Carl Icahn and other activist hedge fund managers are picking a fight with companies seeking to reduce their attacks. Stephen Foley of the Financial Times reports that 33 companies in the U.S. have filed amendments to their bylaws that prevent directors from receiving payments from outsiders.

carl icahn

Data from Institutional Shareholder Services indicates that some of the companies which amended their bylaws in this manner include Halliburton Company (NYSE:HAL), McGraw Hill Financial Inc (NYSE:MHFI) Marathon Petroleum Corp (NYSE:MPC) and Wynn Resorts, Limited (NASDAQ:WYNN).

Carl Icahn defends his position

Both activist investors and institutional investors are bothered by this amendment, although for different reasons. Carl Icahn is one activist who holds the view that he should be able to share some of his profits with a board member he selects for a board who does a lot for the company. He said it isn’t right for companies to allow their directors to freely access “planes and hundreds of thousands in board fees and all kinds of perks” without allowing him the right to reward the board members he selects.

Institutional shareholders are upset with the amendment because they also like to choose their own board members. However, they are not always trusting of what activist investors like Icahn will do.

Icahn dismisses concerns

Icahn notes that existing board members are “just as likely [as others] to act against shareholder interests.” He said directors who are compensated with lots of perks don’t have much incentive to see their perks come to an end, for example, through an acquisition of the company.

Jana Partners, another activist firm, said often existing board members already have significant holdings in the company as well as stock options. As a result, when an activist or institutional investor nominates a board member and then is allowed to pay that person, they are only compensated in line with the other members of the board.