Icahn: 'Voting Rights Really Don't Apply to Public Corporations'

Friday, 20 Sep 2013 09:55 AM

By Dan Weil

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
Corporate governance rules deny shareholders a fair say in companies' policies, says activist investor Carl Icahn, chairman of Icahn Enterprises.

"What baffles me is that voting rights really don't apply to public corporations," he writes in The Wall Street Journal.

"Shareholders can vote, but boards can just ignore them under the 'business judgment rule' backed by state laws and courts."

Editor’s Note:
Retired Americans Slammed by Obama’s Redistribution Plans

It's unjust that when an investor buys 10 to 15 percent of a company's stock, management can issue a bevy of new shares to thwart a takeover and save their jobs, Icahn argues.

"How is it fair that boards can simply ignore shareholder votes and leave incompetent crony directors and CEOs in place? ... Is it fair that CEOs make 700 times what the average worker makes, even if the chief executive is doing a terrible job and thousands of workers are laid off?"

Laws need to be changed so that shareholder votes matter, Icahn maintains.

"We believe without question that holding boards and CEOs accountable and replacing them when necessary will improve the economy, make companies more competitive, increase employment and add to shareholder value."

The increasing presence of activist investors like Icahn may already be affecting corporate behavior.

"Companies are trying to engage with the activists early, below the radar, so that things don’t have to bubble up to the surface and become public, which is extremely disruptive to the company," Damien Park, founder of Hedge Fund Solutions, which consults with companies and hedge funds on activism, tells The New York Times.

Editor’s Note: Retired Americans Slammed by Obama’s Redistribution Plans

Related Stories:

Icahn Opposes Voting Rule Change Proposed by Dell Founder

Dell to Lavish More on PCs, Tablets After $25 Billion Buyout Win

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved