Masimo-Politan Proxy War Goes from Bad to UglyMasimo-Politan Proxy War Goes from Bad to Ugly

In what were supposed to be the final days of its proxy war against Masimo, Politan Capital Management may have found itself in zugzwang this week, with no good options to counter the company's latest move. Masimo has delayed its shareholder vote by eight weeks. Ultimately, we now have two lawsuits to follow, and the vote is postponed from July 25 to September 19.

Masimo's board approved the postponement of the company's annual shareholder meeting (and subsequently, the shareholder vote) on Monday. The company noted that the Securities Exchange Commission requires a broker search to be conducted 20 business days before the meeting, so the company also had to conduct a new broker search. The new record date for determining Masimo stockholders entitled to receive notice of and vote at the 2024 annual meeting will be August 12.

Masimo also launched a lawsuit against Politan, asking a federal court to intervene and make Politan correct alleged material misstatements and omissions from its proxy materials.

Masimo said the board postponed the meeting to accommodate Politan's request for a new record date for the meeting and to give shareholders sufficient time to review revised proxy materials before the vote. But Politan countered with a lawsuit against Masimo and three of its directors to ensure that the annual meeting is held as soon as possible with no further delays. In the complaint, Politan alleges that the two-month delay is unnecessary, in violation of Masimo's own bylaws, and a "manipulation of the corporate machinery to entrench the incumbent board."

Below is a timeline of key developments that have taken this proxy war from bad to ugly:

Graphic by Amanda Pedersen / MD+DI

*MD+DI independently verified that at least some engineers who signed the letter of support for Kiani were pressured into doing so. It seems most of the engineers did not feel pressured to sign, but this is based on just 18 responses to our survey of nearly 300 engineers.

Politan accuses Masimo of empty voting tactics

Politan had previously called Masimo out for alleged "empty voting" tactics, but the activist investor claims a record date could have been set as early as July 18 (today), in which case the annual meeting could have been postponed by just a couple of weeks (until the first week of August) instead of two months. Politan also denies Masimo's allegations of misstatements in its proxy materials.

Politan raised concerns in its proxy materials that an investor who had voted for Masimo's nominees may have engaged in what is known as "empty voting" or "record date capture" – voting shares without economic exposure, achieved by borrowing the shares, then shorting them.

Politan asked Masimo to move the record date without moving the annual meeting date. Politan has also asked the board to look into whether a 13D/SEC violation has occurred.

Masimo claimed in an SEC filing responding to Politan's request that neither Kiani nor any other member of management nor the non-Politan members of the board had or has any agreement, arrangement, or understanding with regard to the trading or voting of Masimo stock by any third-party investor.