assignment 1 c.g.docx

8/14/2019 assignment 1 c.g.docx

1/9

Name :Anam Shoaib

Reg # L1F11MBAE2058

Section (C)

Assignment # 1

Serial #

Date of Submission: October 22, 2013


2/9

James Wolfensohn

Bio Data

Early life

James Wolfensohn was born inSydney,Australia,on 1 December 1933. In his autobiography, A

Global Life, he described that monetary insecurity was a fact of life from childhood and that he

was always looking for a cushion to protect himself from it.

He was first educated at Woollahra Public School,then educated atSydney Boys High School.

He studiedarts (BA) andlaw (LL.B) at theUniversity of Sydney,and in 1959 earned aMaster of

Business Administration (MBA)degree atHarvard Business School.In his 2010 memoirs he

reveals he failed several university classes, including English, and was a 'late developer'. He was

a member of the Australianfencing team at the1956 Summer Olympics inMelbourne and an

officer in theRoyal Australian Air Force.

Business career

Before attending Harvard, Wolfensohn was a lawyer in the Australian law firm of Allen, Allen &

Hemsley in Sydney (nowAllens Arthur Robinson).

Upon graduating from Harvard Business School, Wolfensohn worked briefly for Swiss cement

giant Holderbank (nowHolcim). He then returned to his native Australia, where he worked for

various banking institutions, including Darling & Co. In the late 1960s, he became a director of

Darling's major shareholderJ. Henry Schroder & Co,aLondon-basedinvestment bank.He was a

senior executive in the London office before becoming managing director of the bank'sNew

York City office from 1970 to 1976. He later became a senior executive atSalomon Brothers.

In 1979, he rescued Chrysler along with its bossLee Iacocca and then President of the New York

FedPaul A. Volcker,who later became USFederal Reserve Bank chairman.

In 1980, he became anaturalized citizen of theUnited States,after it was rumored that he was a

candidate to succeedRobert McNamara as president of theWorld Bank.After he was

unsuccessful in this pursuit, he established his own investment firm, James D. Wolfensohn, Inc.,

along with partners includingPaul A. Volcker.Upon accepting his nomination to serve as

president of the World Bank in 1995, Wolfensohn divested of his ownership interest in James D.

Wolfensohn, Inc. The firm was later bought byBankers Trust.

In 2005, upon stepping down as president of the World Bank, he foundedWolfensohn &Company, LLC,a privately held firm that invests, and provides strategic consulting advice to

governments and large corporations doing business, in emerging market economies.

Since 2006, Wolfensohn has also been the chairman of the International Advisory Board

ofCitigroup.

In 2009, he became a member of the International Advisory Council of the Chinesesovereign

wealth fundChina Investment Corporation.
http://en.wikipedia.org/wiki/Sydneyhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Sydney_Boys_High_Schoolhttp://en.wikipedia.org/wiki/Bachelor_of_Artshttp://en.wikipedia.org/wiki/Bachelor_of_Lawshttp://en.wikipedia.org/wiki/University_of_Sydneyhttp://en.wikipedia.org/wiki/Master_of_Business_Administrationhttp://en.wikipedia.org/wiki/Master_of_Business_Administrationhttp://en.wikipedia.org/wiki/MBAhttp://en.wikipedia.org/wiki/Harvard_Business_Schoolhttp://en.wikipedia.org/wiki/Fencing_at_the_1956_Summer_Olympicshttp://en.wikipedia.org/wiki/1956_Summer_Olympicshttp://en.wikipedia.org/wiki/Melbournehttp://en.wikipedia.org/wiki/Royal_Australian_Air_Forcehttp://en.wikipedia.org/wiki/Allens_Arthur_Robinsonhttp://en.wikipedia.org/wiki/Holcimhttp://en.wikipedia.org/wiki/Schrodershttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Investment_bankhttp://en.wikipedia.org/wiki/New_York_Cityhttp://en.wikipedia.org/wiki/New_York_Cityhttp://en.wikipedia.org/wiki/Salomon_Brothershttp://en.wikipedia.org/wiki/Lee_Iacoccahttp://en.wikipedia.org/wiki/Paul_A._Volckerhttp://en.wikipedia.org/wiki/Federal_Reserve_Bankhttp://en.wikipedia.org/wiki/Naturalized_citizenhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Robert_McNamarahttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/Paul_A._Volckerhttp://en.wikipedia.org/wiki/Paul_A._Volckerhttp://en.wikipedia.org/wiki/Bankers_Trusthttp://en.wikipedia.org/w/index.php?title=Wolfensohn_and_Company&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Wolfensohn_and_Company&action=edit&redlink=1http://en.wikipedia.org/wiki/Citigrouphttp://en.wikipedia.org/wiki/Sovereign_wealth_fundhttp://en.wikipedia.org/wiki/Sovereign_wealth_fundhttp://en.wikipedia.org/wiki/China_Investment_Corporationhttp://en.wikipedia.org/wiki/China_Investment_Corporationhttp://en.wikipedia.org/wiki/Sovereign_wealth_fundhttp://en.wikipedia.org/wiki/Sovereign_wealth_fundhttp://en.wikipedia.org/wiki/Citigrouphttp://en.wikipedia.org/w/index.php?title=Wolfensohn_and_Company&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Wolfensohn_and_Company&action=edit&redlink=1http://en.wikipedia.org/wiki/Bankers_Trusthttp://en.wikipedia.org/wiki/Paul_A._Volckerhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/Robert_McNamarahttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Naturalized_citizenhttp://en.wikipedia.org/wiki/Federal_Reserve_Bankhttp://en.wikipedia.org/wiki/Paul_A._Volckerhttp://en.wikipedia.org/wiki/Lee_Iacoccahttp://en.wikipedia.org/wiki/Salomon_Brothershttp://en.wikipedia.org/wiki/New_York_Cityhttp://en.wikipedia.org/wiki/New_York_Cityhttp://en.wikipedia.org/wiki/Investment_bankhttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Schrodershttp://en.wikipedia.org/wiki/Holcimhttp://en.wikipedia.org/wiki/Allens_Arthur_Robinsonhttp://en.wikipedia.org/wiki/Royal_Australian_Air_Forcehttp://en.wikipedia.org/wiki/Melbournehttp://en.wikipedia.org/wiki/1956_Summer_Olympicshttp://en.wikipedia.org/wiki/Fencing_at_the_1956_Summer_Olympicshttp://en.wikipedia.org/wiki/Harvard_Business_Schoolhttp://en.wikipedia.org/wiki/MBAhttp://en.wikipedia.org/wiki/Master_of_Business_Administrationhttp://en.wikipedia.org/wiki/Master_of_Business_Administrationhttp://en.wikipedia.org/wiki/University_of_Sydneyhttp://en.wikipedia.org/wiki/Bachelor_of_Lawshttp://en.wikipedia.org/wiki/Bachelor_of_Artshttp://en.wikipedia.org/wiki/Sydney_Boys_High_Schoolhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Sydney


3/9

In October 2010, Wolfensohn regained his Australian Citizenship.

World Bank tenure and other public service

Wolfensohn became president of the World Bank on 1 July 1995 after he was nominated byU.S.

PresidentBill Clinton.He was unanimously supported by the bank's board of executive directors

to a second five-year term in 2000, becoming the third person to serve two terms in the positionafterEugene R. Black andRobert McNamara.He visited more than 120 countries around the

world during his term as president. He is credited, among other things, with being the first World

Bank president to bring attention to the problem of corruption in the area of development

financing.

On 3 January 2005, he announced that he would not seek a third term as president. During his

term, theAlfalfa Club named him as their nominee forPresident of the United States in 2000 as

part of a long-standing tradition, despite being constitutionally ineligible due to the natural-born

citizen clause inArticle II of the United States Constitution.

He also currently serves as an advisor to theGrassroots Business Fund

How he become President and under What circumstances he

Leave

James D. Wolfensohn became the World Bank Groups ninth president on June 1, 1995, after adistinguished career as an international investment banker and involvement in globaldevelopment and environment issues. The Banks Board of Executive Directors unanimouslyendorsed Mr. Wolfensohns appointment to second five-year term, which began June 1, 2000.He thus became the third World Bank Group president to be reappointed to a second term ofoffice.

During his tenure Mr. Wolfensohn visited more than 120 countries. His first tripto Africatook place only two weeks after he took office. Traveling to the field allowed him to gain first-hand experience on the Banks development projects and understand the challenges facing theorganization.

Global poverty reduction and achievement of the UNs Millennium Development Goals wereamong the highest priorities during Mr. Wolfensohns presidency. The Bank became the largestexternal financier for primary education, health, HIV/AIDS programs, the environment andbiodiversity sectors and there was greater emphasis placed on finding lasting solutions to theseand other development challenges.

In 1996 Mr. Wolfensohn introduced the Heavily Indebted Poor Countries Initiative (HIPC). Thiscomprehensive debt reduction program, launched by the Bank and the International MonetaryFund, addressed the needs of the worlds poorest countries by providing them with substantialdebt relief.

The Strategic Compact, launched by Mr. Wolfensohn in 1997 addressed the institutionseffectiveness and helped transform the World Bank into a Knowledge Bank. After the Banks
http://en.wikipedia.org/wiki/U.S._Presidenthttp://en.wikipedia.org/wiki/U.S._Presidenthttp://en.wikipedia.org/wiki/Bill_Clintonhttp://en.wikipedia.org/wiki/Eugene_R._Blackhttp://en.wikipedia.org/wiki/Robert_McNamarahttp://en.wikipedia.org/wiki/Alfalfa_Clubhttp://en.wikipedia.org/wiki/President_of_the_United_Stateshttp://en.wikipedia.org/wiki/Article_II_of_the_United_States_Constitutionhttp://en.wikipedia.org/wiki/Grassroots_Business_Fundhttp://en.wikipedia.org/wiki/Grassroots_Business_Fundhttp://en.wikipedia.org/wiki/Article_II_of_the_United_States_Constitutionhttp://en.wikipedia.org/wiki/President_of_the_United_Stateshttp://en.wikipedia.org/wiki/Alfalfa_Clubhttp://en.wikipedia.org/wiki/Robert_McNamarahttp://en.wikipedia.org/wiki/Eugene_R._Blackhttp://en.wikipedia.org/wiki/Bill_Clintonhttp://en.wikipedia.org/wiki/U.S._Presidenthttp://en.wikipedia.org/wiki/U.S._President


4/9

global communications network was launched distance learning centers were established inclient countries around the world. Another technological innovation included consolidatingnumerous business systems into a single enterprise system that greatly enhanced the institutionalefficiency.

Advocating a holistic approach to development Mr. Wolfensohn presented the ComprehensiveDevelopment Framework in 1999. The CDF emphasized the interdependence of all elements ofdevelopment, including country ownership of poverty reduction strategies as well as partnershipsamong governments, the private sector and civil society.

Mr. Wolfensohn advocated continuous dialogue and trust building among the Banks clients, theprivate sector, NGOs, and civil society. He helped to strengthen partnerships between the Bankand these groups. His commitment to empowering stakeholders expanded the Banks traditionalcooperation with its clients to include their participation in decision-making processes.

During Mr. Wolfensohnspresidency the Bank expanded its participation in post-war

reconstruction and conflict prevention. He encouraged the thorough exploration andunderstanding of linkages between social and economic stability and peace.

On January 3, 2005 James D. Wolfensohn announced his decision not to seek another term asWorld Bank Group President and retire at the end of his term on May 31, 2005. A few monthslater, in April 2005, Mr. Wolfensohn announced his appointment as Special Envoy for GazaDisengagement (duties effective June 1), thereby continuing his involvement in pubic serviceafter leaving the Bank

J. Wolfensohn Definition of

Corporate Governance"Corporate governance is about promoting corporate fairness, transparency and accountability."

Conclusion

J wolfensonson has given an excellent definition of corporate governance promoting corporate

fairness transperency and accountibility helps to increase loyality of stakeholders towards the

organization. As per his services during his presidency he shows corporate fairness, transparency and

accountability."by his actions


5/9


6/9

Icahn made an attempted run as a major shareholder of Time Warner, owning about 3.3% of the

company valued at billions of dollars. He has been actively seeking to influence the direction of

Time Warner, often in conflict with its former chief executive,Richard Parsons.Although Time

Warner recently sold 5% of its AOL division, Icahn has been pressing for additional action to

increase shareholder value. On February 7, 2006, a group led by Icahn andLazard

Frres CEOBruce Wasserstein unveiled a 343-page proposal calling for the breakup of Time

Warner into four companies andstock buybacks totaling approximately $20 billion. On February

17, 2006, the Icahn-led group agreed with Time Warner to not contest the re-election of Time

Warner's slate of board members at the 2006 shareholders meeting. In exchange for the Icahn

group's cooperation, Time Warner would buy back up $20 billion of stock, nominate more

independent members to the board of directors, cut $1 billion of costs by 2007, and continue

discussions with the Icahn group over their proposal, particularly on the future ofTime Warner

Cable.

In 2008, Icahn showed interest in the takeover ofYahoo! and the ousting ofJerry Yang from his

position as CEO to allowMicrosoft to purchase the web company.

Icahn sold hiscasino interests inNevada on February 21, 2008. They included

theStratosphere,Arizona Charlie's Boulder,Arizona Charlie's Decatur,andAquarius Casino

Resort which are operated throughAmerican Entertainment Properties,a subsidiary of Icahn's

major company, Icahn Enterprises. The sale price of $1.3 billion was roughly $1 billion more

than he paid for the properties.

In June 2008, Icahn launchedThe Icahn Report which campaigns for shareholder rights. It

hostsUnited Shareholders of Americawhere individual investors can sign up and take part.

Icahn was a director ofBlockbuster until January 2010 and the chairman ofImclone,Icahn

Enterprises, XO Communications,WestPoint Home,Cadus, and American Railcar Industries. He

is abeneficial owner ofAdventrx Pharmaceuticals,Vector Group and has had significant

holdings inTime Warner.Icahn tried to take overMarvel Comics,coming into conflict withAvi

Arad,Ron Perelman,andIke Perlmutter.Marvel ended up being acquired byThe Walt Disney

Company in late 2009.

Icahn's hedge funds currently own 5.6% of biotechnology companyBiogen Idec.Beginning in

2007, Icahn has steadily increased his stake in Biogen, seeking to possibly acquire, break up,

and/or sell off various parts of the company. As of June 2009, Icahn has managed to seat two ofhis allies on Biogen's board with the apparent goal of splitting the company into two entities and

possibly replacing CEO James C. Mullen, of whom he has been highly critical.

In July 2010, Icahn acquired a 14 percent stake inMentor Graphics.Based on this acquisition,

Mentor Graphics signed aPoison Pillprovision. As of September 2010, Icahn owns just less than

15 percent ofMentor Graphics.On February 22, 2011 he made an offer to buyMentor

Graphics for about $1.86 billion in cash in a move to push other suitors to declare themselves.
http://en.wikipedia.org/wiki/Richard_Parsons_(businessman)http://en.wikipedia.org/wiki/Lazard_Fr%C3%A8reshttp://en.wikipedia.org/wiki/Lazard_Fr%C3%A8reshttp://en.wikipedia.org/wiki/Bruce_Wassersteinhttp://en.wikipedia.org/wiki/Share_repurchasehttp://en.wikipedia.org/wiki/Time_Warner_Cablehttp://en.wikipedia.org/wiki/Time_Warner_Cablehttp://en.wikipedia.org/wiki/Yahoo!http://en.wikipedia.org/wiki/Jerry_Yang_(entrepreneur)http://en.wikipedia.org/wiki/Microsofthttp://en.wikipedia.org/wiki/Casinohttp://en.wikipedia.org/wiki/Nevadahttp://en.wikipedia.org/wiki/Stratosphere_Las_Vegashttp://en.wikipedia.org/wiki/Arizona_Charlie%27s_Boulderhttp://en.wikipedia.org/wiki/Arizona_Charlie%27s_Decaturhttp://en.wikipedia.org/wiki/Aquarius_Casino_Resorthttp://en.wikipedia.org/wiki/Aquarius_Casino_Resorthttp://en.wikipedia.org/wiki/American_Casino_%26_Entertainment_Propertieshttp://www.icahnreport.com/http://en.wikipedia.org/w/index.php?title=United_Shareholders_of_America&action=edit&redlink=1http://en.wikipedia.org/wiki/Blockbuster_Inc.http://en.wikipedia.org/wiki/Imclonehttp://en.wikipedia.org/wiki/WestPoint_Homehttp://en.wikipedia.org/wiki/Beneficial_ownerhttp://en.wikipedia.org/w/index.php?title=Adventrx_Pharmaceuticals&action=edit&redlink=1http://en.wikipedia.org/wiki/Time_Warnerhttp://en.wikipedia.org/wiki/Marvel_Comicshttp://en.wikipedia.org/wiki/Avi_Aradhttp://en.wikipedia.org/wiki/Avi_Aradhttp://en.wikipedia.org/wiki/Ron_Perelmanhttp://en.wikipedia.org/wiki/Ike_Perlmutterhttp://en.wikipedia.org/wiki/The_Walt_Disney_Companyhttp://en.wikipedia.org/wiki/The_Walt_Disney_Companyhttp://en.wikipedia.org/wiki/Biogen_Idechttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Poison_Pillhttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Poison_Pillhttp://en.wikipedia.org/wiki/Mentor_Graphicshttp://en.wikipedia.org/wiki/Biogen_Idechttp://en.wikipedia.org/wiki/The_Walt_Disney_Companyhttp://en.wikipedia.org/wiki/The_Walt_Disney_Companyhttp://en.wikipedia.org/wiki/Ike_Perlmutterhttp://en.wikipedia.org/wiki/Ron_Perelmanhttp://en.wikipedia.org/wiki/Avi_Aradhttp://en.wikipedia.org/wiki/Avi_Aradhttp://en.wikipedia.org/wiki/Marvel_Comicshttp://en.wikipedia.org/wiki/Time_Warnerhttp://en.wikipedia.org/w/index.php?title=Adventrx_Pharmaceuticals&action=edit&redlink=1http://en.wikipedia.org/wiki/Beneficial_ownerhttp://en.wikipedia.org/wiki/WestPoint_Homehttp://en.wikipedia.org/wiki/Imclonehttp://en.wikipedia.org/wiki/Blockbuster_Inc.http://en.wikipedia.org/w/index.php?title=United_Shareholders_of_America&action=edit&redlink=1http://www.icahnreport.com/http://en.wikipedia.org/wiki/American_Casino_%26_Entertainment_Propertieshttp://en.wikipedia.org/wiki/Aquarius_Casino_Resorthttp://en.wikipedia.org/wiki/Aquarius_Casino_Resorthttp://en.wikipedia.org/wiki/Arizona_Charlie%27s_Decaturhttp://en.wikipedia.org/wiki/Arizona_Charlie%27s_Boulderhttp://en.wikipedia.org/wiki/Stratosphere_Las_Vegashttp://en.wikipedia.org/wiki/Nevadahttp://en.wikipedia.org/wiki/Casinohttp://en.wikipedia.org/wiki/Microsofthttp://en.wikipedia.org/wiki/Jerry_Yang_(entrepreneur)http://en.wikipedia.org/wiki/Yahoo!http://en.wikipedia.org/wiki/Time_Warner_Cablehttp://en.wikipedia.org/wiki/Time_Warner_Cablehttp://en.wikipedia.org/wiki/Share_repurchasehttp://en.wikipedia.org/wiki/Bruce_Wassersteinhttp://en.wikipedia.org/wiki/Lazard_Fr%C3%A8reshttp://en.wikipedia.org/wiki/Lazard_Fr%C3%A8reshttp://en.wikipedia.org/wiki/Richard_Parsons_(businessman)


7/9

On October 31, 2012 Icahn bought 5.5 million shares of the internet video service

providerNetflix taking a 10% stake in the company.

In February 2013 Forbes listed Icahn as one of the 40 Highest-Earning hedge fund managers.

In July 2013 Icahn started an attempt to acquire Dell Inc.

On August 13, 2013 Icahn announced that his new stock pick isApple,pushing the stock 5% up

which breaks its 200-day moving average for the first time in the year.

In October 2013, Icahn acquired around 61 million shares inTalisman Energyprompting shares

in the ailing Canadian oil producer to surge. He also announced he would seek a seat on the

board of the company.

Role and Activities in Corporate Governance

Carl Icahn started working on Wall Street in 1968 and has changed the course of corporategovernance, forcing companies to act on behalf of, you know, the people who actually own them

In the process, Mr. Icahn has accumulated a $15 billion fortune and been a vigorous contributor

to New Yorks medical and educational institutions. Mr. Icahn became famous and influential as

one of the corporate raiders of the 1980s, outsiders who bought their way into hide-bound

corporations and threatened upheaval. With the motivation of having his own investors money

at stake, Mr. Icahn was one of the most successful and influential financiers in the restructuring

of corporate America that followed, and he forcedby whatever means necessary, including

threats, litigation and public shamingcorporate directors and officers to act on behalf of

shareholder interests. Mr. Icahn has engaged in extensive philanthropic activity supporting New

York. He built Icahn Stadium on Randalls Island. In the Bronx, he started eight charter schools

and built a housing complex for single women and children. He is also a trustee and major

contributor to Mount Sinai Hospital.

Governance

These article show his good governance

Carl Icahn Wants to Create Twitter MovementThe activist investor ended his letter to Dell shareholders on Monday by asking them to follow

his handle Mr. Icahn told MoneyBeat hes hoping to turn his account into a movement to fight

the corporate governance issues he believes were showcased at Dell.

The reason Im excited byTwitter is I believe, finally, there is a platform so that shareholders

will understand how really dysfunctional our corporate governance system is, Mr. Icahn said in

an interview. Hopefully if we are able to build a large enough following this will be a
http://en.wikipedia.org/wiki/Netflixhttp://en.wikipedia.org/wiki/Apple_Inc.http://en.wikipedia.org/wiki/Talisman_Energyhttp://topics.wsj.com/subject/T/twitter/4325?lc=int_mb_1001http://topics.wsj.com/subject/T/twitter/4325?lc=int_mb_1001http://en.wikipedia.org/wiki/Talisman_Energyhttp://en.wikipedia.org/wiki/Apple_Inc.http://en.wikipedia.org/wiki/Netflix


8/9

meaningful platform to get the attention of lawmakers to change some of these of these

horrendous laws.

Dell may be his exhibit A, the subject of hisvery first tweet back in June.

The 77-year-old investor spent the past six months battling against what is now a nearly $25billion buyout, saying the board created a process that blocked out shareholders and other

bidders in favor ofMichael Dell and Silver Lake.

When you go to Sothebys to bid on a painting, the auctioneer doesnt point out that the

painting is all scratched up and offer me $25 million not to bid, Mr. Icahn said in the interview,

alluding to a board offer to pay him $25 million for due diligence if he agreed not to launch a

proxy fight. I can certainly understand Michael Dell wanting to buy this company at a bargain

price, but what I cant understand is the action of the board, refusing to make this abidding

contest to benefit shareholders.

Mr. Icahn, 77, has spent dozens of years fighting what he believes are bad boards and deals,

though he isnt shy about saying profits form the basis of his investment ideas. He is not in this

to be altruistic.

Carl Icahn: What I Do Is Good For AmericaThis story appears in the June 24, 2013 issue of Forbes.

This story was written byCarl I cahn,the majori ty shareholder of I cahn Enterprises.

Shareholder democracy does not exist. But in spite of this my activism is alive and well and benefits

everyone.

Early in my career onWall StreetIrealized that attempting to trade stocks or determine if the market will

rise or fall is a complete waste of time. There are simply too many variables. To be a successful investor

one must look for situations where the risk/reward ratio is greatly in your favor. For example, in the 70s I

made a great deal of money purchasing certain convertible bonds and shorting stocks and options against

them; purchasing puts and converting them to calls. Additionally, I invested in arcane situations where the

odds were greatly in my favor.

However, all these models pale in comparison with the activist model I have spent a great deal of time

and capital to perfect and use over the past 15 to 20 years. Most people would agree that many of the

companies in our country are mismanaged. You dont have to be a brilliant financier to realize that the

stocks of these companies are undervalued and would be much higher if the CEO were removed or at the

very least paid more attention to his troubled company than his golf game. However, if you purchase

these undervalued stocks, the odds are not in your favor, because the CEO and/or the board is not going
https://twitter.com/Carl_C_Icahn/status/347739201191702528https://twitter.com/Carl_C_Icahn/status/347739201191702528http://topics.wsj.com/person/D/michael,-dell/425http://www.forbes.com/profile/carl-icahn/http://www.forbes.com/wall-street/http://www.forbes.com/wall-street/http://www.forbes.com/profile/carl-icahn/http://topics.wsj.com/person/D/michael,-dell/425https://twitter.com/Carl_C_Icahn/status/347739201191702528


9/9

away. But if you are able to purchase the stock knowing you have the ability to mount a proxy fight or

tender offer, and/or get control or force the board to make positive changes, the odds turn dramatically in

your favor, and you may have an A+ investment.

Icahn Enterprises record decidedly proves this point. I am proud to say that our stock price performancesince January 2000 through May 28, with reinvested dividends, showed a total return of 1,122%. During

the same period the S&P 500, Dow Jones industrial and Russell 2000 indices had returns of only 46%,

85% and 137%. The reason so few play the activist role and take advantage of the great risk/reward ratio

it offers is that it is extremely difficult to breach the heavily guarded walls that CEOs and boards have

built to protect themselves. Corporate democracy does not exist.

Critics of activism state that activism may be good for the activist but not for other stockholders. Yet

shareholder value has risen by many billions of dollars in the companies we have targeted over the years.

I believe this proves conclusively that all shareholders, not just us, benefit from our involvement, and,perhaps even more important, the changes we institute at these companies cause them to become more

productive, and therefore enable them to compete with foreign companies more efficiently, which in turn

creates more jobssomething this country needs.

Poorly managed companies are generally shunned by investors. An analyst once laughed at me for

making an investment in a terribly run company. He said, Carl, theres an old saying, Fools will venture

where angels fear to tread.? I answered, Yes, but great investors will venture if they know they have

the weapons to correct what the angels fear.

References

http://en.wikipedia.org/wiki/James_Wolfensohn

http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMD

K:20475199~pagePK:36726~piPK:36092~theSitePK:29506,00.html

http://en.wikipedia.org/wiki/Carl_Icahn

http://blogs.wsj.com/moneybeat/2013/09/09/carl-icahn-wants-to-create-twitter-movement/

https://www.google.com.pk/webhp?source=search_app&gws_rd=cr&ei=XKZlUrOrBYWjtAbmnoH4AQ#q=carl+icahn+governance+what+i+do+for+america
http://en.wikipedia.org/wiki/James_Wolfensohnhttp://en.wikipedia.org/wiki/James_Wolfensohnhttp://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMDK:20475199~pagePK:36726~piPK:36092~theSitePK:29506,00.htmlhttp://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMDK:20475199~pagePK:36726~piPK:36092~theSitePK:29506,00.htmlhttp://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMDK:20475199~pagePK:36726~piPK:36092~theSitePK:29506,00.htmlhttp://en.wikipedia.org/wiki/Carl_Icahnhttp://en.wikipedia.org/wiki/Carl_Icahnhttp://blogs.wsj.com/moneybeat/2013/09/09/carl-icahn-wants-to-create-twitter-movement/http://blogs.wsj.com/moneybeat/2013/09/09/carl-icahn-wants-to-create-twitter-movement/https://www.google.com.pk/webhp?source=search_app&gws_rd=cr&ei=XKZlUrOrBYWjtAbmnoH4AQ#q=carl+icahn+governance+what+i+do+for+americahttps://www.google.com.pk/webhp?source=search_app&gws_rd=cr&ei=XKZlUrOrBYWjtAbmnoH4AQ#q=carl+icahn+governance+what+i+do+for+americahttps://www.google.com.pk/webhp?source=search_app&gws_rd=cr&ei=XKZlUrOrBYWjtAbmnoH4AQ#q=carl+icahn+governance+what+i+do+for+americahttps://www.google.com.pk/webhp?source=search_app&gws_rd=cr&ei=XKZlUrOrBYWjtAbmnoH4AQ#q=carl+icahn+governance+what+i+do+for+americahttps://www.google.com.pk/webhp?source=search_app&gws_rd=cr&ei=XKZlUrOrBYWjtAbmnoH4AQ#q=carl+icahn+governance+what+i+do+for+americahttp://blogs.wsj.com/moneybeat/2013/09/09/carl-icahn-wants-to-create-twitter-movement/http://en.wikipedia.org/wiki/Carl_Icahnhttp://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMDK:20475199~pagePK:36726~piPK:36092~theSitePK:29506,00.htmlhttp://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTARCHIVES/0,,contentMDK:20475199~pagePK:36726~piPK:36092~theSitePK:29506,00.htmlhttp://en.wikipedia.org/wiki/James_Wolfensohn

assignment 1 c.g.docx

Documents