Wall Street's top banks face a growing chorus of activist investors with which they must contend.
But certain CEOs probably need not worry — as long as they have Warren Buffett in their corner.
Activist investors have nudged companies in other sectors to bump up dividends and make management changes for years, emboldened to take on increasingly bigger targets.
More recently, as expected, they have turned to Wall Street banks to see if they can juice returns.
This week, ValueAct Capital revealed a position in Morgan Stanley, sending the stock up. Activists cannot force Wall Street banks into dividends or buybacks (as those moves must be approved by the Federal Reserve) — so changes to the C-suites are one potential route for activists to take.
Buffett isn't a major stakeholder in Morgan Stanley, but he has a keen interest in Bank of America, after he put up a $5 billion bet on the bank in 2011 that proved wise. Further, Buffett has supported chairman and CEO Brian Moynihan through thick and thin, including last year's successful campaign to appoint the CEO to the chairman role — a vote which ran into opposition with some of the bank's other investors.
"Buffett has a lot of leverage because he owns a lot of stock," said Christopher Whalen, senior managing director at the Kroll Bond Rating Agency. "They don't want him to sell. It would take the stock down, so he can exercise significant influence on management."