Boston Scientific Keeps CEO Tobin But Dumps COO (BSX)

Boston Scientific Corporation (NYSE: BSX) is making a move which may be a questionable one if you have followed this stock for a while.  The company said that President and CEO Jim Tobin will be extending his tenure at the Boston Scientific and he plans to remain in his role for the foreseeable future.  Back in December we named Tobin on our list of CEO’s that need to go, and shares have only recently come back to the levels seen then.

But there is a management change that Wall Street seems happy with so far.  Paul LaViolette, Chief Operating Officer (COO), will be retiring from the Boston Scientific.  He is only about 50 years old, so retirement is a stretch.  LaViolette joined Boston Scientific back in 1994 and he has been COO since 2005.  Fred Colen will become the President of its Cardiac Rhythm Management.

Pete Nicholas, Co-founder and Chairman of the Board of Boston Scientific: "I am very pleased to announce that Jim Tobin will be extending his tenure as President and Chief Executive Officer of Boston Scientific."  Nichols also noted that Tobin has been involved in mainly integrating Guidant since his first extension two-years ago, and LaViolette has managed much of the day-to-day operations at the other operations of the company.  This will put Tobin back in charge of the entire company. 

Boston Scientific shares are up 1.5% at $13.33 today, so Wall Street is making the first vote that this is the right call.  Shares are also up over 20% from their 52-week lows of $10.76, but down from the 52-week highs of $16.67 and way down from the old $40+ highs of early 2004.

Maybe a CEO can blame the COO for missteps, but only for a while.  If things don’t improve very soon then Tobin is going to need to call LaViolette and see where he’s working in his "retirement."

Jon C. Ogg
June 3, 2008