13D MONITOR ACTIVIST MEDIA CENTER
Breaking news and more: Your media center for shareholder activism and corporate governance.
Abstract News © Copyright 2016 INFORMATION, INC.
Icahn, Paulson Add Transparency, AIG President Says
" Reuters (06/15/16) Cohn, Carolyn"
American International Group (AIG) President and CEO Peter Hancock said on Wednesday that Carl Icahn and John Paulson are increasing transparency at the U.S. insurer through their representation on its board. Paulson and Samuel Merksamer, a managing director at Icahn Capital, joined AIG's board last month after Icahn campaigned last year for the company to split itself into three. AIG rebuffed Icahn's proposal in January in favor of its own strategy, which entailed spinning off its mortgage insurance unit and selling its broker-dealer network. “Inclusion of the activists has forced us to be a little bit more transparent,” Hancock conceded at a briefing in London, adding that after seeing the company from the inside, the investors were gaining better understanding of the hurdles to simplifying the company. He said part of that process would include cutting motor insurance business in some of the countries in which it operates, following a decision to pull out of motor insurance in China. Icahn, AIG's fourth-largest investor, has argued that a split would help AIG relieve itself of the regulatory burden of being a "systemically important financial institution," which demands higher capital cushions.
A New Status Quo for the Boardroom
" Wall Street Journal (06/15/16) Garden, Ed"
In an opinion piece, Ed Garden, chief investment officer of Trian Fund Management, says shareholders are growing less passive for a number of reasons. First, institutional shareholders have gotten larger, and their ownership of corporate America has become more concentrated. Second, many of these institutional shareholders have developed deep industry expertise. In addition, poor performance by management and outright abuse of power has created a mindset among shareholders that management teams have lost their right to be left alone. Lastly, there are a few investors—commonly known as “activists” but whom Garden calls “highly engaged shareowners”—who are rousing shareholder support and providing the catalyst for management to be held accountable. Critics have accused activists of pursuing a short-term bump in stock prices, and some politicians claim they lead to short-termism, rising inequality, and low pay for workers. “But in my view,” Garden writes, “the management and directors of public companies, not the shareholders, have driven such short-term behavior, and the way to build strong companies and create jobs is not through government mandate or protecting weak management teams.” Instead, it will occur because market forces will reward the companies in which management teams and highly engaged shareowners work together to achieve sustained, lasting growth, Garden says.
SEC Change of Proxy Rules Opened Door to Activists
" Business Insider (06/14/16) Wadhwa, Tina"
Shareholder activism can be expensive—with Nelson Peltz, for example, spending a reported $8 million on the campaign at DuPont (DD) a few years ago. Despite the cost, activists have continued to wage battles—largely because the Securities and Exchange Commission has made changes to facilitate shareholder challenges against company boards. These changes "have been grabbed onto and used by activist hedge funds," said Lynn Stout, author and professor of corporate and business law at Cornell Law School. Activist investors ended 2015 with $174 billion under management, up from just $56 billion in 2010. In addition to SEC actions that benefit active shareholders, federal changes in the tax code also now require companies to tie executive pay to metrics like share price—which, in turn, drives CEOs to prioritize making money.
Abstract News © Copyright 2016 INFORMATION, INC.
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exited activist campaigns, including the activist’s investment thesis. This feature
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on filings change when they take significant activist measures; (ii) the average
holding periods for each activist investor on all filings, exited filings, live
filings and filings where they have taken significant activist measures; and (iii)
what activist measures were taken, when they were taken and how the underlying stock
reacted to the filing.
||Misunderstood activist investors?
Source: CNBC Video - May 19, 2016
||Betting on Zero: Bill Ackman vs. Herbalife
Source: CNBC Video - April 15, 2016
||No Joy for Hedge Funds in 2015
Source: Bloomberg TV - December 23, 2015
||Does Ackman's Valeant Call Tarnish His Reputation?
Source: Bloomberg TV - October 30, 2015
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