It has indeed been the year of the medtech CEO turnover.
Invacare is the latest medical device company to give its top executive the old heave-ho. Matthew Monaghan will remain on the company's board as a director, but he is no longer the company's CEO, president, or chairman.
Elyria, OH-based Invacare makes medical equipment used in non-acute care settings. The company named Geoffrey Purtill interim president and CEO while the board searches for a permanent CEO. Purtill had been serving as Invacare's senior vice president and general manager for the EMEA and APAC regions.
“After careful consideration, the board determined that now is the right time for a change in leadership to oversee the successful execution of Invacare’s business transformation. We welcome Geoff who has distinguished himself throughout his tenure with Invacare," said Cliff Nastas, the lead independent director for Invacare. "The board has full confidence that he has the right skillset and industry experience to lead the company through this transition as we search for a permanent successor who can accelerate the achievement of our objectives. We thank Matt for his years of service. We look forward to having Geoff advance our strategic initiatives.”
Invacare also appointed Michael Merriman, Jr. as a director and non-executive chairman of the board. Merriman, who previously served on the board and was chair of its audit committee from 2014 to 2018, will also serve on the company's strategy committee. As independent chairman of the board, he succeeds Nastas as the company's independent director.
“We are excited to welcome Mike Merriman back to the board and know that his leadership, financial and business management acumen, and experience in transforming underperforming businesses will be invaluable to the board as we transform Invacare,” Nastas said.
CEO turnover: It's not just happening in medtech
Whether they're joining the Great Resignation, or being forced out involuntarily, CEOs are exiting in droves this year across the board. The latest CEO turnover report from Challenger, Gray, & Christmas shows exits are up 20% year to date.
So far this year, 774 CEOs have left their posts, the highest first half total since the firm began tracking monthly CEO changes in 2002, Challenger, Gray, & Christmas noted. It is up 20% from the 591 CEO exits announced through June last year, and up 6% from the previous high of 728 exits announced in the first six months of 2006.
In terms of what's driving the trend, there are likely several factors at play. Andrew Challenger, senior vice president of Challenger, Gray, & Christmas, pointed out that the skills CEOs implemented and acquired during the pandemic are "extremely valuable" and many of these top-level executives are finding new opportunities.
Broken down by industry, the firm reports that government/non-profit entities lead all industries in CEO turnover with 174 so far in 2022, followed by technology companies with 80, and healthcare/products at 76.
In medtech, some CEO exits have come as quite a shock to the industry, like in April when Dave Demski resigned, effective immediately, from Globus Medical. Demski had been with the company for nearly 20 years and had been at the company's helm for four and a half years. The Audubon, PA-based company quickly promoted Dan Scavilla to take Demski's place. Scavilla has been with Globus Medical for seven years. He started with the company in 2015 as CFO, and in 2019 he was named executive vice president and chief commercial officer. In 2020 he also became president of the company's trauma business. Scavilla previously worked at Johnson & Johnson for 28 years.
Demski's departure was so unexpected that medtech analysts pressed him pretty hard on the timing of his resignation, asking during a conference call, "Why now?"
"I would probably answer you with, why not now? You know, I've been looking for a new challenge for a while, and I think we're out of COVID, our technology is great, we have some great stuff coming, the team is strong, we're financially strong, so I think there's really no better time for me to step out and try something new with my life," Demski said. "...There's really nothing wrong with the company or with me that’s driving it, it’s just this is the time.”
Another surprising medtech CEO resignation this year is Insulet's Shacey Petrovic, who stepped down for personal family reasons, triggering a chain of CEO transitions in the industry. The Acton, MA-based company hired Jim Hollingshead, who previously served as president of ResMed's sleep and respiratory care business. ResMed promoted Lucile Blaise to president of sleep and respiratory care after Hollingshead's departure.
Other CEO transitions in the industry have been less of a surprise, like when Mark Mallon stepped down from his CEO post at NeoGenomics in late March. Mallon's departure was a "mutual agreement," according to the Fort Myers, FL-based cancer-testing firm, but not everyone was convinced.
"We believe that this was not a voluntary decision and may have been driven by [NeoGenomics'] poor stock performance and the significant decline in [NeoGenomics'] gross and EBITDA margins during his tenure," Mike Matson, a medtech analyst at Needham & Co., wrote in a March 29 report. Mallon spent less than a year as CEO after taking over for Douglas VanOort, who served more than a decade in the position before retiring. NeoGenomics recently hired Chris Smith to take the helm and try to turn the ship around.
Similarly, GE Healthcare poached Peter Arduini from Integra at the end of 2021, and Integra ended up hiring Jan D. De Witte to fill the vacated CEO position.
Other medtech companies that have gone through (or are still going through) CEO transitions this year include Better Therapeutics, Fluidigm, and iCad.