Friday, 1 July 2016
Last updated 19 hours ago
Jun 11 2008 | 2:00am ET
The average American probably accepts the economic slowdown as collateral damage of good times gone by, and thinks that it will eventually right itself. But Carl Icahn, the famed activist investor, hedge fund manager and so-called corporate raider sees things a bit differently.
In fact, Icahn says the country faces real economic problems due to corporate board members who mostly “don’t know what the hell they’re doing.”
Icahn, speaking to a group of journalists last night in New York, lays the blame of rising gas prices, unemployment and the receding housing market squarely at the feet of “a system that really doesn’t work” and a dysfunction in corporate management and governance.
“We cannot compete in the global system, and the problem we have is management and waste,” Icahn said. “We’ve become a second-rate country and our dollar is falling apart. We’ve been getting from the rest of the world cheap goods and services keeping inflation down… and now we’re paying the price for poor management.”
According to Icahn, corporate governance hasn’t changed much since he first became an activist investor in the early 1980s.
“You go to a board meeting and there are people reading the papers, eating doughnuts and getting their checks for being board members,” he said. “Then the CFO comes out and no matter how badly the company is doing, he can always find some graph with a line pointing straight up and other graphs with red, green and yellow lines that nobody knows anything about. Then everybody packs up and goes to the airport.”
Icahn added that he’s aware of board members who make $10,000 a week just for showing up to board meetings, while the average worker in the U.S. makes just over $20,000 per year.
While board members shouldn’t micromanage management teams, they must hold CEOs accountable for the company’s performance, Icahn said.