ISS advises that Masimo change is "absolutely necessary" according to a harsh report.

• Institutional Shareholder Services, a proxy advisor, stated that a boardroom change at medical technology company Masimo was "absolutely necessary."
• The report recommended that shareholders vote for Politan Capital Management's board nominees, Bill Jellison and Darlene Solomon.

Institutional Shareholder Services, a proxy advisor, stated in a Monday report that a boardroom change at the medical technology company was "absolutely necessary." The report specifically criticized CEO Joe Kiani, arguing that he was attempting to "have his cake and eat it" by running the publicly traded company as though it were a privately held one.

The ISS report, which was viewed by CNBC, advised shareholders to vote for Politan Capital Management's board nominees, Bill Jellison and Darlene Solomon. This recommendation is consistent with Glass Lewis's trenchant report from last week, which also issued an identical recommendation.

ISS wrote that Masimo under Kiani's leadership "has continued to exhibit a concerning lack of accountability to shareholders, necessitating further board changes to address the issue."

According to ISS's report, Kiani, a trusted advisor to President Biden and the co-founder of a device company, has shown disregard for public shareholders and has a governance record at Masimo that is among the most concerning of any modern public company.

The proxy advisor stated that Kiani's involvement in numerous corporate governance scandals and abuses, including his excessive pay package, hostile attacks from Masimo management, and oversight of the spinoff process and board refreshment, make it impossible to argue in his favor.

If Kiani is not re-elected at the upcoming shareholder meeting, scheduled for later this month, he has threatened to leave the company.

The proxy advisor wrote that ultimatums or threats from a CEO are unacceptable and shareholders should never abide by them, including at Masimo.

Representatives for Politan and Masimo did not immediately return requests for comment.