- After about 23 years in the position
- Bernard Zovighian taking over
- Mussallem spoke at length and said 144 words
(exechange) — Irvine, California, December 8, 2022 — Mike Mussallem, chief executive of Edwards Lifesciences, leaves his position. As announced by Edwards Lifesciences Corp. in a news release on Thursday, December 8, 2022, Michael A. (Mike) Mussallem leaves his post as chief executive officer at the medical technology company, after about 23 years in the role, effective May 11, 2023.
It is the end of an era.
The average tenure of CEOs who announced their departure over the past 12 months was 8.1 years. Around 6% of CEOs left their posts after more than 20 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.
Mike Mussallem’s duties as CEO will be taken over by Bernard Zovighian, currently corporate vice president and general manager for the Transcatheter Mitral and Tricuspid Therapies (TMTT) business at Edwards Lifesciences Corp.
“Following regular succession planning discussions”
Mike Mussallem’s departure from the CEO post is explained as follows. Edwards Lifesciences said: “Edwards Lifesciences Corporation (NYSE: EW) today announced that following regular succession planning discussions with the Board of Directors, Edwards’ chairman and CEO, Michael A. Mussallem, who recently turned 70, has informed the Board of his decision to retire as CEO in connection with the company’s Annual Meeting of Stockholders on May 11, 2023.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months were performance issues (25.6% of cases), implementation of a planned succession (16%) 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 (6.5% of cases), personal reasons (3.4%) and conduct issues (2.5%). Rather rarely stated reasons were health problems (2.5% of cases), career change (2.2%), the desire for more time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.6% of cases, no reason was given.
Precise information regarding Mike Mussallem’s future plans was not immediately available.
“Retire”
Edwards Lifesciences said: “Michael A. Mussallem, who recently turned 70, has informed the Board of his decision to retire as CEO in connection with the company’s Annual Meeting of Stockholders on May 11, 2023.”
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 the past 12 months, the CEO departure received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
Companies often provide less precise information in their corporate announcements than in regulatory filings, which are sometimes published with a considerable delay and therefore cannot always be included in the exechange analysis. In the present case, a regulatory filing regarding Mike Mussallem’s move was not available at the time of the analysis.
Share price decline since December 2021
The announcement follows a decline in Edwards Lifesciences Corp.’s share price of 32% since December 2021.
In the position of CEO since 2000
Mike Mussallem became CEO of the Company in 2000.
At the 2023 annual meeting, Mussallem will stand for election as non-executive chairman of Edwards’ Board.
Michael A. Mussallem was appointed chairman and chief executive officer of Edwards Lifesciences in 2000, when it became an independent, publicly traded company.
Prior to his current position, Mussallem held a variety of positions at Baxter International from 1979 until 2000, when Edwards was spun off from Baxter.
Currently, Mussallem serves on the board of the Advanced Medical Technology Association (AdvaMed) and is an advisory board member for the Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California.
He is a trustee of the University of California, Irvine Foundation and the Rose-Hulman Institute of Technology in Terre Haute, Indiana.
Mussallem has served as board chairman of both AdvaMed and the California Healthcare Institute (CHI).
In 2022, Mussallem was elected as a member to the National Academy of Engineering, in recognition of the impact of transcatheter heart valves on the health of patients worldwide.
He received a bachelor’s degree in chemical engineering and an honorary doctorate degree from the Rose-Hulman Institute of Technology.
144 words by Mike Mussallem
In the announcement of the leadership change, Mike Mussallem spoke at length and said 144 words.
“Well positioned for an even brighter future”
Mike Mussallem stated: “It has been a special honor and privilege to lead our team at Edwards Lifesciences for more than 20 years in their immense contributions to helping and advancing care for millions of patients around the world. I am particularly proud of the ‘patients-first’ culture that is embodied by our employees and the commitment to innovation and excellence that our global teams demonstrate. Our success to date is a testament to our talented executive leadership and passionate global team, and we are well positioned for an even brighter future. Our Board is confident in the Edwards Executive Leadership Team, which has unmatched experience and a commitment to patient-focused medical innovations globally. We have worked cohesively for many years, collaborating on Edwards’ strategy, and I am confident that under Bernard’s experienced and passionate leadership, the company will continue its legacy of patient impact, innovation and growth.”
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, and 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. In contrast, leadership changes are statistically associated with low pressure when departing CEOs speak more about their successors than their successes.
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 324 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 8, 2021, to December 7, 2022), the average Push-out Score was 5.6, 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, financials and industrials sectors, as measured by average Push-out Scores.
In the health care sector, which includes Edwards Lifesciences Corp., 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, 23 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 Mike Mussallem’s move determined
The Push-out Score regarding Mike Mussallem’s move is explained point by point in the exechange report.
exechange reached out to Edwards Lifesciences and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 50.2022 ($).