The recent announcement that Stephen MacMillan was leaving Stryker ($SYK) sent shockwaves through the device community. But the story has taken quite a strange turn, as it has been revealed that he might not have resigned of his own volition, but rather been ousted by his own board after having a romantic relationship with a former employee, as The Wall Street Journal reports.
Although family reasons have been cited as the cause of MacMillan's exit, insiders have said the Stryker board lost confidence in him for being involved in a relationship during his divorce proceedings. The affair hasn't been independently confirmed, but senior company executives were telling stock analysts about it roughly an hour after MacMillan's resignation announcement.
MacMillan stands to lose a lot for leaving so abruptly, as the company has decided his exit is "termination without cause," according to an SEC filing. So, although he gets a nice $5.5 million severance payout, he was stripped of 676,644 stock options. That suggests "a less than amicable parting,'' according to the University of Delaware's Charles Elson, as quoted by the Journal.
As the WSJ notes, boards dump their leaders for indiscretions more often than people realize, especially if those CEOs have "shown bad judgment in personal life,'' a succession-planning specialist explained.
Regardless of the reasons behind his departure, MacMillan's announcement took many by surprise. Some analysts expressed concern for Stryker's future, especially since he had navigated the company through some tough times, including four FDA warning letters. "He's clearly had a good track record since he's been there," Collins Stewart analyst Tao Levy told Dow Jones. "He's done a good job in growing and diversifying the company over the last couple of years."
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