Activist investors secure record board seats despite fewer campaigns

Activist investors secured a record number of board seats at Australian and global companies in the first half of 2025, according to new findings from Diligent.

The latest Diligent Market Intelligence: Proxy Season Review 2025 report indicates that, although there was an overall reduction in the volume of shareholder activist campaigns worldwide, there has been a significant rise in successful outcomes for activists, particularly via settlements.

Australian data

Data regarding Australian board seats shows that activists won 9 seats through settlement and 7 by vote in the first half of 2025.

This represents an increase compared to the first half of 2024, when only 2 seats were won by settlement and 3 by vote.

Global trends

Globally, the number of seats gained by activists decreased by 11%.

The United States market saw a 23% fall in board representation demands, yet activist investors attained a record 112 board seats at US-based companies in the first half of 2025, up from 101 in the same period last year.

This result was primarily driven by settlements between activists and corporate boards. The proportion of seats secured through settlement reached 92% in the first half of 2025, a five-year high. In comparison, settlements accounted for 86% in both 2024 and 2023, 81% in 2022, and 89% in 2021.

The report notes a decrease in the average time taken to reach settlements for board seat campaigns at US-based companies. It shortened from 19 days in the first quarter of 2025 to 16.5 days in the second quarter, indicating an accelerated negotiation and resolution process.

"The first half of 2025 showed that U.S. activists are not just reacting to market conditions but actively shaping their strategies to capitalise on emerging opportunities," said Josh Black, editor in chief, Diligent Market Intelligence. "While many found advantageous settlement terms, others broke with tradition by going the whole way to a vote or pursued withhold campaigns. Notably, the proportion of seats secured through settlements reached a five-year high of 92%, with the average settlement time dropping to 16.5 days in the second quarter, demonstrating the effectiveness of their strategies."

Shareholder proposals and ESG

The report also found that the volume of shareholder proposals around environmental, social, and governance (ESG) matters at US-listed companies fell to 530 in the first half of 2025, down from 735 in the same period of 2024. This decrease has been attributed to evolving regulatory changes and shifting sentiment both in support of and against ESG issues.

Support for environmental and social proposals averaged 11% among investors, whereas governance-related demands maintained stronger support at 40%. Notably, anti-ESG proposals, in addition to the reduction in number, experienced an average support rate of only 1.4%, a record low.

Executive pay and voting results

The report covers trends in executive remuneration, highlighting that median granted pay for an S&P 500 chief executive was USD $17.2 million in 2024, up from USD $15.9 million in 2023. The average S&P 500 "say on pay" proposal gained 89.3% shareholder support in the first half of 2025, a slight decrease from the 89.4% recorded in the prior year period.

Short selling and focus on technology

Short sellers increased their scrutiny of technology companies, particularly those aligned with artificial intelligence. During the first half of 2025, short sellers released reports on 60 companies worldwide, a 5% increase over the previous year, with US markets being the main target.

The tech sector accounted for nearly half of all short selling activity, reflecting heightened interest in companies related to AI.

Summary of report findings

The Proxy Season Review 2025 report provides insights and data from January to June 2025, including detailed information on activist campaigns, negotiations, shareholder proposal volumes and support rates, compensation packages, and short selling trends. The findings reflect ongoing changes in the relationship between shareholders and boards, particularly as companies respond to shifting regulatory environments, market conditions, and stakeholder priorities.