Natick-based medical-device maker to keep Tobin at helm

Boston Scientific CEO James Tobin

Boston Scientific Corp. shuffled its management ranks yesterday, raising questions about the company's long-term succession plans.

The Natick medical-device maker said chief executive James R. Tobin, 63, who was thought to be edging closer to retirement, will remain with the company "for the foreseeable future."

At the same time, Boston Scientific said Tobin's heir apparent and chief operating officer, Paul LaViolette, 50, will give up his current duties in July and leave the company by the end of the year. He will collect $7.25 million in separation payments in 2009 and 2010.

In a statement, Boston Scientific noted that Tobin has been spending much of his time trying to retool the company's cardiac rhythm management unit, which makes pacemakers and defibrillators. Boston Scientific acquired the ailing unit when it bought Guidant Corp. for $27 billion two years ago.

The Guidant business is now back on track, according to the company, freeing Tobin to focus again on all of Boston Scientific's day-to-day operations and eliminating the need for a separate chief operating officer.

A Boston Scientific spokesman, Paul Donovan, said LaViolette is retiring because Tobin is combining the jobs of chief executive and chief operating officer. Tobin and LaViolette were not available for comment.

"The time is now right for Jim to turn his full attention and energies back to the core challenges facing the company as a whole," cofounder and chairman Peter Nicholas said in a statement.

The company did not give any hint of when Tobin plans to retire or who would assume his position.

LaViolette, who has worked for Boston Scientific for 15 years, was considered Tobin's most likely successor, representing the company in San Francisco during its annual meeting at the prestigious JP Morgan healthcare investment conference in January.

"I don't see a clear operating guy underneath [LaViolette] that's going to have the full grasp of the business that he had," Tim Nelson, a senior healthcare analyst at First American Funds, told Reuters.

Also yesterday, Boston Scientific said it named another executive, Fred Colen, 55, as president of the cardiac rhythm management group, making him one of several possible successors to Tobin.

Boston Scientific has struggled with a host of problems in recent years, including weak sales for its main products, stents and defibrillators, along with heavy debt from the Guidant acquisition and a warning letter from the Food and Drug Administration that limited the company's ability to launch new products.

But Boston Scientific says it is rebounding. The company pared its workforce last year and shed several smaller units to reduce debt and boost profitability. It has predicted the warning letter will be lifted in the middle of this year. And it has seen a resurgence in defibrillator sales, while expressing hope that stent sales have bottomed out.

Analysts had expected Tobin to announce his retirement after the warning letter was lifted and the turnaround was complete.

The company, one of the state's largest medical-device makers, has roughly 2,000 employees in Massachusetts. Its shares rose 2 percent yesterday, after rival Medtronic Inc. predicted revenue would increase 9 to 11 percent this year.

Todd Wallack can be reached at twallack@globe.com.