Masimo seeks to avoid proxy fight with Politan, makes settlement offer

Masimo offered to settle with a dissident director who is considering a second proxy fight, saying in a letter that he would add one of the activist’s proposed candidates in exchange for a truce.
Quentin Koffey’s Politan Capital Management said it would seek to oust Kiani and another director to consolidate control of the company’s board earlier this year.
Koffey won a contentious proxy battle at the company last year, convincing shareholders that the company needed revamped governance and CEO accountability.

Health technology company Masimo, facing the looming threat of litigation and a second proxy fight, on Thursday proposed a settlement to Politan Capital’s Quentin Koffey that would fill a vacant board seat with the one of the administrators proposed by the activist.

Masimo’s lead independent director, Craig Reynolds, said he hoped the addition of William Jellison, Politan’s nominee to the company’s board, would “avoid the distractions and significant expense of a proxy contest. The company is trying to spin off its consumer technology division along with an unspecified joint venture partner, CEO Joe Kiani said earlier this year.

Koffey said earlier this week that Masimo withheld information about the joint venture from the board – requiring directors to sign a non-disclosure agreement to learn the name of the potential partner. He threatened legal action unless the company provided him with that information by Friday.

The settlement offer would not have been possible without the imminent resignation of current director Rolf Classon, whose departure was announced for “personal health reasons”.

Koffey led a successful proxy fight at Masimo last year, winning along with another candidate representation on Masimo’s six-person board of directors. The activist argued that Masimo’s acquisition of consumer technology was enabled by poor governance, a charge that large shareholders bought into and which Koffey said continued unabated throughout his mandate as director.

Politan launched a second proxy battle to oust Kiani earlier this year, saying the “lack of oversight has been detrimental to shareholders.” The activist also noted that aside from Kiani, no board member had access to “basic facts,” even regarding research and development spending or sales and merchandise costs.

Masimo declined to comment. A representative for Politan did not immediately return a request for comment.