Glass Lewis has thrown its weight behind Carl Icahn’s push to remove the CEO and chair of U.S. biotech Illumina with concerns over their handling of the Grail acquisition.
The proxy advisor said CEO Francis deSouza and Chair John Thompson have failed to take responsibility for the “value crimping” acquisition of the cancer screening group, according to an open letter from Icahn, and substantiated by the Financial Times.
Glass Lewis also recommends that shareholders vote for Icahn Nominees Andrew Teno and Vincent Intrieri.
In a campaign initiated in March, Icahn, a 1.5% shareholder, has urged Illumina to stop fighting regulators over the contentious 2021 acquisition, and divest the business, potentially through a spin-off with a rights offering.
Glass Lewis has recommended that Illumina shareholders give their backing to two of Icahn’s director nominees stating the board appeared “disconcertingly disinclined” to accept any clear responsibility for the “costly, distracting, and value-crimping” decision to close the Grail transaction against the wishes of EU and U.S. antitrust regulators.
“We encourage the incumbent board of directors to go to a quiet room, read the thoughtful and well-reasoned report and thoroughly question the failed leadership from CEO Francis deSouza and Chair John Thompson,” Icahn commented. “We believe the report speaks for itself.”
Glass Lewis also gave Illumina an “F” grade for its executive pay program following the board’s decision to almost double deSouza’s total pay in 2022 despite a drop in its share price, according to the the letter and media reports. Compensation has been used as a pain point by Icahn throughout the campaign.
Glass Lewis’ support for the campaign is a boost for Icahn on a week where his publicly traded conglomerate Icahn Enterprises saw its stock price dive after posting a quarterly loss and revealing a request for information from the Department of Justice (DOJ).
Illumina is set to hold its annual meeting on May 25.
Illumina’s share price closed up 7.8% on Wednesday, but was little changed Thursday morning at $208.13 per share.