[Updated with CEO pay packages, 9:52 am Eastern]
Boston Scientific president and CEO Jim Tobin is retiring, and will be replaced by Ray Elliott, the Natick, MA-based medical device maker said today in a statement. Tobin, who has led the company (NYSE: BSX) for a decade, will turn 65 in another two months. The change in leadership is effective July 13.
Elliott, 59, previously was chairman, president and CEO of Warsaw, IN-based Zimmer Holdings (NYSE: ZMH), another medical device company. Elliott will be taking over a company that’s about three times as big—Boston Scientific has about 24,000 employees, compared with 8,500 for Zimmer.
Boston Scientific emphasized in its statement that Elliott presided over boom times while at Zimmer. That company’s sales grew from $1 billion to $4 billion during his tenure from 1997 to 2007, Boston Scientific said. He apparently had a lot of fans on Wall Street as well, since he took Zimmer public in 2001 with an initial market valuation of $5 billion, and quadrupled the valuation to $20 billion by the time he left in 2007, Boston Scientific said.
Boston Scientific has to be hoping for lightning to hit again—its stock is down 33 percent from its 52-week high, closing yesterday at $9.51.
Both men will receive lucrative rewards as they come and go. Boston Scientific will continue to pay Tobin his current annual base salary of $994,000 until November 30, according to a regulatory filing. Under the company’s Executive Retirement Plan, Tobin will get 2.5 months of salary for each of his 10 years of service—an award worth about $2.1 million. The board also decided to give Tobin a Career Service Award, which is worth 2.5 times his base annual salary, or another $2.5 million. Then about 2.1 million of Tobin’s stock options will receive accelerated vesting. He will also continue to be able to use the company jet through his separation date of Nov. 30, according to the filing.
Elliott is getting an even richer package to join the company. He’s receiving a $1.25 million signing bonus, an annual base salary of $1.2 million starting on July 13, personal use of the company jet, and the company is agreeing to buy his house in Indiana. Of course, he’s also getting lots of stock options, including 3.4 million shares with an exercise price established on June 23, 2009—the first day he started at the company as a senior adviser.