“Francis deSouza, CEO of Illumina, Resigns Following Intense Proxy Battle with Carl Icahn”

Illumina CEO Francis deSouza Resigns Following Activist Investor Pressure

Illumina Inc., a DNA-sequencing company, announced the resignation of its CEO, Francis deSouza. This move is seen as a victory for activist investor Carl Icahn, who had been pushing for deSouza’s removal. This article discusses the circumstances surrounding deSouza’s resignation and the background of Icahn’s activism.

Activist Investor Carl Icahn Emerges Victorious

Carl Icahn, a renowned activist investor, had been pressing for changes within Illumina’s board. He claimed that the board and management had made several questionable decisions, including selling and re-buying cancer-detection firm Grail Inc. at a higher price. Mr. Icahn criticized the company’s decision to go ahead with the transaction despite European regulators’ opposition. He also accused the board of being weak and reflexively backing the company’s management.

In March, Icahn started pushing for board seats after Illumina rejected his offer to buy a stake in the company. He demanded that the company add more independent directors to the board. Shareholders elected Andrew Teno, a portfolio manager at Icahn Capital, to the board at the company’s May 25 meeting. This decision marked a major setback for Illumina’s CEO, Francis deSouza.

Francis deSouza’s Departure

DeSouza initially survived Icahn’s attack when he was one of the eight directors re-elected to Illumina’s board last month. However, deSouza could not hold on to his position as CEO. This decision comes after deSouza wrote a letter to employees, posted on his LinkedIn page, stating that he is stepping down. He stated that it is time for him to hand over the reins after ten life-changing years.

Charles Dadswell, Senior Vice President and General Counsel, was named interim CEO after deSouza’s resignation. The company is launching a search for a permanent replacement. DeSouza will stay on in his advisory role until July 31.

Icahn’s Recent Activism

Icahn has faced several challenges recently. Hindenburg Research, a research firm, recently criticized Icahn Capital’s value. The report claimed that the value of his investment firm was inflated and questioned its dividend payouts. Icahn called the report self-serving. Additionally, his company, Icahn Enterprises, reported that it had been contacted by the US Attorney’s Office for the Southern District of New York seeking information on some of its units.

Conclusion

The resignation of Francis deSouza as CEO of Illumina comes after Carl Icahn’s sustained pressure on the company. This move is a victory for Icahn, who had been pushing for more changes within the company’s board and executive leadership. The future direction of Illumina remains unclear, but the company faces several challenges as it searches for a new CEO.