Masimo’s long-running proxy fight has come to a close, at least for now. During the company’s annual meeting, shareholders elected two board members nominated by activist investor Politan Capital Management—and ousted the medtech’s founder and CEO, Joe Kiani, in the process.
Politan’s gains double the two board seats it claimed last year, with the June 2023 election of the firm’s managing partner, Quentin Koffey, as well as Michelle Brennan, a former executive at Johnson & Johnson, amid criticism of Masimo’s $1 billion purchase of the consumer audio group Sound United.
This time around, Politan—which holds about a 9% stake in the maker of pulse oximeters and other patient monitors—decried the company’s plans to spin out its consumer businesses, including that home audio equipment as well as its high-tech baby monitor systems and health-focused smartwatches.
Koffey and Brennan—along with the two newly appointed members, Darlene Solomon and William Jellison—issued a joint statement after the meeting: “While each of us is independent and brings our own unique perspectives, we are united in our enthusiasm for Masimo’s future as a leading, innovation-focused growth company.”
“We look forward to meeting with, learning from, and working together with the Healthcare and Consumer employees to make Masimo an even greater company. We would also like customers to know that we will be completely focused on preventing any disruption to their service and support,” they added. “We will have more to share soon.”
Solomon spent 39 years at Agilent, including as chief technology officer and senior VP, while Jellison previously served as chief financial officer at Stryker. According to a report by CNBC, Politan’s nominees received about twice as many votes as Kiani and also-ousted board member Chris Chavez, formerly CEO of Trivascular and Advanced Neuromodulation Systems. Masimo’s stock price rose about 3.4% after the vote, to over $115 per share.
While Kiani said that he would quit his position and sell his company shares if the vote didn’t go his way, he may not be alone in walking out the door.
Nearly 300 of Masimo’s engineers and global managers signed onto public letters saying they would do the same while Chief Operating Officer Bilal Muhsin tendered a conditional resignation letter in late June. Previously, Politan had said it would not oppose the reelection of Kiani to an expanded board.