{
  "docId": "019dd923-622c-750b-8b99-38d956541145",
  "docSlug": "a8618aad4c6b",
  "documentTitle": "Stryker Corp. (SYK)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-04-06 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 171,
  "pageCount": 195,
  "prevPage": 170,
  "nextPage": 172,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 1,
  "notes": "Uses a 'Huh?' callout to highlight the contradiction between management's claims and financial reality.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "quote_block"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-38d956541145/171",
  "deckHref": "/decks/019dd923-622c-750b-8b99-38d956541145",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-38d956541145.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-38d956541145#slide-171",
  "components": [
    {
      "bbox": {
        "h": 0.15,
        "w": 0.88,
        "x": 0.08,
        "y": 0.17
      },
      "kind": "callout",
      "text": "Spruce Point believes investors should be outraged that management is receiving “off cycle” RSU grants to “retain” management. Is something going wrong at Stryker that the Board is helping to conceal from investors such that management needs inducements to stay? Spruce Point also believes that Mr. Boehnlein (CFO) and Mr. Menon (President of Global Quality and Operations) have done a poor job controlling costs, as illustrated by the fact that the Company is now warning about a 100 bp gross margin impact from supply chain issues and inflation.",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "204edf1a-8efa-4093-b73a-73d6f0df4b4a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "Spruce Point believes investors should be outraged that management is receiving “off cycle” RSU grants to “retain” management. Is something going wrong at Stryker that the Board is helping to conceal from investors such that management needs inducements to stay?",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-25b2-736e-8e58-f7489b032978",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.04,
        "x": 0.49,
        "y": 0.67
      },
      "kind": "legend",
      "text": "Huh?",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "96773e59-c3dc-4066-a7af-dd5ed0148215",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.28,
        "w": 0.82,
        "x": 0.14,
        "y": 0.37
      },
      "kind": "paragraph",
      "text": "Restricted stock units were also granted on an off-cycle basis to Mr. Boehnlein and Mr. Menon in May 2021 and to Mr. Pierce and Mr. Stiles in October 2021. The restricted stock units granted to Mr. Boehnlein and Mr. Menon in May 2021 were awarded in recognition of their efforts and contributions related to the Company's cost transformation initiative and to establish an additional retention incentive. The restricted stock units granted to Mr. Pierce and Mr. Stiles in October 2021 were awarded in recognition of their increased responsibilities in connection with Mr. Scannell's transition and to establish an additional retention incentive.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "121b47d9-5644-45db-9f60-d4d63bd92ec4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.22,
        "w": 0.82,
        "x": 0.14,
        "y": 0.74
      },
      "kind": "paragraph",
      "text": "Oct 28, 2021: “And so as a result, we have seen some increased costs as well in terms of inflation on those items. But to date, our supply chain and procurement teams have really just been able to manage that. And so we haven't seen anything really show up in terms of any major impacts on our financials. And so while we expect that to continue into the rest of '21 and into 2022 as well, we want to make sure that whatever we have in our numbers has already been factored in some of those raw material challenges that we have. And we're going to just continue to monitor the situation as it progresses.”\nJan 27, 2022: “As a result of the latest COVID wave and the current inflationary environment, we expect gross margin performance to be negatively impacted by 50 to 100 basis points with a more pronounced impact in the first half of the year.”\nMarch 11, 2022: “We expect that this is going to drive a negative impact, and in January, we said between 50 and 100 basis points within gross margin as you compare it to prior year. I think, if you think about the full year, it's going to lean more towards 100 basis points in the first half of the year and then it will moderate down as some of these supply chain issues improve in the back half of the year.”",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3c0d7a64-b0b7-4b22-b486-8e270c8b117c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.82,
        "x": 0.14,
        "y": 0.54
      },
      "kind": "paragraph",
      "text": "The restricted stock units granted to Mr. Boehnlein and Mr. Menon in May 2021 were awarded in recognition of their efforts and contributions related to the Company's cost transformation initiative and to establish an additional retention incentive. Mr. Boehnlein and Mr. Menon have overseen meaningful progress of the cost transformation initiative since 2018, with key improvements in the Company's adjusted operating margin and free cash flow levels and optimization of the Company's supply chain. The restricted stock units vest in three equal installments on May 1 in each of 2022, 2023 and 2024, respectively",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "bfc04de3-b024-4703-959b-21fbbd1d0f14",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "\"Restricted stock units were also granted on an off-cycle basis to Mr. Boehnlein and Mr. Menon in May 2021 and to Mr. Pierce and Mr. Stiles in October 2021... awarded in recognition of their efforts and contributions related to the Company's cost transformation initiative\" — Stryker Proxy Statement. \"And so we haven't seen anything really show up in terms of any major impacts on our financials... we expect gross margin performance to be negatively impacted by 50 to 100 basis points\" — CFO and IR Q3 and Yr End Call Conf Calls and Cowen Conf March 11th 2022.",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-25b2-736e-8e58-f8d3c322445d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.13,
        "x": 0.03,
        "y": 0.37
      },
      "kind": "table",
      "text": "CFO and IR Q3 and Yr End Call Conf Calls and Cowen Conf March 11th 2022",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b80b9466-239c-40eb-aa39-d45f1a5ea2bb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.68,
        "x": 0.28,
        "y": 0.04
      },
      "kind": "title",
      "text": "\"Off Cycle\" Bonuses.. For Retention And Good Work?",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5357f282-f1df-4102-8e9a-f14c20bc91e3",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "expose_contradiction",
      "slug": null,
      "matchId": "9c4cc127-affa-47e0-a454-27a18b032ea0",
      "evidence": "Contrasting management's positive claims about cost transformation with their negative financial warnings.",
      "confidence": 1
    }
  ],
  "arcBeats": [
    {
      "to": 195,
      "from": 61,
      "beatId": "85f871f2-b4a8-4a0d-ac09-177a661eed97",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Resolution",
      "beatSlug": "resolution",
      "evidence": "The document concludes with a clear call to action, urging investors to reconsider their position on Stryker's stock.",
      "position": 4,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}