Boston Scientific Corp. (BSX) announced Thursday that long-time Chief Executive Jim Tobin plans to retire next month, and that Ray Elliott, the former chief at Zimmer Holdings Inc. (ZMH), will take the helm.

The announcement and plan for rapid succession surprised analysts, but Boston Scientific officials said transition planning to replace Tobin, 64, was actually put in motion back in November. Shares moved higher on the news, topping $10 for the first time since October, and were recently up 8.4% to $10.32.

"Considering Mr. Elliott's familiarity with the company and success at Zimmer, investors should be initially encouraged," Morgan Stanley analyst David Lewis said.

Elliott, 59, knows Boston Scientific from a recent stretch as a member of the board, which he will rejoin. He is also again joining forces with Sam Leno, the Boston Scientific chief financial officer, who served in the same capacity under Elliott at Zimmer.

Elliott led the orthopedics heavyweight for ten years, including through its 2001 spin-off from Bristol-Myers Squibb Co. (BMY), before he departed in 2007. Zimmer's market capitalization expanded four-fold during its time as a public company under Elliott, who left on a good note, with the stock around an all-time high.

Zimmer's more recent troubles raise questions about whether a tight focus on profitability under Elliott led to problematic underinvestment, but fresh focus on profitability should be welcome in the near term at Boston Scientific, which has stumbled since its $28.4 billion splurge to buy Guidant Corp. three years ago.

The company's incoming CEO is also well-known for lengthy and detailed earnings calls and a competitive streak when it came to talking about rivals. He flashed some of that on Thursday while discussing his new company.

"We have good but beatable competitors," Elliott told analysts on a conference call.

He expressed an interest in beefing up the half of Boston Scientific - which is mostly known for high-tech heart devices such as stents and defibrillators - that investors and analysts don't track as closely. The company makes a wide array of products in fields such as urology, pain management and gynecology, and Elliott said he'd like to diversify the product lineup and look outside the company if needed.

"If we can't find what we want there and develop what we want there, then we'll look to other things," said Elliott, who also said he sees a "target rich" environment for deals.

Boston Scientific's low credit ratings and high debt load following the deal for Guidant, which brought in defibrillators and a key new stent but looks overpriced in hindsight, may limit the company's ability to swing large-scale deals. The business generates a lot of cash, however, and Elliott stressed this focus.

"You know that I am fanatical about sales and cash flow," Elliott said.

Boston Scientific said it will pay Elliott, who also takes the title of president effective July 13, an annual base salary of $1.2 million.

The company said in a document filed with the Securities and Exchange Commission that Elliott will also receive a $1.5 million sign-on bonus payable within 10 days of his assuming his new positions, among other compensation moves.

The retiring Tobin, meantime, who seemed to enjoy the confidence of Boston Scientific's board and founders despite a tumultuous stretch following Guidant deal, said 10 years is enough.

That duration is "sort of the natural limit to how long a CEO can expect to be effective," said Tobin, who told analysts he is healthy and looking forward to skiing.

"Now's a good time to turn this over to the next leg of the relay," Tobin said.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

(Chad Clinton contributed to this report.)