Lazard's 2019 Annual Review of Shareholder Activism

Reports and studies — New York, Financial Advisory, Shareholder Activism

January 15, 2020

Key observations from 2019 report include: 

Activist activity returns to multi-year trend after record 2018

  • 187 companies targeted by activists, down 17% from 2018’s record but in line with multi-year average levels
  • Aggregate capital deployed by activists (~$42bn) reflected a similar dip relative to the ~$60bn+ level of 2017/2018
  • A record 147 investors launched new campaigns in 2019, including 43 “first timers” with no prior activism history

Activism against non-U.S. targets accounted for ~40% of 2019 activity, up from ~30% in 2015

  • Multi-year shift driven both by a decline in U.S. targets and an uptick in activity in Japan and Europe
  • For the first time, Japan was the most-targeted non-U.S. jurisdiction, with 19 campaigns and $4.5bn in capital deployed in 2019 (both local records)
  • Overall European activity decreased in 2019 (48 campaigns, down from a record 57 in 2018), driven primarily by 10 fewer campaigns in the U.K.
  • Expanded activity in continental Europe – particularly France, Germany and Switzerland – partially offset this decline

Record number of M&A-related campaigns

  • A record 99 campaigns with an M&A-related thesis (accounting for ~47% of all 2019 activity, up from ~35% in prior years) were launched in 2019
  • The $24.1bn of capital deployed in M&A-related campaigns in 2019 represented ~60% of total capital deployed
  • The technology sector alone saw $7.0bn put to use in M&A related campaigns

Activist influence on boards continues

  • 122 Board seats were won by activists in 2019, in line with the multi-year average
  • Consistent with recent trends, the majority of Board seats were secured via negotiated settlements (~85% of Board seats)
  • 20% of activist Board seats went to female directors, compared to a rate of 46% for all new S&P 500 director appointees
  • Activists nominated a record 20 “long slates” seeking to replace a majority of directors in 2019, securing seats in two-thirds (67%) of the situations that have been resolved
  • Actively managed funds saw ~$176bn in net outflows through Q3 2019, compared to ~$105bn in 2018 over the same period
  • ESG focus continues to grow: over the past two years, the AUM represented by signatories to the UN’s Principles for Responsible Investment increased ~26% to ~$86tn, and the number of assets in ESG-related ETFs increased ~300%
  • The Business Roundtable’s “Statement on the Purpose of the Corporation” emphasized the importance of companies incorporating the interests of all stakeholders, not just shareholders, into their decision-making processes
  • The SEC’s guidance on proxy advisors sought to increase accountability and oversight standards in their company evaluations

Download the review to read the findings in full.


Lazard’s Rich Thomas on 2019 Shareholder Activism Trends

January 2020
What has fueled the resurgence in UK shareholder activism to date? Managing Director and Head of European Shareholder Advisory Rich Thomas discusses key themes and trends catalyzing more public and aggressive activism. What can stakeholders expect as we look forward? Tune in to hear Rich’s insights.