Averting Proxy Wars: 10 Companies Opting for Activist Investor Settlements

2. CarMax, Inc. (NYSE:KMX)

Activist Investor: Starboard Value

Number of Hedge Fund Holders: 58

CarMax, Inc. (NYSE:KMX) has significantly outperformed the broader stock market, with shares gaining approximately 38.4% year to date compared to a 10% gain for the S&P 500 over the same period. The outperformance follows the company’s agreement with activist investor Starboard Value after negotiations over the used-car retailer’s operational performance, cost structure, and pricing strategy.

The agreement helped the company avoid a potentially contentious proxy fight at its 2026 annual shareholder meeting. It also allowed the activist investor greater influence over the company’s board and strategic direction. Explore CarMax earnings turnaround.

The activist ultimately nominated its CEO, Jeffrey Smith, and William (Bill) Cobb to CarMax’s board. In exchange for the planned board additions, Starboard agreed to withdraw its director nominations, effectively ending the potential proxy battle.

Starboard Value had argued that operational weaknesses and declining performance were preventing the company from realizing its full potential. Its proposals included the overhauling of CarMax, Inc.’s pricing strategy to make used vehicles more competitive. It also called for improvements to the digital customer experience and the online vehicle purchasing process.