Bangalore; Editing by Joyjeet