Tuesday, August 07, 2007

Naples News: Naples activist: Calling all Motorola investors, directors

From today's Naples News:

By Laura Layden

Originally published — 11:11 p.m., August 6, 2007
Updated — 5:51 a.m., August 7, 2007

Eric Jackson has put out his final call to Motorola.

He has finalized what he calls “Plan B” for the company.

The Naples activist investor sent the plan to the cell phone maker and its independent directors a week ago.

With more than 120 investors rallied behind him, he hopes to “return the company to its rightful leadership position in the communications industry.”

Using only the Internet, Jackson has drummed up support for his plan. Using his blog and YouTube, he ran a similar campaign against Yahoo! that observers say helped oust Terry Semel as chief executive officer a few months ago.

Jackson hasn’t heard back from Motorola yet. A Motorola spokesman couldn’t immediately be reached for comment.

The investors behind Jackson’s plan own 600,000 shares. He owns 180 shares.

“The response has been very positive. I think people are disappointed in the recent performance of Motorola,” said Jackson, 35, a business and management consultant and president and CEO of Jackson Leadership Systems Inc. in Naples.

Most supporters are small investors. Among them is 17-year-old Jordan Wells, who owns five shares of Motorola stock.

“We’ve already seen blogs and grassroots technology shake up the political world. It’s great to see them shaking up the financial world,” Wells wrote in an e-mail to Jackson.

Jackson’s campaign comes after billionaire investor Carl Icahn lost a proxy fight against Motorola and failed to receive enough votes to get elected to the company’s board.

Jackson first developed a draft plan, which he sent to the company in early July. During the past few weeks, he has refined the plan based on suggestions he received from supporters by phone and through his wiki Web page and e-mail.

Here are the demands in the final plan:

ΠEd Zander must immediately leave as chairman and CEO.

Œ Replace Judy Lewent, Nicolas Negroponte, Samuel Scott III, and Dr. John White on Motorola’s board of directors.

Œ Appoint Edward Lampert to Motorola’s board and others with deep communications experience.

ΠReduce the size of, and insiders on, the board.

Œ Outline Motorola’s strategy and how it will add exciting new products.

Œ Give Motorola’s culture an inspirational transfusion.

The plan criticizes Zander for not having a clear vision for the company. It asks directors to answer these questions: What has been Ed Zander’s mark on Motorola? He came with a Silicon Valley background, but how has that experience or those past ties translated into tangible results for the company? What has he brought to Motorola in the last 3 1/2 years?

“The fact that there are no obvious answers to these questions screams why a change is needed now,” the plan says.

The plan demands that the board immediately renegotiate Zander’s severance package to ensure that he doesn’t receive $30 million simply for leaving the company.

The plan questions the independence of board directors Lewent, Negroponte, Scott and White because they’ve been on the board so long. It suggests adding Lampert of ESL Investments Inc. to the board because of his strong track record of business experience. He recently purchased stock in the company.

The Motorola board now has three insiders on it: Ed Zander, Greg Brown and Tom Meredith.
At a time when the company has underperformed, the plan suggests that only the CEO serve on the board and criticizes the board for being too large with 13 members.

There seems to be no clear strategy for Motorola, the plan says, and the 18 new models that have reached the market this year have had only lukewarm response.

“In our opinion, none of the models is a game-changing device that will sweep up the consumer or business space,” Jackson says in the plan. “They are incrementalist improvements on past styles. Recent excitement over competitors’ new product launches makes the differences all the more stark.”

Nokia recently announced an “amazing quarter” and its market share is about 38 percent, Jackson said. Motorola has 13 percent of the market, and has slipped to No. 3, behind Nokia and Samsung, he said.

The plan points to “a significant cultural problem.”

“The biggest barrier Motorola faces to righting the ship is not moving some numbers around on the corporate balance sheet; it’s winning back the hearts and minds of its own people,” Jackson said, addressing the board in the plan.

He said “confusion, cynicism and fear appear to have taken root following the recent rounds of layoffs.”

Many supporters of Jackson’s plan are Motorola employees. The support came more quickly this time after his success with Plan B for Internet search giant Yahoo!

Jackson has asked to meet with the Motorola board as soon as possible to discuss the plan.
In the plan, he makes it clear that the investor group doesn’t believe there is a quick fix for Motorola.

“Replacing Ed Zander alone is not the solution; it will require a multipronged effort,” the plan concludes.

If there is enough support from investors, Jackson said he may push Motorola to hold a special meeting to allow shareholders to vote on the plan.

“I would definitely like to meet with the board members and present our views face to face,” he said.

“I think they would be doing their shareholders a service to show they are open to listening to new ideas and open to constructive dialog,” he said.

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Kenneth Udut (free.naplesplus.us - Collier County Communities Wiki Server) said...

It's a shame. I hope they work things out. I had shared in Motorola a few years ago and hated to dump them because I do believe the company has done, and is capable, of great things.

But like the IBM stock - it may take YEARS for it to recover. It's all a matter of waiting and keeping a sharp eye on things.

Two articles found on http://free.naplsplus.us: