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Executive Compensation

Lions Gate Entertainment Corp.’s (LGF) Joe Feitheimer and Michael Burns are starring in their own drama taking place on Wall Street. The plot: Billionaire activist investor Carl Icahn is battling to take-over the company, which has produce mediocre returns in recent years.

The executives insist that the battle has been very time consuming and costly for management, and therefore asked shareholders to approve a poison pill that would make it more difficult for Icahn to take control of the company.

Currently, the billionaire investor owns 19% of Lions Gate and recently made an offer for $6 per share. But, with the share price trading over that premium in recent days, it is unlikely that shareholders will agree to the price.

Meanwhile, many shareholders question the problem with management in the first place. Over the past decade, annual revenues have grown from $100 million to $1.5 billion, as the company rolled out a very successful entry into the TV market.

At the same time, its feature film segment has also been performing very well. The company is best known for its Saw and Hostel films, as well as its more artistic films like Crash and more recently Precious. And, it also releases documentaries like Fahrenheit 9/11.

In the end, many shareholders remain confident in Lions Gate’s ability to perform. However, Carl Icahn has fought successfully against a friendly shareholder base before, and it would be unwise to count him out from any contest to take-over the company.

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