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Martin Birmingham had an encounter with a shareholder activist a decade ago, and it wasn’t pleasant. In 2016, an outfit called Clover Partners out of Dallas took a stake in his company, Warsaw, New York-based Financial Institutions, and began agitating for changes to boost the share price. Eventually, it mounted an uncomfortable proxy fight. The company vowed to change some of its ways, its nominees won the shareholder vote and in 2017, Clover exited the shares. “It was a contested situation, and we did the best we could managing through it and learning what we could,” says Birmingham, CEO of…
Forging an Activist Battle Plan
The recent jump in shareholder activist campaigns has made activist defense a priority in bank boardrooms around the country. Key actions to consider include: Thinking Like an Activist Val Mack, a managing director at FTI Consulting, recommends boards start by assessing the risk of an activist attack using four key factors activists consider before taking a position: 1. Value. Does your bank’s stock appear undervalued relative to its underlying assets and comparable institutions? 2. Action. What kind of actions, such as increasing buybacks, might unlock that value? 3. Support. Would shareholders back an activist in a proxy contest? 4. Path.…
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WRITTEN BY
John Engen
Contributing Writer
John Engen is a contributing writer for Bank Director. He has more than 30 years of experience as a business journalist, writing for a variety of newspapers and magazines, and was a foreign correspondent for the Associated Press. He graduated with a degree in economics and international relations from the University of Minnesota and did his post-graduate work in Asian studies at the University of Hawai’i.