Illumina Chief Executive Francis deSouza received 71 percent shareholder support to remain on the DNA sequencing outfit’s board of directors — despite being targeted for removal by activist investor Carl Icahn.
Shareholder vote totals were released this week from Illumina’s recent annual shareholder meeting, where the San Diego company’s proxy fight with Icahn came to an end.
Winners and losers in the proxy battle were announced on May 25 following the meeting. But vote totals were withheld pending certification. So, it was unclear whether these hard-fought contests were nail-biters.
Icahn’s battle with Illumina centered on the company’s decision in August 2021 to close the $7.1 billion acquisition of cancer diagnostic spinout Grail, even though the transaction remained under review from anti-monopoly regulators in the U.S. and Europe.
Now regulators on both continents have demanded Illumina unwind the Grail deal. Illumina is fighting the orders in courts and expects to have rulings late this year or early next.
Shareholders delivered split results in proxy voting. While deSouza handily survived Icahn’s attempt to oust him, Illumina Board Chairman John Thompson did not. The former Symantec CEO and ex-Microsoft chairman was removed from the board, garnering just 34 percent of votes in favor. He was beaten by Icahn nominee Andrew Teno, who netted 60 percent support.
Two other Icahn nominees — Vincent Intrieri and Jesse Lynn — received 27 percent and 8 percent of ballots respectively, which fell far short of votes cast in favor of the eight Illumina-nominated candidates who retained their seats.
Meanwhile, shareholders trounced Illumina’s advisory vote on executive compensation, known as say on pay. The proposal received just 14 percent support. It is rare for say and pay proposals to be rejected. Typically, they are approved with 90 percent-plus shareholder support.
Icahn criticized Illumina’s executive pay, especially a large stock award this year to deSouza. The $24.9 million grant has performance triggers based on Illumina’s core DNA sequencing business, argued Icahn, thus excluding potentially significant losses related to Grail.
Proxy advisory firms Institutional Shareholder Services and Glass Lewis called out Illumina’s compensation practices, saying there is a disconnect between pay and performance. Illumina declined to comment. But in proxy materials, the company noted that 96 percent of deSouza’s pay is “at risk” if the company fails to hit earnings and shareholder return targets.
Moreover, proxy documents said the board will take shareholder frustration into account as it re-thinks compensation practices over the next year.
Illumina’s shares ended trading Thursday up 1 percent at $199.09 on the Nasdaq exchange.