Marty Lipton Offers Historial Perspective On Shareholder Activism
The current breed of activists engage in behavior that leaves companies "wounded" by pressuring them to sell profitable divisions, take on debt to pay generous dividends, and cut R&D.
Martin Lipton, a co-founder of Wachtell, Lipton, Rosen & Katz, has been a staunch opponent of unfettered, aggressive shareholder activism since the 1970s. In his view, the current breed of activists engage in behavior that leaves companies "wounded" by pressuring them to sell profitable divisions, take on debt to pay generous dividends, and cut research and development. He notes that a recent Boston Consulting Group study advises companies to "be their own activist" - a dangerous stance.
