Looking for better margins, Medtronic names new chief financial officer

Medtronic on Tuesday named an alum of General Electric and French automaker Renault Group to become its new chief financial officer and take on investor pressure to increase profit margins and boost innovation.

Thierry Piéton, 54, will step into the role on March 3, replacing Gary Corona, who has served as interim CFO since Karen Parkhill resigned last summer. Parkhill, who went on to oversee computer-maker HP’s finances, oversaw restructuring while Medtronic faced financial challenges such as a steep drop in net income.

“I am thrilled to join such an iconic company and to have the opportunity to contribute to its mission towards patients and caregivers worldwide,“ Piéton said in a LinkedIn post. ”I am already deeply impressed by the breadth of its portfolio, incredible technology and by the talent and diversity of its teams.”

Piéton will be based in the Twin Cities. Stock in the Fridley-run medtech company remained relatively flat as of 1:30 p.m. Tuesday following the announcement.

Piéton will take the reins at a company that reported an adjusted $6.9 billion in profit on $32.4 billion in revenue in fiscal year 2024. Evercore analyst Vijay Kumar said “he’s coming in at a really, really nice time,” as the company is starting up the life cycles for several new devices.

In a news release, CEO Geoff Martha said, “Thierry is a strategic, creative, operationally focused, experienced CFO with a proven track record of delivering innovation-driven growth, margin improvement, and earnings power through strong financial leadership, which is directly aligned with our financial objectives.”

Martha also spent years working at General Electric in management positions before his arrival at Medtronic in 2011. The medtech company’s previous CEO, Omar Ishrak, was once the president and CEO of GE Healthcare Systems.

Medtronic, Kumar said, has previously attracted supply chain talent from Walmart and IT talent from Amazon.

“I think Medtronic has made a conscious effort to get outside talent,” Kumar said. The move, he said, signals that Medtronic intends to expand its margins to reach toward pre-pandemic levels.

Kumar said global CFOs face similar challenges across industries, such as dealing with governments and regulatory bodies.

Car manufacturers, though, receive a slimmer gross margin — the percentage of revenue retained following direct expenses — and they face a mandate to transform the figure into a healthy operating margin: the proportion of profit on sales after paying for further production costs. Auto industry executives are focused on operational discipline and excellence, Kumar said.

Medtronic highlighted that Renault had its highest ever operating margins under Piéton, Kumar said. Now, Piéton will lead a company with a gross margin roughly three times greater than that common for car manufacturers.

“That’s a lot of gross margin for you to play with,” Kumar said.

Piéton is leaving his post at Renault, where he worked as CFO since 2022. The company’s car brands include Renault and Dacia, which are popular in Europe. The firm’s stock price climbed during his tenure there.

In the LinkedIn post, Piéton said he’s “proud to have contributed to the deployment of the Group’s strategy and its turnaround.” New model demand has led the company to buck Europe’s automobile slump, Bloomberg previously reported.

Before that, Piéton worked almost 16 years at General Electric, overseeing finances in several divisions. He began his career as an auditor at PricewaterhouseCoopers, now known as PwC.

As Medtronic CFO, Piéton will make an annual base salary of $850,000 and participate in the company’s incentive plan, which may give him a payout equal to 110% of his annual base salary for fiscal year 2025 on a prorated basis, according to a financial document.

Piéton will participate in Medtronic’s long-term incentive plan, which has an aggregate target value of $2 million for fiscal year 2025, according to the document, and receive a $3 million cash bonus for forgone compensation at Renault. Medtronic will also award him $2.5 million in restricted shares to make up for his unvested equity compensation at the carmaker.

“We are confident he is the right choice at this important time for Medtronic and can’t wait to benefit from his expertise and leadership,” Martha said.