Aug 19 (Reuters) – Medtronic (MDT.N) announced on Tuesday that it will add two independent directors to its board and establish new committees aimed at improving its underperforming stock, following activist investor Elliott Investment Management’s emergence as one of its largest stakeholders.
The medical device company said seasoned industry leaders John Groetelaars, former interim CEO of Dentsply Sirona (XRAY.O), and Bill Jellison, former CFO of Stryker (SYK.N), will be joining the board as independent directors.
Medtronic raised its full-year profit outlook for fiscal 2026 and said it now expects a smaller impact of about $185 million from U.S. President Donald Trump’s tariffs, down from the earlier estimate of $200 million to $350 million.
However, the company left its fiscal 2026 sales growth forecast unchanged despite posting strong quarterly results, leading its shares to fall 4% in morning trading.
“Investors were looking for stronger operating improvements and higher sales growth than what was reflected in this quarter and the guidance,” said Edward Jones analyst John Boylan.
CEO Geoff Martha said Groetelaars and Jellison bring the critical medtech expertise that had been lacking on the company’s board.
“In medtech, there’s a specific formula for M&A, and having seasoned operators with strong deal-making experience is valuable in providing that perspective on the board,” CEO Geoff Martha said in an interview.
According to Medtronic, one of the newly formed committees will explore investment opportunities, including tuck-in acquisitions, while the other will focus on driving earnings growth. Both panels will be chaired by Martha and include the two new directors.
“We see these changes as a modestly positive step for Medtronic,” said Leerink Partners analyst Mike Kratky, citing Elliott’s history of improving share performance at companies like Cardinal Health (CAH.N).
Elliott has not disclosed the size of its stake in Medtronic and did not immediately respond to Reuters’ request for comment.
