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Average share of board seats won by U.S. shareholder activists

Data: Barclays; Note: Includes companies with more than $500 million in market cap at time of campaign announcement or in prior twelve months. Excludes campaigns without a public number of board seats demanded; Chart: Axios Visuals

U.S. shareholder activism notched its busiest two-quarter stretch since 2022, according to Barclays.

Why it matters: Changes in the proxy voting process and other factors have activist investors adjusting their strategies.

The big picture:  Global activism was down during the quarter, while U.S. activists focused on the tech and consumer sectors for board and strategy shakeups.

The main driver of the falloff has been a drop in M&A. For years, the main demand of activist hedge funds was to push a company into a sales process.

With M&A down globally, activist campaigns have followed suit, with investors now forced to sharpen their focus.

Zoom in: Activism across the globe fell 19% in the first quarter to 63 campaigns, Barclays data show.

Director seats were activists' top demand in Q1, with nearly half of the global campaigns focused on board change.

Activists launched 29 U.S. campaigns in Q1, nearly equal to the same period a year ago.

Yes, but: Combining Q4 2023 and Q1 2024 (the period when most campaigns are launched), U.S. activism rose 7% to 73 campaigns total, compared to the same two quarters a year earlier.

During Q1, 45% of the U.S. activist campaigns were aimed at companies with a market value larger than $5 billion, a higher percentage than the trailing three-year period in a sign that hedge funds are going after bigger targets.

More than half of the campaigns launched in the U.S. focused on companies in the tech, industrial, and consumer sectors.

Between the lines: Forcing a company into a sale process is usually easier for an activist than getting one of its nominees appointed to a company's board.

With M&A continuing to lag (despite a recent spike), activists are being "surgical" in their approach to getting nominees onto boards to push changes, says Jim Rossman, Barclays' global head of shareholder advisory. 

The data shows that activists during Q1 demanded fewer board seats during their campaigns but won a greater percentage compared to prior years.

Previously, activists typically won around two-thirds of the seats demanded. This quarter, that jumped to 79%, according to Barclays.

What's next: The biggest proxy fight of the year goes to a vote on April 3, with two seats on Disney's board being contested by Trian and its co-founder, Nelson Peltz.

U.S. shareholder activism sees uptick in campaigns

Global activism has fallen, while the last two U.S. quarters show a comeback.

Activist shareholders

Bar chart table showing that the average share of board seats demanded that U.S. shareholder activists won was 68% in 2022, 66% in 2023 and 79% in 2024 as of March 31. The average number of board seats demanded was 4.1 in 2022, 3.9 in 2023 and 2.8 in 2024 as of March 31.

U.S. shareholder activism notched its busiest two-quarter stretch since 2022, according to Barclays.Why it matters: Changes in the proxy voting process and other factors have activist investors adjusting their strategies.

U.S. shareholder activism sees uptick in campaigns

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