March 6, 2023
Transcript: “Activist Profiles & Playbooks”
We have posted the transcript for our recent “Activist Profiles & Playbooks” webcast. Our panelists, Joele Frank’s Anne Chapman, Okapi’s Alexandra Higgins, Spotlight’s Damien Park and H/Advisors Abernathy’s Dan Scorpio provided expert insights on what may be in store when it comes to activism in 2023. Here’s an excerpt from Damien Park’s comments about what’s driving activism this year:
What’s fueling activism this year? Clearly, the new adoption of universal proxy as John mentioned at the start of this discussion is going to contribute to activism this year. The amount of increase is still up for debate, but it’s not going to decrease the amount of activism, that’s for sure.
Without going into too much detail right now, we expect universal proxy will make it easier and slightly cheaper for activists to elect one or maybe two directors to a board. It also makes the unreachable, reachable – for example, traditional ESG type funds that typically don’t have the capital to carry out a costly campaign at companies with large retail shareholder bases to elect a director, can now do so at much less cost.
There are a few things we see trending both publicly and privately with our clients this year. One is this phenomenon when more than one activist approaches a company with demands that aren’t necessarily compatible with each other. In fact, their demands may be completely at odds with each other.
To give you a simple example, one activist may demand increased investments into areas of profitable growth while another demands a stepped-up return of capital to shareholders. Both activists may be seeking board representation and threatening a disruptive fight as leverage to get what they want. The difficulty with managing these situations is being able to balance all of these demands somewhat effectively in order to reach global peace, and still be able to run the business well.
– John Jenkins