Preston Wells
STRYKERAbout Preston Wells
Preston W. Wells, age 48, is Stryker’s Vice President and Chief Financial Officer effective April 1, 2025; he previously served as Group CFO, Orthopaedics, Head of Investor Relations, and VP of FP&A, with prior finance leadership roles at Dialight and Johnson & Johnson. He holds a BS in Accounting (Bucknell) and an MBA in Supply Chain Management (Lehigh) . Company performance context: 2024 net sales grew 10.2% to $22.6B and adjusted EPS rose 15.0% to $12.19 ; in Q2 2025, Wells raised guidance to 9.5–10% organic net sales growth and adjusted EPS of $13.40–$13.60, citing margin improvements and operational efficiencies . Stryker’s five‑year cumulative TSR (2020–2024) exceeded the S&P 500 Health Care Index, and pay actually paid aligns strongly with TSR given equity-heavy incentives .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Stryker | VP & Group CFO, Orthopaedics | Jul 2022–Mar 2025 | Financial and strategic leadership across Joint Replacement, Trauma & Extremities, Spine, and Digital/Robotics, supporting market-leading growth |
| Stryker | VP, Investor Relations | Jun 2020–Jul 2022 | Led investor communications and capital markets messaging |
| Stryker | VP, Financial Planning & Analysis | Jun 2016–Jun 2020 | Enterprise planning discipline to support growth and margin improvements |
| Stryker | Senior Director, Finance | Oct 2015–Jun 2016 | Sales finance and operations for Spine business |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Dialight Corporation | Finance leadership roles | Pre‑2015 (within 17 years pre‑Stryker) | Senior accounting and financial management experience |
| Johnson & Johnson | Finance leadership roles | Pre‑2015 (within 17 years pre‑Stryker) | Global healthcare finance expertise |
Fixed Compensation
| Item | 2025 Value | Notes |
|---|---|---|
| Annualized Base Salary | $725,000 | Effective April 1, 2025 |
| Target Bonus | $616,250 (85% of base) | Prorated for 2025 under applicable plan terms |
Performance Compensation
Annual Bonus Structure (Company NEO plan – 2024 reference)
| Metric | Weighting | 2024 Target | 2024 Actual | Payout Component |
|---|---|---|---|---|
| Adjusted Operating Income (Core) | 20% | $5.606B | $5.826B | 20.0% |
| Adjusted Operating Income Margin (Core) | 20% | 25.25% | 25.70% | 20.0% |
| Constant Currency Sales (Core) | 40% | $22.202B | $22.670B | 40.0% |
| Free Cash Flow excl. Recall (Core) | 20% | $3.320B | $3.552B | 20.0% |
| Adjusted Operating Income (Overachievement) | 35% | $5.830B | $5.826B | 7.1% |
| Constant Currency Sales (Overachievement) | 35% | $22.868B | $22.670B | 24.6% |
| Adjusted EPS (Overachievement) | 30% | $12.46 | $12.19 | 3.3% |
| Total Bonus vs Target | — | — | — | 135.0% |
Notes:
- Overachievement payouts for AOI and EPS required meeting AOI margin target; payouts reduced accordingly .
- Free cash flow reconciliation to $3.552B excludes recall payments and capex per policy .
Long-Term Incentive Awards (2025 for Wells)
| Instrument | Target Value | Mix | Vesting Schedule | Performance Metrics |
|---|---|---|---|---|
| Stock Options | ~$1.2M (40% of ~$3.0M) | 40% | 20% annually over 5 years; 10‑year term | Time-based; subject to clawback/recoupment terms |
| Performance Stock Units (PSUs) | ~$1.8M (60% of ~$3.0M) | 60% | Earned over 3‑year cycle; vest on March 21 following cycle | Company uses multi-year goals such as net sales growth and adjusted EPS growth (peer-relative and absolute constructs) |
Award governance:
- Minimum 1-year vesting on awards granted after May 8, 2025 (limited exceptions) .
- Committee may accelerate vesting or deem performance satisfied upon change in control; option cash-out right within 60 days may apply at committee discretion .
Equity Ownership & Alignment
| Policy/Item | Detail |
|---|---|
| Ownership Guidelines | CFO categorized under “Other NEOs”: 3× salary, 5 years to comply |
| Retention Rule on Exercises | 25% of net shares from option exercises cannot be sold until guideline met |
| Hedging/Pledging | Prohibited for directors/officers; no margin accounts or pledges (grandfathered exceptions only) |
| Clawbacks & Recoupment | Broad recoupment for misconduct or restatements; mandatory clawback for restatements per SEC/NYSE (3 prior fiscal years) |
| Compliance Status (as of 12/31/2024) | All non-employee directors and NEOs subject at that time were at or above guidelines or projected to be by target date |
Employment Terms
| Term | Company Practice / Wells’ Status |
|---|---|
| Employment Agreements | Stryker generally does not provide employment or severance agreements; none in place for NEOs |
| Non-Compete/Non-Solicit | Wells is subject to Stryker’s Confidentiality, IP, Non-Competition and Non-Solicitation Agreement as referenced in his promotion letter |
| Severance | No contractual severance; separation payments may occur case-by-case |
| Change-in-Control Economics | Committee discretion to accelerate vesting, remove restrictions, or cash-settle options at FMV minus strike during 60 days post-CIC; CIC defined by >50% ownership, certain combinations, or liquidation/sale |
Performance & Track Record
- Margin and efficiency: Wells highlighted sustained margin expansion driven by pricing discipline, manufacturing efficiency, procurement, supply-chain initiatives, and consistent 100bps operating margin delivery sequentially .
- 2025 guidance uplift: Raised FY25 organic net sales growth to 9.5–10% and adjusted EPS to $13.40–$13.60; YTD cash from operations of ~$1.4B; full-year other income/expense ~$430M; tax rate 15–16% .
- Tariff impact management: Net tariff headwind estimated at ~$175M in 2025 with mitigation via manufacturing footprint and FX .
Company Financial Overview (Context for CFO Tenure)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Net Sales ($USD Millions) | $20,498 | $22,595 |
| Adjusted Net Earnings ($USD Millions) | $4,066 | $4,700 |
| Reported EPS ($USD) | $8.25 | $7.76 |
| Adjusted EPS ($USD) | $10.60 | $12.19 |
| Dividends per Share ($USD) | $3.00 | $3.20 |
| Cash, Equivalents & Marketable Securities ($USD Millions) | $3,053 | $3,743 |
Compensation Committee Analysis
- Committee composition: Golston (Chair), Brainerd, Caforio, McCoy; all independent; met 6 times in 2024 .
- Independent compensation consultant: Semler Brossy advises committee; determined independent with no conflicts .
- Benchmarking: Peer group includes Abbott, Boston Scientific, Medtronic, Danaher, GE HealthCare (added 2024), etc.; no fixed percentile targeting; awards consider role scope, performance, retention, market data .
- Say‑on‑pay: 2024 support ~91% ; 2025 advisory vote approved (For: 269,904,211; Against: 22,785,808; Abstain: 869,691) .
Investment Implications
- Pay-for-performance alignment: Wells’ compensation is heavily variable and equity-based (60% PSUs, 40% options), tied to multi-year sales and EPS goals—supporting alignment with TSR and shareholder value creation .
- Retention and selling pressure: Five-year option vesting and three-year PSU cycles, plus 25% net-share holdback until ownership guidelines are met, reduce near-term selling pressure and promote sustained ownership .
- Governance and risk controls: Prohibitions on hedging/pledging, robust clawback/recoupment, absence of contractual CIC payouts or tax gross‑ups (except relocation/expatriate) mitigate governance risk and pay inflation .
- Execution track record: Early tenure signals constructive margin discipline and confident guidance raises; watch tariff mitigation, FX, and debt-related OI&E as levers impacting EPS cadence .