Fight for Motorola's board intensifies as shareholder vote draws near
By Colleen Taylor, Contributing Editor -- EDN, April 27, 2007
With the May 7 date of Motorola Inc.'s scheduled shareholder vote on the election of Carl Icahn to the company's board of directors fast approaching, the Illinois-based mobile phone maker has ramped up its campaign to prevent the notorious shareholder activist from securing a spot in its boardroom.
Icahn, a 71-year-old New York native, made his name as a Wall Street raider after heading up a hostile takeover of airline TWA in 1985. In recent years, his investments have included Blockbuster Inc., Imclone, Time Warner Inc., and several Las Vegas casinos.
In January, Icahn launched his latest crusade, setting his sights on a spot on Motorola's board. He has since lobbied hard for shareholders' votes, describing himself as "an individual selected outside of the nomination process under which all board members are nominated by existing Motorola directors." He currently holds 2.9 percent of the company's stock http://www.edn.com/article/CA6432281.html.
Motorola's current board is fighting back against Icahn's campaign. The company announced this week that independent proxy advisory firm Glass Lewis and Co. http://www.glasslewis.com has backed the Motorola's current board in its disapproval of Icahn's pursuit of a position on the board. According to a statement made Wednesday by Motorola, Glass Lewis recommends that Motorola's shareholders vote for the company's incumbent directors and against Icahn's nomination. According to Motorola, Glass Lewis believes that Icahn's future plans for the company are "short on details" and that "neither the size nor length of his holdings in Motorola should automatically qualify him as a director of the company."
Icahn, meanwhile, has cited his own endorsements from proxy advisory firms Institutional Shareholder Services (ISS) and Proxy Governance Inc.
"Motorola has significantly underperformed its peers over recent quarters, and by most accounts is expected to struggle the remainder of the year," ISS said, according to a press release made Wednesday by Icahn. "Icahn has a positive track record for creating shareholder value across a diverse universe of industries."
Indeed, Motorola has seen its share of financial troubles of late. Earlier this month, the company posted what its CEO called an "unacceptable" Q1 earnings report that included an operating loss of $366 million. The financial failings have spurred attempts to change the company's course. In January, Motorola announced plans to cut 3,500 jobs, or 5 percent of its workforce. And last month, the company announced a slew of major changes in leadership, naming Greg Brown the company's new president and COO and naming Thomas J. Meredith the company's acting CFO.
