Activist Investor

Activist Investor

A minority shareholder who seeks to influence decision making at a company by voicing concerns, engaging in a dialogue with management, or lobbying other shareholders for support. The demands could relate to changes in management, representation on the board, acquisitions or divestitures, salaries, bonus payments, use of retained earnings etc.

Activist Investor

A shareholder or group of shareholders in a publicly-traded company that tries to make changes in management and/or operations in a way that suits the shareholder(s)' interests. Activist investors deliberately acquire substantial stakes in certain companies and therefore wield enough influence that the company often must listen to them. Activist investors may choose to negotiate directly with the company or indirectly though methods like proxy wars or public shaming. Activist investors may be motivated by ethical concerns; they may want the company to pay its workers better, for example. More often, they wish to change the company in a way that will maximize their own return. Activist investors may be investment companies, institutional investors, shareholder groups, or even wealthy individual shareholders.

Activist investor.

An activist investor attempts to force a corporation to make changes in management, board structure, investment policies, use of retained earnings, or other practices, often by introducing shareholder proposals or putting forward alternative directors.

Activist investors may be hedge funds, institutional investors, such as money managers or pension funds, wealthy individual investors, or groups of investors with a common cause.

Some activists deliberately accumulate substantial stakes in undervalued companies to force changes that will increase the share price so they can sell at a profit. Others, such as long-time or majority stakeholders, may object to current management practices, prefer an independent board of directors, or want a voice in executive pay. While they seek improvement to the bottom line, they may also be committed to strengthening the company in other ways.

Activist methods vary as well. Some wage public relations and proxy wars while others seek to implement their proposals through negotiation. In recent years activists have achieved a number of goals including increased respect for their power to effect change.

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References in periodicals archive ?
industry, is intensifying after the hedge fund led by activist investor Nelson Peltz announced plans to nominate its own slate of four directors to the company board, according to AP.
26 November 2014 - US activist investor Carl Icahn has purchased a further stake in domestic car rental company Hertz Global Holdings Inc (NYSE:HTZ) to increase his equity interest to 10.
The activist investor started buying into Clean Harbors in February.
Despite running the risk of losing his company to fellow bidder and billionaire activist investor Carl Icahn, 48-year-old Dell was (http://www.
Mitchells, which owns the O'Neill's, All Bar One and Toby Carvery, saw several board room changes last year after billionaire activist investor Joe Lewis led a rebellion by shareholders.
SAN FRANCISCO: Activist investor Carl Icahn has again added to his stake in Take Two Interactive Software Inc, upping his bet in the struggling video game publisher.
Knight Vinke has a history as an activist investor and in 2004 it led a group of shareholders that forced Royal Dutch Shell to abandon its dual Dutch-British corporate structure.
Shamrock Capital Advisors has been an activist investor in public companies for more than two decades.
Activist investor Elliott Management has urged BHP Billiton to immediately conduct a review of its dual structure following its commissioned research which argues that a reorganization as a single company in Australia could add over $22B in value to shareholders, Bloomberg reports, citing the investor's letter to BHP chairman Ken MacKenzie.
An activist investor has called for the breaking up of Credit Suisse (NYSE: CS).
Summary: Shareholders hold a lot of power in modern corporations--just ask companies like TECO Energy and Hyundai who are dealing with activist investor influence.
To further understand the board climate, Hewitt gave the example of last year how Darden Restaurants International replaced all 12 members of its board with candidates nominated by Starboard Value, an activist investor.