Medtronic has agreed to not only expand the size of its board of directors, but to also task it with taking a closer look at cutting costs and exploring more tuck-in M&A—after what it described as a “constructive dialogue” with the company’s newest stakeholder, Elliott Investment Management.
The activist investor firm did not disclose the exact size of its recently acquired stake in the medtech giant, however sizable, alongside the company’s second-quarter earnings report.
“Our decision to become one of Medtronic's largest investors was driven by our strong conviction that the company is entering a new chapter of exceptional value creation defined by accelerating growth, operational improvement and enhanced strategic clarity,” Elliott Partner Marc Steinberg said in a statement. “We believe Medtronic's recent innovations in some of the medical technology sector's most attractive markets have positioned the company for an inflection in organic growth.”
“Today's announcements—including the addition of new directors with deep medical technology experience and the formation of two focused Board committees—are the right steps towards realizing Medtronic's potential,” Steinberg added.
The two new independent directors are John Groetelaars, former CEO of Hillrom and Dentsply Sirona, and Bill Jellison, previously a chief financial officer at Stryker, and who until this week was a board member at Masimo with a focus on M&A, after gaining his seat there in 2024 following a proxy fight with Politan Capital Management. Their new titles are effective immediately.
The two new committees, meanwhile, will include teams focused on growth and operations. The former will consider possible acquisitions, R&D investments and divestitures—such as the currently planned departure of Medtronic’s $2.8 billion diabetes unit—while the latter will evaluate potential efficiencies and ways to simplify its global manufacturing and supply chain. Both will be chaired by Medtronic’s CEO, Geoff Martha.
“I am pleased to welcome John and Bill to the Medtronic Board of Directors—each of whom brings decades of relevant experience delivering growth as executives and directors of public companies in the medical technology industry. John's leadership managing global operations and Bill's deep financial expertise will also be valuable to the boardroom,” Martha said.
“We are at an exciting inflection point and in a period of strong momentum, with multiple growth drivers already delivering and additional breakthrough therapies set to launch in the months ahead,” he added. “The separation of MiniMed is an example of the important steps we're taking to create a more focused and more profitable Medtronic.”
The company said it plans to host an investor day in mid-2026 to outline its strategic priorities and detail the work of the two board committees.
"We appreciate our productive dialogue with Marc Steinberg and the Elliott team,” Martha said. “The durable growth drivers now taking hold across several of our businesses are strengthening Medtronic's trajectory and reinforcing our conviction in the company's future. The Board believes Medtronic has the right strategies to build on this momentum and deliver sustained, superior returns for investors over the long term.”
Medtronic has been looking to reshape itself over the past several years, including through the post-COVID exit of the hospital ventilator business. Before deciding to spin out its diabetes division—with its portfolio of insulin delivery systems and wearable blood sugar trackers—the company had previously planned to hive off its acute care and patient monitoring segments, though that plan was ultimately reversed.
Medtronic also once pursued a $738 million buyout of the South Korean insulin patch-pump developer EOFlow, but the deal was scrapped after that company became snarled in a patent and trade secrets dispute with the Omnipod maker Insulet.
For the second quarter of this year, Medtronic reported $8.58 billion in revenue for an 8.4% gain over the same period in 2024.
The company’s cardiovascular portfolio brought in $3.28 billion, for a 9.3% gain, while neuroscience devices totaled $2.42 billion, up 4.3%. Medical surgical hardware added $2.08 billion in sales, growing 4.4%, while its diabetes business rose 11.5% to $721 million.
“We delivered another consistent quarter of mid-single digit organic revenue growth, with broad strength from several innovative product categories, including Pulsed Field Ablation, Transcatheter Valves, Neuromodulation, Diabetes, and Leadless Pacing," Martha said.
The company also raised some of its financial forecasts for the 2026 fiscal year, bumping its earnings-per-share growth to about 4.5%, up from its previous projection of 4%, to land between $5.60 and $5.66.
That excludes the potential impact of tariffs, however, which Medtronic has now lowered to about $185 million compared to the prior range of $200 million to $350 million. The company did not make changes to its revenue guidance, which it had pegged at about 5%.
“As a result of our Q1 EPS outperformance and improved tariff impact assumption, we are raising our full year EPS guidance,” said CFO Thierry Piéton. “Our confidence continues to increase as we advance our revenue growth drivers and execute on efficiencies in manufacturing, supply chain, and operating expenses to drive earnings growth, and increase our growth investments in R&D, sales, and marketing, all with a deliberate focus on creating long-term shareholder value.”
Editor's note: In an August 19 filing with the SEC, Masimo disclosed that Bill Jellison had resigned from the company's board the day prior.