As Mednax searches for a buyer to take over its $550 million radiology business line, the company is making a change at the top.
The Florida-based physician firm announced Monday morning that it’s replacing longtime CEO Roger Medel, MD, who founded the company in 1979. Mednax’s board of directors has selected Mark Ordan—who previously led publicly traded long-term care real estate firm Quality Care Properties—as its new chief executive.
Ordan joins Mednax’s board alongside new members Thomas McEachin, Guy Sansone, John Starcher Jr. and Shirley Weis, officials said July 13.
“I am honored to join Mednax’s outstanding team of passionate physicians, clinicians and employees,” Ordan said in a statement. “Roger is a renowned physician who has built an amazing company. I look forward to working with Guy, Roger, the other board members and management team to continue putting patient needs first and creating value for shareholders.”
Quality Care Properties was previously one of the largest actively managed companies focused in the post-acute, skilled nursing and assisted living spaces. Ordan’s tenure included the sale of the firm to Welltower and hospital system Promedica in 2018. He also served as CEO of Sunrise Senior Living—a publicly traded operator and owner of 300 such communities—from 2008 to 2013. During that tenure, he oversaw the restructuring and eventual sale of the company to Health Care REIT and investment firm KKR.
Mednax said its new board appointments follow the signing of an agreement with activist investor Starboard Value, which owns about 9.9% of the company’s common stock. Under the deal, Starboard has withdrawn its previously submitted slate of nominees and agreed to support these new members at Mednax’s shareholder meeting. Starboard had pushed for a partial or full sale of Mednax and privately nominated a majority slate of directors back in November, the Wall Street Journal reported. With the deal, Mednax is also agreeing to cover Starboard’s legal fees and other out-of-pocket expenses related to the dispute up to $1.2 million.
Ordan, 61, will earn an annual base salary of $1 million as Mednax’s new CEO, along with a one-time payment of $250,000 this year for developing a “strategic plan for the company’s transformation.” Along with other compensation, he’ll also stand to collect an annual incentive bonus equal to 150% of his annual base salary based on to-be-determined performance metrics.
Meanwhile, Medel has retired in his capacity as CEO effective Sunday, July 12. He’ll continue on as a nonemployee member of the board until the company’s 2021 annual meeting, and serve as a consultant to the company for up to a year, collecting a monthly fee of more than $177,000. The 73-page document outlining these changes labeled Medel’s retirement as a “a termination without ‘cause,’” and noted that the company founder has entered into a separation agreement as part of his exit. He stands to collect severance benefits as part of the deal and signed a release of any rights to sue following his departure.
Mednax announced back in June that it plans to sell its radiology business line in the coming months and change its name back to Pediatrix, harking back to its start as a single neonatology group.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.