INTRODUCTION Contributed by: Spencer Summerfield, Travers Smith LLP
Shareholders’ Rights and Shareholder Activism 2025: A Global Overview Shareholder activism – whereby shareholders seek to exercise their rights to exert influence on a company or its management with the purpose of instigating change – remains a fixture of global capital markets. In recent years, activists have increasingly positioned themselves as champions of shareholder value, hold- ing management and boards accountable for their performance. Investors are demanding higher stand- ards of directors and are quick to act where those demands are not met. Activist shareholders contin- ue to be vocal on a broad range of topics ranging from board composition and M&A to environmental, social and governance concerns and executive remu- neration. Although some companies are more likely than others to be targets, it has become increasingly evident that no company is immune from the threat posed by an activist campaign. Levels of activism, sectoral focus and scale of targets In the first half of 2025, activism levels decreased by 12% compared to the record highs observed in the first half of 2024, but the figures align closely with the average of the previous nine years. Activists have diversified their efforts across sectors, with industri- als, technology and healthcare witnessing the most pronounced concentrations, collectively accounting for 61% of activity in the first half of the year and sig- nificantly exceeding previous yearly averages. Departing from last year’s focus on mega-cap compa- nies, the current period has seen a shift towards firms valued under USD5 billion. As regards the geographical spread of shareholder activism, the USA, Japan and the UK emerged as the busiest, together representing 82% of campaigns in the first half of the year, while Europe experienced below-average levels of activity. Nature of activist demands Campaigns seeking changes in board composition, M&A activity, or strategic or operational overhauls have remained among the most popular avenues of share- holder activism. Notably, the number of activists tar- geting board seats, as well as the corresponding seats
won, has increased: this is reflected in a 16% year-on- year rise in successful outcomes. Prominent activist investors such as Starboard, JANA and Elliott have been particularly effective in proxy contests. Mean- while, demands for M&A transactions have declined in the first half of 2025, partly due to broader economic and geopolitical caution. In this more subdued M&A environment, activists have shifted their focus towards advocating for strategic and operational restructuring at target companies. Among M&A-related initiatives, calls for the outright sale of companies were the most frequent, appearing in 12% of campaigns and affect- ing companies such as Lyft and Unifirst. An equivalent proportion of shareholders pursued break-up strate- gies, evidenced in campaigns involving companies such as Becton Dickinson and SSE. Remuneration Shareholder revolts over director and executive remuneration continue to be a recurring concern. Although executive compensation is rarely the sole driver of activism, it increasingly serves as a tool for highlighting broader management shortcomings and governance issues. Activists often present excessive compensation packages as indicative of misaligned interests between management and shareholders. For instance, in 2024, Elliott Investment Management secured five board seats at Southwest Airlines after amassing an 11% stake and calling for changes, criti- cising the substantial compensation paid to manage- ment despite a significant fall in shareholder value. Similarly, during a high-profile contest with Illumina in 2025, Carl Icahn’s campaign succeeded in electing a board member and precipitated the CEO’s resigna- tion, with Icahn emphasising that the CEO’s compen- sation had risen significantly despite the company’s stock value declining. ESG Campaigns The escalating climate crisis has propelled issues to the forefront of institutional investors’ agendas. Increasingly, these investors view the effective man- agement of ESG risks and opportunities as funda- mental to long-term value creation, integrating such factors into their investment decisions. Consequent- ly, poor ESG performance is now a key criterion for identifying companies as potential targets for activist shareholders.
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