Motorola investors express frustration

Last year, billionaire investor Carl Icahn was in Chicago and lost his bid for a seat on the Motorola Inc. board. His demands were spurned.

On Monday, Motorola ushered in the new Icahn era with open arms -- except he wasn't there.

Still, Icahn was the victor after helping to oust CEO Ed Zander, getting two pals on the board and forcing the planned split-up of the company. Icahn's colleagues -- William R. Hambrecht, founder and CEO of WR Hambrecht & Co., and Keith Meister, principal executive officer of Icahn Enterprises --were quietly approved along with 12 other nominees on the board at Motorola's annual meeting.

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While 350 Motorola shareholders gathered in Rosemont, some welcomed Icahn and others blasted the board for a lack of innovation and a long list of no-hit products.

They also railed about the spiraling share price and a so-called smoke screen for splitting up the company. Motorola said last month it plans to spin off the mobile phone business next year into an independent, publicly traded company.

"The split-up is a cop-out," said Malcom Holec, a long-time shareholder from Mount Prospect. "There have been no real reasons given other than 'flexibility' and 'agility' and 'focus.' I don't see anything good coming out of this."

Motorola CEO Greg Brown, who lead his first shareholder meeting, defended the company with having "the right plan in place" to bring it back to "long-term growth and profitability."

"2007 was a challenging year," Brown said.

Brown vowed to add more products that included music and touch control, monitor costs and listen to consumers. "It will be a more consumer-driven product portfolio," Brown said.

But shareholders have heard those lines before and many waited to speak, asking for an iPhone-type of hit, why Zander walked away with millions of dollars, why no board member could clearly discuss financial questions, among other topics.

This was the first meeting that had a barrage of upset shareholders since former CEO Christopher Galvin's last meeting about five years ago. That's when Galvin was lambasted for not turning the company around fast enough even though it was on the verge of releasing what became the hit Razr thin phone.

Holec later shook his head.

"They keep saying 'flexible' and 'focused' but those could be opposites," said Holec. "This has been nothing but a smokescreen."

In other business, shareholders approved by 50.7 percent the right to have a say on executive pay.

The proposal, backed by the AFL-CIO Reserve Fund, wanted the board to adopt a policy that shareholders be given the opportunity at each annual meeting to vote on an advisory resolution to ratify the compensation for executives. Motorola was against the measure.

Two other proposals on recouping executive bonuses and establishing a new set of global ethical standards failed to win over shareholders.