Icahn, who owns 5.6 percent of Transocean, has spent two months campaigning for a dividend of $4 per share. Earlier this month, Transocean recommended that shareholders approve a $2.24 per share dividend.
In the board's first formal response to Icahn's proposals, it said on Sunday his "highly flawed" agenda was focused on temporary returns at the expense of long-term value, and ignored the cyclical and capital-intensive nature of the industry.
The dividend proposal was in "direct conflict with Transocean's disciplined capital allocation strategy," it added.
Icahn also wants Transocean to replace its directors, including the chairman, and is proposing his own nominees.
Transocean's annual meeting is scheduled for May 17 in Switzerland.
(Reporting by Braden Reddall in San Francisco; Editing by Daniel Magnowski)