DealLawyers.com Blog

In a recent HLS blog, Sidley’s Kai Liekefett, Derek Zaba, and Leonard Wood discuss activism in the 2025 proxy season. They note a downward trend in activism overall:

The broad tariffs imposed by the Trump Administration had a significant impact on corporate deal-making in 2025 and helped to cool overall activity in shareholder activism . . . Compared to the prior year, 2025 saw approximately a 10% decline in activist campaigns initiated overall, 26% decline in proxy fights initiated, 15% decline in dissident nominations, 10% decline in Schedule 13Ds filed, and 10% decline in formal settlements.

They also made these observations about how the season played out:

In 2025, value beat virtue, as activists zeroed in on value and capital allocation and sidelined sustainability topics.

Under the universal proxy system, now in its third year, investors happily elected only parts of activist slates.

While proxy advisors continued to factor heavily in outcomes, and often recommended for dissident candidates, in one key contest they didn’t carry the day in the face of a tenacious company campaign.

This proxy season also saw a resurgence in the prominence of traditional economic activists using “vote no” (or “withhold”) campaigns instead of proxy contests.

And companies and activists were reminded to expect the unexpected, as regulatory and political curveballs—from CFIUS reviews to significant SEC guidance—showed a capacity to abruptly reshape campaign tactics and outcomes.

On “vote no” campaigns, the blog says this may not be indicative of a long-term trend and instead — “may have been a circumstantial feature of the 2025 proxy season, owing to the specific nature of a few campaigns in 2025.” Here are a few of the other key takeaways from year-to-date trends:

Performance still trumps every other issue. The key campaigns of the year have centered on TSR and capital-allocation pain points — mega hydrogen cap-ex at Air Products, refinery margins at Phillips 66, sales slides at Harley-Davidson, valuation at U.S. Steel and other companies. While activists avoided ESG rhetoric, value creation was the rallying cry.

Universal proxy continues to encourage “split decisions.” Shareholders felt comfortable electing only part of an activist slate (Air Products 3-of-4, Phillips 66 2-of-4). Boards should not necessarily think of “all-or-nothing” dynamics, and are not expecting to need a clean sweep in order to claim victory.

Proxy-advisor backing is helpful, but not necessarily decisive. ISS and Glass Lewis endorsed the dissidents at Air Products, Phillips 66, Matthews International and elsewhere, with mixed results in each case. This underscores that winning with BlackRock, Vanguard, and State Street matters more than winning the proxy advisors.

Politics, abrupt regulatory changes, and geopolitics can change the battlefield overnight. Ancora’s U.S. Steel withdrawal after a new CFIUS review shows how policy shifts can upend an activist timeline and force tactical retreats. The SEC guidance change of February 2025 also played its role in causing activists to be more cautious, especially in February and March – critical months in the ramp up of the proxy season.

– Meredith Ervine