Key Summary: In September 2022, Politan Capital Management raised governance and board representation issues with Masimo's CEO, leading to a legal complaint in October 2022. By May 2023, Politan's board nominees were elected, despite the company's commitment to only one. In March 2024, Politan nominated new candidates, criticized governance, and demanded transparency on business dealings. They raised concerns about voting manipulation and criticized Masimo’s meeting delay in July 2024. Politan's attempts to expedite the annual meeting and prevent proxy vote manipulation led to further legal actions, with both parties denying allegations as of August 2024. At the AGM held on Sep 19, 2024, both Politan Group nominees were elected to the Board. The same day, Mr. Joe Kiani resigned from his position of CEO.Market Cap: $6 billion| Masimo Corporation develops, manufactures, and markets noninvasive monitoring technologies and hospital automation solutions worldwide..
In September 2022, Politan Capital Management (8.8%) initiated discussions regarding corporate governance and strategic initiatives with the CEO and Chairman, Joe Kiani, expressing interest in board representation. However, after the board approved a rights agreement and amended corporate bylaws, Politan raised legal concerns and requested a meeting with the full board, which was not scheduled. This led to a legal complaint filed by Politan in October 2022, seeking relief against the company and board members.
In May 2023, Politan submitted formal notices of intent to present a stockholder proposal and nominated two director candidates for election to the board at the 2023 AGM. This was supported by recommendations from proxy advisory firms ISS and Glass Lewis. Despite the company's commitment to appoint one of Politan's nominees, Michelle Brennan, contingent upon stockholder approval of board expansion and reelection of incumbent directors, both of Politan's nominees, including Quentin Koffey, were elected to the board at the June 2023 annual meeting.
On March 25, 2024, Politan Capital Management (8.9%) announced its nomination of two candidates for the Board at the 2024 AGM. Quentin Koffey, a then-current director, expressed dissatisfaction with the lack of transparency and governance under CEO Joe Kiani. Politan supported a strategic review but criticized the Board's oversight. They proposed Dr. Darlene Solomon and William "Bill" Jellison as independent directors to address governance issues and enhance expertise. Politan urged engagement with shareholders to resolve concerns. Source
On May 8, 2024, Politan Capital Management submitted a demand letter to the company seeking access to records regarding the company's consumer business separation and undisclosed joint venture partner.
On May 9, 2024, Quentin of Politan Capital Management responded to Craig Reynolds of Masimo Corporation regarding proposals to avoid a proxy contest. Politan questioned the effectiveness of Masimo's approach and suggested adding Darlene Solomon and Bill Jellison to the board to address governance issues, emphasizing the need for a majority of independent directors. Source
On June 14, 2024, Politan Capital Management filed proxy materials seeking support for its nominees.
On June 26, 2024, Politan Capital Management updated its website, www.AdvanceMasimo.com in connection with the solicitation of stockholders of Masimo Corporation. Also, it posted a presentation, "Masimo Urgently Needs A Truely Independent Board" and released an open letter to the shareholders reiterating its concers and urges shareholders to vote for its nominees.
On July 3, 2024, Politan Capital Management alerted the Masimo Board about a potential scheme to manipulate the Annual Meeting of Stockholders. They claimed a brokerage linked to an investor friendly with Mr. Kiani voted 9.9% of the company's stock, exceeding reported ownership and involving suspicious share movements. They urged the Board to set a new record date, investigate Mr. Kiani's involvement, and ensure SEC compliance. Source
On July 12, 2024, Politan Capital Management sent a letter to the Board expressing concerns about alleged manipulation of the upcoming annual meeting through an empty voting scheme orchestrated by RTW Investments, a major shareholder linked to the company' CEO and Chairman, Joe Kiani. Despite RTW's claimed 9.9% voting stake, recent disclosures suggest they may have significantly reduced their economic exposure, raising questions about their influence on voting outcomes. Politan Capital criticized the Board for not addressing these concerns adequately, calling for independent investigation and shareholder protections to ensure a fair election process at Masimo.
On July 12, 2024, Politan Capital announced that Glass Lewis has recommended that shareholders vote FOR the election of Politan’s nominees, Darlene Solomon and Bill Jellison, to the Company’s Board of Directors. Source
On July 15, 2024, Politan Capital announced that ISS has recommended that shareholders vote FOR the election of Politan’s nominees, Darlene Solomon and Bill Jellison, to the Company’s Board of Directors. Source
On July 15, 2024, the company filed a complaint against the Politan Defendants and others, alleging violations including a declaration that Mr. Jellison and Dr. Solomon's nomination notice did not comply with the company’s bylaws, seeking an injunction against Politan from voting proxies due to misleading statements, and invalidating such proxies. Source
On July 16, 2024, Politan Capital (8.9%) criticized the Board's decision to move the Annual Meeting from July 25, 2024, to September 19, 2024, and its lawsuit against Politan and founder Quentin Koffey, a Masimo Board member. Koffey condemned Masimo’s governance and CEO Joe Kiani's actions, claiming the meeting delay is a tactic to avoid shareholder votes and violates bylaws and Delaware law. Politan vowed to ensure the meeting occurs by September 19 and urged shareholders to vote for its nominees. Source
On July 17, 2024, Politan filed a lawsuit in the Delaware Court of Chancery against Masimo Corporation and three of its directors, seeking to expedite the 2024 Annual Meeting and prevent further delays. Source
On August 23, 2024, the company filed a Supplemented Memorandum seeking a preliminary injunction to prevent Politan from voting proxies until corrective disclosures are made. Source
On August 30, 2024, Politan Capital deny all allegations in each of the Amended Complaint and the Preliminary Injunction Motion. Source
On September 5, 2024, Politan Capital emphasized the urgent need for boardroom change ahead of the company's 2024 Annual Meeting. In a letter to shareholders, Politan reaffirmed the importance of electing its nominees, Darlene Solomon and William Jellison, to ensure independent oversight. Politan criticized Masimo's governance and legal tactics, asserting confidence in overcoming challenges to its nominations.
On September 12, 2024, Politan Capital Management commented on a California federal court's decision denying Masimo Corporation's request for a preliminary injunction to block Politan from voting its proxies at the upcoming Annual Meeting scheduled for September 19. The court ruled in favor of Politan, allowing the shareholder vote to proceed. Politan expressed satisfaction with the ruling, emphasizing the need for independent directors on Masimo's Board and criticizing Masimo's tactics during the litigation process. Source
On September 13, 2024, Politan Capital Management LP and its affiliates issued a statement from legal advisors Schulte Roth & Zabel and Munger, Tolles & Olson regarding the Masimo proxy contest. The advisors disagreed with the court's ruling that Politan violated a sealing order, clarifying they believed Politan could announce the motion's outcome. They appreciated the court's denial of Masimo's attempts to block Politan from voting and to delay the 2024 Annual Meeting of Stockholders. Source
On September 17, 2024, Glass Lewis has updated its earlier report to reiterate its recommendation that shareholders vote FOR the election of Politan’s nominees, Darlene Solomon and Bill Jellison, to the Company’s Board at the Annual Meeting of Stockholders, set for September 19. Source
At the AGM held on Sep 19, 2024, both Politan Group nominees were elected to the Board. The same day, Mr. Joe Kiani delivered a notification to the Board stating his decision to resign from his position of Chief Executive Officer of the Company. On September 24, 2024, the Board appointed Board member Michelle Brennan to serve as the Company’s interim chief executive officer effective immediately. Source
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