How to Muck Up a Turnaround in 12 and a Half Months
The old CEO, Ray Elliot, said he was stepping down in May, so the announcement of a new head honcho was expected. And the choice, Michael Mahoney, certainly seems like a good one; he's currently worldwide chairman of the medical device and diagnostics group for Johnson & Johnson (NYS: JNJ) , so he has experience in the business.
It's the transition I'm worried about. Apparently as part of his non-compete agreement with Johnson & Johnson, Mahoney can't take the reins until November of next year. In the meantime, Mahoney will serve as president when he joins Boston Scientific in the middle of next month. Hank Kucheman -- currently the executive vice president, and group president of the cardiology, rhythm, and vascular group at Boston Scientific -- will take over as interim CEO.
So for 12 and a half months, Kucheman will be Mahoney's boss with Mahoney knowing full well that he'll eventually have the position. And when Mahoney does take over, Kucheman isn't planning on retiring, so Mahoney will then become Kucheman's boss. Can you say, "Awkward"?
Who knows, maybe this is all just a show to make Johnson & Johnson happy? Maybe Mahoney will be making all the big decisions, and Kucheman is just a puppet? If not, things could get really ugly in the event the two don't agree on a long-term strategy for the company.
Boston Scientific is well off the bottom it reached last year, but I still wouldn't touch it until it's clear there is a turnaround. Take a look at Medtronic (NYS: MDT) , St. Jude Medical (NYS: STJ) , Abbott Labs (NYS: ABT) , or one of the other medical device companies instead. They might be able to use any leadership weakness at Boston Scientific to their advantage.
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