Wright Medical Group Inc. named Robert J. Palmisano president and CEO, bringing in a medical devices industry veteran to lead the orthopedic device maker.
Palmisano's appointment by the company's board was announced Monday, and took effect Saturday. David D. Stevens, who had been serving as interim president and CEO since April, will remain board chairman.
Palmisano most recently served as president and CEO of ev3, Inc., a global endovascular device company. During his two-year tenure, ev3's market capitalization more than tripled, from about $800 million in April 2008 to $2.6 billion in July 2010, Wright Medical said.
Palmisano's appointment comes after Gary Henley resigned as president and CEO in April, before a board meeting where the Arlington, Tenn., company planned to discuss regulatory compliance issues. The board accepted Henley's resignation, and the company said he would not receive severance because his resignation was not for good reason under terms of his employment agreement.
Wright Medical also said in April that its board had terminated Chief Technology Officer Frank Bono for cause, also related to compliance issues. Wright Medical said Bono did not "exhibit appropriate regard for the company's ongoing compliance program."
Last September, one of Wright Medical's subsidiaries agreed to pay $7.9 million to resolve a government investigation into its consulting agreements with orthopedic surgeons. The company also accepted a one-year monitoring period.
Last week, Wright Medical announced plans to cut 80 employees, or about 6 percent of its work force, as part of a restructuring plan designed to boost growth and profitability. The company also said it is reducing the size of its international product portfolio and adjusting plant operations, among other measures.
In announcing Palmisano's appointment, Stevens said Wright has recently strengthened its compliance program and adopted a plan to reduce operational costs. Palmisano, Wright said, "is the right person to continue building on this progress."
Wright Medical said it is temporarily suspending its previously announced outlook for sales and earnings as Palmisano transitions into his leadership role. The company will provide updated information when it releases third-quarter earnings.
Before leading ev3, Palmisano was president and CEO of IntraLase Corp., and prior that he led MacroChem Corp. Earlier in his career, he served as president and CEO of Summit Technology Inc. until its acquisition by Alcon Inc. From 1984 to 1996, he served in various executive positions at Bausch & Lomb Inc.
In morning trading, shares of Wright Medical rallied 4.3 percent, or 69 cents, to $16.72 while the broader markets declined.