Greenbackd

In his blog, The Icahn Report, Carl Icahn argues in a new post, It’s Up to the Shareholders, Not the Government, to Demand Change at a Company, that “shareholders have been complicit in allowing management excesses and incompetence by not taking a stand.” Nell Minnow, editor and co-founder of the Corporate Library, agrees:

Shareholders have reelected these directors, have approved these pay plans and have been enablers for the addictive behavior of the corporate community.

Icahn asks, “Why should investors tolerate poor performance? Why should taxpayers?”

I have shaken up boards and managements at many companies in which I have invested, including Blockbuster, ImClone, Stratosphere, Philips Services, Federal-Mogul and many others. Generally, but not always, the net result has been very positive for the company and the shareholders. It is important to get new blood, new strategies and new ideas into underperforming companies.

Icahn laments the fact that it took a “force the size of the U.S. government” to change the board and management at General Motors Corporation (NYSE:GM):

In effect, the government has become the world’s biggest activist investor, making the same kinds of demands that any activist or creditor should rightfully make in return for its investment.

He concludes that he hopes that the “global economic meltdown” results in shareholders demanding more of their companies and not leaving it to the government.