CNBC Exclusive: Icahn Contends Motorola Is Doing a 'Terrible' Job
In an exclusive interview on CNBC, billionaire investor Carl Icahn lashed back at Motorola, calling the company's management "terrible" and saying "earnings were so bad that the company had no measure of what they were doing." "
"We're one of the largest shareholders," Icahn told CNBC's David Faber. "We don't think it's well-managed. We don't believe the board has done a good job. Today a lot of things came out --obfuscated the situation so much, that I felt I should come on."
Icahn's interview came as the battle of words escalated between the investor and Motorola, the big maker of wireless handsets. Earlier Wednesday,Motorola urged its stockholders to reject Icahn’s bid join the company’s board, saying the "Board of Directors does not believe Carl Icahn treats public company directorship with the appropriate level of seriousness and commitment."
The Motorola shareholder vote is scheduled for May 7.
When asked by Faber why he wanted to be on Motorola's board, Icahn cited the company's worsening financial situation.
"The problem with Motorola," he added, is that "earnings were so bad--it worried me a great deal that the company had no measure what they were doing."
Icahn said he suggested to the board that they accept" another large shareholder" in lieu on him. But, he claims, the directors rejected the idea out of hand. "It sort of has to be me" on the board, he maintained, to safeguard shareholders' interests.
Motorola, citing a CNBC interview with Icahn originally broadcast in November 2006 and replayed Tuesday, quoted him as saying, “How can a guy be on eight boards and know what the hell he’s doing?”
Citing CNBC’s report, Motorola said Icahn now serves on the board of directors of 11 companies and also serves as chairman of at least four of them.
Icahn told Faber that the claim was "nonsense," and that he was only really involved in four or five boards. He urged stockholders to shake up Motorola’s board of directors.
Icahn also said his attempt to join the board is “a watershed event in corporate America.” He says too many companies are run like “fraternities,” citing “egregious salaries” and “crazy severance packages.” But if he succeeds, it will “send a message” to poor managers.
Icahn took a hard stance on dual-class stocks. “They should be completely abolished. If you want to go public, have the public invest, then they should have the right to vote.”