Medtronic to add two new 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 medtech 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 expected a smaller hit of about $185 million from U.S. President Donald Trump's tariffs, compared to the $200 million to $350 million it had previously expected.

The company did not raise the sales growth forecast for its fiscal 2026 despite strong quarterly results, sending its shares down 4% in morning trading.

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

CEO Geoff Martha said Groetelaars and Jellison brought with them the necessary medtech experience the company's board had been missing.

"There is a specific formula for M&A (in medtech), and having experienced medtech operators and with a lot of M&A background is helpful in being that voice on the board," Martha said in an interview.

One of its new panels will seek investment opportunities, including tuck-in deals, while the other will focus on boosting earnings growth, Medtronic said. Both committees will be led by Martha and include the two new directors.

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

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