TheStreet.com – Shareholder activists can’t always be bullies. Sometimes they must master the art of compromise.
A good example is the decision last week by Pershing Square’s Bill Ackman to drop his campaign against McDonald’s (MCD:NYSE – commentary – research – Cramer’s Take).
Pershing, which used its 4.5% stake to push for an elaborate restructuring, can argue that it precipitated meaningful change at the burger chain. In announcing its fourth-quarter earnings, McDonald’s unveiled plans to sell 1,500 company-owned restaurants within three years and said it would buy back $1 billion of stock in the first quarter, something that is always music to the ears of activists. The hedge fund also won a promise from McDonald’s for more financial disclosure about its company-owned restaurants.
Still, the result at McDonald’s wasn’t a total triumph. While Ackman can claim victory on the 1,500 refranchisings, he was initially pushing for a more complete spinoff of McOpCo, the unit that runs all 8,000 of McDonald’s company-owned restaurants. In addition, while McDonald’s remains committed to returning up to $6 billion to shareholders over the next few years, Ackman’s original plan advocated a $13 billion buyback.
