Forbes Interviews Andrew Freedman on the Upcoming Year in Shareholder Activism

Forbes recently interviewed Andrew Freedman, Corporate partner and Co-Chair of Olshan's Activist & Equity Investment Group, on the state of shareholder activism in 2017 and what can be expected in the upcoming year. “After a relatively sleepy 2016 for large cap activism,” he explains, “the top-tier shareholder activists came back with a vengeance in 2017, mounting high-profile campaigns against well-known, large-cap target companies…. The targeting of CEOs was a particularly intriguing theme woven into the strategy of many of these campaigns. Elliott Management’s successful campaign at Arconic that led to CEO Klaus Kleinfeld’s departure…is certainly one that stood out this year.” Noting that “it was only a matter of time before [activist investors] began to more directly target struggling CEOs as part of their agendas,” Mr. Freedman observes that “the activists’ efforts in the campaigns to hold CEOs immediately accountable to shareholders made their wins particularly significant; the wins represent a noteworthy departure from the early days of shareholder activism…. CEO-targeting may also explain why more proxy contests went to a vote this year without a settlement. Nevertheless, any strategy to remove a CEO will continue to be perceived as highly aggressive. While there may be facts and circumstances under which this strategy is warranted, the standard will be higher for obtaining shareholder support for such a referendum on senior management.” He predicts that the plethora of activist campaigns in 2017 wherein CEOs were blatantly targeted for replacement “may very well embolden other activists to target CEOs [in 2018], especially where there is a sense of urgency to turn around a perennial underperformer.” The top tier activists, he concludes, “like Starboard and Elliott, will continue to make their presence felt through the 2018 proxy season given their willingness to engage in all forms of activist campaigns both here and around the globe.”