- More than $110 million in stock would vest if he departs
- Founder of medical-device maker approved new employment terms
Masimo Corp. Chairman and Chief Executive Officer Joe Kiani was awarded $119.2 million for last year, in exchange for forfeiting certain components of his employment agreement.
Kiani’s compensation includes $111.9 million in restricted stock that will vest only if his employment with the company is terminated, according to the summary compensation table in Masimo’s proxy statement filed Thursday. 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.
The restricted stock grant was made in connection with changes to Kiani’s employment agreement. The amended agreement discontinued payment of Kiani’s taxes by the company in some scenarios, and the ability to exchange his option awards for shares. It also removed provisions for guaranteed annual grants of stock options, and so-called “single-trigger” golden-parachute payments if Masimo is acquired. Kiani founded the Irvine, California-based medical device-maker in 1989.
“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 phone interview.
Payout of the restricted stock grant is not probable, the company said in the filing. If the shares did pay out prior to 2018, Kiani would also receive a cash payment of $35 million. Both the stock award and the cash payment are reduced by 10 percent annually beginning in 2018, the document shows.