Shareholder activism is on the rise recently, especially within the technology sector which has been traditionally immune to this type of activity. It appears it is now also set to become a hot topic of the Presidential campaign. Hilary Clinton is expected to lay out a package of tax measures to tackle what she’s called “quarterly capitalism” and “hit-and-run” activists.
According to a report from S&P Capital IQ covered by CNBC, there have been 64 cases of shareholder activism in 2015 so far, 3½ times as much as a decade ago and on pace to overtake the 102 cases observed in 2014. “We have reached a golden age of investor activism,” S&P Capital IQ said in the report. A rise in shareholder activism appears to have had implications on the way some companies are conducting business. An analysis conducted for WSJ by S&P Capital IQ shows that companies in the S&P 500 increased their spending on dividends and buybacks to a median 36% of operating cash flow in 2013 compared to 18% in 2003. The same companies cut spending on plants and equipment to 29% of operating cash flow from 33%.