UPDATED Dec. 20, 10:22 a.m.
Medtronic Inc. (NYSE:MDT) chairman and CEO William Hawkins plans to step down at the end of April 2011 after what would be nearly four years at the helm of one of the world’s largest medical device makers.
The Fridley, Minn.-based medical device monolith didn’t give a reason for Hawkins’ departure in a press release and senior media relations director Brian Henry stayed coy when asked for the reasons behind the move.
"After 33 years in the medical technology industry and four years as CEO of Medtronic, he’s retiring to pursue other challenges," Henry told MassDevice. "I think there are a number of achievements that can be attributed to Bill’s tenure. The overall strategy of being a chronic disease management was his vision."
Henry had no comment on whether the move was planned or about the search for a successor.
Hawkins joined the company in 2002 to lead its vascular business and was named president and COO in 2004. In August 2007 Medtronic tapped him for the corner office and added chairman to his title a year later.
Hawkins
Hawkins, 56, plans to step down as of April 29, 2011, the close of Medtronic’s fiscal year. Medtronic said it’s looking for a replacement from outside the company and that Hawkins will stay on until one is found. Lead director Ken Powell, chairman of the board’s corporate governance committee, pledged to ensure and "orderly transition."
"I am proud of what we have accomplished during my tenure at Medtronic and am confident that we made the right investments in talent, quality and innovation to position the company for long-term growth and future success," Hawkins said in prepared remarks. "It has been an honor and a privilege to lead such a talented, committed organization and I will work closely with the board to ensure that the transition to my successor is smooth and effective."
In a note to investors, Leerink Swann analyst Rick Wise wrote that the "astonishing and unexpected" news comes on the heels of a reorganization last year that divided the company into two new units with new leaders — Chris O’Connell as group president of restorative therapies and Michael Coyle as cardiac and vascular group president. There may be a "strong possibility of an internal candidate," according to Wise with that duo as leading candidates, even though Medtronic said it’s embarking on an external search.
"While Hawkins has made major achievements during his tenure — maintaining healthy financials, restructuring costs, positive major portfolio moves (CoreValve/CryoCath, etc.) — we’re inclined to think the news will be viewed as a stronger mandate for change ahead, as MDT continues its ongoing efforts to return the company to more predictable and attractive top line and double digit bottom line growth," Wise wrote. "For the past few years, MDT has had to manage through a challenging growth period, with sales pressured by slowing market growth across most of its businesses, market share losses, and a dearth of new product laun ches. Again, under Hawkins’ leadership, MDT has continued to drive free cash flow, invest in the pipeline, and manage SG&A expense to position the company for improving EPS growth ahead. Still with a new leadership team, we would think that everything will be on the table — rethinking the portfolio, further rethinking cost reduction, accelerating share repurchases, etc."
Click here to listen to a recent MassDevice interview with outgoing Medtronic CEO William Hawkins.
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