Stryker CEO Leaves Abruptly; J&J Taps Device Chief as New CEO
A pair of orthopedic powerhouses has shuffled faces at the top. Stryker Corp. Chairman, President and CEO Stephen P. MacMillan and Johnson & Johnson Chairman and CEO William C. Weldon announced their resignations within two weeks of each other.
MacMillan, 48, stepped down abruptly on Feb. 8 for “family reasons.” Neither MacMillan nor executives with the Kalamazoo, Mich.-based company he has led since 2005 elaborated on those reasons at the time, preferring instead to publicly wish each other well. Rumors have begun to swirl subsequently, however, about an inappropriate relationship with an ex-employee that forced his exit. For now, the burden of the company’s financial performance will fall upon the shoulders of William U. Parfet, who is now non-executive chairman, and Vice President and Chief Financial Officer Curt Hartman, who will serve as interim CEO until a permanent replacement is found.
Hartman joined Stryker in 1990 and has held various leadership positions over the last 22 years, including six years as global president of Stryker Instruments. He was named to his current post in April 2009.
Parfet has been a board director at Stryker for nearly 20 years. For the last 13 years, he’s been chairman and CEO of MPI Research, Inc., a Mattawan, Mich.-based drug safety and pharmaceutical development company.
MacMillan began his medical career in 1985 with Procter & Gamble, and later spent 11 years with Johnson & Johnson, eventually becoming president of the joint venture between J&J and Merck. In 2000, he joined Pharmacia Corporation’s executive committee, where he supervised five global businesses with revenues exceeding $2 billion, according to a biography on Stryker’s website.
That biography also states that MacMillan serves on the boards of directors of Texas Instruments Inc., the Greater Kalamazoo United Way and the Washington, D.C.-based Advanced Medical Technology Association. But it is not clear whether the reasons that forced MacMillan to resign from Stryker will cause him to step down from those boards as well. Other memberships and appointments also are in question, including the Institute of Medicine’s Roundtable on Value & Science-Driven Healthcare, and his two-year term on the U.S. Manufacturing Council, a group that advises presidential administrations on ways to create more American manufacturing jobs.
MacMillan received a B.A. in economics from Davidson College in Davidson, N.C., and the graduated from Harvard Business School’s advanced management program.
Less than two weeks after MacMillan left his post, J&J announced Weldon’s resignation and named Alex Gorsky as his successor. The transfer of leadership will officially take place at the company’s upcomingannual shareholders meeting on April 26. Weldon, 63, will remain J&J board chairman.
Gorsky, 51, is a former army captain and endurance athlete who has spent two decades at J&J, most recently leading the Medical Devices & Diagnostics Group, Global Supply Chain, Health Care Compliance & Privacy and Government Affairs & Policy. He also currently serves as vice chairman of the company’s executive committee.
“Gorsky is a conservative choice and the strongest internal candidate,” Erik Gordon, a business professor at the University of Michigan in Ann Arbor, told Bloomberg news. “That’s a big deal at a company that always taps an insider as its next CEO—even if what they need is someone from outside the team that led the company into so much trouble.”
Weldon, 63, has been blamed for much of J&J’s troubles of late. The son of a Broadway stagehand and seamstress, Weldon became CEO in 2002 after spending his entire career at the company. Critics have accused Weldon of allowing the company’s once-staunch attention to quality erode through the years, resulting in the manufacture of drugs with foul odors, adulterated ingredients and/or bad labeling as well as metal hips that wore out and failed long before they should have. J&J’s DePuy unit faces more than 4,500 lawsuits over the ASR XL Acetabular System, a hip socket used in traditional replacement surgery, and the ASR Hip Resurfacing System, a partial hipreplacement that involves placing a metal cap on the ball of the femur to preserve more bone. Both products were recalled in August 2010; to date, J&J has recalled 93,000 hips worldwide, including 37,000 in the United States, warning that more than 12 percent failed within five years.
When he assumes leadership of the company in late April, Gorsky will become only the ninth CEO in J&J’s 126-year history, according to Bloomberg. He joined the firm’s Janssen Pharmacutica unit in 1988 as a sales representative and then worked in various positions in sales, marketing and management over the next 15 years. In 2001, Gorsky became president of Janssen and was promoted two years later to company group chairman of J&J’s pharmaceuticals business in Europe, the Middle East and Africa.
Gorsky left J&J in 2004 to become headof North American pharmaceuticals for Basel, Switzerland-based Novartis AG. He returned four years later as company group chairman and franchise chairman for Ethicon in the medical devices business. In 2009,he was appointed worldwide chairman of the surgical care group and to J&J’s executive committee. Gorsky became vice chairman of the committee in January 2011. As CEO, he’ll be paid $1.2 million, according to a company filing.