Shareholder activism is a form of activism in which shareholders use equity stakes in a corporation to put pressure on its management . A fairly small stake (less than 10% of outstanding shares) may be enough to launch a successful campaign. In comparison, a full takeover bid is a much more costly and difficult undertaking. The goals of shareholder activism range from financial (increase of shareholder value through changes in corporate policy, cost cutting , etc.) to non-financial ( disinvestment from particular countries, etc.). Shareholder activists can address self-dealing by corporate insiders, although large stockholders can also engage in self-dealing to themselves at the expense of smaller minority shareholders.
32-508: Crikey is an Australian online news outlet founded in 1999. It consists of a website and email newsletter available to subscribers. Crikey was founded by the activist shareholder Stephen Mayne , a journalist and former staffer of then Liberal Victorian premier Jeff Kennett . It developed out of Mayne's "jeffed.com" website, which in turn developed out of his aborted independent candidate campaign for Kennett's seat of Burwood . Longstanding Crikey political commentators/reporters have included
64-418: A California-based but Delaware-registered corporation may be "pseudo-foreign" under California law and therefore have to comply with California law. Taking an activist approach to public investing may produce returns in excess of those likely to be achieved passively. A 2012 study by Activist Insight showed that the mean annual net return of over 40 activist-focused hedge funds had consistently outperformed
96-543: A co-founder and writer, Hugo Kelly, had been sacked on the grounds of professional misconduct, but Kelly maintained that Crikey had folded to political pressure and it had "no guts". Several staff members left in the period 2013–2014, including senior reporter Andrew Crook and media editor Matthew Knott. The cartoon First Dog on the Moon was published on Crikey until 2014, when writer Andrew Marlton moved to Guardian Australia . In March 2014, Crikey editor Jason Whittaker became
128-419: A company owned by the former editor-in-chief of The Sydney Morning Herald , Eric Beecher , for A$ 1 million. Under the agreement, Mayne has occasionally written for the email newsletter. Under Private Media's stewardship, the publication aimed for a more "professional" style by avoiding the use of in-house nicknames and other idiosyncrasies of the original Crikey. In February 2006, The Age reported that
160-472: A company with the intention to influence leadership must be accompanied by a Schedule 13D filing; investors who do not intend to become activists may file a Schedule 13G instead. Historically, investors were required to mail separate ballots when trying to nominate someone of their own to the board, but beginning in 2015, proxy access rules began to spread driven by initiatives from major institutional investors, and as of 2018, 71% of S&P 500 companies had
192-615: A comparatively small stake in a company, are seeking to influence the company's environmental and social performance. Some of the recent activist investment funds include: California Public Employees' Retirement System (CalPERS), Icahn Management LP , Santa Monica Partners Opportunity Fund LP, State Board of Administration of Florida (SBA), and Relational Investors, LLC . Due to the Internet, smaller shareholders have also gained an outlet to voice their opinions. In 2005, small MCI Inc. shareholders created an online petition to protest
224-664: A desirable target for an activist investor. Lately, both scholars and practitioners started using machine learning methodologies to predict both targets and activists. Any shareholder, including non-institutional retail investors , may submit a shareholder proposal in the United States, and between 1934 and the mid-1980s these shareholders typically submitted proposals. One estimate placed institutional owners at 68% of shares and retail at 32% of shares, but 98% of institutional owners vote and only 28% of retail owners vote. Institutional shareholders, however, often vote automatically upon
256-901: A fat premium, often at the expense of the other shareholders. More recently, activist investor Phillip Goldstein suggested that the role of the activist investor has moved from green mail to one of being a catalyst to unlock value in an underlying security, and says that the public perception of activist investors as "corporate raiders" has dissipated. In 2019, notable activist investors included Starboard Value , Icahn Enterprises , Elliot Management , and Third Point . In 2019, mutual funds such as Wellington Management Company had begun to show signs of activism. Examples of activist investors in Asia include Oasis Management . Activist investors advertise their message out in various ways including postal mail, websites, and social media. As of 2018, there had been an average of 272 activist campaigns per year in
288-404: A formal proxy context. Shareholder activists are making their mark on mergers and acquisitions as well – a 2015 survey of corporate development leaders found that 60% of respondents saw shareholder activism affecting transaction activity in their industry. Increasingly, however, the non-financial form of shareholder activism is affecting companies in a range of sectors. Shareholders, often with
320-550: A monthly print magazine; the arts and culture webzine , InReview ; The New Daily ; The Southern Cross ; InQueensland ; and other online products. The Independent Weekly , established in September 2004, was a weekly independent newspaper published and circulated in Adelaide, released on Saturdays. The newspaper's owners were Solstice Media. The newspaper launched an online subscriber daily news service called InDaily on
352-420: A proxy access rule. Votes for the board may be "straight" or "cumulative". In straight voting (aka statutory voting), shareholders get one vote per share on all ballot questions (e.g., candidates for the board of directors or shareholder proposals). In cumulative voting , a shareholder receives a general vote for however many number of ballot questions there are. The votes can then be all cast for (or against)
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#1733085419544384-452: A single ballot question, which makes it easier for minority shareholders to elect candidates. There has also been a movement toward "majority" voting, where a candidate must receive the majority of votes. Most large corporations are incorporated in Delaware due to the well-developed Delaware General Corporation Law ; in Delaware, cumulative voting is optional, but exceptions exist; for example,
416-588: A week in November 2010 from a peak of 12,000 in mid-2008. After the cessation of printed publication, the InDaily newsletter and website remained free to its 30,000 subscribers. The InDaily website seeks voluntary donations to "support independent journalism". Solstice Media has run the "40 Under 40" event since 2018, whereby they recognise leadership in South Australians under 40 years of age. The event comprises
448-538: Is an Australian publisher based in Adelaide , South Australia . Established in 2004, it was known for publishing the weekly tabloid newspaper The Independent Weekly . As of 2024 Solstice publishes InDaily , which was initially the online subscriber daily news service of the weekly newspaper but replaced the printed version entirely in November 2010. Solstice also publishes CityMag , a weekly digital magazine and quarterly print magazine established in 2013; SA Life ,
480-502: Is chair of Private Media. (Beecher is also chair of Solstice Media , which publishes InDaily and the superannuation-funded general news site, The New Daily .) Private Media formerly owned Daily Review (2013–2015) and Women's Agenda (2012–2016). Activist shareholder Shareholder activism can take any of several forms: proxy battles , publicity campaigns, shareholder resolutions , litigation, and negotiations with management. Daniel Loeb , head of Third Point Management ,
512-613: Is notable for his use of sharply written letters directed towards the CEOs of his target companies. Activism may help to address the principal-agent problem where the management (agents) do not adequately respond to the wishes of the principals (investors) of publicly traded companies. In the 2010s, investments in the activist asset class grew, with activists receiving coverage by the media and positive attention from investors. Activists have typically engaged in adversarial campaigns, but have also in some cases been able to acquire board seats with
544-669: The Change to Win Federation often engage in shareholder proposals. The Shareholder Rights Group is a coalition of shareholder proposal advocates. Organizations such as the Interfaith Center on Corporate Responsibility (ICCR) , As You Sow and Ceres use shareholder resolutions, and other means of pressure, to address issues such as sustainability and human rights. For an analysis of the hundreds of annual shareholder resolutions, see Proxy Preview. Solstice Media Solstice Media
576-838: The 1940s and 1950s. Notable investors included Cyrus S. Eaton , Phoenix Securities Corporation , Benjamin Graham , J. Paul Getty , and Malcolm Chace . Activism was likely limited by the lack of ownership dispersion, meaning that many corporations had large shareholders with sizable blocks (10 to 20% of total shares) who already exerted significant control over the corporation. Notable activist investors include: Isaac Le Maire (1558–1624), Carl Icahn , Nelson Peltz ( Trian Partners ), Bill Ackman ( Pershing Square ), Daniel Loeb ( Third Point Management ), Barry Rosenstein , Larry Robbins ( Glenview ), David Einhorn , Gregg Hymowitz (EnTrust Global), Larry Fink ( BlackRock ), Christer Gardell ( Cevian Capital ), and Ryan Cohen . During
608-405: The 1980s, activist investors such as Carl Icahn and T. Boone Pickens gained international notoriety and were often perceived as " corporate raiders " for acquiring an equity stake in publicly owned companies, like Icahn's investment in B.F. Goodrich, and then forcing companies to take action to improve value or rid themselves of rebel intruders like Icahn by buying back the raider's investment at
640-429: The 2005, 2006, and 2007 budget "lock-ups" in which financial journalists are shown the federal budget papers some hours in advance so that their publications can report the budget in depth as soon as it is released. The grounds were that Crikey was not considered to be part of the " mainstream media ". On 1 February 2005, it was announced that Stephen Mayne had sold Crikey to Private Media Partners (later Private Media),
672-720: The MCI/Verizon merger. Corporations in 18th-century Europe were privileged and relatively uncommon, but in the United States became much more common, starting with 300 in the 1790s and expanding by around 26,000 between 1790 and the 1860s, resulting in about 15 times the corporations in Great Britain by 1830. These early corporations contained various provisions for corporate governance , including restricted charters, bylaws, prudent-mean voting rules, dividend payments, and press coverage. From 1900 to 1950, about 1.22 "offensive" activist initiatives occurred per year, with more occurring in
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#1733085419544704-570: The MSCI world index in the years following the global financial crisis in 2008. Activist investing was the top-performing strategy among hedge funds in 2013, with such firms returning, on average, 16.6% while other hedge funds returned 9.5%. Shareholder activism directed at both European and American companies has been surging. A 1996 study found that larger firms with higher institutional holdings made firms more likely to be targeted by activist investors. Researchers also try to understand what makes company
736-625: The United States, including 47 proxy contests. About 47% of targeted companies were outside of the United States. As of 2020, passive investors such as index funds by Vanguard as well as non-activist but still active management investors such as mutual funds play a significant role in corporate governance. These firms use proxy advisory firms such as Institutional Shareholder Services to receive recommendations on how to vote on shareholder proposals. Activist investors are often hedge funds funded by accredited investors and institutions. In 2019, institutions were demanding more upfront explanation of
768-523: The activist ideas before funding, and in some cases requiring that the funds be placed into special purpose vehicles specifically for the project. Activist hedge funds, which are hedge funds that "take concentrated positions in the equity of public corporations and actively engage with corporate managers" can address the principal-agent problem and limit self-dealing by providing management with high-powered incentives to increase value. Shareholder activism can be categorized as "offensive" or "defensive"; in
800-470: The advice of proxy advisory firms ; allowing retail shareholders to vote based upon a guideline ("standing voting instructions") has been proposed to increase their involvement. Various websites have been created to facilitate retail involvement, including Moxy Vote, Shareowners.org, United States Proxy Exchange and ProxyDemocracy.org, but over time these generally shut down. Labor unions, including through pension funds such as CalPERS coalitions such as
832-412: The anniversary of its first year in operation. In March 2006, The Independent Weekly switched to a tabloid format and moved its release from Sunday to Saturday. The Independent Weekly ceased physical publication in November 2010 and was replaced by InDaily . The Independent Weekly featured articles of critical and intellectual substance, especially with regard to local issues, and was a champion of
864-552: The arts in Adelaide. Publisher Paul Hamra, as acting editor, changed the structure of the organisation from utilising a full staff of reporters to using contributors and articles sourced from Fairfax , AFP and The Independent . Its international coverage was sourced largely from The Washington Post , the Los Angeles Times and The Independent in London. The newspaper sold for A$ 2.50 . Its circulation dropped to less than 8000
896-417: The chief executive of Private Media, Will Hayward, claimed victory, saying the decision amounted to a "substantial victory for legitimate public interest journalism". Crikey is an Australian online news outlet, comprising a website and email newsletter available to subscribers. It aims to "explain and dissect the news agenda for an intelligent, skeptical, socially and politically aware audience... to understand
928-471: The former Liberal insider Christian Kerr (who originally wrote under the pseudonym "Hillary Bray" ), Guy Rundle , Charles Richardson, Bernard Keane , Mungo MacCallum and Hugo Kelly. In 2003, Mayne was forced to sell his house to settle defamation cases brought by the radio presenter Steve Price and the former Labor Party senator Nick Bolkus over false statements published about them by Crikey. Staff of Treasurer Peter Costello banned Crikey from
960-500: The founding editor of Private Media's new publication The Mandarin . In 2022, following a war of words in which Crikey invited media proprietor Lachlan Murdoch to sue, Murdoch commenced defamation action against Crikey for an article by Bernard Keane that suggested that Murdoch was an "unindicted co-conspirator" in the January 6 United States Capitol attack . On 21 April 2023, Murdoch dropped legal proceedings against Crikey. In response,
992-441: The latter case, an existing shareholder attempts to correct some deficiency, while offensive activists build a position with the intention to agitate for change. Shareholders can also initiative a derivative suit to force action by the corporation. Shareholders can also engage in a securities class action but these are typically not associated with activism. In the United States, acquisition of over 5% of beneficial ownership in
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1024-414: The news from a truly independent perspective". As of June 2024 Sophie Black is editor-in-chief. Private Media is an independent media company. As of June 2024, it publishes four brands: Crikey, The Mandarin (since 2014), SmartCompany, and Inc.Australia. SmartCompany caters to small to medium business owners and managers, while Inc.Australia is for entrepreneurs. Will Hayward is CEO, while Eric Beecher
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