“The combination of single-trigger vesting, tax gross-ups, and highly dilutive option awards typically would not pass the say-on-pay vote," Visithpanich said. "You can’t have multiple failing votes. At a certain point, the whole thing starts to blow up. They had to do something."
Since Kiani’s contract was renegotiated, Masimo said it reached out to 22 large investors representing 53 percent of shares. The new agreement removed many issues that had troubled them, the company said.
“Under any number of somewhat reasonable change-in-control scenarios, this new agreement would save Masimo and Masimo shareholders at least $100 million,” Chief Financial Officer Mark de Raad said in a Wednesday phone interview.
Craig Reynolds is the chairman of Masimo’s compensation committee, which negotiated with Kiani. Tom Harkin, the former U.S. senator from Iowa, and Sanford Fitch, who previously served as the CFO of Cruel World Inc., also sit on the committee.
Payout of the restricted stock grant isn’t probable, the company said. Both the stock award and the cash payment are reduced by 10 percent annually beginning in 2018. The award wouldn’t pay out in event of death, disability or cause such as gross misconduct or violation of trade secrets, the document shows.
Kiani’s pay totaled $119.2 million in 2015, according to the summary compensation table disclosed in Masimo’s proxy statement. That includes the $112 million stock grant, but not the $35 million potential cash payout. Excluding the special awards, Kiani’s compensation was $7.3 million, the table shows. That includes the legal fees, $883,518 in salary, $3.82 million of stock options and a $1.05 million cash bonus.