Motorola versus Carl Icahn, round two: interview replay fuels war of words

By Lisa Kerner

Charlotte, N.C., May 2 - Motorola, Inc. and would-be Motorola board member Carl Icahn exchanged words, on paper at least, after Motorola cited a replay of a Nov. 1, 2006 Icahn interview that aired as part of a May 1 CNBC story. The topic of Icahn's interview was serving on multiple boards of directors.

In the interview, Icahn said, "How can a guy be on eight boards and know what the hell he's doing? These companies are complicated and you have tremendous competition from abroad. How can somebody sit on a board - even if he's the smartest guy in the world - if he was Einstein - and understand what that company is doing?" according to a Motorola news release.

According to CNBC, Carl Icahn currently serves on 11 boards of directors, and according to Motorola, he is the chairman of at least four.

The CNBC story underscores Motorola's belief that Carl Icahn does not treat public company directorship with the appropriate level of seriousness and commitment.

"We believe Carl Icahn views directorship as a mere adjunct to his investing activity. Furthermore, we will not allow Carl Icahn to use Motorola as his self-serving platform. This is not about governance; this is about Carl Icahn's qualifications and commitment to serve on Motorola's board," the release stated.

Icahn, on the defensive, did not address the interview replay in his statement. Instead, he disagreed with Motorola's claim that since April 2003, Motorola has achieved 30% annualized returns. Icahn said that since Dec. 3, 2004 (the first trading day following the distribution of Freescale shares), Motorola has achieved negative 0.3% annualized returns.

"Motorola's destruction of $20 billion of market value over the last 6 months and its failure to create any improvement in share price over 2½ years is, in my opinion, completely unacceptable," Icahn's statement said

"Despite these results, management and the board have the audacity to tell us how great they have done. A vote for me is a vote against the status quo and a vote to demand that management and all existing board members focus on looking forward to fix our business and accept the current reality imposed by past mistakes."

In an April 18 letter to Motorola shareholders, Icahn vowed to serve as "an active, engaged director of Motorola, unafraid to demand management accountability and to ask the tough questions that appear to me to have gone unasked."

In addition, Icahn noted his "expertise in finance and overall business judgment" as well as his success in industries as diverse as telecom, automotive, oil and gas, gaming, real estate and biotechnology.

On Feb. 28, Icahn announced plans to acquire between $119.7 million and $500 million of the Schaumburg, Ill., communications company's common stock.

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