A Surge in Activist Shareholders: A New Era of Corporate Accountability
Record-Breaking Year for Activist Campaigns
In 2024, a staggering 160 investors, including hedge funds, launched campaigns to push global companies to make significant changes, marking an 18% increase from the previous year. This surge in activism has resulted in strong returns, and experts predict further growth in 2025.
A Shift in Investor Mindset
Jim Rossman, global head of shareholder advisory at Barclays, notes that investors are no longer willing to wait for promised improvements. Instead, they’re demanding immediate change, driving companies to reevaluate their strategies and operations. This shift in mindset has led to a significant increase in campaigns focused on operational and strategic improvements, with over 26% of demands centered on these areas.
High-Profile Campaigns and Newcomers
Longtime activists, such as Trian Fund Management and Elliott Investment Management, made headlines with their campaigns at Walt Disney, Starbucks, and Southwest Airlines. However, newcomers like Ananym Capital Management, Daventry Group, and Firstlight Management also made their mark, launching their first campaigns at Henry Schein, Kinaxis, and Sotera Health.
CEO Accountability
A record 27 CEOs were replaced in 2024, up from 24 in 2023, as activists took aim at underperforming leaders. Notable examples include Kohl’s, CVS Health, and Norfolk Southern, where activist pressure led to CEO departures.
Global Trends and Opportunities
The United States saw the majority of global campaigns, with 115 launched, marking a 6% increase from 2023. However, U.S. funds also found opportunities abroad, particularly in the Asia Pacific region, where campaigns boomed in Japan, South Korea, and Australia.
Looking Ahead to 2025
As investors continue to push for change, bankers, lawyers, and analysts predict a growth trend heading into 2025. With returns approaching 30% last year, investors are emboldened to take action, driving companies to adapt and improve. As Rossman notes, “Activist investors are holding companies and boards accountable, and that includes sometimes no longer allowing the CEO to steer the ship.”
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