2016 Year-End Activism Update

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2017-01-19

Posted by Gibson, Dunn & Crutcher LLP, on Thursday, January 12, 2017
Editor's Note: The following post comes to us from Gibson, Dunn & Crutcher LLP and is based on a Gibson Dunn publication by Barbara L. BeckerRichard J. BirnsDennis J. Friedman, Eduardo Gallardo, and Adam J. Brunk. Related research from the Program on Corporate Governance includes The Myth that Insulating Boards Serves Long-Term Value by Lucian Bebchuk (discussed on the Forum here), and The Long-Term Effects of Hedge Fund Activism by Lucian Bebchuk, Alon Brav, and Wei Jiang (discussed on the Forum here).

This post provides an update on shareholder activism activity involving domestically traded public companies with equity market capitalizations above $1 billion during the second half of 2016. Notwithstanding a difficult market backdrop in 2016, including the surprise “Brexit” vote, a bitterly fought U.S. presidential campaign, a significant decline in oil prices, and vigorous public debate on “short-termism,” activist investors continued to be busy across a wide range of industries (even if fewer campaigns made major headlines). Furthermore, in 2016 as compared to 2015, our survey found relative consistency in the total number of public activist actions (90 vs. 95), the number of activist investors involved in such actions (60 vs. 56), and the number of companies targeted by such actions (78 vs. 81).