Listen to this article
Carl Icahn, the billionaire Wall Street investor and shareholder activist, called on Motorola’s board to fire Ed Zander, the company’s embattled chief executive, if he fails to turn the group’s troubled mobile phone business around as promised this year.
Mr Icahn’s warning that senior corporate executives, including Mr Zander, should be held more accountable for corporate performance, came as his proxy battle for a seat on Motorola’s board enters its final stages.
Mr Icahn, who has spent $1.2bn building a 2.9 per cent stake in Motorola, will ask shareholders at the group’s annual meeting on Monday to vote him on to a board that he has previously accused of being “too passive” and standing by while the company “stumbled badly” in the 2006 fourth quarter.
In an interview broadcast on CNBC’s Closing Bell business programme, Mr Icahn said: “What this company needs is somebody to take a tough stance.”
He noted that Mr Zander has forecast that the handset business will return to profitability by the fourth quarter, but pointed out: “You have to stand up to management and say, ‘What the hell is wrong?’ ”
He added: “If it is wrong and they [the management] cannot do the job, you then have to say, ‘Thanks a lot Ed, you are not the guy to run this’.”
His comments on Wednesday underscore the increasingly bitter and personal nature of the proxy battle, with both sides accusing each other of misrepresentation and obfuscation.
On Wednesday, Motorola accused Mr Icahn of lacking the commitment and seriousness needed to join its board. In the latest letter to investors on the subject, Motorola claimed that Mr Icahn views board membership as “a mere adjunct to his investing activity”.
The Schaumburg, Illinois-based company added: “We will not allow Carl Icahn to use Motorola as his self-serving platform,” and it questioned whether he had enough time to devote to the company given his other board commitments.
Motorola’s comments follow a full-page advertisement in Wednesday’s Wall Street Journal in which Mr Icahn repeated his claim that Motorola had “stumbled badly” under Mr Zander’s leadership.
The letters are among several that both Mr Zander and Mr Icahn have dispatched to shareholders in recent days in an effort to win their support.
Mr Icahn began campaigning for a seat on the board in January and started a proxy fight in March because the mobile phone manufacturer would not endorse his nomination.