When I launched the Icahn Report, The Chicago Tribune published an article by Eric Benderoff 'Memo to blogger Icahn: Give power to the people, not your lawyers,' on June 19, 2008. The article attacked the Icahn Report for its format and legalities, but completely missed the point of what the blog is diligently working toward; exposing the adverse effects of flawed corporate governance as experienced by me first-hand.
Legal restrictions aside, I am one of the first activist investors to honestly engage in discussion with the public concerning the atrocities experienced in America’s boardrooms. To Benderoff's point, that should be enough to be taken seriously.
Benderoff notes that "well into Thursday evening there were no comments approved for any of the seven posts his blog launched." Please note I have posted many of the comments and have responded to some of them. As I have explained previously, posting every comment would raise various legal issues that solely affect my blog because of my activist shareholder activities, such as conducting proxy contests. (I noticed comments on Benderoff's articles are moderated as well.) Linking also creates potential legal issues. I know that these limitations are not commonplace in the blogging community, but not many bloggers are activist shareholders.
Even so, my blog continues to maintain a robust and engaging dialogue from a number of readers. It's an exhilarating forum that I hope will continue to grow. I have received many interesting questions, suggestions and opinions that I hope to write about going forward. Many readers send me links to their blogs and I have enjoyed reading their insights.
Benderoff cites a commenter on his blog, Deanna Harms, who states, "Even our more conservative clients recognize the power of social media and are starting to put aside their uneasiness about loss of control in order to reap the overwhelming benefits." I agree with her. The fact I have a blog in the first place says something to her point. I find engagement in new media fascinating.
I, in turn, would point to another article entitled 'Icahn's blog puts more pressure on IR pros' by Tonya Garcia of PR Week. The article addresses how blogs are now affecting the investment community at large and questions whether investor relations departments are ready for this type of immediate manager- client engagement. The 'uneasiness' may not be uncalled for. I, alongside Investment Relations professionals at public corporations, must abide by legal restrictions that apply to outside communication and currently there is discussion on how these laws apply to new mediums such as blogs.
I am hoping that (with the help of this blog) the restrictions that apply to the aforementioned communications will evolve to allow for a more open exchange of ideas unburdened by legal technicalities. This is a new medium – and one that I hope will be a significant benefit to all shareholders.
I am interested to hear your thoughts.
Well said, Carl. You have no responsibility to Eric in posting his thoughts. Let him start his own blog if he is really that adamant about having his voice heard.
Posted by: BryanG | July 16, 2008 at 12:22 PM
Dear Carl,
I wish that I had learned about the comments section sooner. If I had, I would encouraged you to break up the dumbest acquisition that I have ever seen, BAC buying CFC...
I think that it is time for you to take a run at CCO...I would glad to be a part of the effort.
Thank you for all of your hard work.
Best Wishes,
Howard Winston
Posted by: Howard Winston | July 16, 2008 at 12:37 PM
Carl- Great point. It's interesting to see how new media in the financial community will play out. I think these first steps are a great step forward.
Posted by: Kate | July 16, 2008 at 01:38 PM
Mr Icahn,
I greatly appreciate your blog for its education benefits. I just completed my MBA at USC and while the program was an excellent introduction to many different aspects of business, corporate governance was not well covered.
As an entrepreneur, I have watched several friends get themselves into a difficult tangle because they did not understand the implications of corporate structures and governance. I do not believe this is a well understood area of business.
If your blog offers exposure and perspective to these areas, it does a great service to those of us learning as we go along.
One of the great advantage of blogging is getting insights from the source as opposed to only seeing the interpretations of those on the sidelines.
I look forward to your future entries and please know that there are many of us who appreciate what your insights,
Andy
Posted by: Andrew Meyer | July 16, 2008 at 01:48 PM
Finding not only the time to post but also a route through the legal entanglements present during a proxy fight is, I imagine, an impressive task. I can't speak for the reporter, but I certainly appreciate the fairly direct interaction you provide here. While few of us can be sure of the consequences of this new medium, it's interesting and educational to follow, and I'm looking forward to your future contributions.
Posted by: Pierre | July 16, 2008 at 03:05 PM
Dear Carl,
As you’ve said there is always the, for or against and both are right according to which edge of the coin they sit.
However, you’re in the business of getting and taking why the fuss! Regards - Nick
Posted by: Nick Choukair | July 16, 2008 at 03:07 PM
Dear Mr. Icahn,
I think it is sad that your blog is under attack in this manner. I do not see very many other frank and honest interpretations of the current economic atmosphere from your peers. This blog should be lauded, and you with it.
Kind regards,
Thomas Galbraith
Fine Art Expert
AXA Art Insurance Corp.
Posted by: Thomas Galbraith | July 16, 2008 at 03:42 PM
Dear Mr. Icahn,
I am an entrepreneur in Korea, where I would say you have an image as a ruthless capitalist. Before, all I knew about you was from news articles, and I thought you were just a very successful investor (not that being just a successful investor is a bad thing). So I was a bit surprised to find that you have strong (right or wrong aside) beliefs about corporate governance.
One major issue in Korea is owner manager vs. professional manager, especially related with the large chaebols. It has various issues, but one thing I note is that Samsung, Hyundai and LG are run by owner family and have been performing much better (over a long term) than their US competitors run by professional managers. Do you think there is a causality? I hope to know your thoughts on this topic.
Best regards,
Hyokon
Posted by: hyokon | July 16, 2008 at 10:44 PM
You said: "I am hoping that (with the help of this blog) the restrictions that apply to the aforementioned communications will evolve to allow for a more open exchange of ideas unburdened by legal technicalities."
The First Amendment says: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
There is no exception for speech about securities As long as one does not commit fraud we all have a constitutional right to ignore any purported "restrictions" on open discussion about securities or anything else. It is sad that we have succumbed to illegimate bureaucratic threats to our most basic freedoms.
Posted by: Phil Goldstein | July 17, 2008 at 12:53 AM
Could you at least explain the legal issues which prevent you from posting comments and linking to other blogs? Maybe have a guest post from your lawyer?
Posted by: Felix Salmon | July 17, 2008 at 11:50 AM
Hi Carl,
Thanks for the shout-out. I'm touched you took the time to respond to my commentary.
I know you won't link to my response, as you note in this post, but I did write one on my blog. It's called Eric 2.0 and interested readers can find it and my original post at the Chicago Tribune's Web site.
Keep up the interesting work, Carl.
Kindest regards,
Eric
Eric Benderoff
Technology Reporter/Tech Buzz Columnist
Chicago Tribune
I, of course, felt it necessary
Posted by: Eric Benderoff | July 17, 2008 at 11:53 AM
Hyokon, I am a huge fan of South Korea's growth, culture, literacy rate, and investment-savvy. I've been to the country many times, visited factories, churches, schools, and have close family ties there. However, I have one question: how many GM, Chrysler, or Ford factories and dealerships are located in South Korea? This is merely an illustrative and rhetorical question. No firm operates in a vacuum and assigning "causality" to whether or not a firm uses professional managers is ignoring the entire picture: one-sided markets and legacy cost structures are just two facets of causes of your observation. Look at what the family that owns Fiat has accomplished, the firm is ailing (I'm being kind) despite its franchise.
Speaking of Italy (Fiat is an Italian firm, notwithstanding heavy foreign investments), take a look at public Italian firm's Annual Reports: they're huge; practically unreadable. One bank I analyzed issued two 1-inch thick volumes, one comprising financials, the other comprising Corporate Social Responsibility (CSR). In fact, CSR is a vital component of many European firms with barely a nod to it stateside until recently. However, an analyst should measure whether CSR enhances stockholder value and/or social value. Would the pain currently observed in Portugal, Italy, Greece, and Spain been worse had they not had CSR? I have my doubts that formalized CSR practices and reports can eliminate cronyism, deceit, pride, and outright cheating.
Regarding blogs & postings, I have a short list of blogs I scan or read daily, we'll see if Carl's joins my list (though I scan it for articles of interest daily), in addition to Eric's. It's my decision to read or link them via RSS readers and I don't expect Carl, Eric, Yahoo, Microsoft, or Google to make it for me.
Cheers to Carl and to all contributors.
Posted by: teraflop | July 17, 2008 at 02:12 PM
Dear teraflop,
I get your point. I don't believe that owner-managers always perform well, either. I think there is the competency factor, whether you are a professional manager or an owner manager.
But what if they have similar competency? It seems to me that many of the problems that Carl brings up here happen to be about principal-agent problems, rather than competency issues.
Posted by: hyokon | July 21, 2008 at 05:05 AM
"I am interested to hear your thoughts."
Having just listened to a BBC report in which your biographer stated that you 'hate everyone', I have my doubts.
However, he may be wrong and as an insatiable bossy boots, I have to state that I find corporate finance and the acquisition of companies absolutely fascinating; not least because it is a world totally closed to me.
I like your philosophical outlook though; how would Socrates have viewed this, what would Plato say...wisdom is by no means confined to any one era.
I bet you are a wonderful conversationalist and I'd give my eye teeth to sit down at dinner with you and listen to your ideas on life. There's too little good conversation in the world and I'm sure you're a fire-cracker over the wine and Brie!
If you ever come to New Zealand (and everyone should come to New Zealand once in their lifetime - preferably to live!) drop me a line.
Posted by: Lynda Finn | July 22, 2008 at 07:39 PM
Anyone who would critize Mr. Icahn for having a blog where he can address the public does not have faith in free speach. I think it is great that he takes the time to post anything. That does not mean I agree with everything but at least he is listening and responding.
Posted by: Michael | August 16, 2008 at 02:08 AM
If you want to start getting sanity in executive and BOD pay all you need to do is the following...
All bonuses or option profits need to be put in escrow and released 5 complete years after realized...if there are any prior year adjustments for the period in question all bonuses would be recalculated and option profits also recalculated and the amounts given would be reduced net of tax when released from escrow.
Posted by: Larry Hootnick | October 06, 2008 at 07:45 PM