Illumina CEO's Pay Nearly Doubled Despite Steep Market Decline, Says Carl Icahn

Despite the dramatic drop in the market value of Illumina since it closed a controversial deal with a pharmaceutical company last year, investor Carl Icahn blasted the company for nearly doubling its CEO's salary last year. 

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According to Trade Algo, Icahn said in a statement that the purchase is not only absurd, but also questionable, which is why ILMN's share price is lower by 63% as a result of deSouza making such an absurd and questionable purchase, which he described as ridicule.

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As the activist investor said, “What is really funny is that it is hard to find good CEOs in this particular field”, it is something he was fascinated by. Having lost $50 billion in shareholder value in just a few months, it would be hard to find anyone who still gets paid 87% more for a total of $26.8 million in 2022 despite losing $50 billion of shareholder value in a matter of months.”

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A request for comment made to Illumina did not receive an immediate response.

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After serving as the company's president for nearly three years, DeSouza became CEO of the DNA sequencing company in 2016. In a preliminary proxy statement that Illumina filed Thursday, the company disclosed that last year, he was awarded almost $26.8 million in total pay, nearly double what he earned last year, $14.3 million. 

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In addition to deSouza's pay bump, Illumina granted him an additional $12.5 million worth of stock options, which it said constituted a "meaningful retention incentive," meaning that deSouza would receive a "significant benefit in a highly competitive environment." 

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The pay increases for both DeSouza and Alvarado follow a serious period of growth for Illumina, a San Diego-born company whose market value has fallen to about $35 billion from about $75 billion as recently as August 2021, when the company acquired cancer diagnostic company Grail. 

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Icahn, who has been trading jabs with Illumina for nearly a month now, has been attempting to gain control of the $7.1 billion Grail deal as part of a proxy fight. 

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In addition to Icahn, who owns a 1.4% stake in Illumina, he is also trying to nudge the company to unwind the acquisition of Grail, which he has described as "disastrous" and "a new low in corporate governance." In addition, since Illumina owns millions of dollars, he has access to a chance to vote on the board. 

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Earlier this week, he said that the company should bring back former CEO Jay Flatley to "fix the situation" because he had repeatedly criticized Illumina's board of directors and management team. 

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In a letter to shareholders on Thursday, Illumina urged them to reject 3 nominees for its board of directors, and defended the decision to acquire Grail by its management team. 

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In addition, the company argued that Icahn had said more encouraging things about its current CEO before it launched its proxy fight against him. 

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Last month, Illumina reported that Icahn told the company he intends to nominate candidates to the board despite the company's belief that deSouza has been a good manager. 

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During another meeting earlier this month, deSouza's CEO was also reported to have expressed his support for his actions, with the activist investor also making it clear that he would not repeat those comments publicly, as indicated by Illumina. 

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The Icahn company has a strong objection to the Grail acquisition because Illumina decided to close the deal without approval from antitrust regulators. After winning a battle against the U.S. Federal Trade Commission in September, the company is still fighting to have European regulators approve the merger, but has overcome the U.S. Federal Trade Commission in September. 

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There are also plans to force Illumina to unwind the deal as part of the proposed order that has been drafted, which will force Illumina to do so. In January, the European Commission blocked Illumina’s acquisition of Grail, citing concerns that it would stifle innovation and harm consumer choice.

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As Illumina stated earlier this month, Grail has the potential to generate tremendous long-term value-adding for the company. 

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Using a single blood draw, Grail claims it has developed one of the most effective and successful early screening tests on the market. It claims to be capable of detecting 50 types of cancers, far more than any other test available on the market. The test generated $55 million in revenue in 2022 and is expected to generate $110 million in revenue this year, according to Illumina.