Carl Icahn Demands Removal of Xerox CEO

And exploration of strategic alternatives

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Jan 22, 2018
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Carl Icahn (Trades, Portfolio) pushed for the removal of Xerox (XRX, Financial)’s CEO Jeff Jacobson on Monday as the company explores a deal with Fujifilm.

Icahn and Darwin Deason, who together own 40 million shares, or 15%, of the $11 billion printing company’s stock, said in an open letter that they believe the board should not allow him to lead negotiations in any potential deals. They also called for the removal of the company’s entire board, saying they had “little faith” the directors would act according to the investors’ wishes.

“Every day that the ‘old guard’ remains in power – feebly overseeing the company’s steady decline – is a waste of time that could inevitably erode the value of our investment down to nothing,” Icahn said in the letter.

The activist investor also demanded that the board disclose the agreements governing Xerox’s joint venture with Xerox, first reported by the Wall Street Journal. He said he did not necessarily approve or disapprove of a transaction with Fujifilm that could possibly involve a change of control at Xerox, calling consolidation in the industry inevitable.

Icahn has been calling for new management at Xerox for months. He last tussled with the company on Dec. 12 when he wrote another responding to a Dec. 11 statement from the company touting its $600 million in gross cost savings for 2017 and what it described as the largest product launch in its history, as well a 30% rise in share price for the year to date.


Icahn fired back: “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…” He then said the company’s pick up in stock price resulted from the spin-off of Conduent, which he championed.

The letter also criticized Jacobson for not introducing innovative products and for unwisely relying on cost cutting to stem continual revenue declines.

Icahn plans to nominate four new members to Xerox’s board at the company’s 2018 shareholder meeting. His former board representative resigned in December.

Since Icahn started a stake in Xerox in the fourth quarter of 2015, Xerox shares have advanced around 20% to $32.37 a share on Monday.

Icahn has been instrumental in removing CEOs from other companies in the past, including eBay, Forest Laboratories, Hologic and Manitowoc.


Xerox’s financials have suffered in recent years. It has five-year average annual decline rates of 9% for revenue, 9.7% for ebitda, 2.1% for free cash flow and 1.1% for book value. As of third quarter-end, it had $1.8 billion in cash and $5.2 billion in long-term debt on its balance sheet.

See Carl Icahn (Trades, Portfolio)'s portfolio here.