Cooley’s 2024 Activism Year in Review: Activists Ascendent

2024 was a prolific year for activists, with 243 campaigns launched globally – the highest number since 2018. US activity was up modestly, and a busy year in Asia offset a quieter year in Europe. With the 2025 proxy season in full swing, let’s take a fresh look at the landscape.

Setting the stage: 2024 by the numbers

Technology remains the top target – Similar to levels in 2023, the top sectors targeted by activists in 2024 were technology (24%), healthcare (13%), industrials (18%), and communication and media (13%).[1]
Strategic and operational demands continue to rise – Strategic and operational demands were the focus of nearly a quarter of the 2024 campaigns (22%, compared to the 18% three-year average) – including high-profile campaigns, such as Norfolk Southern/Ancora, Southwest Airlines/Elliott Management and Texas Instruments/Elliott Management. 43% of 2024 activist campaigns were M&A focused, in line with the three-year average.
Board seats are tough to come by – Despite an uptick in launched campaigns, globally, activists secured only 119 board seats in 2024, down from 134 in 2023 – with 28 seats won via proxy fights, and 91 seats won via settlement (similar splits to 2023, where activists won 35 seats via proxy fights and 98 via settlement). 78% of the board seats won in 2024 were filled with independent directors rather than activist principals (and it’s likely that a meaningful percentage of the independent directors were sourced by the company and merely “adopted” by the activist in the settlement).
CEOs increasingly targeted by activists – Despite a down year in the boardroom, activists had greater success in driving executive shakeups, logging 27 CEO resignations following the launch of a campaign (an all-time high, representing a 69% increase over the four-year average and a 170% increase since 2020).
“New” activists continue to multiply – Reflecting the widespread adoption of activist tactics (enabled, in part, by the proliferation of activism advisors) and the firm establishment of activism as an asset class, 166 different investors launched campaigns in 2024, the highest number of different investors ever recorded in a given year.
Major activists were behind only 17% of the campaigns launched in 2024 – This is the lowest share ever recorded, as former stalwarts had quieter years. While Elliott and other top-tier activists still know how to land a punch, it’s clear that the increasing institutionalization of the asset class and activists’ desires for quick and cheap wins have led to a moderate but noticeable decline in the sharp-elbowed, poison pen-type tactics historically used by activist trailblazers, like Carl Icahn, Dan Loeb at Third Point and Bill Ackman at Pershing Square. This trend is further illustrated by Starboard Value and ValueAct adopting a more moderate approach in recent years (with ValueAct in particular holding itself out as a white squire of sorts at both Salesforce and Disney in recent years).

Activist focus on strategy and operations: Who is held accountable?

The 2024 activism landscape saw a marked increase in campaigns focused on strategic and operational changes, such as cutting costs, streamlining research and development, and returning capital to shareholders through share buybacks. Particularly, if tech and life sciences M&A activity continues to lag behind activity in other sectors, companies in these sectors should be ready to defend against strategic, operational, and capital allocation-based campaigns even if there’s not an obvious near-term M&A catalyst for an activism campaign. When M&A resurges – as we expect in both tech and life sciences sectors – expect “sell the company” and other M&A focused activism campaigns to similarly gain share.

In 2024, the rate of CEO turnover following an activist campaign rose to approximately 20% of CEOs of activist targets having left their roles in the past two years (as compared to the 12% market-average CEO turnover for the S&P 500 index). In addition, CEOs are departing more quickly following the first point of attack in an activism campaign, with the average time to CEO resignation dropping to 88 days for campaigns in 2024, through October (in 2023, it was 113 days).[2] In 2024, some companies even replaced their CEOs in the wake of underperformance or publicly known disruptions, without the known presence of an activist.[3] The increased pace of CEO resignations may be a result of companies understanding the standard activist playbooks, resulting in boards being more willing to make management changes faster when there is identified management underperformance.

Investor focus on director accountability and individual director qualifications and performance also has increased in recent years.[4] This is particularly true in the wake of the universal proxy rules, which allow shareholders to mix and match candidates from different slates in a proxy contest, arguably making it easier for activists to push out weaker incumbent directors. To decrease board vulnerability, certain public companies appear to have adopted mandatory age retirement policies (62% of the S&P 500 and 75% of the S&P 100). Such retirement policies can be a blunt instrument, however, and some boards would be better served by proactively refreshing the board to address the changing needs of the business.[5]

Activist landscape: ‘New’ and ‘occasional’ activists

As noted above, 2024 was a landmark year for first-time activist activity – with first-time activists behind 18% of the campaigns launched in 2024.[6] As the activism space continues to mature, we expect sophisticated new activist firms founded by investors who previously worked at major activist houses to keep emerging.[7] These players are able to leverage their institutional knowledge and develop new playbooks. Furthermore, as the activism landscape becomes less personality driven, and activists work to rebrand themselves as helpful business partners rather than corporate raiders, these new activism shops are likely to engage in quieter approaches than their more aggressive, public-facing predecessors.[8]

New activist firms were key contributors to the activism activity in the tech sector in 2024, generating an aggregate campaign volume in excess of the “top-tier” activists.[9] As institutional investors focused on tech and life sciences continue to struggle with underperforming funds (driven in part by the tough environment for exits), we expect more investors to turn to activist tactics to attempt to resuscitate weaker investments.

Proxy contests: Speed to settlement

In line with 2023, the trend toward settling proxy fights, and settling them more quickly, continued in 2024. In the past two proxy seasons, nearly two-thirds of settlement agreements were reached privately, before the launch of a public campaign. Historically, the breakdown between public and private settlements was approximately 50%.[10] Furthermore, in 2024, the average span between public demand and settlement plunged to 34 days, from 68 days in 2023 and 77 days in 2022.[11]

This speed to settlement may be a result of a number of factors – including the fact that while it is easier for an activist to get at least one director on the board since the introduction of the universal proxy rules, it is more difficult for them to get all of their nominees (especially in a control slate election). This dynamic might spur both activists and companies to continue to favor settlement over a fight. Furthermore, the increasing presence of new, smaller activist shops that are less eager and equipped to engage in drawn-out proxy fights than the large incumbent activist shops may be resulting in a focus on getting to a quick resolution via settlement.

Activists also are increasingly nominating well-qualified, independent directors (or accepting independents identified by target companies), rather than their own principals, which may make settlements more palatable to boards, along with making boards less confident in their chances of prevailing in full in a contest. Additionally, the high cost of proxy contests may be encouraging both activists and companies to settle quickly.

Counterintuitively, despite activists continuing to nominate more sophisticated director candidates, where companies have been willing to engage in proxy contests in 2024, company slates have enjoyed strong support. In the 10 US proxy fights in 2024 that went to a final vote, activists secured board seats in just three, and of the 38 seats demanded in US proxy fights (including those that went to a vote or were withdrawn), activists only won a total of six seats (a 60% decrease from 2023).[12] Support for company slates in proxy contests may be an outgrowth from the number of board seats won by activists in 2023, which represented a 30% increase from 2022. Additionally, companies appear to be engaging in more proactive measures around their board composition that are securing decisive victories when challenged by activists.

Core takeaways: Prepare, prepare, prepare

We fully expect activism activity to remain elevated in 2025, which underscores the need for public (and soon-to-be public) companies to proactively prepare for activists on a clear day, particularly for companies facing relatively higher activism risk. Our 2023 Activism Year in Review summarizes key red flags that remain relevant today.

Best practices for boards and management teams looking to be prepared include:

Board best practices

Ensuring the board is actively engaged in developing and refining the company’s strategic plan.
Receiving regular briefings from management on burgeoning trends in and risks to the business – and potential available strategic alternatives and capital allocation strategies.
Refreshing directors proactively to ensure that the board has the right mix of skills and experience to oversee the company (particularly for companies facing secular shifts in their businesses).
Monitoring director tenure and potential overboarding and taking proactive action to address where warranted.
Conducting regular board performance assessments.
Maintaining a robust internal director candidate pipeline, including potential candidates with “activist-friendly” attributes (former public company CFOs and CEOs, former investment bankers, etc.).
Promoting director share ownership where possible, including through open-market director purchases.
Benchmarking executive compensation relative to peers.
Maintaining active succession plans for key executives.
Establishing a culture of shareholder engagement whereby senior management and, where appropriate, designated directors maintain regular and active engagement with key shareholders.
Reviewing periodically the company’s structural defense profile (staggered board, supermajority organizational requirement standards, ability for shareholders to call special meetings or act by written consent, advance notice bylaws) and adopting changes on a clear day. The recent Delaware Supreme Court decision in Kellner v. AIM Immunotech Inc. makes clear that reasonable bylaw amendments adopted on a clear day will generally be upheld by the courts, but things are much thornier if companies attempt to adopt changes after an activist has already emerged.
Placing a shareholder rights plan “on the shelf.”

Management best practices

Evaluating the company and its performance from the vantage point of an activist to assess potential lines of attack and effective rebuttals.
Being prepared to explain and defend the company’s capital allocation policies (including with respect to business development and/or research and development spend) in the context of the company’s go-forward strategy – this is critically important if the company has a large cash balance.
Taking proactive measures to improve cost and operational efficiency, including streamlining workflows, outsourcing non-core functions and embracing automation where possible.
Publicly laying out the company’s long-term vision and strategy for addressing secular changes in the company’s market, including potentially through holding an investor day (although note that detailed long-term targets can often be used against you in a later activist campaign).

Proactively monitoring and engaging with the investor base, including laying conceptual groundwork for material strategic transactions outside existing strategy and maintaining a detailed contact log with top shareholders.
Taking investor feedback into account and taking credit for proactive changes in investor materials and communications.
Monitoring performance relative to peers, including on a total shareholder return basis over one-, three- and five-year periods.
Educating the board regarding best practices for activism defense – and what Institutional Shareholder Services (ISS), Glass Lewis and the major index funds look for when evaluating proxy contests.
Preparing “break the glass” communications plans.
Conducting tabletop exercises.
Assembling a response team of seasoned advisors.

[1] All data noted in this section is from the Barclays 2024 Review of Shareholder Activism.

[2] Bill Alpert, “CEOs Lose Their Jobs in 2024 Activist Campaigns,” Barron’s, October 25, 2024.

[3] Lauren Thomas, “The Celebrity Activist Investor Is Going Extinct,” The Wall Street Journal, December 26, 2024 (Boeing, Under Armour and Intel as examples).

[4] See Jaime Smith, “What directors need to know about the 2024 proxy season,” EY, February 6, 2024.

[5] 66% of activist campaigns since 2021 have targeted companies with three or more directors that have served 10 years or more (Evercore, Third Quarter 2024 Quarterly Review). Proxy advisory firms appear to now question a director’s independence with more than a nine-year tenure (“Activists Continue to Target Director Tenure,” Harvard Law Forum on Corporate Governance, December 5, 2024). Blackrock has indicated in its proxy voting guidelines for benchmarking policies that it may vote against directors who fail to promote adequate board succession, highlighting that institutional investors also are keeping an eye on board refreshment.

[6] Barclays, 2024 Review of Shareholder Activism.

[7] Since 2021, at least nine Elliott alums have launched their own funds (Bradley Saacks, “How $70 billion Elliott has evolved to be a more ‘rigid’ hedge-fund behemoth, spawning a class of spinoffs,” Business Insider, August 15, 2024). One example is Irenic Capital, one of the most active activists this year (with seven campaigns launched in 2024).

[8] Lauren Thomas, “The Celebrity Activist Investor Is Going Extinct,” The Wall Street Journal, December 26, 2024.

[9] Qatalyst Partners, “Overview of Shareholder Activism in the Technology Sector,” January 2025.

[10] “What Settlement Data Says About the Evolution of Activism,” Harvard Law School Form on Corporate Governance, July 15, 2024.

[11] Id.

[12] Barclays, 2024 Review of Shareholder Activism.