In the first half of the year, 449 U.S. companies were subject to demands from activist investors, a 9% jump compared to the first half last year. And hedge funds are taking swings at big targets. More than half the demands made to companies in the first half were at large-caps with market values of $10 billion and up. The figures will be published in a Diligent Market Intelligence report on Tuesday. The boardroom battles are generating significant media buzz, which can be time-consuming and distracting, especially at large companies where it might lead to CEO departures or strategic shifts. A 2023 study found that an activist on a board doubled the likelihood of a CEO exiting a company.
“This year, proxy contests have been big, front-page events, whereas in previous years they have taken place largely in the background,” said Stephanie Hill, head of index at Mellon Investments. Hill made her comments at the National Investor Relations Institute conference this year. “This means companies cannot ignore this space; there is the potential for an activist to target your company and make it onto the front page.”
