Visitation by activist shareholders has to be taken as seriously by today’s CEOs as it was back in the 1980s, during the days of corporate raiders such as Boone Pickens and Carl Icahn—perhaps even more so. The continuing, prolonged period of economic weakness and uncertainty around the world has weakened the results and prospects of many companies, while sweeping changes brought by digital technology, globalization and other trends make them strategically vulnerable.
Meanwhile, investors—even the institutional investors who used to be an incumbent CEO’s best friends—generally are more fickle than ever and thus more willing to give agitated and aggressive fellow shareholders a hearing. And, yes, Carl Icahn is still around—much older, but just as effective. Just ask CEOs who’ve recently been targeted by him, including Apple CEO Tim Cook and Family Dollar CEO Howard Levine.
Right now, Mayer is dealing with Starboard Value LP. The concern about Yahoo by the activist investor group came soon after the spotlight was taken off Darden Restaurants CEO Clarence Otis Jr. He ended up spinning off Red Lobster, overhauling the menu of Olive Garden—and allowing Starboard to take over the company’s board of directors. Starboard has been trying to pressure Yahoo to consider a deal with AOL. And now, at least two top-10 Yahoo shareholders have indicated that they are so unhappy with how Mayer has been failing to turn around Yahoo that they have made a direct plea to AOL CEO Tim Armstrong to explore a merger and run the combined company.
Alaix is dealing with Bill Ackman, head of Pershing Square Capital Management, who lately has greatly influenced strategies and execution at companies including Procter & Gamble, J.C. Penney and Herbalife. Zoetis, the former animal-healthcare arm of Pfizer, has taken a stake in the company—so Alaix can expect Ackman to come calling soon if he hasn’t already.