Namal Nawana became the chief executive of Smith & Nephew (SN.) at an opportune time. He was looking for a new role just as Olivier Bohuon’s seven-year tenure was coming to an end, but his arrival in May 2018 soon brought the group’s pay policy into question. The issues still rumble on.
S&N was under pressure from an activist investor (Elliott Management) to sell off businesses, and one reason the directors gave for selecting Nawana was that he had “demonstrated that he can energise businesses to deliver better performance and greater value to shareholders”. As chief executive of Alere, a US medical diagnostics company, he’d had to manage an acrimonious dispute with Abbott Laboratories (US:ABT), who had tried to withdraw a takeover bid after its due diligence raised alarms over the criminal probes Alere was facing. These allegations included paying kickbacks and billing Medicare for defective diagnostic devices. Alere ended up successfully suing Abbott to have the deal completed.
Smith & Nephew describes itself as a “portfolio business focused on the repair, regeneration and replacement of soft and hard tissue”. It’s been a limited company ever since Horatio Nelson Smith formed it in 1907, after becoming a partner in his uncle’s chemist business in 1896: hence its eponymous name. Few companies have survived for so long, and that’s despite it becoming a takeover target. Stryker (US:SYK) made a stab at it in 2014.