Reputation and Investor Activism

52 Pages Posted: 12 Sep 2015 Last revised: 17 Apr 2018

See all articles by Travis L. Johnson

Travis L. Johnson

The University of Texas at Austin

Nathan Swem

Board of Governors of the Federal Reserve System

Multiple version iconThere are 2 versions of this paper

Date Written: April 4, 2018


We show that reputation plays a key role in the success of activist campaigns. We model reputation as target managers' belief about the activist's willingness to initiate a proxy fight. In our model, managers "settle" with high reputation activists by making changes to corporate policy without a proxy fight. We present empirical evidence supporting our model's predictions: managers more frequently raise payouts, replace CEOs, add or replace board members, engage in a merger or acquisition, and initiate restructurings without proxy fights when targeted by high reputation activists.

Keywords: Reputation, investor activism, governance, hedge funds, proxy fights

JEL Classification: G23, G34, G35

Suggested Citation

Johnson, Travis L. and Swem, Nathan, Reputation and Investor Activism (April 4, 2018). Available at SSRN: or

Travis L. Johnson (Contact Author)

The University of Texas at Austin ( email )

2110 Speedway Stop B6600
Austin, TX Texas 78712
United States
6178995325 (Phone)


Nathan Swem

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Register to save articles to
your library


Paper statistics

Abstract Views