With Carl Icahn’s targeting of Xerox (XRX), it’s official, activist investors are out to get female CEOs.
Part of this is the fact that they have poor defenses against said activists. There are 27 companies in the S&P 500 that have a woman CEO – just 1 of those companies have any of the three common takeover defenses in place – including staggered boards, poison pills or unequal voting rights. Reynolds American is the lone exception, but the takeover defense was in place long before Susan Cameron showed up there.
Nearly one-in-four of the men-led S&P 500 companies have at least one defense. The bigger question, I think, is; not having these takeover defenses, is that good or bad corporate governance practice?
Xerox’s Ursula Burns is just the latest to get a call from an activist this year. Nelson Peltz’s Trian Fund has been a true woman hater of late, taking on DuPont’s Ellen Kullman and Pepsico’s Indra Nooyi before that. Peltz has also been putting pressure on Mondelez’s Irene Rosenfeld.
David Tepper, the recent TerraForm activist, was part of a group with frontman Harry Wilson that went semi-activist on GM CEO Mary Barra to force her into a massive buyback.
Now, an even bigger question; is it that activists are targeting women-led companies or is it that activists really just target underperforming companies? Is it safe to assume that activists target women CEOs because they see them as easy targets? And it could be that Wall Street is simply giving women the tough turnaround jobs that prove impossible – Marissa Mayer, Yahoo (YHOO), anyone?
Just chew on this will you; takeover defenses are said to weaken shareholder rights. Hence, women-led companies score better in the corporate governance department. And there’s the strong correlation of underperforming stocks and weak shareholder rights.