Try digitalPLUS for 10 days for only $0.99

Marissa Mayer

Activist shareholders aren't activist enough

Activist shareholders aren't activist enough

Activist investors and institutional shareholders are increasingly forcing publicly held companies to return more cash to shareholders — and that's good for the economy.

According an S&P Capital IQ study, S&P 500 firms returned about 36 percent of operating cash flow to investors through dividends and share repurchases in 2013, up from 18 percent a decade earlier.

Critics contend that's bad for innovation and growth because sending money back to shareholders reduces investments in equipment, technology and research and development, and lowers corporate spending and aggregate demand for goods and services.

Such thinking gets things backward and is counter to...