IR Monitor – 21 January 2026

In this week’s newsletter:

• Japan’s activists grapple with a new problem — success. In the opinion of the Financial Times, “swelling sizes make it harder to deploy capital” 
• People are worried about share buybacks: the worries constitute incorrect economic analysis, according to Matt Levine at Bloomberg, but they are politically appealing 
• AI layoffs are looking more and more like corporate fiction: “companies may be using the technology as a cover for routine headcount reductions”. Fortune Magazine suggests that the primary motivation for this rebranding of job cuts is investor relations
• The case for high CEO pay: CityAM argues that attracting and retaining the right person for the top job cannot be done on the cheap 
• The case against high CEO pay: the Wall Street Journal contends that promising CEOs the moon in terms of compensation hasn’t been a great way to generate results 
• And finally … the GIF is not a reliable medium for Investor Relations. On the contrary, a working paper from the NBER suggests that GIF sentiment is a proxy for misperceptions 

This week’s news

Japan’s activists grapple with a new problem — success

Shareholder activism in Japan has shifted from fringe pressure to a central force in corporate change – and activists are now grappling with the consequences of its own success, the Financial Times discusses. Years of strong returns have drawn in global pensions and endowments, swelling activist funds to a scale where finding deployable opportunities is becoming harder. As capital piles up, advisers in Tokyo expect a turn towards more forceful strategies from 2026, including outright takeover bids and challenges to management-led buyouts. Funds are increasingly targeting larger, politically sensitive groups, from utilities to state-linked businesses, with players such as Elliott Management and Palliser Capital stepping into the spotlight. The rise in activism is also feeding private equity deal flow and pushing up prices, benefiting minority shareholders while raising risks for boards and investor relations teams alike. 

People are worried about share buybacks – Bloomberg

Stock buybacks are in the political crosshairs again, as policymakers look for ways to push companies to lower prices without resorting to blunt tools such as price controls, according to Matt Levine at Bloomberg. The argument gaining traction is less about profits per se and more about how excess cash is used: if companies are funnelling record earnings into repurchases rather than investment or price cuts, buybacks become an easy target. That logic is now filtering into housing policy. In comments to The Wall Street Journal, Bill Pulte, head of the Federal Housing Finance Agency, questioned why homebuilders are spending heavily on buybacks while affordability deteriorates. He suggested government support via Fannie Mae and Freddie Mac should not indirectly finance shareholder returns. Economically, restricting buybacks is unlikely to be a simple lever for lowering prices. Politically, however, it is far more palatable than capping profits – and that makes repurchases an increasingly exposed line item for boards and investor relations teams. 

AI layoffs are looking more and more like corporate fiction – Fortune

Claims that artificial intelligence is already driving large-scale job losses are overstated, according to a new briefing from Oxford Economics. The firm argues that companies are largely using AI as a narrative device to reframe conventional layoffs linked to over-hiring or weak demand, rather than replacing workers at scale. Framing cuts as tech-driven plays better with investors than admitting cyclical pressures. Data from Challenger, Gray & Christmas shows AI accounted for a small fraction of US job losses in 2025, dwarfed by cuts blamed on broader economic conditions. Productivity trends also fail to support an automation shock: output per worker has not accelerated, undermining the idea of widespread labour substitution. While AI adoption continues, Oxford concludes that its impact on employment remains incremental, highlighting the growing gap between AI rhetoric and measurable operational change. 

The case for high CEO pay – City AM

Running a FTSE 100 company is far from easy; the high pay of CEOs is therefore justified, argues City AM’s Christian May. While many have criticised the pay of so-called “Fat Cats,” May suggests that the realities of the role are often overlooked. CEOs face constant pressure, disruption, and a level of accountability far greater than the rest of the executive team, often resulting in uncertainty, loneliness, and an average tenure of under five years. A successful CEO can deliver widespread benefits for shareholders, employees, customers, suppliers & the wider economy, while failure can lead to an abrupt end to the role. Attracting and, crucially, retaining the right person for such a demanding and difficult role justifies the high cost. 

The case against high CEO pay – WSJ

Theo Francis, writing in the Wall Street Journal, makes the case against excessive CEO pay, arguing that nine-figure ‘moonshot’ pay packages for CEOs have largely failed to deliver the exceptional results they had promised. Inspired by Elon Musk’s Tesla pay packages, these schemes were intended to incentivise outstanding performance and shareholder returns. However, a new analysis suggests the reality has not lived up to its expectations. Around three quarters of companies using such pay schemes underperformed the S&P 500, and half of the CEOs lost some or all of their awards due to missing targets, leaving their roles, or company setbacks. CEOs have, on average, earned only a quarter of the total promised value. According to Francis, companies must strike a careful balance between genuinely incentivising long-term value and setting ambitious targets. 

And finally… the GIF is not a reliable medium for Investor Relations

The FT’s Alphaville discusses how researchers from the National Bureau of Economic Research have created GIFsentiment; this is a daily investor mood index based on GIFs posted on Stocktwits.com, an online platform for discussing stocks. GIFs, the researchers argue, evoke faster and stronger emotional responses than words, shaping optimism, risk tolerance, and investment decisions. By tallying “bullish” and “bearish” GIFs, the researchers produce a daily snapshot of market sentiment, in order to gauge the net optimism of posts containing GIFs. GIFsentiment can predict volatility, trading activity and fund flows, offering new insight into investor sentiment and stock market predictability. However, the study suggests GIFs are better at capturing short-term feelings and misperceptions which tend to reverse over time – rather than long-term, accurate investment predictions.