and shareholders can handle the money better. At the same time, changes in corporate governance were making it easier for activists to win board seats. Between 2011 to 2014, a group at Harvard University led by professor Lucian Bebchuk campaigned to get more than 100 major companies to put their entire boards up for annual election, instead of staggering directors in multiyear terms. Annual elections give activists leverage because boards can be overturned in one fell swoop rather than over a series of years. In 2000, 300 of the S&P 500 companies had staggered boards. This year, only 49 do. Barry Rosenstein found few investors interested in activism when he launched Jana Partners in 2001. Photo: ERIC THAYER/REUTERS Perhaps the most important change, according to both activists and detractors, is that activists got more sophisticated about analyzing how to improve operations at target companies. They recruited executives with experience in the relevant industries to work alongside them on campaigns. In 2012, for example, Pershing Square Capital Management LP ’s against Ltd. When Pershing Square called the former boss of rival Co. , Hunter Harrison, for advice, it found a willing partner. Pershing Square campaigned with Mr. Harrison as its CEO candidate, eventually and putting Mr. Harrison in charge. Mr. Rosenstein’s Jana Partners, which now employs more than 50 and runs more than $10 billion in assets, typically presents companies with
and shareholders can handle the money better. At the same time, changes in corporate governance were making it easier for activists to win board seats. Between 2011 to 2014, a group at Harvard University led by professor Lucian Bebchuk campaigned to get more than 100 major companies to put their entire boards up for annual election, instead of staggering directors in multiyear terms. Annual elections give activists leverage because boards can be overturned in one fell swoop rather than over a series of years. In 2000, 300 of the S&P 500 companies had staggered boards. This year, only 49 do. Barry Rosenstein found few investors interested in activism when he launched Jana Partners in 2001. Photo: ERIC THAYER/REUTERS Perhaps the most important change, according to both activists and detractors, is that activists got more sophisticated about analyzing how to improve operations at target companies. They recruited executives with experience in the relevant industries to work alongside them on campaigns. In 2012, for example, ’s Pershing Square Capital Management LP against Ltd. When Pershing Square called the former boss of rival Co. , Hunter Harrison, for advice, it found a willing partner. Pershing Square campaigned with Mr. Harrison as its CEO candidate, eventually and putting Mr. Harrison in charge. Mr. Rosenstein’s Jana Partners, which now employs more than 50 and runs more than $10 billion in assets, typically presents companies with
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