REG - Smith & Nephew Plc - Smith+Nephew announces new Chief Executive Officer

Smith & NephewAnnouncement

22/02/2022 07:15

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RNS Number : 3529C  Smith & Nephew Plc  22 February 2022

Smith+Nephew announces new Chief Executive Officer

22 February 2022

 

Smith+Nephew (LSE:SN, NYSE:SNN) is pleased to announce that Dr Deepak Nath has
been appointed as the Company's new Chief Executive Officer (CEO), succeeding
Roland Diggelmann, who will step down by mutual agreement. Deepak will take up
the role on 1 April 2022 and Roland will leave on 31 March 2022.

Deepak joins Smith+Nephew from Siemens Healthineers (2018-2022) where most
recently he was President of the Diagnostics business segment responsible for
$6 billion of sales and 15,000 employees. During his time there he led a major
programme to drive growth and margin expansion through improved execution and
a strong results-focused culture.

Prior to Siemens Healthineers, Deepak held a number of senior roles at Abbott
Laboratories Inc (2007-2017) spanning R&D, marketing, commercial and
divisional leadership, rising to become President of Abbott Vascular and an
Executive Officer of Abbott Laboratories. At Abbott he significantly improved
performance of the Vascular business and had a leadership role in the $28
billion acquisition of St Jude Medical.

Deepak also worked for Amgen (2004-2007), McKinsey and Company (2000-2004) and
as a scientist at the Lawrence Livermore National Laboratory. He holds BSc and
MSc degrees in Mechanical Engineering and a PhD in Theoretical Mechanics from
the University of California, Berkeley.

Since his appointment in 2019 Roland has navigated Smith+Nephew through the
challenges presented by COVID whilst also building a stronger platform for
future growth including increasing investment in R&D and launching
multiple new products. Most recently he led the process whereby the Board and
management team developed our Strategy for Growth, with its focus on
transforming Smith+Nephew to a structurally higher growth company. Deepak and
the Smith+Nephew management team will take forward the delivery of this
transformation through increased productivity, improved commercial execution,
and a continued focus on innovation.

Roberto Quarta, Chairman of Smith+Nephew, said:

"On behalf of the Board, I am delighted to welcome Deepak as Smith+Nephew's
incoming CEO. Deepak is a highly experienced leader with a track record of
significant improvement in operations and execution at major global healthcare
businesses. He is joining us at an inflection point for the business and will
bring his drive, experience and expertise to lead the team in delivering our
Strategy for Growth at pace.

"I would like to thank Roland for his commitment and leadership during
challenging times, and the important work he has done to ready Smith+Nephew
for our next stage of development."

Deepak Nath said:

"Smith+Nephew is a great company with innovation at its core and a purpose of
Life Unlimited, supporting patients around the world in returning to a healthy
and fulfilled life. I am honoured to have been given the opportunity to lead
the business. I look forward to building on Smith+Nephew's rich history and
heritage and working with the team to take it to the next level of growth."

Roland Diggelmann said:

"It has been a privilege to lead Smith+Nephew. I would like to thank my
colleagues across the business for their tireless efforts to support our
customers and communities, and continue to deliver against the backdrop of
COVID. I look forward to seeing the business go from strength to strength
under Deepak's leadership."

No further disclosure obligations arise under paragraphs (1) to (6) of LR
9.6.13 R of the UK Listing Authority's Listing Rules in respect of this
appointment.

This announcement includes inside information as defined in Article 7 of the
Market Abuse Regulation No. 596/2014.

The person responsible for arranging the release of this announcement on
behalf of Smith+Nephew is Susan Swabey, Company Secretary.

Deepak Nath biography

·    Siemens Healthineers

-     President, Diagnostics, 2021-2022

-     President, Laboratory Diagnostics, 2018-2021

 

·    Abbott Laboratories

-     President, Abbott Vascular & Senior Vice President, Abbott
(Section 16/Executive Officer), 2015-2017

-     President, Abbott Molecular (Corporate Officer, Abbott), 2014-2015

-     Divisional Vice President & General Manager, Ibis Biosciences,
2012-2014

-     Divisional Vice President, Emerging Markets, Europe, Middle East,
Africa, Abbott Vascular, 2011-2012

-     Divisional Vice President & General Manager, Germany, Austria,
Switzerland, Nordics and Eastern Europe, Abbott Vascular, 2009-2011

-     Divisional Vice President, Strategic Marketing, Abbott Vascular,
2008-2009

-     Divisional Vice President, R&D Strategy & Systems, Abbott
Vascular, 2007

 

·    Amgen

-     Director, R&D Strategic Operations and Finance, 2005-2007

-     Associate Director/Director, Strategic Process Analysis, 2004-2005

 

·    McKinsey & Company

-     Engagement Manager/Senior Associate/Associate, 2000-2004

 

·    Lawrence Livermore National Laboratory

-     Scientist, New Technologies Engineering Division/Computational
Physics Group, 1998-2000

 

Remuneration

Deepak Nath will be paid in accordance with the Company's Directors'
Remuneration Policy (the "Policy") approved by shareholders on 9 April 2020
and as set out in the 2020 Annual Report:

·    He will receive a base salary of $1,475,000 per annum. Based on
current exchange rates, this is in line with the salary paid to Roland
Diggelmann.

·    He will participate in the Annual Bonus Plan ("ABP") and Performance
Share Programme ("PSP") as described in the Policy. His ABP opportunity for
2022 will be pro-rated to reflect the time served during the year.

·    The Company will pay a pension contribution in respect of Deepak Nath
in line with average pension payments for the wider US workforce (currently
7.5% of salary per annum).

·    He will receive standard benefits, which are not materially different
in nature or value relative to the incumbent Chief Executive Officer.

·    The notice period will be six months from him and 12 months from the
Company.

·    He will be subject to our standard within-employment and
post-cessation shareholding guidelines.

 

Deepak Nath will also receive buy-out awards in respect of outstanding
incentives he will forfeit on leaving his former company. All awards have been
provided on a like-for-like basis in terms of the value provided and their
performance and/or vesting periods. There has been no acceleration of any
awards, and none of the performance-based awards has been replaced with a
non-performance based award. In summary:

 

-   An amount up to $800,000 will be paid in cash in November 2022 in
respect of his forfeited 2022 cash bonus, subject to the Remuneration
Committee's assessment of performance against the targets attached to the cash
bonus forfeited at his previous company;

 

-   Deepak Nath held various performance-based share awards under
arrangements agreed with his former employer, with an aggregate face value of
€5,258,828 ($5,990,331) (as at 11 February 2022). These will be replaced
with awards over Smith+Nephew shares of an equivalent face value. These awards
will be capable of vesting at varying dates between 2022 and 2025 (fully
aligned with their original vesting dates), subject to meeting the original
performance conditions and continued employment; and

 

-   Deepak Nath also held various restricted share awards under arrangements
agreed with his former employer, with an aggregate face value of €2,242,322
($2,554,229) (as at 11 February 2022). These will be replaced with awards over
Smith+Nephew shares of an equivalent face value, which will vest on their
original vesting dates subject to continued employment.

 

-   No buy-out award will be provided under these arrangements in respect of
Deepak Nath's long-term incentive award granted to him in November 2021 by his
former employer.

 

In connection with his departure from the Company on 31 March 2022, Roland
Diggelmann will be paid in accordance with the Policy and the terms of his
service agreement:

·    He will continue to receive his salary, benefits and pension
contributions in the normal way during his employment with the Company up to
31 March 2022.

 

·    He will receive payments in lieu of his salary, health and dental
benefits, life assurance, car allowance and pension contributions in respect
of the balance of his notice period up to 28 February 2023 (to reflect the
Swiss law requirement that the notice period runs from the end of the month in
which it is served) and payments in respect of accrued unused holiday at the
time he ceases employment.

 

·    His bonus relating to his service during 2021 has been determined in
the normal manner, resulting in a cash payment of CHF 614,468 and a deferred
share award worth (at grant) CHF 614,468. The deferred share award will be
released in 2025. Further details of the Annual Bonus assessment will be
provided in the usual manner in our 2021 Directors' Remuneration Report.

 

·    Roland Diggelmann will be eligible to participate in the Annual Bonus
Plan for 2022, with his opportunity pro-rated for service and the outcome
determined in the usual manner at year-end.

 

·    Roland Diggelmann will be a "good leaver" for the purposes of his
outstanding Performance Share Programme awards. As such, these will be
pro-rated for service and will remain capable of vesting at the end of the
three-year performance period, subject to meeting the relevant performance
conditions. He will be required to retain any vested shares, net of tax, for a
further two-year period after the vesting date. The maximum number of shares
that he will receive under his awards is summarised in the table below:

 

 Date of grant  Maximum number of shares subject to award on award date  Time pro-rated number of shares subject to award (exclusive of dividend
                                                                         equivalents)
 21 May 2020    193,072                                                  135,767
 21 May 2021    192,348                                                  55,283

 

·    All shares earned during Roland Diggelmann's employment as Chief
Executive Officer will be subject to a two-year holding period post cessation
of employment.

 

·    Legal fees incurred in connection with Roland Diggelmann's stepping
down from the Board of up to CHF 5,000 for Swiss legal advice and of up to
£5,000 for English law advice are payable by the Company.

 

Enquiries

 Investors
 Andrew Swift                      +44 (0) 1923 477433
 Smith+Nephew

 Media
 Charles Reynolds                  +44 (0) 1923 477314
 Smith+Nephew

 Susan Gilchrist / Ayesha Bharmal  +44 (0) 20 7404 5959
 Brunswick

 

About Smith+Nephew

Smith+Nephew is a portfolio medical technology business focused on the repair,
regeneration and replacement of soft and hard tissue. We exist to restore
people's bodies and their self-belief by using technology to take the limits
off living. We call this purpose 'Life Unlimited'. Our 18,000 employees
deliver this mission every day, making a difference to patients' lives
through the excellence of our product portfolio, and the invention and
application of new technologies across our three global franchises of
Orthopaedics, Sports Medicine & ENT and Advanced Wound Management.

Founded in Hull, UK, in 1856, we now operate in more than 100 countries, and
generated annual sales of $5.2 billion in 2021. Smith+Nephew is a constituent
of the FTSE100 (LSE:SN, NYSE:SNN). The terms 'Group' and 'Smith+Nephew' are
used to refer to Smith & Nephew plc and its consolidated subsidiaries,
unless the context requires otherwise.

For more information about Smith+Nephew, please visit www.smith-nephew.com
(http://www.smith-nephew.com/) and follow us on Twitter
(http://www.twitter.com/smithnephewplc) , LinkedIn
(http://www.linkedin.com/company/smith-%26-nephew) , Instagram
(https://www.instagram.com/smithnephewmeded/) or Facebook
(http://www.facebook.com/smithnephewplc) .

 

 

Forward-looking Statements

This document may contain forward-looking statements that may or may not prove
accurate. For example, statements regarding expected revenue growth and
trading margins, market trends and our product pipeline are forward-looking
statements. Phrases such as "aim", "plan", "intend", "anticipate",
"well-placed", "believe", "estimate", "expect", "target", "consider" and
similar expressions are generally intended to identify forward-looking
statements. Forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause actual results to
differ materially from what is expressed or implied by the statements. For
Smith+Nephew, these factors include: risks related to the impact of COVID,
such as the depth and longevity of its impact, government actions and other
restrictive measures taken in response, material delays and cancellations of
elective procedures, reduced procedure capacity at medical facilities,
restricted access for sales representatives to medical facilities, or our
ability to execute business continuity plans as a result of COVID; economic
and financial conditions in the markets we serve, especially those affecting
healthcare providers, payers and customers (including, without limitation, as
a result of COVID); price levels for established and innovative medical
devices; developments in medical technology; regulatory approvals,
reimbursement decisions or other government actions; product defects or
recalls or other problems with quality management systems or failure to comply
with related regulations; litigation relating to patent or other claims; legal
compliance risks and related investigative, remedial or enforcement actions;
disruption to our supply chain or operations or those of our suppliers
(including, without limitation, as a result of COVID); competition for
qualified personnel; strategic actions, including acquisitions and
dispositions, our success in performing due diligence, valuing and integrating
acquired businesses; disruption that may result from transactions or other
changes we make in our business plans or organisation to adapt to market
developments; relationships with healthcare professionals; reliance on
information technology and cyber security; and numerous other matters that
affect us or our markets, including those of a political, economic, business,
competitive or reputational nature. Please refer to the documents that
Smith+Nephew has filed with the U.S. Securities and Exchange Commission under
the U.S. Securities Exchange Act of 1934, as amended, including Smith+Nephew's
most recent annual report on Form 20-F, for a discussion of certain of these
factors. Any forward-looking statement is based on information available to
Smith+Nephew as of the date of the statement. All written or oral
forward-looking statements attributable to Smith+Nephew are qualified by this
caution. Smith+Nephew does not undertake any obligation to update or revise
any forward-looking statement to reflect any change in circumstances or in
Smith+Nephew's expectations.

(◊ )Trademark of Smith+Nephew. Certain marks registered US Patent and
Trademark Office.

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