Masimo’s leadership transition brings a two-year boardroom feud to a close, but questions remain about the path forward in the wake of CEO Joe Kiani’s exit.
Kiani resigned after losing his board seat in a Sept. 19 shareholder vote, ending his tenure 35 years after founding the pulse oximetry firm. The former CEO also filed a lawsuit in California related to his employment agreement. BTIG analysts wrote in a recent investor note that they “expect this legal effort to be important in determining whether Mr. Kiani receives a sizable special payment.”
Masimo’s new board, comprising a majority of members nominated by activist investor Politan Capital Management, named director Michelle Brennan as interim CEO. Brennan is a former Johnson & Johnson executive.
As Masimo searches for a permanent replacement for Kiani, investors are watching for other potential staff changes. Chief Operating Officer Bilal Muhsin remains on the job, despite submitting a conditional resignation in June when the proxy fight began to heat up. Several hundred engineers cautioned at the time that they too might leave the company. Muhsin and CFO Micah Young have indicated they will participate in an October earnings call.
A planned divestment of the company’s consumer businesses also will be closely watched. The $1 billion acquisition of Sound United’s audio brands in 2022 was a hot-button issue in the proxy battle. Masimo said the board remains committed to a strategic review of alternatives for both its consumer healthcare and audio businesses.
Throughout the proxy contest, Politan emphasized that it would focus on Masimo’s core healthcare and hospital-to-home markets, divest the audio business, and pursue cost reductions to drive margin expansion, Stifel analyst Rick Wise said in a note to clients.
Check out MedTech Dive’s coverage of developments in the fight for Masimo: