Nearly 300 engineers in Masimo’s healthcare division are among those publicly expressing support for CEO and founder Joe Kiani as he faces a proxy battle that threatens to oust him from the board of the patient monitoring company.
In the letter, the engineers warn that the prospect of losing Kiani, an engineer himself who founded the company in 1989, jeopardizes Masimo’s future.
Activist investor Politan Capital Management, which owns a 9% stake in Masimo and is led by Quentin Koffey, has proposed two candidates for board seats, including Kiani’s. Masimo’s annual shareholder meeting is scheduled for July 25.
“We wish to convey our deepest concern if Quentin Koffey and Politan Capital take control and Joe Kiani is removed. We are committed to Masimo because of the vision and innovation he pushes and drives us to deliver,” the letter states. The engineers wrote they “may not continue with the company” if Kiani is replaced.
Also voicing support, Masimo Chief Operating Officer Bilal Muhsin notified Masimo’s board that he will step down if Kiani is removed as chairman and CEO, according to a securities filing Monday.
Other company executives signed letters in late June backing Kiani’s leadership that were made public. In one letter, five managers at Masimo global operations said they would “seriously contemplate” whether they’d want to keep working at Masimo if Kiani left.
Politan is seeking two additional board seats this year after Koffey, who is the hedge fund’s chief investment officer, and Michelle Brennan, a former Johnson & Johnson executive, were elected as Masimo directors in 2023. The firm has nominated former Agilent Technologies Chief Technology Officer Darlene Solomon and former Stryker CFO William Jellison for Masimo's board.
Masimo is urging shareholders to vote for Kiani and nominee Christopher Chavez, former CEO of device companies Trivascular and Advanced Neuromodulation Systems.
Politan has accused Masimo leadership of mismanagement and argued its board lacks independent oversight.
Masimo has defended its record and said Politan is providing stockholders with inaccurate and misleading information to gain control of the company.
A key point of contention is the medical device maker’s 2022 acquisition of Sound United, known for its high-end consumer audio brands such as Bowers & Wilkins and Denon. Politan blamed the $1 billion deal for the underperformance of Masimo shares.
Masimo now plans to separate its consumer audio and consumer health product businesses. The company said recently it remains in discussions with a potential joint venture partner that may be interested in acquiring a majority stake in the consumer operation.
