Meagan Reda Quoted in Agenda on Activist Campaigns Targeting CEOs

Olshan Shareholder Activism partner Meagan Reda was recently quoted in an article in Agenda (subscription required) on the increased frequency of activist campaigns targeting CEO performance or explicitly requesting a CEO change over the past year. Even when a campaign does not target a CEO explicitly, CEO departures are more likely if an activist wins board seats. “If a shareholder surfaces targeting a CEO,” Meagan said, “the board needs to look deeply at the root of the issues and what is causing the performance problems outlined in public. Obviously tensions are higher when the CEO is involved.” She adds that, “In the past, institutional investors and other shareholders often saw an activist targeting the CEO as destabilizing to the company, but as the sentiment has changed and track records improved, institutional investors have become more comfortable with supporting a CEO change.” Moreover, Meagan noted that CEO misconduct can also be the subject of an activist campaign, particularly after the height of the MeToo movement in 2017 and 2018: “Boards can’t turn a blind eye to bad behavior, so more CEOs are being held accountable. An activist may have more success in getting them ousted from a company in these situations.” She also noted that those with a good CEO candidate lined up are typically more successful. Meagan concluded that activist scrutiny of CEOs is not expected to subside anytime soon: “I don’t see an era where CEOs are not targeted in some manner.”