The ongoing tussle between Masimo Corporation (Nasdaq: MASI) and Politan Capital Management has escalated as the activist investor firm, following its successful bid for two board seats last year, now seeks further influence. Quentin Koffey, Politan’s Managing Partner and Chief Investment Officer, announced the firm’s intention to nominate two additional candidates for Masimo’s board at the upcoming annual meeting, targeting the position held by Masimo’s founder, CEO, and Chair, Joe Kiani.
Reflecting on the previous year’s election, Koffey expressed disappointment in the cooperation level with the current board, accusing Kiani of obstructing their attempts at reform. “Despite our initial optimism, we’ve faced resistance at every turn, from being denied critical company information and access to management, to being excluded from board meetings,” Koffey stated. This lack of transparency and engagement has prompted Politan, which holds approximately 9% of Masimo, based in Irvine, California, to push for significant changes, including the nomination of former Stryker CFO Bill Jellison and former Agilent Technologies SVP and CTO Darlene Solomon to the board.
This year, Kiani is the sole director up for re-election as Masimo transitions to annual elections for all directors by 2026. Politan’s move has been met with strong opposition from Masimo, which contends that the investor’s intentions could undermine both shareholder interests and the well-being of the millions of patients depending on Masimo’s medical innovations.
Masimo’s rebuttal to Politan’s claims emphasizes Koffey’s apparent quest for a board that aligns with his views, rather than one that operates independently. The company also highlighted ongoing disagreements with Politan over the future of Masimo’s consumer division, particularly concerning the proposed spin-off following the contentious acquisition of Sound United for $1 billion two years ago. Politan fears that without proper checks, Kiani may orchestrate a spin-off that maintains his control over both entities under questionable corporate governance and intellectual property arrangements.
In response, Masimo assures that any separation would be carefully executed to ensure the success of the resultant companies, emphasizing the board’s (including Koffey’s) role in approving such a decision. As the company prepares for its 2024 annual meeting, with the date yet to be announced, the board will review Politan’s nominations and provide its recommendations to shareholders through the annual proxy materials.
The standoff marks the latest chapter in the power struggle at Masimo, the 52nd largest medical device manufacturer globally, according to Medical Design & Outsourcing’s 2023 Medtech Big 100 ranking. As both sides prepare for the upcoming annual meeting, stakeholders are keenly watching how this battle for control will shape the future of the company and its commitment to medical innovation.
