Insightia has released its latest statistical analysis of global trends in shareholder activist activity for Q1 2021.   Some key findings are below.

Global trends

• Very quiet: Globally, only 247 companies were publicly subjected to activist demands in Q1 2021. According to the report, this is the lowest level of activity in an opening quarter in over the past seven years.
• Most active regions:
  • Levels of activity continue to be highest in the US where 169 companies were targeted in Q1 2021.
  • The next most active regions were: Australia (12 companies targeted); Japan (11 companies targeted); and Canada, UK, the republic of Korea (all with 8 companies targeted).
  • Activity was lowest in Malaysia, Austria, Finland, Czech republic and New Zealand (all had only one company targeted during the period).
• Sectors most targeted: Globally, financial services companies were the most targeted, accounting for 15% of the overall total number of companies publicly subjected to activist demands. Industrials (14%), health and consumer cyclical (both 13%) were the next most targeted sectors.
• Large cap companies were the most targeted (accounting for 37% of the total number of companies publicly subjected to activist demands).

Proxy voting

• Pay revolts increased:
  • 49 companies faced pay revolts (ie 20% or more votes against) in Q1 2021. According to the report, this is highest proportion in recent years.
  • Pay revolts were most common in the following sectors: 1) consumer defensive (26%); 2) healthcare (25%); 3) consumer cyclical (21%); 4) technology (18%); and 5) industrials sector (17%).

• Support for directors (generally) decreased:
  • Overall, the level of support for directors decreased across all sectors with the exception of the funds sector where support increased from 97.3% in 2020 to 98% in 2021.
  • The drop in the level of support for directors was greatest in the financial services (drop in support from 97.6% in Q1 2020 to 94.9% in Q1 2021) and real estate sectors (97.3 in Q1 2020 to 94.8% in Q1 2021).

Australia

• The number of Australia-based companies publicly subjected to activist demands in Q1 2021 was slightly up on the same period in 2020 (10 in Q1 2020 vs 12 in Q1 2021). For context, this is substantially down on 2018/2019 levels (27 companies were targeted during the opening quarters in each case).
• The basic materials and technology sectors were by far the most targeted (each accounting for 25% of the overall total number of companies targeted during the period)
• Board-related demands were the most common accounting for 47% of demands overall.
• Activists have so far secured six board seats. 50% of this total were secured through settlements.

[Source: Activist Insight report: Shareholder Activism in Q1 2021]