Analyst: New Cerner CEO must focus on 'retaining key personnel'

Two analysts have released reports emphasizing the need for Cerner's new CEO to retain the company's veteran leadership, according to Kansas City Business Journal.

Here are five things to know about the reports.

1. Cerner recently appointed Brent Shafer, former CEO of Philips North America, as its CEO, effective Feb. 1. The appointment came nearly six months after Cerner lost its former CEO and chairman Neal Patterson to an ongoing battle with cancer in July.

2. Some analysts had expected Cerner to tap an internal candidate as the company's next CEO.

"We had commented previously that we expected a swifter process and the selection of an internal candidate such as President Zane Burke," Jeffrey Garro, an analyst with William Blair & Co., wrote in a research note, according to the Kansas City Business Journal.

3. Steven Halper, a managing director for Cantor Fitzgerald, emphasized how various members of Cerner's current leadership team are longtime executives at the company. Retaining these experienced team members is of utmost importance to the success of the company, he said.

"Future performance depends in significant part on retaining key personnel," Mr. Halper wrote in a research note, according to the Kansas City Business Journal. "This includes many key technical and senior management personnel, many of whom have been with the company for a significant period of time."

4. Mr. Garro also highlighted Mr. Shafer's 12 years at Philips, during which he supported the company through a period of modest revenue growth. Philips, a medical device company, has been adding health IT services like precision medicine and population health to its portfolio in recent years.

"There is enough overlap for Mr. Shafer to get up to speed quickly but also provide a unique viewpoint," Mr. Garro said. However, he added "the lack of prior public company CEO experience may garner some questions."

5. Mr. Garro hypothesized Mr. Shafer will build on Cerner's current course, rather than changing the company's strategic direction in any major ways.

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