Joe Kiani, Founder, Chairman & CEO, Masimo; on Startup University Stage on day three of Collision 2024 at the Enercare Centre in Toronto, Canada.
Ramsey Cardy | Sportsfile | Getty Images
Proxy advisor Institutional Shareholder Services said boardroom change at medical technology company Masimo was “absolutely necessary” in a Monday report, and took particular aim at CEO Joe Kiani, saying he wanted to “have his cake and eat it” in running a publicly traded company as though it was a privately held one.
The unusually sharp report, a copy of which was viewed by CNBC, said shareholders should vote for activist Politan Capital Management’s board nominees, Bill Jellison and Darlene Solomon. The ISS news comes on the heels of an equally trenchant report from advisory peer Glass Lewis, which issued an identical recommendation last week.
Masimo under Kiani’s leadership “has continued to display a dangerous lack of accountability to shareholders that will require additional board change to rectify,” ISS wrote.
Kiani, a close confidant of President Biden and the co-founder of the device company, “has demonstrated that he has no regard for public shareholders,” ISS wrote in its report, and has overseen a governance track record at Masimo “that is firmly among the most troubling of any modern public company.”
“He has been at the center of so many corporate governance scandals and abuses that no credible argument exists to the contrary,” the proxy advisor continued, referring to Kiani’s outsize pay package, the unusually venomous attacks by Masimo management in both this year and last year’s proxy fight, and his oversight of both Masimo’s spinoff process and board refreshment.
By contrast, ISS wrote, Politan “has presented a logical plan” and nominees which “appear to be appropriate.”
Kiani has threatened to leave the company if he is not reelected at this year’s shareholder meeting, which is scheduled for later this month.
ISS wrote that such threats were unacceptable. “Under no circumstances should shareholders ever abide ultimatums or threats from a CEO, at MASI or anywhere else,” the proxy advisor wrote, referring to Masimo’s stock ticker.
Representatives for Politan and Masimo did not immediately return requests for comment.
