Kenvue Inc. (KVUE): Riding the Wave of Activist Investor Jeff Smith’s Strategic Overhaul

The consumer health sector has long been a battleground for value-driven investors, but few campaigns have captured as much attention as Jeff Smith’s activist push at Kenvue Inc. (NYSE: KVUE). As the former CEO of Starboard Value LP, Smith has built a reputation for unlocking hidden value in underperforming giants—a strategy now front and center at Kenvue, the $45 billion consumer health colossus spun off from Johnson & Johnson in 2023. This article explores how Smith’s intervention could redefine Kenvue’s trajectory, blending corporate governance reforms with strategic pivots to capitalize on high-growth markets.

The Catalyst: Starboard’s Proxy Fight and Board Overhaul

Starboard’s activist campaign began in October 2024 when it acquired a significant stake in Kenvue, criticizing management’s handling of key divisions like skin health and beauty. By March 2025, the proxy battle culminated in a landmark agreement: three Starboard-aligned directors joined Kenvue’s board, including Smith himself. The expanded board now includes Sarah Hofstetter (digital marketing expert) and Erica Mann (global consumer health veteran), signaling a strategic focus on operational discipline, boardroom diversity, and shareholder returns.

Data-Driven Outcomes: Performance and Promise

Kenvue’s stock rose 3.92% since Starboard’s involvement began, contrasting sharply with the S&P 500’s 8.69% decline over the same period—a compelling early indicator of the activist’s influence. While this gain is modest, it aligns with Starboard’s long-term track record: a 25.02% average return across 152 campaigns since 2011. For Kenvue, the partnership could unlock value through three critical avenues:

1. Strategic Divestitures: Smith’s history at Starboard includes shedding non-core assets to focus on high-margin segments. Kenvue’s skin health and e-commerce divisions—already growing at 8% and 15% annually, respectively—may become focal points.
2. Operational Efficiency: Hofstetter’s expertise in digital marketing could amplify Kenvue’s online presence, while Mann’s experience at Bayer could guide global market penetration.
3. Governance Reforms: The board’s expanded size (14 to 13 members by 2025) and committee assignments (Smith on Compensation & Human Capital, Mann on Sustainability) suggest a focus on aligning executive incentives with shareholder goals.

Risks and the Road Ahead

Kenvue’s 2025 proxy materials highlight risks like regulatory hurdles in the health sector and economic volatility. The company’s “Our Vue Forward” restructuring plan, however, aims to cut costs by $1 billion by 2026, a move that could improve margins from their current 18% to over 22%. Additionally, the standstill agreement—preventing Starboard from further activism for a defined period—provides operational stability while allowing the new board to implement changes.

Conclusion: A High-Stakes Bet on Value Creation

Jeff Smith’s involvement with Kenvue represents a pivotal moment for a company sitting at the intersection of legacy brand equity and emerging market opportunities. With Starboard’s proven ability to drive returns and Kenvue’s $19 billion in annual revenue, the partnership has the potential to deliver outsized gains. The 3.92% stock rise since October 2024 hints at early investor confidence, but the true test lies in executing strategic shifts—such as leveraging Hofstetter’s digital prowess or Mann’s global network—to capitalize on the $400 billion global consumer health market.

For investors, Kenvue’s stock offers a blend of defensive stability (via its Tylenol and Listerine franchises) and growth catalysts (skin health and e-commerce). While risks remain, Smith’s track record and the board’s expertise suggest Kenvue could become one of the starkest examples of activist-driven value creation in 2025—and beyond.