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… said a Minneapolis-based medical device CEO on condition of anonymity.
He was reacting to “Medtronic merger tax advantages bring in $9.3 billion” at http://www.medgroup.biz/MDT93
And specifically the first line, “Medtronic says tax advantages stemming from the merger with Ireland-based Covidien have made billions of dollars available for stock buybacks and other uses.”
“They could not be more tone deaf,” continued my anonymous friend.
“We finally get the medical device tax suspended because we, as an industry, decry its effect on our businesses – and what’s the first thing they do? A stock buyback to increase shareholder value!
How about increasing shareholder value by innovating? Investing in research and development? Buying struggling smaller companies who won’t make it on their own?
Seriously, what a bunch of a-holes!”
To be fair, the article also said, “With the merger, Medtronic promised to invest $10 billion in the U.S. over 10 years and add 1,000 jobs in Minnesota, where Medtronic already has about 8,000 employees.”
But as I tell my marketing clients, “Perception is reality.” If the main takeaway is “Medtronic is doing buybacks after the tax inversion,” what does that say about greed, tax evasion, and the business of healthcare?
What do you think?
Do you begrudge Medtronic for deploying its tax savings on a share buyback? Or is that just good business?
10x KEYNOTES ANNOUNCED
David and Stephen agreed to share the best of what’s out in the medical device marketplace. This will be a great foundation for our medical device conference.
If you’re in Southern California, make a point to at least attend the 10x Medical Device Conference reception!
Discussions This Week
Graphene this, graphene that
Customer or Money: Which Comes First in Med Tech?
Thoughts on the Zika virus
Medical Devices and Apps
FDA labeling requirements for disposal?
Make it a great week.
P.S. We’ve already sold more than half the 10x tickets for May. If you’re interested, get on the guest list! http://medgroup.biz/10x
I am currently reading “Victor Papanek – Path of a Design Prophet”. Victor’s own first book was “Design for the Real World” (1970). I highly recommend both books. Victor’s gives his message straight out. The biography not only gives a view of the man, but also includes the reflections on his message by colleagues and students, including my own minor contribution.
Tony Quintero Jr.
T. Kim Parnell
That said, Medtronic has made SO SO many acquisitions recently, how will they integrate them and who is minding compliance? Based on the increasingly frequent serious warnings letters they receive for repeated numerous deficiencies, apparently nobody in Executive Management gives more than lip service to this.
One more thing – if share buy backs are so bad then tell your friend to put his $$ where his mouth is and short Medtronic.
Christopher M. Murphy
Thank you for the opportunity to comment (or perhaps rant) about corporate inversions. These companies were started, and became successful, in the U.S. However, now that they are profitable greed has run rampant.
It’s one thing to claim that the reason for the move is mainly focused on improving shareholder value, but executive salaries and bonuses are also based on stock price and net profit. Moving to a low tax country automatically improves both without management having to do anything; not create new products nor improve manufacturing efficiency. It’s magic money, at least for the first few years.
David Pennington, PE
Breaking news: CORRUPTION is only tangentially related to MONEY.
Check out the definition of a corrupt product on the FDA website. Application: a government official, elected, hired, or appointed, is corrupt, insofar as he or she does not fulfill the duties of his or her position with honesty, integrity, and competence.
The only way to “end corruption” in government is to vote the bums out.
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