THERE are two words that no chief executive wants to see on his shareholder register: Carl Icahn. He is a 69-year-old New Yorker with so much money that he has an athletics stadium named after him. If you asked him what he did for a living, he probably would tell you that he runs a hedge fund.

Yet unlike most hedge-fund managers, Icahn does not buy into companies because he likes them; he buys because he doesn’t like them. More accurately, he buys because he knows that he could like them, but only after a lot of tinkering.

“Companies, by and large, are run abysmally,” he said recently, “and the earnings of CEOs are outrageous. They’re getting 400 to 500 times what the average worker gets.”

Icahn is perhaps the richest of a breed of investors known as corporate activists, a group of millionaires and billionaires. Their number includes Vincent Bolloré, the Frenchman who shook up Havas, the advertising agency, and may now be preparing a similar move on Aegis, the British media buyer.

Icahn invests when he believes that a company is badly managed, and he uses the influence of his stake to try to change the management to create value.

Witness the impact he has had in the past 18 months since raising at least $2 billion (£1.1 billion) for his hedge fund Icahn Partners. He has humbled Blockbuster, the video rental chain, by engaging in a battle with management that knocked its chief executive off the board of directors. He has forced Kerr-McGee, the energy firm, to cut back exploration, sell its North Sea assets and buy back shares. And he has hectored Mylan Laboratories into scrapping its $4 billion purchase of King Pharmaceuticals. He is still demanding that Siebel Systems distribute its stash of cash — $2 billion — to shareholders.

Lately, Icahn has taken stakes in Time Warner, Toys ‘R’ Us and Morgan Stanley. The latter lost several key dealmakers and Philip Purcell, the chief executive, has been ousted.

At Time Warner, Icahn is trying to cajole Dick Parsons, the chief executive, into buying back shares worth up to $20 billion and to split its cable business. This week he and Parsons met and engaged in what has been described as a spirited exchange of views.

“At the end of the meeting, we both observed that we had, at the very least, one thing in common: we both believed Time Warner was meaningfully undervalued and that we both wanted very much to rectify this situation,” Icahn said in a statement, which also described the discussions as “good and productive”.

Some might say that was Round One to Parsons, but Icahn added ominously: “We agreed to communicate again shortly.” In other words, he isn’t going away.

“We’re grateful to Icahn and his colleagues for highlighting the undervaluation of Time Warner, he’s done them a great service,” Larry Haverty, who manages almost 17 million Time Warner shares, told The Times yesterday. Yet Haverty does not agree with Icahn’s proposals: “I don’t think he’s found the best way to solve the issue.”

There is more than a little of the streetfighter in Icahn, whose mother was a teacher and father was a cantor in the local synagogue. He grew up in Queens and attended Far Rockaway High School before moving on to Princeton and New York universities, where he dropped out before graduation.

Icahn used to be known as a greenmailer, who would buy stakes in companies and threaten to take them over until they bought the shares back at a premium. His attacks on boardrooms are the stuff of legend and his targets included Texaco, which he forced into Chapter 11 bankruptcy, along with US Steel, Pan Am and RJR Nabisco, which he coaxed into selling its food business.

That cut-throat attitude gave Icahn his first claim to fame. In 1985 he took control of TWA through a hostile takeover. In St Louis, where TWA was based, his popularity was compared to that of Ebenezer Scrooge.

Icahn is not fussed about whether he makes friends or enemies along the way. “If you want a friend, get a dog,” he told a TWA employee. The phrase was later borrowed by Oliver Stone, the film director, for his character Gordon Gekko, the anti-hero in the film Wall Street.

Icahn is thought to be one of the models on which Gekko was based, along with Ivan Boesky, the arbitrageur who coined the phrase “greed is good”.

After more than 40 years of dealmaking, Icahn has lost nothing of his appetite for money. “I’m not a charitable institution,” he said this year. “What I do is obvious from the start. I want to make a profit.”

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