From its hedge fund origins in the 1980s, shareholder activism has changed massively. Today, activists are winning campaigns against previously untouchable giants of oil and gas like ExxonMobil – and winning on an ESG ticket, rather than simply focusing on short-term financial returns.
This article is an extract from the newly published IR Magazine Best Practice Report: Recognizing and predicting activist shareholders, in partnership with Q4.
Click to read Best Practice Report – Recognizing and predicting activist shareholders – Q4
So-called friendly activists are looking to get into your stock for the longer term and titans like Carl Icahn are putting forward proposals (though not necessarily winning support) at the likes of McDonald’s with as little as $50,000 worth of shares.
While Covid-19 saw many activists take a step back to allow companies to weather the pandemic, by 2022 it was back to some level of business as usual. Indeed, the start of 2022 saw pharmaceuticals – the sector that returned us to our new normal – increasingly under the activist spotlight.
Surveillance, vulnerability, response and tactics
As activist tactics – and activists themselves – have evolved, so too have companies. With activists often taking an arguably gentler approach and lawyers and advisers telling companies to listen to and engage with activists, there have been more settlements in recent years.
But some things don’t change. When it comes to best practice around shareholder activism, the building blocks of good IR – those relationships you cultivate throughout your career, an ethos of openness – are crucial in building support or engaging with activists.
Talking to leading IROs, lawyers, advisers and activists, this report looks at how companies are adjusting their stock surveillance, vulnerability assessments, response plans and engagement tactics to the goals of the modern activist, as well as offering IROs an eye to the future as we look at the potential impact of the universal proxy card and proposed 13D regulation.
This article is an extract from the newly published IR Magazine Best Practice Report: Recognizing and predicting activist shareholders, in partnership with Q4. Evaluate your company’s risks and susceptibilities, consider external advisers and your ‘poison pill’, identify the challenges firms face with surveillance, and much more.