Activist Investors Show Up at More CEOs’ Doors

An increasing number of corporate chiefs are seeing activist investor groups knocking at their doors demanding they do a better job of running the show. Among the targets are Yahoo CEO Marissa Mayer and Zoetis CEO Juan Ramon Alaix.

The success of activism campaigns has more than doubled over the last decade, to more than 70%, according to a recent survey by law firm Schulte Roth & Zabel and the data provider Mergermarket. Virtually all the senior corporate executives surveyed said they believed that activism will rise over the next 12 months, and more than half predicted a “substantial” increase.

“The success of activism campaigns has more than doubled over the last decade.”

These shareholder-agitators also are proving “more willing to broaden their suggestions beyond financial-engineering moves like spin-offs or special dividends,” The New York Times reported.

The newspaper reports that nearly half of respondents to the survey said calls for improved efficiency and resolving operational issues would underpin activist campaigns in the next year. The biggest drivers of campaigns, will remain companies’ stock performance, changes to boards or management teams, and announced acquisitions.

All of this means that the back seat is getting more crowded for CEOs as they pilot their companies. Chiefs should keep their eyes and ears peeled for signs of dissent coming from outside the boardroom or C-suite, and always be prepared to back up their strategy and direction.

 


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