Corporate raider Carl Icahn and his two associates won seats on the Blockbuster board today after a heated battle with CEO John Antioco. The battle had been raging for weeks after Icahn bought up significant share in the video rental company to make him the lead stockholder.
Icahn charged that current attempts by Antioco diversify the Blockbuster’s offerings were frivolous and demanded higher dividends to the shareholders. Also said the compensation package, $50 million in cash and stocks, for Antioco was exorbitant as the company went from making over $100 million last year to a first quarter loss of $57 million.
Antioco leaped right back saying that the board decides his compensation and this is diversification attempts are meant to save the company from competitors. . Sales have been slipping as mega retailers like Wal-Mart have cheap DVD and VHS sales. Other companies like Netflix promote easy to deal with rentals through the mail. Blockbuster has had to change some of their offerings and come up with new programs like their current “no late fees” campaign in order to try and be competitive.
Official results are a few days away but the vote looks to have gone very much in Icahn’s favor. He, Strauss Zelnick and Edward Bleier all made it to the board and while changes are expected, Icahn stressed he want to work with Antioco, who’s expected to be reelected to his CEO position.
Antioco isn’t quite so enthusiastic. He stressed his plan was working and that this was the best avenue for the video giant.
“My nominees and I are looking forward to working hand-in-hand with the rest of the board and Mr. Antioco,” Mr. Icahn said in a press release following the election.
Icahn’s reputation isn’t quite so friendly though. Last week, he called during a stockholder teleconference and lambasted Antioco and current Blockbuster management.
Icahn raided the Kerr-McGee oil firm based in Oklahoma and forced the firm to spend $4 billion to buy back it’s stock. It landed Icahn’s firm a cool $57 million.
John Stith is a staff writer for Murdok covering technology and business.
