Family handout

‘Crisis waiting to happen’

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The founder of medical technology manufacturer Masimo is demanding $400mn in payouts from his former company after being sacked as board chair.

Joe Kiani filed a lawsuit in California state court asking a judge to declare his employment agreement allows him to receive pay typically associated with a company sale. The company announced on Wednesday that Kiani was ousted by shareholders at the company’s annual general meeting last week. Shares rose more than 6 per cent in Wednesday trading after the announcement.

The move follows a bruising years-long tangle with activist investor Quentin Koffey and his $1.65bn firm Politan Capital.

Kiani said in his lawsuit that “ceasing to be Board Chair” entitled him to the vesting of 2.7mn restricted stock units, which at the current Masimo stock price is worth $360mn. Kiani also said he was owed a $35mn cash payment, representing twice his average salary and bonus over the past two years and the funding of a “rabbi trust”. Masimo’s current market capitalisation is about $7bn. Kiani declined to comment.

Kiani resigned as chief executive of Masimo after last week’s board election. In his resignation letter to the board demanding the payout, he wrote: “I am deeply disappointed by the way you have treated me and undermined my leadership and vision for the Company.”

Kiani’s current ownership stake is 8 per cent of Masimo’s outstanding shares, worth approximately $500mn. He told the Financial Times last week he would sell his Masimo shareholdings if he was deposed from the board.

Two directors elected last week by Masimo shareholders were nominees of Politan, which now has four of the six Masimo board seats. Politan, which owns 9 per cent of the company, sued Masimo in 2022 over the Kiani employment contract payouts, alleging the size represented a breach of the board’s fiduciary duties. The assigned Delaware state judge had criticised aspects of the payouts in a hearing but Politan dropped the lawsuit after Koffey was elected to the board.

Kiani founded Masimo in his Orange County, California, garage in 1989, and designed a market-leading pulse oximeter used by hospitals and other healthcare providers. But the company’s stock price has fallen 60 per cent since 2021 after revenue declines and poor acquisitions. 

Politan declined to comment on Kiani’s lawsuit. During this year’s proxy fight it said it could seek to keep Kiani as board member to avoid the payouts and, regardless, the payout terms may not have been legally valid, per their previous Delaware lawsuit. 

Masimo said in a press release on Wednesday that Michelle Brennan, a Politan-affiliated director who joined the board last year and is a former Johnson & Johnson executive, would become interim CEO and the company would look to separate its consumer wearables business.

M&S shoppers have been left gutted after the chain axed a popular takeaway meal after less than two years.

The supermarket’s Vegan ‘Chicken’ & Pepper Pizza earned rave reviews before it was scrapped.

1

One fan of the tasty dish took to social media to ask the food giant where the popular Plant Kitchen product had gone.

She wrote: “I’m going to have a mental breakdown if you have discontinued the plant kitchen chicken and pepper pizza fr.

“Specifically the fake chicken and pepper one? Blackheath or Charlton are my local ones!”

The M&S official account responded: “The chicken and pepper one has been discontinued, Tash I’m sorry.

“I’ve let our Food team know you’ve asked about it so they can keep this in mind for any future reviews of the range.

“We will still have a vegan BBQ pizza in the range.”

The large pizza was introduced to the lineup by M&S back in January last year.

It was described as being “topped with signature tomato sauce, vegan herb chicken and grilled peppers.”

Customers said that the large pizza was big enough to serve two unless you were especially hungry.

The Sun have contacted M&S for comment.

M&S also recently axed some of its popular Percy Pig sweets – leading to desperate calls for them to be reinstated. 

Percy Pig Phizzy Chews earned rave reviews before they were scrapped in the brand’s recent confectionery overhaul in July.

The chews were not the only product to face the axe. 

This summer, M&S also ditched its Colin and Connie “Together Forever” fruit gums, meaning Connie the caterpillar no longer appears in the caterpillar sweet range. 

Percy Pig is not only a loved treat, but also a fierce topic of debate.

Five years ago, M&S sparked both outrage and praise when it announced it had been turning its entire Percy sweets range vegetarian, with the change happening over several years.

Many social media users claimed the taste was no longer the same and called for M&S to retain both vegetarian and the original versions, which contained gelatine.

But after the store invited 100 Percy Pig lovers to a panel vote, a 60%  majority voted to keep the sweet meat-fee.

The store is continuing to innovate Percy, with its many variations including seasonal additions such as “Percy meets the Easter Bunny”, “Merry Percymas” and “Pumpkin Percy” for Halloween. 

Why are products axed or recipes changed?

ANALYSIS by chief consumer reporter James Flanders.

Food and drinks makers have been known to tweak their recipes or axe items altogether.

Advertisement

They often say that this is down to the changing tastes of customers.

There are several reasons why this could be done.

For example, government regulation, like the “sugar tax,” forces firms to change their recipes.

Some manufacturers might choose to tweak ingredients to cut costs.

Advertisement

They may opt for a cheaper alternative, especially when costs are rising to keep prices stable.

For example, Tango Cherry disappeared from shelves in 2018.

It has recently returned after six years away but as a sugar-free version.

Fanta removed sweetener from its sugar-free alternative earlier this year.

Advertisement

Suntory tweaked the flavour of its flagship Lucozade Original and Orange energy drinks.

While the amount of sugar in every bottle remains unchanged, the supplier swapped out the sweetener aspartame for sucralose.

Stay informed with free updates

Simply sign up to the Artificial intelligence myFT Digest — delivered directly to your inbox.

The writer is executive director of the Aspen Strategy Group and a visiting fellow at Stanford University’s Hoover Institution

While millions of lives have been saved through medical drugs, many thousands died during the 19th century by ingesting unsafe medicines sold by charlatans. Across the US and Europe this led to the gradual implementation of food and drug safety laws and institutes — including the US Food and Drug Administration — to ensure that the benefits outweigh the harms.

The rise of artificial intelligence large language models such as GPT-4 is turbocharging industries to make everything from scientific innovation to education to film-making easier and more efficient. But alongside enormous benefits, these technologies can also create severe national security risks. 

We wouldn’t allow a new drug to be sold without thorough testing for safety and efficacy, so why should AI be any different? Creating a “Food and Drug Administration for AI” may be a blunt metaphor, as the AI Now Institute has written, but it is time for governments to mandate AI safety testing.

The UK government under the former prime minister Rishi Sunak deserves real credit here: after just a year of Sunak taking office, the UK held the game-changing Bletchley Park AI Safety Summit, set up a relatively well-funded AI Safety Institute and screened five leading large language models.

The US and other countries such as Singapore, Canada and Japan are emulating the UK’s approach, but these efforts are still in their infancy. OpenAI and Anthropic are voluntarily allowing the US and UK to test their models, and should be commended for this. 

It is now time to go further. The most glaring gap in our current approach to AI safety is the lack of mandatory, independent and rigorous testing to prevent AI from doing harm. Such testing should only apply to the largest models, and be required before it is unleashed on to the public.

While drug testing can take years, the technical teams at the AI Safety Institute have been able to conduct narrowly focused tests in the span of a few weeks. Safety would not therefore meaningfully slow innovation.

Testing should focus specifically on the extent to which the model could cause tangible, physical harms, such as its ability to help create biological or chemical weapons and undermine cyber defences. It is also important to gauge whether the model is challenging for humans to control and capable of training itself to “jailbreak” out of the safety features designed to constrain it. Some of this has already happened — in February 2024 it was discovered that hackers working for China, Russia, North Korea and Iran had used OpenAI’s technology to carry out novel cyber attacks. 

While ethical AI and bias are critical issues as well, there is more disagreement within society about what constitutes such bias. Testing should thus initially focus on national security and physical harm to humans as the most pre-eminent threat posed by AI. Imagine, for example, if a terrorist group were to use AI-powered, self-driven vehicles to target and set off explosives, a fear voiced by Nato. 

Once they pass this initial testing, AI companies — much like those in the pharmaceutical industry — should be required to closely and consistently monitor the possible abuse of their models, and report misuse immediately. Again, this is standard practice in the pharmaceutical industry, and ensures that potentially harmful drugs are withdrawn.

In exchange for such monitoring and testing, companies that co-operate should receive a “safe harbour” to shield them from some legal liability. Both the US and UK legal systems have existing laws that balance the danger and utility of products such as engines, cars, drugs and other technologies. For example, airlines that have otherwise complied with safety regulations are usually not liable for the consequences of unforeseeable natural disasters.

If those building the AI refuse to comply, they should face penalties, just as pharmaceutical companies do if they withhold data from regulators. 

California is paving the way forward here: last month, the state’s legislature passed a bill — currently awaiting approval from Governor Gavin Newsom — requiring AI developers to create safety protocols to mitigate “critical harms”. If not overly onerous, this is a move in the right direction.  

For decades, robust reporting and testing requirements in the pharmaceutical sector have allowed for the responsible advancement of drugs that help, not harm, the human population. Similarly, while the AI Safety Institute in the UK and those elsewhere represent a crucial first step, in order to reap the full benefits of AI we need immediate, concrete action to create and enforce safety standards — before models cause real world harm.