Illumina ousted in proxy fight with chair Carl Icahn

Illumina shareholders have voted to oust the company’s chairman John Thompson and approved a nominee backed by Carl Icahn after a vigorous proxy fight led by the veteran activist investor.

Andrew Tenno, Icahn’s nominee for a board seat at the world’s largest gene sequencing company, won a shareholder vote at the company’s annual meeting on Thursday, while Thompson was ousted.

However, Icahn’s two other candidates failed to attract enough votes to win board seats, paving the way for Illumina CEO Francis D’Souza and director Robert Epstein to be re-elected.

“We appreciate the constructive shareholder feedback received during this process and remain committed to executing on our plan to accelerate shareholder value creation,” Illumina said in a statement.

The vote to oust Thompson, a former Microsoft chairman and director, follows a campaign by Icahn to close an $8bn acquisition of cancer test developer Grail in 2021 against the wishes of EU and US antitrust regulators. focused on Illumina’s “reckless decision”.

Icahn, who holds a 1.4 percent stake in Illumina, said it was “inexplicable and inexcusable” that the Thompson-led board moved forward without ascertaining whether it would receive approval from EU regulators. In December, Brussels ordered Illumina to divest Grail and plans to issue fines of up to $453mn for “gun jumping”.

The US Federal Trade Commission has also ordered Illumina to divest Grail. Illumina is appealing the orders from EU and US regulators.

The 87-year-old investor also alleged that the board lacked independence and most of the directors were chosen by D’Souza.

Illumina’s market capitalization has plummeted from $75 billion in August 2021, when it bought Grail, to just over $33 billion as of Wednesday.

The Illumina proxy fight is one of the largest shareholder activism campaigns in recent years. Since 2012, only seven US battles have voted in companies with a market capitalization of more than $30 billion, according to analytics company Insightia. Disney and Salesforce’s activist campaigns this year were settled before any shareholder votes.

A shareholder, who was not authorized to speak publicly, told the Financial Times that he voted to replace Thompson because the Grille deal had not worked out and the board remained “tone deaf” to shareholders.

“It seems they are unable to accept their mistake and the vote provided an opportunity to send a strong message,” the shareholder said.

The vote at Illumina was also a test case for the shareholder voting rules adopted by the U.S. Securities and Exchange Commission, which Icahn and other activists fought for, that gave shareholders the freedom to pick and choose nominees.

Previously, shareholders were forced to vote for the company’s full slate of nominees or activists to contest elections. Now, shareholders have the option of supporting different nominees from both the camps. With the new “universal” voting rules only a handful of workers have gone to vote, and all in small companies.

Illumina shareholders have voted to oust the company’s chairman John Thompson and approved a nominee backed by Carl Icahn after a vigorous proxy fight led by the veteran activist investor.

Andrew Tenno, Icahn’s nominee for a board seat at the world’s largest gene sequencing company, won a shareholder vote at the company’s annual meeting on Thursday, while Thompson was ousted.

However, Icahn’s two other candidates failed to attract enough votes to win board seats, paving the way for Illumina CEO Francis D’Souza and director Robert Epstein to be re-elected.

“We appreciate the constructive shareholder feedback received during this process and remain committed to executing on our plan to accelerate shareholder value creation,” Illumina said in a statement.

The vote to oust Thompson, a former Microsoft chairman and director, follows a campaign by Icahn to close an $8bn acquisition of cancer test developer Grail in 2021 against the wishes of EU and US antitrust regulators. focused on Illumina’s “reckless decision”.

Icahn, who holds a 1.4 percent stake in Illumina, said it was “inexplicable and inexcusable” that the Thompson-led board moved forward without ascertaining whether it would receive approval from EU regulators. In December, Brussels ordered Illumina to divest Grail and plans to issue fines of up to $453mn for “gun jumping”.

The US Federal Trade Commission has also ordered Illumina to divest Grail. Illumina is appealing the orders from EU and US regulators.

The 87-year-old investor also alleged that the board lacked independence and most of the directors were chosen by D’Souza.

Illumina’s market capitalization has plummeted from $75 billion in August 2021, when it bought Grail, to just over $33 billion as of Wednesday.

The Illumina proxy fight is one of the largest shareholder activism campaigns in recent years. Since 2012, only seven US battles have voted in companies with a market capitalization of more than $30 billion, according to analytics company Insightia. Disney and Salesforce’s activist campaigns this year were settled before any shareholder votes.

A shareholder, who was not authorized to speak publicly, told the Financial Times that he voted to replace Thompson because the Grille deal had not worked out and the board remained “tone deaf” to shareholders.

“It seems they are unable to accept their mistake and the vote provided an opportunity to send a strong message,” the shareholder said.

The vote at Illumina was also a test case for the shareholder voting rules adopted by the U.S. Securities and Exchange Commission, which Icahn and other activists fought for, that gave shareholders the freedom to pick and choose nominees.

Previously, shareholders were forced to vote for the company’s full slate of nominees or activists to contest elections. Now, shareholders have the option of supporting different nominees from both the camps. With the new “universal” voting rules only a handful of workers have gone to vote, and all in small companies.