Cerner Corp. has announced that it has begun the search for a CEO to replace Brent Shafer, who has been CEO and chairman since February 2018.
The Kansas City-based company’s board has formed a CEO search committee and has retained an executive search firm. Shafer plans to serve as chairman and CEO until the board has identified and appointed a successor, after which he will serve as a senior advisor for one year.
“Cerner is on the right trajectory, with increased financial guidance based on actions we are taking to improve performance,” Shafer said in a statement. “With the support of the entire organization, we have simplified the business while implementing a new operating model to make Cerner more efficient and effective. We have strengthened our senior leadership team, including the recent addition of Mark Erceg as our CFO, and I believe we now have the right team assembled to drive our company forward."
Shafer succeeded Cerner co-founder and former CEO Neal Patterson, who passed away at the age of 67 in July 2017. Previously he had servied as CEO of Philips North America, which is the largest market for Netherlands-based Royal Philips. Philips North America’s health technology portfolio includes a broad range of solutions and services covering patient monitoring, imaging, clinical informatics, sleep and respiratory care as well as a group of market-leading consumer-oriented brands.
During the company’s first-quarter conference call with analysts, its new chief financial officer, Mark Erceg, pointed out several of Cerner’s strengths, but added that “while Cerner does have the associates and the capabilities, and has created significant value for clients and shareholders since its inception, there is a clear recognition that a lack of focus and at times sub-optimal execution has caused revenue growth to slow and margins to compress, which in turn has resulted in bottom quartile total shareholder return versus our proxy peer set over the past several years.This understanding is what led the board, Brent and the senior management team to initiate a series of actions to improve results. I believe the actions taken so far are a good start and I am excited to play a role in increasing the pace of change so Cerner can realize its full and considerable potential faster.”
Shafer said the company is “going faster on efficiency initiatives already being actioned by our transformation office, continuing and broadening our product and business portfolio reviews, and adjusting our organizational design to centralize key functions. These actions all have a common goal, and that’s to tighten our strategic focus so we can more effectively deliver value to our clients, while also contributing to sustainable, long term, profitable growth for our shareholders.”
In its first quarter, the company announced revenue of $1.388 billion, down 2 percent from $1.412 billion in the first quarter of 2020 with diluted earnings per share of 56 cents, up 19 percent from 47 cents in the year-ago quarter.
