Politan Capital Management’s fight for two Masimo
(Nasdaq: MASI)
board seats won a key endorsement from proxy advisory firm Institutional Shareholder Services (ISS), the activist investor said today.
ISS is recommending Masimo shareholders vote for Politan’s two board nominees: Politan Managing Partner and Chief Investment Officer Quentin Koffey and former Johnson & Johnson MedTech executive Michelle Brennan.
Politan, which owns around 9% of Masimo, is campaigning to replace Masimo-backed board incumbents H Michael Cohen and Julie Shimer at the June 26 annual meeting. Politan says change is needed to keep the device developer focused and rein in Masimo founder, CEO and Chair Joe Kiani.
Related: Masimo makes an offer in board election fight with Politan
In a letter to shareholders before Politan announced the ISS recommendation, Masimo said it feared Koffey would move to oust Kiani, citing a “history of replacing CEOs.”
“Electing Quentin Koffey to the Board would threaten Masimo’s mission, guiding principles, strategy and leadership and jeopardize the potential of your investment in Masimo. … In all but one of Mr. Koffey’s past campaigns, the CEO has been replaced within one year of the campaign,” Masimo said in a news release.
Masimo has not publicly responded to the ISS recommendation, but MassDevice has asked for comment and will update this post as appropriate.
In excerpts of the ISS recommendation published by Politan, ISS said the Masimo board “has demonstrated a profound disregard for shareholders.”
“Masimo is a public company that is run like a private business,” ISS said. “This reality is reflected in the corporate governance framework, which has been structured to support management at the expense of shareholders. As evidence, shareholders need look no further than the CEO’s employment contract, which includes a walkaway provision that functions as an entrenchment mechanism and was written to be triggered by corporate governance improvements.”
Both organizations have launched dueling websites: advancemasimo.com from Politan and keepmasimostrong.com from Masimo.
