Patterson CEO resigns after board investigation finds he violated personnel policies

Mark Walchirk has resigned as chief executive of Patterson Cos. after a board investigation determined he "violated company policy and demonstrated poor judgment regarding an encounter with an employee."

The resignation was announced last week and effective immediately. Don Zurbay, the company's chief financial officer, was named president and CEO.

"Patterson is committed to cultivating a people-first culture where every employee is treated with respect and those standards apply to every member of the organization," board Chair John Buck said in a news release. "Immediately upon becoming aware of the allegation, the independent directors conducted a comprehensive investigation with the support of independent, outside legal counsel and determined that Mark could not remain in his leadership position."

Zurbay joined Patterson in June 2018. He was previously a vice president and CFO at St. Jude Medical Inc. before that company was acquired by Abbott Laboratories.

"I'm excited to continue to work closely with the board and the rest of the management team in my new role to build on our strong momentum and capitalize on the many opportunities ahead," Zurbay said in the release.

Patterson's controller and vice president of finance, Kevin Barry, was named interim CFO.

The company said in a related Securities and Exchange Commission filing that Walchirk's actions "did not relate to the company's operations or the integrity of the company's financial statements."

Based in Mendota Heights, Patterson distributes equipment and supplies to the dental, veterinary and animal health markets. Walchirk was president and CEO since November 2017 when he was hired from the pharmaceutical business of McKesson Corp.

Since the board investigation determined that Walchirk had violated company policy, his remaining unvested stock options, restricted stock and performance-based stock units have been forfeited. He also forfeits 30 days of base pay.

According to the most recent proxy for the fiscal year ended April 30, Walchirk had received options and restricted stock awards worth $4.7 million. He stands to forfeit those awards.

Patterson reported revenue of $6.5 billion and earned $203 million for the fiscal year ended April 30. Revenue had grown 10% and earnings 30% over the previous fiscal year.

Piper Sandler analyst Jason Bednar wrote to investors last week that the financial firm was surprised by the announcement but confident in the appointment of Zurbay.