Device recall delays linked to CEO stock shares, study finds

Medical device companies with CEOs who have a high financial stake in their business are more likely to delay recalls, according to a study published July 24 in Manufacturing & Service Operations Management.

Researchers collected data on 2,144 medical device recalls from 2002 to 2015 and used "accelerated failure time models" to see how CEO stock ownership could affect time of recalls. The study found a positive correlation between higher CEO shares and slower recall notices, and the more severe the recall, the slower the alert. 

In one case, a medical devicemaker CEO with 2 percentage points of a higher stake than another CEO was associated with 26 more days before a recall was posted, according to an Aug. 3 report on the study from The Wall Street Journal

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars