Glass Lewis Highlights Urgency and Need for
“Swift Investor Action” at Upcoming Meeting Given the “Restricted,
Myopic and Poorly Monitored Process” To Separate Masimo’s Consumer
Business That Has Been “Spearheaded by Mr. Kiani”
Concludes There Is a “Wealth of Evidence” That
Mr. Kiani "Runs Roughshod" Over the “Largely Self-Selected” Board
Which Remains “Seemingly Disinterested” in Accountability and
Oversight
Notes That the Stakes Are “Substantially Higher
Than Last Year” and That Addition of Both Politan’s “Highly
Credible, Capable and Independent Nominees” – Darlene Solomon and
William Jellison – Is Necessary To Help Masimo Address Its "Battery
of Oversight Issues"
Politan Capital Management (together with its affiliates,
“Politan”), an 8.9% shareholder of Masimo Corporation (“Masimo” or
the “Company”) (NASDAQ: MASI), today announced that leading proxy
advisory firm Glass, Lewis & Co. (“Glass Lewis”) has
recommended shareholders vote FOR the election of Politan’s
nominees, Darlene Solomon and Bill Jellison, to the Company’s Board
of Directors (the “Board”) at the Annual Meeting of Stockholders
(the “Annual Meeting”), scheduled for July 25, 2024.
Glass Lewis’s report resoundingly affirms that change is
urgently needed at this Annual
Meeting, stating: 1
- “…[W]e believe the most exigent near-term impetus supporting
the election of Mr. Jellison and Dr. Solomon is the need to ensure a thorough and independent assessment of
the prospective separation of the consumer segment.”
- “While this framework would already portend an array of
potentially substantial risks for investors, the discussion proves much less academic in the case of
Masimo, which is currently pursuing, with truly nominal
board involvement, a separation of Sound United alongside an
indeterminate array of other assets, which could place the interests of Mr. Kiani well above those of the
Company and its shareholders.”
- “Though these factors would already seem to demand swift investor action to remediate faults Masimo
declines to acknowledge, much less proactively address, we consider
the stakes to be raised substantially higher
here, given a potentially high-consequence environment
inextricably linked to what presently appears to be a functionally unchecked separation effort spearheaded by
Mr. Kiani.”
Glass Lewis details Masimo’s poor governance and continued
underperformance, describing Masimo’s analysis as “disturbing,”
“deeply concerning” and seeking to “accept little to no
accountability for significant losses suffered by shareholders,”
stating:
- “…[T]here remains a wealth of evidence to suggest operational
and strategic execution, shareholder value and fundamentally sound
corporate governance continue to take a back
seat to the espoused preferences of Mr. Kiani, who continues to run
roughshod over a largely self-selected board seemingly
disinterested in basic accountability and effective
oversight.”
- “…Masimo investors have, in our view, abundant cause to
conclude that the existing board remains obdurately committed to
legacy oversight methodologies which have consistently enabled and
amplified poor governance architecture, wide operational misses,
nil-return strategic excursions, seemingly de minimis
accountability and, ultimately, a lax commitment to acknowledging
and addressing profound damage to shareholder
value.”
- “…Politan much more persuasively
highlights a meaningful series of concerns in relation to
Masimo, including, among others, continued failures to hit
stated several key operational targets by wide measures (which
circumstance notably also substantially erodes the credibility of
Masimo's long-stated, but never achieved goal of 30% operating
margins), deteriorating capital efficiency, muddled operational
messaging (e.g. inconsistent commentary on COVID
tailwinds/headwinds) and, disconcertingly, discounting/channel
stuffing in the run-up to the 2023 contest (leading to a damaging
revenue miss and a dubiously convenient self
exculpation by Mr. Kiani in the first earnings report after
the proxy fight).”
- “…[W]e believe Masimo's trading performance remains
observably poor and inextricably linked to
operational, strategic and regulatory factors which Politan seeks
to highlight and Masimo appears largely content to
dismiss.”
Glass Lewis also criticizes the Board’s separation process and
notes the risks of it being dominated by Mr. Kiani, stating:
- “We believe investors have no reason to
believe the existing board is prepared to thoroughly and
independently monitor this process.”
- “…[A] considerable portion of the board remains heavily
deferent to the preferences of Mr. Kiani, who
appears committed to a narrow engagement framework largely
supportive of his prior demands. Masimo's July 8, 2024,
joint venture update does little to mitigate this concern, with
associated disclosure leaving open the possibility that several of
the material requests to which the scuppered special committee
objected remain in play (e.g. IP licensing matters, trade secrets,
trademarks, employment and control arrangements benefiting Mr.
Kiani).”
- “We believe these factors, taken together with what we consider
to be a restricted, myopic and poorly
monitored process, already represent clear and compelling
cause for investors to support a further reconstitution of the
board at this time.”
Glass Lewis notes the lack of credibility inherent in the
Company’s threats of business disruption should Politan’s nominees
be elected, stating:
- “…[I]f fundamental narratives surrounding the separation are
accepted at face value, Mr. Kiani has
previously expressed his intention to leave Masimo as part
of a split-off of the Company's consumer business…”
- Regarding “letters of support” for Mr. Kiani released by the
Company: “…[T]his letter was viewed as
coercive by an indeterminate number of Masimo employees who
felt pressured to endorse Mr. Kiani. We consider these materials
hardly bear the hallmarks of organic
support.”
Glass Lewis confirms the valuable expertise and independent
oversight Politan’s nominees will bring to the boardroom,
stating:
- “…[W]e ultimately find both Mr. Jellison and Dr. Solomon to be
highly credible and capable candidates
bringing appropriate industry expertise, potentially critical
M&A/IP knowledge and reasonable public board experience
(including relevant committee service). We believe there is
suitable cause to conclude these nominees will act independently and that neither candidate is
beholden to the interests of Politan or Quentin Koffey.”
- “…[W]e consider Politan has advanced two highly credible, capable and independent candidates
bringing to bear appropriate experience and expertise suited to the
battery of oversight issues which continue to hamper
Masimo.”
- “In addition, while we consider the bulk of Politan's
assessment of Masimo's upside opportunity following further board
reconstitution is both comprehensive and persuasive, we believe the
most exigent near-term impetus supporting the election of Mr.
Jellison and Dr. Solomon is the need to ensure a thorough and independent assessment of the prospective
separation of the consumer segment.”
Glass Lewis highlights the significance of the concerns raised
by Politan regarding empty voting:
- Glass Lewis identifies a shareholder that reached out claiming
to own 9.9% of the stock and then went silent following Politan’s
letter being released publicly.
- Regarding the importance of the Board further looking into the
matter: “If additional materials corroborating Politan’s concerns
subsequently emerge, whether prior to or following the forthcoming
meeting, we would view such circumstances as a highly inappropriate manipulation of the shareholder
franchise and a severe indictment of Masimo's credibility and
corporate governance.”
Quentin Koffey, Managing Partner and Chief Investment Officer of
Politan, stated:
“We appreciate Glass Lewis’s support for both of our nominees –
Darlene and Bill – and the validation of our belief that true
independent oversight is needed on Masimo’s Board. Fundamentally,
Glass Lewis’s report confirms our view that the arguments, excuses
and attacks put forth by Mr. Kiani and his affiliated directors
lack credibility and should be viewed warily by shareholders. If
elected, we are confident that Darlene and Bill would work
constructively in the boardroom during this critical period to
safeguard shareholder value and help ensure the Company is
positioned to realize its full potential.”
Politan encourages shareholders to review its presentation,
proxy materials and letter to shareholders, all of which are
available at www.AdvanceMasimo.com. Shareholders can support real
change at Masimo by voting on the WHITE proxy card FOR the election
of Darlene Solomon and William Jellison.
Your vote is important, no matter how many
shares of Common Stock you own. We urge you to sign, date, and
return the WHITE universal proxy card today to vote FOR the
election of the Politan Nominees and in accordance with the Politan
Parties’ recommendations on the other proposals on the agenda for
the 2024 Annual Meeting.
If you have any questions, require assistance
in voting your WHITE universal proxy card or voting
instruction form, or need additional copies of Politan’s proxy
materials, please contact D.F. King using the contact information
provided here:
D.F. King & Co., Inc. 48 Wall
Street New York, New York 10005 Stockholders call
toll-free: (888) 628-8208 Banks and Brokers call: (212)
269-5550 By Email: MASI@dfking.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
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 any of the
underlying assumptions of Politan Capital Management LP (“Politan”)
or any of the other participants in the proxy solicitation
described herein 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 statements and information included herein may have been
sourced from third parties. Politan does not make any
representations regarding the accuracy, completeness or timeliness
of such third party statements or information. Except as may be
expressly set forth herein, permission to cite such statements or
information has neither been sought nor obtained from such third
parties. Any such statements or information should not be viewed as
an indication of support from such third parties for the views
expressed herein.
Politan disclaims any obligation to update the information
herein or to disclose the results of any revisions that may be made
to any projected results or forward-looking statements herein to
reflect events or circumstances after the date of such information,
projected results or statements or to reflect the occurrence of
anticipated or unanticipated events.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Politan and the other Participants (as defined below) have filed
a definitive proxy statement and accompanying WHITE universal proxy
card or voting instruction form with the Securities and Exchange
Commission (the “SEC”) to be used to solicit proxies for, among
other matters, the election of its slate of director nominees at
the 2024 annual stockholders meeting (the “2024 Annual Meeting”) of
Masimo Corporation, a Delaware corporation (“Masimo”). Shortly
after filing its definitive proxy statement with the SEC, Politan
furnished the definitive proxy statement and accompanying WHITE
universal proxy card or voting instruction form to some or all of
the stockholders entitled to vote at the 2024 Annual Meeting.
The participants in the proxy solicitation are Politan, Politan
Capital Management GP LLC (“Politan Management”), Politan Capital
Partners GP LLC (“Politan GP”), Politan Capital NY LLC (the “Record
Stockholder”), 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 (all of the foregoing persons, collectively, the “Politan
Parties”), William Jellison and Darlene Solomon (such individuals,
collectively with the Politan Parties, the “Participants”).
As of the date hereof, the Politan Parties in this solicitation
collectively own an aggregate of 4,713,518 shares (the “Politan
Group Shares”) of common stock, par value $0.001 per share, of
Masimo (the “Common Stock”). Mr. Koffey may be deemed to own an
aggregate of 4,714,746 shares of Common Stock (the “Koffey
Shares”), which consists of 1,228 restricted stock units (the
“RSUs”) as well as the Politan Group Shares. 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) the Politan Group Shares,
and, therefore, Politan may be deemed to be the beneficial owner of
all of the Politan Group Shares. The Record Stockholder is the
direct and record owner of 1,000 shares of Common Stock that
comprise part of the Politan Group Shares. Both the Politan Group
Shares and the Koffey Shares represent approximately 8.9% of the
outstanding shares of Common Stock based on 53,182,247 shares of
Common Stock outstanding as of June 13, 2024, as reported in
Masimo’s definitive proxy statement filed on June 17, 2024. As the
general partner of Politan, Politan Management 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
Group Shares and, therefore, Politan Management may be deemed to be
the beneficial owner of all of the Politan Group Shares. As the
general partner of the Politan Funds, Politan GP 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 Group Shares, and therefore Politan GP may be deemed to be
the beneficial owner of all of the Politan Group Shares. Mr.
Koffey, including by virtue of his position as the Managing Partner
and Chief Investment Officer of Politan and as the Managing Member
of Politan Management and Politan GP, 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 Koffey Shares.
IMPORTANT INFORMATION AND WHERE TO FIND IT
POLITAN STRONGLY ADVISES ALL STOCKHOLDERS OF MASIMO TO READ ITS
DEFINITIVE PROXY STATEMENT, ANY AMENDMENTS OR SUPPLEMENTS TO SUCH
PROXY STATEMENT AND OTHER PROXY MATERIALS FILED BY POLITAN WITH THE
SEC 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
AND OTHER RELEVANT DOCUMENTS, ARE ALSO 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: (888) 628-8208.
1 Permission to quote Glass Lewis was neither sought nor
obtained. Underlining added.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240712811040/en/
Investor Contact D.F. King & Co., Inc. Edward
McCarthy / Gordon Algernon / Dan Decea MASI@dfking.com
Media Contacts Dan Zacchei / Joe Germani Longacre Square
Partners dzacchei@longacresquare.com /
jgermani@longacresquare.com
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