- After less than two years in the position
- Praise and thanks for Fruchterman
- Jonathan Rothberg taking over temporarily
- Search for a successor
(exechange) — Burlington, Massachusetts & New York, December 6, 2022 — Todd Fruchterman, chief executive of Butterfly, leaves his position — as “mutually agreed.” As announced by Butterfly Network Inc. in a news release and in a regulatory filing published on Tuesday, December 6, 2022, Todd M. Fruchterman leaves his post as chief executive officer at the digital health company, after less than two years in the role.
The average tenure of CEOs who announced their departure over the past 12 months was 8.2 years. Around 13% of CEOs left their posts within two years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
The exact date of Todd Fruchterman’s departure from his post was not explicitly given in the announcement.
Butterfly will undertake a search for a successor.
Todd Fruchterman’s duties as CEO will be taken over temporarily by Jonathan Rothberg, most recently Founder and Chairman of the Board at Butterfly Network Inc., as Interim Chief Executive Officer.
Butterfly Network, Inc. still listed Fruchterman as President and Chief Executive Officer on its leadership page on its website shortly after the leadership announcement was published.
“Drive the Company forward”
Butterfly did not give an explicit reason for Todd Fruchterman’s departure from the CEO post. Butterfly said: “Dr. Rothberg will serve as Interim CEO during this time of transition and will work closely with Butterfly’s executive team to continue to drive the Company forward and ensure business continuity during the search for a permanent replacement.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months were performance issues (25.5% of cases), implementation of a planned succession (16.9%) and the statement that the time was right for a change (8.6%), according to exechange data. Other motives given for CEO exits included the outgoing CEO’s wish to pursue other opportunities (6.4% of cases), personal reasons (3.4%) and conduct issues (2.5%). Rather rarely stated reasons were health problems (2.5% of cases), career change (2.1%), the desire for more time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.1% of cases, no reason was given.
Precise information regarding Todd Fruchterman’s future plans was not immediately available.
“Leave”
Butterfly said: “[T]he Company and Todd Fruchterman, M.D., Ph.D. have mutually agreed that Dr. Fruchterman will leave his position as President and Chief Executive Officer and as a member of the Board of Directors.”
Share price decline since February 2021
The announcement follows a decline in Butterfly Network Inc.’s share price of 83% since February 2021. February 2021 is the month in which Fruchterman’s tenure as CEO began.
In the position of CEO since 2021
Todd Fruchterman became CEO of the Company in 2021.
Fruchterman will partner with Butterfly’s leadership team through the end of the year to ensure a smooth transition.
Todd M. Fruchterman, M.D., Ph.D. has served as the Company’s President and Chief Executive Officer and as a director of the Company since the Closing of the Business Combination in February 2021, and had served as President and Chief Executive Officer and as a director of Legacy Butterfly since February 2021.
Prior to joining the Company, from November 2020 through January 2021, Fruchterman served as Group President, Reliability Solutions of Flex Ltd., where he oversaw health solutions and automotive and industrial business units.
Before that, Fruchterman held several leadership roles of increasing responsibility at 3M Company, or 3M, most recently as President and General Manager, Medical Solutions, the largest division of the company, from May 2018 to September 2020.
Fruchterman also served as President and General Manager, Critical & Chronic Care Solutions at 3M from August 2015 to May 2018, and as Senior Vice President R&D, Regulatory Affairs, Chief Technology Officer, and Chief Medical Officer at 3M from February 2011 to August 2015.
Prior to joining 3M, Fruchterman was Executive Vice President, Chief Technology Officer and Chief Medical Officer at Kinetic Concepts, Inc.
He previously held various positions at Johnson & Johnson, where he led worldwide biosurgical R&D for the Ethicon division; Schering-Plough, where he directed medical and strategic marketing for the hepatitis business; and Response Genetics, Inc., where he held the positions of President, Chief Executive Officer, and Chief Operating Officer.
In addition, Fruchterman served as a member of the Board of Directors of the Advanced Medical Technology Association (AdvaMed) from October 2016 to September 2020. In 2018 and 2019, Fruchterman was also a core participant in the Innovation and Investment Summit at the U.S. Department of Health and Human Services.
Fruchterman earned his M.D. from the University of Pennsylvania School of Medicine, his Ph.D. in physiology and biophysics from the University of Louisville, and his B.A. in biological basis of behavior from the University of Pennsylvania.
At the time of Todd Fruchterman’s appointment as Chief Executive Officer at Butterfly, Jonathan Rothberg had stated: “We are very excited Todd has joined Butterfly as President and CEO to lead the Company at this critical stage. Todd brings together his unique qualifications and experience as an M.D., Ph.D. and proven business executive in public medical device companies, where he has successfully scaled disruptive technologies throughout his entire career. Our most valuable assets are the people of Butterfly who innovate and serve on a daily basis, and I am pleased to support Todd as he builds upon a culture of purpose, joy and empowerment for our team and impact for patients and caregivers.”
At the time of Todd Fruchterman’s appointment as Chief Executive Officer at Butterfly, Larry Robbins, then Chairman of Longview, had stated: “The heart of Butterfly’s culture is clinical excellence, combined with technological breakthroughs, with a customer-centric approach to drive commercial success. Todd’s experience fits hand in glove with the breadth and depth of our opportunity to drive better medicine, empower medical professionals, improve patient outcomes and generate significant growth and value over the long-term.”
At the time of his appointment as Chief Executive Officer at Butterfly, Fruchterman had stated: “It is a privilege for me to join Butterfly at this pivotal time in its pioneering effort to deliver affordable imaging solutions to the world. Together with the deep and skilled leadership team, and with the support of Jonathan and Larry, I look forward to empowering a full spectrum of medical professionals, worldwide, with Butterfly’s technology to help millions of patients achieve better, more cost-effective outcomes, and maintain wellness.”
No statement by Todd Fruchterman
In the news release announcing his departure as CEO of Butterfly Network Inc., Todd Fruchterman received praise and thanks.
The just-released announcement of the leadership change does not include a statement by Todd Fruchterman.
Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 111 words. The longest statement was 382 words, and the shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5, according to exechange data.
32% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 326 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 6, 2021, to December 5, 2022), the average Push-out Score was 5.5, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or personal reasons were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 32% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, three in 10 departing CEOs were forced out or fired.
Pressure in the health care sector well above critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, health care and consumer staples sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, industrials and financials sectors, as measured by average Push-out Scores.
In the health care sector, which includes Butterfly Network Inc., the average Push-out Score over the past 12 months was 6.6, which is well above the critical threshold of 5.
In the health care sector, 22 exiting CEOs received Push-out Scores of 8 or higher over the past 12 months, indicating that they were most likely forced out or faced strong pressure to step down.
Push-out Score for Todd Fruchterman’s move determined
The Push-out Score regarding Todd Fruchterman’s move is explained point by point in the exechange report.
exechange reached out to Butterfly and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 50.2022 ($).