Carl Icahn: Investor Activism Creates Accountability

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Billionaire investor Carl Icahn went on Fox Business Network’s Cavuto to talk about the Federal Reserve’s decision to continue with tapering, but he seemed unconcerned about how long Fed involvement in the market would continue, and confident that  Icahn Holdings would make money regardless of what comes next.

Carl Icahn: Investor Activism Creates Accountability

Carl Icahn on taprring

“We’ve done better than the market for the last 14 years,” said Icahn, who has championed stockholder activism, and upset plenty of executives over the years. “We’re very proud of our record and in fact this year we’re up 30 percent already in our hedge fund. It just proves the activist model really works, and I think it will work whether they taper or they don’t taper.”

Icahn became famous as a corporate raider in the 1980s, taking over TWA and selling off its assets, and has continued to have high profile fights with corporate executives, most recently with Michael Dell, but he insists that investor activism doesn’t have to be hostile. “There are many, many companies that I get involved with where we do it peacefully, people don’t even know about it,” he said. “In some cases we have been very destructive, [but] we’ve been damn good board members. I mean, Hain, we just sold the stock after it went from 20 to 80, we were on the Board for quite a while and I think Irwin Simon has done a great job there.”

Carl Icahn on corporate governance

Icahn says that activism works because unaccountable management teams underperform causing companies to be undervalued. “There is no corporate governance in this country, there is no democracy at the corporate level. The votes don’t really count,” said Icahn. But activist shareholders can change that, injecting a degree of accountability and aligning executive and shareholder interests.

Cavuto tried to bring Icahn back to the topic of tapering, and he acknowledged that what happens next is “unchartered territory,” but it’s clear that this isn’t his highest priority, and he quickly segued into the main reason he has become so active (forgive the pun) on Twitter.

“One of the things I hope to do is get a ground swell and change some of these laws that are completely unfair to shareholders,” said Icahn.

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