Proxy contests have become more expensive than ever and they now sit at the center of many corporate strategies. In recent years, the budgets for high profile disputes have climbed into the tens of millions as both companies and activist investors build large teams of financial advisors, legal experts and campaign specialists. This raises a natural question: does higher spending actually lead to better outcomes? The answer is not as straightforward as it may seem.
Industry data shows that companies expected to spend an average of about 4.6 million dollars on proxy contests for the 2025 season while activists anticipated budgets of around 1.8 million dollars. Proxy solicitation fees alone often exceed hundreds of thousands of dollars for both sides. Many advisors argue that significant spending is justified when board control and strategic direction are at stake.
Over time companies have consistently spent more than their activist opponents. High stakes campaigns influence board composition, long term strategy and the overall future of a business. As a result companies often invest heavily in defense efforts, including the use of multiple advisory firms to prepare for every possible outcome.
In 2015 the average cost of a proxy contest for activists was just over 636,000 dollars while companies spent nearly triple that amount. By 2024 this figure had climbed to more than 4 million dollars for companies with additional increases recorded in 2025. Activists also saw costs rise to roughly 1.6 million dollars on average with another sizable jump this year.
Winning comes at a price
The financial outcome of a campaign often reflects the intensity of the fight. When activists succeed in winning at least one board seat their expenses rise significantly. In 2025 the average cost of a successful activist campaign approached 5 million dollars compared with a much lower figure when the effort failed. Companies on the other hand typically spend more than 5 million dollars regardless of the result. Even settlement agreements carry substantial costs. Settled contests averaged about 3.7 million dollars for companies with activists spending close to 700,000 dollars.
These rising expenses have concentrated the field among a smaller group of investors that have both the capital and the willingness to engage in costly battles year after year.
What drives the rising expenses
The proxy fight landscape has become broader and more complex which has also pushed costs upward. In the past the main players were the company team, legal counsel and public relations advisors. Today campaigns draw on a much wider network of experts. Regulatory shifts have added to this change. For example new voting rules have essentially turned every director race into a separate contest. This has increased the number of strategic angles and the resources needed to manage them.
Modern proxy campaigns frequently involve private investigators, stock surveillance firms and specialist consultants who analyze shareholder behavior and examine director backgrounds. These services add to the overall cost but are now viewed as essential for a competitive campaign.
Some of the most expensive contests in recent years were fueled by public outreach efforts, investor webinars, extensive digital media strategies and the use of large teams dedicated to shareholder engagement.
Alternative strategies gain traction
Market uncertainty during the 2025 proxy season led some investors to consider more cost efficient approaches for driving board change. One increasingly popular tactic is the withhold campaign where activists encourage shareholders to vote against existing directors without nominating their own candidates. This avoids the time and expense associated with a full nomination process.
Another emerging option is the conditional notice of withdrawal. In this approach activists submit nominations but agree to withdraw them once companies provide certain concessions. This strategy has ended several campaigns early when management teams committed to specific improvements. It is viewed as a quicker and more affordable way to reach common ground.
As proxy season approaches again many activists acknowledge the growing financial pressure. The economics of activism influence the strategies investors choose since effective campaigns require significant resources. Ultimately activists aim to create value for all shareholders and cost considerations play a major role in shaping how they pursue that goal.
