Activist investor Carl Icahn has attacked what he sees as the failure of Motorola CEO Ed Zander as he stepped up his campaign to win a seat of the board of the struggling company.
In a full-page advertisement in yesterday’s Wall Street Journal, Icahn revealed the text of a letter to the company’s shareholders in which he asserted that Motorola has stumbled badly.
Over the past 6 months, on this board’s watch, almost $20bn of market value, of stockholder value, of your money, has disappeared. Motorola has suffered a critical failure in oversight and leadership that must be addressed, said Icahn.
He insisted that Motorola is a great company with good employees but says it has been shaken by leadership setbacks that could have and should have been averted. Icahn said: As things deteriorated, CEO Ed Zander, according to the Wall Street Journal, shouted at an office meeting, ‘I love my job. I hate my customers’, which reportedly became one of his favourite phrases. It sounds like something straight out of Alice in Wonderland.
He said that when Cingular Wireless, one of Motorola’s biggest customers, launched its 3G service, Motorola had no handsets to offer to Cingular. Instead, Cingular got their phones from Samsung.
Icahn quoted Ed Zander as saying that performance at our mobile device business in the first quarter was unacceptable. Yet Icahn claims the board played on with business as usual at Motorola. I am convinced that significant stockholder representation in the Motorola boardroom, even by a single director, is absolutely necessary at this troubled company, he said.
Icahn, who with his affiliates owns $1.2bn worth of Motorola stock, or 2.7% of the total, invests in companies that he considers undervalued by the market and which he says often have stumbled.
However, with the company AGM less than one week away, Motorola directors have reiterated that it strongly opposes his nomination for election to the board.