Monday, June 16, 2008

A Maverick's View of CEOs

In his commencement remarks to the LeBow Business School at Drexel University, Carl Icahn made his usual sweeping indictments of business, which however broad, do contain some bits of truth. But the ego-centric view from the outsider--the man who reportedly was the inspiration for the greed-is-good Gordon Gekko--lives off corporate fat and corporate mismanagement. He's just another partner is the same tired dance.

"Standing in a black robe and blue cap after receiving an honorary degree, Icahn spent a lot of time taking aim at the 'anti-Darwinian" route to the corporate suite.

'There's a symbiotic relationship between boards and CEOs today,' Icahn said. 'As a result there is no way to hold them accountable.'

Except, he added, when 'someone like me comes along.'

with exceptions, Icahn said, the CEO is the guy who was the frat president, always available to play pool, have a drink with you,hang out when your girlfriend didn't show up. You wondered if he ever studies, Icahn said.

He was a 'likable guy, not too bright, maybe even a buffoon.'

In the business world, he's agile at the political game, never making waves, putting out ideas or posing a threat to the guy in front of him, in Icahn's view.

That way, he gets to be CEO and makes sure his number-two person isn't smarter, Icahn said.

'Sooner or later, we're all going to be run by morons,' he said to applause.

He professed to not knowing how poorly companies were run until he was buying a business in the 1980's. The company building had 12 floors of people, but he couldn't figure out what they all did even after meeting with the CEO, he said.

He paid a consultant $250,000 to find out. The consultant came back with a huge stack of papers that Icahn refused to read. By his account, he shoved a pencil and a notepad tat the consultant and told him, 'Tell me what they do.'

The consultant pocketed the money and said: 'You were square with me. I'll be square with you. We can't figure out what they do, either.'

Icahn said he had closed the plac eonly afterward If it were today, he said, he would have fired everyone earlier."

From Icahn's LeBow Business School Commencement Speech as written for the Philadelphia Inquirer by Mara Rao, June 14, 2008.