Activists at the Gate

Your company could be doing better. The stock is in the doldrums, and the price-to-book ratio is low. On a variety of financial measures — shareholder returns, revenue growth, operational costs, and so on — the company is underperforming its peers. Cash flow is reasonably healthy, but one of the divisions is starting to falter. Adding insult to injury, management won the last say-on-pay vote by less than a large margin. Your company, in short, is a prime target for an activist hedge fund.