MASI DEF 14A DEF-14A Report Jan. 2, 2021

MASIMO CORP

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DEF 14A 1 masi-20210415xdef14a.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

(Amendment No. )

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Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

MASIMO CORPORATION

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Table of Contents						ABOUT MASIMO

About Masimo

“Improve patient outcomes and reduce the cost of care”

________________________

Masimo Corporation is a global medical technology company that develops, manufactures and markets a variety of noninvasive patient monitoring technologies, hospital automation solutions, home monitoring devices and consumer products. Our mission is to improve patient outcomes and reduce the cost of care. Our patient monitoring solutions generally incorporate a monitor or circuit board, proprietary single-patient use or reusable sensors, software and/or cables. We primarily sell our products to hospitals, emergency medical service providers, home care providers, physician offices, veterinarians, long-term care facilities, and consumers through our direct sales force, distributors and original equipment manufacturer partners, and through our website. Our core measurement technologies are Measure-through Motion and Low Perfusion ™ pulse oximetry, known as Masimo Signal Extraction Technology ® (SET ® ) pulse oximetry, and advanced rainbow ® Pulse CO-Oximetry parameters such as noninvasive hemoglobin (SpHb ® ), alongside many other technologies, including brain function monitoring, regional oximetry, acoustic respiration rate monitoring, caponography, nasal high-flow respiratory support therapy, patient position and activity tracking, and neuromodulation technology for the reduction of symptoms associated with opioid withdrawal. Masimo measurements are available on many types of devices, from bedside hospital monitors like the Root ® Patient Monitoring and Connectivity Hub, to various handheld and portable devices, and to the tetherless Masimo SafetyNet ™ remote patient surveillance solution. The Masimo Hospital Automation ™ Platform facilitates data integration, connectivity, and interoperability through solutions like Patient SafetyNet ™ , Replica ™ , and UniView ™ to facilitate more efficient clinical workflows and help clinicians provide the best possible care, both in-person and remotely. Leveraging our expertise in hospital-grade technologies, we are also expanding our suite of products intended for use outside the hospital and products for consumers, including Sleep ™ and the Radius Tº ™ wireless, wearable continuous thermometer.

An industry leader in patient monitoring

9 of the

top 10 U.S. hospitals

have chosen Masimo as their primary pulse oximetry provider. (1)

More than

200

million

patients monitored each year using Masimo SET ® technology. (2)

17%

estimated

installed base

growth in

FY 2020.

2.2 million

technology boards

and instruments have shipped over the last 10 years.

Our long-range plan

8 to 10%

product revenue growth

30%

operating margins

$300 million

free cash flow (3)

____________________________

(1) As listed in the 2019 - 2020 U.S. News and World Report Best Hospitals Honor Roll.

(2) In leading hospitals and other healthcare settings around the world.

(3) Free cash flow is a non-GAAP financial measure - please see Appendix A to this Proxy Statement for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.


Table of Contents



Letter to Masimo Corporation Stockholders
			Joe Kiani Chairman and Chief Executive Officer Apri l 15, 20 21
Dear Fellow Stockholders: Last year was full of challenges for our customers and for millions of patients around the world who struggled to overcome the burden and effects of the COVID-19 (“COVID”) pandemic. Throughout 2020, as our customers on the front lines responded to this crisis and tried to save as many lives as possible under life-threatening conditions, we responded to their demands to rapidly secure and install new monitoring technologies, enabling them to accommodate more critically ill patients than ever before, even at home. Within this tough environment, I am proud to say that our team contributed to the critical solutions that were, and are still, required to manage this pandemic. In the midst of the pandemic, last year was also a milestone year for Masimo as our revenues exceeded $1 billion for the first time since our founding over 30 years ago. Today, we are even more committed to helping our customers overcome the persistent challenges related to this pandemic with an expanding portfolio of products to improve patient outcomes. We realized many significant achievements in 2020 such as the introduction of our Masimo SafetyNet ™ system for enabling hospital-to-home monitoring while also capturing a wider customer base for our Patient SafetyNet solution that enables hospitals to streamline workflows and improve patient care, especially where hospital staff are overwhelmed due to many COVID patient admissions. Within Masimo, our dedicated team was nimble in its response to our customers in the face of significant demand for our existing products, while at the same time expanding our portfolio. This expansion included several important products beyond SafetyNet ™ for COVID, some organic, such as the Radius-Tº ™ continuous wearable thermometer, Centroid ™ continuous wearable bed sore and fall detection monitor, and Masimo SafetyNet-OPEN ™ to help institutions open and stay open safely, and other important products acquired through acquisitions, such as the SoftFlow ™ High Flow Nasal Cannula respiratory support system from TNI and the LiDCO cardiac output and hemodynamic monitor. We are excited to bring these clinically relevant technologies to our growing customer base around the world. On the financial front, we were happy to report full-year 2020 results that exceeded expectations and set the stage for another promising year ahead. For the full-year, our product revenues increased 22% to reach one billion, one hundred and forty-four million ($1,144 million). In addition, we delivered GAAP EPS growth of 20% to reach $4.14 per share and non-GAAP EPS (1) growth of 12% to reach $3.60 per share. We were able to achieve this level of performance despite the unprecedented challenges related to the pandemic facing our organization, which required many modifications to our operations and the sheer determination and commitment of our team. We instituted multiple safety measures throughout, including at our manufacturing facilities, such as regular health and temperature checks as well as safe transportation protocols for our team members. This internal solution was the basis for Masimo SafetyNet-OPEN ™ , recently launched worldwide for others to use. Changes to our operations also included the production of greater inventory levels of the products our customers relied upon to provide care to their patients as we believed it prudent to prepare for a scenario where COVID would prevent our plants from operating. Fortunately, that never happened and hopefully will not happen, but we will continue to be prepared. Our customer interactions in the field were also carefully maintained in the face of heavy restrictions on hospital visitors, as our sales and installation teams rose to the occasion to ensure timely deliveries, training and product activations as rapidly as possible. Lastly, while many of our team members worked from home, most of our exceptional team of engineers continued their activities at Masimo facilities to maintain the unparalleled pace of innovation that has always been our hallmark. Thank you for your continued support of Masimo and I hope you will be able to join us for the Annual Meeting. Joe Kiani Chairman and Chief Executive Officer
____________ (1) Constant currency product revenue and non-GAAP EPS are non-GAAP financial measures - please see Appendix A to this Proxy Statement for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.


Table of Contents

NOTICE OF 2021
ANNUAL MEETING
OF STOCKHOLDERS

How to Attend the Virtual Stockholders’ Meeting

Date: Thursday. May 27, 2021

Virtual Stockholders Meeting at:

Time: 2:00 p.m., Pacific Daylight Time

www.meetingcenter.io/216850033

Who Can Vote

Due to continuing COVID-19 related restrictions, this year’s Annual Meeting of Masimo Stockholders will be held virtually. The Annual Meeting will begin promptly at 2:00 p.m. Pacific Daylight Time. If you plan to participate in the meeting, please see the instructions on p age 96 of this Proxy Statement. Stockholders of record will be able to listen, vote, and submit questions from their home or anywhere that has Internet connectivity. There will be no physical location for stockholders to attend the Annual Meeting. Stockholders may only participate online by logging in at www.meetingcenter.io/216850033 .

The record date for the 2021 Annual Meeting of Stockholder’s is April 5, 2021. Only stockholders of record at the close of business on that date may vote at the Annual Meeting.

ITEMS OF BUSINESS:

Board Recommendation

Page Reference

Election of a Class II director as named in our Proxy Statement;

FOR each

Ratification of appointment of Grant Thornton LLP as our independent registered public accounting firm for our fiscal year ending January 1, 2022;

FOR

Advisory vote to approve named executive officer compensation; and

FOR

To conduct any other business properly brought before the Annual Meeting and any adjournment or postponement thereof.

How to Cast Your Vote (See page 103 for additional details.)

By Internet

Telephone

Mail

Visit 24/7

Dial the toll-free telephone number listed on your proxy card under the heading “vote by telephone”

Cast your ballot, sign the proxy card and drop in the mailbox

www.meetingcenter.io/216850033

By order of the Board of Directors,

/s/ J OE K IANI

Chairman & Chief Executive Officer

Irvine, California

April 15, 2021


Table of Contents


PROXY STATEMENT TABLE OF CONTENTS
NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS.................................................................			5
PROXY STATEMENT SUMMARY.................................................................................................................			9
1	CORPORATE GOVERNANCE	Our Executive Officers..........................................................	16
		Our Board of Directors.........................................................	18
		Corporate Governance Guidelines.......................................	23
		Consideration of Director Nominees....................................	24
		Board Leadership Structure.................................................	26
		Board’s Role in Risk Oversight............................................	26
		Investor Feedback and Engagement....................................	27
		Corporate Responsibility and Sustainability......................	28
		Cybersecurity Risk Practices................................................	29
		Human Capital Management...............................................	29
		Charitable Outreach..............................................................	30
		Adoption of Proxy Access.....................................................	31
		Meetings and Executive Sessions..........................................	31
		Policy Regarding Board Member Attendance at Annual Meetings..................................................................................	31
		Independence of the Board of Directors..............................	31
		Code of Business Conduct and Ethics..................................	32
		Stockholder Communications with the Board of Directors.................................................................................	32
		Information Regarding Board Committees........................	32
		Non-Employee Director Compensation...............................	38
2	AUDIT COMMITTEE MATTERS	Audit Committee’s Pre-Approval Policies and Procedures..............................................................................	40
		Principal Accountant Fees and Services..............................	40
		Audit Committee Report.......................................................	41

| 2021 Proxy Statement


Table of Contents


3	EXECUTIVE COMPENSATION	Compensation Discussion and Analysis...............................	42
		Compensation Committee Report........................................	65
		Compensation Committee Interlocks and Insider Participation...........................................................................	66
		Summary Compensation Table............................................	67
		Grants of Plan-Based Awards During Fiscal Year 2020....	69
		Outstanding Equity Awards on January 2, 2021................	71
		Option Exercises and Stock Vested During Fiscal Year 2020.........................................................................................	73
		Employment Arrangements with Named Executive Officers....................................................................................	73
		Pay Ratio Disclosure..............................................................	82
4	OWNERSHIP OF OUR STOCK	Security Ownership of Certain Beneficial Owners and Management...........................................................................	83
		Securities Authorized for Issuance Under Equity Compensation Plans..............................................................	85
		Stock Ownership Policy........................................................	85
		Non-Employee Director Stock Ownership Policy...............	86
5	PROPOSALS TO BE VOTED ON	PROPOSAL 1: Election of Director....................................	87
		PROPOSAL 2: Ratification of Selection of Independent Registered Public Accounting Firm.....................................	89
		PROPOSAL 3: Advisory Vote to Approve the Compensation of Our Named Executive Officers...............	90
6	ADDITIONAL INFORMATION	Transactions with Related Persons, Promoters and Certain Control Persons........................................................	91
		Questions and Answers You May Have About These Proxy Materials and Voting..................................................	94
		Householding..........................................................................	93
		Annual Report on Form 10-K..............................................	93
		Important Notice Regarding Availability of Proxy Materials for Stockholders Meeting to be Held on May 27, 2021...................................................................................	101
		Other Matters.........................................................................	101
Appendix A...........................................................................................................................................................			A-1
Appendix B...........................................................................................................................................................			B-1

| 2021 Proxy Statement


Table of Contents

YOUR VOTE IS IMPORTANT

You are cordially invited to attend the meeting. Whether or not you expect to attend the meeting, please complete, date and sign and return the enclosed proxy or submit your proxy through the internet or by telephone as promptly as possible in order to ensure your representation at the meeting. If you choose to submit your proxy by mail, a return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote electronically at the meeting. Please note, however, if your shares are held of record by a broker, bank or other agent and you wish to vote electronically at the meeting, you must obtain a proxy issued in your name from that record holder.

The Notice of Internet Availability of Proxy Materials containing instructions on how to access this Proxy Statement and our annual report is first being mailed on or abou t April 15, 2021 to a ll stockholders entitled to receive notice of and to vote at the Annual Meeting.

SPECIAL NOTE ON FORWARD LOOKING INFORMATION

This Proxy Statement contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially and adversely from those expressed or implied by such forward-looking statements. These statements are often identified by the use of words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “ongoing”, “opportunity”, “plan”, “potential”, “predicts”, “seek”, “should”, “will” or “would”, and similar expressions and variations or negatives of these words. These forward-looking statements are based on the expectations, estimates, projections, beliefs and assumptions of our management based on information currently available to management, all of which is subject to change. Such forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and could cause our actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed under Item 1A-“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ende d January 2, 2021 , as filed with the Securities and Exchange Commission on February 23, 2021 . Furthermore, such forward-looking statements speak only as of the date of this Proxy Statement. We undertake no obligation to update or revise publicly any forward-looking statements to reflect events or circumstances after the date of such statements for any reason, except as required by law.

| 2021 Proxy Statement


Table of Contents						PROXY STATEMENT SUMMARY

PROXY STATEMENT SUMMARY

The Annual Meeting and this Proxy Statement provide an important opportunity for us to communicate with you about the achievements of the past year and the leadership of Masimo. As you consider your vote, we ask that you carefully review the information in this Proxy Statement, which includes an overview of our business and summarizes key aspects of our performance, executive compensation and corporate governance.

The following summary highlights certain information contained elsewhere in this Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy Statement carefully before voting .

Date and Time

Location

Record Date

Thursday, May 27, 2021, 2:00 p.m. PDT

The 2021 Annual Meeting of Masimo Stockholders will be held virtually. Please visit www.meetingcenter.io/216850033

to join the meeting.

April 5, 2021

Voting Matters and Recommendations

Proposals

Page No.

Board
Recommendations

To elect a Class II Director as named in our Proxy Statement

Page 89

FOR

To ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending January 1, 2022

Page 91

FOR

To provide an advisory vote to approve the compensation of our named executive officers

Page 92

FOR

New for 2020

This year’s proxy statement includes a discussion of the impact of COVID-19 on our business, as well as expanded discussions regarding executive compensation, corporate responsibility and sustainability matters, our human capital and our cybersecurity risk practices. We believe that a deeper understanding of our approach to these issues will assist you in your consideration of our proposals.

l Discussion of COVID-19’s impact on the business

see page 44

l Enhanced transparency on the design of Masimo’s executive compensation programs

see pages 48-66

l Expanded focus on corporate responsibility and sustainability matters, human capital management and cybersecurity risk practices

see pages 29-31

| 2021 Proxy Statement


Table of Contents						PROXY STATEMENT SUMMARY

Fiscal 2020 Performance Highlights

Our performance in fiscal 2020 demonstrates yet another year of strong execution towards our long-range plan and enabled us to reinvest in the business to drive growth and deliver long-term stockholder value.


1-Year Financial Performance \| Year-Over-Year Growth Rates (FY2019 to FY2020)
l	22% GAAP product revenue growth	l	22% Non-GAAP product revenue (1) growth
l	16% GAAP operating profit growth	l	17% Non-GAAP operating profit (1) growth
l	20% GAAP EPS growth	l	12% Non-GAAP EPS (1) growth

3-Year Financial Performance \| Compound Annual Growth Rates (CAGR) (FY2017 to FY2020)
l	13% GAAP product revenue growth	l	16% Non-GAAP product revenue (1) growth
l	12% GAAP operating profit growth	l	24% Non-GAAP operating profit (1) growth
l	23% GAAP EPS growth	l	28% Non-GAAP EPS (1) growth

Fiscal 2020 Performance Highlights (1)

l Shipped 472,300 non-invasive technology boards and monitors, which reflects a 92% increase over the prior year.

l Shipped over 2.2 million non-invasive technology boards and monitors over the last 10 years, which reflects a 17% increase over the prior year.

l Product revenues increased 22% or $207 million, to reach $1,144 million, which exceeded our original FY2020 financial guidance o f $1,035 million.

l GAAP operating profit was $256 million and non-GAAP operating profit was $264 million, growing 16% and 17% over the prior year, respectively.

l GAAP EPS increased 20% to reach $4.14 per diluted share. Non-GAAP EPS increased 12% to reach $3.60 per diluted share, which exceeded our original FY2020 guidance of $3.56 per diluted share.

l Delivered $211 million of operating cash flow, despite a year marked by substantial inventory investment to sustain our operations during the pandemic.

l Successfully completed three acquisitions during FY2020 with a total value of $113 million.

l Repurchased 453,000 shares of Masimo common stock, valued at $111 million.

______________________

(1)/* Non-GAAP Product Revenue, Non-GAAP Operating Profit and Non-GAAP EPS are non-GAAP financial measures - please see Appendix A to this Proxy Statement for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.

| 2021 Proxy Statement


Table of Contents						PROXY STATEMENT SUMMARY

Cumulative Total Stockholder Return (TSR)

Our 2020 TSR of 68% reflects our strong financial results in FY2020. Furthermore, our TSR has outperformed those of the Nasdaq Composite and the Nasdaq Medical Equipment Indices over a 1-year, 3-year and 5-year period.

Corporate Governance Highlights

Board Independence

Board Effectiveness

All of our non-employee directors are independent

All directors attended more than 75% of the Board and their committee meetings

Maintain an independent Compensation Committee

Commitment to Board refreshment with three new independent directors since 2016

Compensation Committee retains an independent compensation advisor

Diverse Board with mix of skills, tenure and age

Director nominee selection process aligned with our long-term strategic plans

Best Practices

Stockholder Rights

Stock ownership policy for executive and Board members

Annual stockholder advisory vote on named executive officer compensation

Annual compensation-related risk assessment

Stockholder engagement that includes our Compensation Committee Chairperson

Annual executive compensation review

Stockholders have proxy access with market standard conditions for director nominations

Compensation recovery (“Clawback”) policy

No stockholder rights plan (“poison pill”)

No hedging; pledging requires pre-approval

| 2021 Proxy Statement


Table of Contents						PROXY STATEMENT SUMMARY

Executive Compensation Highlights

Masimo’s executive compensation programs are designed to align the interests of Masimo’s executive officers with those of its stockholders, attract and retain highly-talented individuals and support our long-term growth and profitability goals. Our compensation programs provide a mix of fixed, variable and long-term incentive (“LTI”) compensation elements that are closely aligned with company performance and are sensitive to our stock performance, including the following:

Type

Component

Objective

Fixed compensation

Base salary

Fixed portion of annual cash compensation

Attract and retain talent

Motivate strong business performance without encouraging excessive risk-taking

Performance-based
Compensation

Annual incentive

Variable, earned amounts paid annually

Drive the achievement of key business results on an annual basis

Recognize individuals based on their contributions

Performance-based and not guaranteed

Long-term incentives

Variable, equity-based:

l 25% in the form of stock options that vest annually over a five year period; and

l 75% in the form of performance share units (“PSUs”) that vest after three years based on our actual performance as measured against multiple pre-established performance objectives at the end of the multi-year performance period

Reinforce the need for long-term sustained performance and business growth, and value creation

Focus executives on annual objectives that support the long-term business strategy and creation of stockholder value

Align the long-term interests of executives and stockholders

Balance cash payments with equity ownership

Encourage retention

| 2021 Proxy Statement


Table of Contents						PROXY STATEMENT SUMMARY

Total Target Compensation

Masimo’s “at-risk” compensation (which includes the annual cash bonus and LTI compensation) comprised 92.2% of our Chief Executive Officer’s (“CEO”) compensation and an average of 80.2% of the compensation of our other Named Executive Officers’ (“NEOs”) FY2020 total target compensation, as seen below:


Total long-term incentive compensation =	81.0%	Total long-term incentive compensation =	66.0%
Total “at-risk” compensation =	92.2%	Total “at-risk” compensation =	80.2%

Our compensation philosophy and structure has continued to evolve, based on changing market conditions, input from our Compensation Committee’s independent compensation consultant and direct feedback from our stockholders. The Compensation Committee believes that the current LTI equity award structure focuses our NEOs on driving increased stockholder value over a multi-year period and enables us to achieve our retention objectives, while maintaining a conservative approach to overall share usage.

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Table of Contents						PROXY STATEMENT SUMMARY

Compensation Policies and Practices at a Glance

What We Do

What We Don’t Do

Maintain an Independent Compensation Committee

No Guaranteed Bonuses

Compensation Committee Retains an Independent Compensation Advisor

No Special Executive Retirement Plans

Annual Executive Compensation Review

No Hedging; Pledging Requires Pre-Approval

Compensation At-Risk - Pay For Performance

No Tax Payments on Perquisites

Annual Compensation-Related Risk Assessment

No Tax Gross-Up Payments on Post-Employment Compensation Arrangements

Multi-Year Vesting Requirements

No Stock Option Re-pricing

Compensation Recovery (“Clawback”) Policy

No Evergreen Provision

Stock Ownership Policies

Annual Stockholder Advisory Vote on Named Executive Officer Compensation

Stockholder Engagement That Includes Our Compensation Committee Chairperson


Stockholder Advisory Vote (“Say-On-Pay Vote”)

In 2020, stockholders continued their support for our FY2019 executive compensation programs with approximately 88% approval of the stockholder advisory votes. Consistent with the Company’s strong interest in stockholder engagement and our pay-for-performance approach, the Compensation Committee continues to review our executive compensation program to ensure alignment between the respective interests of our executives and stockholders. No significant changes were made for FY2020.

| 2021 Proxy Statement


Table of Contents						PROXY STATEMENT SUMMARY

Director Snapshot

Our directors possess broad expertise, skills, experience and perspectives that facilitate the oversight and strategic direction required to govern Masimo’s business and strengthen and support the executive management team. As shown in the following charts, our Board of Directors (“Board”) is comprised of individuals with expertise in fields that align with Masimo’s business and long-term strategy, and reflects a blend of tenure that allows for both new perspectives and continuity. Our Nominating, Compliance and Corporate Governance Committee is responsible for identifying and recommending director candidates to our Board for nomination. The Nominating, Compliance and Corporate Governance Committee reviews candidates for director nominees in the context of the current composition of our Board and committees, our operating requirements and the long-term interests of our stockholders. In conducting this assessment, the Nominating, Compliance and Corporate Governance Committee may consider the director nominee’s qualifications, diversity, skills and such other factors as it deems appropriate given the current needs of our Board, the committees and Masimo, to maintain a balance of knowledge, experience, diversity and capabilit y.


100%	of non-employee Directors are INDEPENDENT.	3	NEW DIRECTORS added since 2016, bringing fresh perspectives to the Board.


The graph below provides an overview of the collective experiences, qualifications and attributes of the Board. See page 20 of this Proxy Statement for individual details for each director. (1)
	Skills/Experience	Number of Directors with Relevant Skills/Experience
	CEO & Board Leadership	3

	Financial Expertise	5



	Sciences/Technology	2

	Healthcare Industry	5

	Medical Device Operations	3

	International	5

	Diversity	5

_______________

(1) The data presented in this graph includes Messrs. Cohen, Kiani, Mikkelson, Reynolds and Dr. Shimer, all of our current directors other than Mr. Harkin. Mr. Harkin’s service on the Board will cease when his current term expires at the Annual Meeting.

| 2021 Proxy Statement


Table of Contents						OUR EXECUTIVE OFFICERS

EXECUTIVE OFFICERS

Our executive officers are appointed by and serve at the discretion of our Board. Our executive officers, their ages, respective positions and biographies are listed below:

Name

Age (1)

Position(s)

Joe Kiani

Chief Executive Officer & Chairman of the Board

Micah Young

Executive Vice President, Chief Financial Officer

Bilal Muhsin

Chief Operating Officer

Tao Levy

Executive Vice President, Business Development

Tom McClenahan

Executive Vice President, General Counsel & Corporate Secretary

____________

(1) As of April 15, 2021 .


			Joe Kiani
			Chief Executive Officer & Chairman of the Board
			Employee Since: 1989
Joe Kiani is the founder of Masimo and has served as Chief Executive Officer (“CEO”) & Chairman of the Board since our inception in 1989. He is an inventor on more than 100 patents related to signal processing, sensors and patient monitoring, including patents for the invention of Measure-through motion and low-perfusion pulse oximetry. Mr. Kiani holds a B.S.E.E. and an M.S.E.E. from San Diego State University. In addition to Mr. Kiani’s role at Masimo, he is also the Chairman of the Masimo Foundation for Ethics, Innovation and Competition in Healthcare, and the Chairman and CEO of Cercacor Laboratories, Inc. Mr. Kiani also serves on a number of other Boards of Directors, including Stereotaxis, Inc. (NYSE: STXS), CHOC Children’s Orange/CHOC Children’s at Mission Hospital, the Patient Safety Movement Foundation, the Medical Device Manufacturers Association, Like Minded Media Ventures and CalTech. As Masimo’s founder, Chief Executive Officer and Chairman of the Board since our formation in 1989, Mr. Kiani has the deepest understanding of Masimo, our history, our culture and our technology. He has broad experience in a wide range of functional areas, including strategic planning, strategic investments, engineering and development, and legal and governmental affairs. Our Nominating, Compliance and Corporate Governance Committee believes Mr. Kiani is critical to our continued development and growth.


			Micah Young
			Executive Vice President, Chief Financial Officer
			Employee Since: 2017
Micah Young has served as our Executive Vice President, Chief Financial Officer (“CFO”) since October 2017. From July 2012 to September 2017, Mr. Young served as Vice President, Finance, at NuVasive, Inc. (Nasdaq: NUVA), a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. Prior to that time, he served as NuVasive, Inc.’s Senior Director, Finance, Global Operations, from December 2009 to July 2012. From 2002 to 2009, Mr. Young held various accounting and finance positions with Zimmer Holdings, Inc., a company focused on the design, development, manufacture and marketing of orthopedic reconstructive, spinal and trauma devices, dental implants and related surgical products. Prior to his time at Zimmer Holdings, Inc., Mr. Young was an accountant at Deloitte & Touche LLP from 2000 to 2002. He holds a Bachelor of Science, Accounting and Criminal Justice from Indiana Wesleyan University and is a Certified Public Accountant (inactive).

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Table of Contents						OUR EXECUTIVE OFFICERS


			Bilal Muhsin
			Chief Operating Officer
			Employee Since: 2000
Bilal Muhsin has served as our Chief Operating Officer since May 2019. Prior to this, Mr. Muhsin served as Executive Vice President, Engineering, Marketing and Regulatory Affairs from March 2018 to May 2019. Prior to March 2018, Mr. Muhsin, held various other roles including Executive Vice President, Engineering; Vice President, Engineering, Instruments and Systems; Director and Manager level positions within Masimo since June 2000. Mr. Muhsin’s technical, product and overall leadership skills have helped Masimo bring revolutionary new products to the marketplace, including Masimo’s Patient SafetyNet, Radical-7 ® , Root ™ and various significant software products. Mr. Muhsin holds a B.S. in Computer Science from San Diego State University.


			Tao Levy
			Executive Vice President, Business Development
			Employee Since: 2018
Tao Levy has served as our Executive Vice President, Business Development since January 2018. From March 2013 to December 2017, Mr. Levy served as Managing Director, Medical Devices Equity Research, at Wedbush Securities. Prior to that time, he served as Senior Analyst, Medical Devices Equity Research at Loewen Ondaatje McCutcheon, from August 2012 to March 2013. From September 2010 to February 2012, Mr. Levy was Managing Director, Medical Devices Equity Research at Collins Stewart. Prior to his time at Collins Stewart, Mr. Levy was Director, Medical Devices Equity Research at Deutsche Bank where he served from 2002 to 2010. He holds a B.A. in Biology from the University of Pennsylvania.


			Tom McClenahan
			Executive Vice President, General Counsel & Corporate Secretary
			Employee Since: 2011
Tom McClenahan has served as our Executive Vice President & General Counsel since April 2013 and as our Corporate Secretary since August 2014. From April 2011 to April 2013, Mr. McClenahan was our Vice President and Assistant General Counsel. From November 2002 to April 2011, he was an associate and then principal with the law firm of Fish & Richardson. From September 1999 to November 2002, he was an associate with the law firm of Knobbe, Martens, Olson & Bear. Mr. McClenahan holds a B.S. in Mechanical Engineering from Iowa State University and a J.D. from the University of Minnesota Law School.

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Table of Contents						OUR BOARD OF DIRECTORS

BOARD OF DIRECTORS

Our Board presently has six members and is divided into three classes, designated Class I, Class II and Class III. Each class currently consists of two directors and has a three-year term. Class I, Class II and Class III directors currently have a remaining term of office until the 2021, 2022 and 2023 Annual Meeting of Stockholders, respectively. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors in office (even though the remaining directors may constitute less than a quorum). A director elected by our Board to fill a vacancy in a Class, including a vacancy created by an increase in the number of directors, will serve for the earlier of the remainder of the full term of that Class, until the director’s successor is elected and qualified or until the director’s death, resignation or removal.

The names of our current directors, their ages, director class and position(s) are listed below.

Name

Age (1)

Director Class

Term Expires

Position(s)

H Michael Cohen

Class I

2023

Director

Thomas Harkin (2)

Class II

2021

Director

Joe Kiani (3)

Class II

2021

Chief Executive Officer & Chairman of the Board

Adam Mikkelson

Class III

2022

Director

Craig Reynolds

Class III

2022

Director

Julie A. Shimer, Ph.D.

Class I

2023

Director

______________

(1) As of April 15, 2021.

(2) Mr. Harkin’s service on the Board will cease when his current term expires at the Annual Meeting.

(3) Please see “Executive Officers” on page 17 of this Proxy Statement for Mr. Kiani’s biography.

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Table of Contents						OUR BOARD OF DIRECTORS

DIRECTOR SKILLS MATRIX (1)

Director Skills and Experience

Cohen

Kiani

Mikkelson

Reynolds

Shimer

CEO & Board Leadership

CEO and board leadership experience brings skills that help our Board to capably advise, support, and oversee our executive management team, and our strategy to drive long-term value.

Financial Expertise

Financial expertise assists our Board in overseeing our financial statements, capital structure and internal controls.

Science/Technology

Innovation and technology experience is important in overseeing our business in the rapidly changing medical device/life sciences industry. Our success is highly dependent on the continued development and investment in new technologies, R&D and engineering trends while addressing constant threats in the ever changing physical and cyber realm.

Healthcare Industry

Healthcare industry experience brings a deep understanding of factors affecting our industry, operations, business needs, and strategic goals.

Medical Device Operations

Medical device operations increase the Board’s understanding of our distribution and manufacturing operations.

International

International exposure yields an understanding of diverse business environments, economic conditions, and cultural perspectives that shapes our global business perspective, strategy and enhances oversight of our multinational operations.

Diversity

Representation of a range of perspectives, skills, experiences and expertise, as well as gender, race, ethnic or national origin, expands the Boards understanding of the needs and viewpoints of consumers, employees, healthcare providers, investors and others worldwide.

______________

(1) Mr. Harkin’s service on the Board will cease when his current term expires at the Annual Meeting. As such, Mr. Harkin was excluded from the above table.

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Table of Contents						OUR BOARD OF DIRECTORS

SKILLS AND QUALIFICATION OF OUR BOARD OF DIRECTORS

The table below illustrates some of the skills, qualifications, background and experience of each member of the Board of Directors. This high level summary is not intended to be an exhaustive list of each of the Board members’ skills or contributions to the Board.

H Michael Cohen

Board Committee: Audit Committee Chairperson and Compensation Committee

Director since: 2018

Experience and Qualification of Particular Relevance to Masimo:

Mr. Cohen has served as a member of our Board since August 2018. Mr. Cohen has almost 30 years of experience in the healthcare industry. Over the past 19 years, he has held various roles at Deutsche Bank, including Global Head, Healthcare Investment Banking and most recently Vice Chairman, Healthcare Investment Banking. Prior to joining Deutsche Bank, Mr. Cohen worked at SG Cowen, Union Bank of Switzerland, and Booz Allen Hamilton. Mr. Cohen began his career in healthcare at Hambrecht & Quist, where he was a member of the equity research team covering biotechnology, medical device and diagnostic companies. He received his B.A. in Economics from the University of Vermont and his M.B.A. from Columbia University. Our Nominating, Compliance and Corporate Governance Committee believes Mr. Cohen’s financial background and investment experience allow him to provide additional insight to the Board on strategy and business decisions as well as make valuable contributions to the Audit Committee and the Compensation Committee.

Current/Prior Public Company Boards:

None

Thomas Harkin

Board Committees: None (1)

Director since: 2015

Experience and Qualification of Particular Relevance to Masimo:

Mr. Harkin has served as a member of our Board since December 2015. Mr. Harkin, formerly a five-term U.S. Senator from the State of Iowa, retired from the U.S. Senate in January 2015. Mr. Harkin was first elected to the U.S. House of Representatives in 1974, and 10 years later, he was elected to the U.S. Senate. Prior to his service in the House of Representatives, Mr. Harkin served in the U.S. Navy and achieved the rank of lieutenant commander. Mr. Harkin holds a B.S. from Iowa State University, a J.D. from Catholic University of America and was admitted to the Iowa Bar in 1972. Mr. Harkin’s experience in the Senate, and in particular his work on healthcare-related legislation, as well as his extensive understanding of the healthcare system in the U.S., bring a unique perspective and insight to the Board.

Current/Prior Public Company Boards:

None

____________

(1) Mr. Harkin’s service on the Board will cease when his current term expires at the Annual Meeting. He served on the Compensation Committee and the Nominating, Compliance and Corporate Governance Committee (as its Chairperson) until April 1, 202 1.

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Table of Contents						OUR BOARD OF DIRECTORS

Adam Mikkelson

Board Committees: Audit Committee, Compensation Committee and Nominating, Compliance and Corporate Governance Committee

Director since: 2016

Experience and Qualification of Particular Relevance to Masimo:

Mr. Mikkelson has served as a member of our Board since October 2016. Mr. Mikkelson is a Partner at Camber Capital Management, LLC, a healthcare-focused investment fund. Mr. Mikkelson was been with Camber Capital since 2007 and has nearly 15 years of experience in the healthcare investment arena, where he focused on identifying and actively monitoring investment opportunities in both the therapeutic and medical device sectors. Prior to joining Camber Capital, Mr. Mikkelson held various roles at Datamonitor plc and Leerink Partners. He received his B.S. in Business Administration from Boston University.

Our Nominating, Compliance and Corporate Governance Committee believes Mr. Mikkelson’s investment experience allows him to provide additional insight to the Board on strategy and business decisions as well as make valuable contributions to the Audit, Compensation and Nominating, Compliance and Corporate Governance Committees.

Current/Prior Public Company Boards:

None

Craig Reynolds

Board Committees: Compensation Committee Chairperson and Nominating, Compliance and Corporate Governance Committee

Director since: 2014

Experience and Qualification of Particular Relevance to Masimo:

Mr. Reynolds has served as a member of our Board since April 2014. Mr. Reynolds previously held the role of Chief Executive Officer and a director of Cereve, Inc., a medical company engaged in resolving insomnia issues. Prior to joining Cereve, Mr. Reynolds served as Chief Operating Officer of Philips-Respironics Home Health Solutions a subsidiary of Philips, from 2008 to 2010. Prior to Philips-Respironics, Mr. Reynolds was the Chief Operating Officer and a board member of Respironics, Inc., from 1998 to 2008. From 1993 to 1998, Mr. Reynolds was with Healthdyne Technologies, Inc., a medical device company, serving for five years as Chief Executive Officer and director. From 1981 through 1992, Mr. Reynolds was with Healthdyne, Inc. in the positions of Executive V.P. (1981 to 1983), President of Healthdyne Cardiovascular Division (1984 to 1985) and President of Healthdyne Homecare Division (1986 to 1992). From 2008 through 2014, Mr. Reynolds served as a director of Symmetry Medical, Inc., most recently as Chairman of the Board. He also served as Chairman of the Board of Symmetry Surgical, Inc. from 2014 through 2016. Mr. Reynolds was a member of the Board of Directors of Vapotherm, Inc. from 2010 through late 2020, and Welch Allyn, Inc. from 2012 through 2014.

Mr. Reynolds earned his B.S. in Industrial Management from the Georgia Institute of Technology and his M.B.A. from Georgia State University. Our Nominating, Compliance and Corporate Governance Committee believes Mr. Reynolds’ experience allow him to provide additional insight to the Board on strategy decisions as well as make valuable contributions to the Compensation Committee and Nominating, Compliance and Corporate Governance Committees.

Current/Prior Public Company Boards:

Vapotherm, Inc. - (2010-2020)

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Table of Contents						OUR BOARD OF DIRECTORS

Julie A. Shimer, Ph.D.

Board Committees: Nominating, Compliance and Corporate Governance Committee Chairperson and Audit Committee

Director since: 2019

Experience and Qualification of Particular Relevance to Masimo:

Dr. Shimer is currently a private investor and has over 30 years of product development experience. Dr. Shimer was President and Chief Executive Officer of Welch Allyn, from March 2007 to April 2012. Prior to Welch Allyn, Dr. Shimer served as President and Chief Executive Officer of Vocera Communications, Inc., from September 2001 through February 2007, also serving on the Board of Directors. Dr. Shimer also previously held executive positions at 3Com Corporation from January 2000 through August 2001, most recently serving as Vice President and General Manager of its networking products. Before joining 3Com, she held executive positions at Motorola, Inc., from 1993 through 1999, where she was Vice President and General Manager for the paging division, and prior to that post, Vice President of its semiconductor products section. Dr. Shimer worked for AT&T Bell Laboratories and Bethlehem Steel Company before joining Motorola.

Dr. Shimer is a member of the Society of Women Engineers and the Institute of Electrical and Electronics Engineers. Dr. Shimer holds a B.S. in Physics from Rensselaer Polytechnic Institute and M.S. and Ph.D. degrees in Electrical Engineering from Lehigh University. Our Nominating, Compliance and Corporate Governance Committee believes Dr. Shimer’s extensive executive leadership and financial background allow her to provide significant insight to the Board on business decisions as well as make valuable contributions to the Nominating, Compliance and Corporate Governance Committee and the Audit Committee.

Current Public Company Boards:

Apollo Endosurgery, Inc. - (2018 - present)

Avanos Medical, Inc. (formerly known as Halyard Health) - (2014 - present)

Prior Public Company Boards:

Windstream Holdings - (2017 - 2020)

Netgear, Inc. - (2007 - 2019)

Earthlink Holdings Corp. - (2013-2017)

Windstream Holdings, Inc. - (2017 - 2020)

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Table of Contents			CORPORATE GOVERNANCE AND BOARD MATTERS

CORPORATE GOVERNANCE AND BOARD MATTERS

This section describes key corporate governance guidelines and practices that we have adopted. Complete copies of the charters of the committees of our Board and our Code of Business Conduct and Ethics described below may be viewed on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.” Alternatively, you can request a copy of any of these documents free of charge by writing to our Corporate Secretary, c/o Masimo Corporation, 52 Discovery, Irvine, California 92618.

CORPORATE GOVERNANCE PRACTICES

Our Board has adopted corporate governance guidelines to ensure that our Board will have the necessary authority and practices in place to exercise its duties and responsibilities, to review and evaluate our business operations as needed, to make decisions that are independent of our management and to serve the best interests of Masimo and our stockholders. These corporate governance guidelines provide a framework for the conduct of the Board’s business and provide that:

• except in unusual circumstances, the positions of Chairman of our Board and CEO will be held by the same person;

• ordinarily, directors should not serve on more than five boards of publicly-traded companies, including our Board, and all of our directors currently satisfy this requirement;

• outside directors must own a minimum number of shares of our common stock (see “Non-Employee Director Compensation—Non-Employee Director Stock Ownership Policy” on pag e 39 o f this Proxy Statement for additional information); and

• a non-employee director will not be nominated for re-election at the next annual meeting of stockholders for which his or her class of directors is up for election following his or her 15th anniversary of service on our Board, unless our Board waives this term limit with respect to such non-employee director as a result of its determination that such nomination is in the best interests of Masimo and its stockholders.

CHARACTERISTICS OF OUR BOARD (1)

New directors joined the Board

since 2016

5 Year Board

Refreshment rate:

50%

20%

Women

Average tenure of our Board:

3.6

Years

Average Age of our Board:

100%

Independent

(non-employees)

____________________________

(1) The data presented in these boxes includes Messrs. Cohen, Kiani, Mikkelson, Reynolds and Dr. Shimer, all of our current directors other than Mr. Harkin. Mr. Harkin’s service on the Board will cease when his current term expires at the Annual Meeting.

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Table of Contents			CORPORATE GOVERNANCE AND BOARD MATTERS

CONSIDERATION OF DIRECTOR NOMINEES

Director Qualifications

The Board does not prescribe any minimum qualifications for director candidates. The Nominating, Compliance and Corporate Governance Committee may consider a potential director candidate’s experience, areas of expertise and other factors relative to the overall composition of our Board and its committees, including the following characteristics:

• the highest ethical standards and integrity and a strong personal reputation;

• a background that demonstrates experience and achievement in business, finance, technology, healthcare or other activities relevant to our business and activities;

• a willingness to act on and be accountable for Board and, as applicable, committee decisions;

• an ability to provide reasoned, informed and thoughtful counsel to management on a range of issues affecting us and our stockholders;

• an ability to work effectively and collegially with other individuals;

• loyalty and commitment to driving our success and increasing long-term value for our stockholders;

• sufficient time to devote to our Board and, as applicable, committee membership and matters; and

• meeting the independence requirements imposed by the SEC and Nasdaq.

Diversity of background, including diversity of gender, race, ethnic or national origin, and experience (including in business, finance, government, technology, healthcare or other activities relevant to our business) is also a relevant factor, as a diverse Board is more likely to reflect varying perspectives and a breadth of experience that will positively contribute to robust discussion at Board meetings.

The Nominating, Compliance and Corporate Governance Committee retains the right to modify these criteria from time to time.

Stockholder Nominations and Proxy Access

The Nominating, Compliance and Corporate Governance Committee will consider director candidates recommended by our stockholders. The Nominating, Compliance and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates based on whether a candidate was recommended by a stockholder or not. Stockholders may nominate directors for election if such stockholders satisfy the advance notice provisions set forth in our Bylaws. To be timely for our 2022 Annual Meeting of Stockholders, stockholders who wish to recommend individuals for consideration by the Nominating, Compliance and Corporate Governance Committee to become nominees for election to the Board at the 2022 Annual Meeting of Stockholders, must do so by delivering a written recommendation to the Nominating, Compliance and Corporate Governance Committee, c/o Masimo Corporation, 52 Discovery, Irvine, California 92618, Attention: Corporate Secretary, no later than the close of business on March 1, 2022, and no earlier than January 30, 2022, unless the meeting date is more than 30 days before or after May 27, 2022, in which case the written recommendation must be received by our Corporate Secretary no later than the close of business on the later of (i) the 90th day before the 2022 Annual Meeting of Stockholders, or (ii) the 10th day following the day on which we first publicly announce the date of the 2022 Annual Meeting of Stockholders.

Each written recommendation must contain the following minimum information:

• the name and address of the stockholder and any beneficial owner on whose behalf the nomination is being made;

• the class, series and number of shares of Masimo, and any convertible securities of Masimo, that are beneficially owned by the stockholder and any beneficial owner on whose behalf the nomination is being made;

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Table of Contents			CORPORATE GOVERNANCE AND BOARD MATTERS

• any proxy, contract, arrangement, understanding or relationship pursuant to which the stockholder and any beneficial owner on whose behalf the nomination is being made has the right to vote any of Masimo’s voting securities;

• any “short” interest in Masimo’s securities held by the stockholder and any beneficial owner on whose behalf the nomination is being made;

• the proposed director candidate’s full legal name, age, business address and residential address;

• complete biographical information for the proposed director candidate, including the proposed director candidate’s principal occupation or employment and business experience for at least the previous five years;

• a description of the proposed candidate’s qualifications as a director;

• the class and number of shares of Masimo that are beneficially owned by the proposed director candidate as of the date of the written recommendation; and

• any other information relating to the proposed director candidate that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Director candidate recommendations from stockholders must include the written consent of each proposed nominee to serve as director if so elected. If a proposed director candidate is recommended by a stockholder in accordance with the procedural requirements discussed above, the Corporate Secretary will provide the foregoing information to the Nominating, Compliance and Corporate Governance Committee.

In 2019, we amended our Bylaws to permit eligible stockholders to nominate candidates for election to the Board in accordance with procedures providing for proxy access (the “Proxy Access Bylaw”). The Proxy Access Bylaw may be used by an eligible stockholder, or a group of up to 20 eligible stockholders, who has continuously owned at least 3% of the outstanding shares of our common stock for at least the three years before, and including the day of the submission of the proxy access notice, who continues to hold the qualifying minimum number of shares through the date of the applicable annual meeting of stockholders, so long as the eligible stockholder(s) and the director nominee(s) satisfy the requirements specified in the Proxy Access Bylaw. The Proxy Access Bylaw further provides that an eligible stockholder, or a group of eligible stockholders, may nominate up to the greater of (i) 25% of the total number of directors who are members of the Board as of the last day on which a proxy access notice may be submitted, or (ii) two directors, subject to reduction in the event a director has been elected to the Board through proxy access at one of the two immediately preceding annual meetings of our stockholders.

Stockholders who wish to recommend director nominees for inclusion in our proxy materials at the 2022 Annual Meeting of Stockholders in compliance with the Proxy Access Bylaw must do so by delivering a proxy access notice to be received by our Corporate Secretary no earlier than November 16, 2021, and no later than December 16, 2021. In the event that the date of the 2022 Annual Meeting of Stockholders is more than 30 days before or after May 27, 2022, such proxy access notice must be received by the later of (i) 180 days prior to the 2022 Annual Meeting of Stockholders, or (ii) the 10th day following the date that the 2022 Annual Meeting of Stockholders is first publicly announced or disclosed.

Evaluating Nominees for Director

Our Nominating, Compliance and Corporate Governance Committee will consider director candidates that are recommended by members of the committee, other members of our Board, members of management, advisors and our stockholders who submit recommendations in accordance with the requirements set forth above.

The Nominating, Compliance and Corporate Governance Committee may also retain a third-party search firm to identify candidates on terms and conditions acceptable to the Nominating, Compliance and Corporate Governance Committee, but has not done so to date. The Nominating, Compliance and Corporate Governance Committee will evaluate all candidates for director using the same approach regardless of who recommended them.

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Table of Contents			CORPORATE GOVERNANCE AND BOARD MATTERS

The Nominating, Compliance and Corporate Governance Committee will review candidates for director nominees in the context of the current composition of our Board and committees, the operating requirements of the Company and the long-term interests of our stockholders. In conducting this assessment, the Nominating, Compliance and Corporate Governance Committee may consider the director nominee’s qualifications, diversity, age, skills and such other factors as it deems appropriate given the current needs of the Board, the committees and Masimo, to maintain a balance of knowledge, experience, diversity and capability. In the case of incumbent directors whose terms of office are set to expire, the Nominating, Compliance and Corporate Governance Committee may review such directors’ overall service to the Board, the committees and Masimo during their term, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair such directors’ independence. In the case of new director candidates, the Nominating, Compliance and Corporate Governance Committee will also determine whether the nominee must be independent for Nasdaq purposes, which determination will be based upon applicable Nasdaq listing standards and applicable SEC rules and regulations. Although we do not have a formal diversity policy, when considering diversity in evaluating director nominees, the Nominating, Compliance and Corporate Governance Committee will focus on whether the nominees can contribute varied perspectives, skills, experiences and expertise to the Board. Diversity of background, including diversity of gender, race, ethnic or national origin, and experience (including in business, finance, government, technology, healthcare or other activities relevant to our business) is also a relevant factor in considering nominees to the Board, as a diverse Board is more likely to reflect varying perspectives and a breadth of experience that will positively contribute to robust discussion at Board meetings.

The Nominating, Compliance and Corporate Governance Committee will evaluate each of the director candidates and recommend whether the Board should nominate the proposed director candidate for election by our stockholders.

BOARD LEADERSHIP STRUCTURE

Our Board believes that our CEO is best situated to serve as Chairman because he is the director who is most familiar with our business and industry, possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing us and is therefore best positioned to ensure that the Board’s time and attention are focused on the most critical matters. Our independent directors bring experience, oversight and expertise from outside the Company and industry, while the CEO brings Company-specific experience and expertise. The Board believes that the combined role of Chairman and CEO facilitates information flow between management and the Board, which is essential to effective governance. We have no lead independent director.

BOARD’S ROLE IN RISK OVERSIGHT

Our Board has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Each committee is responsible for evaluating certain risks and overseeing the management of such risks and reporting to the entire Board as necessary.

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INVESTOR FEEDBACK AND ENGAGEMENT

In an effort to foster direct, open and transparent com munication with our investors and stockholders, Masimo’s leadership and investor relations team met with analysts and stockholders, as well as potential stockholders, at ten conferences, five roadshows and three bus tours during fiscal 2020. In addition, we hosted quarterly earnings calls, and also engaged with investors via frequent phone calls and emails.

We value the feedback from our investors and stockholders. During fiscal 2020, the Chairman of our Compensation Committee and members of management were involved in more than 15 in-person or telephonic meetings with stockholders representing more than 45% of our outstanding shares. These discussions covered topics such as long-term strategy, financial and operating performance, risk management, executive compensation and governance practices. We found these meetings to be informative, and they help us shape our compensation programs and other strategic priorities.

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Table of Contents			CORPORATE GOVERNANCE AND BOARD MATTERS

CORPORATE RESPONSIBILITY & SUSTAINABILITY

Under the guidance and supervision of the Board, we pursue high standards of corporate responsibility and sustainability, including how we support, protect and empower our employees, how we work with our customers, how we govern the Company and how we connect with our communities.

Environment

Masimo is committed to operating in an environmentally responsible manner and supports the internationally recognized environmental principles set forth in the United Nations Global Compact.

We actively seek to decrease our energy consumption through the use of energy efficient fixtures and machinery, occupancy sensors, motion sensors, and automated lighting controls.

Minimizing our environmental impact

We strive to identify new opportunities to improve the sustainability of our business and encourage our employees to join in our efforts.

We have installed solar photovoltaic panels on key facilities to supply our energy needs for lighting, HVAC, manufacturing needs and electric vehicle charging.

As a global manufacturer of patient monitoring technology, our mission is to improve patient outcomes and reduce the cost of care. We also understand that the materials we use and the products we manufacture, which include single-patient-use sensors, have an impact on the environment.

The lightweight design of our latest generation of RD patient sensors reduces material waste versus our traditional cable-based sensors. Based on our sales of the RD sensors from 2016 to 2020, the new sensors have resulted in approximately 1,100 metric tons of material eliminated.

Masimo is always considering ways to reduce the company’s overall environmental footprint. We have implemented and will continue to implement measures to promote greater environmental responsibility, conserve resources, and reduce waste in an effort to help combat climate change.

To reduce landfill waste, we recycle returned Masimo products to harness re-useable natural elements and materials to minimize raw material usage.

Supply Chain

Suppliers are critical partners in the Masimo value supply chain. We are committed to efforts to prevent forced labor, modern slavery and human trafficking and child labor in our supply chain.

We are committed to further improving our supply chain due diligence processes, driving accountability within the supply chain by leveraging the industry standard Responsible Mineral Initiative - Conflict Mineral Reporting Template and continuing our outreach efforts in order to further develop transparency in our supply chain and mitigate the risk that Masimo’s use of conflict minerals benefits or finances armed groups.

Responsibility in supply chain

Ethical sourcing is an important facet of our ethical conduct strategy. Masimo prohibits any form of forced labor, including slavery and human trafficking in its supply chain. Masimo evaluates suppliers through questionnaires, supplier audits, and risk-based assessments.

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Table of Contents			CORPORATE GOVERNANCE AND BOARD MATTERS

Workforce/Workplace

We understand the need for great ideas, innovation and leadership to stay current and relevant.

We are committed to maintaining a safe workplace environment free from discrimination and harassment.

Building an innovative, collaborative and
diverse workforce

We seek to retain our employees through fair and competitive compensation, benefits and challenging work experiences with increasing levels of responsibility.

We do not tolerate employment discrimination based on race, religion, gender, age, marital status, national origin, sexual orientation, citizenship status, disability or other protected characteristics.

CYBERSECURITY RISK PRACTICES

Cybersecurity is a critical component of our risk management. We rely on information technology and any failure, inadequacy, interruption or security lapse of such technology, including any cybersecurity incidents, could harm our ability to operate our business effectively.

Our cybersecurity program is focused on the following:

• Cybersecurity Awareness: We identify and assess cyber risks through the dissemination of information from industry groups and third-party experts.

• Training: We provide annual cybersecurity training for company personnel with network access and conduct periodic phishing exercises.

• Technical Safeguards: We deploy measures to protect our network perimeter and internal information technology platforms, such as internal and external firewalls, network intrusion detection and prevention, penetration testing, vulnerability assessments, threat intelligence, anti-malware and access controls.

• Vendor Management: For our vendors that receive personal information, we maintain data protection agreements that contain contractual provisions requiring safeguards for the protection of the personal information.

• Incident Response Plans: We maintain and update incident response plans that address the life cycle of a cyber incident (i.e., detection, response and recovery), as well as data breach response, and test those plans annually with table-top exercises.

• Mobile Security: We deploy controls to prevent loss of data through mobile devices.

• Security Standards: We hold accreditations for information and security standards for HIPAA, HITRUST, NIST CSF, and PCI DSS.

• Insurance: We maintain a cybersecurity insurance program with established and respected insurance companies .

HUMAN CAPITAL MANAGEMENT

At the core of our long-term strategy for human capital management is attracting, developing and retaining the best talent globally with the right skills to drive our future success. We seek to attract and retain highly talented, highly motivated, experienced and well-educated individuals to support our long-term growth and profitability goals.

Our success and future growth is largely dependent on our continued ability to retract, retain and develop a diverse workforce at all levels of the organization. To succeed, we have developed key recruitment and retention strategies that we focus on as part of our overall management of our business. These include:

• Compensation. Our compensation programs are designed to align the compensation of our employees with their performance and to provide the proper incentives to attract, retain and motivate employees to achieve

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superior results. The structure of our compensation programs balances incentive earnings for both short-term and long-term performance.

▪ We utilize a nationally-recognized compensation consultants to evaluate our executive compensation program.

▪ Our executive compensation program is designed so that a significant portion of compensation is “at-risk” based on performance, to align the interests of our executive officers and stockholders.

▪ We provide employee wages that are competitive and consistent with employee positions, experience, skills, knowledge and geography.

▪ A large part of our employee population has received equity as part of their overall compensation, which helps align our employee’s interests with those of our stockholders.

▪ Annual increases and cash incentives are based on merit, and not guaranteed.

▪ We offer a wide variety of benefits, including health insurance, paid time off, and a retirement plan, as well as voluntary benefits such as financial and personal wellness benefits.

• Health and Safety. We are committed to the safety and well-being of our employees. In response to the COVID-19 pandemic, we implemented changes to our business in an effort to protect our employees and customers. A majority of our employees worked remotely during most of 2020, and we instituted safety protocols and procedures for our essential employees who continued to work on-site, including:

▪ Daily temperature checks upon entering all facilities;

▪ Implementation of Masimo SafetyNet ™ to pre-clear employees entering our main campus facilities;

▪ Installation of plexiglass partitions between work stations for our manufacturing/assembly facilities; and

▪ Increased distancing and implementation of extensive cleaning and sanitation procedures for our manufacturing and assembly facilities as well as our general administration and sales facilities.

• Succession Planning. We are committed to identifying and developing the talents of our next generation of leaders. Our executive management team periodically conducts an organization and leadership review of all business units and leaders, focusing on our high-performing and high-potential talent, diversity, and succession planning for critical roles.

• Employee Feedback and Retention. In November 2020, we were certified as a Great Place to Work ® . To assess and improve employee retention and engagement, we periodically survey employees and take actions to address areas of employee concerns. The average tenure of our employee is approximately 5.5 years and more than 20% of our employees have been employed by us for more than ten years.

• Divers ity. Our workforce grew from approximately 1,600 full-time employees and approximately 3,700 dedicated contract personnel worldwide as of December 28, 2019 to approximately 2,000 full-time employees and approximately 4,200 dedicated contract personnel worldwide as of January 2, 2021. Of our full-time employees, approximately 65% were male and approximately 35% were female, and women represented approximately 27% of our management/leadership roles. Minorities represented approximately 49% of our U.S. workforce, and approximately 39% of the employees in our management/leadership roles.

CHARITABLE OUTREACH

We undertake philanthropic activities both directly and indirectly through the non-profit organizations we support throughout the globe. We believe in being an active corporate citizen and, among other things, support programs, initiatives and research designed to improve patient safety and outcomes, promote efficient and cost-effective healthcare delivery, and provide advanced healthcare to people worldwide who may not otherwise have access to lifesaving technologies.

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$1.5 Million

in contributions

to the Masimo Foundation

$2.4 Million

in cash contributions to nonprofit organizations (other than the Masimo Foundation)

$3.6 Million

in contributions of Masimo products to charitable organizations

ADOPTION OF PROXY ACCESS

In 2019, our Board adopted the Proxy Access Bylaw, which permits eligible stockholders to nominate candidates for election to our Board. The Proxy Access Bylaw may be used by an eligible stockholder, or a group of up to 20 eligible stockholders, who has continuously owned at least 3% of the outstanding shares of our common stock for at least the three years before, and including the day of the submission of the proxy access notice, who continues to hold the qualifying minimum number of shares through the date of the applicable annual meeting of stockholders, provided that the eligible stockholder(s) and the director nominee(s) satisfy the requirements specified in the Proxy Access Bylaw. The Proxy Access Bylaw further provides that an eligible stockholder, or a group of eligible stockholders, may nominate up to the greater of (i) 25% of the total number of directors who are members of our Board as of the last day on which a proxy access notice may be submitted, or (ii) two directors, subject to reduction in the event a director has been elected to our Board through proxy access at one of the two immediately preceding annual meetings of our stockholders. See “—Consideration of Director Nominees—Stockholder Nominations” on pa ge 25 of th is Proxy Statement for additional information regarding the Proxy Access Bylaw and deadlines for the 2022 Annual Meeting of Stockholders.

MEETINGS AND EXECUTIVE SESSIONS

Our Board meets on a regular basis throughout the year to review significant developments affecting the Company and to act upon matters requiring its approval. Our Board also holds special meetings, as required from time to time, when important matters arise requiring Board action between scheduled meetings. During fiscal 2020, our Board met five times. None of our directors attended fewer than 75% of the total number of meetings held by the Board and the committees (on which and for the period during which the director served) during fiscal 2020.

As required under applicable Nasdaq listing standards, our independent directors periodically meet in executi ve sessions at which only they are present.

POLICY REGARDING BOARD MEMBER ATTENDANCE AT ANNUAL MEETINGS

It is the policy of our Board to invite directors and nominees for director to attend annual meetings of our stockholders. We held one Annual Meeting of Stockholders in fiscal 2020, which was attended by Mr. Kiani.

INDEPENDENCE OF THE BOARD OF DIRECTORS

Our Board has the responsibility for establishing corporate policies and for the overall performance of the Company, although it is not involved in day-to-day operations. As required under the Nasdaq rules, a majority of the members of our Board must qualify as “independent” as affirmatively determined by our Board. Our Board consults with our counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent” including those set forth in applicable Nasdaq rules. Consistent with these considerations, after review of all relevant transactions or relationships between each director, and the director’s family members and Masimo, our senior management, and our independent registered public accounting firm, our Board has determined that all of our directors other than Mr. Kiani are independent, as that term is defined in Nasdaq Listing Rule 5605(a)(2).

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CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, executive officers and directors. The Code of Business Conduct and Ethics is available to stockholders on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.” If we make any substantive amendments to our Code of Business Conduct and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents” and/or in our public filings with the SEC.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Our Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Stockholders of Masimo wishing to communicate with our Board or an individual director may send a written communication to the Board or such director, c/o Masimo Corporation, 52 Discovery, Irvine, California 92618, Attention: Compliance Officer. Each communication must set forth:

• the name and address of all the Masimo stockholders on whose behalf the communication is sent; and

• the number of Masimo shares that are beneficially owned by the stockholders as of the date of the communication.

Each communication will be reviewed by Masimo’s Compliance Officer to determine whether it is appropriate for presentation to the Board or the individual director. Examples of inappropriate communications include junk mail, spam, mass mailings, product complaints, product inquiries, new product suggestions, resumes, job inquiries, surveys, business solicitations and advertisements, as well as unduly hostile, threatening, illegal, unsuitable, frivolous, patently offensive or otherwise inappropriate material. These screening procedures have been approved by a majority of the independent members of our Board. Communications determined by our Compliance Officer to be appropriate for presentation to the Board or such director will be submitted to the Board or the individual director on a periodic basis.

In accordance with our Open Door Policy for Reporting Accounting, Audit, and Other Compliance Concerns (the “Open Door Policy”), all communications directed to the Board, a committee of the Board or an individual director relating to accounting topics, internal accounting controls, or auditing matters involving the Company are forwarded to our Compliance Officer regardless of the method of communication, and then promptly and directly forwarded by the Compliance Officer to the Audit Committee or the Board, as appropriate. All communications directed to the Board, committee, or individual director that relate to non-financial matters (including, without limitation, purported or suspected violations of any law or regulation, our Code of Business Conduct and Ethics or other policies) will be forwarded to Masimo’s Compliance Officer, and, if the Compliance Officer deems the matter to be a potentially significant violation of law, the Code of Business Conduct and Ethics, or company policy, the Compliance Officer will promptly and directly forward the communication to the Nominating, Compliance and Corporate Governance Committee.

INFORMATION REGARDING BOARD COMMITTEES

Our Board has established a standing Audit Committee, Compensation Committee, and Nominating, Compliance and Corporate Governance Committee to devote attention to specific subjects and to assist it in the discharge of the Board’s responsibilities. All of these committees operate under a written charter adopted by our Board, each of which is available on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.” The following table provides committee membership and meeting information for fiscal 2020 for the Audit Committee, Compensation Committee and Nominating, Compliance and Corporate Governance Committee.

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Committee Membership

Name

Independent

Audit

Compensation

Nominating, Compliance and
Corporate Governance

Employee Director:

Joe Kiani

—

Non-Employee Directors:

H Michael Cohen (1)

—

Thomas Harkin (2)

—

Adam Mikkelson

Craig Reynolds

—

Julie A. Shimer, Ph.D. (3)

—

Total meetings in fiscal 2020

______________

¬ Committee Chairperson. À Financial Expert. ü Member. u Independent.

(1) Mr. Cohen was appointed the Audit Committee Chairperson effective March 20, 2020. He joined the Compensation Committee April 1, 2021.

(2) Mr. Harkin’s service on the Board will cease when his current term expires at the Annual Meeting. He served on the Compensation Committee and the Nominating, Compliance and Corporate Governance Committee (as its Chairperson) until April 1, 2021.

(3) D r. Shimer joined the Nominating, Compliance and Corporate Governance Committee and was appointed its Chairperson effective April 1, 2021.

Audit Committee

We maintain a separately-designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our Board has adopted a written charter of the Audit Committee that is available to stockholders on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.”

Our Board has determined that all members of the Audit Committee meet the criteria for independence and financial literacy under Nasdaq Listing Rule 5605(c)(2)(A)(i) and (ii) and Rule 10A-3(b)(1) under the Exchange Act and qualify as financial experts under the applicable Nasdaq and SEC rules.

Both our independent registered public accounting firm and internal financial personnel regularly meet privately with our Audit Committee and have unrestricted access to the Audit Committee.

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Members and Number of Meetings

Primary Committee Functions

Committee Members: (1)

l Appointing, retaining and determining the compensation of our independent registered public accounting firm;

l Overseeing and approving any proposed audit and permissible non-audit services provided by our independent registered public accounting firm;

l Reviewing at least annually the qualifications, performance and independence of our independent registered public accounting firm;

l Overseeing the relationship with our independent registered public accounting firm, including the rotation of the audit partners, as well as reviewing and resolving any disagreements between our management and ensuring discussions with our management and our independent registered public accounting firm relating to internal controls over financial reporting;

l Discussing with our management and our independent registered public accounting firm the design, implementation, adequacy and effectiveness of our internal controls;

l Reviewing and discussing with our management and our independent registered public accounting firm the results of the annual audit and the review of our quarterly financial statements;

l Overseeing and approving the annual Committee Report to be included in our annual public filings;

l Reviewing the quarterly earnings announcements and any other public announcements regarding our results of operations with our management;

l Reviewing and discussing reports from our independent registered public accounting firm relating to our critical accounting policies and practices;

l Establishing and overseeing the processes and procedures for the receipt, retention and treatment of any complaints regarding accounting, internal controls or audit matters, as well as the confidential and anonymous submissions by employees concerning questionable accounting, auditing and internal control matters;

l Investigating any matter brought to its attention, with full access to our books, records, facilities and employees, and with sole authority to select, retain and terminate any consultants, legal counsel or advisors to advise the Audit Committee; and

l Reviewing and evaluating, at least annually, the performance of the Audit Committee and its members, including compliance of the Audit Committee with its charter.

Mr. Cohen, Chairperson (2)

Mr. Mikkelson

Dr. Shimer

Number of Meetings: (3)

Attendance Rate:

100%

_____________

(1) Our Board has determined that each of Messrs. Cohen and Mikkelson and Dr. Shimer is an audit committee financial expert, as defined under applicable SEC rules, and that Messrs. Cohen and Mikkelson and Dr. Shimer each meet the background and financial sophistication requirements under Nasdaq Listing Rule 5605(c)(2)(A). In making this determination, the Board made a qualitative assessment of Messrs. Cohen’s and Mikkelson’s and Dr. Shimer’s level of knowledge and experience based on a number of factors, including each of their respective formal education and experience.

(2) Mr. Cohen was appointed Audit Committee Chairperson effective March 20, 2020.

(3) Typically, the Audit Committee meets at least quarterly and with greater frequency if necessary.

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Compensation Committee

Our Board has adopted a written charter for the Compensation Committee that is available to stockholders on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.” The charter of the Compensation Committee grants the Compensation Committee full access to all of our books, records, facilities and personnel. The Compensation Committee has the authority, in its sole discretion, to retain and terminate (or obtain the advice of) any advisor to assist it in the performance of its duties, but only after taking into consideration factors relevant to the advisor’s independence specified in Nasdaq Listing Rule 5605(d)(3). The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any advisor retained by the Compensation Committee, and has sole authority to approve the advisor’s fees and the other terms and conditions of the advisor’s retention.

Our Board has determined that all members of our Compensation Committee meet the criteria for independence under Nasdaq Listing Rule 5605(a)(2) and Rule 10C-1 of the Exchange Act.

Members and Number of Meetings

Primary Committee Functions

Committee Members:

l Reviewing and approving our general compensation strategy;

l Establishing annual and long-term performance goals for our executive officers;

l Conducting and reviewing with the Board an annual evaluation of the performance of our CEO and other executive officers;

l Considering the competitiveness of the compensation of our executive officers;

l Reviewing and approving all salaries, bonuses, equity awards, perquisites, post-service arrangements, and other compensation and benefit plans for our CEO and all other executive officers;

l Reviewing and approving the terms of any offer letters, employment agreements, termination agreements or arrangements, change in control agreements and other material agreements between us, on the one hand, and any of our executive officers, on the other;

l Acting as the administering committee of our Board for our executive compensation and cash incentive plans and for any equity incentive plans, including establishing performance metrics, determining bonus payouts and granting equity awards to employees and executive officers;

l Providing oversight for our overall compensation plans and benefit programs;

l Reviewing and approving compensation programs as well as salaries, fees, bonuses and equity awards for the non-employee members of our Board;

l Reviewing and discussing with management, and recommending the annual Compensation Discussion and Analysis disclosure and the related tabular and narrative disclosures regarding named executive officer compensation included in our annual public filings;

l Overseeing and approving the annual Compensation Committee Report included in our annual public filings;

l Overseeing risks and exposures associated with executive compensation programs and arrangements, including incentive plans; and

l Reviewing and evaluating, at least annually, the performance of the Compensation Committee and its members, including compliance of the Compensation Committee with its charter.

Mr. Reynolds, Chairperson

Mr. Cohen (1)

Mr. Mikkelson

Number of Meetings: (2)

Attendance Rate:

100%

_____________

(1) Mr. Cohen joined the Compensation Committee effective April 1, 2021. Mr. Harkin served on the Compensation Committee until April 1, 2021.

(2) The Compensation Committee meets from time to time during the year.

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The Compensation Committee has retained the services of Compensia, Inc. (“Compensia”) to assist the Compensation Committee in assessing and determining competitive compensation packages and to provide input on other executive compensation related matters. Compensia provides no other services to Masimo, and its sole relationship with Masimo is as an advisor to the Compensation Committee.

For more information regarding the Compensation Committee’s engagement of Compensia, see “Executive Compensation—Compensation Discussion and Analysis” starting on pag e 43 of this Proxy Statement.

The Compensation Committee meets outside the presence of all of our executive officers, including the named executive officers, in order to consider appropriate compensation for our CEO. Our CEO may not participate in or be present during any deliberations or determinations of the Compensation Committee regarding his compensation. For all other named executive officers, the Compensation Committee meets outside the presence of all executive officers except our CEO. The specific determinations of the Compensation Committee with respect to executive compensation for fiscal 2020 are described in greater detail in the “Compensation Discussion and Analysis” section of this Proxy Statement.

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Nominating, Compliance and Corporate Governance Committee

Our Board has adopted a written charter of the Nominating, Compliance and Corporate Governance Committee that is available to stockholders on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.” Our Board has determined that all members of our Nominating, Compliance and Corporate Governance Committee meet the criteria for independence under Nasdaq Listing Rule 5605(a)(2). The Nominating, Compliance and Corporate Governance Committee meets from time to time as it deems appropriate or necessary.

Members and Number of Meetings

Primary Committee Functions

Committee Members:

l Evaluating the composition, size, organization and governance of our Board and its committees, making recommendations to our Board about the appointment of directors to committees of our Board and recommending the selection of chairs of these committees to the Board;

l Reviewing and recommending to our Board director independence determinations made with respect to continuing and prospective directors;

l Reviewing and recommending to our Board “Section 16 officer” determinations with respect to our executive officers;

l Developing and recommending to our Board policies for considering director nominees for election to the Board;

l Identifying, reviewing, considering and evaluating candidates for election to the Board and recommending to the Board candidates to be nominated for election or incumbent directors to be nominated for re-election at each annual meeting of our stockholders or to fill any vacancies on the Board or any newly-created directorships;

l Overseeing our Board’s performance and annual self-evaluation process and evaluating the participation of members of the Board in continuing education activities in accordance with Nasdaq rules;

l Overseeing corporate governance;

l Overseeing our corporate compliance programs;

l Developing, and updating as necessary, a legal compliance and ethics program designed to evaluate, maintain and correct, when appropriate, our overall compliance with all federal and state rules and regulations and all of our codes of ethics and conduct;

l In consultation with the Audit Committee, reviewing and, if appropriate, updating or recommending to our Board updates to our existing procedures for the receipt, retention and treatment of reports or evidence of violations of any federal or state rules or regulations or of our codes of ethics and conduct; and

l Reviewing and evaluating, at least annually, the performance of the Nominating, Compliance and Corporate Governance Committee and its members, including compliance of the Nominating, Compliance and Corporate Governance Committee with its charter.

Dr. Shimer, Chairperson (1)

Mr. Mikkelson

Mr. Reynolds

Number of Meetings: (2)

Attendance Rate:

100%

__________________

(1) The Nominating, Compliance and Corporate Governance Committee meets from time to time during the year.

(2) Dr. Shimer joined the Nominating, Compliance and Corporate Governance Committee and was appointed as its Chairperson effective April 1, 2021. Mr. Harkin served on the Nominating, Compliance and Corporate Governance Committee and as its Chairperson until April 1, 2021.

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NON-EMPLOYEE DIRECTOR COMPENSATION

Our current non-employee director compensation policy was adopted by the Board effective January 1, 2020, after consultation with the Compensation Committee’s independent compensation consultant and consideration of market data for a group of peer companies (the “Non-Employee Director Compensation Policy”). During fiscal 2020, the Non-Employee Director Compensation Policy provided for the following compensation:


Compensation Item(s):		Annual Amount
Annual Cash Retainer (1)
	Board Service	$	70,000
	Audit Committee	12,500
	Compensation Committee	10,000
	Nominating, Compliance and Corporate Governance Committee	5,000
Committee Chairperson Annual Cash Retainer (2)
	Audit Committee	$	25,000
	Compensation Committee	20,000
	Nominating, Compliance and Corporate Governance Committee	15,000
Equity Awards (3)(4)
	Restricted Share Units	$	180,000

_____________

(1) All annual cash retainers are payable on a quarterly basis in arrears. For Board committees, excludes committee chairperson.

(2) All annual cash retainers are payable on a quarterly basis in arrears.

(3) Each year on the date of our annual meeting of stockholders, each non-employee director is granted an award of restricted share units (“RSUs”) with respect to shares of our common stock having a grant date fair value of $180,000, rounded down to the nearest whole share, which vest on the earlier of the first anniversary of the grant date or the date of the next annual meeting of stockholders.

(4) The Non-Employee Director Compensation Policy also provides that all RSU awards granted to the non-employee directors pursuant to the policy will vest in full in the event of a change in control of Masimo.

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The following table sets forth summary information concerning compensation paid or accrued for services rendered to us in all capacities to the non-employee members of our Board for the fiscal year ended January 2, 2021.


Fiscal 2020 Non-Employee Director Compensation Table:
Name (1)	Fees Earned or Paid in Cash		Stock Awards (2)(3)		Option Awards (4)		All Other Compensation			Total
Steven J. Barker, Ph.D., M.D. (5)	$	29,555	$	—	$	—	$	110,000	(6)	$	139,555
H Michael Cohen	92,253		179,902		—		—			272,155
Sanford Fitch (5)	35,051		—		—		5,000		(6)	40,051
Thomas Harkin	95,000		179,902		—		—			274,902
Adam Mikkelson	97,500		179,902		—		—			277,402
Craig Reynolds	87,500		179,902		—		—			267,402
Julie A. Shimer, Ph.D.	82,500		179,902		—		—			262,402

______________

(1) Our Chairman and CEO, Mr. Kiani, is not included in this table as he is an employee of Masimo and therefore receives no compensation for his service as a director. Mr. Kiani’s compensation is included in the “Summary Compensation Table” on page 69 of this Proxy Statement.

(2) As of January 2, 2021, each of the listed non-employee directors held RSU awards with respect to 749 shares of our common stock.

(3) These amounts generally represent the aggregate grant date fair value of the RSU awards granted to each listed non-employee director in fiscal 2020, computed in accordance with Financial Accounting Standard Board Accounting Standard Codification Topic 718 (“ASC Topic 718”). These amounts do not represent the actual amounts paid to or realized by the directors during fiscal 2020. The value as of the grant date for the RSU awards is calculated based on the number of RSUs at the grant date market price and is recognized once the requisite service period for the RSUs is satisfied. For a detailed description of the assumptions used for purposes of determining grant date fair value, see Note 18 to our Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates-Share-Based Compensation,” included in our Annual Report on Form 10-K for the year ended January 2, 2021 that was filed with the SEC on February 23, 2021.

(4) As of January 2, 2021, none of our then serving non-employee directors held any options to purchase shares of our common stock other than Craig Reynolds, who held options to purchase an aggregate o f 60,000 shares .

(5) Dr. Barker’s and Mr. Fitch’s service on our Board ceased when their then-current terms expired at our 2020 Annual Meeting of Stockholders held on May 29, 2020.

(6) Consists of fees earned for non-employee consulting services provided to the Company.

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AUDIT RELATED MATTERS

AUDIT COMMITTEE’S PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee has adopted a policy for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, Grant Thornton LLP. The policy generally pre-approves specified services in the defined categories of audit, audit-related and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. By the adoption of this policy, the Audit Committee has delegated the authority to pre-approve services to the Chairperson of the Audit Committee, subject to certain limitations.

The Audit Committee has determined that the rendering of the services other than audit services by Grant Thornton LLP is compatible with maintaining the independent registered public accounting firm’s independence.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table represents aggregate fees billed to Masimo for the fiscal years ended January 2, 2021 and December 28, 2019 by Grant Thornton LLP, our independent registered public accounting firm for such periods. All fees described below were approved by the Audit Committee.


	Fiscal Year Ended
	January 2, 2021		December 28, 2019
Audit Fees (1)	$	1,967,130	$	1,995,593
Audit-Related Fees (2)	131,838		895,015
Tax Fees (3)	36,270		35,490
All Other Fees (4)	—		26,377
Total Fees	$	2,135,238	$	2,952,475

______________

(1) Audit fees consist of fees billed for services rendered for the audit of our consolidated annual financial statements, including performance of the attestation procedures required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended, review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Grant Thornton LLP in connection with statutory and regulatory filings or engagements.

(2) Audit-related fees consist of fees for assurance and related services performed by our independent registered public accounting firm and include fees reasonably related to the performance of the audit of our U.S. retirement savings plan as well as due diligence services in connection with strategic investments and other merger and acquisition-related activities.

(3) Tax fees consist of fees related to certain U.S. state and local tax preparation and consultation services.

(4) All other fees primarily consist of fees associated with the reimbursement of out-of-pocket expenses related to certain legal matters.

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AUDIT COMMITTEE REPORT

Our Audit Committee is composed of “independent directors,” as determined in accordance with Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3 of the Exchange Act. The Audit Committee operates pursuant to a written charter adopted by the Board, a copy of which may be viewed on our website at https://investor.masimo.com/governance/governance-documents/default.aspx under “Governance Documents.”

As described more fully in its charter, the purpose of the Audit Committee is to assist our Board with its oversight responsibilities regarding the integrity of our financial statements, assessing the independent registered public accounting firm’s qualifications and independence and the performance of the persons performing internal audit duties for us and the independent registered public accounting firm. Management is responsible for the preparation, presentation and integrity of our financial statements as well as our financial reporting process, accounting policies, internal audit function, internal accounting controls and disclosure controls and procedures. The independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with generally-accepted auditing standards and issuing a report. The Audit Committee’s responsibility is to monitor and oversee these processes. The following is the Audit Committee’s report submitted to the Board for fiscal 2020.

The Audit Committee has:

• reviewed and discussed our audited financial statements with management and Grant Thornton LLP, the independent registered public accounting firm;

• discussed with Grant Thornton LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and

• received from Grant Thornton LLP the written disclosures and the letter regarding their communications with the Audit Committee concerning independence as required by the applicable requirements of the Public Company Accounting Oversight Board and discussed Grant Thornton LLP’s independence with them.

In addition, the Audit Committee has met separately with management and with Grant Thornton LLP as part of the committee’s quarterly meetings.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended January 2, 2021 for filing with the SEC. The Audit Committee also has selected and engaged Grant Thornton LLP as Masimo’s independent registered public accounting firm for the fiscal year ending January 1, 2022, and is seeking ratification of the selection by Masimo’s stockholders.


			Audit Committee
			Mr. H Michael Cohen
			Mr. Adam Mikkelson
			Dr. Julie A. Shimer

This foregoing audit committee report is not “soliciting material,” is not deemed “filed” with the SEC, and shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing of ours under the Securities Act of 1933, as amended, or under the Exchange Act, except to the extent we specifically incorporate this report by reference.

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Table of Contents						EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

The following Compensation Discussion and Analysis may contain statements regarding future individual and Company performance targets and goals. Any targets and goals so disclosed are referenced in the limited context of Masimo’s compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. Masimo specifically cautions investors not to apply these statements to other contexts .

This Compensation Discussion and Analysis describes the compensation program for our Principal Executive Officer, Principal Financial Officer and the next three most highly-compensated Executive Officers of the Company for fiscal 2020 (our “Named Executive Officers” or “NEOs”). During fiscal 2020, these individuals were:


Name						Position(s)
Joe Kiani						Chief Executive Officer & Chairman of the Board
Micah Young						Executive Vice President, Chief Financial Officer
Bilal Muhsin						Chief Operating Officer
Tao Levy						Executive Vice President, Business Development
Tom McClenahan						Executive Vice President, General Counsel & Corporate Secretary

This Compensation Discussion and Analysis describes the material elements of our executive compensation program for fiscal 2020. It also provides an overview of our executive compensation philosophy and objectives. Finally, it analyzes how and why the Compensation Committee of our Board (the “Compensation Committee”) arrived at the specific compensation decisions for our executive officers, including our NEOs, for fiscal 2020, including the key factors that the Compensation Committee considered in determining their compensation.

COMPENSATION DISCUSSION & ANALYSIS TABLE OF CONTENTS

Executive Summary

Compensation Philosophy & Objectives

Governance of Executive Compensation

Individual Compensation Elements

Other Compensation Policies and Practices

Tax and Accounting Considerations

Summary Compensation Table

EXECUTIVE SUMMARY

Our compensation programs are designed to attract and retain the most talented employees within our industry and motivate them to perform at the highest level while executing our long-term plan. In order to retain and motivate this caliber of talent, the Compensation Committee is committed to promoting a performance-based culture. Compensation is tied to financial metrics that incentivize management to successfully deliver on the long-term plan and our commitments to our stockholders.

| 2021 Proxy Statement


Table of Contents						EXECUTIVE COMPENSATION

Fiscal 2020 Performance Highlights

The following represents a few financial and operational highlights of fiscal 2020 (these include GAAP and non-GAAP measures (1) ):

Product Revenue

(in millions)

$1,144

Goal: $1,035M

Non-GAAP

Product Revenue Growth (1)

22%

Non-GAAP EPS (1)

($ per diluted share)

$3.60

Goal: $3.56

Non-GAAP EPS (1)

(% growth)

12%

In 2020, we witnessed extremely challenging situations for patients and healthcare providers around the world related to the COVID-19 pandemic. We also witnessed incredible leadership, resilience and courage by many people in many walks of life, and in particular the frontline healthcare providers: our doctors, nurses, respiratory therapists, EMS professionals and others.

Within this tough environment, our global organization contributed to the critical solutions that were, and still are, required to manage this pandemic. In the midst of the pandemic, last year was also a milestone year for Masimo as our revenues exceeded $1 billion for the first time since our founding over 30 years ago. Today, we are even more committed to helping our customers overcome the persistent challenges related to this pandemic with an expanding portfolio of products to improve patient outcomes and reduce the cost of care.

We realized many significant achievements in 2020 such as the introduction of our Masimo SafetyNet ™ system for enabling hospital-to-home monitoring while also growing the customer base for our Patient SafetyNet solution that enables hospitals to streamline workflow and improve patient care, especially where hospital staff were overwhelmed due to many COVID-19 patient admissions. Within Masimo, our dedicated team was nimble in its response to our customers in the face of significant demand for our products, while at the same time expanding our portfolio. This expansion included Radius-Tº ™ continuous wearable thermometer, Centroid ™ continuous wearable patient orientation and activity sensor, and Masimo SafetyNet-OPEN ™ to help institutions open and stay open safely. We also completed three notable acquisitions, including the iSirona ™ Connected Care business from NantHealth, TNI medical AG, and LiDCO Group Plc, which expands our technology portfolio into the large and growing markets for hospital automation, respiratory therapy and hemodynamic monitoring, respectively.

Our performance in 2020 demonstrates yet another year of strong execution towards our long-range plans and a commitment to reinvest in the business to drive growth and deliver long-term stockholder value.


1-Year Financial Performance \| Year-Over-Year Growth Rates (FY2019 to FY2020) (1)
l	22% GAAP product revenue growth	l	22% Non-GAAP product revenue growth
l	16% GAAP operating profit growth	l	17% Non-GAAP operating profit growth
l	20% GAAP EPS growth	l	12% Non-GAAP EPS growth

3-Year Financial Performance \| Compound Annual Growth Rates (CAGR) (FY2017 to FY2020) (1)
l	13% GAAP product revenue growth	l	16% Non-GAAP product revenue growth
l	12% GAAP operating profit growth	l	24% Non-GAAP operating profit growth
l	23% GAAP EPS growth	l	28% Non-GAAP EPS growth

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(1) Non-GAAP product revenue and non-GAAP EPS are non-GAAP financial measures - please see Appendix A to this Proxy Statement for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.

| 2021 Proxy Statement


Table of Contents						EXECUTIVE COMPENSATION