When it comes to GlaxoSmithKline, Elliot is all talk, no substance

K, I get it. Activist investors need to make a noise when they launch their assaults on companies and their boards.

It’s all part of the marketing and PR they have to do to spread the word among their investors. It says: look at us – taking no prisoners in our hunt for profits.

But you have to wonder if a lot of it isn’t just hot air.

Take Elliott’s letter to the GSK board today. For 18 or so pages, it roars out a fire and brimstone sermon against the company’s decade or more of dismal underperformance, but read it carefully, and you realise most of the problems it identifies happened years before current CEO Emma Walmsley arrived.

Dig down to the actual substance of what it would do differently and there’s very little to speak of, bar a broad hint that she shouldn’t lead “New GSK”.

Its reasoning for demanding new bosses is that investors don’t trust the company to deliver on its promises.

But even Elliott concedes that this lack of trust is due to previous managements’ errors: too much paid out in dividends at the expense of research and development; the daft decision to sell its cancer business.

Walmsley has already dealt with most of those issues.

She bought Tesaro for $5 billion to get back into cancer treatments (a deal Elliott concedes was good value); she hired highly-rated scientists into top positions; she brought in a new chief financial officer from HSBC to get a better handle on the numbers.

There are now decent compounds in phase III trials which should replace revenues that will be lost when blockbusters come off patent. The share price will eventually reflect that.

Besides some tweaks to GSK’s bonus schemes and a weird demand not to ignore any takeover bids for the consumer business (why would they?), Elliott’s letter is all mouth, no trousers.

Brave it out, Emma.