The troubled cell-phone maker agrees to back two board nominations from activist investor Carl IcahnWhen Motorola CEO Greg Brown agreed on Apr. 7 to back two of Carl Icahn's nominations to the company's board of directors, it was an admission of defeat. Icahn, the activist shareholder who has been calling for changes at Motorola (MOT) and demanding board representation for a year, had substantially beefed up his stake in the cell-phone and network-equipment maker in recent months, likely rendering further efforts to block his nominations moot.
Since Icahn first demanded a board seat a year ago, his voting power has more than doubled to 6.4%, according to Securities & Exchange filings as of late March. While that alone wouldn't be enough to elect his representatives, Icahn is believed to have built considerable support among other agitators. "Other pushers for change have started to move into the shares," says Ronald Orol, author of Extreme Value Hedging: How Activist Managers Are Taking On the World (Wiley, 2007).
Icahn might have gained some board seats—perhaps as many as four—at the annual meeting in May, says Orol.
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