Joe Kiani, CEO of Masimo.
Scott Mlyn | CNBC
Earlier this month, Masimo subpoenaed proxy advisors ISS and Glass Lewis for their private communications with investors about the upcoming proxy contest with activist Politan Capital, according to people familiar with the matter.
The unusual move comes after the medical device company delayed its annual meeting and sued Politan Capital in federal court earlier this summer. Masimo founder Joe Kiani, a close confidante of President Joe Biden, has framed the upcoming vote as existential.
Glass Lewis disclosed the subpoena to at least some of the affected investors, but it was not clear if ISS had done the same, the people said. ISS declined to comment. Glass Lewis did not respond to CNBC’s request for comment.
ISS and Glass Lewis deployed unusually strong language to criticize Kiani’s governance of Masimo and recommended shareholders vote to elect two directors put forth by Politan. The company sued Masimo the same day ISS’ recommendation first emerged. Masimo accused Politan of misleading shareholders about its motivations and maneuvering. Politan denies those claims.
Masimo’s annual meeting was originally scheduled for July 25, but the company rescheduled it for September shortly after ISS issued a negative report about the company. Masimo and Politan have since been engaged in legal proceedings in Delaware and California.
ISS and Glass Lewis speak with shareholders as they prepare to make recommendations which, while not binding, can be crucial to passive shareholders as they decide how to vote at thousands of different companies.
The subpoena is the latest twist in a saga that has played out for two years. The proxy fight between Masimo and Politan in 2023 was marked by bitter commentary and widely criticized tactics from management. This year, Politan accused an associate of Kiani’s of buying Masimo shares, voting those shares in favor of Kiani and then exiting its position. That maneuver, by RTW Investments, was flagged by Glass Lewis as a point of potential concern, and was then cited by Masimo when it rescheduled its annual meeting.
Politan previously said Masimo’s rescheduled investor meeting violated its own bylaws and was an unjustifiable delay, noting that it only came after the two negative reports from Glass Lewis and ISS.
Politan referred CNBC to public legal filings but declined to comment further. A spokesperson for Masimo did not immediately have a comment.
