Billionaire Carl Icahn takes new aim at Xerox leadership
Sean LahmanBillionaire investor Carl Icahn is taking aim at the leadership of Xerox Corp. once again, criticizing the performance of CEO Jeff Jacobson and nominating a slate of reform candidates for the company's board of directors.
Icahn is Xerox’s largest shareholder, reporting a 9.7 percent stake in the company as of September.
In an open letter to Xerox shareholders published Tuesday, Icahn said that the company needs new leadership.
"If the long-tenured directors at Xerox continue to refuse to acknowledge that change is needed, then we believe it is mandatory for shareholders to speak up and demand that further new blood be introduced into the boardroom," Icahn wrote. "We have shown time and time again that replacing an ineffective CEO can lead to billions and billions of dollars of value creation for all shareholders."
Jonathan Christodoro, former managing director of Icahn Capital, resigned from the company’s board of directors on Monday. In a letter to chairman Robert Keegan, Christodoro said he believed the board's decisions were taking the company in the wrong direction.
In the letter, Christodoro announced that he would stand with three other candidates in seeking election to the board at the company's 2018 annual meeting.
The move ends a standstill agreement reached in June 2016, which put Christodoro on the board in exchange for the Icahn group agreeing to stop pushing for more aggressive changes.
Icahn takes exception
Icahn was outspoken about the company's direction when he disclosed his major stake in the company in November 2015. The company announced in June 2016 that it would spin off its business services division into a separate company, since named Conduent.
In a statement Monday, the company acknowledged receipt of the nominations and defended its own performance.
"Since our December 2016 separation of Conduent Inc., we have delivered on our commitments to shareholders and are ahead of plan relative to our well-defined Strategic Transformation," the statement said. "Shareholders have recognized our strong progress."
In his open letter, Icahn took exception to that assessment.
"Yesterday, Xerox released a statement that paints a rosy picture of what is in reality a bleak situation that I fear could turn out like that of Eastman Kodak," Icahn wrote.
In particular, he criticized the claim that Xerox's stock price is up 30 percent since the first of the year.
"To be clear, the primary reason Xerox stock is up 30 percent year-to-date is the Conduent spin-off that I spent over a year fighting for," Icahn said. "That means the split I championed is responsible for 75% of the value creation Xerox claims as evidence of shareholder support."
If you exclude the impact of that move, Icahn says, Xerox stock has "dramatically underperformed" the S&P 500 Index.
Xerox is the largest manufacturer in the Rochester area, where it employs about 6,000 people.
SLAHMAN@Gannett.com