Ackman, Icahn Respond To Berkshire Criticism Of Activism

May 5 2014 | 2:20pm ET

Berkshire Hathaway’s second-in-command thinks shareholder activism is bad for America. Two of the strategy’s most prominent representatives agree—to a point.

Carl Icahn and Pershing Square Capital Management’s William Ackman, until a rapprochement last month bitter enemies, said they agreed with Charles Munger’s criticism of “short-term” activism. But they made clear that they don’t consider themselves short-termers.

“I 100% agree with them,” Ackman said. The Pershing Square chief, who attended Berkshire’s annual meeting this weekend in Omaha, Neb., said that pushing for short-term gains without long-term benefits to a company is “bad for markets, and it’s bad for shareholders.”

By contrast, Pershing Square typically holds its investments for “four, five, six years or more,” he said.

For his part, Ichan said he understands “and somewhat agree with their criticisms that some activists are going for a short-term pop.” But, he warned, “that doesn’t mean you throw the baby out with the bath water. One of the most important things we need in this country is to keep companies accountable.”

Munger told the assembled Berkshire shareholders of activism, “I don’t think it’s good for America.” And he and Berkshire chief Warren Buffett warned that the menace is here to stay.

“They are certainly attracting more and more money,” Buffett said. “I don’t think it will go away, and I think it scares the hell out of a lot of managers.”


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...