December 13, 2017
The Wall Street maven and billionaire investor is picking a fight with Xerox, criticising the performance of its CEO and warning of potential future bankruptcy for the OEM.
As the Democrat & Chronicle reports, Icahn, who is Xerox’s biggest shareholder with a 9.7 percent stake in the OEM, has published an open letter to other shareholders in which he criticises CEO Jeff Jacobson and warns of dire repercussions if the company’s leadership is not changed.
“If the long-tenured directors at Xerox continue to refuse to acknowledge that change is needed, then we believe it is mandatory for shareholders to speak up and demand that further new blood be introduced into the boardroom,” Icahn wrote. “We have shown time and time again that replacing an ineffective CEO can lead to billions and billions of dollars of value creation for all shareholders.”
As The Recycler has already reported this week, Icahn Capital’s former Managing Director, Jonathan Christodoro, resigned from Xerox’s Board of Directors on Monday. Christodoro explained in a letter to chairman Robert Keegan that that “he believed the board’s decisions were taking the company in the wrong direction.” He also revealed that he would “stand with three other candidates in seeking election to the board at the company’s 2018 annual meeting.”
Xerox also released a statement on Monday:
“Since our December 2016 separation of Conduent Inc., we have delivered on our commitments to shareholders and are ahead of plan relative to our well-defined Strategic Transformation,” the statement said. “Shareholders have recognized our strong progress.”
By way of response, Carl Icahn described Xerox as painting “a rosy picture of what is in reality a bleak situation” which he likened to that of Eastman Kodak, and slammed the OEM’s claim that its stock price was up 30 percent.
“To be clear, the primary reason Xerox stock is up 30 percent year-to-date is the Conduent spin-off that I spent over a year fighting for,” Icahn said. “That means the split I championed is responsible for 75 percent of the value creation Xerox claims as evidence of shareholder support.”
Excluding the impact of that move, according to the Wall Street mogul, Xerox stock has “dramatically underperformed” the S&P 500 Index.
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