Masimo backs off bylaw amendments requiring detailed information from activists
By Svea Herbst-Bayliss
NEW YORK (Reuters) – Medical device maker Masimo Corp on Monday said it changed its bylaws to eliminate requirements that would have forced investors seeking to nominate directors to the firm to reveal information that hedge funds consider to be top secret.
The decision removes the company’s widely criticized bylaw amendments, adopted late last year, after an activist investment firm built a stake in the company.
The changes instituted last year, which were being challenged in court, unnerved activist investors who push companies to perform better often by nominating board directors.
They would have required any hedge fund nominating directors at Masimo to identify its own clients and to say whether it planned to nominated directors at other companies. This sparked fears that other companies might adopt similarly detailed bylaw requirements.
But on Monday, Masimo backed off. It said in a regulatory filing it has “adopted amended and restated bylaws” which revert to the Second Amended and Restated Bylaws of the Corporation, dated as of October 24, 2019.”
The reversal comes only days after the hedge fund industry association MFA backed activist firm Politan Capital Management’s lawsuit against Masimo to reverse “draconian” amendments by filing an amicus curiae, or friend of the court brief.
The case was being widely watched in corporate America as activist investors increasingly push companies, such as Walt Disney and Salesforce, for changes.
(Reporting by Svea Herbst-Bayliss; Editing by Bernadette Baum)