Shareholder activists are flexing their muscles with a new exuberance this proxy season, running more insurgent slates in proxy contests, stalking larger targets and enjoying a higher rate of success. A recent New York Times DealBook survey finds that 66 percent of insurgent slates have been at least partially successful this year. Almost certainly, this is because the principal proxy advisers Institutional Shareholder Services (ISS) and Glass, Lewis & Co. have backed the insurgents some 73 percent of the time in 2013.
In short, incumbent boards are under siege, particularly at underperforming companies. That may be salutary. But with success can come hubris. A dark side to this new activism is now looming.
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