Review and Analysis of 2018 U.S. Shareholder Activism

Sullivan & Cromwell LLP - March 14, 2019
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On the surface, the 2018 activism data is largely consistent with 2017, but with an uptick in overall activity. The amount of capital invested in new activist positions in 2018 was up approximately $2.5 billion from 2017, and activists won more board seats in 2018 than in 2017, mostly through settlements. Although several well-known activists (including Third Point, Pershing Square and Greenlight Capital) announced disappointing investment results in 2018, and the industry experienced negative net asset flows overall, activist funds continue to attract substantial new capital.

  • 5% increase in total number of publicly announced campaigns against U.S. issuers
  • Elliott, Starboard and Spruce Point lead the way with the most publicly announced campaigns against U.S. issuers
  • Infrequent activists bring 68% of all publicly announced campaigns, up from 56%
  • 56% increase in board seats obtained per announced 2018 campaign, as activists on average obtained 0.8 board seats per campaign
  • Issuers with market capitalizations between $1 – $10 billion targeted in 40% of announced 2018 campaigns despite comprising only 21% of Russell 3000 companies
  • 37% of activist campaigns focus on M&A objectives, up from 26%
  • Proxy contests focusing on board-related governance matters decrease significantly from 51% to 14%Proportion of publicly filed settlement agreements expressly permitting information sharing with the activist fund drops from 18% to 7%