Legg Mason chief Mark Fetting seemed thrilled Monday when he announced that billionaire investor Nelson Peltz would take a seat on the big money manager's board.
"We welcome Nelson, whose firm is a significant investor in Legg Mason," Fetting said in prepared propaganda. "We look forward to benefiting from his insights and experiences as we work together."
The Roman Senate must have sounded similarly enthusiastic when it let in the Visigoths in 410 A.D. At least the barbarians left after a few days.
Peltz looks like he's there for a while, pulling up a chair to deliver his unique brand of investment "activism" to one of Baltimore's most important companies.
The financial crisis and some bad bets had already cast a shadow on Legg's future, although its stock and mutual funds have recovered smartly since last winter.
The arrival of Peltz and his 4.3 percent ownership stake increases the uncertainty. Given what Legg has been through, it was hard to imagine that the pressure on Bill Miller and the firm's other money managers to perform could have been any greater. But it just intensified.
"His appearance is not good news for management," says Charles M. Elson, a business professor and corporate governance expert at the University of Delaware. "But it may be good news for the shareholders."
Investor activists aren't like the activists you see at International Monetary Fund meetings. They're a heck of a lot better dressed, and instead of waving signs on the sidewalk they're up in the corporate towers. World peace and social justice are not on the agenda.
T. Boone Pickens, Kirk Kerkorian and Carl Icahn are well-known white-collar agitators. The idea is to buy a big chunk of a troubled firm and then hassle the people in charge to get the stock price up - sometimes through a sale or breakup of the company.
But often Peltz isn't even content with back-seat driving. He'll try to take the wheel and while he's at it tell you he doesn't like the fuzzy dice on the mirror.
After acquiring at 6 percent stake in Wendy's a few years ago, he pushed out the hamburger chain's chief executive and persuaded the company to split off its Tim Horton's doughnut chain and the Baja Fresh Mexican food operation.
Peltz, who operates through Trian Fund Management, bought a piece of Tiffany & Co. and started telling the jeweler how to conduct a trade it had been plying since 1837. When he turned his sights on Heinz, Peltz told the condiment maker that its little plastic ketchup pouches were all wrong.
