It was the best of times and the worst of times for med tech CEOs in 2013. Medical device outfits faced a chilly regulatory climate, with product approvals reaching a new low and the 2.3% device tax threatening to damage each company's bottom line. As a result, sales and R&D took a substantial hit--and CEOs responded with a new plan of attack. With industry veterans at the helm of each company, med tech outfits managed to outrun nagging legal woes, win critical devices approvals, generate M&A--and in some cases, post a profit.
Resolving courtroom drama was at the top of many CEOs' to-do lists, as companies like C.R. Bard ($BCR) and Medtronic ($MDT) faced ongoing legal battles related to products and patents. C.R. Bard CEO Timothy M. Ring charted plans to boost business in the midst of the company's transvaginal mesh implant lawsuits, and charted a 7% pay raise in the process. This past spring, Medtronic settled its ongoing patent battle with Edwards Lifesciences ($EW), refocusing its efforts on global expansion. As CEO Omar Ishrak said at the beginning of the year, new therapies, emerging markets and independent solutions would help turn the company's numbers around--and so far, his predictions have not fallen short. Ishrak took home less pay in 2013--he was lured from GE in 2012 with a one-time signing bonus--but still scored a sizeable pay package with $2.8 million in stock awards.
Med tech CEOs led their companies through critical transitions, implementing a series of structural changes intended to provide a much-needed boost. Roche's ($RHHBY) Severin Schwan shut down the company's applied science business in October, boosting diagnostic sales by 2% along the way. Covidien ($COV) dropped its lagging pharma unit in June 2013, and CEO José Almeida cut jobs and closed plants in the following months to free up some extra cash. Johnson & Johnson ($JNJ) CEO Alex Gorsky sold off the company's underperforming testing arm, Ortho Clinical Diagnostics, charting solid gains in med tech sales despite sluggish diabetes care and diagnostics growth. The payoff for Gorksy's hard work? A 55% pay increase from 2012, bringing his total compensation for 2013 to $16.9 million.
Newcomer CEOs also generated a substantial amount of change in 2013. In his first fiscal year at the helm of Stryker ($SYK), CEO Kevin Lobo began an ambitious M&A push, gaining ground in China and funneling $1.7 billion into a robot-assisted surgery outfit. Since taking over the top spot at Boston Scientific ($BSX), CEO Michael Mahoney cut costs and bought into innovative areas like patient monitoring and renal denervation. Mahoney said earlier this year that new deals, device approvals and restructuring will help the company continue its upward march.
With more M&A, product development and restructuring on the horizon, med tech CEOs have their work cut out for them in the coming year. But for now, here's the breakdown of what they took home in 2013. And as always, feel free to contact us with any comments or questions. -- Emily Wasserman (email | Twitter)