Masimo Corp. didn’t have to go far to find its next chief executive.
The Irvine-based medical device maker last week announced that it tapped Edwards Lifesciences Corp. veteran Katie Szyman as CEO, effective Feb. 12, following “an extensive search process,” the company said.
Szyman is currently worldwide president of BD Advanced Patient Monitoring, the former Critical Care unit of Edwards that was acquired by Becton, Dickinson and Co. (NYSE: BDX) in September for $4.2 billion.
Masimo has underwent several leadership changes in the past year.
Founder Joe Kiani resigned as CEO after activist investor Politan Capital Management in September won the proxy battle against Masimo, gaining two additional seats and ousting Kiani from the board. Politan-controlled Masimo named Michelle Brennan interim CEO and soon after laid off 75 employees, reflecting the company’s shifting focus away from wearables amid the separation of its consumer business.
Brennan will become chairman, along with Politan founder Quentin Koffey, who has been appointed vice chairman. Both changes will take effect Feb. 12 as well.
Shares in Masimo (Nasdaq: MASI) were unchanged in after-hours trading the day of the announcement at $176.07 and a $9.4 billion market cap. Since Kiani’s resignation in late September, shares have jumped 30%.
The board said that it’s still reviewing both options of either potentially spinning off its consumer business or selling it to an undisclosed bidder, offering between $850 million to $950 million, and will provide updates in the “near-term.”
Experienced Medtech Leader
Masimo said it wanted someone with a medtech background for its next CEO.
“Katie’s more than 35 years of relevant experience and her unique mix of expertise set her apart during our search and make her an ideal fit to lead the next innovation-focused stage of Masimo’s evolution,” Koffey said in a statement.
Szyman’s “deep existing relationships within the industry” will also help Masimo develop a strategy for bringing its next patient monitoring platform to market, according to Brennan.
Becton decided to keep the unit in Irvine. Szyman and her team moved into the former Alteryx Inc. headquarters at Spectrum Terrace, where Szyman oversees 500 local employees.
Critical Care, which brought in $928.1 million in revenue for 2023, makes patient monitoring devices similar to Masimo’s that are typically used in hospital and intensive care unit settings.
“We want to bring more advanced patient monitoring into those environments where it hasn’t happened before,” Szyman told the Business Journal in a previous interview last September.
Its portfolio includes the Swan-Ganz pulmonary artery catheter, minimally invasive sensors, noninvasive cuffs, tissue oximetry sensors and monitors.
Szyman led Critical Care for nearly a decade as corporate vice president and general manager prior to the acquisition.
Under her leadership, Critical Care grew almost 50% to $800 million within her first six years .
She helped develop a “smart monitoring” system that would switch from the typical standard blood pressure monitoring cuff typically used on a patient’s upper elbow to a device that monitors blood at the fingertips. A year ago, the classic monitoring generated about 50% of the unit’s revenue by monitoring 14 million patients while the smart monitoring generated 30% of revenue with only 2 million patients.
She also oversaw the launch of the Acumen Hypotension Prediction Index (HPI) tool. The predictive software utilizes machine learning to alert clinicians if a patient is at risk of hypotension, or low blood pressure, and is said to be the first AI technology approved by the Food and Drug Administration in the patient monitoring space.
Prior to Edwards, Szyman spent 24 years at Medtronic PLC (NYSE: MDT), where she moved up to be senior vice president and president of Medtronic’s global diabetes business.
She’s credited with growing the unit more than 40% to $1.5 billion in revenue during her tenure.
Szyman also brings board experience at a public company as a current member on the board of Irvine-based Inari Medical Inc. since 2019 and previously at San Jose-based Outset Medical Inc. Inari is being sold to Stryker Corp. for $4.9 billion.
“I have long admired Masimo as an innovation leader, and I could not be more excited about the opportunity to grow the business and deliver improved outcomes for millions more patients around the world,” Szyman said in the statement.
“I believe Masimo’s leadership team and bench of talent is top tier, and I am thrilled by the chance to work with and learn from this group.”
Szyman will receive an annual base salary of $1 million, a one-time reward of approximately $6 million in restricted stock units and other incentives, according to a Jan. 21 filing.
What The Analysts Think
Analysts seem to agree on Szyman.
Szyman’s appointment is seen as a “satisfying conclusion” to the search for a new CEO, according to BTIG.
“We are pleased by this announcement as we believe that Ms. Szyman is a strong fit,” BTIG analysts Marie Thibault, Sam Eiber and Alexandra Pang wrote in a note to investors last week.
Her appointment will also help rebuild investor confidence “after a couple of tumultuous years at the company,” analysts at Wells Fargo wrote.
“From our perspective, we also like that MASI was able to attract an executive the caliber of Szyman from a competing patient monitoring franchise, which we believe is a favorable signal on both the near- and long-term growth opportunities in front of MASI,” Piper Sandler analyst Jason Bednar said.
The choice has received support from Chief Financial Officer Micah Young and Chief Operating Officer Bilal Muhsin, according to Bednar.
Both have “expressed enthusiasm to work with Szyman, a point that should ease investor concerns regarding possible executive turnover should an internal candidate not be named CEO,” he said.
During the heat of the proxy battle, Muhsin last July told the board that he had “no intention of remaining with the company” if Kiani was removed as chairman and CEO.