Icahn's letter to investors, which appeared as an advertisement in newspapers on Tuesday, criticized the company for losing almost $20 billion in market value over the past six months. He said the company has suffered a critical failure in oversight and leadership.
Icahn said he is not seeking to control Motorola. Instead he wants a seat on the board to influence the company and to look out for shareholders' rights.
"I am convinced that significant stockholder representation in the Motorola boardroom, even by a single director, is absolutely necessary at this troubled company," he said. "My significant stock ownership is many times that of the entire board. It represents both my commitment to Motorola and your assurance that I am solely interested in what is best for the company and its stockholders."
In response to the letter, Motorola filed its own shareholder letter with the SEC stating that the company doubted Icahn "would commit the time and energy necessary" to serve on the board. Icahn already serves on as many as eight boards and is chairman of at least four, according to Motorola. The company also said that Icahn's role as a fund investor could cause a conflict of interest between his clients and Motorola.
Icahn, who said he and his affiliates now own 68 million Motorola shares worth $1.2 billion, first notified Motorola that he wanted a board seat in January after amassing a 1.39 percent stake in the company.
Icahn's initial proposal for a board seat came just weeks after Motorola had announced disappointing fourth-quarter earnings, as handset prices continued to decline. He said then that he. Meanwhile, Motorola's management team wants to use its cash to make investments to broaden its product portfolio.
Motorola has. In at least a partial concession to Icahn's demands, Motorola has accelerated its stock-buyback program. But Icahn still seems unhappy with the company's leadership and has focused his current attention on fixing the company's operational problems. For the first quarter of 2007, Motorola reported a loss and executives said the second quarter would be "difficult."
At least two proxy advisory firms, Institutional Shareholders Services and Proxy Governance, have urged Motorola shareholders to vote for Icahn. But another proxy advisory firm, Glass Lewis, does not support Icahn, because it says that Icahn has failed to detail a specific plan for the company.
Motorola will vote on its new board of directors at its annual shareholder meeting on Monday, May 7.