Carl Icahn talking at Delivering Alpha in New York on Sept. 13, 2016.
David A. Grogan | CNBC
Carl Icahn blasted Illumina for practically doubling its CEO’s pay final 12 months regardless of a dramatic drop within the biotech firm’s market worth since closing a controversial deal.
“I might discover it comical, if it wasn’t so reprehensible that ILMN’s share worth is down 63% as a result of CEO Francis deSouza making such an absurd and questionable buy,” Icahn stated in an announcement to CNBC.
“And what’s actually humorous is the concept that it’s exhausting to seek out good CEOs on this space,” the activist investor added. “I assume it will be exhausting to seek out somebody who might lose $50 billion of shareholder worth in a matter of months but nonetheless receives a commission 87% extra for a grand whole of $26.8 million in 2022.”
Illumina didn’t instantly reply to a request for remark.
DeSouza stepped in as CEO in 2016 after serving because the DNA sequencing firm’s president for nearly three years. He was awarded practically $26.8 million in whole pay final 12 months, practically double the $14.3 million he acquired in 2021, in response to a preliminary proxy statement Illumina filed Thursday.
A part of deSouza’s pay bump is a particular grant of inventory choices value $12.5 million, which Illumina referred to as a “significant retention incentive in a extremely aggressive expertise setting.”
DeSouza’s pay improve follows a rocky 18 months for San Diego-based Illumina. The corporate’s market worth has fallen to roughly $35 billion from about $75 billion in August 2021, the month it closed its acquisition of most cancers check developer Grail.
Rafael Henrique | Lightrocket | Getty Photos
The $7.1 billion Grail deal is the main target of a proxy struggle between Icahn and Illumina, who’ve been buying and selling jabs for practically a month.
Icahn, who owns a 1.4% stake in Illumina, is in search of seats on the corporate’s board. He’s additionally making an attempt to push Illumina to unwind the Grail acquisition, which he has referred to as “disastrous” and “a brand new low in company governance.”
He has repeatedly slammed Illumina’s board and administration workforce, saying earlier this week that the corporate ought to bring back former CEO Jay Flatley to “repair the scenario.”
Illumina on Thursday urged shareholders to reject Icahn’s three nominees to its board of administrators and continued to defend its administration workforce’s choice to amass Grail.
The corporate additionally claimed Icahn had extra favorable issues to say about its present CEO earlier than launching the proxy struggle.
Icahn instructed Illumina final month that he supposed to make board nominations regardless of believing deSouza “had finished job” managing the corporate, Illumina stated.
The activist investor additionally stated he was “supportive” of deSouza’s actions as CEO throughout one other assembly earlier this month, however famous he wouldn’t repeat these feedback publicly, in response to Illumina.
A part of Icahn’s opposition to the Grail acquisition stems from Illumina’s choice to shut the deal with out approval from antitrust regulators. The company prevailed over the U.S. Federal Commerce Fee’s opposition to the deal in September, however continues to be combating for approval from European regulators.
The EU’s government physique, the European Fee, final 12 months blocked Illumina’s acquisition of Grail over considerations it will stifle innovation and damage shopper alternative. The fee additionally unveiled particulars of a deliberate order that might pressure Illumina to unwind the deal.
Illumina said earlier this month that Grail has “great long-term worth creation potential.”
Grail says it provides the one commercially out there early screening test that may detect greater than 50 varieties of cancers via a single blood draw. The check generated $55 million in income in 2022 and is slated to rake in as much as $110 million this 12 months, in response to Illumina.