ISS supports Politan directors in boardroom challenge at Masimo

Proxy advisory firm Institutional Shareholder Services (ISS) on Tuesday backed Politan Capital Management in a boardroom challenge at medical device maker Masimo Corp (MASI.O) by recommending shareholders elect both of the activist’s candidates.

Politan, which owns 9% of Masimo shares, has long criticized the company’s capital allocation and board oversight and nominated two director candidates, including Politan’s chief investment officer Quentin Koffey.

Politan is pushing for seats one year after Masimo spent $1 billion to buy consumer technology company Sound United and its stock price tumbled on the news. Masimo is run by its founder, Joe Kiani, whom ISS praised for contributing to healthcare improvements around the world.

But, ISS also noted that Masimo is struggling to adjust to the fact it is accountable to shareholders.

Masimo “is a public company that operates like a private business, and is disregarding shareholders in the process.” The board needs to effectively oversee management and that can be achieved only through board change, the ISS report said.

Investors will be able to vote on directors at the June 26 annual meeting. Reuters