Shareholder activism

Corporations in 18th-century Europe were relatively uncommon, but in the United States they were more prevalent, 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 provisions for corporate governance, including restricted charters, bylaws, prudent-mean voting rules, dividend payments, and press coverage. By the 2010s shareholder activism which predominantly occurred in places such as the US and Europe began to expand into Asia and quickly surpassed the amount of activism occurring in Europe. == Notable investors and funds ==

Notable activist investors include: Isaac Le Maire (1558–1624), Carl Icahn, Nelson Peltz (Trian Partners), Larry Fink (BlackRock), Christer Gardell (Cevian Capital), and Ryan Cohen. During 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 and then forcing them to take action to improve value or rid themselves of activist investors by buying back the raider's investment at a premium, often at the expense of 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. 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. In 2019 and beyond, notable activist investors included Starboard Value, Icahn Enterprises, Elliott Investment Management, and Third Point. A prominent campaign by hedge fund Engine No. 1 resulted in them winning three seats on Exxon's board in 2021, with the objective of influencing the company to reduce its reliance on fossil fuels. Examples of activist investors in Asia include Oasis Management, David Webb, and Yoshiaki Murakami. Outreach strategies Activist investors advertise their message out in various ways including postal mail, websites, and social media. Funding Activist investors are often hedge funds funded by accredited investors and institutions. In 2019, institutions were demanding more upfront explanation of 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.'''''' == Offensive versus defensive ==

Shareholder activism can be categorized as "offensive" or "defensive"; in 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 initiate 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. == Laws ==

In the United States, acquisition of over 5% of beneficial ownership in 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. Proxy access 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 a proxy access rule. Voting 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) 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, a California-based but Delaware-registered corporation may be "pseudo-foreign" under California law and therefore have to comply with California law. == Performance ==

Research has suggested that activist investment strategies may generate returns higher than those achieved through passive investing. A 2012 study by Activist Insight found that the mean annual net return of more than 40 activist-focused hedge funds consistently outperformed the MSCI World Index in the years following the 2008 financial crisis. Activist investing continued to draw attention in subsequent years. In 2013, it was reported as the top-performing hedge fund strategy, with activist funds earning average returns of 16.6%, compared to 9.5% for the hedge fund industry overall. == Research and statistics ==

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 a desirable target for an activist investor. Since the late 2010s scholars and practitioners have started using machine learning methodologies to predict both targets and activists. As of 2018, an average of 272 activist campaigns were initiated each year in the United States, including 47 proxy contests. with Europe and Asia seeing increases in the CAGR of such campaigns of over 40%, between 2016 and 2020, companies in Australia, Argentina, Brazil and Canada seeing increases of over 20%, compared to activist campaigns in the US increasing by 3%. In H1 2025, the business sectors that experienced the highest volume of shareholder activism campaigns globally were Industrials (22%), Technology (20%) and Healthcare (12%), with Industrials most targeted in APAC, Technology most targeted in the US and the Healthcare sector most targeted in Europe. == Retail involvement ==

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. 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. == Political and labor involvement ==

Labor unions, including through pension funds such as CalPERS coalitions such as the Strategic Organizing Center often engage in shareholder proposals. The Shareholder Rights Group is a coalition of shareholder proposal advocates. Socially responsible investing 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. == See also ==