Despite a changing landscape and a slower start to the year reflecting the subdued M&A market, activism campaigns globally in 2025 exceeded 2024’s record-breaking levels. “Occasional activists” – institutional investors, individuals, and others who are not dedicated activist funds and do not regularly use activist tactics – continued to play an important part, launching campaigns consistent with their elevated activity in 2024, above their more historic levels.27 ▪ M&A Demands: Demands for M&A (including divestitures as well as whole-company sales) and capital allocation increased in the latter part of the year as equity markets and M&A rose, particularly in the U.S. M&A-focused themes made up 35% of activist campaigns (above the 29% average for 2020 – 2024), while capital allocation demands accounted for 31% (above the 19% average for 2020 – 2024).28 Activists also took aim at announced deals, seeking better terms or even outright rejection on both target and (where applicable) buyer sides. ▪ New SEC Guidance on Shareholder Engagement: 27 Barclays 2025 Review of Shareholder Activism, ib.barclays/content/dam/barclaysmicrosites/ibpublic/documents/our-insights/Q4-2025-Shareholder-Activism/ Barclays%202025%20Review%20of%20Shareholder%20Activism.pdf; see MoFo Client Alert, Occasional Activists and the Evolving Landscape of Shareholder Activism in 2025, Sept. 26, 2025, mofo.com/resources/insights/250926-occasional-activists-and-the-evolving-landscape. 28 Lazard Annual Review of Shareholder Activism 2025, lazard.com/research-insights/annual-review-of-shareholder-activism-2025/. 29 Barclays 2025 Review of Shareholder Activism. 30 See Fact Sheet: President Donald J. Trump Protects American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors, Dec. 11, 2025, whitehouse.gov/fact-sheets/2025/12/fact-sheet-president-donald-j-trump-protectsamerican-investors-from-foreign-owned-and-politically-motivated-proxy-advisors/. SEC guidance in February 2025 may require shareholders engaging in certain ways with companies – particularly with respect to governance changes and environmental, social, and political matters – to file a long-form Schedule 13D, rather than a shortform Schedule 13G. The more burdensome filing requirement, which requires disclosures of “intent” and more updating, may discourage shareholders from engaging with companies other than in “listen only” mode. The guidance does not implicate shareholder to shareholder discussions, so activists can continue to seek support from other shareholders in accordance with prior SEC guidance on group formation and proxy statement delivery requirements. ▪ Broader Candidate Pool for Activist Board Nominees: The pool of director candidates willing to align themselves with activists is expanding. The stigma associated with serving as an activistnominated director has diminished in recent years, as more board careers are spanning both activistnominated and traditional director roles. ▪ Rise in Private Settlements: Companies have been settling with activists more quickly and more often since the introduction of the universal proxy card in August 2022. Approximately 44% of all settlements in 2025 were negotiated privately (i.e., before the activist publicly announced a campaign), as compared to 17% in 2024 and 26% in 2023.29 The rise in private settlements suggests that both companies and activists are less willing to bear the costs and distractions of public campaigns. ▪ Increased Scrutiny on Proxy Advisors: Throughout 2025, proxy advisors faced regulatory scrutiny at federal and state levels. In December, President Trump signed an executive order directing the SEC, FTC, and Department of Labor to take actions to “end the outsized influence of proxy advisors.”30 Several states, including Florida and Missouri, launched investigations and filed lawsuits against ISS and Glass Lewis related to their recommendations on ESG 8. Activist Focus on M&A Continues to Rise 54 Morrison Foerster
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