Supports Strategic Review of Consumer Business,
But Has Serious Concerns Given Masimo’s Broken Governance and Lack
of Independent Oversight
Nominees Dr. Darlene Solomon and William
Jellison Bring Critical Expertise and Independence That Is Clearly
Lacking in Masimo’s Boardroom Today
Politan Capital Management (together with its affiliates,
“Politan”), an 8.9% shareholder of Masimo Corporation (“Masimo” or
the “Company”) (NASDAQ: MASI), today announced that it is
nominating two candidates for election to the Masimo Board of
Directors (the “Board”) at the upcoming 2024 Annual Meeting of
Stockholders (the “Annual Meeting”).
Quentin Koffey, Managing Partner and Chief Investment Officer of
Politan, and a current director on the Masimo Board, stated:
“When shareholders overwhelmingly elected Michelle Brennan and
me to the Masimo Board last year, we were optimistic we could work
productively with the rest of the Board to drive positive change.
Unfortunately, our efforts were continually rebuffed, as Chairman
& CEO Joe Kiani refused to give us basic information, denied us
access to management, repeatedly held Board meetings excluding us,
and refused to even consider allowing any review of capital
allocation or strategy.
Politan supports a strategic review to evaluate a separation of
the Consumer Business (the “Separation”), as evidenced by our
ongoing efforts over the last 18 months. However, at this stage the
Board has been provided zero details, and Politan has serious
concerns given the lack of basic governance and oversight we have
observed since joining the Board. Information is controlled tightly
by the Chairman & CEO and almost never shared. As a result, no
independent director knows basic facts such as what COGS, SG&A
or R&D dollars are actually spent on. There is no budget
approval process by the Board, thereby allowing the Chairman &
CEO to spend however much he wants on whatever he wants without
Board review, authorization or even knowledge.
While the fact that Mr. Kiani seeks to exert this level of
control is troubling, it’s perhaps even more concerning that the
current Board allows it to occur. This absence of oversight has
been damaging for shareholders and the Company. Masimo’s stock
price has substantially underperformed peers, financial metrics are
well below targets set only a year ago at the Company’s analyst
day, and consumer healthcare revenues are essentially zero.
This is why it is clearer than ever that a majority of truly
independent directors are needed at Masimo, especially given the
critical importance of not only ensuring the Company follows
through on its announcement to evaluate the Separation, but also to
make sure it is done right. For example, in the event of a
transaction there would be vital considerations around the
allocation of Masimo’s intellectual property and the control of a
potential SpinCo. We have serious concerns that Mr. Kiani, without
proper oversight, will seek to push through a spin-off with poor
corporate governance and IP arrangements where assets are allocated
in such a manner designed to maintain his control and influence of
both separated companies. A rushed Friday afternoon announcement
that the Company was exploring the Separation – which came after
being informed that Politan intended to nominate directors this
week – only further confirms our concerns.
To address these severe oversight issues, Politan has worked
with an independent, nationally recognized search firm to identify
two directors with crucial expertise that is sorely needed on the
Board:
Dr. Darlene Solomon is a scientist by training who recently
completed a 39-year career at Agilent Technologies, Inc., where she
served in numerous leadership roles, including as Chief Technology
Officer and Senior Vice President under three successive CEOs, and
helped define the company’s technology strategy and R&D
priorities. Having helped oversee three different separations of
Agilent, Avago and Keysight as part of Agilent’s corporate
transformation toward becoming a market-leading life sciences and
diagnostics company, she brings critical expertise that would
inform the appropriate division of Masimo’s IP in a separation of
its Consumer Business, as well as the understanding of how best to
lead and retain technical talent while executing forward-looking
business growth for the Company.
William “Bill” Jellison is a veteran medical technology
executive and finance expert with decades of relevant experience,
including as the former Chief Financial Officer of Stryker
Corporation. Bill would bring extensive medical technology and
financial oversight expertise. He would also be a natural fit to
chair the Board’s Audit Committee, which has not been chaired by a
director with any audit committee or even public company board
experience in nearly five years. Bill also presided over billions
of dollars of M&A transactions during his tenure as Chief
Financial Officer and would bring significant experience to the
evaluation of a separation transaction at Masimo.
It is important to recognize that these
directors can be added without a proxy contest. Darlene and
Bill are indisputably qualified to help the Company and adding them
immediately would have the benefit of avoiding a costly and
distracting contested election.
Politan looks forward to engaging further with our fellow
shareholders soon.”
Full Biographies of Politan’s
Nominees
Dr. Darlene Solomon is a proven expert in R&D
strategy who recently completed a 39-year career at Agilent
Technologies, Inc., with nearly 20 years as Chief Technology
Officer and Senior Vice President. In this role, she oversaw
Agilent Research Laboratories, which focuses on high-impact,
longer-range research in support of the company’s sustained
business growth, as well as Agilent’s programs in university
relations, external research, and venture investment. As Chief
Technology Officer, she also navigated numerous complex
intellectual property and technology issues associated with
Agilent’s multiple separation and acquisition transactions. Darlene
previously served in a number of leadership positions, including as
Vice President and Director of Agilent Laboratories and in a dual
capacity as the Director of the Life Sciences Technologies
Laboratory and the Senior Director, Research &
Development/Technology of Agilent’s Life Sciences and Chemical
Analysis business.
Darlene is an independent director on the boards of Materion
Corporation (NYSE: MTRN), where she is a past member of the Audit
and Risk Committee and currently on the Compensation Committee and
the Nominating, Governance, and Corporate Responsibility Committee,
and of Novanta, Inc. (NASDAQ: NOVT), where she is a member of the
Compensation Committee. Darlene is also a member of the National
Academy of Engineering and serves on multiple academic and
government advisory boards focused on science, technology, and
innovation. Darlene holds a BS from Stanford University and a Ph.D.
from MIT.
William “Bill” Jellison is a veteran medical technology
executive and corporate finance expert. Bill previously served as
Chief Financial Officer of Stryker Corporation where he oversaw all
areas of international finance, including accounting, planning and
analysis, SEC reporting, acquisition valuations, internal audit,
tax and treasury activity. Prior to Stryker, Bill spent 15 years at
Dentsply International in a number of leadership positions,
including Chief Financial Officer, as well as Senior Vice President
with full P&L responsibilities for some of Dentsply’s operating
divisions in the U.S., Europe and Asia. Bill began his career with
Donnelly Corporation where he held multiple financial management
and executive positions, including Vice President of Finance,
Treasurer and Corporate Controller. He is currently an independent
business consultant and M&A advisor for Astor Place
Holdings.
Bill is an independent director at Avient Corporation (NYSE:
AVNT) and is chair of the Audit Committee and a member of the
Environmental, Health and Safety Committee. He holds a BA from Hope
College in Holland, Michigan.
Cautionary Statement Regarding Forward-Looking
Statements
This press release does not constitute an offer to sell or
solicitation of an offer to buy any of the securities described
herein in any state to any person. The information herein contains
“forward-looking statements.” Specific forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts and include, without limitation, words
such as “may,” “will,” “expects,” “believes,” “anticipates,”
“plans,” “estimates,” “projects,” “potential,” “targets,”
“forecasts,” “seeks,” “could,” “should” or the negative of such
terms or other variations on such terms or comparable terminology.
Similarly, statements that describe our objectives, plans or goals
are forward-looking. Forward-looking statements are subject to
various risks and uncertainties and assumptions. There can be no
assurance that any idea or assumption herein is, or will be proven,
correct. If one or more of the risks or uncertainties materialize,
or if Politan’s underlying assumptions prove to be incorrect, the
actual results may vary materially from outcomes indicated by these
statements. Accordingly, forward-looking statements should not be
regarded as a representation by Politan that the future plans,
estimates or expectations contemplated will ever be achieved.
Certain Information Concerning the Participants
Politan and the other Participants (as defined below) intend to
file a preliminary proxy statement and accompanying WHITE universal
proxy card with the Securities and Exchange Commission (the “SEC”)
in due course to be used to solicit proxies for, among other
matters, the election of its slate of director nominees at the
Annual Meeting. Promptly after filing its definitive proxy
statement with the SEC, Politan will mail the definitive proxy
statement and accompanying WHITE universal proxy card to each
stockholder entitled to vote at the Annual Meeting.
The participants in the proxy solicitation are Politan, Politan
Capital Management GP LLC, Politan Capital Partners GP LLC, Politan
Capital NY LLC, Politan Intermediate Ltd., Politan Capital Partners
Master Fund LP (“Politan Master Fund”), Politan Capital Partners LP
(“Politan LP”), Politan Capital Offshore Partners LP (“Politan
Offshore” and collectively with Politan Master Fund and Politan LP,
the “Politan Funds”), Quentin Koffey, Matthew Hall, Aaron Kapito,
William Jellison and Darlene Solomon (collectively, the
“Participants”).
As of the date hereof, (i) Politan Master Fund directly owns
4,712,518 shares of common stock, par value $0.001 per share, of
Masimo (the “Common Stock”), and (ii) Politan Capital NY LLC is the
direct and record owner of 1,000 shares of Common Stock.
Politan, as the investment adviser to the Politan Funds, may be
deemed to have the shared power to vote or direct the vote of (and
the shared power to dispose or direct the disposition of) 4,713,518
shares of Common Stock (the “Politan Shares”) and, therefore,
Politan may be deemed to be the beneficial owner of all of the
Politan Shares. The Politan Shares collectively represent
approximately 8.9% of the outstanding shares of Common Stock based
on 52,913,166 shares of Common Stock outstanding as of January 24,
2024, as reported in Masimo’s Annual Report on Form 10-K filed on
February 28, 2024. As the general partner of Politan, Politan
Capital Management GP LLC may be deemed to have the shared power to
vote or direct the vote of (and the shared power to dispose or
direct the disposition of) all of the Politan Shares and,
therefore, Politan Capital Management GP LLC may be deemed to be
the beneficial owner of all of the Politan Shares. As the general
partner of the Politan Funds, Politan Capital Partners GP LLC may
be deemed to have the shared power to vote or to direct the vote of
(and the shared power to dispose or direct the disposition of) all
of the Politan Shares and, therefore, Politan Capital Partners GP
LLC may be deemed to be the beneficial owner of all of the Politan
Shares. By virtue of Mr. Koffey’s position as the managing partner
and chief investment officer of Politan and as the managing member
of Politan Capital Management GP LLC and Politan Capital Partners
GP LLC, Mr. Koffey may be deemed to have the shared power to vote
or direct the vote of (and the shared power to dispose or direct
the disposition of) all of the Politan Shares and, therefore, Mr.
Koffey may be deemed to be the beneficial owner of all of the
Politan Shares. As of the date hereof, none of Mr. Hall, Mr.
Kapito, William Jellison or Darlene Solomon own beneficially or of
record any shares of Common Stock.
Important Information and Where to Find It
POLITAN CAPITAL STRONGLY ADVISES ALL STOCKHOLDERS OF MASIMO TO
READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH
PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE
AT WWW.SEC.GOV. THE DEFINITIVE PROXY STATEMENT, WHEN FILED, AND
OTHER RELEVANT DOCUMENTS, WILL ALSO BE AVAILABLE ON THE SEC
WEBSITE, FREE OF CHARGE, OR BY DIRECTING A REQUEST TO THE
PARTICIPANTS’ PROXY SOLICITOR, D.F. KING & CO., INC., 48 WALL
STREET, 22ND FLOOR, NEW YORK, NEW YORK 10005 (STOCKHOLDERS CAN CALL
TOLL-FREE: +1 (866) 620-9554).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240325763381/en/
Investor D.F. King & Co., Inc. Edward McCarthy
emccarthy@dfking.com
Media Dan Zacchei / Joe Germani Longacre Square Partners
dzacchei@longacresquare.com / jgermani@longacresquare.com
Masimo (NASDAQ:MASI)
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Masimo (NASDAQ:MASI)
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