Chavez’s Independence Stands in Stark Contrast
to Politan’s Paid and Handpicked Nominees
Masimo Corporation (“Masimo” or the “Company”) (NASDAQ: MASI)
today issued a letter to stockholders in connection with the
Company’s 2024 Annual Meeting of Stockholders. The letter
highlights the fierce independence and deep medtech experience of
nominee Christopher Chavez and contrasts it to Politan’s handpicked
and paid nominees. Masimo believes that ceding control of Masimo to
Politan by electing its nominees would jeopardize the value of your
investment in Masimo. The Board encourages stockholders to vote FOR
Masimo’s highly qualified director nominees, Joe Kiani and
Christopher Chavez.
Find more information on why your vote is so important to the
future of Masimo at www.ProtectMasimosFuture.com. The full text of
the letter to our stockholders can be found here:
Dear Fellow Masimo Stockholders:
Masimo’s Board has a duty to stockholders to share its views on
the nominees proposed for election at this year’s annual meeting.
The three of us signed below, constituting all the non-Politan
directors, have led public companies as CEOs and senior executives
and served on public company boards for many years. Through our
service, we have seen how directors can be effective and value
additive for stockholders in the boardroom. Most critically, we
understand that every boardroom needs robust discussion and a
healthy, open dialogue and believe that stockholders should have
representatives with the experience, expertise and independence to
provide objective counsel to management. That is why we nominated
Christopher Chavez, and why we believe Politan’s nominees are
clearly inferior to ours.
What we find most disappointing, and troubling, is that
Politan’s central argument to cede control of Masimo to Politan is
the “refusal by Masimo to permit independent oversight.” It appears
to us that Politan is repeating a false narrative over and over in
the hopes that stockholders will believe it to be true. It is
simply not the case that having met Joe Kiani in the past, whether
at an industry event, on the opposite side of the negotiating
table, or at a civic function, compromises the independence of our
directors, creates an obligation to him or interferes with their
duty to provide oversight. The success Mr. Chavez and our
non-Politan directors have had at the highest levels of leadership
allow them to challenge and counsel management and help make the
best decisions for Masimo at the Board level. Meanwhile, Politan
continues to admit that its nominees will vote in a bloc regardless
of what is presented and discussed in the boardroom: “Electing only
one of our two nominees would not be sufficient to effect this type
of change. Adding just Darlene Solomon or William Jellison would
result in a deadlocked Board.”
The assertion that Mr. Chavez would rubber stamp anything Mr.
Kiani wants to do is frankly nonsensical. Mr. Chavez is widely
respected for his industry knowledge and decades of experience
working for and leading medical technology companies. We invite
stockholders to compare Mr. Chavez’s independence and experience
with Mr. Jellison’s or Dr. Solomon’s, who are being paid by
Politan.
Mr. Chavez is a self-made businessman who rose from the bottom
to leading public medtech companies. He brings more than 30 years
of leadership experience in the medical technology industry,
including two past appointments as a public company CEO and many
years as an independent public company director. He has dealt with
complex strategic, operational, regulatory and transactional
matters unique to the medtech industry that neither Politan nominee
– and neither of the Politan directors – has experienced. His
personal involvement in product development, commercialization and
revenue growth in the medtech industry will add significant value
to the Board.
It should come as little surprise to stockholders that Mr. Kiani
and Mr. Chavez became professionally acquainted many years ago,
given they were both leading medtech CEOs who as a result served on
the board of the Medical Device Manufacturers Association (MDMA).
However, while Mr. Kiani still serves on MDMA’s board, Mr. Chavez
left more than 12 years ago. Since that time, Mr. Kiani has had
only one brief meeting with Mr. Chavez, when Masimo considered –
but did not pursue – the acquisition of a company at which he was a
director.
Mr. Jellison is by contrast a serial activist nominee. He
recently joined the board of Anika Therapeutics (a company with a
market cap well under $400 million) as a nominee of activist
investor Caligan Partners. Notwithstanding Politan’s claims that
Mr. Jellison is “unquestionably independent” and “found via
nationally recognized, third-party search firm,” it is no
coincidence that Caligan Partners’ attorney also happens to be
Politan’s attorney.1 Moreover, in a recent publication an executive
at Anika Therapeutics indicated that he believes that Mr. Jellison
is simply a stand-in for Caligan:
“[Jellison] is not what is important. It’s
Caligan. Jellison is a proxy,” the executive said. The activist
investor approach is their worst nightmare because if they don’t
reach an agreement, “it tears you apart.”
Dr. Solomon has a technical background, but her expertise is in
a field unrelated to Masimo’s business, and she does not have
familiarity with medical technology development or the regulatory
processes to which Masimo is subject, all of which are critical to
Masimo’s innovation engine. She has dealt with few, if any, of the
industry-specific challenges through which Mr. Chavez has
successfully led the companies he served during his long
career.
It is our belief that Politan selectively chose nominees who
depend on activist investors to advance their director careers or
have limited perspective on, background in, or knowledge of the
medical device sector to ensure they will simply follow Mr.
Koffey’s lead on issues before the Board, as Ms. Brennan has done.
It is clear Politan wants Board members that will vote with Mr.
Koffey. Politan’s mantra, “Masimo Urgently Needs a Truly
Independent Board,” should truthfully state, “Politan Urgently
Wants a Quentin Koffey-Controlled Board.”
We also do not believe that any of Politan’s current directors
or nominees are qualified to serve as an interim CEO. Politan is
demanding control of Masimo without providing any concrete
transition and leadership plan to shareholders. That is not an
approach we think will maximize value for stockholders. Quite the
opposite.
If Masimo stockholders want knowledgeable, independent Board
members to lead and guide the company, Mr. Chavez is the ally they
need on the Board. In our view, Politan has already told
stockholders what they will get voting for their slate: control of
Masimo by Politan. An activist with less than 9% of Masimo’s shares
in control of Masimo with an inexperienced Board and with no actual
plan for running Masimo is a threat to Masimo’s current and future
value. We believe it is also a disservice to patients around the
world and to stockholders to seek to reduce innovation. As we have
presented recently, we expect Masimo’s continued investments in
R&D to support patient-focused, innovation-based revenue growth
will allow Masimo to achieve $8 non-GAAP EPS in 5 years.
Thank you for your continued support, Craig Reynolds Bob Chapek
Joe Kiani
1 https://www.srz.com/en/people/ele-klein (see
“Representations”).
About Masimo
Masimo (NASDAQ: MASI) is a global medical technology company
that develops and produces a wide array of industry-leading
monitoring technologies, including innovative measurements,
sensors, patient monitors, and automation and connectivity
solutions. In addition, Masimo Consumer Audio is home to eight
legendary audio brands, including Bowers & Wilkins, Denon,
Marantz, and Polk Audio. Our mission is to improve life, improve
patient outcomes, and reduce the cost of care. Masimo SET®
Measure-through Motion and Low Perfusion™ pulse oximetry,
introduced in 1995, has been shown in over 100 independent and
objective studies to outperform other pulse oximetry technologies.1
Masimo SET® has also been shown to help clinicians reduce severe
retinopathy of prematurity in neonates,2 improve CCHD screening in
newborns3 and, when used for continuous monitoring with Masimo
Patient SafetyNet™ in post-surgical wards, reduce rapid response
team activations, ICU transfers, and costs.4-7 Masimo SET® is
estimated to be used on more than 200 million patients in leading
hospitals and other healthcare settings around the world,8 and is
the primary pulse oximetry at 9 of the top 10 hospitals as ranked
in the 2022-23 U.S. News and World Report Best Hospitals Honor
Roll.9 In 2005, Masimo introduced rainbow® Pulse CO-Oximetry
technology, allowing noninvasive and continuous monitoring of blood
constituents that previously could only be measured invasively,
including total hemoglobin (SpHb®), oxygen content (SpOC™),
carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth
Variability Index (PVi®), RPVi™ (rainbow® PVi), and Oxygen Reserve
Index (ORi™). In 2013, Masimo introduced the Root® Patient
Monitoring and Connectivity Platform, built from the ground up to
be as flexible and expandable as possible to facilitate the
addition of other Masimo and third-party monitoring technologies;
key Masimo additions include Next Generation SedLine® Brain
Function Monitoring, O3® Regional Oximetry, and ISA™ Capnography
with NomoLine® sampling lines. Masimo’s family of continuous and
spot-check monitoring Pulse CO-Oximeters® includes devices designed
for use in a variety of clinical and non-clinical scenarios,
including tetherless, wearable technology, such as Radius-7®,
Radius PPG®, and Radius VSM™, portable devices like Rad-67®,
fingertip pulse oximeters like MightySat® Rx, and devices available
for use both in the hospital and at home, such as Rad-97® and the
Masimo W1® medical watch. Masimo hospital and home automation and
connectivity solutions are centered around the Masimo Hospital
Automation™ platform, and include Iris® Gateway, iSirona™, Patient
SafetyNet, Replica®, Halo ION®, UniView®, UniView :60™, and Masimo
SafetyNet®. Its growing portfolio of health and wellness solutions
includes Radius Tº®, Masimo W1 Sport, and Masimo Stork™. Additional
information about Masimo and its products may be found at
www.masimo.com. Published clinical studies on Masimo products can
be found at www.masimo.com/evidence/featured-studies/feature/.
RPVi has not received FDA 510(k) clearance and is not available
for sale in the United States. The use of the trademark Patient
SafetyNet is under license from University HealthSystem
Consortium.
References
- Published clinical studies on pulse oximetry and the benefits
of Masimo SET® can be found on our website at
http://www.masimo.com. Comparative studies include independent and
objective studies which are comprised of abstracts presented at
scientific meetings and peer-reviewed journal articles.
- Castillo A et al. Prevention of Retinopathy of Prematurity in
Preterm Infants through Changes in Clinical Practice and SpO2
Technology. Acta Paediatr. 2011 Feb;100(2):188-92.
- de-Wahl Granelli A et al. Impact of pulse oximetry screening on
the detection of duct dependent congenital heart disease: a Swedish
prospective screening study in 39,821 newborns. BMJ. 2009;Jan
8;338.
- Taenzer A et al. Impact of pulse oximetry surveillance on
rescue events and intensive care unit transfers: a before-and-after
concurrence study. Anesthesiology. 2010:112(2):282-287.
- Taenzer A et al. Postoperative Monitoring – The Dartmouth
Experience. Anesthesia Patient Safety Foundation Newsletter.
Spring-Summer 2012.
- McGrath S et al. Surveillance Monitoring Management for General
Care Units: Strategy, Design, and Implementation. The Joint
Commission Journal on Quality and Patient Safety. 2016
Jul;42(7):293-302.
- McGrath S et al. Inpatient Respiratory Arrest Associated With
Sedative and Analgesic Medications: Impact of Continuous Monitoring
on Patient Mortality and Severe Morbidity. J Patient Saf. 2020 14
Mar. DOI: 10.1097/PTS.0000000000000696.
- Estimate: Masimo data on file.
-
http://health.usnews.com/health-care/best-hospitals/articles/best-hospitals-honor-roll-and-overview.
Forward-Looking Statements
This press release includes forward-looking statements as
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
in connection with the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, among others,
statements regarding the 2024 Annual Meeting of Stockholders (the
“2024 Annual Meeting”) of Masimo and the potential stockholder
approval of the Board’s nominees and Masimo’s earnings per share
estimates and targets. These forward-looking statements are based
on current expectations about future events affecting Masimo and
are subject to risks and uncertainties, all of which are difficult
to predict and many of which are beyond Masimo’s control and could
cause its actual results to differ materially and adversely from
those expressed in its forward-looking statements as a result of
various risk factors, including, but not limited to (i)
uncertainties regarding future actions that may be taken by Politan
in furtherance of its nomination of director candidates for
election at the 2024 Annual Meeting, (ii) the potential cost and
management distraction attendant to Politan’s nomination of
director nominees at the 2024 Annual Meeting and (iii) factors
discussed in the “Risk Factors” section of Masimo’s most recent
periodic reports filed with the Securities and Exchange Commission
(“SEC”), which may be obtained for free at the SEC’s website at
www.sec.gov. Although Masimo believes that the expectations
reflected in its forward-looking statements are reasonable, the
Company does not know whether its expectations will prove correct.
All forward-looking statements included in this press release are
expressly qualified in their entirety by the foregoing cautionary
statements. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of today’s date.
Masimo does not undertake any obligation to update, amend or
clarify these statements or the “Risk Factors” contained in the
Company’s most recent reports filed with the SEC, whether as a
result of new information, future events or otherwise, except as
may be required under the applicable securities laws.
Additional Information Regarding the 2024 Annual Meeting of
Stockholders and Where to Find It
The Company has filed a definitive proxy statement containing a
form of GOLD proxy card with the SEC in connection with its
solicitation of proxies for its 2024 Annual Meeting. THE COMPANY’S
STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY
STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND
ACCOMPANYING GOLD PROXY CARD AS THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders may obtain the proxy statement, any
amendments or supplements to the proxy statement and other
documents as and when filed by the Company with the SEC without
charge from the SEC’s website at www.sec.gov.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers
and employees may be deemed to be participants in connection with
the solicitation of proxies from the Company’s stockholders in
connection with the matters to be considered at the 2024 Annual
Meeting. Information regarding the direct and indirect interests,
by security holdings or otherwise, of the Company’s directors and
executive officers in the Company is included in the Company’s
definitive proxy statement for the 2024 Annual Meeting (the “2024
Proxy Statement”), which can be found through the SEC’s website at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
Changes to the direct or indirect interests of Masimo’s securities
by directors and executive officers are set forth in SEC filings on
a Statement of Change in Ownership on Form 4 filed with the SEC on
June 28, 2024, which can be found through the SEC’s website at
https://www.sec.gov/Archives/edgar/data/937556/000093755624000053/xslF345X05/wk-form4_1719606794.xml.
Any other changes to the 2024 Proxy Statement may be found in any
amendments or supplements to the 2024 Proxy Statement and other
documents as and when filed by the Company with the SEC, which can
be found through the SEC’s website at www.sec.gov.
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version on businesswire.com: https://www.businesswire.com/news/home/20240701952554/en/
Investor Contact: Eli Kammerman (949) 297-7077
ekammerman@masimo.com
Media Contact: Evan Lamb (949) 396-3376
elamb@masimo.com
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