Icahn 'will do whatever it takes to win'
Author Mark Stevens has some advice for Motorola executives about corporate activist and multibillionaire Carl Icahn, the subject of his 1993 biography, King Icahn:
• Underestimate Icahn at your peril. "Managements at the companies he has his eyes on almost always do," he said. "Corporate management is raw meat for Carl."
• Brush up on your chess. "Icahn was a top chess player at Princeton. He will do whatever it takes to win. He will surprise. He will come back from the dead. He will not go away until he wins. Motorola management is on the second move in the game, but Carl is already on his 10th."
• Read up on hardball philosophers, especially Nicolo Machiavelli, the master of real politics. Icahn was a philosophy major, and thinks business should be run on the principles of philosophy, not business, said Stevens, chief executive of MSCO Inc., a global marketing firm, and the author of the Business Week best seller, Your Marketing Sucks. He said Icahn considers fairness to be "stupid. He wants to be legal, but never fair. He does what it takes to win."
• Even if you think you're a crack chess player, chances are Icahn will have his way and will win. "He almost always takes the value of the shares he bought and drives them up," Stevens said.
Shareholders also might win, but Icahn is strictly looking out for No. 1, asserted Stevens, adding, "He's an extremely self-centered person."
Icahn has a hand in many pots. He recently has gone after the energy company Kerr-McGee Corp. and Blockbuster Inc., where he was given a seat on the board of directors. He is involved with casinos in Las Vegas and also has taken an interest in some drug companies. He even tried to take over Marvel Comics. Take that, Hulk and Spider-Man.
When he gets a foothold, Icahn is critical of corporate governance, criticizing high executive compensation and calling for job cuts.
Motorola this month announced it would eliminate 3,500 more jobs after years of cuts, spinoffs and sales of divisions. Motorola soon will have about 65,000 employees, compared with 150,00 during the peak of the Internet and telecom booms in 2001. But Stevens said that in Icahn's reckoning, "There's always more that can be slashed."
Motorola's directors, who are now considering Icahn's self-nomination for the election at the annual meeting, held in late May, might look to Time Warner to see what could be in store for them.
Icahn is a major shareholder in Time Warner, where he has clashed with CEO Richard Parsons. Icahn last year ended a proxy battle in exchange for an agreement for a stock buyback program and a pledge to name two independent directors. Ironically, Motorola Chairman and CEO Ed Zander was named to one of the independent director slots last week. Time Warner shares have gone up more than 25 percent over the last year.
Icahn, who will be 71 next month, grew up in Queens, while Zander, an engineer and MBA, who just turned 60, grew up in Brooklyn, the son of Polish and Greek immigrants.
Could the two Jewish New Yorkers hit it off?
A Motorola spokesman said Zander would have no comment about Icahn.
Biographer Stevens predicted, "They might talk about the Dodgers, but Icahn will never get sentimental. It's all about business and making money. Carl likes to say corporations are influenced by 'reverse Darwinism.' The boss hires someone dumber than himself and so on down the line."