Shareholder activism is a form of activism in which shareholders use equity stakes in a corporation to put pressure on its management.Reasonable Investor(s), Boston University Law Review, available at: http://ssrn.com/abstract=2579510 A fairly small stake (less than 10% of outstanding shares) may be enough to launch a successful campaign. In comparison, a full takeover bid is a much more costly and difficult undertaking. The goals of shareholder activism range from financial (increase of shareholder value through changes in corporate policy, cost cutting, etc.) to non-financial (disinvestment from particular countries, etc.). Shareholder activists can address self-dealing by corporate insiders, although large stockholders can also engage in self-dealing to themselves at the expense of smaller minority shareholders.
Shareholder activism can take any of several forms: proxy battles, publicity campaigns, shareholder resolutions, litigation, and negotiations with management. Daniel Loeb, head of Third Point Management, is notable for his use of sharply written letters directed towards the CEOs of his target companies.
Activism may help to address the principal-agent problem where the agents (management) do not adequately respond to the wishes of the principals (investors) of publicly traded companies. In the 2010s, investments in the activist asset class grew, with activists receiving coverage by the media and positive attention from investors. Activists in some cases been able to acquire board seats with a formal proxy context.
Shareholder activists are influencing mergers and acquisitions. A 2015 survey of corporate development leaders found that 60% of respondents saw shareholder activism affecting transaction activity in their industry. Increasingly, non-financial forms of shareholder activism affect companies in a range of sectors. Shareholders, often with a comparatively small stake in a company, often seek to influence the company's environmental and social performance. Other forms of activist campaigns include influencing divestitures, with results from Fortune 500 companies, between 2007 and 2015, suggesting these are often more successful in terms of increasing shareholder value than management led divestitures.
According to Lazard’s H1 2026 Review of Shareholder Activism, 184 new activist campaigns launched globally in the first half of 2026, the busiest six-month period on record.
History Corporations in 18th-century Europe were relatively uncommon, but in the United States they were more prevalent, starting with 300 in the 1790s and expanding by around 26,000 between 1790 and the 1860s, resulting in about 15 times the corporations in Great Britain by 1830. These early corporations contained provisions for corporate governance, including restricted charters, bylaws, prudent-mean voting rules, dividend payments, and press coverage.
Between 1900 and 1950, about 1.22 "offensive" activist initiatives occurred per year, with more occurring in the 1940s and 1950s. Notable investors included Cyrus S. Eaton, Phoenix Securities Corporation, Benjamin Graham, J. Paul Getty, and Malcolm Chace. Activism was likely limited by the lack of ownership dispersion, meaning that many corporations had large shareholders with sizable blocks (10 to 20% of total shares) who already exerted significant control over the corporation.
Shareholder activism has evolved from the "corporate raider" tactics of the 1980s to the more sophisticated approaches employed by contemporary hedge funds. These funds often adapt their strategies to different regulatory and business environments. The practice has expanded globally, with activist tactics shaped by ownership structures in the United States, the United Kingdom, and continental Europe, particularly in companies with controlling stakeholders. Modern campaigns frequently involve private negotiations with management, media engagement, and alliances with institutional investors. Coalition building has become an increasingly important element of activist strategy, allowing participants to amplify influence while addressing both short-term financial objectives and longer-term corporate value .
By the 2010s shareholder activism which predominantly occurred in places such as the US and Europe began to expand into Asia and quickly surpassed the amount of activism occurring in Europe.
Notable investors and funds Notable activist investors include: Isaac Le Maire (1558–1624),Frentrop, Paul (2009). The First Known Shareholder Activist: The Colorful Life and Times of Isaac le Maire (1559–1624), in Frentrop/Jonker/Davis 2009, 11–26 Carl Icahn,Carried Interest: "Activist Investors" . Retrieved 6 May 2015. Nelson Peltz (Trian Partners), Bill Ackman (Pershing Square), Daniel Loeb (Third Point Management), Barry Rosenstein, Larry Robbins (Glenview), David Einhorn, Gregg Hymowitz (EnTrust Global), Larry Fink (BlackRock), Christer Gardell (Cevian Capital), and Ryan Cohen.
During the 1980s, activist investors such as Carl Icahn and T. Boone Pickens gained international notoriety and were often perceived as "corporate raiders" for acquiring an equity stake in publicly owned companies and then forcing them to take action to improve value or rid themselves of activist investors by buying back the raider's investment at a premium, often at the expense of other shareholders. More recently, activist investor Phillip Goldstein suggested that the role of the activist investor has moved from green mail to one of being a catalyst to unlock value in an underlying security, and says that the public perception of activist investors as "corporate raiders" has dissipated.
Activist investment funds include: California Public Employees' Retirement System (CalPERS),Forbes: "Calpers Votes Against Jamie Dimon, Again" . Retrieved 28 June 2013. Icahn Management LP, Santa Monica Partners Opportunity Fund LP, State Board of Administration of Florida (SBA),ProxyDemocracy.org: "FLORIDA SBA" Retrieved 28 June 2013.Harvard Law School Forum on Corporate Governance and Financial Regulation: "Florida SBA Supports Proxy Access and Advisory Firm Transparency" Retrieved 28 June 2013. and Relational Investors, LLC.
In 2019 and beyond, notable activist investors included Starboard Value, Icahn Enterprises, Elliott Investment Management, and Third Point. In 2019, mutual funds such as Wellington Management Company began to show signs of activism. A prominent campaign by hedge fund Engine No. 1 resulted in them winning three seats on Exxon's board in 2021, with the objective of influencing the company to reduce its reliance on fossil fuels.
Examples of activist investors in Asia include Oasis Management, David Webb, and Yoshiaki Murakami.
Outreach strategies Aside from nominating a slate of directors, the most frequently used activist tactics are publicity campaigns. These commonly include the public release of presentations or letters addressed to the company, the issuance of press releases, the creation of dedicated websites, and the use of social media platforms such as Twitter. Other methods, such as initiating litigation or calling a special meeting, are employed far less often.
Funding Activist investors are often hedge funds funded by accredited investors and institutions. In 2019, institutions were demanding more upfront explanation of the activist ideas before funding, and in some cases requiring that the funds be placed into special purpose vehicles specifically for the project. Activist hedge funds, which are hedge funds that "take concentrated positions in the equity of public corporations and actively engage with corporate managers" can address the principal-agent problem and limit self-dealing by providing management with high-powered incentives to increase value.
Offensive versus defensive Shareholder activism can be categorized as "offensive" or "defensive"; in the latter case, an existing shareholder attempts to correct some deficiency, while offensive activists build a position with the intention to agitate for change. Shareholders can also initiate a derivative suit to force action by the corporation. Shareholders can also engage in a securities class action but these are typically not associated with activism.
Laws In the United States, the acquisition of over 5% of beneficial ownership in a company with the intention to influence leadership must be accompanied by a Schedule 13D filing with the Securities and Exchange Commission (SEC). Investors who do not intend to become activists may file a Schedule 13G instead.
Proxy access
Historically, investors were required to mail separate ballots when trying to nominate someone of their own to the board, but beginning in 2015, proxy access rules began to spread (driven by initiatives from major institutional investors) and as of 2018, 71% of S&P 500 companies had a proxy access rule.
Voting Votes for the board may be "straight" or "cumulative". In straight voting (aka statutory voting), shareholders get one vote per share on all ballot questions (e.g., candidates for the board of directors or shareholder proposals). In cumulative voting, a shareholder receives a general vote for however many number of ballot questions there are. The votes can then be all cast for (or against) a single ballot question, which makes it easier for minority shareholders to elect candidates. There has also been a movement toward "majority" voting, where a candidate must receive the majority of votes. Most large corporations are incorporated in Delaware due to the well-developed Delaware General Corporation Law; in Delaware, cumulative voting is optional, but exceptions exist; for example, a California-based but Delaware-registered corporation may be "pseudo-foreign" under California law and therefore have to comply with California law.
Performance
Taking an activist approach to public investing may produce returns in excess of those likely to be achieved passively. A 2012 study by Activist Insight showed that the mean annual net return of over 40 activist-focused hedge funds had consistently outperformed the MSCI world index in the years after the 2008 financial crisis.Activist Insight: "New Shareholder Activist Index Reveals Rewards of Activist Investing" . Retrieved 12 December 2012. Activist investing was the top-performing strategy among hedge funds in 2013, with such firms returning, on average, 16.6% while other hedge funds returned 9.5%.
Research and statistics A 1996 study found that firm size and institutional ownership were positively related to the likelihood of being targeted by activist investors. Researchers also try to understand what makes company a desirable target for an activist investor. Since the late 2010s scholars and practitioners have started using machine learning methodologies to predict both targets and activists.
As of 2018, an average of 272 activist campaigns were initiated annually over the previous five years in the United States, including 47 proxy contests. The trend has also been global in scope; approximately 47% of companies targeted by activist investors during this period were located outside the United States, with Europe and Asia seeing increases in the CAGR of such campaigns of over 40%, between 2016 and 2020, companies in Australia, Argentina, Brazil and Canada seeing increases of over 20%, compared to activist campaigns in the US increasing by 3%.
When the COVID-19 pandemic reached the United States, shareholder activism campaigns in the U.S. declined by approximately 30 percent between January and August 2020, compared with the same period in 2019. A report by Sullivan & Cromwell stated that industry commentators had incorrectly predicted that the resulting market volatility from the pandemic would trigger a sharp increase in shareholder activism, but the opposite happened.