The Below Average CEO: J. Raymond Elliott, Boston Scientific

Average: “an estimation of or approximation to an arithmetic mean”–Webster

The smartest move that J. Raymond Elliot made in his career was to leave the Boston Scientific (BSX) board in 2009 after less than two years of service. The dumbest move was to rejoin the board and become the Boston Scientific CEO last July. The firm’s shares are down 20% since then while the DJIA is up 30%.

Boston Scientific has not been able to right itself after a string of legal defeats at the hands of its rivals in patent battles and its ill-advised purchase of Guidant. Elliott can’t be blamed for those things, but he has been slow at cutting costs to improve the firm’s efficiency.

Boston Scientific still faces substantial competition in its stent business especially from Abbott (ABT) and from drugs which work to accomplish the same therapeutic goals that stents do. The company is also up against increased competition from Medtronic (MDT) in the cardiac rhythm management sector.

Elliott has not been able to do anything to improve the financial fortunes of the company.  In the last quarter, Boston Scientific posted a net loss of $1.08 billion, or $.71  a share, compared with a loss of $2.39 billion or $1.59 a share for the same period in 2008. Revenue rose 3.8% to $2.08 billion. The company said it would cut 8% to 10% of its work force, which Wall St. did not think was adequate.

After the earnings , Deutsche Bank analyst Tao Levy downgraded the company’s stock to hold from buy. “We had thought that Ray Elliott was taking leadership of a company that was already on its way to better days, but the past two quarters of lackluster financial results have made it increasingly clear that heavy lifting still remains and the turnaround will likely take several more quarters,” Levy wrote. Very few people in the investment community disagree with him.

Douglas A. McIntyre