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 Icahn, in a posting on his website, said that 33 public companies
had adopted such a bylaw amendment without shareholder approval as
of late November.
The billionaire investor, who is known for taking large stakes in
companies and pushing for corporate management change, cited Service
Corporation International, an operator of cemeteries and funeral
homes, and gaming company International Game Technology as two
companies that have adopted such measures, which he called Director
Disqualification Bylaws.
Icahn, in the article on his website, Shareholders' Square Table,
said such measures bar a person from obtaining a spot on a company's
board of directors if a shareholder nominated the person and agreed
to pay the nominee a fee, including compensation for a proxy fight.
"It is absolutely offensive for an incumbent board to unilaterally
adopt a Director Disqualification Bylaw without shareholder
approval, and shareholders should also reject a Director
Disqualification Bylaw if their incumbent board puts one up for a
vote in the future," Icahn said.
He said that since shareholders are already fully informed of
compensation arrangements between activist investors and board
nominees under federal securities laws, the bylaw amendment
"undermines the most basic right of shareholders" to decide who
should join a company's board.
Icahn is chairman of investment firm Icahn Enterprises L.P. and
holds substantial stakes in companies including Apple Inc, Ebay and
Talisman Energy Inc.
"We'll continue to hold CEOs & boards more accountable & grow
partnerships btwn activists & institutional investors to help #ShareholderValue,"
Icahn wrote on social media platform Twitter on January 8.
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On Wednesday, Icahn noted that proxy advisory firm Institutional
Shareholder Services Inc. said in mid-January that it may recommend
a vote against such bylaws.
"The adoption of restrictive director qualification bylaws without
shareholder approval may be considered a material failure of
governance because the ability to elect directors is a fundamental
shareholder right," ISS said on January 13.
ISS in its statement said that it has not recommended voting against
directors and boards that have adopted bylaws prohibiting nominees
who fail to disclose third-party compensation from taking board
seats, saying that "such provisions may provide greater transparency
for shareholders."
Icahn recently took a more than $4 billion stake in Apple Inc. and
had waged a public campaign to get Apple to return more cash to
shareholders.
In a letter to Apple shareholders on Monday, Icahn said he was
ditching his nonbinding proposal to force Apple to add another $50
billion to its stock buyback plan, citing the company's recent
repurchases as well as ISS's call against his proposal.
(Reporting by Sam Forgione; editing by
Leslie Adler)
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