Motorola forced to back two Icahn board members
Knuckling under again to pressure from dissident investor Carl Icahn, Motorola has agreed to appoint one of Icahn’s partners to serve on Motorola’s board and has agreed to nominate another candidate handpicked by Icahn at its 2008 annual meeting.
Motorola has given a board seat to Keith Meister, a managing director of the Icahn investment funds and principal executive officer of Icahn Enterprises. Meister will still have to stand for election at the board meeting. Motorola had previously rejected Meister as a board member.
The other nominee is William R. Hambrecht, founder, chairman and chief executive officer of WR Hambrecht + Co. and co-founder of Hambrecht & Quist.
The issue was Motorola’s backing those two on its own slate of nominees. Icahn may yet nominate other board members. His goal all along has been to place four of his proxies on Motorola’s board.
Not only does Icahn get the board seats, but Motorola must consult with him before making any decisions regarding the separation of its mobile devices business from its broadband operations, including getting Icahn’s approval of the CEO that will be appointed to run the mobile devices company.
The separation of businesses was a move Icahn had long agitated for. On March 26, Motorola finally capitulated to that demand, though its statement about the decision to spin off the mobile unit was phrased to make it sound like a tentative plan. With a hand-picked slate of directors, Icahn can assure that Motorola will follow through.
In exchange for agreement on board members, Icahn has agreed to drop several lawsuits he’s filed against Motorola and its executives.
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