Medtronic plans to add two independent directors after Elliott takes large stake

By Puyaan Singh and Kamal Choudhury

Aug 19 (Reuters) - Medtronic MDT.N said on Tuesday it would add two new directors to its board and set up committees to help boost its lagging shares, after activist investor Elliott Investment Management emerged as one of its largest shareholders.

The medical-device maker said veteran med-tech executives John Groetelaars, once interim CEO for Dentsply Sirona XRAY.O, and Bill Jellison, formerly CFO at Stryker SYK.N, would join its board as independent directors.

Medtronic also raised its full-year profit forecast for fiscal 2026 and said it expects a smaller hit of about $185 million from U.S. President Donald Trump's tariffs, versus the $200 million to $350 million it had previously expected.

The company's finance chief, Thierry Pieton, said in a conference call that execution of mitigation efforts helped reduce the impact from tariffs.

Shares of Medtronic, which have risen 16% so far this year, fell 5% in early trading.

Edward Jones analyst John Boylan said investors may be disappointed in the unchanged fiscal-year 2026 sales growth forecast despite the company's strong first-quarter results.

"Investors were hoping for more operating improvements and more sales growth than we got this quarter and in guidance," Boylan said.

"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," said Elliott Partner Marc Steinberg.

Elliott, which has not disclosed the value of its stake in the company, did not immediately respond to a Reuters request for the details.

Medtronic said one of the new committees would seek tuck-in mergers and acquisitions, research and development investments and potential divestitures, while the other would look to boost earnings growth.

The panels, to be led by CEO Geoff Martha, will include Groetelaars and Jellison.

"We view these changes as an incrementally positive development for Medtronic," Leerink Partners analyst Mike Kratky said in a note, pointing to Elliott's track record of boosting share performance for companies such as Cardinal Health CAH.N.