NEW YORK (AP) -- Medical device maker Boston Scientific Corp. announced Tuesday that its Chief Executive Ray Elliott will retire as president and CEO at the end of the year, after just over two years leading the company.
Elliott's departure was unexpected and sent company shares tumbling more than 10 percent.
The Natick, Mass.-based company hired Elliott away from orthopedic maker Zimmer Holdings in July 2009, paying him a $1.5 million signing bonus. The selection was widely praised by analysts and investors based on Elliott's 10-year track record as an executive with the rival device maker, including six years as CEO. He replaced CEO Jim Tobin, who led the company for more than a decade.
Boston Scientific has struggled for years to manage its costs after the massive 2006 acquisition of defibrillator maker Guidant for $27 billion. At the same time, sales of defibrillators and stents have been hit by safety concerns and cutbacks by hospitals reeling from the weak economy.
Elliott, 61, said the company is well-positioned for growth and it is time for a longer-term CEO. He will remain on the Natick, Mass., company's board of directors.
The company said Elliott will sit on a special committee that will select his successor. It expects to name Elliott's replacement by the end of the year.
Shares of the company slipped 79 cents, or 10.2 percent, to $6.93 in midday trading.
Elliott moved to reposition Boston Scientific by cutting 10 percent of its jobs, restructuring the company, selling its neurovascular business, and acquiring a group of smaller companies. The changes were intended to get Boston Scientific's debt under control and bolster its revenue.
But his brief tenure included several high-profile missteps -- some which directly benefitted the company's competitors. Last March the company was forced to halt sales of its best-selling defibrillators for a month due to what was essentially a paperwork error. The company failed to alert the Food and Drug Administration to regulatory changes in how it made the devices -- a requirement for device makers.
Last year, the company's adjusted earnings fell 11 percent to $1.05 billion, or 69 cents per share.
Boston Scientific's announcement means there are now two leading medical device manufacturers in search of new leadership. Medtronic Inc., the industry's largest company, is trying to replace CEO Bill Hawkins, who was scheduled to step down at the end of April. But the company said Hawkins will remain on the job as the company continues searching for a new CEO.