The CEOs Delivering Consistent Shareholder ReturnsFinancial Times analysis reveals value creation by bosses of 660 US, UK and European listed companies. 01 November 2021
Patrick Mathurin and Chris Campbell of the Financial Time look into the CEOs performance at the largest companies. As pointed out in their article, while activists do not always explicitly demand leadership change, their demands can accelerate transition. The FT’s analysis looks at which chief executives of listed companies have created value and which have not, by calculating annualised returns during the tenures. Of 660 bosses analysed across three major indices — the S&P 500, FTSE 100 and Stoxx 600 excluding UK constituents — 49, or roughly 7 per cent, were found to have negative annualised returns.
Four CEOs exceeded average annual returns of 100 per cent, each of whom only just met the three-year tenure mark. Twelve, including ExxonMobil, GSK and SSE, have faced activist pressure in the past year — although some disputes have since been resolved. Many experts say the actual number of companies targeted by activists is at least double what has been publicly announced, given that many campaigns take place behind closed doors.
“The days of the imperial CEO acting alone are no longer,” commented Ali Saribas, a partner at SquareWell who advises companies on activist situations. “Investors are increasingly focused on strengthening boards as a collective unit.” Investors appear ever more comfortable voicing their opposition to boards and coming together to do so, especially when it comes to environmental concerns.
You can access the full article here (subscription required).
Activist investors are expected to launch more and bolder campaigns for change among European companies in the year ahead, advisers told Reuters, after a record number in 2023.
AQTION, a subsidiary of SquareWell Partners, published its inaugural study – ‘Stewardship in AQTION’ – which details how the world’s largest 65 asset managers and owners steward their portfolio companies and how they incorporate extra-financial considerations into their investment decision-making processes.
Carl Icahn is preparing for a second board battle at gene-sequencing company Illumina after shareholders elected his candidate, Andrew Teno, to the company’s board and ousted the chairman, John Thompson, in May. Icahn then successfully pushed out former CEO Frances DeSouza in June.