Carl Icahn slams Illumina CEO’s pay rise

Carl Icahn speaks at Delivering Alpha in New York on September 13, 2016.

David A Grogan | CNBC

Carl Icahn exploded Enlightenment for nearly doubling its CEO’s pay last year despite a dramatic decline in the biotech’s market value since inching a controversial deal.

“I would find it funny if it weren’t so reprehensible that ILMN’s stock price has fallen 63% because CEO Francis deSouza made such an absurd and questionable purchase,” Icahn said in a statement to CNBC.

“And what’s really funny is the idea that it’s hard to find good CEOs in this space,” the activist investor added. “I reckon it would be hard to find someone who could lose $50 billion in shareholder value in a matter of months but still get 87% more for a grand total of $26.8 million in 2022.”

Illumina did not immediately respond to a request for comment.

DeSouza stepped in as CEO in 2016 after nearly three years as president of the DNA sequencing company. He received nearly $26.8 million in total compensation last year, nearly double the $14.3 million he received in 2021, according to a preliminary proxy statement filed Thursday.

Part of deSouza’s pay increase is a $12.5 million special stock option grant, which Illumina described as a “meaningful incentive for retention in a highly competitive talent environment.”

DeSouza’s pay rise follows a bumpy 18 months for San Diego-based Illumina. The company’s market value has fallen to about $35 billion from about $75 billion in August 2021, the month it completed its acquisition of cancer test developer Grail.

Rafael Henrique | Light Rocket | Getty Images

The $7.1 billion Grail deal is at the center of a proxy fight between Icahn and Illumina, who have been trading jabs for nearly a month.

Icahn, who owns a 1.4% stake in Illumina, is seeking a seat on the company’s board. He’s also trying to pressure Illumina into reversing the Grail acquisition, which he has called “catastrophic” and “a new low in corporate governance.”

He has repeatedly criticized Illumina’s board and management team, saying earlier this week that the company should bring back former CEO Jay Flatley to “fix the situation.”

Illumina on Thursday urged shareholders to reject Icahn’s three nominees for its board of directors and went on to defend its management team’s decision to acquire Grail.

The company also claimed Icahn had more positive things to say about its current CEO before initiating the proxy fight.

Icahn told Illumina last month that he intends to make board nominations, although he thinks deSouza “did a good job” running the company, Illumina said.

The activist investor also said he “supported” deSouza’s actions as CEO during another meeting earlier this month, but noted that he would not publicly repeat those comments, according to Illumina.

Part of Icahn’s opposition to the Grail acquisition stems from Illumina’s decision to complete the transaction without antitrust approval. The company prevailed against opposition from the US Federal Trade Commission in September but is still fighting for approval from European regulators.

The EU’s executive body, the European Commission, blocked Illumina’s acquisition of Grail last year, fearing it would stifle innovation and hamper consumer choice. The commission also revealed details of a proposed order that would force Illumina to reverse the deal.

Illumina said earlier this month that Grail has “tremendous long-term value creation potential.”

Grail says it offers the only commercially available early detection test that can detect more than 50 types of cancer from a single blood draw. The test generated $55 million in revenue in 2022 and is expected to bring in up to $110 million this year, according to Illumina.

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