Carl Icahn Says 'Enough!' to Overpaid, Underperforming CEOs

Jan. 12, 2009— -- Billionaire investor Carl Icahn places the blame for much of the recent corporate carnage squarely on the shoulders of the companies' boards of directors, which are supposed to keep an eye on the bottom line for the shareholders.

"The trouble with the country is that we don't have accountability. The boards in this country are not doing the job, and that's why you have the trouble on Wall Street," Icahn told ABC News' John Stossel.

Icahn, 74, has been called a corporate raider, renegade capitalist and the Superman of shareholders because he has battled entrenched corporate boards to bring greater efficiency to companies and value to shareholders.

Over the years, Icahn has taken controlling positions in mega-companies like RJR Nabisco, Texaco, Western Union, Viacom and Time Warner.

Icahn recently sat down with Stossel to discuss a system that richly rewards CEOs while their companies fail.

Watch John Stossel's interview with Carl Icahn Friday on "What Are You Worth?" -- a special edition of "20/20" at 10 p.m. ET

Icahn faults the boards more than the CEOs of troubled financial companies because the boards ignored the red flags raised over risky mortgage-backed securities.

"Everybody got their huge bonuses, but who paid the price?" he said. "Not the CEOs, not the board members. The shareholders of these companies paid the price. And that's unfair and it's wrong."

But Icahn also says that awarding huge salaries to underperforming CEOs is "absurd ... it's a complete travesty."

Icahn -- who stresses that there are many good boards and CEOs -- maintains boards don't have to pay a fortune to get a talented chief.

"I assume the people on the board aren't stupid. Why are they giving them all this money?" Stossel asked.

"You go to these board meetings, everybody is buddy-buddy, everybody's friendly," Icahn said. "It's like a fraternity."

Icahn has called CEOs the survivors of the corporate world, but says it's the "survival of the unfittest": "[The CEO] would never have anyone underneath him as his assistant that's brighter than he is because that might constitute a threat. So therefore, with many exceptions, we have CEO's becoming dumber and dumber and dumber."