Proxy Firms Divided on Icahn Board Seat at Motorola

Institutional Shareholder Services has advised Motorola shareholders to elect Carl Icahn to the Board of Directors at their annual meeting on May 7. Rival advisory firm Glass Lewis, however, says Icahn has not provided a sufficiently detailed plan for Motorola to warrant election to the board. Icahn controls 2.9% of Motorola stock. "[W]e believe the presence of a new viewpoint may help to ensure that shareholder value is preserved," stated ISS. Glass Lewis claims management has acknowledged "previous errors in judgment" and should be given a chance to turn the company around. "We believe Mr. Icahn rightly identifies a number of problems with Motorola's business and misjudgments by its managers and board," the group said. "However, we feel the dissident's plan for improving Motorola's current position is short on details." Motorola's management, led by CEO Ed Zander, is opposed to Icahn's election on the grounds that he is overcommitted elsewhere and has insufficient experience in the wireless industry. The company's shares have lost a third of their value since October on poor high-end handset sales and the loss of a price premium on the Razr line.

Sources: Bloomberg, MarketWatch, Reuters
Commentary: Icahn Pushes for Motorola Board Seat; Urges Postponement of Buyback • Shareholder Activism At Motorola: The Power Of Free Markets • Analysts Believe Motorola Hasn't Yet Hit Bottom
Stocks/ETFs to watch: Motorola Inc. (MOT). Competitors: LM Ericsson Telephone Co. (ERIC), Nokia Corp. (NOK). ETFs: Broadband HOLDRs (BDH), Wireless HOLDRs (WMH), PowerShares FTSE RAFI Telecom & Tech (PRFQ)
Conference call transcripts: Q1 2007

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