Bill Hawkins, the outgoing CEO of Medtronic Inc. (NYSE:MDT), will remain at the company for one year after stepping down in April.
He will receive on top of his current annual salary of $1.25 million an expected $3.8 million in separation pay, according to a Securities & Exchnage Commission filing.
Medtronic announced in early December that Hawkins would leave after three years of leading the company. The Fridley, Minn.-based maker of new innovative medical devices said it would seek an outside candidate for chief executive officer.
Hawkins’ transition role will largely be as a consultant. He won’t be required to report to work, but instead make himself available to advise on everything from litigation and community affairs to talent retention and industry leadership, according to the separation letter filed with the SEC.
Hawkins will also take with him one of Medtronic’s 4,500 iPads. In the separation agreement Hawkins is allowed to keep a “cellular phone, iPad and laptop computer.” There was no mention of brand of phone or laptop. His stock options and restricted stock grants will also continue to vest during his transition year. His total compensation was about $9.6 million in the previous fiscal year.
While Hawkins’ tenure was relatively short, he left an indelible mark on the world’s largest maker of medical devices.
Here’s a look back on the Hawkins era at Medtronic.
August 2007: Medtronic names Hawkins CEO. He previously served as chief operating officer and president of the company’s vascular unit. Prior to Medtronic, Hawkins was president and CEO of Novoste Corp., a firm that specializes in using radiation to treat the reclotting of blood vessels.
October 2007: Medtronic issues a worldwide recall of its next generation Sprint Fidelis wires, which had a faulty design that may have contributed to 13 deaths.
The recall was “probably the toughest decision of my life,” Hawkins later told Chief Executive magazine.
“It was not black and white,” he said. “It was all statistics and probabilities – not that we had had [a significant number] of failures. Plus, we had to consider the risk of people whose lives depend upon the device getting concerned and wanting to have it extracted, which could have a higher mortality risk than leaving it in.”
Sprint Fidelis cast an enormous shadow over Hawkins’ tenure. But the company eventually won a landmark Supreme Court decision that protected medical device makers from liability if the Food and Drug Administration had approved their products.
Medtronic recently announced that it would pay $268 million to settle all Sprint Fidelis-related lawsuits.
December 2008: Medtronic pays $380 million to purchase CryoCath Technologies Inc. The Canadian company makes catheters and balloons that restore normal electrical signals in the heart by freezing the tissue or pathways behind the irregular quivering.
The deal epitomized Hawkins’ “tuck-in” acquisition strategy, which favored smaller deals that could replenish Medtronic’s product pipeline and/or goose sales.
The FDA recently approved CryoCath’s Arctic Front therapy for use in the United States.
Over the next few years, Medtronic paid $700 million for CoreValve, $325 million for Ventor Technologies, $123 million for Osteotech, $370 million for ATS Medical, and $800 million for Ardian.
August 2009: Medtronic reorganizes its business operations, combining cardiac rhythm disease management, cardiovascular, and Physio-Control into one operating unit and spinal and biologics, neuromodulation, diabetes and Surgical Technologies Group into another.
The reorganization was a key component to Hawkins’ “One Medtronic” strategy that emphasized profitability and cost control through greater integration and cooperation between the company’s traditionally independent business units.
August 2010: Medtronic opens a new patient care center in Beijing, a symbol of the increasing clout of China and the rest of the company’s global operations.
Over 40 percent of Medtronic’s yearly revenue now originates overseas, led by China, which generates about $500 million in annualized sales and an annual growth rate of 20 percent.
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