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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________
FORM 10-K/A
(Amendment No. 1 )
________________________________________________________________________
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number 001-33642
masimologo300pra03.jpg
________________________________________________
MASIMO CORPORATION
(Exact name of registrant as specified in its charter)
_________________________________________________________
DE33-0368882
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification Number)
52 DiscoveryIrvine,CA92618
(Address of principal executive offices)(Zip Code)
(949)297-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:Trading symbol:Name of each exchange on which registered:
Common Stock, par value $0.001MASIThe Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 
YesNo
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
YesNo
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) 
Yes
No
The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the common stock on June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the Nasdaq Global Select Market, was approximately $6.5 billion. Shares of stock held by officers, directors and 5 percent or more stockholders have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. At January 27, 2024, the registrant had 52,913,166 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”) amends the registrant’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023 that was originally filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2024 (the “Original Form 10-K”). This Amendment No. 1 is being filed to include the information required in Part III (Items 10, 11, 12, 13 and 14) of Form 10-K that was previously omitted from the Original Form 10-K in reliance upon General Instruction G(3) to Form 10-K. General Instruction G(3) to Form 10-K allows such omitted information to be filed as an amendment to the Original Form 10-K or incorporated by reference from the registrant’s definitive proxy statement which involves the election of directors not later than 120 days after the end of the fiscal year covered by the Original Form 10-K. As of the date of this Amendment No. 1, the registrant does not intend to file a definitive proxy statement containing the information required in Part III of Form 10-K within such 120-day period. Accordingly, the registrant is filing this amendment to include such omitted information as part of the Original Form 10-K.
The reference on the cover of the Original Form 10-K to the incorporation by reference to certain portions of the registrant’s proxy statement into Part III of the Original Form 10-K is hereby deleted.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Part III, Items 10 through 14 of the Original Form 10-K are hereby amended and restated in their entirety, Part IV, Item 15 of the Original Form 10-K is hereby amended and restated in its entirety, and new certifications by the registrant’s principal executive officer and principal financial officer pursuant to Rule 13a-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”), are filed as exhibits to this Amendment No. 1 under Part IV, Item 15. Because no financial statements have been included in this Amendment No. 1 and this Amendment No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the Section 302 Certifications have been omitted. In addition, this Amendment No. 1 does not include the certification under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment No. 1.
Except as described in this explanatory note or as otherwise expressly provided by the terms of this Amendment No. 1, no other information in the Original Form 10-K is being modified or updated by this Amendment No. 1, and this Amendment No. 1 does not otherwise reflect events occurring after the filing date of the Original Form 10-K. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Form 10-K and the registrant’s other filings with the SEC. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Original Form 10-K.
In this report, “Masimo,” the “Company,” “we,” “us” and “our” refer to Masimo Corporation and, where applicable, its consolidated subsidiaries.

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MASIMO CORPORATION
AMENDMENT NO. 1 TO FISCAL YEAR 2023 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS

Page
Item 10
Item 11
Item 12
Item 13
Item 14
Item 15

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PART III
ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Board of Directors
Background and Qualifications
The names of our current directors, their respective age, director class and position(s) as of April 29, 2024 are listed below.
Committee Membership
NameAge
Independent
Chairman of the BoardAuditCompensationNominating, Compliance and
 Corporate Governance
Michelle Brennan(1)
58üüü
Robert Chapek
65üüü
Rolf Classon(2)
78üü
Joe Kiani(3)
59ü
Quentin Koffey(4)
46üü
Craig Reynolds(5)
75üüüü
____________________________
(1)    Ms. Brennan joined the Board of Directors on June 26, 2023. She was appointed to the Compensation and Nominating, Compliance and Corporate Governance Committees on July 12, 2023.
(2)    Mr. Classon joined the Board of Directors on November 3, 2023 and was appointed to the Audit Committee on January 4, 2024.
(3)    Please see “Executive Officers” in this Item 10 below for Mr. Kiani’s biography.
(4)    Mr. Koffey joined the Board of Directors on June 26, 2023. He was appointed to the Audit Committee on July 12, 2023.
(5)    Mr. Reynolds was appointed Chairperson of the Audit Committee on February 29, 2024.
Michelle Brennan has served as a member of our Board since June 2023. Ms. Brennan currently serves on the boards of Cardinal Health, Inc. and Peroshere Technologies, Inc., where she sits on the Audit Committee and the Human Resources & Compensation Committee. Before her retirement, Ms. Brennan held various positions at Johnson & Johnson, a researcher, developer, and manufacturer in the healthcare and consumer packaged goods fields. Prior to that role, she served as Company Group Chair of Medical Devices in Europe, the Middle East, and Africa (“EMEA”) from 2015 to December 2018, and from 2007 to 2014 she held various senior management positions including President of Enterprise Standards & Productivity, Worldwide President of Ethicon Energy, Regional President of Ethicon Endo Surgery for EMEA, the Mediterranean and Iberia, and Worldwide Vice President of Business Development & Strategy for Ethicon Endo Surgery. Ms. Brennan earned a B.S. in Business Administration from the University of Kansas.
Ms. Brennan was elected to our Board pursuant to a contested proxy solicitation in 2023.
Robert Chapek has served as a member of our Board of Directors since January 2024. Mr. Chapek is an experienced media and entertainment executive with nearly 30 years of experience at The Walt Disney Company (NYSE: DIS), most recently serving as its Chief Executive Officer from February 2020 to November 2022. Prior to becoming Disney’s Chief Executive Officer, Mr. Chapek served as Chairman of Disney Parks, Experiences and Products since the segment’s creation in 2018. Prior to that, he was Chairman of Walt Disney Parks and Resorts since 2015. During his tenure at Parks, Mr. Chapek oversaw the opening of Disney’s first theme park and resort in mainland China, Shanghai Disney Resort, and the addition of numerous guest offerings across Disney’s six resort destinations in the U.S., Europe and Asia, including the creation of the new Star Wars: Galaxy’s Edge lands at Disneyland and Walt Disney World. Mr. Chapek previously served as head of Disney Consumer Products, where he managed Disney’s film content distribution strategy across multiple platforms and drove a technology-led transformation of the business, and as President of Walt Disney Studios Home Entertainment, where he led the organization to record-setting performances and played a key role in the commercialization of the Studio’s film business and spearheaded the successful “vault strategy” for Disney’s iconic films. Mr. Chapek previously served on the board of the Make-A-Wish Foundation. Prior to joining Disney in 1993, Mr. Chapek worked in brand management at H.J. Heinz Company, and in advertising at J. Walter Thompson. He holds a degree in microbiology from Indiana University Bloomington, and received his MBA from Michigan State University.
Our Board believes Mr. Chapek’s experience as Chief Executive Officer and a member of the board of directors of Disney, a large public company with global operations, allows him to provide additional insight to the Board of Directors on strategy and
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business decisions as well as make valuable contributions to the Compensation Committee and the Nominating, Compliance and Corporate Governance Committee.
Rolf Classon has served as a member of our Board of Directors since November 2023. Mr. Classon is an experienced biopharma and medical technology executive. From October 2002 until his retirement in July 2004, Mr. Classon was Chairman of the Executive Committee of Bayer HealthCare AG, a subsidiary of Bayer AG. He served as President of Bayer Diagnostics from 1995 to 2002 and as Executive Vice President of Bayer Diagnostics from 1991 to 1995. Prior to 1991, Mr. Classon held various management positions with Pharmacia Corporation. Mr. Classon previously served as Vice Chairman of the Supervisory Board of Fresenius Medical Care AG & Co. KGaA (NYSE: FMS) from 2011 to 2023. He has served as Chairman of the Board of BICO Group AB since May 2023, having joined its board of directors in April 2022. Mr. Classon has served on the board of Catalent, Inc. (NYSE: CTLT) since 2014. He was previously Chairman of the Board of Directors of Perrigo Company plc (NYSE: PRGO) from 2018 to May 2022, having joined that board as a director in May 2017, and Chairman of the Board of Directors of Tecan Group Ltd., serving from 2009 until April 2018. Mr. Classon served as Chairman of the Board of Directors of Hill-Rom Corporation (NYSE: HRC) from 2006 until March 2018, also serving as Vice Chairman of the Board from 2003 through May 2005 and as interim Chief Executive Officer from May 2005 until March 2006. From 2005 to 2015, Mr. Classon served as Chairman of the Board of Directors of Auxilium Pharmaceuticals, Inc., and as Vice Chairman from March 2005 to April 2005. He also previously served as a director of Sequanna Medical AG from 2016 to 2017; of Aerocrine AB, Stockholm from 2013 to 2015; of Millipore Corporation from 2005 to 2010; of Prometheus Laboratories Inc. from 2004 to 2010; and of Enzon Pharmaceuticals Inc. from 1997 to 2011. Mr. Classon received his Chemical Engineering Certificate from the Gothenburg School of Engineering and a Business Degree from the Gothenburg University.
Our Board believes that Mr. Classon’s extensive experience as an executive officer at biopharma and medical technology companies allows him to provide additional insight to the Board of Directors on strategy and business decisions as well as make valuable contributions to the Audit Committee.
Quentin Koffey has served as a member of our Board since June 2023. Mr. Koffey is the Managing Partner and Chief Investment Officer of Politan. Prior to founding Politan, Mr. Koffey was a partner at Senator Investment Group LP, and a Portfolio Manager for Strategic Investments at The D.E. Shaw Group. Mr. Koffey also served as a Portfolio Manager at Elliot Management Corporation. Mr. Koffey holds a BA from Yale College, a JD from Stanford Law School, and an MBA from Stanford Graduate School of Business.
Mr. Koffey was elected to our Board pursuant to a contested proxy solicitation in 2023.
Craig Reynolds has served as a member of our Board of Directors 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 a 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 2010 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 Board believes that Mr. Reynolds’ extensive experience as an executive officer at other medical device companies allows him to provide additional insight to the Board on strategy decisions as well as make valuable contributions to the Audit Committee, the Compensation Committee and the Nominating, Compliance and Corporate Governance Committee.
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Executive Officers
The names of our executive officers, their ages, their position(s) with Masimo and other biographical information as of April 29, 2024, are set forth below.
NameAgePosition(s)
Joe Kiani59Chief Executive Officer and Chairman of the Board
Micah Young45Executive Vice President, Chief Financial Officer
Bilal Muhsin43Chief Operating Officer
Tao Levy50Executive Vice President, Business Development
Tom McClenahan51Executive Vice President, General Counsel and Corporate Secretary
Blair Tripodi51Chief Operating Officer, Consumer Division
Joe Kiani is the founder of Masimo and has served as our Chief Executive Officer (“CEO”) and 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 (the “Masimo Foundation”), and the Chairman and CEO of Willow Laboratories, Inc. Mr. Kiani also serves on a number of other Boards of Directors, including CHOC Children’s Orange/CHOC Children’s at Mission Hospital, the Medical Device Manufacturers Association, Like Minded Media Ventures, CalTech and The Carter Center Board of Councilors founded by President Jimmy Carter. In 2021, Mr. Kiani was appointed by President Joe Biden to the President’s Council of Advisors on Science and Technology (PCAST). Mr. Kiani served on the Board of Directors of Stereotaxis, Inc. from September 2016 to May 2021. As Masimo’s founder, CEO 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 Board believes Mr. Kiani is critical in his roles as Chairman and CEO to our continued development and growth.
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 B.S. in Accounting and Criminal Justice from Indiana Wesleyan University and is a Certified Public Accountant (inactive).
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 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 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 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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Blair Tripodi has served as our Chief Operating Officer, Consumer Division since September 2022. Prior to September 2022, Mr. Tripodi was the Chief Commercial Officer of DEI Holdings, Inc. (“DEI”), a wholly owned subsidiary of Viper Holding Corporation, the parent company of Sound United, since September 2015. Mr. Tripodi joined DEI in January 2013 and served as Chief Marketing Officer and Senior Vice President, International for Sound United. Prior to joining DEI, Mr. Tripodi worked as Managing Director of Under Armour’s European, Middle Eastern and African business, being one of the first executives on the ground to help launch the global sports company. Mr. Tripodi’s previous experience includes serving as Director, Brand and Business Development for the U.S. Olympic Committee, as well as serving in various roles with Nike, Inc. Mr. Tripodi holds a B.A. in Psychology from the University of Western Ontario.
Family Relationships
There are no family relationships between or among any of our directors or executive officers.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than 10% of our common stock, file reports of ownership and changes of ownership with the SEC. Such directors, executive officers and 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
SEC regulations require us to identify in this Annual Report on Form 10-K anyone who failed to file a timely required report during the most recent fiscal year. Based solely upon our review of forms we received, or written representations from reporting persons stating that they were not required to file these forms, we believe that during our fiscal year ended December 30, 2023, all Section 16(a) filing requirements were satisfied on a timely basis, except for one Form 4 for Mr. Koffey reporting a grant of an RSU award with respect to 1,228 shares on June 26, 2023 that was filed on July 6, 2023 and one Form 4 for Ms. Brennan reporting a grant of an RSU award with respect to 1,228 shares on June 26, 2023 that was filed on June 29, 2023.
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.
Consideration of Director Nominees
No material changes have been made to the procedures by which security holders may recommend nominees to our Board from those that were described in our Definitive Proxy Statement for our 2023 Annual Meeting of Stockholders that was filed with the SEC on May 24, 2023.
Audit Committee; Financial Expert
We maintain a separately-designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of our Audit Committee are Messrs. Koffey, Classon and Reynolds, with Mr. Reynolds serving as the Chairperson of the Audit Committee. From January 2023 to June 2023, the members or our Audit Committee were H Michael Cohen (Chairperson), Adam Mikkelson and Julie Shimer, Ph.D. In June 2023, Mr. Cohen and Dr. Shimer ceased serving on our Board. Messrs. Reynolds and Koffey joined the Audit Committee in July 2023, at which time Mr. Mikkelson was appointed as Chairperson of the Audit Committee. Mr. Classon was appointed to the Audit Committee in January 2024. In February 2024, following Mr. Mikkelson ceasing to serve on our Board, Mr. Reynolds was appointed the Chairperson of the Audit Committee. Our Board has determined that Mr. Reynolds is an audit committee financial expert, as defined under applicable SEC rules, and that Mr. Reynolds meets 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 Mr. Reynolds’ level of knowledge and experience based on a number of factors, including his formal education and experience.
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ITEM 11.     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 program 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 material elements of our executive compensation program for our Principal Executive Officer, Principal Financial Officer and the next three most highly-compensated executive officers of the Company that were serving as an executive officer at the end of fiscal 2023 (our “Named Executive Officers” or “NEOs”). During fiscal 2023, these individuals were:
NamePosition(s)
Joe Kiani 
Chief Executive Officer and Chairman of the Board
Micah Young Executive Vice President, Chief Financial Officer
Bilal MuhsinChief Operating Officer
Tao LevyExecutive Vice President, Business Development
Tom McClenahanExecutive Vice President, General Counsel and Corporate Secretary
Our Compensation Discussion and Analysis 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 2023 including the key factors that the Compensation Committee considered in determining their compensation.
Executive Summary
Our compensation program is designed to attract and retain highly-qualified employees within our industry and motivate them to perform at the highest level while executing our long-term plan. In retaining and motivating high-caliber talent, the Compensation Committee is committed to promoting a performance-based culture. Accordingly, we deliver the vast majority of our executives’ pay opportunities in the form of annual and long-term incentives tied to challenging financial metrics that incentivize management to successfully deliver on the long-term plan and our commitments to our stockholders.
2023 Compensation Highlights
Based on fiscal year 2023 financial performance, our CEO and NEOs:
Received no base salary increases in fiscal year 2023;
Earned no bonuses for fiscal year 2023; and
Earned only 28% of the performance shares granted in 2021 for the fiscal year 2023 performance period.
2023 Business Highlights
Achieved a record contracting year with hospital customers:
• We had a record year in 2023 for our U.S. healthcare business and the second highest year for our worldwide healthcare business in terms of new customer wins converting hospital customers over to Masimo technologies.
• As a result of strong hospital contracting, our unrecognized contact revenue (as of the end of fiscal year 2023) increased 17% over the prior year period.
Achieved key product and technology milestones:
• Masimo Opioid Halo was granted de novo classification by the FDA, making it the first and only FDA-authorized opioid overdose prevention and alert system for detecting opioid-induced respiratory depression.
• Masimo Radius VSM received FDA 510(k) clearance. The Radius VSM is a patient worn, continuous multi-parameter vital signs monitor that allows ambulation and movement while ensuring patients remain continuously monitored.
• We launched the Masimo Stork, a revolutionary smart home baby monitoring system. This innovative system offers parents insight into their baby’s health data, helping them learn more about and be better connected to their baby.
• ORi, a noninvasive, continuous parameter designed to provide additional insight into a patient’s oxygen status in the moderate hyperoxic range under supplemental oxygen, was granted a De Novo by the FDA.
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2023 Business Highlights - (Continued)
• The medical version of our W1 watch received FDA 510(k) clearance for over-the-counter (OTC) and prescription use (Rx). Masimo W1 is the first FDA-cleared watch to provide continuous real-time oxygen saturation (SpO2) and pulse rate (PR) for OTC and Rx use.
• We expanded the capabilities of our HEOS® platform by providing our customers with health tracking capabilities integrated into their favorite audio solutions. The global expansion of the HEOS® platform enables an always-on connection to the Masimo Health secure cloud device, thereby empowering consumers with an enhanced health tracking experience.
• We launched the Denon PerL and PerL Pro True Wireless Earbuds powered by Masimo AAT™, allowing users to create a personal audio profile to optimize the sound quality of the headphones.
Consideration of Say-on-Pay Advisory Vote
Our Board believes it is important to be responsive to feedback from our stockholders about our executive compensation program. In the months preceding and since the 2023 Annual Meeting of Stockholders, at which only 56% of the stockholders votes were cast in favor of our say-on-pay, certain of our independent directors engaged in extensive outreach efforts to understand our stockholders’ concerns regarding out compensation practices. The CEO and other executives participated in these meetings, but were not present unless asked to be present for discussions of their compensation. Across conversations with stockholders holding over 50% of our outstanding shares, we received valuable feedback that the Compensation Committee carefully considered in designing our 2024 executive compensation program. Key compensation-related themes discussed across these meetings, as well as how we responded to the feedback received, are summarized below.
Stockholder Feedback Related to Executive Compensation
Investor FeedbackOur Responses
Changes for 2023
Consider adding a relative TSR metric to the long-term incentive award.Commencing in 2023 and continuing for 2024, the Company added a relative TSR metric to the performance share units granted to our executive officers that requires Company TSR out-performance at the 55th percentile relative to the constituents of the Nasdaq Composite Index to achieve target payout over a three-year cumulative performance period. If the Company’s absolute TSR is negative, the funding percentage is capped at 100%.
For long-term incentive compensation plans, consider moving to three-year cumulative financial metrics rather than annual metrics at the end of a three-year performance period.For 2023, we incorporated three-year cumulative Adjusted Revenue and Operating Income performance metrics in the design of the performance share units. For 2024, we incorporated a three-year cumulative non-GAAP Operating Income performance metric in the design of the performance share units.
Continue to enhance disclosure on our executive compensation program.
We have endeavored to increase the transparency of and details regarding our executive compensation program and governance practices throughout this Annual Report on Form 10-K, including key details regarding 2023 and 2024 enhancements to our incentive structures as outlined below.
Stockholders expressed a preference that future executive employment agreements include only double trigger cash severance provisions in connection with a change-in-control.Starting in 2023, the Compensation Committee has committed that any new employment agreements will include only double trigger change-in-control provisions.
Changes in 2024
Consider setting performance goals at the higher end of guidance, rather than the mid-point of guidance
We set the performance targets under both our annual cash incentive and 2024-2026 PSUs at the high end of guidance provided to stockholders, incentivizing exceptional performance.
Preference for separate metrics in the annual cash incentive and PSUs. We removed Adjusted Revenue from the 2024-2026 PSU design while retaining it in the 2024 annual incentive. As such, the metrics considered under each incentive structure are separate and distinct.
Preference for higher weighting of TSR in the in the PSUs.
For 2024, we increased the weighting of 3-year relative TSR in our 2024-2026 PSUs from 20% to 50% of the award.
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Overview of 2024 Incentive Compensation Program Design
Our Board believes that it is important to be responsive to stockholders’ viewpoints about our executive compensation program. After considering the feedback we received from stockholders as summarized above, we made several responsive changes to enhance our 2024 incentive compensation structures. Key features of our 2024 annual and long-term incentive programs are highlighted in the following tables.
2024 Annual Cash Incentives
Performance Period
Annual cash incentives are earned, if at all, at the end of a one-year performance period based on the Company’s actual performance as measured against pre-established performance objectives.
Metrics and
2024 Adjusted Revenue(1) (50%)
Weighting
2024 Adjusted Non-GAAP Earnings Per Share (New Definition)(1) (50%)
Performance Achievement
Maximum: 110%
Target: 100%
Threshold: 90%
Achievements between the threshold and maximum are based on a linear interpolation between points along the funding percentage curve.
Rigorous
Performance
Goals
2024 Adjusted Revenue(1): The target for the Company’s revenue was set at the top end of its financial guidance range, which represents a significant increase in revenue compared to the prior year actual results. Furthermore, the target is intended to incentivize management to deliver revenue performance that exceeds the growth rates of the markets in which the Company competes.
2024 Adjusted Non-GAAP Earnings Per Share (New Definition)(1): The target for the Company’s earnings per share (EPS) was set at the top end of its financial guidance range.
Details regarding the established threshold, target and maximum goals for each metric will be disclosed in next year’s proxy statement.
2024 Equity Awards
Equity Vehicle
Mix and Performance Period
25% in the form of Stock Option Awards, which vest annually over a five-year period.

75% in the form of PSU Awards, that vest after three-years based on our actual cumulative performance for the three-year performance period as measured against multiple pre-established performance objectives.
PSU Metrics and
Weighting
Three-Year Cumulative Adjusted Non-GAAP Operating Income (50%): Represents the sum of the Company’s operating income for the three-year performance period.
Three-Year Relative TSR (50%): Represents the Company’s TSR as a percentile ranking relative to the constituents of the Nasdaq Composite Index for the three-year performance period (i.e., beginning on January 1, 2024 and ending on December 31, 2026).
PSU Payout
Range
Maximum: 200%
Target: 100%
Threshold: 50%
Achievements between the threshold and maximum are based on a linear interpolation between points along the funding percentage curve.
Rigorous
Performance
Goals
Three-Year Cumulative Adjusted Non-GAAP Operating Income (Updated Definition): The target for the Company’s operating income was set at the top end of its financial guidance range and represents significant increases in operating income for the performance period.
Three-Year TSR: Targets the Company’s TSR performance at the 55th percentile ranking of the constituents of the Nasdaq Composite Index for the three-year performance period. If the Company’s TSR is negative, the funding percentage is capped at 100% for the relative TSR metric component of the award.
Details regarding the threshold, target and maximum goals for each metric will be disclosed at the end of the performance period.
Performance
Achievement %
Operating Income
Relative TSR
Maximum: 110% of targetMaximum: 154.5% (85th percentile)
Target: 100% of targetTarget: 100% (55th percentile)
Threshold: 90% of targetThreshold: 45.5% (25th percentile)
_______________________________________________________________________
(1)    Non-GAAP financial measure - please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
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Fiscal 2023 NEO Compensation Highlights
We believe that our fiscal 2023 executive compensation decisions were closely aligned with our stockholders’ interests. While base salary and an annual cash bonus opportunity focused on the achievement of shorter-term goals, our equity awards, in the form of options to purchase shares of our common stock and PSU awards, are wholly performance-based to provide for a longer-term compensation structure to focus executives’ attention on our long-term operating results that will drive sustained value creation for our stockholders, and use extended vesting schedules to promote retention. Further, through the use of performance-based annual cash bonuses, stock options and PSU awards, the vast majority of our executive officers’ fiscal 2023 annual compensation was at risk and was directly tied through performance-based annual cash bonuses and LTI compensation in the form of stock options and PSU awards, to the achievement of financial and operating results that increased stockholder value.
The Compensation Committee took the following key actions for fiscal 2023 with respect to the compensation of our NEOs:
Base Salaries - We did not increase annual base salaries of our NEOs during fiscal 2023. Please see “Individual Compensation Elements Base Salary” of this Item 11 for additional information.
Annual Cash Incentives - Based on objective, pre-established financial measures, weighted equally between Adjusted Revenue(1) and Adjusted Non-GAAP EPS(1) for fiscal 2023, as a result of combined achievement below the minimum threshold, we did not pay an annual cash bonus under our fiscal 2023 Executive Bonus Incentive Plan to any of our NEOs.
LTI Compensation - Equity Awards - In February 2023, we granted options to purchase shares of our common stock to each of our NEOs with a grant date fair value ranging from $424,965 to $687,474, and an option to purchase shares of our common stock to our CEO with a grant date fair value in the amount of $3,299,985. In February 2023, we also granted PSU awards with a target grant date fair value ranging from $1,274,821 to $2,062,371 to our NEOs and a PSU award with a target grant date fair value of $9,899,929 to our CEO.
_______________________________________________________________________
(1)    Non-GAAP financial measure - please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
Total Direct Compensation
The following charts show the mix of our CEO’s and, on average, each of our other NEOs’ total direct compensation for fiscal 2023, consisting of base salary, and the grant date fair value of the equity awards granted during the year:

342343
Total long-term incentive compensation =91.4%Total long-term incentive compensation =82.2%
Total “at risk” compensation =91.4%Total “at risk” compensation =82.2%
We have also aligned the interests of our executive officers with those of stockholders and our long-term interests through executive stock ownership requirements. The policy requires (i) our CEO to own and hold shares of our common stock with a value equal to at least six times his annual base salary and (ii) our other executive officers to own and hold shares of our common stock with a value equal to the executive officer’s annual base salary. As of March 29, 2024, each of our executive officers to whom such stock ownership requirements are applicable was in compliance with such requirements.
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Executive Compensation Policies and Practices
We endeavor to maintain sound executive compensation policies and practices, including compensation-related corporate governance standards, consistent with our executive compensation philosophy. During fiscal 2023, we maintained the following executive compensation policies and practices, including both policies and practices we have implemented to drive performance and policies and practices that either prohibit or minimize behaviors that we do not believe serve our stockholders’ long-term interests:

What We Do
ü    Maintain an Independent Compensation Committee. The Compensation Committee consists solely of independent directors who establish and review our compensation practices.
ü    Compensation Committee Retains an Independent Compensation Advisor. The Compensation Committee has engaged its own compensation consultant to provide information, analysis and other advice on executive compensation independent of management.
ü    Annual Executive Compensation Review. At least once a year, the Compensation Committee conducts a review of our compensation strategy.
ü    Compensation At-Risk - Pay For Performance. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at-risk” based on corporate performance, to align the interests of our executive officers with those of our stockholders. Further, as our executives derive value from stock options if, and only if, the price of our stock increases over time, our Compensation Committee considers our equity incentives to be 100% performance-based.
ü    Annual Compensation-Related Risk Assessment. The Compensation Committee considers our compensation-related risk profile to ensure that our compensation plans and arrangements do not create inappropriate or excessive risk and are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee has determined that there are no risks arising from our compensation policies and practices for our employees that are reasonably likely to have a material adverse effect on the Company.
ü    Multi-Year Vesting Requirements. To align the interests of our executive officers with those of our stockholders, the time-based stock option awards granted to our executive officers vest over a five-year period. In fiscal 2023, we granted our executive officers PSU awards that will be earned, if at all, at the end of a three-year performance period based on our actual performance over the three year performance period (fiscal 2023-2025) as measured against pre-established performance objectives relating to Three-Year Cumulative Adjusted Revenue(1), Three-Year Cumulative Adjusted Non-GAAP Operating Income(1) and Three-Year Relative TSR.
ü    Clawback Policy. We have adopted a compensation recovery (“Clawback”) policy. Under the Clawback policy, if we are required to prepare an accounting restatement to correct our material noncompliance with any financial reporting requirement under securities laws, including restatements that correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, we are obligated to recover erroneously awarded incentive-based compensation received from us by any of our current and former executive officers during the three year period preceding the date on which we became required to prepare the accounting restatement. Erroneously awarded incentive-based compensation is the amount of incentive-based compensation received that exceeds the amount of incentive-based compensation that otherwise would have been received had it been determined based on an applicable restatement.
ü    Robust Stock Ownership Policies. We have adopted stock ownership policies for our executive officers and the non-employee members of our Board under which they must accumulate and maintain, consistent with the terms of our stock ownership policy, a certain value of shares of our common stock.
ü    Annual Stockholder Advisory Vote on Named Executive Officer Compensation. We conduct an annual stockholder advisory vote on the compensation of our NEOs. The Compensation Committee considers the results of this advisory vote during the course of its deliberations on our executive compensation program.
ü    Stockholder Engagement Led by Independent Directors. Our independent directors, including the Chairperson of our Compensation Committee, engage with our stockholders on executive compensation matters regularly.
_________________________________________________________________________
(1)    Non-GAAP financial measure - please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
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What We Do Not Do
û    No Guaranteed Bonuses. We do not provide guaranteed bonuses to our executive officers. 
û    Upward Discretion. We do not exercise upward discretion on our pre-established compensation goals.
û    No Special Executive Retirement Plans. We do not currently offer, nor do we have plans to offer, defined benefit pension plans or any non-qualified deferred compensation plans or arrangements to our executive officers, other than the plans and arrangements that are available to all employees. Our executive officers are eligible to participate in our defined contribution plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), on the same basis as our other employees.
û    No Hedging; Pledging Requires Pre-Approval. We prohibit our employees, including our executive officers, and the non-employee members of our Board from hedging our equity securities. In addition, all pledging of our equity securities by our executive officers and members of our Board must be pre-approved by the Compensation Committee and, as a condition to pre-approving any pledge of our equity securities, the executive officer or member of our Board seeking to pledge securities must clearly demonstrate his or her financial capacity to repay any loan for which securities will be pledged as collateral without resort to the securities to be pledged.
û    No Tax Payments on Perquisites. We do not provide any tax reimbursement payments (including “gross-ups”) to our executive officers on any perquisites or other personal benefits.
û    No Tax Gross-Up Payments on Post-Employment Compensation Arrangements. We do not provide any tax reimbursement payments (including “gross-ups”) on payments or benefits contingent upon a change-in-control of the Company.
û    No New Single-Trigger Change-in-Control Provisions. Our Compensation Committee has committed that any new employment agreement will include only double trigger change-in-control provisions.
û    No Stock Option Repricing. We do not permit options to purchase shares of our common stock to be repriced to a lower exercise price without the approval of our stockholders. We have never repriced our stock options.
û    No Evergreen Provisions. The 2017 Equity Incentive Plan does not contain an annual “evergreen” provision that increases the number of shares available for issuance each year. The 2017 Equity Incentive Plan authorizes a fixed number of shares, so that stockholder approval is required to increase the maximum number of shares that may be issued subject to awards under the 2017 Equity Incentive Plan.
Compensation Philosophy and Objectives
The primary objective of our executive compensation program is to attract and retain a talented, entrepreneurial and creative team of executives who will provide leadership for our success in driving our technologies and products to the broadest number of patients, and in turn, creating sustainable long-term value. We seek to accomplish this objective in a way that is aligned with the long-term interests of our stockholders.
Compensation Philosophy
We operate within a complex business environment that requires a strong management team. Our business model requires our management team to be adept at developing competitive healthcare and consumer products and sales/marketing strategies to support multiple customers, including hospitals, alternate care facilities and original equipment manufacturers within multiple geographies, as well as consumer products sold direct-to-consumers, or through authorized retailer and wholesalers. Many of our competitors have substantially greater capital resources, larger customer bases and larger sales forces than we do, and have ties with group purchasing organizations and other purchasers that are stronger than ours. In addition, the medical device industry is characterized by rapid product development and technological advances, which require our management team to be adept at managing these key areas of the business.
As a result, the Compensation Committee believes that it is critical to attract, develop and retain a highly-qualified management team with the experience, knowledge, expertise and vision capable of not only operating, but also excelling, in this complex and competitive business environment, including competing against larger competitors and developing and commercializing new products, new and improved technologies and new applications for our existing technologies.
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Compensation Objectives
Our executive compensation program is intended to help us achieve and foster a goal-oriented, highly-motivated management team with a clear understanding of our business objectives and shared corporate values. To this end, the Compensation Committee believes that our executive compensation program should provide compensation that:
attracts and retains the best executive talent;
appropriately aligns with our business objectives and stockholder interests;
maintains a reasonable balance across types and purposes of compensation, particularly with respect to fixed compensation objectives, short-term and long-term performance-based objectives and retention objectives;
motivates our executive officers to achieve our annual and long-term strategic goals and rewards performance based on the attainment of such goals;
appropriately considers risks and rewards in the context of our business environment and long-range business plans;
recognizes individual value and contributions to our success;
considers but does not exclusively rely upon competitive market data; and
supports our succession planning objectives.
We seek to achieve these objectives in a way that is consistent with our long-term interests and the interests of our stakeholders, including our stockholders and employees. We structure the annual compensation of our executive officers, including our NEOs, using three principal elements: base salary, annual cash incentive opportunities and LTI compensation opportunities in the form of equity awards. While the pay mix may vary from year to year, the ultimate goal is to achieve our compensation objectives as described above.
Governance of Executive Compensation Program
Role of Compensation Committee
The Compensation Committee discharges the responsibilities of our Board relating to the compensation of our executive officers. The Compensation Committee consists of directors who are “independent” directors as required by the Nasdaq listing standards and Exchange Act Rule 10C-1, and “non-employee directors” for purposes of Exchange Act Rule 16b-3. From January 2023 to June 2023, the Compensation Committee was comprised of Messrs. Reynolds (Chairperson), Cohen and Mikkelson. From July 2023 to January 2024, the Compensation Committee was comprised of Ms. Brennan and Messrs. Mikkelson and Reynolds. Mr. Chapek was appointed to the Compensation Committee in February 2024. Mr. Mikkelson resigned from our Board in February 2024 and the Compensation Committee is currently comprised of Mr. Reynolds (Chairperson), Ms. Brennan and Mr. Chapek.
The Compensation Committee has responsibility for overseeing our compensation and benefits policies generally, and overseeing, evaluating and approving the compensation plans, policies, and programs applicable to our CEO, as well as our other executive officers. In carrying out its responsibilities, the Compensation Committee evaluates our compensation policies and practices with a focus on the degree to which these policies and practices reflect our executive compensation philosophy, develops recommendations, makes decisions that it believes advance our philosophy and reviews the performance of our executive officers when making decisions with respect to their compensation.
The Compensation Committee reviews the base salary levels, annual cash bonus opportunities and LTI compensation opportunities of our executive officers annually or more frequently as warranted. In making decisions regarding the compensation of our executive officers, the Compensation Committee relies on its general experience and subjective considerations of various factors, including the following:
our performance against the financial, operational and strategic objectives established by the Compensation Committee and our Board;
each individual executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group;
the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group;
the performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function and work as part of a team, all of which reflect our core values;
compensation parity among our executive officers;
our financial performance relative to our compensation and performance peers and consideration of market data as discussed in “—Competitive Positioning” below;
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feedback from our investor outreach programs; and
with respect to his direct reports, the recommendations of our CEO.
These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each executive officer. No single factor is determinative in setting pay levels, nor is there any assigned weighting among these factors.
The Compensation Committee also considers the potential risks in our business when designing and administering our executive compensation program. We believe our balanced approach to performance measurement and pay delivery works to avoid misaligned incentives for individuals to undertake excessive or inappropriate risks.
The Compensation Committee does not engage in formal benchmarking against other companies’ compensation programs or practices to establish our compensation levels or make specific compensation decisions with respect to our executive officers. Instead, in making its determinations, the Compensation Committee reviews information summarizing the compensation paid by a representative group of peer companies, to the extent that the executive positions at these companies are considered comparable to our positions and informative of the competitive environment, as well as more broad-based compensation surveys to gain a general understanding of market compensation levels.
Role of Management
In discharging its responsibilities, the Compensation Committee works with members of our management team, including our CEO. The management team assists the Compensation Committee by providing information on our performance, as well as the individual performance of our executive officers, market data and management’s perspectives and recommendations on compensation matters.
The Compensation Committee solicits and reviews our CEO’s recommendations and proposals with respect to adjustments to annual cash compensation, LTI compensation opportunities, program structures and other compensation-related matters for our executive officers (other than with respect to our CEO’s own compensation).
The Compensation Committee reviews and discusses these recommendations and proposals with our CEO and uses them as one factor in determining and approving the compensation for our executive officers. However, when the Compensation Committee sets the compensation for our CEO, he recuses himself from discussions regarding his own compensation. The Compensation Committee does not delegate any of its functions to others in deciding executive compensation.
Role of Compensation Advisor
The Compensation Committee engages an independent compensation advisor to assist it by providing information, analysis and other advice relating to our executive compensation program and the decisions resulting from its executive compensation review. The compensation advisor serves at the discretion of the Compensation Committee, which reviews the engagement and independence of the compensation advisor annually.
Since October 2016, the Compensation Committee has retained Compensia, a national compensation consulting firm, to serve as its compensation advisor. During fiscal 2023, Compensia provided the following services to the Compensation Committee:
consulting with the Chairperson and other members of our Compensation Committee between Compensation Committee meetings;
providing competitive market data based on the compensation peer group for our executive officer positions and evaluating how the compensation we pay our executive officers compares both to our performance and to how the companies in our compensation peer group compensate their executives;
reviewing and analyzing the base salary levels, annual cash bonus opportunities and LTI compensation opportunities of our executive officers;
reviewing and analyzing compensation of our Board members;
assessing executive compensation trends within our industry, and providing updates on corporate governance and regulatory issues and developments;
reviewing the Compensation Discussion and Analysis in our Annual Report on Form 10-K and proxy statement; and
assessing compensation risk to determine whether our compensation policies and practices are reasonably likely to have a material adverse impact on the Company.
Compensia did not provide any services to us other than the consulting services to the Compensation Committee.
The Compensation Committee regularly reviews the objectivity and independence of the advice provided by its compensation advisor to the Compensation Committee on executive compensation matters. During fiscal 2023, the Compensation Committee
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considered the six specific independence factors adopted by the SEC and Nasdaq in past years, determined that Compensia was still an independent advisor, and concluded that its work did not raise any conflicts of interest. During fiscal 2023, the total fees payable to Compensia were approximately $189,000.
Competitive Positioning
For purposes of comparing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of comparable companies. The companies in this compensation peer group for fiscal 2023 were approved in November 2022 on the basis of their similarity to us in size, in terms of annual revenue and market capitalization. On an annual basis the Compensation Committee reviews our peer group and makes additions or removals as appropriate to account for changes in both our business and the businesses of the companies in the peer group, and to ensure constituents continue to be within an appropriate range as compared to the Company with respect to the financial criteria noted below.
Our compensation peer group for fiscal 2023 was as follows:
 2023 Peer Group
Continuing Companies
ABIOMED, Inc.
Insulet Corporation
Align Technology, Inc.
Integra LifeSciences Holdings Corp.
The Cooper Companies, Inc.
LivaNova PLC
DENTSPLY SIRONA, Inc.
NuVasive, Inc.
Dexcom, Inc.
ResMed, Inc.
Globus Medical, Inc.
Teladoc Health, Inc.
Haemonetics Corp.
Teleflex, Inc.
Hologic, Inc.
West Pharmaceutical Services, Inc.
ICU Medical, Inc.
Removals
Tandem Diabetes Care, Inc.
Additions
QuidelOrtho
The companies included in the compensation peer group had median revenues of $2.4 billion, ranging from approximately $974 million to approximately $5.2 billion, based on the four fiscal quarters ended nearest to December 31, 2022, representing approximately 0.4 times to 2.2 times of our last four quarters of revenue of approximately $2.5 billion as of such date. In addition, the compensation peer group had a median market capitalization of $8.4 billion, ranging from approximately $2.3 billion to $34.4 billion, as of December 31, 2022, and representing approximately 0.3 times to 4.1 times of our market capitalization of $7.7 billion as of such date.
To analyze the compensation practices of the companies in our compensation peer group, Compensia gathered data from public filings (primarily proxy statements). This market data was then used as a general external reference point for the Compensation Committee in assessing our current compensation levels for executive base salaries, annual cash bonus opportunities and total equity compensation targets.
Individual Compensation Elements
The specific elements of our executive compensation program for fiscal 2023 included base salary, annual cash incentive opportunities, LTI compensation opportunities in the form of equity awards, welfare and health benefits and post-employment compensation arrangements.
TypeComponentPurposeKey Features
Fixed CompensationBase SalaryProvide competitive, fixed compensation to attract and retain the best possible executive talent
l
Cash-based
basesalarypiea01.jpg
l
Reviewed annually, changes are generally effective in July of each year(1)
l
Takes into account level of responsibility, time in role, performance and the ability to replace the individual
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TypeComponentPurposeKey Features
Performance-Based
Annual Incentives
Align executive compensation with our corporate strategies and business objectives; promote the achievement of key strategic and financial performance measures by linking annual cash incentives to the achievement of corporate performance goals
l
Cash-based
Compensation
annualincentive01.jpg
l
Reviewed annually, paid in March(2)
l
Performance-based and not guaranteed
l
Drive the achievement of key business results on an annual or multi-year basis
TypeComponentPurposeKey Features
Performance-BasedEquity AwardsAlign executive compensation with our corporate strategies and business objectives;
motivate our officers to create sustainable long-term value for our stockholders and achieve other business objectives;
encourage stock ownership by our officers in order to align their financial interests with the long-term interests of our stockholders
l
Equity-based
Compensation
longtermincentive.jpg
l
Attract and retain talents
l
Multi-year vesting period and not guaranteed
l
Combination of:
l Performance-based restricted stock units; and
l Time-based stock options
l
PSUs are based on performance goals tied to pre-determined financial metrics approved by the Board
l
Drive the achievement of key long-term business results on a multi-year basis
Other CompensationBenefitsSupport the health and security of our executives and their ability to plan for retirement
l
Ongoing or event driven
Perquisites
l
Enhance executive productivity
Severance Protection
____________________________
(1)        For fiscal 2023, there were no base salary adjustments for any of our NEOs and annual base salaries remained unchanged from fiscal 2022.
(2)        For fiscal 2023, no annual incentive compensation was paid to any of our NEOs as the minimum thresholds for financial and performance measures were not met.
Base Salary
Generally, we establish the initial base salaries of our executive officers through arm’s-length negotiation at the time we hire the individual executive officer, taking into account his or her position, qualifications, experience, prior salary level and the base salaries of our other executive officers. Thereafter, the Compensation Committee reviews the base salaries of our executive officers annually and makes adjustments to base salaries as it determines to be necessary or appropriate.
During fiscal 2023, the Compensation Committee reviewed the base salaries of our executive officers, including the NEOs, taking into consideration overall Company performance, and determined not to make any annual salary adjustments for any of our executive officers and recommended to our CEO that no annual salary adjustments be made for any other employees. Base salaries of the NEOs for fiscal 2023 remained unchanged from fiscal 2022, as follows:
Name
Base Salary as of
December 31, 2022
Base Salary as of
December 30, 2023
Percentage
Change
Joe Kiani $1,247,786 $1,247,786 0%
Micah Young600,875 600,875 0
Bilal Muhsin627,000 627,000 0
Tao Levy418,000 418,000 0
Tom McClenahan501,600 501,600 0
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Annual Cash Incentive
In February 2023, the Compensation Committee approved the terms of the 2023 Executive Bonus Incentive Plan under which our NEOs are eligible to receive a cash bonus based on the achievement of our performance goals. At the beginning of the year, the Compensation Committee approves funding percentages that include payout scenarios for various levels of Company financial performance. For 2023, the Compensation Committee selected Adjusted Revenue(2) and Adjusted Non-GAAP EPS(2) as the performance measures for the funding percentages, each weighted equally, as the Compensation Committee believes these performance measures directly support both our short-term strategy and our long-term objective of creating sustainable stockholder value.
Target performance for each metric was set higher than both target and actual performance in the prior year and in each case required double digit growth over the prior year period on a constant currency basis. For purposes of calculating the performance achievement and funding percentages for 2023, the Compensation Committee determined that the performance measures would be adjusted to exclude the impact of foreign currency fluctuations and share repurchases that were not reflected in the targets. The purpose of these adjustments is to ensure the measurement of performance reflects factors that management can directly control and that payout levels are not artificially inflated or impaired by factors unrelated to the ongoing operations of the business. After reviewing the Company’s performance, the Compensation Committee determined that the Company did not meet the minimum performance threshold required in order to payout the annual cash incentive bonus to any NEO including our CEO, and recommended no annual cash incentive bonus be paid to the any other employees.
The table below sets forth the Adjusted Revenue(2) and Adjusted Non-GAAP EPS(2) performance goals and funding percentages at the threshold, target and maximum funding levels for 2023, as well as the actual performance results:
MetricWeightingTarget Goal
Actual Performance(2)
Achievement %(1)
Payout %(1)
Weighted Result
ThresholdMaximumActual PerformanceThresholdMaximumActual Performance
Adjusted Revenue
(in millions, except for percentages)
50%$2,460$2,049.790%110%83%0%200%0%0%
Adjusted Non-GAAP EPS50%$4.80$3.2090%110%67%0%200%0%
______________
(1)    Pursuant to the 2023 Executive Bonus Incentive Plan, no payment is made for performance below threshold; payouts for achievement levels between the threshold and maximum were to be based on a linear interpolation between points along the funding curve.
(2)    Non-GAAP financial measure - please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
The following is a summary of the target annual cash bonus opportunities, the actual annual 2023 bonus awards for the NEOs and a comparison relative to their target awards:
Name
Base Salary as of
December 30, 2023
2023 Target
Cash Bonus
(% of Base Salary)
2023 Target
Cash Bonus
Amount
2023 Actual
Cash Bonus
Amount
2023 Award
(% of Target)
Joe Kiani $1,247,786 100%$1,247,786 $0%
Micah Young600,875 100600,875 0
Bilal Muhsin627,000 100627,000 0
Tao Levy418,000 100418,000 0
Tom McClenahan501,600 100501,600 0
Long-Term Incentive Compensation - Equity Awards
The Compensation Committee believes LTI compensation in the form of equity awards provides an incentive for our executive officers, including our NEOs, to focus on driving increased stockholder value over a multi-year period, serves as a reward for appreciation in our stock price and long-term value creation, and enables us to achieve our retention objectives.
Furthermore, the Compensation Committee believes that stock options and PSU awards are effective, performance-based tools for increasing long-term stockholder value and aligning executive and stockholder interests. In the case of stock options, they only have value to the extent that the market price of our common stock appreciates above the option exercise price, thereby driving value over the vesting period. In the case of PSU awards, actual payouts are based on our achievement of pre-
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established performance objectives over the performance period, and the value of the stock that is ultimately delivered fluctuates based on our stock price performance.
In determining the target LTI award opportunities for each NEO, the Compensation Committee considered the various factors noted above, and aimed to deliver awards that were market competitive while achieving its motivation and retention objectives, the Compensation Committee awarded 2023 LTI awards to our NEOs in the form of stock options (25% of total target award value) and PSUs (75% of total target award value). The following is a summary of the annual 2023 LTI awards for the NEOs.
Stock OptionsPSUs
Name
Total 2023 LTI
Target Award Value
Options to Purchase Shares
of Common Stock
(number of shares)(1)
Options to Purchase Shares
of Common Stock
(total fair value at grant date)(2)
PSUs at Target
(number of shares granted)
(3)
PSUs at Target
(grant date fair value)(4)
Joe Kiani $13,199,914 42,251 $3,299,985 54,267 $9,899,929 
Micah Young2,749,845 8,802 687,474 11,305 2,062,371 
Bilal Muhsin2,749,845 8,802 687,474 11,305 2,062,371 
Tao Levy1,699,786 5,441 424,965 6,988 1,274,821 
Tom McClenahan2,749,845 8,802 687,474 11,305 2,062,371 
______________
(1)The 2023 stock option awards were granted on March 3, 2023.
(2)Amounts set forth in this column reflect the grant date fair value of the option awards, computed in accordance with ASC Topic 718. All of these amounts reflect certain assumptions with respect to the option awards and do not necessarily correspond to the actual value that will be recognized by our NEOs. The actual value, if any, that may be realized from an option award is contingent upon the satisfaction of the conditions to vesting of that award, and upon the excess of the stock price over the exercise price, if any, on the date the option award is exercised. See Note 20 of the Notes to Financial Statements included in this Annual Report on Form 10-K for a discussion of the assumptions made in determining the grant date fair value of the stock options.
(3)Reflects the target number of shares subject to PSUs, assuming all performance goals and other requirements are met. As described below, the PSUs earned will range from 50% to 200% of target based on the achievement of performance goals, which vest in the form of shares of our common stock following the conclusion of the three-year performance period.
(4)The 2023 PSU awards were granted on March 3, 2023. The number of shares was determined by dividing the economic value by the closing stock price per share of $182.43 on the date of grant. Any calculation that results in a fractional share was rounded down to the nearest whole share.

The table below sets forth the type, purpose, performance goals and vesting terms of the 2023 LTI awards.
LTI Award TypePurposePerformance Goal(s)Vesting Terms
Stock options
(25% of total target value)
Retain and reward executives for creating long-term stockholder valueValue derived only if stock price appreciatesVest annually over a five-year period (20% per year)
PSUs
(75% of total target value)
Retain and reward executives for the achievement of long-term performance goals
 40% Three-Year Cumulative Adjusted Revenue(1),
40% Three-Year Cumulative Adjusted Non-GAAP Operating Income(1)
20% Three-Year Cumulative Relative TSR
Vest in 2026 with threshold maximum payout opportunities ranging from 50%-200%
The Compensation Committee selected Three-Year Cumulative Adjusted Revenue(1), Three-Year Cumulative Adjusted Non-GAAP Operating Income(1) and Three-Year Cumulative Relative TSR as the primary performance metrics for the 2023 PSU awards to balance growth and profitability objectives and to incentivize management to deliver forward-looking results in line with our long-term plans that create long-term stockholder value. In particular, the Compensation Committee utilizes revenue metrics that cover different time horizons in both the annual and long-term incentives because it continues to believe revenue is the best driver of the Company’s long-term growth. Furthermore, the Compensation Committee believes that it has set challenging, yet attainable, forward-looking Three-Year Cumulative Adjusted Revenue(1) , Three-Year Cumulative Adjusted Non-GAAP Operating Income(1) and Three-Year Relative TSR goals. The Company will disclose the performance goals for the Adjusted Revenue and Non-GAAP Operating Income metrics following the conclusion of the performance period. The Relative TSR component requires Company TSR out-performance at the 55th percentile relative to the constituents of the Nasdaq Composite Index to achieve target payout over a three-year cumulative performance period. If the Company’s absolute TSR is negative, the funding percentage is capped at 100%.
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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.
_________________________________________________________________________
(1)    Non-GAAP financial measure - please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
Prior 2021 PSU Award Payouts
The 2021 PSU awards vested at the end of a three-year performance period on February 28, 2024 based on actual performance against pre-established performance objectives. The Compensation Committee selected fiscal 2023 Adjusted Revenue(1) and fiscal 2023 Adjusted Non-GAAP Operating Income(1) as the performance measures for the targeted PSU award percentages, each weighted equally.
2023 Adjusted Revenue(1): The target goal for 2023 Adjusted Revenue(1) was $1,450 million.
2023 Adjusted Non-GAAP Operating Income(1): The target goal for 2023 Adjusted Non-GAAP Operating Income(1) was $391 million.
The table below sets forth the Adjusted Revenue(1) and Adjusted Non-GAAP Operating Income(1) performance goals and funding percentages at the threshold, target and maximum funding levels, as well as the actual performance results:
MetricWeightingTarget GoalActual Performance
Achievement %(1)
Payout %(1)
Weighted Result
ThresholdMaximumActual PerformanceThresholdMaximumActual Performance
Adjusted Revenue (in millions, except for percentages)
50%$1,450$1,32490%110%91%50%200%57%28%
Adjusted Non-GAAP Operating Income(2)
50%$391$29290%110%75%50%200%0%
______________
(1)    Non-GAAP financial measure - please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
(2)     Pursuant to the 2021 PSU awards, payouts for achievement levels between the threshold and maximum were based on a linear interpolation between points along the funding curve.     
Welfare and Health Benefits
Our NEOs participate in our employee benefit plans on the same terms as all of our other eligible employees.
We provide health care, dental, vision and life insurance, health savings account employer contributions, an employee assistance plan and both short-term and long-term disability, accidental death and dismemberment benefits to all full-time employees. These benefits are subject to applicable laws and at benefit levels that we believe are generally consistent with the benefits of companies with which we compete for talent.
Retirement Plans
We maintain a tax-qualified Code Section 401(k) defined contribution plan in which all of our employees, including our executive officers, who satisfy certain eligibility requirements, including requirements relating to age and length of service, are entitled to participate. Employees may contribute their own funds on a pre-tax basis.
The plan permits us to make matching contributions and we have historically provided employer contributions that match eligible employee contributions (“employer matching contributions”), generally limited to 3% of the compensation that can be taken into account for this purpose under federal law.
Employer matching contributions vest 50% when an employee has been employed for two years, and vest an additional 25% for each additional year of service until fully vested after four years of eligible employment.

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Perquisites and Other Personal Benefits
Generally, we provide perquisites and other personal benefits to our executive officers, including our NEOs, in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective and for recruitment and retention purposes.
In addition, under the Amended CEO Agreement (as defined below), we reimburse our CEO for all reasonable travel and lodging expenses, which include travel and hospitality expenses for first class travel and accommodations, including travel by private or chartered aircraft, for his family and household members if they accompany him during business travel. Our Board believes that these arrangements are appropriate because of the extensive travel requirements of our CEO’s position.
We also have established a security program for our CEO that provides physical and personal security services as they may be deemed necessary. This security program may include providing security services at his residences and during personal travel. Our Board does not consider any of these security services to be a personal benefit as the requirement for this occasional security is directly the result of his role as our CEO. As our CEO, Mr. Kiani’s personal safety is vital to our continued success. We may also provide security services to other executive officers from time to time on an as-needed basis.
We own one aircraft to facilitate the business travel of our executive officers and certain other employees. In fiscal 2017, we entered into an aircraft time share agreement with Mr. Kiani, pursuant to which we have agreed to make our aircraft available to Mr. Kiani for lease on a time sharing basis. Under this agreement, Mr. Kiani reimburses us for incremental costs incurred in connection with his personal use of our aircraft, in accordance with Federal Aviation Administration requirements.
We have reported the actual amounts that we have paid for our CEO’s family and household members to accompany him during his business travel and for his security arrangements that were not security arrangements provided at our business facilities in the “All Other Compensation” column in the Summary Compensation Table in this Item 11.
Post-Employment Compensation
Each of our NEOs, other than our CEO, is eligible to participate in our 2007 Severance Protection Plan (the “Severance Plan”) pursuant to a written severance agreement that they have executed with us. The Severance Plan provides these NEOs with specified payments and benefits in the event of certain terminations of employment or a change-in-control of Masimo or both. Our CEO’s post-employment compensation arrangements are set forth in the Amended CEO Agreement and are described in the section entitled “Employment Arrangements with Named Executive Officers—Employment Agreement with Mr. Kiani” in this Item 11.
We believe that having in place reasonable and competitive post-employment compensation arrangements is essential to attracting and retaining highly-qualified executive officers. Our post-employment compensation arrangements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment.
Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits.
We also believe that these arrangements are designed to align the interests of our executive officers with those of our stockholders when considering our long-term success. The primary purpose of these arrangements in the case of a change-in-control of the Company is to keep our most senior executive officers focused on pursuing all corporate transaction activities that are in the best interests of our stockholders, regardless of whether those transactions may result in their own job loss.
Reasonable post-acquisition payments and benefits should serve the interests of both the executive officer and our stockholders. Further, we believe that these arrangements are necessary to offer compensation packages that are competitive with the market.
For information on the employment arrangements for our CEO and other NEOs, as well as an estimate of the potential payments and benefits payable under these arrangements as of the end of fiscal 2023, see “—Employment Arrangements with Named Executive Officers” in this Annual Report on Form 10-K.
Other Compensation Policies and Practices
Equity Awards Grant Policy
Equity awards granted to newly-hired employees are effective as of the later of the date the individual commences work or service with us or the grant approval date. Equity awards granted to existing employees and others providing services to us are effective as of the grant approval date. The terms of each equity award, including the date of grant, the corresponding exercise, purchase or base price, the vesting conditions, the term of such award, and the number of shares of our common stock subject to
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such award, as applicable, are approved by our Board, the Compensation Committee, or the non-officer equity award committee (as defined in the policy), as applicable. In addition, the exercise price for options to purchase shares of our common stock may not be less than the fair market value of our common stock as of the close of business on the effective date of the option.
Compensation Recovery (“Clawback”) Policy
Effective October 31, 2023, our Board adopted a restated compensation recovery (“Clawback”) policy pursuant to the listing standards approved by The Nasdaq Stock Market LLC implementing Rule 10D-1 under the Exchange Act. The Clawback policy is administered by our Compensation Committee and applies to our current and former executive officers as defined in Rule 10D-1 (each an “Affected Officer”). Under the Clawback policy, if we are required to prepare an accounting restatement to correct our material noncompliance with any financial reporting requirement under securities laws, including restatements that correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (collectively, a “Restatement”), we are obligated to recover erroneously awarded incentive-based compensation received from us by any Affected Officers during the three year period preceding the date on which we became required to prepare the accounting restatement. Incentive-based compensation includes any compensation that is granted, earned or vested based in whole or in part on the attainment of a financial reporting measure. Erroneously awarded incentive-based compensation is the amount of incentive-based compensation received that exceeds the amount of incentive-based compensation that otherwise would have been received had it been determined based on an applicable Restatement.
Policy Prohibiting Tax “Gross-Up” Payments
We maintain a policy governing the inclusion of tax “gross-up” provisions in agreements with our executive officers. Under this policy, the Compensation Committee will not approve any employment or other agreement or arrangement with any of our executive officers that includes a tax “gross-up” or similar provision that would require payments by us to an executive officer be made in the full amount, free of any deductions or withholdings, and without exercising any right of set-off, in connection with a change-in-control of the Company.
Our policy also provides that the Compensation Committee will not approve an amendment to extend the term of any current employment or other agreement or arrangement between us and any executive officer if such agreement or arrangement includes a tax “gross-up” or similar provision. Currently, we have no agreements or arrangements in place with any executive officer that require or provide for a tax “gross-up” or similar payment.
Under our Severance Plan in which our NEOs other than our CEO participate, the plan administrator has the right to reduce any change-in-control severance payment or benefits payable to an executive officer to avoid triggering any “excess parachute payments” under Sections 280G and 4999 of the Code.
Hedging and Pledging Policies
Our Insider Trading Policy prohibits our employees, including our executive officers, and the non-employee members of our Board from engaging in “short sales” of our equity securities and from engaging in hedging transactions involving our equity securities. Further, our Insider Trading Policy restricts our employees, including our executive officers, and the non-employee members of our Board from pledging our equity securities as collateral for a loan or otherwise unless the transaction is pre-cleared by our Insider Trading Compliance Officer. Further, as a condition of pre-approving any pledge of our equity securities, the executive officer or member of our Board seeking to pledge securities must clearly demonstrate his or her financial capacity to repay any loan for which securities will be pledged as collateral without resort to the securities to be pledged.
As of April 29, 2024, an aggregate of 2,972,778 shares of our common stock owned by a family trust and beneficially owned by our CEO were pledged as collateral for a personal loans. In addition to obtaining pre-clearance from our Insider Trading Compliance Officer, our CEO sought and received the approval of the Compensation Committee prior to entering into this transaction in 2013. When requesting such pre-clearance, Mr. Kiani explained that, without the ability to pledge these shares, certain of his family’s financial planning objectives would need to be satisfied through the sale of shares of Masimo common stock held by his family trust and that he did not want to diminish his shareholdings. The Compensation Committee considered Mr. Kiani’s request and, as part of that consideration, noted that his beneficial stock ownership in the Company, even without taking into account the pledged shares, would still greatly exceed the number of shares that Mr. Kiani would be required to hold under our stock ownership policy. The Compensation Committee concluded that continued ownership of the pledged shares by Mr. Kiani’s family trust further aligned Mr. Kiani’s interests with the long-term interests of our stockholders.
In light of these facts, the Compensation Committee concluded that approving the pledge was consistent with stockholder interests.
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Tax and Accounting Considerations
Deductibility of Executive Compensation
Generally, Section 162(m) of the Code (“Section 162(m)”) disallows public companies a tax deduction for federal income tax purposes of compensation in excess of $1 million paid to their chief executive officer, the chief financial officer and the three other most highly-compensated executive officers in any taxable year. In making compensation decisions, the Compensation Committee considered the potential effects of Section 162(m) on the compensation paid to our executive officers who are subject to the deduction limit (the “covered executives”). The exemption from Section 162(m)’s deduction limit for performance-based compensation was generally repealed for taxable years beginning after December 31, 2017, such that compensation paid to our covered officers in excess of $1 million will generally not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
To maintain flexibility in compensating the NEOs in a manner designed to promote varying corporate goals, the Compensation Committee has not adopted a policy that all compensation payable to the covered executives must be deductible for federal income tax purposes. Accordingly, the Compensation Committee may, in its judgment, approve compensation for our executive officers that does not comply with an exemption from the deduction limit when it believes that such compensation is in the best interests of the Company and our stockholders.
The Compensation Committee believes that stockholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in structuring our compensation program, even though such program may result in non-deductible compensation expenses.
Accounting for Stock-Based Compensation
We follow ASC Topic 718 for our stock-based compensation awards. ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards granted to our employees and the non-employee members of our Board, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
To calculate the fair value of options to purchase shares of our common stock, we use the Black-Scholes-Merton option pricing model which requires the input of several subjective assumptions. These assumptions include estimating the length of time recipients will retain their vested options before exercising them, the estimated volatility of our stock price over the expected option term, and the number of shares of our common stock subject to options that will ultimately be forfeited prior to meeting their vesting requirements. The fair value of the options granted to our employees and the non-employee members of our Board are expensed over the requisite service period of each option, which is the vesting period, using a straight-line attribution method. The fair value of RSU awards is calculated based upon the closing market price of our common stock on the date of the grant or any “modification” to the grant, as that term is defined under ASC Topic 718. The fair value of the time-based RSU awards granted to our employees and the non-employee members of our Board are expensed over the requisite service period of each award, which is the vesting period, using the straight-line attribution method.
The fair value of PSU awards is calculated based on the closing price of our common stock on the date of grant. The actual stock-based compensation expense is dependent on the number of PSUs that are ultimately awarded, not the number of PSUs granted. As a result, we are required to estimate, based on our best judgment, the number of PSUs that will ultimately be awarded. In fiscal 2023, the cost of the estimated PSU awards was expensed pursuant to the “graded” vesting concept whereby a higher amount of amortization expense is incurred in the early portion of the vesting period, as compared to the later part of the period. This is required in an attempt to separate the performance period of the award as compared to the retention period of the award.
With respect to the RSU award covering 2.7 million shares of our common stock granted to our CEO as part of the terms of the Amended CEO Agreement (the “Award Shares”), this RSU award will vest in the event of a Qualifying Termination or upon the termination of our CEO’s employment with us pursuant to his death or disability (see “—Employment Arrangements with Named Executive Officers—Employment Agreement with Mr. Kiani” in this Item 11 for details). In addition, in the event of a change-in-control prior to a Qualifying Termination, on each of the first and second anniversaries of the change-in-control, 50% of the Award Shares will vest. Accordingly, and in accordance with ASC Topic 718, we will only recognize compensation expense for this contingent stock award at the time of a change-in-control of the Company or when it is determined that the occurrence of a Qualifying Termination is “probable.” Should this occur, in accordance with applicable accounting standards, the amount of compensation expense that will be recognized will be based upon the fair value of the RSU award on the date of grant. At the present time, we do not believe that an occurrence of a Qualifying Termination is “probable” and as a result, no stock-based compensation expense has been recorded related to this RSU award.
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While the Compensation Committee considers the expense impact under ASC Topic 718 as one of the factors in granting equity awards, it also considers the importance of aligning the interests of our executive officers with the interests of our stockholders, the retentive value of equity awards and other factors, and makes its decisions regarding equity awards based on its evaluation of such factors.
Compensation Committee Interlocks and Insider Participation
From January 2023 to June 2023, the Compensation Committee was comprised of Mr. Reynolds (Chairperson), Mr. Cohen and Mr. Mikkelson. From July 2023 to January 2024, the Compensation Committee was comprised of Ms. Brennan and Mr. Mikkelson (who resigned from our Board in February 2024) and Mr. Reynolds (the current Chairperson of the Compensation Committee). The Compensation Committee is currently comprised of Mr. Reynolds (Chairperson), Ms. Brennan and Mr. Chapek. There are no relationships between the current or former members of the Compensation Committee and our executive officers of the type contemplated in the SEC’s rules requiring disclosure of “compensation committee interlocks.” None of the current or former members of the Compensation Committee is our employee and no current or former member has been an officer of Masimo at any time.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.
Compensation Committee*
Ms. Michelle Brennan
Mr. Craig Reynolds
*Mr. Chapek currently serves on the Compensation Committee but as he was appointed to the Compensation Committee in February 2024, he did not participate in the review, discussions and recommendation with respect to the Compensation Discussion and Analysis and has therefore been omitted from the Compensation Committee Report.
This Compensation 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 Annual Report on Form 10-K 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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Summary Compensation Table
The following table provides information regarding the compensation earned during the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022 by our NEOs. We generally pay bonuses in the year following the year in which the bonus was earned.
Name and Principal Position(s)YearSalaryBonus
Stock
Awards(1)
Option
Awards
(1)
Non-Equity
Incentive Plan
Compensation
(2)
All Other
Compensation
 
Total
Joe Kiani2023$1,247,786 $$9,899,929 $3,299,985 $$1,029,056 
(3)
$15,476,756 
Chief Executive Officer and Chairman of the Board20221,220,920 9,899,973 3,299,970 1,123,007 967,566 16,511,436 
20211,176,664 8,999,953 2,999,417 1,647,794 1,395,450 16,219,278 
Micah Young2023600,875 2,062,371 687,474 12,359 
(4)
3,363,079 
Executive Vice President, Chief Financial Officer2022577,364 989,919 329,992 540,788 12,022 2,450,085 
2021449,131 899,870 299,919 314,480 10,200 1,973,600 
Bilal Muhsin2023627,000 2,062,371 687,474 11,117 
(5)
3,387,962 
Chief Operating Officer2022621,144 1,979,995 659,984 564,300 12,891 3,838,314 
2021574,998 1,799,991 599,838 402,612 8,700 3,386,139 
Tao Levy2023418,000 1,274,821 424,965 12,826 
(6)
2,130,612 
Executive Vice President, Business Development2022411,673 989,919 329,992 376,200 10,650 2,118,434 
2021362,461 899,870 299,919 258,750 10,393 1,831,393 
Tom McClenahan2023501,600 2,062,371 687,474 11,536 
(7)
3,262,981 
Executive Vice President, General Counsel and Corporate Secretary2022494,655 989,919 329,992 451,440 11,415 2,277,421 
2021447,133 899,870 299,919 313,081 14,314 1,974,317 
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___________
(1)Amounts set forth in the “Stock Awards” and “Option Awards” columns for 2023, 2022 and 2021 reflect the grant date fair value of stock and option awards granted in the year indicated, computed in accordance with ASC Topic 718. These amounts reflect certain assumptions with respect to the stock and option awards and do not necessarily correspond to the actual value that will be recognized by the NEOs. The actual value, if any, that may be realized from a stock award or an option award is contingent upon the satisfaction of the conditions to vesting in that award, and, in the case of option awards, upon the excess of the stock price over the exercise price, if any, on the date the option award is exercised. See Note 20 of the Notes to Financial Statements included in this Annual Report on Form 10-K for a discussion of the grant date fair value of the stock awards and the assumptions made in determining the grant date fair value of the PSUs, RSUs and stock options granted in fiscal years 2023, 2022 and 2021. For PSUs, amounts reflect the target number of shares subject to the PSUs, assuming all performance goals and other requirements are met. As described below, the PSUs earned will range from 50% to 200% of target based on the achievement of performance goals, which vest in the form of shares of our common stock following the conclusion of the three-year performance period. The maximum potential value of the PSUs (assuming 200% of target, the maximum potential value of the award) granted to each of our NEOs in fiscal 2023 was as follows: Mr. Kiani: $19,799,858, Mr. Young: $4,124,742, Mr. Muhsin: $4,124,742, Mr. Levy: $2,549,642, and Mr. McClenahan: $4,124,742.
(2)All amounts for fiscal 2022 and 2021 were paid pursuant to our Executive Bonus Incentive Plan.
(3)Consists of $9,900 in retirement savings plan matching contributions, $18,605 incremental lodging costs during certain business travel, $189,994 related to the net incremental costs of certain lodging, meals and other travel-related expenses incurred by his family and household members accompanying him during certain business travel pursuant to Mr. Kiani’s employment agreement (see “—Employment Arrangements with Named Executive Officers—Employment Agreement with Mr. Kiani” in this Item 11), and $810,557 related to certain incremental costs for security personnel and security services provided to Mr. Kiani and his family at his personal residence or other non-Masimo facilities that were not directly-related to Masimo business. We have established a security program for Mr. Kiani that provides physical and personal security services as they may be deemed necessary. This security program may include providing security services at his primary residence and during personal travel. We do not consider any such security services to be personal benefits as the requirement for this occasional security is directly the result of Mr. Kiani’s role as our CEO and as our CEO, his personal safety is vital to our continued success.
(4)Consists of $9,900 in retirement savings plan matching contributions, $1,500 in employer HSA contributions and $959 related to certain incremental costs for travel.
(5)Consists of $9,900 in retirement savings plan matching contributions and $1,217 related to certain incremental costs for travel.
(6)Consists of $9,900 in retirement savings plan matching contributions, $1,500 in employer HSA contributions and $1,426 related to certain incremental costs for travel.
(7)Consists of $9,900 in retirement savings plan matching contributions and $1,636 related to certain incremental costs for travel.
Pension Benefits-Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation
No pension benefits were paid to any of our NEOs during fiscal 2023. We do not currently sponsor any non-qualified defined contribution plans or non-qualified deferred compensation plans.
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Grants of Plan-Based Awards During Fiscal Year 2023
The following table presents the plan-based awards granted to each of our NEOs in fiscal 2023.
 
Estimated Possible Payout Under
Non-Equity Incentive Plan Awards
(1)
Estimated Future Payouts Under
Equity Incentive Plan Awards
(2)
All Other Stock Awards:
Number of Shares of
Stock or Units
(#)
(2)
All Other
Option Awards:
Number of Securities Underlying Options
(#)
Exercise Price
Per Share
($/Sh)
Grant Date
Fair Value of Stock
and Option Awards
($)
(4)
NameGrant DateThreshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Joe KianiMarch 3, 2023$$1,247,786 $2,495,572 

$$
March 3, 202327,133 54,267 108,534 9,899,929 
March 3, 202342,251 
(3)
182.43 3,299,985 
Micah YoungMarch 3, 2023600,875 1,201,750 
March 3, 20235,652 11,305 22,610 2,062,371 
March 3, 20238,802 
(3)
182.43 687,474 
Bilal MuhsinMarch 3, 2023627,000 1,254,000 
March 3, 20235,652 11,305 22,610 2,062,371 
March 3, 20238,802 
(3)
182.43 687,474 
Tao LevyMarch 3, 2023418,000 836,000 
March 3, 20233,494 6,988 13,976 1,274,821 
March 3, 20235,441 
(3)
182.43 424,965 
Tom McClenahanMarch 3, 2023501,600 1,003,200 
March 3, 20235,652 11,305 22,610 2,062,371 
March 3, 20238,802 
(3)
182.43 687,474 
______________
(1)Represents possible payments under the 2023 Executive Bonus Incentive Plan based on the base salary in effect for each of our NEOs as of March 3, 2023, the grant date of the award. The fiscal 2023 Executive Bonus Incentive Plan provided that amounts payable thereunder would be based on the base salary in effect for each of our NEOs as of the end of fiscal 2023, and actual payouts were therefore based on base salaries as of the end of fiscal 2023. For fiscal 2023, no executive bonus incentive payments were made as the minimum Company financial and performance thresholds were not met.
(2)For fiscal 2023, the Compensation Committee selected Three-Year Cumulative Adjusted Revenue(1), (40% weight), Three-Year Cumulative Adjusted Non-GAAP Operating Income(1) (40% weight) and Three-Year Relative TSR (20% weight) as the performance measures for the target PSU award percentages. If performance objectives are achieved, the PSUs will vest on the date of the approval by the Audit Committee of the audit of our financial statements for fiscal 2025 (or such later date determined by the Compensation Committee).
(3)This stock award vests over a five-year period, with 20% of the shares subject to the option vesting on each anniversary of the grant date.
(4)For PSUs, amounts reflect the fair value of the award as of the grant date assuming achievement of the “target” performance achievement level. For stock options, amounts reflect the fair value per share as of the grant date of the award multiplied by the number of shares granted. Regardless of the value on the grant date, the actual value will depend on the market value of our common stock on a date in the future when an award vests or stock option is exercised. As described below, the PSUs earned will range from 50%-200% of target based on the achievement of performance goals, which vests in the form of shares of our common stock following the conclusion of the three-year performance period. The maximum potential value of the PSUs (assuming 200% of target, the maximum potential value of the award) granted to each of our NEOs was as follows: Mr. Kiani: $19,799,858, Mr. Young: $4,124,742, Mr. Muhsin: $4,124,742, Mr. Levy: $2,549,642, Mr. McClenahan: $4,124,742.
_______________
(1) Non-GAAP financial measure – please see Appendix A to this Item 11 for a description of the adjustments and a reconciliation to the corresponding GAAP financial measure.
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Outstanding Equity Awards at December 30, 2023
The following table presents the outstanding option awards and stock awards held by each of our NEOs as of December 30, 2023.
 
Option Awards(1)
Stock Awards
NameGrant DateNumber of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights
That Have
Not Vested
($)
(2)
Joe Kiani6/15/2015300,000 $38.76 6/15/2025$
11/4/2015— 2,700,000 
(3)
316,467,000 
2/29/2016300,000 37.84 2/28/2026
6/5/2017100,000 90.87 6/5/2027
3/16/2018104,362 86.95 3/16/2028
3/15/201957,884 14,471 133.50 3/15/2029
3/12/202039,801 26,535 179.42 3/12/2030
2/26/2021— 35,895 
(4)
4,207,253 
2/26/202115,825 23,738 250.73 2/26/2031
2/22/2022— 62,845 
(5)
7,366,062 
2/22/202212,724 50,897 157.53 2/22/2032
3/3/2023— 54,267 
(6)
6,360,635 
3/3/202342,251 182.43 3/2/2033
Micah Young10/16/201720,000 84.97 10/16/2027
3/16/20184,175 86.95 3/16/2028
3/15/20194,341 1,447 133.50 3/15/2029
3/12/20203,979 2,654 179.42 3/12/2030
2/26/2021— 3,589 
(7)
420,667 
2/26/20211,582 2,374 250.73 2/26/2031
2/22/2022— 6,284 
(8)
736,548 
2/22/20221,272 5,090 157.53 2/22/2032
3/3/2023— 11,305 
(9)
1,325,059 
3/3/20238,802 182.43 3/2/2033
Bilal Muhsin5/13/201510,000 34.51 5/13/2025
2/29/201630,000 37.84 2/28/2026
8/14/201730,000 85.54 8/14/2027
3/16/201810,436 86.95 3/16/2028
3/15/20195,788 1,447 133.50 3/15/2029
5/9/201940,000 10,000 140.23 5/9/2029
3/12/20207,960 5,307 179.42 3/12/2030
2/26/2021— 7,179 
(10)
841,451 
2/26/20213,164 4,748 250.73 2/26/2031
2/22/2022— 12,569 
(11)
1,473,212 
2/22/20222,544 10,180 157.53 2/22/2032
3/3/2023— 11,305 
(9)
1,325,059 
3/3/20238,802 182.43 3/02/2023
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Option Awards(1)
Stock Awards
NameGrant DateNumber of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights
That Have
Not Vested
($)
(2)
Tao Levy3/16/201825,000 $86.95 3/16/2028$
3/16/201810,436 86.95 3/16/2028
3/15/20195,788 1,447 133.50 3/15/2029
3/12/20203,979 2,654 179.42 3/12/2030
2/26/2021— 3,589 
(7)
420,667 
2/26/20211,582 2,374 250.73 2/26/2031
2/22/2022— 6,284 
(8)
736,548 
2/22/20221,272 5,090 157.53 2/22/2032
3/3/2023— 6,988 
(12)
819,063 
3/3/20235,441 182.43 3/2/2033
Tom McClenahan3/20/201519,000 31.01 3/20/2025
2/29/201630,000 37.84 2/28/2026
6/5/201710,000 90.87 6/5/2027
3/16/201810,436 86.95 3/16/2028
3/15/20195,788 1,447 133.50 3/15/2029
3/12/20203,979 2,654 179.42 3/12/2030
2/26/2021— 3,589 
(7)
420,667 
2/26/20211,582 2,374 250.73 2/26/2031
2/22/2022— 6,284 
(8)
736,548 
2/22/20221,272 5,090 157.53 2/22/2032
3/3/20230.00 — 11,305 
(9)
1,325,059 
3/3/20238,802 182.43 3/2/2033
______________
(1)For each of our NEOs, the shares listed in this table are subject to a single stock option award carrying the varying exercise prices as set forth herein. The shares subject to each stock option vest over a five-year period, with 20% of the shares subject to the option vesting on each anniversary of the grant date, with partial or full vesting under certain circumstances upon a change-in-control of Masimo or various events specified in the NEOs employment agreement or severance agreement, if applicable. The option awards remain exercisable until they expire ten years from the date of grant subject to earlier expiration following termination of employment.
(2)Represents the market value of the unvested shares underlying the RSUs and PSUs as of December 30, 2023, based on the closing price of our common stock, as reported on the Nasdaq Global Select Market, which was $117.21 per share on December 29, 2023, the last trading day of fiscal 2023.
(3)Represents an award of 2.7 million RSUs with contingent vesting granted to Mr. Kiani in November 2015 in connection with the November 2015 Agreement. The amount represents the value of 100% of the Award Shares subject to the RSU award based on the closing stock price of $117.21 per share on December 29, 2023, the last trading day of fiscal 2023.
(4)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 35,895 shares and the market value of such 35,895 shares was $4,207,253. The maximum number of shares issuable pursuant to this PSU award was 71,790 shares and the market value of such 71,790 shares was $8,414,506.
(5)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 62,845 shares and the market value of such 62,845 shares was $7,366,062. The maximum number of shares issuable pursuant to this PSU award was 125,690 shares and the market value of such 125,690 shares was $14,732,125.
(6)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 54,267 shares and the market value of such 54,267 shares was $6,360,635. The maximum number of shares issuable pursuant to this PSU award was 108,534 shares and the market value of such 108,534 shares was $12,721,270.
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(7)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 3,589 shares and the market value of such 3,589 shares was $420,667. The maximum number of shares issuable pursuant to this PSU award was 7,178 shares and the market value of such 7,178 shares was $841,333.
(8)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 6,284 shares and the market value of such 6,284 shares was $736,548. The maximum number of shares issuable pursuant to this PSU award was 12,568 shares and the market value of such 12,568 shares was $1,473,095.
(9)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 11,305 shares and the market value of such 11,305 shares was $1,325,059. The maximum number of shares issuable pursuant to this PSU award was 22,610 shares and the market value of such 22,610 shares was $2,650,118.
(10)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 7,179 shares and the market value of such 7,179 shares was $841,451. The maximum number of shares issuable pursuant to this PSU award was 14,358 shares and the market value of such 14,358 shares was $1,682,901.
(11)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 12,569 shares and the market value of such 12,569 shares was $1,473,212. The maximum number of shares issuable pursuant to this PSU award was 25,138 shares and the market value of such 25,138 shares was $2,946,425.
(12)Represents the target number of shares issuable pursuant to this PSU award. The target number of shares issuable pursuant to this PSU award was 6,988 shares and the market value of such 6,988 shares was $819,063. The maximum number of shares issuable pursuant to this PSU award was 25,138 shares and the market value of such 13,976 shares was $1,638,127.
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Options Exercised and Stock Vested During Fiscal 2023
The following table provides details regarding stock options exercised by our NEOs and stock vested during the fiscal year ended December 30, 2023. None of our NEOs exercised any stock options during fiscal 2023.
 Option AwardsStock Awards
NameNumber of Shares
Acquired on 
Exercise (#)
Value Realized
on Exercise ($)
Number of Shares
Acquired on 
Vesting (#)
Value Realized 
on Vesting ($)(1)
Joe Kiani$50,161 $9,150,871 
Micah Young5,016 915,069 
Bilal Muhsin10,032 1,830,138 
Tao Levy5,016 915,069 
Tom McClenahan5,016 915,069 
______________
(1)The value realized equals the closing sale price of our common stock as reported by Nasdaq on the date of vesting, multiplied by the number of shares vested.
Employment Arrangements with Named Executive Officers
Employment Agreement with Mr. Kiani
In November 2015, we entered into the Amended and Restated Employment Agreement (the “November 2015 Agreement”) with Mr. Kiani, our CEO. Following extensive deliberations and discussions with Mr. Kiani, our compensation consultant and legal advisors, the Compensation Committee agreed to amend the November 2015 Agreement on July 27, 2017, which was further amended on January 14, 2022 (as amended, the “Amended CEO Agreement”). The November 2015 Agreement was amended to retain Mr. Kiani as our CEO who, based on his proven ability to launch and build successful companies and his knowledge and visibility within the medical device industry, could attract other very lucrative job opportunities.
The initial employment period under the Amended CEO Agreement ran until December 31, 2017, subject thereafter to automatic one-year extensions unless either party provides a notice of non-renewal to the other at least one year prior to the scheduled expiration.
The Amended CEO Agreement provides that Mr. Kiani will continue to serve as our CEO and Chairman of the Board. The Amended CEO Agreement also provides the following material terms and conditions, as may be adjusted from time to time by our Board or the Compensation Committee:
Eligibility to receive a base salary of $1,000,000 per year, which is subject to adjustment by our Board or the Compensation Committee, and was adjusted to $1,247,786 per year in July 2022. There was no adjustment to Mr. Kiani’s base salary in fiscal 2023.
Eligibility to receive an annual bonus equal to 100% of his base salary in the event we attain certain performance criteria set by our Board or the Compensation Committee under our annual incentive plan for our executive officers. The bonus payable will not be above the payment level determined based on actual achievement of the applicable performance criteria. In addition, Mr. Kiani’s annual bonus payable if all applicable performance criteria are achieved at maximum levels will not exceed 200% of his base salary.
Under the Amended CEO Agreement, Mr. Kiani is eligible to receive equity awards with a value at least consistent with equity awards granted to comparable CEOs of comparable companies (taking into account revenues, market capitalization and industry). Following approval of our 2017 Equity Incentive Plan by our stockholders at the 2017 Annual Meeting of Stockholders, Mr. Kiani agreed that the only equity awards he may be awarded must be approved by the Compensation Committee under the 2017 Equity Incentive Plan, consisting of both PSU awards and time-based options to purchase shares of our common stock.
Right to participate in or receive benefits under all of our employee benefits plans and to be eligible to participate in any pension plan, profit-sharing plan, savings plan, stock option plan, life insurance, health-and-accident plan or similar arrangements made available to members of our management.



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Reimbursement for all reasonable expenses incurred and paid by him in the course of the performance of his duties under the Amended CEO Agreement and reimbursement for all reasonable travel and lodging expenses for his family and household members in the event they accompany him during business travel, which includes travel and hospitality expenses for first class airplane travel and accommodations, including travel by private or chartered aircraft. To the extent inconsistent with the Amended CEO Agreement, Mr. Kiani is exempt from our travel and expense policy and our expense reimbursement policy.
In addition, Mr. Kiani is entitled to certain post-employment compensation arrangements. Under the Amended CEO Agreement, we may terminate Mr. Kiani’s employment for “cause” (as defined below), as a result of his disability under certain circumstances, or for any other reason. Similarly, Mr. Kiani may terminate his employment for “Good Reason” (as defined below), for health reasons, or for any other reason upon six months written notice to us. Specifically:
If Mr. Kiani’s employment is terminated for cause, he is entitled to receive his full base salary through the date of termination.
If Mr. Kiani’s employment is terminated as a result of his death, his designee or estate is entitled to receive his full base salary through the date of termination and an additional amount equal to 50% of his base salary then in effect as of the date of his death for each of three consecutive years following his death, which will be paid in substantially equal monthly installments over the three-year period.
If Mr. Kiani’s employment is terminated as a result of his disability, he is entitled to receive his full base salary through the date of termination and an additional amount equal to 75% of his base salary then in effect for each of two consecutive years following the date of termination, which will be paid in substantially equal monthly installments over the two-year period.
In the event (i) we terminate Mr. Kiani’s employment other than for cause, death or disability, or (ii) Mr. Kiani terminates his employment with us for Good Reason (each, a “Qualifying Termination”), Mr. Kiani will receive the following payments and benefits:
payment of an amount equal to his full base salary through the date of termination, if applicable, and an additional amount equal to twice the sum of his base salary then in effect and the average annual bonus paid to him over the prior three years, which will be paid in installments over two years pursuant to our normal payroll practices; and
all of his outstanding options and other equity awards will immediately vest.
Mr. Kiani may provide a notice of termination for Good Reason under the Amended CEO Agreement up to two years following the event giving rise to the Good Reason to terminate.
In addition, we will issue Mr. Kiani the Award Shares pursuant to the terms of an RSU award agreement between us and Mr. Kiani prior to the earliest to occur of (i) the applicable Retention Vesting Date (as defined below), (ii) a Qualifying Termination, (iii) Mr. Kiani’s death during his employment with us and (iv) the termination of Mr. Kiani’s employment with us pursuant to disability. We will also pay him a cash amount equal to $35 million upon a Qualifying Termination (the “Cash Payment” and, together with the Award Shares, the “Special Payment”). The Cash Payment will be paid to Mr. Kiani as consideration for his agreement to comply with certain non-competition and non-solicitation obligations under a restrictive covenant agreement by and between Masimo and Mr. Kiani, and will be subject to repayment to us if Mr. Kiani materially breaches any of such obligations.
Further, in the event of a “change-in-control” of Masimo (as defined below) prior to a Qualifying Termination, on each of the first and second anniversaries of the change-in-control (each, a “Retention Vesting Date”), 50% of the Award Shares and 50% of the Cash Payment will vest, subject in each case to Mr. Kiani’s continuous employment through each such anniversary date. However, in the event of a Qualifying Termination or a termination of Mr. Kiani’s employment due to death or disability prior to either of such anniversaries, any remaining unvested amount of the Cash Payment and all of the unvested Award Shares will vest and be paid in full. In addition, in the event of a change-in-control of Masimo prior to a Qualifying Termination, Mr. Kiani’s stock options and any other equity awards will vest in accordance with their terms, but in no event later than in two equal installments on each of the first and second anniversaries of the change-in-control, subject in each case to Mr. Kiani’s continuous employment through each such anniversary date.
Pursuant to the Amended CEO Agreement, if any payment or benefit received or to be received by Mr. Kiani would be subject to any excise tax imposed by Section 4999 of the Code, then the payments and benefits payable to Mr. Kiani will be reduced so that no portion of the payments or benefits payable to Mr. Kiani is subject to the excise tax, but only if the after-tax amount of such payments and benefits, as so reduced, is equal to or greater than the after-tax amount of such payments and benefits without such reduction.

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The Amended CEO Agreement also provides that in the event of a change-in-control, we must fund a grantor trust with an amount equal to the aggregate of the cash severance payment to which he would be entitled and the Special Payment, payable to Mr. Kiani in the event of a Qualifying Termination. In the event Mr. Kiani’s employment is not terminated on or prior to the fifth anniversary of the change-in-control in a manner entitling him to such payments, the amounts held in the trust will revert to Masimo.
In addition, if Mr. Kiani’s employment under the Amended CEO Agreement is terminated for any reason other than cause, Mr. Kiani will be entitled to participate in all of our employee benefit plans and programs that he participated in as of the date of his termination of employment for the full term of the Amended CEO Agreement as long as his participation is possible under the general terms and provisions of the plans. If for any reason Mr. Kiani is not permitted to participate in any of our employee benefit plans or programs after the date of his termination of employment, he will be entitled to reimbursement of the amount paid by him to obtain similar coverage to that offered by our benefit plans and programs but only up to the amount we would otherwise have paid on behalf of him as an employee of Masimo under the Amended CEO Agreement as of the date of his termination.
For purposes of the Amended CEO Agreement:
termination for “cause” generally means his termination of employment as a result of his willful and continued failure to substantially perform his duties under the Amended CEO Agreement, his willful engaging in gross misconduct materially injurious to us or his willful violation of the confidentiality and trade secret protection provisions contained in a restrictive covenant agreement with us if the violation results in demonstrably material injury to us. Any termination for cause must be approved by at least 75% of the entire membership of our Board.
termination for “Good Reason” generally means a termination of his employment by Mr. Kiani subsequent to (A) a diminution in his responsibilities, duties and authority, including him ceasing to serve as CEO of the Company or him ceasing to serve as Chairman of the Board, (B) any reduction in his rate of compensation or fringe benefits, (C) Masimo’s failure to comply with certain obligations relating to his compensation or place of work, (D) the provision of a notice not to renew the Amended CEO Agreement by Masimo, or (E) (1) a change-in-control (as defined below) was triggered as a result of a change in more than one third of the directors on the Board during a rolling twenty-four month period, or (2) following, or in connection with, a “change-in-control” triggered as a result of an acquisition, (i) the highest level of parent entity holding, directly or indirectly, majority voting control of the Company after the “change-in-control” (the “Acquirer Parent”) is not a publicly-traded company, (ii) he does not become the, or is removed from the position of, CEO and Chairman of the Board of the Acquirer Parent, with such position being on terms and conditions reasonably acceptable to him, provided that the terms and conditions of employment providing for total compensation with a value comparable to the total compensation paid to the chief executive officers of comparable companies shall be deemed to be reasonable, or (iii) any other director is designated the lead director of the board of directors of the Acquirer Parent; provided that, in the case of clauses (A), (B), (C) and (E) above, “Good Reason” will not be deemed to exist unless certain notice and cure period conditions are met and his resignation for Good Reason is effective within thirty days after the expiration of the cure period. The Amended CEO Agreement previously provided that the designation of any director other than Mr. Kiani as the lead director of the Board would also be considered “Good Reason”. However, on March 22, 2023, the independent members of the Board unanimously selected then-existing director H Michael Cohen as the Lead Independent Director of the Board, to serve in such position until the Company’s 2024 Annual Meeting of Stockholders, or until his successor is duly elected and qualified, or until his earlier death, resignation or removal from the Board. Mr. Cohen served as the Lead Independent Director until June 2023, when his service on our Board ceased. Mr. Reynolds was appointed as the Lead Independent Director in July 2023. In connection with Mr. Cohen’s appointment as the Lead Independent Director of the Board, Mr. Kiani voluntarily irrevocably and permanently waived his rights, pursuant to the Amended CEO Agreement, to: (i) treat the appointment of any Lead Independent Director of the Board as “Good Reason” under the Amended CEO Agreement, and (ii) terminate (or deliver any termination notice) or make any claim under the Amended CEO Agreement as a result of the appointment of any Lead Independent Director of the Board.
a “change-in-control” generally means (i) the acquisition by any person or group of more than 35% of our outstanding voting stock, (ii) the acquisition of our assets that have a total fair market value of 40% or more of the total fair market value of all of our assets immediately before the acquisition by any person or group, or (iii) a change in one-half or more of the directors on our Board then in office, at the beginning of the twelve (12) month period immediately preceding such change. For purposes of determining whether a change-in-control has occurred, a director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to, a consent solicitation, relating to the election of directors of the Company) whose election by the Board or whose nomination for election by the stockholders of the Company was approved by a vote of at least a majority of the directors then in office either who were directors at the beginning of such period or whose election or nomination for election was previously so approved or who was elected to the Board at the 2023 annual meeting of stockholders will be treated as a member of the Board at the beginning of the 12-month period.
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Background of the Employment Agreement with Mr. Kiani
Mr. Kiani’s employment agreement was amended and restated in 2015 after months of negotiations between Mr. Kiani and the Compensation Committee. The Compensation Committee initiated the negotiations in response to stockholder feedback, with the objective of eliminating certain tax gross-ups, guaranteed annual stock option grants, and certain other benefits that Mr. Kiani was entitled to under his earlier employment agreements dating back to the 1990s, before the Company’s stock was publicly-traded.
In 2015, the Compensation Committee, which was comprised solely of independent directors, considered a number of different alternatives with respect to Mr. Kiani’s employment, including terminating Mr. Kiani or providing a notice of non-renewal under his prior employment agreement. If the Compensation Committee had terminated Mr. Kiani, Mr. Kiani would have been owed more than $240 million upon termination. If the Compensation Committee had provided a notice of non-renewal under his prior agreement, the agreement would have continued in effect for another three years, and Mr. Kiani may have been entitled to receive a severance payment even after the expiration of the prior agreement.
The Compensation Committee carefully considered the available alternatives, with advice from two leading law firms and a nationally recognized compensation consultant, and ultimately concluded that the amendment and restatement of Mr. Kiani’s employment agreement was in the best interests of the Company and its stockholders. As explained in the Company’s Current Report on Form 8-K announcing Mr. Kiani’s November 2015 Agreement, the Compensation Committee believed it would save the Company almost $100 million versus the prior agreement in the event of a qualifying termination of Mr. Kiani’s employment. The new agreement also had the important benefit of retaining and incentivizing Mr. Kiani, who founded the Company and has led it through an incredible period of growth since 2015. The Compensation Committee believed then, as it does now, that retaining Mr. Kiani is critically important to the Company’s continued growth and success.
Mr. Kiani’s November 2015 Agreement should be considered in context. As the founder of the Company, Mr. Kiani’s prior employment agreements with the Company entitled to him to benefits and rights that were unique to Mr. Kiani, considering the value he provided to the Company. In 2015, the Compensation Committee asked that Mr. Kiani agree to eliminate a number of these benefits and rights. The 2.7 million RSU award granted to Mr. Kiani under the November 2015 Agreement was granted, in part, as consideration for the elimination of these legacy provisions and to further align Mr. Kiani’s interests with those of all of the Company’s stockholders. Notably, the value of Mr. Kiani’s RSU award has increased substantially since 2015 due to the substantial increase in the Company’s stock price under Mr. Kiani’s leadership.
Offer Letters with Other Named Executive Officers
Messrs. Young, Muhsin, Levy and McClenahan each signed an offer letter before commencing their employment with us. The offer letters set forth each executive officer’s position and title, initial base salary, health benefits, number of options or RSUs to be initially granted and the vesting schedule of such options or RSUs. Additionally, each offer letter states that the executive officer’s employment is “at-will” and may be terminated at any time by either the officer or us for any reason.
Employee Proprietary Agreements
Each of our NEOs, other than our CEO, has also entered into a standard form agreement with respect to proprietary information and inventions. Our CEO has also entered into an agreement with respect to proprietary information and inventions. Among other things, these agreements obligate each NEO to refrain from disclosing any of our proprietary information received during the course of his employment and, with some exceptions, to assign to us any invention conceived or developed during the course of his employment.
2007 Severance Protection Plan
The Severance Plan provides the benefits set forth below to the executives who are eligible to participate in the Severance Plan and who have signed severance agreements with us (the “Severance Agreements”). The Board has the discretion to amend or terminate the Severance Plan prospectively, subject to the limitation that, in the event of a change-in-control, no amendments may be made during the 36 months following the change-in-control without a participant’s consent if it would adversely affect the participant’s benefit. The Compensation Committee is the Severance Plan administrator.
Each of our NEOs, other than our CEO, is a participant in the Severance Plan on the terms set forth below. The following general description of the Severance Plan is qualified by the actual terms of the Severance Plan document and the individual Severance Agreements signed by the participants.
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Conditions to Severance Benefits. To the extent set forth below, a participant can receive either basic severance benefits or change-in-control severance benefits, but not both. Generally, in order to receive a basic or change-in-control severance benefit, the following conditions must be met:
the participant must execute, within 60 days of termination, a general release of claims (which becomes irrevocable within such 60-day period), a non-disparagement agreement, an intellectual property nondisclosure agreement, and a non-competition agreement that covers the period during which the participant is receiving severance benefits;
a participant entitled to the basic benefit must not have received any change-in-control severance benefits under the Severance Plan or any severance benefits equal to, or better than, the basic severance benefits pursuant to another arrangement between the participant and us;
a participant entitled to the change-in-control benefit must not have received any basic severance benefits under the Severance Plan or any severance benefits equal to, or better than, the change-in-control severance benefits pursuant to another arrangement between the participant and us; and
the participant must waive any and all rights, benefits and privileges to severance benefits that he might otherwise be entitled to receive under any other oral or written plan, employment agreement, or arrangement with us.
Basic Severance Benefits. Each of our NEOs, other than our CEO and Mr. Levy(1), are eligible for these benefits. Basic severance benefits are payable if a participant is terminated without “cause” (as defined below) and include the following:
an amount equal to annual salary determined at the highest rate in effect during the one-year period immediately prior to the date of termination, paid in installments according to normal payroll practices over 12 months commencing within 60 days following the participant’s termination;
COBRA continuation coverage at our expense during the 12 months following termination; and
the right to purchase life insurance through the Company during the 12 month period following his termination.
However, if a participant commences new employment during the one-year period following termination, any income or benefits received from new employment will reduce (on a dollar-for-dollar basis) these basic severance benefits.
Change-in-Control Severance Benefits. Each of our NEOs, other than our CEO and Mr. Levy(1), are eligible for the change-in-control severance benefits described in this paragraph.
The change-in-control severance benefits are payable upon a covered termination (which generally consists of a termination by the Company without cause or a termination by the executive for Good Reason upon or within a certain period after a change-in-control) and consist of the following:
if the participant has a covered termination because his current job is not offered to him on the date of the change-in-control, the participant will receive (i) an amount equal to his annual salary determined at the highest rate in effect during the one-year period immediately prior to the date of the covered termination, plus the average annual bonus paid to him over the three-year period prior to the change-in-control, and (ii) life insurance for the 12-month period following his termination;
if the participant has a covered termination for a reason not described in the preceding clause, instead of one time base salary, he will receive two times base salary;
the participant will receive COBRA continuation coverage at our expense during the 12-month period following his termination; and
upon the change-in-control, 50% of the participant’s unvested stock options and other equity-based awards shall be fully accelerated as of the change-in-control and 100% of the unvested stock options and other equity-based awards shall be fully accelerated upon the participant’s termination under circumstances that entitle him to change-in-control severance benefits noted above.
Change-in-control severance amounts will be paid in a lump sum cash payment within 60 days following the participant’s termination, provided that the participant has met all of the conditions for his change-in-control severance payment.
The Severance Plan administrator has the right to reduce any change-in-control severance benefits payable to an executive to avoid triggering any “excess parachute payments” under Section 280G of the Code. In addition, the Severance Plan administrator may delay the payment or issuance of any severance or change-in-control severance benefits for up to six months as necessary to avoid the imposition of additional tax under Section 409A of the Code.

_______________
(1)    As of December 30, 2023, Mr. Levy was not entitled to any Basic Severance Benefits under the Severance Plan. In addition, as of December 30, 2023, Mr. Levy’s Change-in-Control Severance Benefits under the Severance Plan were limited to the acceleration of 50% of his unvested stock options and other equity-based awards upon a covered termination on or after a change-in-control.
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Under the Severance Plan:
“cause” generally means the participant’s: (i) refusal or failure to perform his duties with us or to comply in all respects with our policies or the policies of our affiliates after notice of a deficiency and failure to cure the deficiency within three business days following notice from us, unless he has delivered a bona fide notice of termination for Good Reason to us, and the reason for the termination has not been cured by us within 30 days of receipt of notice; (ii) engagement in illegal or unethical conduct that could be injurious to us or our affiliates; (iii) commitment of one or more acts of dishonesty; (iv) failure to follow a lawful directive from our CEO; or (v) indictment for any felony, or any misdemeanor involving dishonesty or moral turpitude.
“change-in-control” generally means: (i) a merger or consolidation or a sale of all or substantially all of our assets unless more than 50% of the voting securities of the surviving or acquiring entity are held by our stockholders as of immediately prior to the transaction; (ii) the approval by our stockholders of the sale of all or substantially all of our assets; or (iii) without the prior approval of our Board, the acquisition by any person or group of securities representing beneficial ownership of 50% or more of our outstanding voting securities.
“Good Reason” generally means, provided that the executive has provided us with notice of one of the following events within 15 days after it occurs, and we fail to cure the event within 30 days after receiving notice from the executive: (i) any material reduction by us in the participant’s annual salary; (ii) any requirement that the participant change his principal location of work to any location that is more than 40 miles from the address of our current principal executive offices; or (iii) any material change in the participant’s responsibilities.
Voluntary Resignation. Excluding a resignation for Good Reason during the period commencing upon a change-in-control and ending on the 36-month anniversary of the change-in-control, each participant has agreed to provide us with six months advance notice of his resignation in the event he wishes to voluntarily resign from his employment at any time during which the Severance Plan and his Severance Agreement are effective.
Potential Payments Upon Termination or Change-in-Control
The tables below estimate the amounts payable to our NEOs in the event that a change-in-control, termination of employment, or both occurred on December 29, 2023, the last business day of our fiscal year that ended December 30, 2023. The closing price of our common stock, as reported on the Nasdaq Global Select Market, was $117.21 per share on December 29, 2023, the last trading day of fiscal 2023. The following tables exclude certain benefits, such as accrued vacation, that are available to all employees generally. The actual amount of payments and benefits that would be provided can only be determined at the time of a change-in-control and/or the NEO’s qualifying separation from Masimo.
Joe Kiani
 Termination
Executive Benefits, Payments
and Acceleration of Vesting of Equity Awards
Upon DeathUpon
Disability
By Masimo
Without Cause or by Mr. Kiani for Good Reason
Change-In- Control (CIC)
Without Termination and Two Years
Post-CIC Continuous Service
Number of Equity Award Shares Accelerated153,007 
Value of Equity Award Shares Accelerated(1)
$$$17,933,950 $
Special Payment - Value of Award Shares Vesting(2)(3)
316,467,000 316,467,000 316,467,000 316,467,000 
Special Payment - Cash Payment(4)(5)
35,000,000 35,000,000 
Other Cash Payments1,871,679 1,871,679 4,699,277 
Continuation of Benefits(6)
8,116 8,116 8,116 
Total Cash Benefits and Payments$318,346,795 $318,346,795 $374,108,343 $351,467,000 
_______________
(1)Consists of the value of in-the-money stock options and 100% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. Kiani as of December 30, 2023, the vesting of which would be accelerated.
(2)Upon a Qualifying Termination or a termination of Mr. Kiani’s employment pursuant to his death or disability, all of the Award Shares subject to the RSU award granted to Mr. Kiani under the Amended CEO Agreement will become vested. The amount represents the value of 100% of the Award Shares subject to the RSU award based on the closing stock price of $117.21 per share on December 29, 2023, the last trading day of fiscal 2023.
(3)Subject to Mr. Kiani’s continuous employment following a change-in-control, 50% of the Award Shares will vest on each of the first two anniversaries of such change-in-control. The amount represents the value of the Award Shares subject to the RSU award based on the closing stock price of $117.21 per share on December 29, 2023, the last trading day of fiscal 2023.
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(4)Upon a Qualifying Termination, we will pay to Mr. Kiani the Cash Payment as consideration for his agreement to comply with certain non-competition and non-solicitation obligations under a non-competition and confidentiality agreement between Masimo and Mr. Kiani, and Mr. Kiani will be subject to repayment to Masimo if he materially breaches any of such obligations.
(5)Subject to Mr. Kiani’s continuous employment following a change-in-control, 50% of the Cash Payment will vest and become payable on each of the first two anniversaries of such change-in-control.
(6)Presumes a remaining term of one year. Comprised of the cash equivalent of our cost of standard employee benefits, including health, dental and vision insurance for Mr. Kiani and his eligible dependents for 12 months, and life, accidental death and dismemberment and long-term disability insurance for Mr. Kiani for 12 months.
Micah Young
 Termination
Executive Benefits, Payments
and Acceleration of Vesting of Equity Awards
By Masimo
Without Cause Outside a Change-In- Control
 By Masimo
Without Cause or by Mr. Young for Good Reason in Connection with a Change-In- Control
 
Change-In- Control
Without Termination
Number of Equity Award Shares Accelerated21,178 10,328 
Value of Equity Award Shares Accelerated$$2,482,273 
(1)
$1,210,486 
(2)
Cash Payments600,875 1,412,038 
Continuation of Benefits(3)
26,399 
(4)
28,109 
(5)
Total Cash Benefits and Payments$627,274 $3,922,420 $1,210,486 
_______________
(1)Consists of the value of 100% of the in-the-money stock options and 100% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. Young as of December 30, 2023, the vesting of which would be accelerated.
(2)Consists of the value of 50% of the in-the-money stock options and 50% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. Young as of December 30, 2023, the vesting of which would be accelerated.
(3)Assumes that Mr. Young does not commence employment with another employer during the period from December 31, 2023 through December 28, 2024.
(4)Comprised of health, dental and vision insurance benefits for Mr. Young and his eligible dependents for 12 months.
(5)Comprised of health, dental and vision insurance benefits for Mr. Young and his eligible dependents for 12 months and life insurance for Mr. Young for 12 months.
Bilal Muhsin
 Termination 
Executive Benefits, Payments
and Acceleration of Vesting of Equity Awards
By Masimo
Without Cause Outside a Change-In-Control
 By Masimo
Without Cause or by Mr. Muhsin for Good Reason in Connection with a Change-In- Control
 
Change-In- Control
Without Termination
 
Number of Equity Award Shares Accelerated31,053 15,527 
Value of Equity Award Shares Accelerated(1)
$$3,639,722 $1,819,861 
(2)
Cash Payments627,000 1,478,650 
Continuation of Benefits(3)
26,399 
(4)
27,539 
(5)
Total Cash Benefits and Payments$653,399 $5,145,911 $1,819,861 
_______________
(1)Consists of the value of 100% of the in-the-money stock options and 100% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. Muhsin as of December 30, 2023, the vesting of which would be accelerated.
(2)Consists of the value of 50% of the in-the-money stock options and 50% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. Muhsin as of December 30, 2023, the vesting of which would be accelerated.
(3)Assumes that Mr. Muhsin does not commence employment with another employer during the period from December 31, 2023 through December 28, 2024.
(4)Comprised of health, dental and vision insurance benefits for Mr. Muhsin and his eligible dependents for 12 months.
(5)Comprised of health, dental and vision insurance benefits for Mr. Muhsin and his eligible dependents for 12 months and life insurance for Mr. Muhsin for 12 months.
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Tao Levy(1)
 Termination 
Executive Benefits, Payments
and Acceleration of Vesting of Equity Awards
By Masimo
Without Cause Outside a Change-In- Control
 By Masimo
Without Cause or by Mr. Levy for Good Reason in Connection with a Change-In- Control
 
Change-In- Control
Without Termination
 
Number of Equity Award Shares Accelerated8,431 
Value of Equity Award Shares Accelerated$$988,139 
(2)
$
Cash Payments
Continuation of Benefits
Total Cash Benefits and Payments$$988,139 $
_______________
(1)As of December 30, 2023, Mr. Levy was not entitled to any Basic Severance Benefits under the Severance Plan. In addition, as of December 30, 2023, Mr. Levy’s Change-in-Control Severance Benefits under the Severance Plan were limited to the acceleration of 50% of his unvested stock options and other equity-based awards upon a covered termination on or after a change-in-control.
(2)Consists of the value of 50% of the in-the-money stock options and 50% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. Levy as of December 30, 2023, the vesting of which would be accelerated.
Tom McClenahan
 Termination 
Executive Benefits, Payments
and Acceleration of Vesting of Equity Awards
By Masimo
Without Cause Outside a Change-In- Control
 By Masimo
Without Cause or by Mr. McClenahan for Good Reason in Connection with a Change-In-Control
 
Change-In- Control
Without Termination
 
Number of Equity Award Shares Accelerated21,178 

10,589 
Value of Equity Award Shares Accelerated$$2,482,273 
(1)
$1,241,137 
(2)
Cash Payments501,600 1,210,921 
Continuation of Benefits(3)
26,011 
(4)
28,634 
(5)
Total Cash Benefits and Payments$527,611 $3,721,828 $1,241,137 
_______________
(1)Consists of the value of 100% of the in-the-money stock options and 100% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. McClenahan as of December 30, 2023, the vesting of which would be accelerated.
(2)Consists of the value of 50% of the in-the-money stock options and 50% of the unvested PSUs (on the basis of 100% target achievement) that were held by Mr. McClenahan as of December 30, 2023, the vesting of which would be accelerated.
(3)Assumes that Mr. McClenahan does not commence employment with another employer during the period from December 31, 2023 through December 28, 2024.
(4)Comprised of health, dental and vision insurance benefits for Mr. McClenahan and his eligible dependents for 12 months.
(5)Comprised of health, dental and vision insurance benefits for Mr. McClenahan and his eligible dependents for 12 months and life insurance for Mr. McClenahan for 12 months.
Pay Ratio Disclosure
As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of all employees of our Company (other than our CEO) and the annual total compensation of our CEO, Mr. Kiani.
For 2023, our most recently completed fiscal year:
the median of the annual total compensation of all employees of our Company (other than our CEO) was $76,230 (excluding any estimated health and retirement benefits); and
the annual total compensation of our CEO, Mr. Kiani, was $15,476,756, as reported in the 2023 Summary Compensation Table.