Empirical proof that activists exacerbate short-termism is strangely elusive. Indeed, such evidence as there is suggests the opposite. \u201cThe Long-Term Effects of Hedge-Fund Activism\u201d, a recent paper by Lucian Bebchuk of Harvard Law School and others, examined the roughly 2,000 interventions at companies by activist funds from 1994 to 2007. Over the five years following an intervention both the share price and the operating performance of the target company improved, on average. The operating performance got stronger towards the end of the five-year period, not weaker.<\/p>\n
This is the sort of evidence that has convinced Mary Jo White, the chairman of America\u2019s Securities and Exchange Commission, to argue in a recent speech that activist shareholders should no longer be automatically viewed negatively. These days, she said, \u201cThere is widespread acceptance of many of the policy changes that so-called \u2018activists\u2019 are seeking to effect.\u201d\u00a0 Shareholder Activists<\/strong><\/a><\/p>\n Empirical proof that activists exacerbate short-termism is strangely elusive. Indeed, such evidence as there is suggests the opposite. \u201cThe Long-Term Effects of Hedge-Fund Activism\u201d, a recent paper by Lucian Bebchuk of Harvard Law School and others, examined the roughly 2,000 … Continue reading ![\"Carl](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/02\/Carl-Icahn-300x194.jpg\")
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