By Svea Herbst-Bayliss
NEW YORK (Reuters) – A record number of shareholders activated campaigns in global companies in 2024, a Barclays report showed on Thursday, as their pressure tactics produced strong returns, and further growth is likely this year.
“Looking back to 2024, it almost feels like there's a shareholder revolt,” said Jim Rossman, global head of shareholder advisory at Barclays.
In 2024, 160 investors such as hedge funds pushed companies to make moves such as improving strategy and operations or firing chief executives, including 45 who used the strategy for the first time, Barclays said.
That's up more than 18% from 135 investors in 2023, which included 31 first-timers. The number of campaigns launched last year, 243, was more than 229 in 2023 but slightly below the record of 249 in 2018.
Looking ahead to 2025, bankers, lawyers and analysts believe more companies will face shareholder attacks as last year's profits and expectations for continued equity market strength bolster investors.
“Investors are no longer willing to sit and wait for promised improvements and are saying, 'We want the companies in which we are currently invested to change,'” Rossman said.
Although 2024 performance figures are not yet available, investors said several high-profile companies had profits of nearly 30% last year. The S&P 500 rose just over 23% over the same period.
Among the high-profile campaigns launched in 2024 by longtime executives were Trian Fund Management in entertainment giant Walt Disney and Elliott Investment Management in coffee chain Starbucks and Southwest Airlines.
But newcomers also flexed their muscles, holding their first campaigns.
These included Ananym Capital Management at Henry Schein, Daventry Group at Kinaxis and Firstlight Management at Sotera Health.
Investors also continued a shift seen in the past three years towards prioritizing operational and strategic improvements over mergers and acquisitions, the data showed.
More than a quarter, or 26%, of all campaign calls focused on strategy and operations, up from 19% in 2021.
Only 22% of campaigns in 2024 requested M&A moves such as divesting business units or selling a company. In 2021 when the number of global deals reached a high level, 43% of operator requirements focused on M&A.
Bankers and lawyers predict that campaigns that could lead to divestment will rise this year under the Trump administration, which they believe will be less likely to erect barriers to deals than its predecessor.
In 2024, operators aimed more than ever at chief executives. A record 27 were replaced, up from 24 in 2023 and the four-year average of 16, Barclays data showed.