The new wave of shareholder activism is is one of the best ways to stave off the heavy hand of government, CLSA analyst Mike Mayo said Wednesday.
"What we learned going into the crisis is that government wasn't doing its job and investors weren't doing their jobs, so nobody was minding the store," Mayo told CNBC's "Squawk on the Street."
"What I'd prefer to see is investors step up to the plate with this activism ... (and) do more of the heavy lifting so that Jack Lew, Treasury and government doesn't have to do as much" in terms of regulation.
Mayo was interviewed as Senate confirmation hearings for Treasury Secretary-nominee Jack Lew were taking place.
Mayo said when shareholders act as owners, such as they have recently with Morgan Stanley, Citigroup and State Street, "that's a positive development for the stock market."
It's all about "holding the feet to the fire for these executives and ensuring they're looking after my interests as a shareholder," Mayo said. "If I was talking to these managements, I would say: 'What are you doing to improve the efficiency of my company? What are you doing to improve my returns? What are you doing to hold my CEO and board of directors more accountable?'"
He cited the activist proposal from Trillium Asset Management that would require Citigroup to analyze breaking up the company, which Citigroup has fought to keep off its agenda. A ruling from the SEC is expected in the next few days, Mayo said.
"I don't see how the SEC could not allow this on the proxy for the annual meeting, and I don't see how shareholders could not say, 'Yeah we agree with this — go analyze breaking up the company and report back to us.'"
Mayo said he sees a similar opportunity at KeyCorp. "I'll go to the annual meeting and ask questions of the directors if nobody else does."
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