Sunday, December 2, 2007

Three brief items

1. Motorola, a Fortune 100 communications company, announced that Ed Zander is stepping down as its CEO.

Zander will remain as chairman of the board until May, when the company holds its annual meeting. Carl Icahn has said for at least a year now that Zander wasn't right for the CEO job. He put out a statement Friday crowing a bit. Zander's departure is "long past due" etc.

But Zander himself was never the focus of Icahn's efforts at Motorola. He believes the best way to increase the value of the stock for shareholders like himself is to split it up -- make it a company focused tightly on mobile devices and spin off everything else.

My guess at the moment is that the new CEO, Greg Brown, won't be on board with Icahn's agenda any more than Zander was.

2. Readers may recall that here on November 20 I blogged about proxy access rules under consideration by the SEC.

Since then, the agency has made its choice. Its adopted the most restriuctive of the rules under consideration. In other words, it holds that company's can simply exclude from the ballot any shareholder attempt to re-write the company's ruiles concerning elections to the board of directors.

In general, this is bad news, not just for the Carl Icahns of the world but for corporate productivity in the US. This ruling will encourage incumbemnt managemnents to entrench themselves and resist pressures from outside. Entrenchment, as a rule, is a bad thing. Shake-ups are ghood things. Capitalism requires that the pot be kept boiling.

Creative destructive works like that. Protect yourself from the latter, you minimize the former.

3. More about Gyrodyne and Goldstein. As I mentioned Wednesday, Gyrodyne brought a lawsuit in federal court asking for an injunction so that Goldstein couldn't ruin their party this week. Their annual meeting is Wednesday and they don't want him soliciting proxies to replace three of them on the board with himself and two associates.

It's an 8-member board, so even complete success in terms of his slate won't give Goldstein a majority. But his slate would need only 1 convert to produce a tie vote, and deadlock, on a given issue.

At any rate, it appears that the district court refused to grant the injunction, so the solicitations continue.

The big issue? Poison pills. I'll discuss such "pills" in general in tomorrow's entry.

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