Illumina CEO survived Icahn's challenge by more than 2-to-1 margin

Illumina Inc ILMN CEO Francis deSouza survived a challenge to his board seat from activist investor Carl Icahn last week by securing more than twice the shareholder votes than the number his challenger received, the company said in a filing on Tuesday.

While the outcome of the vote was known, the tally had not been previously disclosed. It gives deSouza legitimacy to carry on after Icahn mustered enough shareholder support to oust Illumina's board chair John Thompson and install one of his board nominees, Andrew Teno.

Icahn tried to replace both deSouza and Thompson on the board and said he wants former Illumina CEO Jay Flatley to return to run the company. The company's share price lost 18.4% in the last 52 weeks.

A year ago deSouza was the company's top vote getter with 130,098,117 votes cast for him. This year he received 93,110,014 votes, beating out only Thompson and all three of Icahn's nominees.

Teno received 77,769,509 votes while Thompson received 45,091,516 votes. The two other Icahn nominees received the fewest votes.

Icahn criticized Illumina, including deSouza and Thompson, for its $7.1 billion acquisition of cancer test maker Grail. Illumina completed the deal over the objections of U.S. and European antitrust regulators, who are now trying to force the company to unwind it.

Illumina lost $50 billion in market value following the deal as investors fret it may be forced to divest Grail at a big loss.

Illumina has said it will expand its board from nine members to 11 and has interviewed chiefs of publicly traded companies with healthcare experience and chief financial officers of publicly traded companies with Wall Street experience to join. It will also elect a new board chair.

Activist investors are increasingly calling for top executives to be replaced, with Insightia data showing they pushed for the removal of personnel at 60 companies last year, a 46% jump from the year before and the highest amount since 2017.

Some CEOs who had activists join their board did not stay in the position for long. Unilever Plc CEO Alan Jope, for example, announced plans to leave three months after hedge fund Trian Fund Management's Nelson Peltz joined the consumer giant's board last year. Brian Niccol took the reins at Chipotle Mexican Grill in early 2018 after one of Bill Ackman's lieutenants at Pershing Square Capital Management joined the board in late 2016.

Other CEOs have survived. Vicki Hollub remains Occidental Petroleum's OXY CEO after the company cut a deal with Icahn over board seats in 2020 and after Icahn cashed out two years later.