Billionaire Carl Icahn: I'm No 'Heartless' Corporate Raider

Tuesday, 11 Feb 2014 06:39 PM

By Greg Richter

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Carl Icahn, the nearly 78-year-old investor, says he isn't a "heartless" corporate raider and hopes he's someday remembered as someone who helped stop an "erosion of accountability" in the corporate world.

Icahn appeared Tuesday on Fox News Channel's "Your World with Neil Cavuto" and on Fox  Business Network. Icahn said his holding company, Icahn Enterprises, doesn't simply buy major shares of stocks in companies to make a huge profit. Instead, he said, he targets only those he thinks are being run poorly and that don't share enough of their profits with investors.

The multibillionaire who grew up in Queens said the United States is no longer the meritocracy that enabled him to rise through hard work and intelligence. Many CEOs get their positions today because they are essentially frat brothers with members of the board, he said.

He says, "with a lot of exceptions," that corporate governance in the United States is dysfunctional and that it is dangerous for the economy. He finds it especially galling when a CEO is paid a thousand times what a worker in his company makes even though the company is performing terribly.

Icahn's critics accuse him of essentially taking over companies and forcing their boards to make short-term moves before selling his shares for a profit and moving on. Icahn told Cavuto he has remained invested in many of his companies for decades and only sells when the time is right.

"You can't say don't bother these guys because you can't make them think short-term when the guy is losing a fortune," Icahn said. "They're thinking long-term to take the company completely off the cliff."

He added that his company doesn't try to hurt corporations.

"We've made billions and billions for shareholders. So, now the PR mills, the lawyers that they pay so much money to, now are saying we're short-termers."

He pointed to his recent Apple buy, saying, "I'm not going anywhere. I'm not leaving. I haven't sold one share, nor do I intend to."

He said that he is on good terms with Apple CEO Tim Cook and that the company is managed well, though he thinks it is sitting on money it should be returning to shareholders.

He acknowledged that not all of his ventures have paid off, including TWA, which he ended up taking private. The company was $540 million in debt before he sold its key London routes to American Airlines.

"We're not going to win every one," he told Cavuto.

But he noted that often he becomes friends with companies he's turned around, and they put him or his associates on their boards.

Icahn's politics has never been nailed down, and he said he still sees problems with both major parties. He said he fears another economic calamity like what happened in 2008, though he acknowledged, "I'm not astute enough to know if it's a ways off or not."

He said he likes the Volcker rule, a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act that prevents banks from being involved in the stock market. "A bank should be a bank should be a bank," he said.

His views on rescuing financial institutions deemed "too big to fail": the government should nationalize them for a time, then sell them to someone who can better manage them.

He agrees that last year's market advances were "built on air," but doesn't fault former Federal Reserve Chairman Ben Bernanke for multiple instances of "quantitative easing" — or money-printing — that he oversaw.

"I think he saved the country," Icahn said, but added that those actions were like a "new medicine" that even the doctor doesn't know the full effects of.

He added, "You can't just keep printing forever."

President Barack Obama could have done a lot more for the ailing economy, Icahn said. Instead, "he stressed Obamacare too much."

Icahn isn't a foe of the Affordable Care Act, but he also doesn't think businesses should be forced to be medical providers. On the other hand, he suspects businesses that blame Obamacare for layoffs, cutting wages, and reducing hours are using him as a scapegoat for doing a bad job.

A resident of New York City, Icahn is OK with new Mayor Bill de Blasio's plan to raise taxes on the wealthy like himself who have multiple billions, but not those in the lower levels who make $250,000 or less a year.

He parts ways with de Blasio on charter schools. Among Icahn's many charitable efforts are charter schools that give inner-city youths a chance at a better education.

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