Activists Find Winning Strategy in Surprise First Half

U.S.-based activists in particular achieved an uptick in success rates amid the turbulence sparked by U.S. President Donald Trump’s trade war and policy shift, with many adopting new tactics and advancing stronger director candidates to achieve their desired objectives.

While the volume of seats gained by activists globally saw an 11% decline in the first half of 2025, activists operating in the U.S. won 112 board seats, up from 101 in the same period in 2024, making it the most successful start to a year for board gains since 2022. Out of the 91-board representation demands advanced at U.S.-based targets in the first half of the year, activists secured at least one seat in 64 cases, or roughly 70% of the time. That compares with a 53% success rate at securing at least one seat over the same period in 2024 when there were 118 board representation demands. Globally, the success rate for activists winning at least one board seat was 55% in the first half of 2025.

Although the volume of U.S.-focused board representation demands fell by almost 23% in the first half when compared to the same period last year, many industry experts told DMI that those that did advance were of high quality and delivered with conviction.

“The activists are getting better,” said Jim Rossman, global head of shareholder advisory at Barclays. “The quality of who they’re nominating and the strategy with which they nominate has become better and more sophisticated.”

Going the distance

Of the 112 U.S. board seats won in H1, 103 or 92% were achieved via negotiated agreements – the highest proportion of seats won through settlement in the last five years over the same period. Market uncertainty may also have prompted both companies and activists to reach settlements at a faster pace. According to DMI’s settlement tool, the average time taken to settle a campaign for board seats at U.S.-based companies dropped from 19 days in the opening quarter of 2025 to 16.5 days by quarter two, compared to 26 days in the second quarter of 2024. Activists are getting better. The quality of who they’re nominating and the strategy with which they nominate has become better and more sophisticated.

Outside of settlements, only nine seats were won through contested votes, compared to 14 secured through such votes in the same period in both 2024 and 2023.

However, despite the drop-off in the volume of votes, the first half saw activists that typically seek settlements persevere to bring high-conviction campaigns all the way to shareholders for decision.

Elliott Management’s proxy fight at Phillips 66 was one and marked the firm’s first such contest in the U.S. to continue to a vote, underscoring its willingness to go the distance.

Pete Michelsen, who heads the activism and shareholder advisory business at investment bank Qatalyst Partners, noted that while Elliott only secured two of its four nominees, the campaign reflected a broader tension between activist conviction and institutional investor caution. “That was a fascinating situation,” he told DMI. “Elliott probably ran the table on a lot of the fundamental investors but Phillips 66 mounted a pretty effective defense.”

Activist Mantle Ridge also opted to stay the course and take a campaign all the way to a vote for the first time in a contest that saw Air Products shareholders elect three of its four director nominees, including the firm’s CEO Paul Hilal.

Withhold campaigns

One of the surprise developments of the season saw activists revise their playbook to hold directors to account with less costly withhold or “vote-no” campaigns.

H Partners was one of many to deploy such a campaign when it pushed for a withhold vote at Harley-Davidson targeting CEO Jochen Zeitz and long-tenured directors Norman Linebarger and Sara Levinson. While all the directors were reappointed, H Partners noted that nearly half the shares voted withheld on the three targeted directors, along with almost 90% of actively held shares. The company subsequently announced that the three directors would resign from the board before the 2026 annual meeting and that it will appoint a new, external CEO – giving the activist what it wanted, albeit on a delayed timeline.

Darren Novak, global co-head of shareholder engagement at JP Morgan, noted that withhold campaigns are becoming a more common activist weapon and could do huge reputational damage. “It seems less aggressive to the company and publicly,” he said. “But let’s be clear – it is highly, highly aggressive.”

Top Demands

Governance remained the top priority for activists globally, with 226 governance-related demands made in the U.S. during the first half of the year, up from 193 in the same period in 2024. Personnel removal also climbed, with 50 demands in the U.S. and 47 in Asia, both rising year over year. Meanwhile, calls for changes in capital structure and executive compensation remained common.

Although the wave of M&A-driven activism predicted by many at the start of the year did not materialize due to the impact of tariffs and changes to trade policy, dealmaking stayed in focus with 30 such demands advanced in the U.S., flat on the same period last year, while moves to oppose such transactions increased by over 60%.

“We entered 2025 with an M&A environment that appeared much more favorable than in prior years,” Michelsen said. “What we found – at least in the first half of the year – is that momentum has been somewhat constrained because there’s so much uncertainty.”

With activists laying the groundwork and engagement heating up, the stage is set for a lively back half and 2026.

“There’s been a massive increase in activist outreach since Liberation Day,” Novak said. “They’re digging in, taking positions below the disclosure threshold. So I think we’ll see an uptick in terms of public demands as we get into the second half.”