Carl Icahn website targets corporate governance reform

Oct 25, 2013
<p>Shareholders&rsquo; Square Table aims to become part of &lsquo;an important campaign for corporate democracy&rsquo;</p>

Veteran activist investor Carl Icahn has launched a new discussion platform for activist investors to tackle what he describes as a ‘dysfunctional system of corporate governance’, dubbed the Shareholder’s Square Table (SST).

The site – located at www.shareholderssquaretable.com – offers users the opportunity to unite and fight for improved shareholder rights, aiming for ‘the goal of real corporate democracy’. On signing up for free, viewers are also offered the opportunity to read reports on current investor activism and companies the SST is involved with, along with insights on business and commentary on certain boards and CEOs.

The SST’s name alludes to Icahn’s previous plans to set up a meeting point for activist investors, as described in an interview in the New York Times in 2005, which he called a ‘square table’ in the hope that shareholders would get a ‘square deal’.

An email addressed to those who sign up to the website – and signed by Icahn - reads: ‘The public companies in this country suffer from poor governance. Among many other problems, poor corporate governance allows for a growing disparity in income best reflected by CEOs of public companies earning as much as 700 times the wages of an average employee.

‘Even though these companies often underperform, the board of directors continues to overpay the CEO because poor corporate governance allows for a dramatic and universal lack of accountability. This is a huge problem for shareholders, and for our economy. As shareholders, the time has come for us to stand together and make a change. I intend for the Shareholders Square Table to be a platform enabling us to do this together.’

Further information on the website states that it will display periodic posts that discuss ‘what can be done to change our current dysfunctional system of corporate governance’, targeting ineffectual CEOs and boards that ‘are strangling shareholders and the economy’.

The site’s first entry replicates a letter sent by Icahn to Tim Cook, CEO of Apple, reiterating a call for the electronics company to initiate a $150 bn buyback of its shares. The letter also reveals that Icahn has recently increased his holding in Apple by 22 percent, with Icahn Enterprises owning 4.7 mn shares in the company worth a total of $2.5 bn.

Icahn suggests Apple’s current $147 bn cash reserves – and expected pre-interest earnings of $51 bn next year – mean ‘the timing for a larger buyback is still ripe, but the opportunity will not last forever.’ He goes on to say that if Apple were to execute the suggested buyback, stakeholders would benefit from an immediate 33 percent boost to earnings per share, with an eventual expected share price of $1,250.

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