Illumina shareholders have voted to oust company chair John Thompson and approve a nominee supported by Carl Icahn following a bruising proxy battle led by the veteran activist investor.
Andrew Teno, Icahn’s nominee for a board seat at the world’s biggest gene sequencing company, won a shareholder vote at the company’s annual meeting on Thursday, while Thompson was unseated.
However, two other Icahn nominees failed to attract enough votes to win board seats, paving the way for Illumina chief executive Francis deSouza and director Robert Epstein to be re-elected.
Illumina said: “We appreciate the constructive shareholder feedback throughout this process and are committed to delivering on our plan to accelerate shareholder value creation.”
“I see this as only the first round in a continuing battle,” said John Coffee, a Columbia Law School professor. “The shareholders may yet be able to remove the CEO. But clearly the shareholders were nervous about giving Icahn even three seats on the board.”
Illumina shares were down nearly 11 per cent at $189.71 following the vote, the lowest level this year.
Julie Utterback, an analyst at Morningstar, said of the stock sell-off: “It looks like investors might have been hoping for a more significant change at the embattled genome sequence leader.”
The shareholder vote makes a quick divestiture of Grail unlikely, she said, but management is “on a tighter leash”.
In a further sign of investor frustration with the company, Illumina said shareholders rejected its 2022 pay for senior executives. DeSouza was awarded $26.7mn in total pay in 2022, almost double the amount in the previous year. Pay proposals are non-binding in the US, but big companies rarely lose these votes.
The vote to oust Thompson, a former Microsoft chair and director, follows Icahn’s campaign that focused on Illumina’s “reckless decision” to close its $8bn acquisition of cancer test developer Grail in 2021 against the wishes of EU and US antitrust regulators.
Icahn, who has a 1.4 per cent stake in Illumina, said it was “inexplicable and unforgivable” that the board led by Thompson went ahead with the deal without ascertaining whether it would get clearance from EU regulators. In December, Brussels ordered Illumina to divest Grail and is planning to issue a fine worth up to $453mn for “gun jumping”.
The US Federal Trade Commission has also ordered Illumina to divest Grail. Illumina is appealing against the EU and…
Click Here to Read the Full Original Article at UK homepage…
