Masimo director Brennan urges shareholders to support cultural reset

Politan Capital Management, an 8.9% shareholder of Masimo, shared a statement from Michelle Brennan, an independent director of Masimo: “When I was approached last year by an executive search firm about the opportunity to potentially serve on Masimo’s Board of Directors, I was immediately intrigued. Although I had no pre-existing relationship with Politan, I was very familiar with Masimo and its reputation in the sector given my time spent overseeing multi-billion-dollar global medical device businesses for Johnson & Johnson. As I did more of my own research, it became clear to me that Masimo was a company with vast potential – which ultimately led me to accept the role as an independent nominee. After shareholders voiced their desire for change and elected Quentin and me to the Board, I was optimistic that I would be able to work constructively with the other independent directors. However, when I shared a standard list of onboarding questions and requested data that I had found useful in my other board roles, I was rebuffed. I was told to be patient, and that eventually I would receive the information I needed to do my job as a director. After two months, I was told to stop asking. Masimo’s boardroom is not like any other I have experienced. There is no budget process. There is no belief that directors need to be adequately informed about, or provide oversight in relation to, regulatory investigations like the ones opened by the DOJ and the SEC at Masimo. And, most troublingly, there is a deep-seated belief among Mr. Kiani’s hand-picked directors that the desire to actively oversee management is equivalent to disloyalty. Specifically, the status quo is to “trust and believe” whatever Mr. Kiani says and not ask questions beyond the information he provides – even when there is an apparent disconnect between what may be best for Mr. Kiani and what is best for shareholders. Nowhere has this been more apparent than during the potential transaction process to separate the Consumer Business, during which directors received material information for the first time via Mr. Kiani’s media appearances. The bottom line is that my experience has led me to believe that the Board is unable to carry out its basic functions because it is essentially kept in the dark. As a result, all of Masimo’s stakeholders have suffered. Shareholders have repeatedly seen results that miss expectations and have cost the Company its credibility with the financial community while driving down the share price. Employees have to deal with the distraction of two successive proxy contests, bonus cuts and coercion by leadership to demonstrate their “support” for Mr. Kiani. Patients are not the top priority they should be, as the Company invests in unnecessary areas and faces inquiries into recall processes. Masimo has the market position and leading technology to be a growth business. It’s my belief that our responsibility as directors is to help make that a reality, by continuing to invest in R&D and enhancing productivity. This is the type of transformation I led at Johnson & Johnson when I successfully returned multiple medical device businesses that had stagnated to above market growth, and it is what I am committed to achieving at Masimo. Ironically, Mr. Kiani and his affiliated directors have made the fear of “disruption” a central theme of their campaign to maintain the status quo. This rings hollow to me. As an experienced operator, I know that the continuation of the problems listed above – in addition to the notion that if Mr. Kiani’s affiliated directors view him as “irreplaceable,” they will never feel like they can hold him to account – represent massively greater risks than a majority of independent directors sitting on the Board. Over the last few months, I have had an opportunity to get to know Darlene Solomon and Bill Jellison. They are the type of objective, qualified and seasoned directors Masimo needs – particularly at this critical juncture as the Company advances the separation of the Consumer Business. The myriad financial hurdles and nuanced IP transfers that need to be navigated in order to ensure any potential transaction maximizes value for shareholders, while positioning Masimo for success over the long term, are areas where Darlene and Bill have direct expertise. The Board would be lucky to have them. I continue to believe Masimo’s best days are in front of it. This is why I urge shareholders to support further change and true independent oversight at Masimo’s upcoming 2024 Annual Meeting.”