This paper examines the relationship between hedge fund activism and target firm performance, executive compensation, and executive wealth. It introduces a theoretical framework that describes the activism process as a sequence of discrete decisions. The methodology uses regression analysis on a...

Hedge funds are more likely to target firms with high levels of institutional ownership and demonstrate a preference for short-term focused institutional investors. Hedge fund activism generates short run and long run abnormal returns without increasing stock return volatility. Regardless of...