Medtronic Outlines New Management Structure After Covidien Deal Closes

Medtronic Inc.—soon to be Medtronic plc—has announced the executive team leading the combined organization following the close of its planned acquisition of Covidien.  The new company will comprise four major business groups and four geographic regions led by a new executive committee. 

Omar Ishrak, CEO and chairman of Medtronic will remain in his current position.

Covidien’s CEO, Joe Almeida, will step down following the close of the deal. Other top executives also will leave Covidien after the purchase is finalized. Based on a clause in a Jan. 24 proxy statement covering termination upon “change in control,” Almeida would receive a severance payout of $37.3 million if he leaves Covidien when the buyout is complete. Charles H. Dockendorff, Covidien’s executive vice president and chief financial officer, would get $15.1 million in severance. Other senior executives listed in the document are Peter L. Wehrly, group president for developed markets, who would receive $9.3 million; and, John H. Masterson, senior vice president and general counsel, who would get $7.7 million.

“The planned acquisition of Covidien will greatly accelerate our joint vision to transform healthcare around the world, improving our ability to address the needs of more patients, in more ways, and in more places than ever before,” said Ishrak.

The four business groups of the new company will be led by the following group leaders and current Medtronic executives: Mike Coyle, executive vice president and president of the Cardiac and Vascular Group (CVG); Hooman Hakami, executive vice president and president of the Diabetes Group; and Chris O’Connell, executive vice president and president of the Restorative Therapies Group (RTG). Bryan Hanson, currently group president for Covidien, will become executive vice president and president of the fourth major business group, a newly formed Covidien Group, upon close of the deal.

In addition to the new Covidien Group, the current Peripheral Vascular business from Covidien, including the Endovascular, Arterial and Chronic Venous Insufficiency businesses, will be integrated into the CVG’s Aortic and Peripheral Vascular business after the close of the transaction. Upon close, Covidien’s Neurovascular business will be integrated into the RTG as an independent business unit.

More details regarding the specifics of the organizational changes will be announced over time, Medtronic officials said.

The executive leadership team also will include a new regional structure intended to drive organizational effectiveness and focus necessary to achieve the company’s globalization objectives.  Upon the close of the transaction, the new company will organize into four major regions:
• Bob White will become senior vice president and president of Medtronic Asia Pacific, based in Singapore.  This new region is composed of Japan, India, Australia/New Zealand, Korea and Southeast Asia.  White is currently president of Covidien’s emerging markets;
• Mike Genau will become senior vice president and president of Medtronic’s Americas Region, including Canada, Latin America, and the United States.  Genau currently is Medtronic’s U.S. Region leader overseeing the company’s Integrated Health Services business in the United States;
• Rob ten Hoedt will serve as executive vice president and president, of the Europe, Middle East, and Africa region. Ten Hoedt has been the leader for this region, including Canada, for the past five years and most recently led the creation of Medtronic’s Hospital Solutions business in Europe; and
• Chris Lee, president of Medtronic Greater China, will continue to lead the Greater China market as senior vice president and president.

The functions represented on the current Medtronic Executive Committee will not change and will continue to be led by the current Medtronic leaders after the transaction closes.

The functional leaders include:
• Gary Ellis, executive vice president and chief financial officer, who is responsible for finance, information technology and operations;
• Rick Kuntz, M.D., senior vice president and chief scientific, clinical and regulatory officer;
• Brad Lerman, senior vice president, general counsel, and corporate secretary;
• Geoff Martha, senior vice president, chief integration officer, strategy and business development;
• Stephen Oesterle, M.D., senior vice president for medicine and technology;
• Luann Pendy, senior vice president, global quality;
• Carol Surface, senior vice president and chief human resources officer; and
• Katie Szyman, senior vice president, channel strategies.

Until the close of the transaction, the respective companies will continue to operate under current leadership structures and as two separate companies.

“We have an exciting journey ahead as we bring together two great companies,” said Ishrak.  “In the coming months, the new executive team will work together to assist the integration planning efforts, listening and learning from both companies, to build our combined strengths and craft our future plans as one company.”