Review of Shareholder Activism – Q3 2019
Key observations from Q3 2019 report include:
2019 is closing the gap with prior years following an active Q3
- 159 campaigns were launched at 145 companies in 2019 YTD, compared to 185 campaigns at 171 companies in 2018 YTD
- Although 2019 still lags 2018’s record pace, the 51 new campaigns launched in Q3 2019 is a ~19% increase over Q3 2018
European activism ended Q3 with record activity
- Activists launched a record 20 new campaigns in Europe, shifting their historical focus from the U.K. into other jurisdictions, such as France, Germany and Switzerland
- European campaigns notably targeted both underperforming small-cap companies and large-cap outperformers
- Non-U.S. activity continues to account for ~40% of campaign activity, in line with recent years
M&A persists as primary campaign thesis
- 45% of all activist campaigns in 2019 YTD have had an M&A thesis, the highest proportion to date
- Attempts to scuttle or sweeten transactions were the most common type of M&A-related thesis
- Over half of all capital deployed ($19.1bn) has been in campaigns with an M&A thesis
Activists continue to effect board change
- 98 Board seats have been won by activists YTD and over 800 have been won by activists since the start of 2013
- Nominating long slates remains a popular tactic, with a record 16 nominated in 2019 YTD, but the majority of Board seats are secured outside of the proxy process
- Activists have been successful in five of 21 proxy fights that have gone to a vote in 2019 YTD, resulting in 15 Board seats
2019 Proxy Season Highlights Complex Reality for Companies
- Support for ESG proposals increased as investors further link these issues to corporate strategy and performance
- “Overboarding” was a factor in many narrow Director elections in 2019 due to stricter institutional investor policies
- Investors continued to seek strong ties to strategy and performance in executive pay programs
Download the review to read the findings in full.
