Activist investor Carl Icahn's quest for a director's seat on Motorola's board has come and gone, but his efforts to prod the firm's management to improve its 3G offerings could come to fruition next Tuesday when Motorola is scheduled to reveal new 3G devices.
After Motorola's annual meeting Monday, the company said a preliminary tally of stockholder proxy votes indicated that Icahn lost his bid for a director's seat. At the same time, Motorola CEO Ed Zander said the company next week will show new mobile devices based on 3G and Java technologies.
The announcement wasn't lost on some stockholders, who noted that Zander came to Motorola in 2004 after a stint as president of Sun Microsystems. This week Sun, the main developer of Java, announced that it will unveil new mobile phone software based on new Java technologies.
Icahn, who represented nearly 3% of Motorola's stockholders, began his drive to change Motorola in January, after the company posted dismal financial results. Initially, Zander rode Motorola's popular Razr handsets to higher revenue and profits, but then handset competition set in and the company had to lower prices to the point where Motorola's sales and earnings suffered.
Icahn took some last feeble shots at Motorola and at Zander at the annual meeting, but late support for Motorola management from the California Public Employees' Retirement System helped derail his efforts to nab a director's seat. Icahn said a few large mutual funds doomed his campaign when they threw their support to Zander and Motorola top management. Icahn said he had support from smaller funds and individual investors.
"We are focused on executing our plan to improve the performance of our mobile devices business and building upon the strength of our strong Networks & Enterprise and Connected Home Solutions business," said Zander in a statement after the meeting. "During the past few months, we have met with and listened to a large number of our stockholders, including Mr. Icahn, and we value their insights and perspective regarding Motorola."
Icahn, who had previously launched stinging personal attacks against Zander, became conciliatory at the meeting. "There's no reason they shouldn't have welcomed me with open arms," Icahn told laughing stockholders. "I mean, heck, I'm a nice guy."
Zander recognized Icahn at the start of the meeting and set the tone for a gentlemanly proceeding.
Icahn said he will keep his Motorola investment; the firm's stock dropped in early trading Tuesday. "It's a very, very good investment," Icahn said, speaking with reporters after the meeting. "It's just a question of do they have good enough management to carry it home."