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The Icahn Report

Join the United Shareholders of America: The Icahn PlanOctober 7

One of the biggest problems we face today is the egregious mismanagement and reckless incompetence of many American corporate boards which utterly fail to do their primary job of holding managements accountable.

Many board members are often beholden to managements for lavish pay and perks they get for very little work and oversight. The credit crisis we find ourselves in is a direct manifestation of board members' lack of oversight. Alarm bells should have gone off in board rooms as crisis loomed, but many boards looked the other way.

Our economy has floundered for nearly two years because boards allowed their companies to make vast leveraged investments into faltering mortgage-backed securities. These investments vaporized trillions of dollars in shareholder value and left the banking industry in crisis. Boards gave permission to CEOs to take these risks, which often times they misunderstood, which is like giving the fox permission to guard the henhouse.

Incredibly, some board members make as much as $10,000 a week and soak up expensive trips to the Super Bowl and Augusta aboard corporate aircraft - simply to go to four or five board meetings a year.

Many of these same boards and managements are members of such groups as the Business Roundtable and the U.S. Chamber of Commerce, which annually spend huge sums of money in Washington to pass laws favoring managements and boards. These laws are often at the expense of shareholders, which are t

Bailout Plan Must Include Corporate Governance ChangesSeptember 26

With the shocking collapse of multiple banks and financial institutions in recent months and staggering losses to shareholders, Congress clearly needs to forge a bailout package to stall the economy from further downward spiral.

In my view, the primary factor that got us into this mess is the egregious mismanagement and short-sightedness of boards and CEOs of these institutions, who took inordinate and leveraged risks with stockholders money, not simply external factors like the housing market slump.

Business cycles happen. Obviously, responsible managements should have planned for this possibility and not blindly invested in subprime mortgages and other toxic instruments.

Unfortunately this has been a disaster for shareholders, many of which are pension funds for working people. These shareholders are paying for the mistakes, while managements are leaving with huge bonuses, such as the $2.5 billion package for Lehman executives after the bank collapsed.

I have long maintained that there are too many laws in this country that protect inept managements and don’t give stockholders enough power to throw out these managers. The banking industry is a prime example.

The bailout is one answer. But perhaps the most important solution is to bring private money into these institutions. We need to have management accountability to induce private money to come into the financial industry.

The U.S. Federal Reserve recently relaxed bank

Say On PaySeptember 26

John McCain and Barack Obama finally agree on something: corporate accountability.

'Say on Pay' has become a hot topic in the 2008 elections and highlights our faulty corporate structure. 'Say on Pay' may be the first step in emphasizing to our political leaders how important corporate governance is to the United States economy.

The other day, I watched CNBC anchor Melissa Lee say, "…both presidential candidates railing against high executive pay at failed firms Fannie Mae and Freddie Mac and certainly the GSEs (are) not the only troubled firms giving multimillion dollar send-offs to departing CEOs. It has happened at Merrill Lynch, it has happened at Citigroup, the list goes on and on." Now executives at Lehman’s New York office that may be directly responsible for the world’s largest corporate bankruptcy are to share a $2.5 billion bonus courtesy of its deal with Barclays. Should a top executive pocket big bucks even if the company is failing?

Good question. The answer is NO.

Aflac, run by CEO Daniel Amos, became the first public U.S. company to allow shareholders a nonbinding vote on executive compensation. This is now referred to as 'Say on Pay.' Although shareholders did not secure the power to determine executive pay at Aflac, they did obtain the ability to present their views on compensation awarded the year prior. This might seem like a big improvement, but it is in actuality a baby step in the battlefield for improved corpor

Corporate Waste Brings this Nation Closer to the BrinkSeptember 19

Few things bother me more than the titanic government debt load this country carries from years of reckless government borrowing and spending. We really have no ability to repay this debt, other than by continually issuing new debt to pay the interest on the old debt.

The Peter G. Peterson Foundation calculates that we as a country have racked up a staggering $53 trillion in government obligations. That’s $455,000 per household and growing at the rate of $2 trillion to $3 trillion a year "on autopilot," the respected think tank says.

Just this week, we added another $85 billion to these obligations with the bailout of insurance giant AIG. Add that to the $200 billion in potential obligations to Fannie Mae and Freddie Mac, the $29 billion to back up Bear Stearns toxic credits, and $300 billion for the Federal Housing Authority and a possible $25 billion to $50 billion in low-interest loans for Detroit’s Big-3 automakers and we’re talking nearly $700 billion on top of this.

The debt and obligations we carry as a nation, combined with our miniscule savings rate and monster trade deficit, is truly frightening.

But what is even worse is the sheer amount of waste in corporate America that impedes our ability to generate revenue needed to finance these obligations. Already many infrastructure projects across the nation are suffering from declining tax revenue.

America’s corporations need to be

We Pay So Much For So LittleSeptember 17

With the monster financial meltdowns of the past month, the time has clearly come for shareholders to exert their rights and bring about major changes in corporate governance in America.

I intend to use this blog as a forum and a focal point to push for legislative changes to make corporate managements more accountable to shareholders, who are the true owners of America’s corporations.

I don’t claim to know what went on inside the boardrooms of these companies. However, based on my close involvement and knowledge concerning how many boards operate, it is difficult to see how one could reach any conclusion other than that the boards of directors of a number of these imploded financial firms utterly failed to successfully implement some of their primary tasks - to oversee management and monitor and evaluate risk controls.

This is unacceptable and intolerable. The financial pain and job losses these meltdowns have caused is now reverberating through the economy and this will likely continue for months or even years.

What has transpired in recent weeks with Lehman Brothers, AIG, Fannie Mae, Freddie Mac and Merrill Lynch is shocking. The dominoes keep falling on Wall Street from a mismanaged credit crisis, causing economic disarray, huge job losses and pain on a global scale.

In each case, the root cause seems to be excessive risk-taking by managements, or worse, managements that weren’t sufficiently aware of the risks their com