“The increase in settlements with activists by U.S. companies was the most significant trend in shareholder activism in 2016. Institutional investors have publicly voiced concern about companies settling so easily. It will be interesting to keep an eye on strategic developments at these companies in 2017 and beyond, as well as how these settlements affect management and employee turnover.”
Jay Frankl, Senior Managing Director
Country:
USA
Average % of insider ownership:
Activism
Threat Level
To learn more about this country, please click on the tabs below
With more than 3,000 activist campaigns recorded since 2010, the United States is the epicenter of shareholder activism worldwide. One of the consequences of the election is that many ESG initiatives that proponents previously thought would be addressed by regulation will not be addressed under the current administration. Therefore, advocates of environmental, social, and governance proposals have put these issues up for vote at individual company AGMs. By-law proposals were at a recent high in 2017 and this trend should continue to accelerate in 2018.
Shareholders must disclose beneficial ownership of more than five percent of a public company’s registered voting equity securities. Investors report holdings using a Schedule 13D filing within ten business days after their holdings exceeds five percent, unless they are eligible to report their holdings on a short-form Schedule 13G. 13G filings are reserved for investors acting in the ordinary course and without a control purpose or effect (i.e. passive investors).
Structural company defenses include poison pills, staggered boards, limited ability to call a special meeting, and denying replacement of directors without cause. Stringent advance notice by-laws and other warning systems for shareholder proposals can serve as a structural defense.
Some states have anti-takeover statutes that create hurdles for shareholders wishing to own over a certain percentage of stock.
Companies may have golden shares or classes of shares with increased voting rights which can deter activism however, these companies may run afoul of new proposed index inclusion rules currently being discussed.
Top Campaigns by Type
1. Amend Bylaw
2. Gain Board Representation
3. Adopt Majority Vote Standard
Campaigns By Year
Total
Campaigns
Notable Invested Activists
• Elliott Management
• California Public Employees' Retirement System (CalPERS)
• Starboard Value
Recent Activism Campaigns
| Arconic Inc. (previously Alcoa Inc.) | VS. |
Elliott Management |
| Buffalo Wild Wings Inc | VS. |
Marcato Capital Management |
| Whole Foods Market Inc | VS. |
JANA Partners |
Total Active
Campaigns
Contact FTI Consulting
Capital Markets Research and Activist Engagement
Managing Director
+1 312 861 4721
Geoff.Serednesky@FTIConsulting.com
Americas Head of Capital Markets Communications
Senior Managing Director
+1 (312) 553 6707
Bryan.Armstrong@fticonsulting.com
Head of Activism and M&A Solutions
Senior Managing Director
+1 (202) 312 9216
Jason.Frankl@fticonsulting.com