Medtronic Announces Key Executive Retirement Amid Strategic Transformation

Jun 18, 2024 17:31 CST Updated 17:31

Medtronic

Medical Device Manufacturer

Recently, Medtronic stated in a filing with the U.S. Securities and Exchange Commission that Rob ten Hoedt, Executive Vice President and President of Global Regions at Medtronic, will retire on June 28. Ten Hoedt, who is also a member of Medtronic's Executive Committee, submitted his retirement notice on June 1.

Rob ten Hoedt, Executive Vice President and President of Global Regions at Medtronic

Global Vice President, Key Node Retirement

According to a filing with the U.S. Securities and Exchange Commission, he turned 63 on April 28. In recent years, Medtronic has set a mandatory retirement age of 65 for departing executives, such as former CEO Omar Ishrak, former Executive Vice President and General Counsel Brad Lerman, and former Chief Medical and Scientific Officer Dr. Rick Kuntz.

Ten Hoedt's departure comes amid significant changes at Medtronic, which has implemented a series of management initiatives such as shutting down its ventilator business, layoffs and an early retirement plan last year, strengthening spending discipline, and increasing the use of automation and digitalization.At the same time, the company said it has made strategic R&D investments to support future growth.

Foreign media stated that they have contacted Medtronic for more information regarding ten Hoedt's retirement, including who will succeed him, but so far, Medtronic has not disclosed the successor.

One of the largest shareholders, driving continuous growth of core products

The company said on its website that, as the president of the Global Regions,ten Hoedt is fully responsible for Medtronic's product development and market in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific region.This includes the ongoing development of the Hugo surgical robot system, a project that began after Medtronic acquired Covidien in 2015 for a substantial $43 billion.Hugo received the CE mark in the EU in 2021.

"In the press release announcing that Medtronic's Hugo received the CE mark, he stated, 'Robotics and artificial intelligence are an undeniable part of the future of healthcare, with tremendous potential not only to enhance patient care but also to reduce reliance on physicians’ technical skills.'"

Medtronic's Hugo system has not yet received FDA approval, but the company stated last month that it is conducting more clinical studies to support submission for FDA review.

Image Source: Official Website

Medtronic transferred last yearTen Hoedt was ranked as one of the highest-paid executives in the company, with a total compensation of $5 million for the 2023 fiscal year.

According to a document filed with the U.S. Securities and Exchange Commission (SEC),He is also one of the largest individual shareholders of Medtronic.As of August 2023, he held approximately 540,000 shares. The document at the time listed only two executives who held more shares:Chairman and Chief Executive Officer Geoff MarthaHold7.95 million sharesBob White, former Executive Vice President and President of the Medical Surgical Portfolio, holds 623,000 shares.

Bob White (whose Medical Surgical Portfolio includes Hugo) also retired this year. Martha announced the complete shutdown of the ventilator business during the company’s Q3 earnings call in February. She simultaneously announced that Bob White, Executive Vice President and President of the Medical Surgical Portfolio, would be leaving the company as part of a new round of restructuring.

Bob White

That isHe successfully led the acquisition of Medtronic and Covidien.And complete the integration in the Asia-Pacific region, bringing together more than 5,000 employees as one team.

Since Ten Hoedt's announcement, Medtronic has not held an earnings call, and the company does not appear to have publicly discussed his upcoming departure.

Rob ten Hoedt's Medtronic Career

At the age of 18, ten Hoedt visited the hospital after experiencing a "rather terrifying accident," which marked the beginning of his career.

"Although that experience was terrifying, everything that happened in the hospital left a deep impression on me — the doctors, nurses, care, all the progress," he said in a 2014 interview with the U.S. Securities and Exchange Commission, as Medtronic was completing its acquisition of Covidien. "He recalled lying in bed, staring at the ceiling, and thinking, I know this is my destiny; I want to do something in the healthcare field."

"I come from Europe, and as far as I know, Europe has always implemented a socialized healthcare system," he continued. "But these systems are now getting into very complicated situations. The government can no longer afford it, the demand is too great, and it's time to change healthcare. I hope my children and grandchildren can receive the same medical services as I do. I think as a new company we can support these systems in a valuable way, with economic value, and have the opportunity to participate in providing medical services, supporting systems, holistic solutions, services, and solutions. I believe that now, in our new company, we have the opportunity to change healthcare for our future and for our children."

In 1991, Ten Hoedt joined Medtronic as the marketing manager for the Western European neurological business.
In 1994, he continued to lead Medtronic in establishing a gastro-urology business in Europe, and subsequently took charge of the global operations of that business.
In 1999, Ten Hoedt was appointed as the Vice President and General Manager of Vitatron, a wholly-owned subsidiary of Medtronic Netherlands, responsible for the development and marketing of pacemaker devices. Under his leadership, Vitatron established a strong image and market position in the medical technology field.
In 2006, Ten Hoedt moved to Medtronic's European headquarters in Tolochenaz, Switzerland, to lead the cardiovascular business in Western Europe, which later expanded to Europe and Central Asia (ECA).

Last year, Ten Hoedt concluded his final term as Chairman of the MedTech Europe Board but continues to serve as Chairman of the Medmix Board, Chairman of the NLC Health Ventures Supervisory Board, and a member of the Fagron Board.

"First of all, my personal leadership style is teamwork," he said in an interview during the merger of Covidien. "I don't necessarily tell everyone specifically what to do, but I want to guide the leadership team and a group of people to perform at their best. Doing this in the Medtronic environment makes me very happy, and I look forward to continuing to do so in the coming years."

Medtronic, at a time of significant transformation

Early Retirement

In March 2023, Medtronic launched a voluntary early retirement incentive program in an effort to complete a significant cost-cutting plan before the end of the fourth quarter. In a public statement, Medtronic described the Voluntary Early Retirement Program (VERP) as a "limited opportunity for early retirement with enhanced benefits," and also as a way for the company to avoid layoffs. Compared to large-scale layoffs, this approach can also reduce unemployment, severance payments, and litigation costs.

Shut Down Ventilator Business

On February 20, 2024, Medtronic Global CEO Geoff Martha announced a major decision via teleconference: the global ventilator business will be shut down. Notably, in October 2022, Medtronic had announced the spin-off of its patient monitoring and respiratory interventions businesses from the medical surgical segment to form a new company. However, just over a year later, Medtronic decided to close this business. Analysts believe that there are mainly two reasons behind this decision: First, during the COVID-19 pandemic, the demand for ventilators surged, prompting Medtronic to significantly ramp up production to meet market supply; as the pandemic gradually came under control, the reduction in ventilator market demand became an inevitable trend. Second, Medtronic has been advancing the spin-off process of its patient monitoring and respiratory interventions businesses in recent years. The closure of the ventilator business is a further evolution of this divestiture strategy to enable the company to focus more on other high-value areas.

Executive Departure

On March 17, Ariel Mactavish, President of Medtronic's Respiratory Interventions division, announced she would be leaving the company. Additionally, Bob White, Executive Vice President and President of the Medical Surgical Portfolio, will also depart around the same time.

On April 19, Gio Di Napoli, President of Medtronic's Gastrointestinal Business, announced that he would step down from his role at the medical technology giant.

Layoffs

On June 13, U.S. time, Medtronic issued a statement to the Star Tribune, confirming rumors of its global layoffs, but did not disclose the specific number.

MedtronicIn January this year, its CEO Geoff Martha announced a major restructuring plan aimed at restoring the company's profitability.Martha made it clear in the statement that the company's top priority is "to restore our profitability - nothing else," pointing out that restructuring is a key measure to achieve this goal.

At the same time as announcing this news,He also revealed plans to close at least five manufacturing plants and consolidate eight distribution centers into two "super distribution centers."

Ten Hoedt's retirement marks another major change in Medtronic's management team. We will continue to monitor the impact of his departure on Medtronic!

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