Medtronic Says Canada Clears Heart Device
MINNEAPOLIS (AP) -- Medtronic Inc., the world's biggest medical device maker, said Wednesday that Omar Ishrak of GE Healthcare will become its new chairman and CEO in June.
Ishrak, 55, will join the company on June 13. He had been the president and CEO of General Electric Co.'s health care systems business, and worked at the company for 16 years. Medtronic said GE Healthcare had strong growth in clinical systems and ultrasound devices during Ishrak's tenure, and he improved its performance in emerging markets.
Medtronic announced in December that Chairman and CEO Bill Hawkins planned to retire by the end of April. The Minneapolis company said last week that Hawkins would remain on the job until a replacement was found.
Ishrak became president and CEO of GE's clinical systems unit in January 2005 and was named president and CEO of the health care systems unit in January 2009. He will earn an annual base salary of $1.4 million at Medtronic.
General Electric Co. said Tom Gentile, the head of its aviation services division, will replace Ishrak as president and CEO of GE Healthcare Systems.
Citi Investment Research analyst Matthew Dodds said the choice of Ishrak "is unexpected but looks promising." He noted that Ishrak's background is in diagnostic and imaging devices rather than implanted devices, which are Medtronic's primary focus. Dodds said Ishrak will probably not shake up the company and will instead try to improve its execution, control spending, and speed up its expansion into emerging markets.
Ishrak's appointment comes a day after Medtronic competitor Boston Scientific Corp. announced that President and CEO Ray Elliott will retire by year-end. Boston Scientific stock fell 9 percent on the surprising news.
Wedbush analyst Phillip Nalbone said that no matter who is in charge, medical device companies are struggling with major problems like falling prices, tougher regulation, and pressure from payors.
"It's not easy being a medical device company CEO these days, battling the troubles within the industry and attempting to live up to demands from Wall Street for quick results," he wrote. "We expect the challenges in Medtronic's business to persist long after Mr. Hawkins has departed."
Shares of Medtronic added 13 cents to $42.78 in morning trading.
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