Billionaire investor Carl Icahn has fallen short in his effort to win a seat on the board of directors of struggling handset maker Motorola. The preliminary estimates of votes show all incumbent board members have been re-elected. The results, which will not be decided for a few weeks as proxy votes and those cast directly during the shareholder meeting Monday are subject to verification by an auditor, represent a vote of confidence for the board and Motorola CEO Ed Zander, and their plans to revive the company. After a three-month long intense campaign, Motorola said that preliminary results indicate Icahn’s nomination has failed to gather enough support from shareholders.
The latest developments will provide Zander more time to uncover new phones and return Motorola to profitability after a drop in market share last quarter led to its first loss in almost three years. The world’s second-largest mobile-phone maker is still confronting allegations that Zander is not turning the business around quick enough.
Icahn’s campaign was mainly spoiled due to the lack of a detailed recovery plan. This contention was repeatedly emphasized by Glass, Lewis & Co., a proxy advisory firm, which recommended shareholders vote against Icahn because his plan for improving Motorola’s performance was ’short on details.’ Icahn has told shareholders gathered for the event in Chicago that he probably lost the contest because fewer big funds voted for him. He further said that two or three large holders swayed the balance. Icahn mainly gained support from small funds which certainly was not enough to bring him at the Motorola board.
During his campaign for the seat at Motorola board, Icahn had appealed directly to shareholders in a letter that called the existing board ‘passive and reactive,’ and blamed the company’s market share losses and profit misery on slow reaction to changing market dynamics. At the same time, Motorola’s board was fast to defend itself, and in a letter to its shareholders it questioned the corporate governance practices at other companies where Icahn already holds board seats. The company also contended that Icahn brought no experience in the wireless field to the table and was already serving on too many boards.
As a matter of fact, Icahn’s bid to win a seat on the board had received a heavy blow when the California Public Employees’ Retirement System announced that it would support the company’s incumbent slate of directors. Carl Icahn may not have succeeded in his furious campaign to grab a seat on Motorola board but the billionaire financier’s proxy fight with the phone company might not have been an outright failure, either. Irrespective of the fact, he might not be on the board seat physically, but he will definitely make his presence felt in the company. The 71-year-old veteran further indicated that he plans to retain his 2.9 percent stake in the firm and he has not ruled out another board bid next year as well.
Image Source: New York Times/AP
