The Activism Vulnerability Report
With the rise of shareholder activism in recent years and its evolution into an asset class of its own, companies should prepare themselves for targeted shareholder activity by assessing their vulnerability to such actions.
To accomplish this, FTI Consulting built the Activism Screener (the “Screener”), a proprietary model that evaluates U.S. and Canadian public companies’ vulnerability to shareholder activist pressures, based on a variety of quarterly reported metrics. The Screener was built and refined in 2017 and 2018 in collaboration with experts across FTI Consulting’s practices, drawing expertise from corporate finance, corporate governance, and forensic and technical accounting professionals.
While some industries are more susceptible than others, every company needs to be cognizant of its key vulnerabilities and how it stands compared to industry peers. To help predict activist targets, FTI Consulting has built a proprietary Activism Screener that uses a variety of quarterly reported metrics to determine the vulnerability of U.S. and Canadian public companies to shareholder activist pressures. This inaugural issue of FTI Consulting’s quarterly Activism Vulnerability Report will summarize the Screener’s results and evaluate 25 well-known industries based upon an average of the aggregate vulnerability scores of the components of each industry. FTI Consulting plans to publish the Report quarterly as financial data and other common publicly disclosed information become available.
This report provides a starting point for companies and their advisors seeking to locate their most prevalent vulnerabilities from an external perspective. Contact us if you would like to discuss how to create a long-term, actionable plan to address these vulnerabilities and to increase the confidence of all investors, including those not yet present.