- After less than four years in the position
- Praise for Grossman
- Search for a successor
- Grossman will remain as Chairman at Nevro
- Grossman made a lengthy statement and said 305 words
(exechange) — Redwood City, California, January 9, 2023 — Keith Grossman, chief executive of Nevro, is set to leave his position. As announced by Nevro Corp. in a news release and in a regulatory filing published on Monday, January 9, 2023, D.Keith Grossman will leave his post as chief executive officer at the medical device company, after less than four years in the role, effective in 2023 following the selection of his successor.
The average tenure of CEOs who announced their departure over the past 12 months was 8.3 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.
Nevro will undertake a search for a successor.
No reason given
In the announcement, Nevro did not explicitly explain the reason for the move.
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.6% of cases), implementation of a planned succession (16.4%) and the statement that the time was right for a change (8.4%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.3% of cases), personal reasons (3%) and conduct issues (2.4%). Rather rarely stated reasons are health problems (2.1% of cases), career change (2.1%), the desire for more time with family (0.9%), death (0.9%) and disagreement (0.6%). Sometimes, more than one reason was given. In 30.4% of cases, no reason was given.
Grossman will remain as Chairman at Nevro
Nevro stated: “Mr. Grossman will continue to serve as the Chairman of Nevro’s board following the CEO succession. ”
Nevro said: “Chief Executive Officer and President, D. Keith Grossman, has informed the Board of his intention to retire as CEO in 2023 following the selection of his successor.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, 32% of the time “retire” was used in CEO departure announcements over the past 12 months, the departing chief executive received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
Share price decline since January 2021
The announcement follows a decline in Nevro Corp.’s share price of 77% since January 2021.
In the position of CEO since 2019
Keith Grossman became CEO of the Company in 2019.
Grossman joined the Company in March 2019 as the Company’s President and Chief Executive Officer and additionally has served as Chairman of the Board since May 2019.
Grossman has over 30 years of experience in the medical device field. Grossman served most recently, and for the second time, as the President, Chief Executive Officer and director of Thoratec Corporation (“Thoratec”), leading up to its 2015 sale to St. Jude Medical.
Prior to Thoratec, he served as President, Chief Executive Officer and director of Conceptus, a women’s health medical device company, leading up to its sale to Bayer Healthcare.
Prior to Conceptus, Grossman served as managing director of Texas Pacific Group (“TPG”), a private equity firm, as a member of its healthcare investment team.
Prior to TPG, Grossman served as Thoratec’s President, Chief Executive Officer and director for the first ten years of its growth as a commercial company.
Grossman currently serves as Lead Independent Director and a member of the nominating and corporate governance committee and the compensation committee of Outset Medical, Inc.
Grossman also serves as Vice Chairman, chairperson of the governance and nomination committee and member of the innovation committee of Alcon, Inc., and previously served as a member of the board of directors of ViewRay, Inc., Intuitive Surgical, Inc., Kyphon, Inc., Zeltiq and a number of privately-held medical device companies.
Grossman received a B.S. in Animal Science from The Ohio State University and an M.B.A. from Pepperdine University.
305 words by Keith Grossman
In the news release announcing his departure as CEO of Nevro Corp., Keith Grossman received praise.
In the announcement of the leadership change, Keith Grossman made a lengthy statement and said 305 words.
“Challenges to our market will gradually but steadily improve throughout 2023”
Keith Grossman stated: “I am very pleased with the significant efforts of the Nevro team to serve our customers and patients, and execute on our plans throughout 2022. We continued to move our business forward and see encouraging signs of recovery, which we expect to continue throughout 2023. Our PDN progress with referring clinicians, payers and clinical societies has exceeded our expectations, and we are looking forward to continuing to develop this exciting growth platform this year. The limited launch of our new HFX iQ system has been very well received, and as a result, we look forward to leading the way with the first AI-driven SCS therapy that brings truly personalized relief to patients who need it most. I’m very pleased with the building blocks that are now in place for attractive growth and leverage going forward, and we believe the challenges to our market will gradually but steadily improve throughout 2023. I’m extremely proud of the significant progress we have made over the past four years, and I believe now more than ever Nevro is well-positioned for future growth and poised to enter an exciting period of progress. With what we believe will be continued recovery in our markets, important new products like the HFX iQ platform, entirely new patient populations such as PDN and NSBP, and the opportunity for attractive operating leverage on future growth as a result of our intense focus on the scalability of our expense structure, the outlook for Nevro is very bright. It’s been my honor to serve as CEO and work alongside all of the talented and dedicated Nevro team members who are committed to our vision, values and most importantly to our patients. I am excited to remain in my role as Chairman of the Board and look forward to continuing to be a part of this company’s successes.”
Over the past 12 months, 27% 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 109 words. The longest statement was 382 words. The shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short, excessively long 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.
33% 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 335 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 9, 2022, to January 8, 2023), the average Push-out Score was 5.7, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When performance issues, time with family or other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 33% 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 the critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, consumer staples and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, utilities and financials sectors, as measured by average Push-out Scores.
In the health care sector, which includes Nevro Corp., the average Push-out Score over the past 12 months was 6.8, which is well above the critical threshold of 5.
In the health care sector, 27 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 Keith Grossman’s move determined
The Push-out Score regarding Keith Grossman’s move is explained point by point in the exechange report.
exechange reached out to Nevro and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 3.2023 ($).