New shareholder activists are emerging, and smaller companies are increasingly being targeted, according to a new report from Fitch Ratings.
Among other things, the credit-rating agency reports that it is seeing an increase in first-time shareholder activists, and those targeting more mid-cap companies instead of large caps. However, this comes amid an overall decline in shareholder activism generally.
“Greater shareholder engagement, more internally motivated restructurings and increased remuneration have taken some of the wind out of activists’ sails as companies look to beat them to the punch,” says Carla Norfleet Taylor, senior director at Fitch, in a statement.
“Nonetheless, first-time and seasoned dissidents alike are selectively launching campaigns against firms of all sizes, despite the trend towards targets with a market capitalization of US$2 billion to US$10 billion, with credit implications remaining mixed,” she says.
Fitch reports that activists’ ability to motivate change remains high, with almost 60% of activists’ demands being fully or partially adopted. The report was based on non-financial U.S. corporate campaign studies and profiles of notable activists.