Masimo Corporation (“Masimo” or the “Company”) (NASDAQ: MASI)
today issued the following statement to address what Masimo
strongly believes is Politan’s campaign of deception and
distraction to deflect attention from its own failures and its
nominees’ shortcomings.
The Company urges investors to choose Masimo’s commitment to
transparency and value creation over what it believes are Politan’s
fabrications and deflections by voting FOR Masimo nominees Joe
Kiani and Christopher Chavez on the GOLD card.
Included below are examples of quotes and assertions by Politan
that Masimo strongly believes are false and misleading, set against
Masimo’s explanation of the true facts and clear explanations. For
more information on why the Company believes Politan should not be
rewarded with votes for its candidates when it is providing
stockholders with inaccurate, incomplete and misleading information
in an effort to gain control of Masimo, please visit
www.ProtectMasimosFuture.com.
“A lie gets halfway around the world before
the truth has got its boots on”
In a desperate attempt to divert shareholders’
attention from the absence of a clear plan, we believe that Politan
continues to misdirect to cover up their own failures.
1. Politan Fiction: Politan’s nominees are “unquestionably
qualified and independent” and had “no prior relationship with
Politan” and were “found via nationally recognized, third-party
search firm”
MISDIRECTION: Politan is attempting to
shift the focus away from Masimo’s independent and highly
experienced directors. Except for the Politan Board members,
Masimo’s Board has deep and relevant expertise, having led numerous
public companies – as CEOs and directors.
FACTS: Mr. Jellison owes his board
position with Anika Therapeutics (a company with a market cap well
under $400 million) to an activist. He was appointed to the board
of Anika in May 2024 through a settlement with activist Caligan
Partners. Caligan Partners shares the same attorney as Politan.1
Mr. Jellison also has a history of questionable financial
investments, including a large investment in Saddle River Advisors,
which turned out to be a Ponzi scheme, undermining his credibility
as a “financial expert”.2
Dr. Solomon’s technical expertise
(Chemistry) is not relevant to Masimo and she does not meet the
director search specification that Masimo’s Nominating Committee –
which includes Politan’s Michelle Brennan – agreed on. Politan
hand-picked Ms. Solomon and Mr. Jellison and is paying them $50,000
each to run as Politan’s nominees, with another $50,000 due if they
are elected or appointed to Masimo’s Board.3
POLITAN’S FAILURE: Even Politan concedes
it has not nominated truly independent directors and its nominees
will vote as a bloc, telling shareholders that a “split vote would
create a deadlocked board that cannot affirmatively act.”
2. Politan Fiction: “Mr. Kiani is pursuing the transaction today
with a single counterparty and no actual Board oversight” and the
transaction “raises the exact same IP concerns and similar related
party concerns the Special Committee objected to”
MISDIRECTION: Politan is diverting
attention from the fact Mr. Koffey failed to deliver any
value-creating solution for the Consumer separation as Chair of the
Special Committee.
FACTS: Mr. Kiani is not pursuing any
transaction without Board oversight. The full Board is overseeing
and will approve any transaction following a sound process that was
outlined and agreed to at the April 30, 2024 Board meeting.
The IP framework Masimo proposed to the
potential JV partner matches what Mr. Koffey proposed to Mr. Kiani
as Chair of the Special Committee. In summary, Masimo would license
certain IP to the JV for use solely within the consumer field. The
license would not extend to the professional healthcare field. As
Politan is aware, the Board has agreed that an independent third
party will review the IP allocation proposed by the company’s IP
counsel.
The Special Committee also did not object
to “related party concerns,” as Politan claims. The Special
Committee was set up specifically to deal with the related party
issues inherent in the terms agreed by Mr. Koffey and Mr. Kiani in
January.4
POLITAN’S FAILURE: Mr. Koffey not only
failed as Chair of the Special Committee, but we believe his
behavior resulted in the resignation of former director Rolf
Classon from the Committee, leading to its subsequent
dissolution.
3. Politan Fiction: “Cercacor was the last time Mr. Kiani
oversaw a separation” and “Mr. Kiani has done this before, with
Cercacor”
MISDIRECTION: Politan is once again
ignoring the fact that Mr. Koffey failed to find any viable options
for the Consumer separation and has no plan to generate shareholder
value.
FACTS: The separation of Masimo and
Cercacor was completed in 1998, nearly a decade before Masimo went
public, and was fully disclosed in the S-1 and subsequent
materials. In 1996, Masimo was considering going public and one of
its new investors who had visitation rights to Board meetings
proposed a separation because he and other investors were not
attributing any value to Masimo’s noninvasive blood constituent
monitoring technology (released several years later as rainbow) as
it had not yet produced revenue and required significant R&D
investments. Mr. Kiani initially opposed the separation, but in
1998 relented. The separation agreement was fully disclosed and
approved by Masimo’s shareholders (mostly Venture Capitalists) at
the time. Mr. Kiani’s ownership share in both companies was the
same, as were those of the other shareholders.
POLITAN’S FAILURE: Nothing about the
Cercacor transaction, which was completed more than 20 years ago,
had any bearing on Mr. Koffey’s inability to deliver the simple
objectives of the Special Committee.
4. Politan Fiction: “No information on R&D, COGS, or
SG&A beyond public disclosures” which Politan claims justifies
the Politan directors’ refusal to sign the Masimo’s Form 10-K and
approve earnings releases
MISDIRECTION: Politan is simply
fabricating excuses to mask their failures on the Board.
FACTS: Politan’s false claims regarding
the directors’ access to information were addressed in Masimo’s
previous press releases dated April 1 and June 20, 2024. As
explained in those releases, in addition to the thousands of pages
of documents management delivered during onboarding, Masimo’s CFO
Micah Young provided a detailed presentation to the full Board on
October 31, 2023. He presented the management plan for 2024 and a
long-range plan through 2033. He included a breakdown of each
business (professional healthcare, consumer health and consumer
audio), including revenue by major product line, cost of goods
sold, gross profit, R&D expenses, SG&A expenses, operating
income, adjusted EBITDA, working capital and capital expenditures
for each business. He followed up by emailing this detailed
information—which goes well beyond what is disclosed publicly—to
Mr. Koffey. The email and attachment that Mr. Young sent to Mr.
Koffey dated October 31, 2023, is available here:
https://protectmasimosfuture.com/plan-email/ (the data in
the spreadsheet is confidential and has been removed).
POLITAN’S FAILURE: Despite having
requested an exorbitant number of documents, and having received
those documents, the Politan directors were still unable to fulfill
even the most basic director duties like signing the Form 10-K and
approving quarterly reports. Indeed, it appears to us that Mr.
Koffey was only issuing these document requests in furtherance of
Politan’s proxy contest to take control of Masimo.
5. Politan Fiction: “Corporate Jet Travel Appears Overwhelmingly
for Personal Use, Even During Periods of Crisis for Company”
MISDIRECTION: Politan is diverting
attention from the fact that it doesn’t understand the business or
the industry in which we operate.
FACTS: Mr. Kiani’s corporate jet travel is
overwhelmingly for business use, and Mr. Kiani pays for his
personal use.
Politan wrongly characterizes a number of
business trips as vacations. For example, Mr. Kiani’s trip to
Anguilla was for Masimo’s CEO Summit, which is an award trip held
annually for the top performing Masimo sales representatives. In
July 2023, Mr. Kiani met with several customers in Spain, including
a senior representative of the Andalusian Health Service to discuss
Masimo technologies, including the telemonitoring technologies that
we recently received significant orders for in Spain.
Mr. Kiani offered to buy the aircraft at
the outset, but Masimo’s advisors determined it would be preferable
for Masimo for the company to own it. Mr. Kiani has told the Board
he is still willing to buy the aircraft at fair market value if the
Board prefers.
POLITAN’S FAILURE: In 12 months on the
Board, including numerous executive sessions and audit committee
meetings without Mr. Kiani present, Mr. Koffey never once raised
Mr. Kiani’s use of the corporate jet as an issue, when it could be
evaluated by the other independent directors. It appears to us he
is only raising it now to support Politan’s efforts to take control
of Masimo and distract from their failure to have a plan or viable
CEO candidate.
6. Politan Assertion: “CEO has lowest employee approval rating
of any peer, evidencing beleaguered employee culture”
MISDIRECTION: Politan is shifting the
focus from their unqualified CEO replacement, Michelle
Brennan.
FACTS: Mr. Kiani has strong support among
current employees. Masimo was certified as a Great Place to Work
for 2020-2021 and 2021-2022 and was one of Fortune’s Best
Workplaces in Manufacturing and Production for 2021, both of which
are based on employee surveys including questions about the CEO and
senior management. More than 300 Masimo engineers and sales leaders
have publicly expressed their support for Mr. Kiani.5
POLITAN’S FAILURE: Politan’s stop-gap
measure, appointing Ms. Brennan, is farcical: she has no CEO
experience, no ability to oversee a large complex company, and
failed to deliver any options for the Consumer separation while on
the Special Committee.
7. Politan Assertion: The Board was not timely notified of the
DOJ and SEC subpoenas
MISDIRECTION: Politan is attempting to
turn the focus away from their inexperience in the
Boardroom.
FACTS: Masimo received the first DOJ
subpoena relating to its Rad-G and Rad-97 devices on February 21,
2024. Management forwarded the subpoena to the Board the same day.
The second DOJ subpoena also related to the Rad-G and Rad-97
devices and both subpoenas were discussed with the Board at the
next regularly scheduled Board meeting. The allegations at issue in
the SEC subpoena were raised with and had already been investigated
by the Audit Committee, Internal Audit, and external auditors in
2023.
POLITAN’S FAILURE: Despite having been
provided an exorbitant amount of information both by at request and
in the Board’s proper functioning, Mr. Koffey continues to fail in
even his most basic duties as a director: to engage with the other
independent directors in good faith for the benefit of Masimo’s
stockholders.
8. Masimo Foundation invested in Mr. Chavez’s Company
MISDIRECTION: Politan is trying to shift
attention away from Mr. Chavez’s strong qualifications.
FACTS: Mr. Chavez does not benefit from –
and was indeed until recently was unaware of – the Foundation’s
investment. Mr. Chavez was CEO of Trivascular, which was acquired
by Endologix in February 2016. As part of the merger agreement, Mr.
Chavez was appointed to the board of directors of Endologix but
only served on the board for two years. Endologix was a public
company and Masimo Foundation purchased Endologix stock in the open
market. Endologix had its headquarters near Masimo and Mr. Kiani
had been introduced to the company years before Mr. Chavez joined
its board. Many investment fund bus trips visited both companies
and Endologix was often discussed as a growing device company,
bringing it to the attention of Masimo Foundation. Mr. Chavez was
not aware that Masimo Foundation had bought Endologix stock until
Politan filed its presentation on June 26, 2024.
POLITAN’S FAILURE: Politan appears to be
uninterested in meaningful director independence. Its opposition to
Mr. Chavez, like its selection criteria for its own nominees,
appears to be rooted in Politan’s lack of any understanding of what
Masimo does, how the medical device industry operates, and where
the future lies. In our view, Politan equates independence with
loyalty to Politan.
1 https://www.srz.com/en/people/ele-klein (see
“Representations”) 2
https://www.sec.gov/enforcement-litigation/litigation-releases/lr-23501
3 Politan’s 2024 Definitive Proxy Statement, page 18 4 Masimo’s
June 20, 2024 Press Release entitled “Masimo Provides Facts in
Response to Politan’s False Narrative”, point #16,
https://investor.masimo.com/news/news-details/2024/Masimo-Provides-Facts-in-Response-to-Politans-False-Narrative/default.aspx
5 https://protectmasimosfuture.com/materials-faqs/
Don’t be fooled by Politan’s numerous
fictions and attempts at misdirection. Don’t put the value of your
investment in Masimo at risk.
Vote FOR Joe Kiani and
Chris Chavez on the GOLD Card
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 the proposed separation of
Masimo’s consumer business. 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 a potential separation of Masimo’s consumer
business, (ii) 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, (iii) the
potential cost and management distraction attendant to Politan’s
nomination of director nominees at the 2024 Annual Meeting and (iv)
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240702444100/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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