Icahn Gets Personal In Proxy Battle With Motorola's Zander

The two men exchange barbs days before a vote on Icahn's bid is expected at Motorola's annual meeting May 7.
What began as a gentlemanly dispute between billionaire investor Carl Icahn and Motorola chief executive Ed Zander over a Motorola director's seat took on a harsh personal tone Tuesday as Icahn said some of Zander's reported management activities sound "like something straight out of Alice in Wonderland."

Icahn made the statement in a full page letter in the Wall Street Journal addressed to his "fellow Motorola stockholders." Much of the letter, which listed a litany of complaints against Motorola, was based on a recent Wall Street Journal article, which was mostly negative against Zander.

Motorola fired some of its own ammunition Tuesday, as it noted in a Securities and Exchange Commission filing that it had offered to work with Icahn to find a mutually acceptable director candidate but that Icahn had resisted the offer. Motorola demonstrated, too, that it could write a harsh letter to stockholders as it mailed a letter Tuesday urging them to reject Icahn's bid for a director's seat.

"Carl Icahn is a professional investor whose business is running funds which buy and sell public company securities," the Motorola letter stated. "He has responsibilities to his investors which may conflict with his ability to represent all stockholders."

The letter, signed by Zander and lead director Samuel C. Scott III, said Icahn has no plan to deliver value to Motorola stockholders and in addition Icahn's voluminous commitments would not give him enough time to devote proper attention to Motorola's affairs.

"Carl Icahn is unfamiliar with Motorola, our industry, technologies, customers and markets," the letter went on to state.

Icahn, who is alternately referred to as a Wall Street raider or a pro-stockholder investor depending on who is talking, said he represents nearly 3% of Motorola stockholders in his campaign for a directors seat. The more Zander has dug in against Icahn, the more the billionaire has escalated his campaign until arriving at its current stage in which Icahn has turned personal against Zander.

In his public letter, Icahn relied heavily on the Journal story and particularly on a statement Zander allegedly made at a meeting: "I love my job. I hate my customers." Motorola spokespersons have said the statement, if Zander had made it, would have been stated in a teasing manner, according to the Journal.

Motorola's sales and earnings have plunged in recent months as the firm seeks to dig out of a trench created when sales of its once-popular Razr mobile phone handset began slipping. In recent days, some prominent stockholders have supported Icahn in the wake of a report supporting his effort issued by shareholder advisory firm Institutional Shareholder Services.

A vote on Icahn's bid is likely to take place at Motorola's annual meeting May 7.

This article was edited on May 1 to add comments made by Motorola.