Politan Nominates Two Independent Candidates for Masimo Board

Politan Capital Management (together with its affiliates, “Politan”), an 8.9% shareholder of Masimo Corporation (“Masimo” or the “Company”) (NASDAQ: MASI), today announced that it is nominating two candidates for election to the Masimo Board of Directors (the “Board”) at the upcoming 2024 Annual Meeting of Stockholders (the “Annual Meeting”).

Quentin Koffey, Managing Partner and Chief Investment Officer of Politan, and a current director on the Masimo Board, stated:

“When shareholders overwhelmingly elected Michelle Brennan and me to the Masimo Board last year, we were optimistic we could work productively with the rest of the Board to drive positive change. Unfortunately, our efforts were continually rebuffed, as Chairman & CEO Joe Kiani refused to give us basic information, denied us access to management, repeatedly held Board meetings excluding us, and refused to even consider allowing any review of capital allocation or strategy.

Politan supports a strategic review to evaluate a separation of the Consumer Business (the “Separation”), as evidenced by our ongoing efforts over the last 18 months. However, at this stage the Board has been provided zero details, and Politan has serious concerns given the lack of basic governance and oversight we have observed since joining the Board. Information is controlled tightly by the Chairman & CEO and almost never shared. As a result, no independent director knows basic facts such as what COGS, SG&A or R&D dollars are actually spent on. There is no budget approval process by the Board, thereby allowing the Chairman & CEO to spend however much he wants on whatever he wants without Board review, authorization or even knowledge.

While the fact that Mr. Kiani seeks to exert this level of control is troubling, it’s perhaps even more concerning that the current Board allows it to occur. This absence of oversight has been damaging for shareholders and the Company. Masimo’s stock price has substantially underperformed peers, financial metrics are well below targets set only a year ago at the Company’s analyst day, and consumer healthcare revenues are essentially zero.

This is why it is clearer than ever that a majority of truly independent directors are needed at Masimo, especially given the critical importance of not only ensuring the Company follows through on its announcement to evaluate the Separation, but also to make sure it is done right. For example, in the event of a transaction there would be vital considerations around the allocation of Masimo’s intellectual property and the control of a potential SpinCo. We have serious concerns that Mr. Kiani, without proper oversight, will seek to push through a spin-off with poor corporate governance and IP arrangements where assets are allocated in such a manner designed to maintain his control and influence of both separated companies. A rushed Friday afternoon announcement that the Company was exploring the Separation – which came after being informed that Politan intended to nominate directors this week – only further confirms our concerns.